Globalisation is a sell-out by treasonous politicians who care far less about their countries than their citizens do. Politicians transfer wealth and jobs overseas via globalisation. They do the same with free-trade - cheap, shoddy imports from China, for example, forcing Australian industries making high quality goods to shed jobs and in more and more cases, close down industries in Australia. Globalisation stinks, and our politicians should be held to account for their involvement in it. If we are to maintain our standards of living, globalisation must stop, and we should be prepared to pay more for good quality products. Chinese cannot even put a zip in mens' trousers properly for instances, and their sizing of garments is way out. They are ahead of us with technology and our electronics industry is long gone. But most of their consumer goods are rubbish we should not have to tolerate.

Ttbn

Meaning what? There should be no trade or movement of goods across international borders?

Globalization only works if the trade balance works in your favor. When it doesn't, trade deficits grow and grow as your export incomes shrink and shrink.

China was until recently experiencing 30% wages inflation and saw many American manufacturers returning even though their tax burden subsequently increased.

Energy is the key in a high tech world that China is joining! And that's how you make globalization work for you along with the flow on factors that you otherwise lose! And gone whenever you import manufactured goods from elsewhere along with the jobs that are also exported.

We have enough resources to become completely self sufficient! And if our "Leaders" were capable of using the brains they were born with for more than repeating mindless mantras, we'd go back to a nation that made things! And successfully compete with the emerging economies for market share!

For that we need just two things, preferenced Co-ops and ultra cheap energy! And assisted if all the cooperative enterprise in building complex items occurred on a single site to eliminate as much as possible, cascading tax and transport imposts.

Finished objects need to be packed in containers and shipped to convenient departure ports. (Darwin?) Via roll on roll off fast ferries/ports that had enough infrastructure to load complete trains that could then complete their journeys/ courtesy of similar infrastructure at other nations terminals. (Say Singapore?)

Meaning minimal handling, and rail sending goods through several cooperating nations to end customers, far fast and safer than any shipping, which just makes the goods more expensive for the end market/customer. And oft times all you need to dissolve the competitive edge.

The only bulk freight forwarding shipping worth considering has to be both nuclear powered and submersible! Thereby virtually guaranteeing timely delivery! When Nuclear powered planes ply the airways, (doable) that'd be the time to consider flying freight/trade goods anywhere.

We really need to divorce ourselves from the notion, that our place in the global market is as a quarry or frequently drought ravaged farm!

Blocking? No! Competing with all inherent advantages working for you? Yes!
Alan B.

It is unusual to find myself agreing with ttbn, but In do on this subject.
Gloalization is basicly turning large parts of the economy over to a small ellite number of large companies. We are reduced to workers and consumers with little control over who we can buy anything from. As the economy becomes more automated, and we are squized to the margins of the economy , our needs will be ignored.
Please excuse the spelling errors as this is a borrowed computer and I cant find the spell checker.

Chris

JKJ,

Of course not. If I had meant that, I would have said so. Trade has been going on for centuries, and could continue, without the nonsense of 'globalisation' and 'free' trade. Any government worth its salt would not be carrying on like ours does. A good government would be doing everything in its power to maintain, and preferably increase it if possible, our standard of living. They are not doing that through either globalisation or free trade; they are not improving the lot of poorer countries, which was part of the 'bright' idea. Low wages, poor conditions remain in these countries so that our prices can be undercut by providing us with junk far inferior to what we used to produce. It is a typical 'progressive' way of taking money (jobs, business opportunities) away from the less well-off in rich countries, and giving it to the wealthy on poor countries.

Only by increasing our wealth can we hope to help the really poor overseas.

Ttbn

So by what principle do you decide whether a particular transaction is to be permitted or not?

The idea of globalisation, with each country producing the things where it has a competitive advantage would be fine, if there were such things to produce for all countries.

With the stupidity of renewable power generation, there is nothing left where Oz has a competitive advantage. The only one we had was our cheap power. With this advantage destroyed by green ratbaggery, & any advantage in agriculture long gone, all we have left is mining.

Mining although great for balance of trade, is not much use in providing jobs, & most of those are nowhere near where people live, or want to live.

Thus globalisation leaves us either taking in each others washing, dependant on government handouts, or on government make work. The huge expansion in the bureaucracies & academia is no accident. It is to absorb the huge numbers with no productive usefulness available.

Worse still, too many are now happily dependent on this government make work, & will ride the gravy train right up to, & over the cliff.

Globalisation may have worked to some extent with old high freight costs, & high employment in transport, but now we can land a finished product into our Australian store for less than the local cost of the raw materials to make it. In this situation the only direction left for our economy, destroyed by these cheap imports is down. Our collapse is inevitable with globalisation, & free trade deals, it is just a matter of when.

JKJ,

I know that you are more than intelligent enough to understand my post, whether or not you agree with it. I think you are being deliberately obtuse or smart-arsed for reasons known only to you. You out of luck if you think I'm going to rise to your bait. Post your own opinion.

