This editorial in The Australian today is perhaps reflective of the mood starting to take hold across the nation: http://www.theaustralian.com.au/news/opinion/time-to-draw-a-big-line-under-big-canberra/story-e6frg71x-1225832347280

http://www.skynews.com.au/business/article.aspx?id=374838

I note that Labor Senator Doug Cameron is quoted as saying you should never let an academic economist run the economy and that the IMF, the OECD the ILO and Treasury all agree with the method of stimulus. Who does Cameron think are at these organisations? They are packed with academics!

And if he claims that not a cent of this stimulus has been wasted then he is living in dream world.

I would like at least one member of the Government to at least come out and say that there have been some bits that they have got wrong, some parts they have mismanaged and overspent and other areas that are totally unnecessary and they won’t be pushing ahead with them because it would be wasteful and pointless.

As for investing in shares, well Ned it is bit like Australia playing cricket in England. The Australian team know the pitches will be made to suit the English, the crowd will be hostile, the weather unpredictable and the umpires could do anything. But the team get out there, try and play the best they can, overcome the hurdles and come out a winner.

Hopefully I can overcome the many stock market investment hurdles and sometimes come out a winner also

So our big export areas, mining, tourism and education are all down and yet the RBA and Treasury reckon the economy is bouncing back? Mmmm…does not quite add up to me.

Looking at America’s current difficulties should be a wakeup call to even the most ignorant. If it was only America, one could say Oh but they are different. But they aren’t that different – Lots of the developed economies seem to be facing pretty big issues going forward.

Queensland – Our third biggest “export” is Education. I’d like to think the second one was agriculture. But strongly suspect it is “cuddle a koala” while throwing another “shrimp on the barbie”?

Education is an interesting one – I’ve got a sneaky suspicion that a huge amount of it is not that Aussie unis teach anything all that clever, but just that when the kid has their Aussie degree, they’ve cracked a passport to the West.

My concern is that we won’t change in the things where we’d be wise to. And where we do change, it will be change in the wrong direction.

Wonder why the Tamiflu scripts I bought in Oz were made in Switzerland and not here???

This means that Australian’s are starting to think there will always be money around and that the government will be ready to bail them out if they get into trouble. In addition it starts to become less attractive for people to put in the big hours because the higher incomes brackets are clearly going to bear much of the burden caused by governments need for funds to pay down debt.

It is going to be interesting to see how much the nation will change over the next few years.

Disincentives to work – Plenty of them – Self funded retirement is at best an unrealistic dream for most. And once one realises that, the whole focus changes to thinking in terms of what is the maximum amount that government will let me have (and in what types of asset classes [including super with its own special government determined risks and rewards]) and still get a part pension for the perks.

Especially given that we all really know just how many Aussies coast along doing comparatively little – And/or spivving the system in one way or another. Why should I work and pay high tax to support all the others who don’t, becomes the mindset.

Ken Henry has a little problem there with his tax review – On one hand I suspect he could be a socialist at heart? But on the other, he is clever enough to know that you don’t get many tax dollars back from welfare recipients.

This one is old (7 august 2008) but interesting. Especially given that Oz companies just mightn’t be doing so well anymore. Amongst other things it says:

“Treasury’s review of the Australian tax system shows there is little scope for lowering personal income tax, as the nation’s total tax on wages is already well below the average of OECD industrialised countries.

But it says taxes on “investment capital” – including company tax, capital gains and property taxes – are the highest in the world.”

http://www.theaustralian.news.com.au/story/0,25197,24140111-601,00.html

Always a pleasure to talk – Cheers!

With almost wall to wall Labor Governments we are heading down a more socialist path. It is a bad day when a generation expect the government to just hand them everything and begrudge anybody that has worked hard to achieve their own goals.

Actually the ancient Greeks had a system where you could vote someone out of office and that must have made things interesting. In our terms this would mean that the MP’s/Senators could vote one person out of office every year..I wonder who would be given the chop this year in Australia if we had such a system?

