"If unemployment turns sour, who should we blame?" is an odd title. It implies unemployment is not sour but may become sour.

"If unemployment turns sour, who should we blame?" try global warming. I am sure many will come up with some 'science' to prove it.

Fred, the blame goes to number 0 and responsibility lies completely with labor state and now the federal labor government in their socialist quest to force up artificial housing values by their urban consolidation policies and practices. What a shallow and rude political failure to achieve higher wages. Labor does miss the control achieved within the now demolished berlin wall and with urban consolidation have achieved this bygone collective result. It is a pity so many non thinking and vested so called individuals supported this. It just goes to show that group movements collect the so called objective in their sweep. The community costs lay at the feet of labor and their blind supporters including so called think tankers and assorted institutional hangers on who milk private capital for their big government supporters. A labor local government council stated that they do not want any more affordable housing. Say no more...

I have to agree with Dallas on this one. This government seems to be hell bent on following ideology (just like the previous one): They're introducing inflationary workplace relations legislation, a stimulatory budget and are engaging in politics which drives high achieves away, all because that's what their ideology demands.

It seems to be a simple question to answer: who to blame? Starts with a Rudd, ends with a Swan and has a Lizard in the middle

I read Dallas's post and thought it must be a caricature. Apparently not.

Apparently babbling on like twit is okay as long as you describe your opponents as "socialistic" and gibber on about something along those lines. I take note, he hasn't actually offered any actual of proof for his assertions.

General economic changes take a long time to filter through from their cause. Any economist will tell you that inflationary pressures take years to build up. That puts the fault of current inflation on the coalition government. Lack on investment in training and infrastructure have created bottlenecks within the economy. Although to be fair, it can be politically difficult to do these things. The coalition were not horrible managers of the economy. I felt that they simply missed a golden opportunity to really invest for the future.

To blame the Labor government for any immediate rises in unemployment is stupid. Rising interest rates over the last few years will be one of the factors, I suspect. One of the effects of higher interest rates is increase unemployment. Unemployment rises which helps contain wage inflation. It's not all that fun, but thats how the reserve bank operates. It has seemed to have worked for the last few decades. We don't have any other better methods, unfortunately.

"I have to agree with Dallas on this one. This government seems to be hell bent on following ideology (just like the previous one): They're introducing inflationary workplace relations legislation, a stimulatory budget and are engaging in politics which drives high achieves away, all because that's what their ideology demands."

Quite frankly thats rubbish. Collective bargaining Agreements gave a huge surge to worker productivity when they were introduced. Wage systems like AWA's have never been proven to increase worker productivity in the macro scale. When they were introduced in New Zealand, worker productivity collapsed. Worker productivity is the corner stone of economic development.

What are you babbling about Dallas?

Are you trying to suggest that the long mounting housing affordability crisis is the fault of a government in power for all of six months?

The blame must be shared between a class of aspirationals who desired the most expensive Mcmansions and to get rich through becoming investors in the propety market and the Howard government who encouraged them by first cutting the capital gains tax they were paying and later providing a first home buyers grant. As RBA govener Glen Stevens recently pointed out, the effect of this largely middle/upper class welfare was simply to increase both demand and the size and cost of the houses demanded, ultimately blowing housing prices out of all proportion.

And yet many of these people actually believed that they were thinking for themselves and acting as individuals when all they were doing was following the latest mass trend - convinced that they were not running with the herd, everyone around them coincidently just happened to be running together in the same direction at the same time.

The housing affordability crisis is the hangover from a worthless and thankfuly gone government and sheer human AVARICE.

If Dallas read my opinion piece he or she would know that I see the Rudd budget as deflationary not stimulatory.
Look at Table 2 Page 10-9 of Budget Papers no. 1. http://www.budget.gov.au/2008-09/content/bp1/html/bp1_bst10-03.htm

You will see that government tax revenue as a % of GDP rose under Howard from 22.3% in 1995/6 to 24.7% in 2007/8. Under Rudd, taxation revenue is projected to fall from 24.7% of GDP to 23.9% in 2011-12. Government spending will fluctuate but basically resume the downward trend that we saw under Howard in his first two terms but not the last two. Don't believe this rubbish about the Rudd Government being a high spending, high taxing government.

When you consider that the Swan budget is likely to be quite deflationary – reducing domestic demand by 1/4 to 1/2 per cent – and that this will happen at a time when unemployment is likely to rise by up to 1 percentage point, I consider this very “brave’ and the Government deserves praise for its courage.

