Comments on: GDP growth does not equal a quality Australian economy.

By: Greg Atkinson

Greg Atkinson — Thu, 14 Apr 2011 03:41:36 +0000

It really is a mixed picture out there Ned. I saw on Bloomberg TV last night that Goldman Sachs were saying it was time to sell out of commodities and lock-in some profits but plenty of others reckon commodities prices will just keep on rising.

I can’t see much to be positive about except if China keeps powering ahead but to be honest, I don’t believe that China can power the global economy alone. Yes there is always India but the trade between India and China is now so large now that if the Chinese economy slowed it would also drag India down and the effects would ripple across the other BRIC economies.

Anyway I will write more on the subject when I am back in sunny Japan. Right now I am in the airport in Shanghai where the free wi-fi service is probably quicker than the NBN back in Oz

By: Ned S

Ned S — Tue, 12 Apr 2011 08:45:11 +0000

Excellent link -- Thanks Greg. Time to have a think (if one hasn’t already done so) about how one’s investments and job and income security and such like are tied to the broader economy as opposed to mining maybe?

By: Greg Atkinson

Greg Atkinson — Sun, 10 Apr 2011 01:22:36 +0000

I have been talking about how the mining boom has been covering over how the rest of the Austrlaian economy has been sliding backwards for quite some time. Finally it seems a lot more people are talking about this issue now as per this article in the SMH on the 7th April 2011: No debate as Australia hollows out The longer the mining boom runs the more damage it does to the rest of the economy and our policy makers seem asleep at the wheel.

By: Vince L

Vince L — Mon, 08 Nov 2010 11:20:37 +0000

I think we pretty much destroyed the manufacturing sector in Australia all on our own.

By: Mervyn Jacobi

Mervyn Jacobi — Tue, 05 Oct 2010 21:39:41 +0000

I know it is hard for people to understand, but the economical value of a country is more determined by the top personal tax applied, If you look at the tax applied by the US over the years, “History of US tax”, you will see the tax has been through chaotic changes, and the recesssions or depressions in the 1930′s and today, show that trend, “Stop the uncontrolled CEO’s and others, from taking obscene incomes and forcing high costs of goods and services on low income earners, and poor economy on industries to force closurers”, by appling a higher top tax, it was 66.6% in australia in the years from1950-1971, and the economy was in a prosperous situation. The low income employees, would have to have a no tax probable $30,000, to keep within the 30% of GDP or the government would have to spend much more -- not on themselves as they had been doing previously, but on protecting our country from preditors -- as mining export corporations, the reciprocal imports destroys our own manufasturing industries and much farming.

By: Greg Atkinson

Greg Atkinson — Sat, 16 Jan 2010 10:05:28 +0000

The latest unemployment figures have me a little puzzled. Where are the new jobs being created I wonder? I will look into this over the next few days.

By: Dave L

Dave L — Sun, 08 Nov 2009 08:29:19 +0000

But the RBA & Treasury will continue to focus on GDP. I am not sure if they have enough depth to contemplate the merits/demerits of focusing on GDP growth alone.

By: Greg Atkinson

Greg Atkinson — Fri, 06 Nov 2009 01:24:20 +0000

Thanks Niko. I just try and raise some views that don’t get a lot of airtime in the mainstream media.

By: Niko

Niko — Thu, 05 Nov 2009 07:27:28 +0000

Great post. Good to see someone seeing through the spin.

By: Ralph

Ralph — Thu, 05 Nov 2009 02:56:16 +0000

Yep, climate change is a red herring. I reckon the world talks big about climate change because it’s too $hit scared to fess up about peak oil. And peak gas, and eventually, peak coal. It’s all just too big to contemplate.

It’s taken us probably 150 years to build the modern economy based on cheap and abundant oil. Now we’ve got 30-40 years max to find something else to power the global economy. And we’re in no hurry.

I agree that climate change is spurious at best -- something that we can quibble about and that our grandkids may get to witness. But peak oil is something that is geologically provable, will affect us in our lifetime and no one wants to talk about it. Probably a good enough reason to jump into oil exploration stocks.

By: Greg Atkinson

Greg Atkinson — Thu, 05 Nov 2009 02:45:06 +0000

Ralph the problem we have now as I see it is most of the public cheer when GDP grows but really have no idea why they are happy. They are simply told that positive GDP is good and so that is the end of the debate.

Few in the media bother to look behind the numbers and even some of the leading financial journalists don’t seem to really think about the quality of economic growth.

Your point about Peak Oil is important for two reasons because:

1. We don’t seem to have an energy policy in Australia aimed on getting us weaned off oil and;

2. There is actually a point at which the world’s C02 emissions will start to decline anyway because we begin to run out of oil and coal.

Maybe we can solve a lot of future problems by simply focusing on reducing the use of oil and coal? We could stop exporting and using coal over the next 20 years and that would make a big difference but ooops, I forgot about “clean coal”, silly me

I also don’t buy into the “poor China needs cheap fossil fuels to develop” story. If they can spend a fortune building up their military then they can afford to invest in cleaner energy generation.

By: Ralph

Ralph — Thu, 05 Nov 2009 01:40:25 +0000

Well said, Greg.

I’m sure GDP is not the best measure of economic activity, but that’s what we have for now. Much of it is political games, as you say. It looks like a bit of an exercise in churn. People in work, money spent, trinkets produced -- it’s all good if the conveyor belt of the modern economy can be kept spinning and everyone can purchase more stuff. Genuine longer term outcomes for society are all secondary really.

And I think you’re spot on re the lack of interest in the rate of depletion of natural resources. That’s something that never ceases to amaze me -- that we are in a hurry to exploit finite resources that by their very definition will run out at some stage in the medium term.

Take peak oil for instance. No one disputes that it will occur -- just a matter of when. Even if we’re optimistic and say it occurs in 2040, that’s only 30 years to completely overhaul the fundamental building block of the modern economy. And no-one seems to care -- we’ve got time, we’ll find more oil. Forget climate change, I just find that incredible.