What cruelled the Californian economy? The green agenda of its very conservative governor, or incredibly unwise investments in worthless derivatives?
Why are Australians so unhappy?
Well arguably, because they are endlessly told by Authors like this one they have reasons to be very unhappy?
Many have gotten used to the middle class welfare, that The Howard led coalition handed out in a bid to retain power? And are unhappy with the very real prospect this will have to be rolled back, if only to ensure a balanced budget going forward and confidence building surpluses.
If we were half smart we would stop listening to the conservative, talk the economy down message; and instead, compare ourselves with Europe and the ongoing economic damage being done by the Conservative fix!
The only way to keep our economy growing and or alive and well, is to improve both discretionary spending and savings! We seem to be doing just that under the stewardship of the Gillard govt, paying down household debt, while still encouraging enough discretionary spending to keep the economy turning over.
Yes, the carbon tax as applied will simply churn money, and could have been better done as a part of long overdue genuine tax reform and simplification.
And that would have likely stimulated onshore high tech manufacture, production and exports?
For mine, I see absolutely no message coming from the conservative element that they have any appetite for long overdue real reform?
One should conclude with, be very careful what you wish for, least we through our simple minded acceptance of the conservative sales blurp, put them at the helm and follow the conservative imposed economy shrinking austerity now killing Europe's economic prospects/salvation?
The question we really need to ask, is history repeating itself, with a still manageable recession being converted into yet another Great Depression, with entirely counter productive conservative management paradigms. i.e, socialise the dept and privatise the profits, and squeeze the general populace to replace the wealth lost by the wealthy, when in fact, they ought to be the only one taking a financial haircut!
Rhrosty.

John, how can you describe the extraordinary success of Australia's Government in recent years and express puzzlement at the electorate's failure to acknowledge this - without mentioning the Murdoch and Fairfax media?
http://www.onlineopinion.com.au/view.asp?article=12286
Fail, John. Bad fail.

"Topping the list is Gillard’s absurd $23 a tonne carbon tax, effective from 1 July this year. Most pundits are loath to concede that, in international terms, the measure is quite radical and Gillard only embraced it to appease the Greens. From the comfort of their armchairs, they dismiss fears about the tax as irrational. After all, Treasury modeling indicates that the effect on growth will be minuscule and, under the government’s package, households will be over-compensated for cost of living increases. If only the Opposition would drop its inflammatory attacks, they maintain, the pessimism would disappear."

"Across a range of traditional industries, workers grasp that the economy is shifting in directions that could erode the foundations of their mobility and independence. Understanding more than they are given credit for, they fear that the current Labor Government, beholden to Greens and academic elites, and hiding behind stodgy rhetoric, is driving or exploiting those shifts. The most visible manifestations of this are the carbon tax and other green agendas."

Very well grasped by the author.

Sadly, the vast majority of Labor MPs -- including former PM Keating, once a lucid thinker -- have lost touch with reality, by placing their trust in the great green hope of structural change: the green industries. Is it too much to hope that these MPs' misplaced optimism will give way to the realisation that the green industries have done very little, except jack up energy prices, for the economies that have promoted them?

John Muscat you blame the Greens, carbon price and investment in clean energy for all of Australia's (and California's) ills.

That is nonsense. The C price will have about 1/3 of the impacts of the GST, which was the one thing that (in hindsight) I would say Howard's Govt did right. Why? Because it forced the rich to at least start paying a fair tax on their excess consumption.

The spotlight should really be shone on the deregulation and lack of oversight of the banks which has led to them being overloaded with property mortgages. This debt is increasingly going bad just as property prices are beginning to deflate to closer their real value. That and the excessive middle class welfare, both were given by Howard, Abbott and his neo-liberal cronies.

Yes I agree - manufacturing needs help and so does tourism. Best way to do it?- Mining tax (version 1, the substantial one) and carbon price on all mining and resources industries - it will dampen (but by no means extinguish) the huge pipeline of investment in that industry which has drained manufacturing and tourism by keeping the dollar high and skills scarce.

That solution, which is bleeding obvious to the big portion of thinking Australians, is the opposite of what you advocate John.

When (not if) the crunch does come to Australia with the deflation of the China bubble, followed by our housing bubble then maybe the banks will be in trouble. Then we'll pray for a Government that will not (as Rhosty says) "socialise the dept and privatise the profits, and squeeze the general populace to replace the wealth lost by the wealthy" as the European and US governments are doing.

PS Who knows, something good may come of this, like an end to 'growth'.

Just how long can we keep taking in each other's washing, before we all run out of money. Someone has to actually make something for wealth to be created. Fortunately for us at present, it was done for us when our continent was created, but we are depending far too much on this good luck.

It is no accident that the only really successful EU country is Germany. For those who don't know, they are the one who build all those cars, & trains & STUFF.