I think of the old blokes the depression produced – Their generation was called “The Builders”. They were a rather different breed to what came after (in the West.) Which could probably be described as “The Debt Based Consumers”.

Maybe the “new” way really will continue to work long term? (Debt based consumption driving growth, with inflation to reduce the real debt over time.) And all we’ve had is a nasty fright. But either way, I know the old way was not risky and the new model is.

I just wish I had a better alternative to democracy. I haven’t read much of what the American founding fathers had to say, but what little I have, indicates that some of them had some pretty strong reservations about it. I even get the impression that is why the right to bear arms was enshrined in their constitution? The theory being that if the mob ever voted in a bunch of drongos, they’d be a bit reluctant to do anything too damaging as they knew there were lots of guns out there to keep them honest. Doesn’t work nowadays of course – A bunch of enraged average Americans rising up with their hunting rifles are not going to fare too well against the tanks and what not of the military.

Family is an interesting concept to me. And people’s roles in society generally. I’ve had a reasonable amount of contact with a relatively primitive tribal society that had a large mining company as its “guest”. They wanted all the very good things that come with civilization of course. But there were certainly times when I asked myself if they had any concept of just what they were likely to lose as a result of getting those things.

Not that there is an alternative for us in the West now. We’ve been on a one way track pretty much since the industrial revolution I guess. But I see the downsides to our ways more than some I guess. And have seen benefits to other ways.

Including a society (Russia) that seemed more middle of the road in being partially developed while still appearing to retain ties to their agricultural roots. And a stronger sense of family than we’ve got in the West – Albeit from necessity since the USSR collapsed perhaps? (Wikipedia says “With the emergence of Proto-industrialisation and early capitalism, the nuclear family became a financially viable social unit.”)

I look at democracy and I know it has significant problems inherent in it. And I also know that it is not a system that has truly stood any real test of time. Women didn’t get the vote until around the 1920s. And there have obviously been other systems that have been around much longer than 90 years. Maybe democracy has a saving grace in that it copes better with change than other systems? I’m honestly not sure.

But either way, I do think the advocates of democracy would do well to show a bit of caution. But “Fools rush in where angels fear to tread” as they say. And we sure do seem to have a habit of voting people into positions of power in the West who don’t seem to entertain many self doubts. And who really are just working on a whole bunch of theory (including an economic one right now). I think it’s a concern.

Who is going to vote for someone who is not going to give out any handouts?
What is in it for me?

These are just some of the questions that would go through the minds of many voters.

No wonder Rudd is so popular. Everybody gets a handout. There has not really been much pain so to speak. Glen Stevens just the other day said that this could very well be one of the mildest downturns in recent history.

It takes a great deal of determination and convictions and not worrying about being popular to go against the grain of this sort of mentality.

We are not going to see that with this Government. It is too easy for people to be just plain lazy and still get free money. Why would they want to change the Government? And the Government is not going to change its ways because in its eyes what it is doing is keeping it popular and will get it re-elected. Why change a winning strategy?

Paradoxically, maybe if the financial crisis was more savage it could have broke the mould?

There’s lots of reasons for this. But a real big one is that in the absence of strong multi-generational and relatively broad based family structures, ultimate responsibility for people’s welfare sits very firmly with government.

It’s an old problem. Any society that “progesses” past tribalism and its family structures are not held together through such things as economic necessity and a widely accepted belief system that places significant emphathis on family will encounter it I suspect? At least when times get a bit tough.

But comparatively privledged and developed Western democracies do not seem to have done a very good job at all of coming up with a solution to the problem. In lots of ways, they actually seem to have exacerbated it perhaps?

And such a solution as they do have, which is to give money to government so that government can dole it out as they see fit probably isn’t one that sits terribly naturally with human beings who tend to be biologically programmed to think in terms of the much more immediate me and mine. Certainly when times are a bit tough anyway.

So I’ve got very strong reservations about seeing Western ambassadors galloping around the world singing the praises of the system to the less enlightened.