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The Forum > Article Comments > The many heads of the European crisis > Comments

The many heads of the European crisis : Comments

By Julie Bishop, published 4/5/2012

Trade protectionism will inevitably rise as one of many counterproductive European policies.

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I agree, the European Union is arguably a union in name only. And politicians that lead others down the garden path, don't represent any spectrum of politics; but rather, all the colours and flavours. Arguably, as with most politicians, self interest and or the pursuit of personal power, nearly always trumps the national interest?
Moreover, a degree in economics is not worth much, given a recent study of 300 economists, by an Ivy league university, over a period of twenty years, concluded that their accurate predictions, were no better than a dart throwing money.
It seems the more we learn, the less we know?
Clearly the lessons of history inform us nobody learns the lessons of history, particularly self serving politicians.
Be it Green politicians locking up vital economic resources, claiming as they do that tourism will replace all the lost jobs and income; even as the tourist dollar is drying up with GFC and or continuing contraction; exacerbated by policies that socialise debt while protecting and or privatising profits!
Capitalism is supposed to be accompanied by risk, and those that make poor choices or carry far too much debt, need to be allowed to fail!
Cause and effect!
History informs us that a manageable recession was turned into the Great depression, by populist policies that isolated economies and dried up discretionary spending.
As usual, the very people who did absolutely nothing or very little to cause the economic downturn, are the only ones asked to sacrifice and or pay for it!
That is not my idea of justice, and on that basis, find it as policy, indefensible.
I believe the answer to the current raft of problems is stimulated economic expansion and trading out of trouble.
This very different expansionary economic paradigm, requires quite massive tax reform and simplification; industrial harmonisation, profit sharing incentives; and, the repeal/jettisoning of all unproductive profit taking parasitical practise! Rhrosty.
Posted by Rhrosty, Friday, 4 May 2012 11:17:51 AM
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"One of the dangers is there will be a rush to the mirage that government holds the solutions to the problems of Europe."

Interesting, since governments in bed and at the beck and call from financial elites and big business are the one's who created the problems, talk about hypocrisy.

There is one thing we have to take into account: What is happening to most citizens in a country?

When you look at America or Europe, you have to concede that they have failed. Most today are worse off than they were fifteen years ago. A full-time US worker is worse off today than 40 years ago. That is astounding, half a century of stagnation. Australia is heading in the same direction.

The economic system is not delivering.

It does not matter whether a few people at the top are benefitting, when the majority are not better off; the economic system is not working.

A critical question is how we grade economic systems; people are beginning to agree GDP is not a good measure.

The notion of the welfare of most citizens is almost a no-brainer.

If we are grading economic systems, we must concede the system has failed!

We are facing a very difficult transition from manufacturing to a service and resource extraction economy. Both sides of politics in Australia, like elsewhere have failed to manage the transition smoothly. If we don’t correct that mistake, we will pay a very high price. Already, the average American and European is suffering from their failed transition.

We have set in motion an adverse economics and an adverse politics. Australia has some economic sectors that are very good, but we also have a lot of parasites, governments are one of the prime examples of growing parasitic organisms which outgrow their host (taxpayers).

The hopeful view is that the economy can grow if we rid ourselves of the parasites and focus on the productive sectors. But in any disease there is always the risk that the parasites will devour the healthy body parts.

Julie is part of the growing parasite.
Posted by Geoff of Perth, Friday, 4 May 2012 2:15:40 PM
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...The most fundamental of necessities, housing, has been used as a weapon against the populations of the West. The subduing influence of the lie is finally and totally exposed as the trade-off it always was. The housing market was wrested from the hands of common sense and turned over to market forces which have for many years, been manipulated in value ever upwards for aspirational generation of personal wealth. A home as a generator of personal wealth allowed the fallacy that wealth could ever be assured from the family home as strictly a financial benefit, giving dividends into the future.

...Not one bubble but two bubbles have been burst with the real estate crash most evident in the USA, and the inexorable grinding slide downwards of our own real estate values in Australia. The “average man” now stands naked to the truth, a painful truth telling him that a job is now simply an obligation with no long term financial benefit outside the line of survival alone, and his lifelong investment in a home has become a liability encumbered with unrecoverable debt.
Posted by diver dan, Friday, 4 May 2012 3:08:00 PM
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Yes Geoff, you don't keep flogging a dead horse! Doing what you've always done while expecting a different result is madness. We simply can't rely on ever increasing population as an economic model that underpins economic growth!
Economic growth that makes us all virtual slaves the serve the economy, when in fact, more pragmatic policy settings, would craft an economic paradigm that would instead serve us.
We need to stop focusing almost exclusively, on the needs and wants of foreign debt laden carpet bagging speculators; and instead, refocus on and invest in our own people and their better ideas.
Simply eliminating poverty in all its forms and guises, will grow both available discretionary spending and the domestic economy, all while also eliminating post code poverty traps.
This approach will empower and turbo charge the economic prospects of all our home-grown entrepreneurs and cooperative enterprise. The only business model to survive the great depression largely intact and fully functional! And, the only economically viable future currently open to us, when and as all the resource projects wind down. Cheers, Rhrosty.
Posted by Rhrosty, Friday, 4 May 2012 3:23:20 PM
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In 1999 I wrote:

What do you get if you blend the [German] D-Mark with the [French] Franc and the [Italian] Lire?


A hyper-competitive Germany, an Italian basket case and France somewhere in the middle.

Pity I couldn't figure out some way for me to make money from my forecast. However I long ago learned that markets can stay mad longer than I can stay solvent and it all took longer to unravel than I expected.

Which leads to another point. Here is the difference between "left" and "right" in modern political economy.

The "left" believes that, since some regulation is beneficial, more must be better and total regulation must be best of all.

The "right" believes that since over-regulation is bad, deregulation is good and the abolition of all regulation must be best of all.

As a result of these equally lunatic positions there is no debate on what should and should not be regulated and how best to go about it. So we have over-regulation in some areas – such as child care – and an absence of regulation in others such as reining in the banks. In this latter Australia is fortunate that Peter Costello, arguably the best treasurer Australia ever had, instituted APRA so we've probably escaped the worst of it
Posted by stevenlmeyer, Sunday, 6 May 2012 10:05:04 AM
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One of the questions which Julie and her political mates need to
answer, is why have they been so hopeless at trade negotiations?

Our media is flooded with advertisements for BMW, Mercedes, Audi,
Peugot, VW and all the rest. Yet Australian politicians have been
unable to negotiate more then a 16'000 tonne quota for Australian
lamb and mutton, for the EU market. Meantime NZ has a quota of
around a quarter of a million tonnes.

I think that its time that Julie and her mates stood up for Australia
and its exporters, such as farmers. Its time to come up with
innovative ideas, to make it clear to those trying to sell their
German and French wares here, that it would be in their interest
to make sure that the bureaucrats back home see reason. Why should
I buy their German products, if they deny us the ability to sell our Australian
products in the EU? Its not as if EU lamb production is booming,
after all. There is not much of an industry to protect, as people
simply eat more factory farmed pork and chicken, as they are denied
access to more of our lamb.

Now there is a challenge, Julie!
Posted by Yabby, Sunday, 6 May 2012 2:22:54 PM
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