It is by no means obvious which voluntary transactions you are saying should be criminalised or why? Machine tools, gargling salts, electrical conduits, printers inks perhaps? How is anyone supposed to guess what you had in mind?

If I wish to do business with someone, I shouldn't need to sign an agreement first.
Free Trade agreements are just protectionism for the Bilderbergers.

ttbn,

Your assumption that the locally made goods are of higher quality doesn't always match the reality. But even if it did, why should we try to enforce a level of quality that's not appreciated by the customers?

If we are to improve our own standard of living, globalisation must continue. It is silly to devote our resources to the production of low value products that can be obtained much more cheaply from overseas.

We certainly can't hope to help the really poor overseas by denying them the opportunity to work in making things that we want to buy. And denying us the opportunity to by what they make diminishes our standard of living as well.

It is not the progressives who are taking jobs and business opportunities away from the less well off in rich countries, it's those who oppose government deficits.

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Alan B,

For countries with floating currencies, trade balance is self correcting. When trade deficits grow, the currency value declines and the goods become more competitive again.

Energy is one of many significant factors, but if there's any one thing that's key, it's intellectual property. The future will rely more on the value of ideas and knowledge,

RORO ferries may be good for short distances, but shipping containers (with largely automated loading and unloading) make them hopelessly uneconomic over distances as far as Australia to Singapore. Nor are they well suited to rail; rail RORO requires non tidal docks. Submarines are hopelessly uneconomic for any transport application, let alone bulk freight! Nuclear aviation won't be viable this century. And whether air freight is economic depends on the value and time sensitivity of the goods carried.

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Hasbeen,

It wasn't renewables that ended our cheap power, 'twas profiteering at all levels. Indeed renewables could be the solution, as solar energy is one thing we have a great competitive advantage in.

If you really think we're so uncompetitive, why do you think the market has not fixed that by devaluing our dollar?

Chris,

'Tis not globalisation that's turning over large parts of the economy to a small number of large companies. It's a combination of technological change (enabling companies like Apple and Google to expand into areas that were once considered unrelated to their business) with competition laws that only rarely block mergers.

_____________________________________________________________________________________

ttbn,

Apologies of the obvious typo in my previous comment.

_____________________________________________________________________________________

Jardine

ttbn never said he wanted those transactions criminalised. It's far more likely that he wants them taxed; a much more reasonable view (though still one I disagree with of course).

_____________________________________________________________________________________

Armchair,

I think yours is the first sensible comment on this thread! People do often conflate free trade with free trade agreements that are nothing of the sort.

Unfortunately there are so many regulations blocking free trade that some agreements are needed. But we should be wary of complicated agreements.

In an idealised world free trade, utilising the notion of comparative advantage, is unarguably good and preferred.
There is little doubt that free trade has been one of the factors that has led to the miraculous decline in world poverty over the past century and the improvement of almost everyone's standard of living. It is also, it seems, unarguable that free trade is good for each participating nation with that nation's total GDP benefiting.

But...
That's in an idealised world. In the real world, free trade is never completely free. There are always interventions that detract from its total utility. These can be a minor as "Buy Australia" campaigns through to governmental interventions to protect this or that group.

In a developed country, free trade involves winners and losers. Because the industrial base has been out-competed (fairly and unfairly) the losers are those involved in the industrial base. The winners are consumers who get their goods cheaper. Economists in particular and the political elite in general, are consumers and therefore love free trade. Factory-workers and their kin, not so much.

The rise of Trumpism is the cry of those free-trader losers who are saying enough is enough. They don't accept that things are fair and level, they suspect common interest among the consumer elite who foist free trade on them and those nations most benefiting from the non-level playing field.

Free trade benefits the nation (particularly a nation like Australia) but it doesn't benefit the whole nation and the numbers of losers has reached critical mass.

The aim isn't to turn away from the principals of free trade but to ensure that it is truly free (that means confronting those developing nations who game the system) and to ameliorate the consequences of being out-competed.

Aidan the only profiteering that occurred in Queensland's power was that by the Beattie Labor government, that was ripping a quarter of a billion dollars in special payments into his coffers each year, to try to reduce the deficit his wild drunken sailor spending had generated.

Well that was the case before hundreds of dollars were added to each bill to subsidise solar & wind. Mine with less people in the same house with the same services has gone from $360 a quarter to $860 today, in 12 years. Now that really is inflation gone mad, or a ridiculous power generation policy.

"If you really think we're so uncompetitive, why do you think the market has not fixed that by devaluing our dollar?" Aidan

Have you really not noticed our dollar has fallen from above parity to the US, [107C at one time], to 75 cents today. That Aidan looks remarkably like a devaluation, a 30.4% devaluation in fact. Thanks for highlighting that for us.

