News That’s Fit To Punt – 13/Jul/2014

Garbage In, Garbage Out Process

Leading economists are rejecting the basis on which the Abbott Government is proceeding with cuts. They don’t think there is a budget crisis. At all.

We knew this going into the election last year, we’ve known it since; people ave been saying it across different media for most of the time since; and the only people who think there is a crisis is the Coalition Government. I know we’ve been through this topic on several occasions, but basically our Federal government debt is miniscule compared to the debt carried by other OECD nations; most of the government debt we do carry is in the local councils; and the big debt problem is in the private sector, where low interest rates have ruled supreme since the Global Financial Crisis has allowed for bubbling asset speculation on borrowed money.

In short, the government could possibly wipe out the debt in a small number of years if it were bloody-minded enough to not to care what happened to he economy. But nobody asked for this, and it would rewrite the social consensus about what government does. While that is an enormous problem all of its own, I want to focus on something for a moment. This government came up with the worst-received budget of all time on the assumption that there is a budget crisis when there manifestly is no crisis at all whatsoever. it stands to reason that none of the solutions they’ve reached for have gained any traction in the electorate.

Never has a bigger load of garbage been shoved into the process of government in this country, and never has it given rise to so many garbage policies you wouldn’t wish upon anybody (okay, except maybe Iran).

Cue Jerry Harrison

The myth that grew up around Senator Ricky Muir arriving in Canberra was that he was a ‘Bogan’ – meaning exactly what, it’s hard to say because Bogan-ism isn’t a political credo, it’s a class-conscious insult – but here’s an article that reveals he might not fit the prejudices of the media. The way the media have portrayed him, he’s been anything from the second coming of Pauline Hanson to some rural Victorian village yokel idiot who got lucky in the exchanging of preferences (as if such things happen regularly).

The so-called ”rev-head senator” outlined personal passions that include organic food, which he grows and eats from his garden in rural Victoria, preventive healthcare, which he is interested in championing at a political level, and renewable energy, following his surprise intervention last week to protect the Australian Renewable Energy Agency from the government’s budget knife.

——

Senator Muir revealed a broad belief in the environment, renewable energy and organic food. ”Just because someone is a motoring enthusiast doesn’t mean they are an environmental vandal,” he said. ”I don’t think many people would argue that renewable energy is the way of the future.”

Asked whether he would use his balance of power influence to push for preventive health programs, he said: ”I will certainly look at it with a very open mind, that’s for sure.”

For the Coalition, that’s a Trojan Horse. The guy called himself a “motoring enthusiast” sounding like he’s pro-roads and pro-construction and he’s turned out to have a far more nuanced and sophisticated take on the environment and civilisation than anybody on the side of the Coalition. You could do a lot worse than that, and in looking at the sorry lot in the Coalition ranks, Australia has done a lot worse than Ricky Muir for a very long time, but Australia might have just got lucky right there with this Senator.

She said let’s ride, rev it up, rev it up little boy and ride!

Not A Bubble (Nudge Nudge Wink Wink)

As we’ve learnt over our lifetime, nobody ever sees the big financial disaster coming. It’s always “This time it’s different”. So in that spirit, I just want to say it’s very different this time with housing in Australia because there’s a ton of money being laundered out of China looking for landing spots and Australian Housing has turned out to be one of those asset classes.

Thus you have to take it with a grain of salt when economists say “yes it’s overpriced but no, it’s not a bubble”. If you believed that then maybe I can interest you in this nice little coat hanger-shaped bridge in Sydney Harbour that you might want to buy. The conventional wisdom now is that it’s never a bubble until it pops.

As with these things I’ve had a little while to reflect on it and it seems if there’s one thing that limits future growth in an economy it is rent-seeking and there are a lot of rent-seekers. This is understandable because housing construction forms such a large part of the economy in Australia, somebody has to be the lobby that twists the economy in some way. In that sense negative gearing appears to be just one of the economically irrational policies we have going. Naturally if you look through old articles in the SMH for negative gearing, it is is littered with articles defending the policy – which in turn reminds us of this blanket denial that there is no bubble going on. Sure. No bubble, and negative gearing is working a treat.

So as with most things to do with what pundits say, you can be assured of two things. They’re wrong, and we’ll be the ones to pay for it.

The World’s Worst Kept Secret Is ‘Out’

Ian Thorpe says he’s gay. I don’t know what to say except we knew about this from way back in the heady days of the 2000 Sydney Olympics and all those gay people saying they gave him a pearl necklace. The denials over the years were comical and the topic of much derision. In this day and age, it shouldn’t be such big ‘news’ but I guess wowserism is always going to make this news.

People, come on, he didn’t win because he was or wasn’t straight or gay.

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