Perhaps the economic circumstances over the next two years will demand a more stimulatory budget but that's not what we got.

Fortunately the Rudd Government has left itself an opening to draw on the three investment funds (capital and income) from 2009-10 if the unemployment figures turn ugly. This flexibility is good not bad

Unemployment figures are a joke, they in no way reflect true unemployment [or under employment]

Working as little as 2 hours a week is classed as FULL employment [thanks to the howard-esq style of unemployment measure] I dont want to talk into a debate because every govt does it , the numbers simply arnt to be relied upon.

Ok they may go up [but i doudt it , any real movement in unemployment can see them cut off the dole at whim['creating' 30,000 'jobs'using the 'fall' in numbers] or like they did in the 90.'s they can be moved into other statistical classifications [ie become trainee's ,or pensioners ,or sickness benifits,[or the neo public service]

There is really no end to the creative accounting we can do with to those reacting to good or bad numbers ,
i personally favour training them in new teqnoligal needed specialities [that at the end of their training sees the best in the course set up into their own small buisness [running out of the very training center they were taught in ],that in better times repays the cost of their setup ,like turning hemp into bio fuel [locally]

ie use the new infastructure fund to set up really new [NEW] buisness models to train the untrained or under employed ,we then become shareholders in a NEW buisness
[we all know a dollar today will buy less tomorrow, so funds are a great way to lose value.that thus becomes some funds managers new bonus

On this string "socialism" and "the market" have been loosely used.

I understand socialism to mean government ownership of the means of production as in the USSR. The Australian Labor Party is no more for government ownership of the means of production than the Liberal Party. Labor is connected to the trade union movement which is a feature of capitalism - not socialism. Under Lenin and the other Marxist dictators there were and are no free trade unions. Trade unions did not have a right to strike or collectively bargain but were reduced to transmitters of the party line to the workers. Regardless of whether Labor or the Liberals are in government Australia is not socialist.

I understand the market to mean what Adam Smith described in 'The Wealth of Nations', and market theory is based on that model. Freely operating supply and demand rest upon three assumptions:

1. No producer is large enough to affect the market by itself.
2. No consumer is large enough to affect the market by itself.
3. Commodities are essentially indistinguishable. (One barrel of oil or load of wheat is much the same as another barrel of oil or load of wheat.)

The first assumption is generally not true since much production issues from large corporate entities which have a great deal of power to flood or withhold goods from the market and so manipulate price.
The second assumption is generally not true since many purchasers are themselves large entities such as Coles-Myer and the government which have a great deal of power to affect demand and so manipulate price.
The third assumption is generally not true since manufactured commodities can differ widely in capabilities so the consumer cannot readily compare one product with another.

The market as envisioned by Adam Smith exists in farmer's markets, opal miners in Cooper Pedy and a few other places. However, these instances only apply to a small segment of the Australian economy.

On this string the words "socialism" and "the market". have been used to express various ideological predilections and have contributed little or nothing to understanding.

Green labor State Government regulated land supply (Urban Consolidation/Constraint) is directly proportional to housing price and therefore choice.

Lots of people chose to get in on the renovation/investment property craze, collectively bidding up the price of housing/rent as they aspired to be ever richer and more affluent.

A small handfull of people doing this would not have been harmfull but too many people wanted for too much materially, putting affordable housing out of reach in the process.

The Howard government left Australia

the highest inflation since the early 1990s,

interest rates among the highest in the developed world,

record levels of debt in the economy,

housing the most unaffordable ever,

historically low levels of household savings
http://tinyurl.com/65yuwq

record foreign debt,

record Current Account deficit,

slowing growth,

investment in Higher Education in reverse,

one of the most draconian workplace systems in the western world, aimed at putting downward pressure on pay conditions and jobs security.

They managed to 'achieve' all this while governing during the most remarkable period of global prosperity in a generation, and a once-in-a-lifteime mining boom.

What do the Liberal 'achieve' on the economy -without- those benefits? We need look no further back than the results of Howard as Treasurer, 1977-1983:

BUDGET DEFICIT
Before Howard $3.2 billion
After Howard $4.3 billion

INFLATION
Before Howard 8 per cent
After Howard 11 per cent

GROWTH RATE
Before Howard 1.6 per cent
After Howard negative 0.4 per cent

UNEMPLOYMENT
Before Howard 6.3 per cent
After Howard 10.2 per cent

The Canberra Times, 9 April 2007

http://canberra.yourguide.com.au/news/opinion/opinion/howards-record-as-treasurer-questioned/573574.html