Aidan
ttbn isn't saying, but in any event, tax is by law a compulsory exaction. If you don't pay, it's a criminal offence. So it's six of one and half-a-dozen of the other.

Hasbeen
Have you ever spent any time in a third world economy?
I have lived in a third world economy(Laos) for the last ten years, and I can tell you that your understanding of how they function is incorrect. Most of the exports are controlled by government connected families, and they have little to add to a world economy all ready over supplied with stuff to buy if you have cash or credit. The problem for the worlds economy is that it is so efficient, that there are is no cashed up demand to increase growth. There is of course plenty of liquidity, which is owned by a small group of families that have all the consumables that they want.

Chris

Yes I have Lefty One, I think New Guinea & the Solomons are about as third world as you can get.

If you are saying that free trade has very little to offer third world peasants, or subsistence farmers, I agree completely. However Taiwan & South Korea, Singapore, parts of China & quite a few others have ridden to wealth on the back of exports. While that wealth may not be evenly distributed, most have really benefited.

Why anyone would expect all to benefit equally I can't imagine. Surely those who invest, risking their wealth, & those whose brains have guided the developments should benefit greatly more than the unskilled bloke who sweeps the factory floor.

He has to be happy that the new wealth will provide the education & opportunity he has not had, to his kids. Unless much of this new wealth stays in the hands of those who really generated it, there will be no money for future investment & development. Meanwhile even the floor sweeper is much better off than working as farm labour.

I would like to say that their watching our mistakes should enable them to avoid doing the same. However us watching the Pommy unions destroy the British car industry has not helped us stop it happening again here.

Sooner or later welfare, like communism, destroys any state that embraces it. It's been happening since the mobs of Rome, & will probably still be happening long after we've gone.

Hasbeen
I ran a backpacker in the party town of Vang Vieng for four years up till the end of 2014. I met many people and talked to a lot of them about their lives. One in particuler struck me as he was a lawyer from South Korea.He told me how many hours he worked and how it would be ten years before he had another holiday of many than just a few days. I was in South Korea in 73 just passing through so I know how far it has come from those days. Some countries in the east of Asia have come a long way in terms of stuff ownership, but I fear the price is the loss life quality.
I also worked in British manufacturing from the mid sixties to the mid seventies and am well aware of the collapse at that time.

The problem that I see is our ability to produce consumer goods far out strips the world ability to keep up with the level of production. So I dont see how creating more factories is going to help anyone except for the owners who use threats of closure to collect an increasing amount of community wealth to keep them from moving to a cheaper work force in another community.

Chris

Hasbeen,

You seem to be a bit ignorant of what's really going on. See http://eemg.uq.edu.au/filething/get/519/Factsheet_Queensland%20Electricity%20Pricing_Jan2015.pdf if you want to know the real cause of the rise in Queensland's electricity prices.

And of course I've noticed the recent fall in our dollar. But if you look at the ten year chart you'll see it's not a long term trend. Its rate above parity with the US dollar was due to short term factors due to bad policy by the RBA (they set our interest rates far too high, and failed to do anything to counteract the resultant surge of foreign demand for our dollar).

Whatever the imbalance is, the market will correct it, but a lot of damage can be done before that happens. The high dollar did a lot more damage to Australia's car industry than unions ever did.

How and why do you imagine welfare destroys any state that embraces it?

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mhaze,

The key problem isn't that free trade isn't completely free, it's that long term decisions may be made based on short term comparative advantage – especially when that short term comparative advantage is the result of government intervention.

Free trade does benefit the whole nation, but there are big disbenefits for people doing low value work, as they're almost certain to be paid less and likely to lose their jobs completely. That wouldn't matter if the government implemented policies to ensure alternative employment opportunities were always available. Unfortunately they prioritise budget repair instead, and a real problem is exacerbated in a futile attempt to solve an imaginary problem.

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Chris,

There's still an enormous amount of stuff that people desire but can't afford. We may reach a post scarcity situation some day, but we're nowhere near it yet.

Hi Aidan
You may be right that there is an advertising created desire in many people However if the manufacturing facilities that already exsist to fill that desire, have automated to a point of not needing the very people with that desire,how do we complete the processes.

My point is that companies are continually finding way's to become more efficient at creating and satisfying human desires. However it is that very efficiancey that is causing the lack of growth in the worlds economy today.

If people dont have money to spare at the end of the week then it does not mater what they desire.

And how many hours did you work running that backpackers Lefty one, heaps I'll bet. I worked from 7.00 AM to 9.00 PM 7 days a week with about a day a month off, running a tourist boat operation in the Whitsundays. The boat crews averaged 10 or 11 hours a day. Many of us have to work long hours, we can't all be bureaucrats or academics averaging 3 or so hours a day a few days a week, can we.

The last time I had one of those traditional holidays, staying in some sort of tourist accommodation was my honeymoon, about a hundred years ago I think. We got so bored in 3 days, we went home to start setting up house. Yes I am from that era, where you set up house after getting married.