Just like primary school teachers, our public service, higher education, & the bulk of our health care workforce, [all public servants really], are over educated, over paid, & under worked. Poor human relation management appear to think you need a BA to push a bit of paper from one box to another.

W have graduates flipping burgers due to the promotion of a general liberal, education, useful for nothing but paper pushing in the bureaucracy. Meanwhile Perth, the home of highly paid mining professional, is developing a pommy accent, due to the number of technical graduates UK universities produce, with no real industry to absorb them. They are the beneficiaries of our mining boom, & are filling the best most highly paid positions, our people should be educated to take. Bit of a problem I suppose, with little other than humanities people on staff.

So watch out folks. Make as much hay as you can. If China stop making electricity, & steel with our raw materials, or the carbon tax sends the miners elsewhere, it's the poor house for us.

With this fixation on arts & humanities in our higher education system, we should have the best spoken unemployment ques in the world.

To the contrary Roses1, when the crunch does come we will wish we had been smart enough not to elect a government that had not thrown away a carefully built up surplus, but sunk us deep into debt as well.

We will also wish we still used coal to generate the cheapest power in the world, rather than this stupid boutique wind & solar stuff.

I wonder how how many will freeze to death, because of this arrogant stupidity.

What the writer fails to mention is the fact that Australian's, that is, the general population, now have a private debt to GDP ration of nearly 120%, perhaps even higher.

When people deleverage it places a major stress on a limited economy like Australia's.

China is in the process of flat-lining big time, you can forget the two speed economy, if you own shares or are hedging on the big resources companies to make you money or to invest in, you will be making one of the biggest mistakes of your life.

Europe and the US are China's two biggest markets, China has finally realised they cannot 'grow' with their two biggest markets headed for financial Armageddon. They are now focusing on getting internal (their service sector) to sustain their future growth, you don't need steel, concrete, iron ore or anything else that may come from an Australian mine when you shift focus like this.

Anyone with half a brain will notice growth is pretty much tapped-out.

We are heading toward a very different future, green economy or not.

The ride is going to be very different from the one we have enjoyed over recent history. Get ready; it's going to be rough!

...Why are Australians so low when their economy is so high?

...Let me answer this simple question with a couple of point-notes from a long innumerable list of similar examples:

...First, its Gillard closing down the live cattle export industry overnight without warning: And now….Closing-down the fishing industry by declaring huge tracts of ocean as marine reserves.

...If, maybe, the Gillard Government could simply get on with running the place, instead of their preferred alternative of ruining the place, some confidence and trust would be the reward.

hasbeen. Sure, solar and wind energy is carbon free, but the wing only blows for around 35% of the time with suffient power to turn turbines; and, solar voltaic is the most expensive way to convert solar energy into power; given only around 15% of full sunlight is actually converted to energy. And then only during daylight hours.
I believe we should investigate the nuclear option, thorium in particular.
Thorium is 4 times more abundant than uranium. It is old 1950's technology that was abandoned because there was no weapons spin-off.
However, it should be extraordinarily cheap. Let me elucidate. In oxide reactors, loaded with 500 kgs of enriched uranium; only 3.5kgs of the material produces power, the rest is waste; and yes the waste can be used a few more times in fast breeder reactors. And potentially, the resultant final waste will have a half life of just 300 years.
Modern pebble reactors reduce the risk of future melt downs to almost negligible, or nigh on impossible.
And given pebble reactors can be mass produced and then trucked on site, as ready to use modules. At least as cheap as coal-fired options, but particularly where there is an ever rising price to pay for carbon production?
Not so however, with thorium. Thorium is currently, the embarrassing waste of riches produced by rare earth processing!
Unlike uranium oxide, the thorium reactor consumes most of the material, leaving very little waste.
Thorium leaves the ground as virtually ready to use material, requiring little pre-preparation. Moreover, the very small amount of waste created is far less toxic and eminently suitable for very long life space batteries, in things like communication satellites etc.
All things considered, thorium produced power should be significantly less costly than any current coal-fired power.
We have lots of it.
As far as I know, there is no carbon production associated with it, particularly if we mine and process the stuff, using only carbon free power?
The very best alternatives will be ones that walk out the door, and be affordable in still developing third world countries! Rhrosty.

