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106 responses to “The bullet we dodged – just”

  1. Graham Walters

    So what is your alternative? That we just keep putting taxes up and up and keep pouring money into people who never learn how to look after themselves?

    It’s time we stopped pumping money into the poor and started pumping education into them, so they don’t need our money!

    Smaller government = better government.

  2. Paul Burns

    Excuse me Robert, while I throw up ovewr comment 1.
    The alternative is a sensible neo-Keynesian policy when appropriate 9as during the GFC) and a fair just policy that does not redistribute wealth FROM the poor To the rich.
    Yeah, I know I’m ideaistic and naive and I should meekly accept we must live in the Howard-Abbott dog eat dog society, but every bone in my body tells me that’s wrong.

  3. Fine

    Yes, let’s not pump money into the poor. Let them starve.

    Yes, Robert we did dodge a bullet and it amazes me how little credit the government has received for it.

  4. Mindy

    That we just keep putting taxes up and up and keep pouring money into people who never learn how to look after themselves?

    You mean the middle and upper classes who did very well under Howard with all their tax cuts, surely.

  5. Lefty E

    Make the banks and financial sector foot the bill – they were entirely responsible for the GFC after all, not the public. It’s a no brainer, and comment 1 typical of the freeloading attitude of economic elites. These cuts are clearly opportunist, and will only deepen recessions.

  6. bmitw

    And I suppose offering a high income earning woman 75 grand to have a baby is smaller government.

    The Australian tax system contains within it poverty traps which act as a disincentive for those on benefits to re-enter the workforce. What is needed is a restructure of the welfare and transfer payments system not “cuts”.

    This could be paid for at least in part by weaning six figure earners off the welfare teat. I would rather my taxes went to the genuinely needy than to someone who can for example afford his/her private health insurance but gets a 30% rebate anyway.

  7. Sam

    This is to be expected from the Tories. They promised a war against the public sector for years, well before the GFC.

    The mystery is why their coalition partners the LDP have gone along with it. I know it’s nice to be called “Minister” and to get to ride around in the chauffered government limos and so on, but I suspect they will pay a heavy price at the next election.

  8. Howard Cunningham

    Isn’t Cameron and the Coalition British Government cutting all sorts of middle-class and corporate welfare? Surely something the red and very red alike can support.

    I think, compared to the Republicans, and also many of our own right-wing representatives, what we are seeing in Britain is an actual conservative. Not one who is interested in dog-whistle politics on issues such as border security or “values”, but someone who truly believes government should be smaller, and is making the tough and possibly unpopular decisions.

    There are all sorts of measures in Australia that shouldn’t be available to people on comfortable incomes, but the polarisation of the Australian electorate means that’s where the elections are fought, and we love a fistful of dollars. It’s just counter-productive in the long term, because money that should be going into hiring better teachers (instead of more of them), or developing energy efficient technologies, is instead funnelled into middle and upper class welfare, and social engineering.

  9. patrickg

    Howard, you missed the key sentence in Robert’s post:

    particularly the bits that redistribute money to the poor.

    If you take a close look at most the cuts, it’s brutally clear that direct state support and initiatives targeted at the poor are getting the chop, whilst _a wealth_ of subsidies, funding, govt bodies, etc that are essentially corporate or high income targeted are being ignored, or relatively unscathed.

    There is an unspoken “trickle down” ideology operating behind a lot of these cuts, they’re not the utilitarian teeth-gritting necessity they are being painted as.

  10. Sam

    Howard @7,

    Krugman’s point is that now is not the time to be making savage cuts to the budget because it will send the economy back into recession. Cutting out middle class and corporate welfare, desirable as it may be in its own terms, should be replaced with other good spending.

    Have you caught up with Pat Morita yet?

  11. Duncan

    “Smaller government = better government.”

    Where? Can you provide any evidence of this statement, or is it just pure ideology?

    Doesn’t it follow that if small government = good government, the ideal system of government would be one guy calling all the shots, or maybe no government at all?

    http://www.youtube.com/watch?v=7QDv4sYwjO0

    “It’s time we stopped pumping money into the poor and started pumping education into them, so they don’t need our money!”

    What about people who are poor, underemployed or unemployed because they are not very bright, or not suited to formal education, or who’s low paid, menial jobs (y’know, the ones you don’t need a degree for) have been sent offshore by free market “true believers”?

  12. dave

    The pressure on the Gillard government to follow suit is evident by Swan’s statements today about the need to cut spending to bring the budget back into surplus. The rich who have been doing very well recently have obviously recognised that a growing pool of unemployed can be managed and the dog eat dog mentality that grows in societies where ordinary jobs are a prize to be fought creates internal division amongst the poor.

    Its an ominous sign that the size of these cuts and number of lost jobs in the US has no obvious solution in the short to medium term. It is a classic case of privatising profits and socialising the costs particularly given the amount of money spend by governments to prop up the capitalist system.