On the other hand if holidays are fun, I've been on holidays my entire life, although at times the fun was only in retrospect.

I once salvaged a bankrupt manufacturing operation by sending most of the manufacturing part of the business to Taiwan. The company survived, with 16 staff, down from over 50, & became quite profitable, but I did not feel proud of this, until we developed some export markets for the last of our manufacturing. It was really only a token, but it made me feel better.

This is our future with free trade. We are never going to provide enough meaningful jobs, particularly well paid jobs when we export our industry & import finished goods.

Hi Lefty,
There's a lot more to the manufacturing process than jsut fabrication. The value of actually assembling things is declining, while the value of the designs continues to increase.

What's causing the lack of growth in the world's economy today isn't specifically a lack of consumer spending; it's a lack of spending in general — it doesn't matter whether the spending comes from consumers, businesses or governments. Sovereign currency issuing governments (such as our federal government) have unlimited credit so can always afford to spend as much as necessary to keep the people employed. But few people recognise this.

Issue with 'globalisation' is that everyone seems to have a different perception or understanding of what it means e.g. international trade in goods and commodities while ignoring or showing antipathy towards services and human movement.

In modern political media discourse the 'anti-globalisation' message favoured by both ageing culturlly specific members of both left and right exemplifies a successful white nativist strategy revolving around national socialism.

In other words, be suspicious of an outlook that is encouraged by a group of global oligarchs, often with monopolies, against competition, regulations, trade rules/blocs, government, civil society, immigration etc. while promoting border control and national 'identity'.

While economies, societies, politics etc. can be negatively impacted by anti-globlisation or nativist policies, the elites proposing such policies e.g. Brexit or Trump, will remain unaffected in their little bubble.

There are two distinct types of international import trade. The first is of benefit to the Australian people, the other is a harmful to the Australian people (and also to exploited foreigners).

Type 1 consists of imports of goods and services from civilised countries such as EU countries, Britain, Ireland, America and Canada. The benefit is from competing with foreign suppliers to maximise the variety of goods and services available to Australians. Competitive advantage for a foreign supplier is the same as that for an Australian supplier – better products, better and more responsive business dealing with buyer.

Type 2 consists of imports from crap countries like China and most of ASEAN and South America which maintain authoritarian regimes with dissent muzzled and producers denied freedom of association. The consequent low production costs compete with the cost of decent Australian social and working conditions.

A government FOR the Australian people would set up barriers to trade to serve the Australian people's interests and those of wealth creators ripped off in the crap countries.

The primary weapon would be exploitation-indexed tariffs set at rates that cancel the price advantage of garbage conditions in the suppler countries. Goods and services from civilised countries exempt from tariffs or other impediments.

A further weapon would be a Tobin tax of 1% on all transfers of Australian dollars into other currencies, which would impinge little on Australians' modest transactions for personal reasons but stop dead in its tracks trade in currency speculation.

It has been proven time and again that free trade benefits every country. Only idiots are against globalisation.

"It has been proven time and again that free trade benefits every country. Only idiots are against globalisation."

Any logical evidence-based arguments for those statements or is the writer merely emoting?

EJ,

Adam Smith, generally considered the founder of economics, in his book “An Inquiry into the Nature and Causes of the Wealth of Nations” published in 1776 gave an exhaustive mathematical analysis of the benefits of free trade on improving the productivity and wealth of nations. This analysis forms the very basis of year 1 economics. Empirical proof is that every major reduction in world tariffs has seen a massive increase in trade, productivity and standards of living worldwide.

So yes there is iron clan proof that globalisation improves living standards worldwide.

shadow minister
A few points
You seem to base your economic opinion on a single book written in a very different time, with very different economic realities. What other publication written recently have you read, that thinks anyone who disagrees with you is idiot?

Globalization has enriched the multi nationals, as many spend more of their income on imports, without the matching exports.Some in the third world have left the farm to work in factories, which enable them to buy some of the output.

However many thousands more are living on city tips, sifting through the rubbish to pay the ever increasing rents they now have to pay.

I can tell you from just looking out my front window that globalization ,benefits are spread very unevenly and it is only going to get worse with automation.

And finally on another post you thought i was offended as you moved on to another post. I was not offended, but I dont appreciate being called an idiot, because I hold a particular view that is different to yours. If you want people to exchange opinions, then I suggest you dont insult them.

Lefty one:

"You seem to base your economic opinion on a single book" My god, is that all you really got out of it?

No, Adam Smith's work was the first example of using reason and logic to determine the economic consequences of trade and tariffs, and certainly far from the last. That it has nothing to do with politics or events of the day is why the work is so enduring, just like mathematics from centuries ago still applies today.

