Unfortunately there is no 'courage' or 'imagination' to be seen in the current Government. And, there is nothing to say that the previous Government would have shown any courage or imagination if it had been in the same position.

Governments of all colours are interested only in their own fortunes; and when they are caught with their pants down, as the current one has been, we all suffer.

I'm looking forward to the day when politicians can be sacked by the people at any time during their terms of office if they do not perform.

Polititicians, not workers, are the ones who should be losing their jobs now.

On the contrary, Leigh. The politicians should be working for the first time in their lives right now. They're the ones who should be bowing, scraping and busting their backs to feed the parasite-oligarch financiers who caused this colossal disaster. They're their mates after all. Like Bob Carr and his bosses at Macquarie, or Turnbull and his mobster bosses at Goldman Sachs, Costello and the World Bank, etc. Corrupt scum the lot of them.

But no, they want workers to now just feed even more into a yet greater scam yoking the economy tighter to the financiers' monetarist cancer!

And Levien, don't push that old rubbish about Keynes (this time claiming he got us out of the Depression!). If we'd relied on Keynes Mussolini and Hitler would have won by 1943 at the latest. Forget Lend-Lease for starters. After all, Keynes' theories were - even by his own admission - most compatible with one of his greatest fascist admirers i.e., Hjalmar Schacht, the mastermind behind Hitler's rise.

Like most articles of its type this one proposes a range of "solutions" to problems that may well make the problems worse - or perhaps create a whole new set of problems. First off, the crisis did not originate in Australia. It came from America and Europe, therefore regulating the markets here to fix a problem that occured somewhere else would not seem appropriate.

Regulating banks ect to better stimulate the economy.. All this sounds attractive but the problem is that, as both sides of politics have found to their cost, regulating or madating to achieve some end in the economy - create more hard industry, ect - often cost billions to no result, and may have unintended effects. Tax breaks for the film industry, for example, resulted in the rich not having to pay billions in tax dollars and a lot of completely forgotten films..

Regulation of lending was dropped decades ago for good reasons. You will find that by the time its put in place the economy will be reviving on its own, and the regulations will hamper growth.

Activitsts frequently cite the failures of the market, and conveniently forget that the failures of market regulation - particularly knee-jerk regulation - have been more numerous and costly.

People still are not getting to the root of the problem, which in this case is key to understanding it, and proposing useful fixes. Here is an article about the Canadian situation, which should be of interest as the two countries are not that dissimilar in many ways: Global Financial Meltdown: Forces beyond our control, or the greatest scam ever? http://www.rudemacedon.ca/greatest-sting-ever.html

A Biblical Perspective on the Economic Crisis

Some words from the Prophet Amos:

2.6 This is what the LORD says:
....
They sell the righteous for silver,
and the needy for a pair of sandals.

2.7 They trample on the heads of the poor
as upon the dust of the ground
and deny justice to the oppressed...

5:10 you hate the one who reproves in court
and despise him who tells the truth.

5.11 You trample on the poor
and force him to give you grain….

Haven't we, metaphorically speaking, done all this? Have we not denied justice to the poor and despised those who tell the truth about eg climate change. Have we not sold the righteous for silver?

I do not think our current travails are a result of some miraculous intervention on the part of a wrathful God out to punish us. But I do think that had we all behaved somewhat more responsibly, had we concentrated on charity and justice instead of the pursuit of a fast buck, we would not today be suffering the consequences of our excesses.

Curmudgeon,
"more numerous and costly" -really?
Do you think that, in aggregate, the costs of all the ill-conceived regulation schemes exceed the capital and production lost in the current unfolding catastrophe? Few countries haven't used development policy of some kind to grow their economies, particularly Japan and Korea and their top management did not receive a fraction of the salaries of the West's current managerial incompetents. Read an economic history of Japan, it will be instructive.

Good article :-) - glad to see someone else who promotes a mixed banking sector - with a role for public banking....

But this stuff about Keynes and Fascism? Tell me:do you think Bob Hawke was fascist too?

(I do think, though, that the ACTU compromised far too much for not-enough in return - Kelty wanted the Swedish model...and Hawke was edging towards neo-liberalism - while organised labour was demobilised...)

Truth is this: many of us (including me) would love to see progress driven by class struggle... But all manner of factors have conspired to weaken organised labour...

If there are liberal bourgeois elements who want social democracy....if we work with them does it make us 'fascist'? Even Karl Marx needed to support of Engels to complete his work...Equating liberal corporatism with fascism is a mistake I think.....

There are all manner of interpretations - but let's remember what Axis facism meant: violent and expansionist militarism, racial hatre and genocided, repression of the liberties of civil society.... We associate all these with fascism...

Be careful the words you used when thinking of possible misinterpretation...

I think there may be more to that than the eye sees. Official wages are one thing, and unrecorded wages are another. If you pay peanuts you get monkeys. [ someone said ] Enormous pay outs after a company collapse under the weight of it's own debt. [Job well done ] Maybe there's more to it than mismanagement. Is this liberalism.

Steve Keen at Debtwatch makes a compelling case for resetting the parameters under which banks can create money/debt. Private debt to GDP in Oz has reached 165% where long term levels thru the 20thC were below 50%. The line of credit to business for leveraged investments like Equity buy outs which do nothing to increase production have lead to the self inflating asset bubble which has now burst.

Likewise the housing bubble which he predicts is still yet to burst.

The trouble is not so much 'the market' or Capitalism as the distorted and counterfeit market that regulators allowed to fester. Money has a very limited role as a commodity. Money is created as debt in our system and the old FRD and SRD system worked quite well thru prolonged steady growth for decades.