Diver Dan, yes, we should pause and please consider, what we may in fact, be locking away in the proposed maritime no go areas or reserves.
We could and should husband our marine resources?
This could be done for far less cost, by buying back fishing licences at full market value, which in turn ought to be enough for former fisher folk, to enter into alternative business ventures?
Like say, fish farms, which produce as much money as 10,000 acres of sustenance grazing, from a fish farms the size of Eagle farm's international runway; and indeed, far more reliably, than hit or miss conventional farming or fishing.
Green acolytes are, I believe, as ever busy busy trying, where they may, to shut down industrial development, or make us entirely dependant on fully imported oil.
Which by the way produces as much as four times the carbon of locally available, sulphur free, sweet light crude, which leaves the ground as virtually ready to use, as is, as diesel?
You may have noted the sheer size of the proposed coral sea exclusion zone!
Or, the prognostications of any number of geological/mineral development experts, who number amongst them, some who say, we have to our immediate north, hydrocarbon riches to rival the entire Middle East?
And wouldn't be good to know where it is, how much we are being asked to forego, by Canadian and other activists?
Even as Canada develops its much dirtier tar sands, without so much as a reported murmur, from those same advocates? Rhrosty.

While it certainly isn't the only factor in California's economic woes, John Muscat doesn't even mention the effects of illegal immigration on the California economy, as the business interests that employ the illegal immigrants privatise the profits and socialise the costs. People on very low wages can't pay much in the way of taxes, but they are entitled to expensive first world healthcare, education, welfare, and other public services. See this article from the LA Times

http://articles.latimes.com/2009/feb/02/local/me-cap2

All those billions of dollars have to come out of someone's taxes.

"The C price will have about 1/3 of the impacts of the GST"

Absolutely incorrect; the GST standardised state indirect taxes and largely eradicated the black economy.

The GST was an economic enhancer and level playing field creater; anyone who invokes class warfare to describe it doesn't know what they are talking about.

The CO2 tax is designed to remove competitive advantage and put the brakes on the economy. It s effect is scandously underestimated by this wretched government and its sychophantic pundits.

To get a small idea of this effect all one has to do is go to the Department of Climate Change website:

http://www.climatechange.gov.au/en/government/initiatives/national-greenhouse-energy-reporting/publication-of-data/nger-greenhouse-energy-information-2010-11.aspx

There is a list of the top 150 or so CO2 emitters. This list will not represent the total spread of affected entities under the CO2 tax so its effect will be much greater than shown by this list.

The list gives CO2 emissions in tonnes; this can be totalled and then multiplied by the CO2 price of $23; the list total comes out to be about $12 billion; just for the top 150 or so companies; the full spread will double this.

About $24 billion will be taken out of the economy, per annum, at least.

The government is committed to giving at least $13 billion of this to wind and solar 'clean energy' start up programs and the rest as compensation in the form of periodic gifts to the deserving poor. None of this will be recoverable or have any lasting economic benefit because wind and solar do not work and consumption directed 'gifts' have no lasting effect on economic productivity or GDP.

The electorate have figured out that the economy is going down the gurgler despite the completely misleading 'good news' economic statistics trumpeted by this witless treasurer and government.

As the writer notes:

"Understanding more than they are given credit for, they fear that the current Labor Government, beholden to Greens and academic elites, and hiding behind stodgy rhetoric,"

The Prime Minister still has no qualms about making misleading and deceptive statements. On last night's ABC Q&A program, she said:

"We’ve got the biggest polluters paying the price for putting carbon pollution in our atmosphere. We’re using that money to assist industries, particularly those that are trade-exposed, to cut their emissions and to remain competitive."

The use of "carbon pollution" is deliberately misleading. The socalled carbon tax is to be levied on certain carbon dioxide (CO2) emissions, not on carbon particles as she infers. CO2 is not a pollutant, but an invisible odourless gas that is essential to plant life.

There is no doubt that the carbon tax will make trade-exposed industries less competitive, because the already sky-high electricity prices will be raised at least 10% more by the carbon tax to start with, and then prices will continue to rise thereafter as the carbon tax rate rises annually. Her claim that "using that money to assist industries ... to cut their emissions and to remain competitive", is gross exaggeration. Tell that to the aluminium smelters who are shutting up shop -- an increasing carbon tax is a serious disincentive for them to stay in Australia, given recent electricity price rises and a high $A. Only a few trade-exposed industries will benefit from compensation.

Few people will forget the PM's deception in claiming before the election that there would be no carbon tax under her government. But the mother of all deceptions is that there is no empirical scientific evidence that man-made CO2 emissions -- which only account for some 3% of atmospheric CO2 in any case -- have caused any measurable global warming. Consequently, there is no scientific or economic justification for imposing a carbon price in the first place.

We had a credit boom.
This expanded credit could have gone into factories and research which would have increased the "real world" wealth.
Instead it went into inflating house prices...not better houses just more expensive ones.
This sort of ponzi finance has been shown to cause booms that are inevitably followed by the bust. (payback time is not nearly as fun as the credit splurge.)
I've noticed that industry likes to blame "green" for many things such as the privatised power industry. Massive hikes to pay for all the profit extraction, no real increase in efficiency, so now they must increase prices and blame lefty idealists.
Lets all agree that both lefty and Righty idealists are the problem...some how we must return to the rational center.