Economics is about numbers, maths and reasoning, not emotions, politics and posturing. But if you had even the very basic understanding of economics you would not make such a blunder.

shadow minister
In my opinion economics is about people,not just numbers. If people were just expendable machines then I would agree with you.,
To me the whole point of the economy is to support the well being of all people, not just those that have a certain skill set, or family connection.

I would agree that if number, such as GPD,life expectancy, and the number of fridges were the only way to measure the successes of an economy then things are improving with globalization.

However i (and many others)believe there are other issues such as home ownership, and control of ones life, are also important when improvement in an economy is measured.

So I hope you would accept that we can agree to differ,as opposed to throwing around insults, just because someone uses a different set of measures to come to a conclusion.

Chris

L1,

Perhaps you could then give us a new definition of Physics or Chemistry? Economics is often called the grim science simply because it predicts and controls the outcomes of peoples lives irrespective of motives ethics etc, in much the same way as physics predicts the path of bullet and cares not for the consequences.

However, any politician with an ounce of sense will pay due regard to the economics of any policy, as economics predicts not only the positives but the consequences as well.

In that frame, the anti globalisation movement is based on populism and emotion, and is blind to the benefits of globalisation, and the huge consequences of reversing it, incl unemployment and poverty.

shadow minister
Economics is not a science, even though there is a Nobel prize for it.

I think connecting politicians with an ounce of sense is interesting, as most would agree that politicians will make decisions based on what the whip or a lobbyist has motivated them to do.

Globalization has filled the market place around the world with more stuff than can be consumed. I live in a third world country that is in the bottom twenty in the world, but the car and machinery yards are full, and the food and general markets are packed with people trying to sell what is all ready available.

What we do with the millions of "workers" no longer required to create an ever larger mountain of unsold stuff is what we should be thinking about, not how to make more stuff.

With all due respect to you and your opinion, you really need to think about that, not building more factories to keep people occupied.

Chris

Adam Smith's calculations have been debunked by economists of many stripes since Smith's day. Globalisation along with the neoliberal ideology which supports it has been called out by many economists including the Nobel Memorial Prize winning guru Joseph Stiglitz.

But the theorising of econowonks isn't reality, life in countries such as the USA is the reality of the economic effects of globalisation - catastrophic erosion of working conditions for the bulk of the people, serious decay of the built public infrastructure, wholesale transfer of wealth-creating economic activity to crap countries like the Prison Republic of China, secure jobs a thing of the past.

This is because globalisation is an open ticket to greedy pigs whose own hands and brains create no wealth whatsoever, but whose gaming of the system enables them to acquire and allocate wealth they haven't created, to scour the world for the most debased countries with the most cowed work force to produce goods to import at consequently reduced prices to compete on price with the productive workers of the home country (thus debasing ITS standards - a debasement expressed in Australia by the 2014 Budget and the endless attacks on the young unemployed who are its victims.)

'Calculated'? Try applying social science research and theory that demands a very clear and exact definition of terms e.g. 'globalisation'.

The likes of Malthus and Ricardo became the pin up boys of anti-immigrant, anti-globalisation, eugenics and nativist movements based on philosophy and beliefs from years ago.

Steady state economy with fixed inputs/outputs suggested by Ricardo allows nativists to demand closed national economy that needs to be protected e.g. stop immigration, border control etc., or 'the social contract' to protect workers.

Privately it's a small clique of nativist and neo-con elites the 'top people', with global business interests, who wish to protect their economic and social position, precluding access by others.

Not to say they don't have a religious bent e.g. in US demanding white christian conservatives have priviliges over all others, fits neatly with the elitist philosophy of founder of modern eugenics Francis Galton et al.. That is the religion of eugenics or racial hygience, need for autocracy and order aka the Nazis; many coincidences if one looks back a hundred a years or so. Movers and shakers in the US nativist movement long avoided any public linkage with KKK, neo Nazis etc., this has now changed aka Trump(a sympton)/GOP, UKIP/BNP/Tories, One Nation/radical right of LNP etc..

Why try stopping everything and potentially trashing their economies, not to forget parties too? The US electorate was 90% white generations ago and the GOP's constituency was 20% black till Goldwater; now the electorate is 60% white and falling with few minorities let alone blacks voting for the party of Lincoln; demographic decline..... and they don't like it.

However, many of these old elites still expect to run the show but if it's not possible through fair electoral franchise and democracy how can you maintain power? In the UK it's been creatiing angst, fear and rage e.g. an EU referendum, US it's been Trump, and Oz too e.g. 'cultural issues'.

John McCain described his radical GOP colleagues blocking all or most Obama govt. legislation as 'lemmings in suicide vests who simply don't care about consequences'.

L1

The definition of science is: "a branch of knowledge or study dealing with a body of facts or truths systematically arranged and showing the operation of general laws:" Which makes economics a science.

The conditions you are looking for occurred in the great depression of the early 30s.

EJ

All I'm hearing from you is emotion and politics.

