It can be said that a rising tide, rises all boats. But, those boats must be in the water. Thus an improving ecconomy only benefits those who have a skill that is in demand or assets, which are increasing in value and are saleable. Too many Australians are not receiving any benefit from the booming economy.

This article indicates that Rudd’s approach amounts to little more than tweaking the current way doing things. That’s nowhere near good enough for me.

We’ve got huge pressures bearing down on us, in the form of peak oil, an ever-rapidly-growing population with an ever-shrinking resource base, and climate change. And yet stuff-all effort is going to be put into these things, except perhaps the third and least important of these big factors, and the one that we have least control over in Australia.

This is why I won’t be voting for either Howard or Rudd – because they both entertain the same endless-expansionist paradigm conventional-economics, that pays no more than lip service to the true fundamentals of economics and quality of life; the demand-supply equations and the protection of a healthy sustainable resource base.

Their approach (and they really are virtually the same on this) flies blatantly in the face of these fundamentals, and is bound to take us headlong into an economic crash scenario.

We desperately need a sustainability party. Unfortunately neither the Greens not the Democrats come anywhere near this.

And anyone who wishes to vote for a minor party and to specifically vote against the major parties, CAN’T DO IT, as their preferences filter down and end up for one of the two major parties, in just about every case.

Whatever we may say about economic growth it is clear that the proceeds of growth are unevenly distributed. Profits are at record levels as reflected in the record high for profits in the wages-profit share; this has not arisen by accident but is a first cause and then consequence of neo-liberalism and economic policy (the shift began under Labor with the support of the ACTU); people understand, esp ‘cause of “workchoices” that the government is about helping the rich, at their expense (again began with the support of the ALP and the ACTU). Notice that the fact of growth is just assumed by most to be due to structural changes in the economy, i.e. neoliberalism, but if Australia is riding the wave of the global commodities boom it cannot be so for a commodities boom led growth isn’t really due to structural effects in which case rising inequality is a direct consequence (designed as such) of policy whilst growth is a bit of “the lucky country” dynamic…I think voters have a gut feeling about this and understand that Howard is conning them. This and the myth of “strong on national security” are the twin myths of the Howard era, established and sustained with a complicit corporate media which of course is understandable given the direction of the proceeds of growth. Labor understands where power lies and will be different but mostly at the margins of policy. Politics and economics in Australia is dominated by corporations.

Regarding Kevin Rudd and empathy:

Mark, today on OLO you're claiming that: 'One of Clinton's many exceptional qualities as a politician was his ability to project empathy for ordinary citizens. That's something Kevin Rudd understands well.'

On 21 June 2007, you wrote in another OLO piece: 'It’s tempting to suggest that Rudd’s determination and his single-mindedness might leave him somewhat lacking in empathy, and that he might be the worse for not having had a more rounded life.'

Will the real Kevin Rudd (or the real Mark Bahnisch) please stand up?

FrankGol, good point. What I was talking about in the review of the Rudd bio was the way that he has trained himself to talk to "ordinary people" as a quite deliberate political tool of the trade. He's good at it, it just doesn't come from the heart, I don't think.

cheers!

mark

yer right, guys, parliamentary society doesn't work for the bottom half, but it was designed for the top 10% so no surprise there.

frank, the apparent variation in the warmth of the kevinoid is due to manipulation of the temperature control. this is the latest version 'politician' bot- very nearly superhuman, with the right programming.

"you get the government you deserve", so don't blame the pollies for making a good thing out of oz laziness and ignorance. they would have stayed in property development and used car sales, but this pays better, and is much easier.

Mark is right - there's a disjunction between the media hoopla about the strength of the macro-economic indicators and people's real-life experience of the economy.

Part of this reflects the shallow nature of media reporting of the indicators that the government trumpets as evidence of its superior management abilities.

Case in point is the quarterly CPI numbers. You don't have to dig too far below the surface to find that headline inflation has been held down by China's influence on traded goods prices.

Inflation in the non-traded sector (things that are not readily exported or imported) has been going up much faster. This is a problem, as it includes lots of important stuff for the average person like health, housing, education, insurance and haircuts. (You don't buy a Plasma TV everyday).

Likewise, the media trumpets the lack of growth in average weekly earnings as a positive. But it just as easily be seen as a negative if you're the person putting in lots of unpaid overtime.

The profit share of the economy is at a record high. And while the CIS Austrian school mob will be saying that's good news in a shareholder economy, the fact is most people derive the lion's share of their income from their human capital, not financial assets.

If he were to win another election and maintain his Senate majority, it is clear that Howard's next big ideological frontline would be Medicare and the dismantling of what's left of free health care (unless it is in a marginal seat).

Rudd would do well to urge people to go and see Michael Moore's explosive new movie 'Sicko' on the rank injustices of the dog-eat-dog American healthcare system. That's what would lie ahead under a fifth term Howard government.

demos,
Is there anything you are not cynical about?
Go have a nice cuppa and think about what you have said.
I think that those who generalise are themselves lazy
and don't take the time to look at other perspectives.
What do you think?

The author makes some telling points. No economy has ever performed so uniformly well that everyone evidently benefits. By focussing on areas of genuine stress (such as housing costs) and pushing a few populist buttons (such as petrol prices) it’s possible to accentuate the negative even in an economic performance that, considered objectively, is a pretty good one.

Mr Denmore’s post is rather a case in point.