In his March missive Keen questions the wisdom of Rudds substituting of public debt for private debt.

The cash handouts are a joke, the money will be needed when unemployment rises. If this recession goes on for a couple years as some predict Rudds cupboard will be bare very quickly.

Seems Ewins is trying a swipe at my point about Schacht and Keynes. Couldn't have been less clear, or more irrelevant commentary, on another's comments.

"but let's remember what Axis facism meant: violent and expansionist militarism, racial hatre and genocided, repression of the liberties of civil society.... We associate all these with fascism...Be careful the words you used"

Yeah, thanks Fabian schoolmarm. And Keynes' personal friend Hjalmar Schacht too: agreed with Keynes' theories for state supervision of monetarist manipulation and austerity. Schacht oversaw the financing of Hitler from before 1933 and through the Nazis' takeover of government, eradication of unions, armaments drive and war - as the Nazis' Economics Minister. All quite "fascist" by any sensible definition.

Keynes' notions around multilateral clearing, and Schacht's near-identical and implemented "conversion fund" describe the fascist version of the trickery that actually preserves reigning monetarists' claims over odious, unpayable debt.

The situation is similar now in that the massive derivatives bubble can be compared to Weimar Germany's own unpayable bubbles of hyperinflationary excess and reparations debts. Schacht - with Keynes' approving nod - spent his way into Nazism's rise and war drive.

Such Schachtian/Keynesian notions of debt conversion match neatly the latest imperial ventures around a revamped IMF as global clearing house (as pushed by Gordon Brown and his adviser Sir Alan Greenspan), and the equally absurd and nasty Paulson-Bernanke "bad bank" concept.

Palimpsest: the real point here should be that the debt is mostly unpayable (remember: USD 1.5 QUADRILLION). So most of it just needs to be written off upon the (overdue) declarations of bankruptcy; the parasites can go look for a job, instead of continuing to feed off those who work.

Mac - I am aware of Japanese economic history and it proves my point. Japanese industry developed post-war in spite of Japanese government intervention, not because of it. The Japanese car manufacturers, for example, developed the way they did because of extremely tough internal competiton. See Porter's The competitive Advantage of Nations. You are probably thinking of the period when they developed a market economy and, sure, changing a whole society from feudalism required major govt effort - no one is arguing that point - but the government trying to direct markets in advanced countries? Sorry. Its a waste of time, and widely acknowledged to be so. This is why calls to change "the market" have been ignored - mostly.

Well, a bit of a recession to be honest, is not such a bad thing,
it brings values back to some kind of reality.

Lets face it, things got out of hand, some people thought that
the bubble economy would last forever, they lived and borrowed
accordingly. Now, there is a price to pay, as was predicted.

Certainly for WA its a good thing to calm things down a bit.
When people earning 200k$ go on strike, when those not earning
6 figures think that they are hard done by, clearly values
were a bit out of whack.

As Warren Buffett said, its when the tide goes out, that we
see who is swimming naked. All those people who borrowed to
the max, who thought that the bubbles would never burst, will
learn the hard way.

Lets face it, a nation with 5% claimed unemployed, with an
average wage of around 59k, with every perk from overtime,
long service leave, holiday leave loading, 9% super payments,
5000$ baby bonuses, over a million big screen tvs sold last
year, is not actually doing it tough.

curmudgeonathome,

I can remember these same arguments 20 years ago when I was studying Asian Development, the roles of MITI and the keiretsus,for example,in development, were contentious,and interpreted according to one's ideological bias. I was referring to the post war period when the Japanese financed industrialisation by "over-lending" well beyond Western prudential limits, certainly they paid the price in the 90s, but after 40 years of growth. In my opinion the Japanese, Koreans and now the Chinese employed a modern version of mercantilism. My comment in regard to the capital and production losses in the unfolding debacle compared with the losses incurred by government attempts "to pick winners" still stands, only time will tell.

mac
"do you think that, in aggregate, the costs of all the ill-conceived regulation schemes exceed the capital and production lost in the current unfolding catastrophe?"

The capital and production lost in the current unfolding catastrophe are *a sub-set* of the costs of all the ill-conceived regulation schemes: see http://mises.org/story/3128

Siamdave,

The essay you referenced made entertaining reading and is most thought provoking. Very clever and quite obvious most of it, but hard to grasp in full.

I repeat the link here for those who missed your post or didn't check out the reference. It does take a bit of reading though.

http://www.rudemacedon.ca/greatest-sting-ever.html

PeterHume,
If I understand correctly,
you interpret the current difficulties as a product of inept regulation in the US(or more precisely, regulation) and that it is not due to laissez-faire policies. Also, under perfect laissez-faire conditions the market could not, in effect, "fail",even though enterprises, including banks, might fail, failure is caused by government intervention.If economics were a science,this could be resolved with a minimum of ideological bias,however it isn't. If we were all economists, and the assumptions that economists make about economics were laws, our economies might function "economically",so for the time being I'd prefer regulators to oversee the economy.

Yeah, great concept. But if the regulators are corrupt, and allow these various mass crimes to happen, then "regulation" would really be a bit like setting rules for the coroner's examination of corpses during Pol Pot's time.

The "regulators" are the first that should be arrested and imprisoned, preferably with labor duties to help build the infrastructure they allowed their mates to loot from the people.

Can't understand why u say that mr peterhume. This is a fat cat disaster. Executives get paid molty millions for creating disasters like this. why shouldn't there be checks and balances, in the system.
An economist is no better than a weather forecaster.

mil-observer,

Wave the Red Flag as much as you like comrade, you're about 100 years too late.

What red flag? What drugs are you on?