Adam Smith's theory of trade has not been proven wrong by anyone, and while ardent socialists like Stiglitz (have you read his nobel prize winning theory? It's not very socialist at all.) have decried some of its results, the theory is sound.

shadow minister
An interesting definition, however I still cant agree with you and neither can many others. I suggest you put "is economics a science" into google and read what others have said. I believe it is a debatable point and therefore you can not state it as a fact when it is just opiniont.

Chris

L1,

I took that definition straight out of the dictionary to which economics complies. It is not just my opinion, it is a pure definition, even though it sometimes gets twisted to suit political agendas.

To quote Robert Schiller "As economics develops, it will broaden its repertory of methods and sources of evidence, the science will become stronger, and the charlatans will be exposed."

shadow minister
The Schiller article was interesting, but I am guessing you did not read the comments below it
.
The difference I see is that the accepted sciences, such as physics, chemistry etc, dont have so many in the profession disagreeing with one another. From time to time some wiz kid comes along and shakes things up, and basic theory is adjusted amongst most in the profession.

However when it comes to economic theory there is constant debate about what should be adjusted to get the economy performing efficiently.

I appreciate that as the owner of an economics degree you are some what protective of the theory that you were taught. However many of the rest of us just think it is all just a lot of nonsense that has lead us to a world that is in economic chaos.

If the economists of the world have such a great understanding of how the economy works, how come so many never saw the crash in 2008 coming, or were able to stop it happening.

A final point, can you tell me if or when another crash is coming so that I can stop stuffing my assets under the mattress, as I am scared they will disappear if i put them in a bank as happened in Cyprus not to long ago.

Chris

L1

A physicist is not able to predict the path of a meteor that he cannot see. Similarly, there were very few people that were fully aware of the extent of the junk bonds that crashed. No science can predict accurately with imprecise or incorrect measurements. Secondly, there is always active debate and disagreement in all the natural sciences, just that you don't see it.

Secondly most of those arguing about economics are politicians with a huge vested interest.

shadow minister
So most economists did not see junk bonds coming is the same as a meteor that is light years away. I would think most would find it a strange admission that economists after a four year degree could not spot, that particulate disaster a long way off.

There are many who are not politicians who look to the professionals, to give them advise about where to safely put their savings.

We can all agree to differ on whether economists work in a science or a profession. However I am sure even you would agree that, it is the economists job to see an economic meteor long before it lays our economic future into a waste land.

Chris

L1,

Really! So how many of the world's best pollsters predicted a Trump victory?

Wake up. If you don't have all the information, predictions are not possible.

"So how many of the world's best pollsters predicted a Trump victory?"

About as many as predicted a Brexit victory over Brussels.

Their failure lies in their basic operating system which includes a low value ascribed to democracy and what it can do when unleashed. Bob Katter had his finger on the button when he noted that free trade is as dead as the dodo now that America is turning its back on it.

Next step is to lift economics from Adam Smith's flawed calculations to a scientific basis with a focus on what wealth is and how it's created. HINT: Acquisition and allocation - i.e. investment - creates none of it. Zilch.

EJ,

So Bob Katter is your economic guru?

See if what Bob Katter said turns out be true.

As for economic gurus - try testing your Adam Smith calculations against reality as it has unfolded and is unfolding, and in particular a scientific appraisal of what wealth is and how it's created (see my last par).

EJ,

Adam Smith was the first to use science and Maths to analyse economic activity. Since then many more reputable geniuses have tackled the issues, leading to the body of economics we have today. A few hack politicians are not going to "suddenly see the light".

All locked in to the same false premise - that acquisition and allocation of wealth (i.e. investment) creates any wealth.

So people and governments investing in infrastructure and businesses, employing people does not create wealth?

Apparently nobody knew and the last century has been a sham.

The invested wealth is usually not created by the hands and brains of the investors, merely acquired by them and allocated by them. There will be small scale exceptions in which a producer of wealth has saved up some of the wealth he has personally produced. This was recognised during the war when tax returns were divided into income from personal exertion and what was misleadingly termed "unearned income". The "unearned income" was earned but not by the taxpayer. It included the usual spiv sources of income - dividends, rent collection, share trading profits, real estate profits. It was taxed at a very steep rate approaching (in the UK) 20 shillings in the pound. The buyers of influence got the distinction discontinued when the war was over.

EJ,

I believe that you are trying to spout some version of Marxist doctrine. Having watched every marxist country descend into tyranny and poverty, have you not thought of revising your opinions?

Shadow,

Allocation of wealth enables more wealth to be created. But generally it would be more efficient if less of the wealth produced went to those doing the allocation and more to the actual production (or better still, passed on to the customers).

Karl Marx did indeed make a similar point, but it is logically impossible for the other stuff Marx said, let alone the stupid stuff that some countries have done in his name, to affect whether or not the point is true.

If physicists had the intellectual standards of economists, a lot of them would still be arguing (despite the evidence) that Einstein was wrong!