  13. Ken Lovell

    Complaints about ‘government spending’ are grossly misleading. Most alleged ‘spending’ is nothing of the kind; it’s income redistribution. Taxing consumption or income or company profits and giving the proceeds to pensioners, new home buyers, students etc is not ‘spending’ in any sense of the word that assists constructive analysis and discussion.

    Many of the chronic problems in the delivery of public services are caused by governments’ inability to spend enough. The constant ratcheting up of welfare payments to all sectors of society has effectively crowded out their ability to employ enough public servants and pay them suitable compensation.

  14. Bernice

    As George Monboit makes clear in this piece, who will pay the price of fiscal austerity will be those who can least afford it. And it will be a price that just keeps on giving.

    http://www.monbiot.com/archives/2010/10/18/britains-shock-doctrine/

    Nor do I have any doubt that the same mindset exists in the Coalition party room – the only difference being Hockey’s laughable incompetence re financial matters may provide us with a grim joke or two as we go down swinging.

  15. Fran Barlow

    Howard said:

    because money that should be going into hiring better teachers (instead of more of them)

    Classic false dilemma, with an embedded error.

    We absolutely do need more teachers providing that they are of at least adequate standard. Class sizes are too large in many cases, there’s inadequate choice and teachers are having to deal with too many diffgerent curriculum areas and too many classes etc.

    There’s no practical way of hiring better teachers, (as opposed to not hiring or getting rid of those who simply aren’t going to pass muster in the time required). There aren’t large numbers of people out there who could outperform existing teachers in delivering measurable outcomes if only they were given the financial rewards commensurate with these outcomes. Finding the handful of those who might in practice and luring them to teaching would be prohibitively expensive and in cost-benefit terms would scarcely stack up. I’d like to see a CBA on that!

    What we need is to make better use of our existing teacher pool by improving educational culture and professional standards and resources for professional academic upgrading and so forth. We need to give our best quality teachers admin support so that we can maximise their abaility to attend to the things only they can do. Dollar for dollar, that would be money far better spent.

  16. Steve at the Pub

    ..the public sector workforce is expected to shrink..

    Is this supposed to be a bad thing?

    …slash the size of government, particularly the bits that redistribute money to the poor.

    And the problem with this is what, exactly?

  17. joe2

    Probably no problem with either, Steve, for anybody with a complete lack of empathy or compassion for ones fellow man.

  18. conrad

    “It’s unlikely that the Coalition would have attempted anything on quite the scale that their British counterparts have”

    I imagine that Jeff Kennett got rid of more per head in Victoria, so that’s only because the current coalition are populist idiots with no ideology.

  19. Fran Barlow

    On the other hand Robert, they will, for contractual reasons, be sticking with a $AUD5bn aircraft carrier that won’t carry any aircraft and will be mothballed in 3 years.

    Apparently grants to support teaching at universities are to be cut by 80% or so and research by about 25%.

    One of the amusing side-effects will be a serious hammering for the LDP. They would be so chuffed to be the caboose on the Tory train, I feel sure.

  20. Fran Barlow

    Joe2 …

    Probably no problem with either, Steve, for anybody with a complete lack of empathy or compassion for ones fellow man.

    Perhaps those 490,000 or so can nip down to the local pub for a drink with Steve? Then he could show them his compassion by buying the first round.

  21. The Groke

    Oh, I don’t know about that, [email protected] The Steves of the UK will probably have a brief gloat as desperate unemployed line up for ever more poorly paid casual jobs in his pub, but the smirk will be wiped off as fewer and fewer people can spend money in the bistro or on the pricier drinks, while the escalation in desperation, mental illness and crime will have a definite impact on the atmosphere in pubs and bars.

  22. Fran Barlow

    Robert said:

    Fran, I’ll be very surprised if the aircraft carrier actually ends up getting mothballed.

    They are very expensive to operate. Perhaps they could, like the Russians, attach a nuclear power plant to it, and park it someplace where the output could be plugged itno the grid.

    If it was near some place which was short on parking, they could rent out the decks. Perhaps they could have soccer matches on the decks, use some of it for social housing and use it on New Years Eve for fireworks displays.

    I’ve heard they are setting aside the expansion of Heathrow. Now we know where extra aircraft can land.

    So you might be right Robert. No naphthalene yet.

  23. Ken Lovell

    Robert @ 15 wasn’t Prime Minister Jim Hacker going to replace the Tridents about 100 years ago? They must be the British equivalent of the second Sydney airport.

  24. MikeM

    The Economist this week points out:

    Even after Mr Osborne’s savagery the state will still consume in 2014-15 the same share of GDP—41%—as it did in 2007-08. And, despite occasional attempts to devolve power in line with Mr Cameron’s “Big Society”, the state will still fundamentally be the same shape, trying to do virtually all the same things.

