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.