Marx didn't go far enough. He didn't explode the myth that acquisition/allocation creates wealth. He and the Communists did not take into account and forestall the creation in the chaos of 1917 Russia of a central political bureaucracy - a class whose architects quickly grasped and gamed the evolving post revolutionary authoritarian system of government to burst the anti-popular tyranny on the people. This class soon had control of all walks of life in the new republic and hasn't entirely lost that control today.

In the West today this hostile class (which includes pollies) shares power with other classes such as the acquisition/allocation leaners (who purchase the political parties and much of officialdom), and the class of wealth creators.

The chaos of the Trump election offers prospects to press for progress towards the following measures:

1. Introduce "Make-up tariffs" on imported goods to counteract the price advantage of slave conditions in crap countries like China.

2. Introduce a tax system which restores the wartime dichotomy of general income tax rates for producers vs very steep "unearned income" rates for such sources as rent collection, dividends, share and real estate trading gains, currency speculation profits, spivmanship in general.

3. Impose a 1% Tobin tax on all conversions between currencies. This would have a small and easily compensable effect on transactions for personal purposes while stopping the international currency market dead in its tracks.

4. Expose officialdom (the central political and administrative bureaucracy) to much greater transparency and vulnerability to the requirements of an informed public

EJ,

With regards your "Brilliant" ideas which have mostly all been tried and failed:

1 A make up tax on China would be reciprocated on our exports creating poverty in Aus and china, or would be largely bypassed by importing via a 3rd country.

2 High taxes on rent would cause rental properties to disappear and become more expensive hurting those that can't buy houses even more. Similarly taxes on dividends would crash the investment and strangle investment for local businesses. etc, etc, and bring on another depression.

3 The Torbin tax would simply move currency trading off shore, and would be paid only by personal transactions.

Any more bright ideas.

Dunno what SM meant by ideas having been tried and failed. If he's referring to the wartime spiv surcharge in taxation rates then winning the war is hardly evidence of failure. Other items, with his numbering:

1. There would be no scope for retaliatory Make-up tariffs by China. We haven't had LNP governments in place long enough to reduce us to what the Chinese would recognise as slave conditions relative to their own to invite such tariffs.

2. A return to socially owned housing would correct SM's No. 2 for the same reason that many British people are living in Council houses at affordable rents. Investment by governments needs to replace investment by non-wealth-creating predators.

3. The Tobin tax would be a tax imposed in Australia on Australian dollars being changed to foreign currencies. First casualty would be the artificial delays now imposed on personal bank to bank transfers within Australia, imposed in order to maintain a cash pool for playing the currency market - a racket that is destined to be ended soon even without a Tobin tax.

Of course these reforms are not suggested as a sudden revolutionary sea change. They are reforms that need to be sought on a ratchet basis - incremental changes to be nailed down and defended once in place. The ultimate goal is the disempowerment and dispossession of the predatory leaners.

PS: It is probably not necessary to impose Make-up tariffs on a country by country basis. The worst goods sources like that death trap clothing factory in Bangla Desh could be hit with a Make-up tariff for a start without targeting Bangla Desh as a whole. Same with the worst of the factories in other debased ASEAN countries. The effect of a slave factory on Australian employment would also need to be taken into account.

EJ,
1. Why do you want to make Australians poorer, and Australian businesses less competitive, by denying them the ability to buy cheap Chinese goods? And why do you want to make people in 3rd world countries even poorer by denying them the ability to work in manufacturing products for export to Australia?

2. There's really no point in overcomplicating our tax system. Instead it's better to simplify it: income from capital gains should be taxed at the same rate as other income.

But be warned: not a single social house would be built by increasing the tax on private rental properties. And there are long waits for British council housing, as most of the houses were sold off in the 1980s.

3. The Tobin tax would be an extra cost on Australians. Businesses would easily dodge it by doing their currency trading overseas. And the banks don't currently impose their delays to enable a cash pool for playing the currency markets. They do it because they can, and because it's profitable. A Tobin tax wouldn't prevent that from being profitable. Like most of the benefits of a Tobin tax, it's completely illusory.

EJ,

1. If you think the Chinese wouldn't retaliate you are delusional. They would not need the same reason. P.S. raising tariffs to protect business turned the 1929 crash into a depression.

2. That Social housing costs a fortune is why Britain is forced to move away from it.

3. People can trade Aus dollars in NY or London. Good reason to move your money off shore.

Aidan, Capital gains is taxed at the same rate as company tax, for good reasons.

Re Aidan

Make-up tariffs (also called exploitation-indexed tariffs) are an incentive to ASEAN slave owners (often non-ASEAN investors exploiting crap conditions in slave countries) to improve their employees' wages and conditions to reduce the Make-up tariffs against their products.

Cheap consumer goods does Australians far less harm than importation of the mass impoverishment that is accompanying the cheap goods by exporting jobs. And there is also the moral issue (irrelevant I know to neoliberal econowonks) of Australian consumers exploiting foreign slavery.