  25. sg

    The problem the British have that makes this so much more palatable to them than it would be to us is that they do have a large, omnipresent and very unpleasant lumpen proletariat that causes a lot of trouble and about whom “something really needs to be done.” They also have had 10 years of high levels of government spending and nothing has been done to reduce inequality or to alleviate the plight of that large class of lumpen proles.

    This makes the cuts very easy to sell to the tory working class and the middle class, especially when the middle class themselves are race-conscious rather than class-conscious, and poorly educated, so easy prey for the likes of the Daily Mail and the Sun.

    To that end, I think these cuts represent the end result of the absolute and compelling failure of the mainstream left in the UK. Australia didn’t dodge the bullet so much as avoid creating the social and economic conditions under which anyone would want to fire that particular gun.

  26. Katz

    What the hell does “big government” mean in this context? The wingnuts upthread have demonstrated their usual ignorance on ths point.

    British taxpayers are trapped in a lift with banksers wearing suicide belts. These bankers threatened to blow up themselves and the entire lift unless a ransom of trillions of pounds of bail-out money was paid to them. The government did a quick whip around the rest of the lift passengers and paid over the ransom.

    Now the bankers are satisfied but the lift passengers are flat broke.

    But the bankers are still wearing their suicide belts.

    The dictates of small government would indicate that the government should get their taxpayers’ money back from the bankers.

    But that isn’t going to happen. Only the biggest of big governments is big enough to appease suicidal bankers.

    And the Tories have happily donned Brown’s mantle in this matter.

  27. wilful

    I thought that the main problem or *crisis* with the UK economy related to the massive bail-out of the banks. Together with the structural weakness of putting way too many eggs into the financial services basket. So it seems unavoidable that some sort of rebalancing had to be attempted, either now or in the future (or both) to make the economy more structurally sound.

    But from reports, it seems that there is no attempt to restructure the economy somewhat, to reduce the financial services sector’s overbalance. In fact, they don’t seem to lose much support at all. Which is pretty damn odd, but again, not so surprising.

  28. Liam

    Ken, in Yes Prime Minister, the PM wanted to maintain Polaris, the previous UK submarine deterrent, and cancel the development of Trident.
    (BTW, congratulations on combining political comedy, submarines, rocketry and the nuclear deterrent into one comment: I bow to your mastery)

  29. Ken Lovell

    Heh thanks Liam. My memory is obviously unreliable about Jim Hacker’s administration.

    If he had won the argument and the Brits had canned their nuclear deterrent, would Britain have been any less safe these many years? Would they have used the money wisely on alternative public infrastructure or pissed it up against the welfare wall? Ah, the imponderables of counterfactual narratives.

  30. sg

    It’s interesting to imagine what would be going on now if the Labour Party had remained ideologically “pure,” rejected Blair and New Labour and stayed in the wilderness. The Tories would almost certainly have gone down the same pro-banking path, which is partly why they haven’t made an issue of the bankers’ responsibility for the crisis (it shows off their own incompetence). With increased inequality and an economic crisis, the Labour Party could have come into power on a policy of punishing the bankers, spending on Britain’s (shockingly poor) infrastructure, etc.

    Instead they grabbed the early, easy money, and now they look as stupid as the Tories, and they fucked the country in the process. And they have an illegal war on their conscience to boot. Fools rush in, etc…

  31. Steve1

    Debt is neither good nor bad. What Government need to do is balance the budget over the business cycle. This means when things are slow you borrow, and when things pick up, you pay the debt back. This is precisely what the current Federal Goverment is doing. The problem in Europe and the USA is their Governments have failed to pay back debt when things were going well and when their economies turned down, they didn’t have the resources to protect their economies. We were very lucky to have had the Hawke/Keating Governments in the 80’s to manage the transition of our economy from a closed economy to an open economy while integrating with Asia and trying to maintain the social wage. Europe & the US don’t have the poltical will or ability to engage in the necessary social, political and economic reforms they require, so all they have is slash & burn and blame shifting.

  32. pablo

    Re: aircraft carrier. My understanding was that the Brits were discussing with the French the potential of sharing aircraft carriers, including crew. Maybe the French are also supplying the planes. But a pity the Harrier jump jet is going. Now there was a bit of whizz bang British know-how. On the other hand great to see the Trident with their US supplied warheads going. Having a nuclear capability is just so yesterday.
    Sharing a navy could be something Australia might want to talk about with Indonesia. Both are trading nations dependent on open sea lanes. Not to mention interdicting boat people.

  33. Graham Bell

    Robert and Everyone:

    Gee, I’m a spoil-sport …. however I’ll wait for all the cheering to die down first and then give you a sobering reminder ….