I haven’t seen the media anywhere trumpet the lack of growth in average earnings as a positive. Partly, this is because it would be factually incorrect – most measures of earnings growth are quite robust at present. Furthermore, the standard line from most economic commentators is that growth in average earnings a little ahead of inflation is most desirable – much faster than this, and earnings growth just ends up as inflation; any slower, and workers’ real spending power decreases. The “goldilocks” ideal lies somewhere between these two, with real wage growth supported by productivity growth, and that’s the line most mainstream economic commentators take.

Similarly, Mr Denmore’s spin on inflation is excessively negative. It’s true that inflation in the non-tradables sector is consistently higher than in the tradables sector, and competition (especially, but not only, from China) is the main reason.

But that’s a good thing for Australian consumers.

The tradables sector includes not only luxuries like plasma TVs but also daily necessities including food, clothes, household goods, petrol, etc.

And the non-tradables sector is mainly services, which includes not only necessities but also luxuries like lawn cutting, domestic holidays, restaurant meals, sports and recreation, etc.

Furthermore, the essential services - education and health - are provided subsidised or free of charge to many Australians. The prices included in the Consumer Price Index are only those paid by consumers, and therefore comprise mainly private education and private health care.

This is why these items represent only a small proportion of the Consumer Price Index, even though they are indeed important services for many households.

See ABS publication here for details on CPI classifications:

http://www.abs.gov.au/AUSSTATS/free.nsf/log?openagent&64610_2005.pdf&6461.0&Publication&F66CB9C7C6C24B94CA257028007F8647&&2005&23.06.2005&Latest

"I haven’t seen the media anywhere trumpet the lack of growth in average earnings as a positive. Partly, this is because it would be factually incorrect –"

Rhian if you look at http://www.aph.gov.au/library/pubs/mesi/mesi21.htm

You will see a .5% drop in average weekly ordinary time earnings for the last 4 quarters. This is the same measure Joe Hockey used to justify a 1.6% increase.

So it is indeed factually correct. :)

Do the political advisors of Mr Howard and Mr Rudd read the items in this forum?
If they do they ought to know that I am a "self-funded" retiree (I claim no merit for being self funded, merely an accident of the lines of employment that I went in for, I could just as easily be a pensioner if I had followed other whims) and truly I have never had it so good!
But having it good is not what will sway my vote, and I am a swing voter. Howard or Rudd, who cares who navigates in the great swells of the global economy?
I will vote for a party and a leader who offers not to rock the boat too much, but who will align the country to contribute to the alleviation of the problems of inequity, overpopulation, starving, unviable nation States, and global warming - as the evidence develops.

ruawake
The chart shows continuous growth in price wages.

Yes, there was a dip in "real" (after infation) wages in mid-2006 as the "banana effect" pushed inflation ahead of wage growth, but that was a temporary effect, and more recent data show real wage growth.

In the year to February 2007 (the latest data available), average weekly ordinary time earnings rose by 3.5%, average weekly earnings of all employees rose by 4.9%, and the CPI rose by 2.1%. This is what the data you refer to also show.

And, I don't recall anyone "trumpeting" the temporary drop in real wages as a good thing.

An interesting note to the issue of inequality. I am reading "The Origin of Wealth" by E Beinhocker who describes a study called "Sugarscape" which attempted to model asset aquisition using some simple rules (the agents were placed at random in areas of differetn asset abundance, had different needs for assets, could buy and sell between themselves to meet needs, could save, and tended to move towards areas that had more assets).

There was no political bais one way or the other.

The results were very consistent, a few individuals accumulated massive ammounts of assets, with large numbers of agents having very little asset accumulation.

The results follow power law principles (a natural phenomenon describing among other things earthquakes, biological extinctions, the number of people's sexual partners) - few few ultra large events, many very small events. I read a newspaper report a few years ago of an experiment on passenger plane evacutations, some people always got out regardless of where on the plane they were, some people never got out, even if they were sitting at the emergency exit.

Maybe we can do nothing to change inequality (it is a predestined or natural part of humans and complex systems??) in the longer term, we certainly have put a huge amount of effort into it and it seems to be without result.

Australia's economy is going to slowly end up like it did around 1987-9, unemployment is soon going to sky rocket when the price of oil reaches $US95 and then even a posible $US120 for a barrel of WTI. Our economy is dependant on this one commodity.
we must reconstruct our transit systems, City Rail might have to work!
when the price of oil goes from $US72 to $US95 when the US Winter sets in, maybe the "you've never had it so good" commnt might not be comeing out of anyone's mouth in the government.
Houseing commission estates are generally aroun train stations in the suburbs, and they have the highest rate of unemployment in Australian (accept the homeless). if only the people around our existing transportation system could go some where ease and maybe we could put the land to better use, houseing productive people, with jobs!
if States lik NSW could kill two birds with one stone and built ports and a high speed rail network with cheaper houseing, which people slowly pay off. if we could built a city with the unemployed nd create jobs in that city, does the economy win? therefore does everyone else win? YES!

for goodness sake Liberalcynic, get thee to a spellchecker,PRONTO!

goddess?

At least Liberalcinic had something to say about policy .
Well may you think your a Goddess but me thinks your very rude.
Is that all you can add?
This is not the first time I have seen you trying to put another poster down because of missing a few letters.
You dont walk on a higher moral groud and apparently Mummy and daddy were busy when others parents were teaching their kids a few manners,
So what- theres a few letters left out.
I do it all the time.
Some peoples brain work quicker than their hands. Some people have very old computers that wont run spell checks.
Try being a nicer person. Who knows you may end up being a lot happier too because its clear your taking out your frustrations on this other poster who make some very worth while comments
Regardless or not if I agree with them.