Yes the Thatcherite asset sales crippled social housing. Opposing the plunder of public assets is part and parcel of working for the reverse process of building them up.

If the banks are imposing delays in completing transfers "because it's profitable" how does it profit them if using our money to play the currency markets isn't what is profitable?

A Tobin tax is a 1% in the dollar tax on all conversions made in Australia of Australian into foreign currency.

Taxing spiv income at a higher rate than wealth-creators' income worked fine during the war. It was phased out after the war not because of complexity but because the wartime pressure was gone and the spivs used the usual path of buying political parties to get rid of it.

Neoliberals may well try to keep their fingers in their ears to remain deaf to the messages that American and British voters have been sending them but the behind-the-scenes permanent governments will stir up an even harsher response if they try to circumvent what the millions of victims of their policies are telling them.

The sorts of responses I've advocated are very mild in comparison.

Shadow,
Much of Britain's council housing was sold off at a huge discount, and the councils were prevented from investing in more.

And what could possibly be a good reason for treating income from capital gains differently from other income?

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EJ,

You are making false accusations of slavery in order to justify discriminatory policies.
LOW WAGES ARE NOT SLAVERY!
And by denying people the opportunity to work for low wages, you're effectively forcing them to work for even lower wages.

Do you really think that it's a good idea to have Australians doing work of such low value that the only way to pay them is to force Aussies to pay more for the kind of things they make?

Are you still unaware that monetary and fiscal policy can always be set to create as much employment here as we want?

"how does it profit [banks] if using our money to play the currency markets isn't what is profitable?"
Everything they do with the money is likely to be profitable, but the point of their delays is that it means they still have the money but don't have to pay us interest on it.

Tobin taxes are always a bad idea. And the one your proposing would just ensure that the transactions that currently occur in Australia would instead occur overseas.

EJ,

Slavery! what racist bollocks. The point of these make up tariffs is not to benefit the low wage workers in poor nations, but to protect the highly paid workers in rich countries. The consequences would mean that the poorest would get poorer and those in rich countries would find the price of goods would increase and their standard of living would drop, especially when they face a boycott from the poor countries of their exports.

Next you want a Torbin tax that will raise bugger all.

Aidan,

Dividend and capital gains tax was set at 30%, as this was roughly the average rate paid by people, and as capital gains is paid by people of various means, it was a simple way to make it manageable and fair.

P.S. if you add capital gains to revenue, then any argument against negative gearing disappears.

Shadow,
A simple way to make it manageable and fair?? That's complete rubbish; it's just a tax break for the rich!

Having capital gains income taxed differently from other income needlessly complicates things. And as capital gains is paid by people of various means, it is unfair to have everyone pay it at the same rate when they're paying different rates from the rest of their tax.

P.S. if you add capital gains to revenue, then the biggest argument against negative gearing disappears; there are others, but nowhere near as compelling.

Two opposite class perspectives emerge in this thread. To the class of leaners, dependant on reducing Australian wages in order to profit leaners (aka investors), Australian wages are too high and need to be reduced towards the level of Asian cheap labour (also ripped off by the leaners).

Class struggle over decades has brought Australian award levels to what they are today and naturally the leaners will want them curbed (ABCC anyone?). Forcing Australian workers to compete with Asian workers in a race to the bottom is a benefit, to the leaners, of unimpeded trade with debased regimes whose draconic (slave) labour laws cow their wealth creators out of struggle over their wages.

Terms like "racist" are deployed (like the hoary old "left"/"right" labels) on behalf of the acquisitions class, who create none of the wealth they acquire, to muddy the waters when this managed homeland producer vs foreign producer contest is challenged.

Perhaps the best destination for the funds collected in Make-up tariffs would be labour organisations in the debased countries!

Meanwhile the Americans have blasted a great big hole in the elitist structures impoverishing the creators of wealth. What a surprise, steering an election into actually meaning something.

No, EJ, it's not a class struggle. I'm not suggesting reducing Australian wages. You seem to have failed to realise that wages are high in Australia because we do high value work.

You're suggesting effectively subsidising low value work here by making Australians pay more for stuff in order to pay other Australians Australian wages to make things that could be made in Asia for a much lower cost.

Another way of looking at it is you want to simulate the costs of a lower Australian dollar for imports, while denying us the benefits of a lower Aussie dollar for exports.

I want us to race to the top, not the bottom. I want us to concentrate on doing more high value work rather than distorting the economy to encourage us to do more low value work.

And I also recognise that in low wage countries, wages are improving. More trade with these countries puts upward pressure on wages there.

Aidan,

Consider this, A rich man buys shares all his life, then on retirement sells his shares, and lives off capital. If he sells $100k shares p.a. with a capital gain of say $50 000, he presently pays $15k p.a. in tax, under your scheme, he would pay far less after "expenses