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The Forum > Article Comments > What is the 'Road to Recovery'? > Comments

What is the 'Road to Recovery'? : Comments

By Julie Bishop, published 23/8/2012

The global economy continues to be fragile despite massive government intervention in the form of stimulus, bailouts and increased banking regulation.

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Hasbeen, I think you should take a look at this link http://www.energybulletin.net/stories/2012-08-22/don%E2%80%99t-count-revolution-oil-supply it outlines some of the issues the world faces in terms of continuing the growth paradigm.

I would also suggest you look at this additional report (PDF) http://www.countercurrents.org/clugston190812.pdf and it will give you a real sense of how much trouble we are really in.

If you think we can overcome some of these fundamental predicaments I would be interested to read your response.

Cheers

Geoff
Posted by Geoff of Perth, Thursday, 23 August 2012 3:49:20 PM
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Hasbeen, no plans to buy junk bonds, regardless of the rate of return! Don't fancy the "risk".
My beef with the European economy, or those who are responsible for its direction, is the mindless austerity paradigm.
Having run several businesses over my lifetime, I know and understand that the best way out of trouble or possible bankruptcy, is trade and or increased commerce, rather than less; given, base costs remain a constant, or can be reduced!
My solution, if it is one, is to develop and export our much lower carbon producing potentially massive energy products, at significantly less cost to both Europe and the US. This would be helpful to both the global economy and environment!
This would help inasmuch as, it would reduce base costs, and free up some of the discretionary spend; to allow it once again, add to and progressively ramp up economic activity.
It is in Australia's ultimate interest that the largest economies pick up/recover. As they do so, they will likely buy more Chinese made "stuff".
That in turn will underpin a symbiotic increase in Chinese economic activity, and a consequent rise in our exports; and or, terms of trade.
Apart from that, we need to quite dramatically reform and vastly simplify our tax act, tax collection and trade practises act! A good example others will follow?
We clearly need foreign capital, which would better serve our needs as export incomes, rather than more foreign debt!
And it would also assist, if we adopted/accepted a more cooperative, less corrosive form of capitalism, that puts/engages essential competition, with elements of the global economy; rather than, with states or other Australians.
That being so, we also need to invest in Australians and their better ideas, rather than debt laden, debt servicing, foreign "investors"!
[Cheap energy has always underpinned economic development and human freedom! Something as simple as a water wheel freed as much as one hundred humans; per wheel, from endlessly repetitive work, and or, slavery?]
Cheers, Rhrosty.
Posted by Rhrosty, Thursday, 23 August 2012 4:13:35 PM
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Michael in Adelaide writes

'We have entered a 50 year contraction phase that will end with a new equilibrium between what humans demand and nature can provide'

Yes in school in the 1970's we were told definetely no oil by the end of the century. Nothing changes in the propaganda wars.
Posted by runner, Thursday, 23 August 2012 4:59:07 PM
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I doubt that Julia writes many of these articles let alone reads the responses.

The singular perpetrator of economic oppression is the banking system.They own our productivity by virtue of creating from nothing all the money to equal it as debt.

It is enslavement from which we cannot ever escape unless we challenge their present authority who own our toil.The present economic situation will only get worse.Remember the "Green Shoots lies"? "Quantitative easing" is just the counterfeiting of our currency and we again get it as debt.They continue to steal from us and the pollies have not a clue.
Posted by Arjay, Thursday, 23 August 2012 7:34:09 PM
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Geoff of perth

‘If you consider all the important things, all the services that are most beneficial to you, all material needs and wants, how many of them were or are produced by governments?’

If you mean government as in parliament … then the answer is zilch. If you mean government as in public service departments, then the answer is … before the 1980s – lots!

Before mass global privatisation, governments actually earned considerable revenue in their own right, via their many, varied and profitable enterprises and utilities. Not only did this revenue go back into public wealth, it also provided a major ongoing source of reliable employment. Because government profits did not have to be maximised for distribution to shareholders, board member salaries and (mostly) foreign owners’ coffers, the fees and rates could be kept to a minimum.

Once the global privatisation juggernaut took hold in the 1980s, leading to mass sell-offs of government departments and utilities, revenues formerly earned by the government sector have been stripped from public wealth and redirected to the private sector. Likewise, fees and rates have skyrocketed to feed the profit monster.

The main reason government services can now be portrayed as ‘non-productive’ is because thirty years of privatisation has stripped them of their public earning power.
Posted by Killarney, Thursday, 23 August 2012 8:11:39 PM
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So the GFC was a product of peak oil, not a crisis in the banking system? I hadn't heard that one before, and I'd be stunned if there was any evidence for it.

Peak oil is no longer a problem for the foreseeable future. Unconventional gas finds have changed the energy equation.

Julie's basic point is well-made - all of these Keynesian solutions aren't making the problem any better. A strong economy rests on the ability of people to make decisions in their own interest, not have them taken out of their hands by governments.
Posted by GrahamY, Thursday, 23 August 2012 8:32:17 PM
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