    Britain may indeed be getting rid of the aircraft carrier, HMS Ark Royal and all the unusually useful Harrier tactical strike aircraft (why doesn’t Australia hop in an make an offer for them?) …. but never never never forget that, like Pakistan, India and DPRK, Britain is a nuclear weapons power.

    These cut-backs mean that Britain is soon to lose several of its options in the game of international politics …. henceforth, it can send in a battalion of troops and a squadron of conventional strike aircraft (or something like that) to sort out a situation OR it can send in a brace of 20 Kilotonne airburst nuclear devices.

    Britain has suddenly become a very dangerous country.

    Some people might believe that a democracy like Britain, home of the Mother Of Parliaments, could never dream of taking such a drastic course of action …. Yeah. Right. Excuse me for a moment, I’ll just dig my fallout shelter a little deeper if you don’t mind ….

  34. Liam

    If …the Brits had canned their nuclear deterrent, would …they have used the money wisely on alternative public infrastructure

    I’ll defer to other experts but as an armchair rocketspotter and Cold War nerd, the UK argument in favour of the deterrent into the 1980s was that it orders of magnitude cheaper than the maintenance of similar deterrence and regional power projection with conventional forces.
    I also seem to recall that the sales agreement was pretty favourable to the UK; the Americans put a levy on the top of the price but the British didn’t have to pay directly for any of the R&D.

  35. Katz

    But Britain’s 1980s version of deterrence made sense only in relation to an enemy with a world-ending capacity, i.e., the Soviet Union.

    Britain has no enemy like that today.

    Only North Korea does.

  36. Howard Cunningham

    Surely debt is bad unless you are using the debt to acquire an asset? Borrowing to pay the wages (or pensions) is a bad idea.

    The UK are also joining in that great European tradition – relying on NATO, and therefore the US, to defend them. It’s a similar situation in Australia with the Pacific nations, and a main reason why it’s better to get sick in Sweden than in Illinois. New Zealand’s Air Force is at Point Cook.

    Graham Bell’s analysis is naive – the Brits are not about to use the bomb.

  37. Mindy

    I’d call social stability an asset Howard. As long as, in the good times, you pay back the debt, rather than keep giving the well off tax breaks.

  38. wilful

    liam, it’s pretty hard to do nuclear deterrence and not do political comedy!

  39. wilful

    Howard, who are the US defending the Brits from?

  40. Ken Lovell

    Graham @ 35 can you mention even one ‘situation’ in which Britain has been involved since Korea when ‘a brace of 20 Kilotonne airburst nuclear devices’ would have been remotely useful? Let alone a foreseeable future one in this age of asymmetric warfare.

    Despite romantic throwbacks like Daniel Hannan, there are sings that the Brits, like many other Europeans, are slowly coming to understand that the main potential future threats they face will most likely come from their alliance with the USA and getting entangled in foreign adventures that are none of their business. Much like Australia really. Since the whole logic of NATO has now evaporated, and it is being used by the USA for offensive purposes that were never intended, one can only hope that from now on the Brits will not feel obliged to send armed forces of any kind to far-flung corners of the American empire.

    Americans and Australians might still be engaged in an exercise of deep self-deception and denial about the Iraqi project but indications are the Brits are very conscious of the catastrophic failure of public policy it represented and unlikely to risk a repeat any time soon.

  41. murph the surf.

    The cuts outlined are a sign of the influence of the very devious sleaze bags who caused the GFC.
    When do these City bankers start repaying all the money they looted from the financial markets with their fraudulent investment systems?
    That the Tories have been elected reflects a severe loss of faith in the New Labour model, they are complicit in all the failed schemes.
    First they steal all the money then they makes everyones else pay.
    Must have got a First at Ox/bridge!

  42. Brett

    Must have got a First at Ox/bridge!

    Yes, probably in horse management too!

    Ken’s right, for Graham suggest that having cut down on conventional forces the UK will now be more likely to use nuclear weapons is really rather silly. They’d only be used when Britain itself was in extreme danger.

  43. Graham Bell

    for Graham Walters (on comment number 1):

    The alternative?

    Put the cleaners right through Defence, the ADF and all the tenderers and contractors. That’s the alternative.

    When half the rorts, the waste and the stupidity are knocked on the head, we will have money to burn …. and have a highly efficient and reliable national defence.

    Clean up the other half and we will have a serious prooblem of finding enough places to invest all the savings …. maybe we could even use some of the savings to subsidise the defence of Britain.

  44. Graham Bell

    Ken Lovell (42) and Brett (42):

    Just because something in the control of human beings hasn’t happened in the past is no guarantee that it won’t happen in the future.

    I really do wish and pray that I could agree with both of you. The sad reality is that, sometimes, nations do things that are unexpected or which go completely against their history and their ideology. Who would have thought that the noble Christians of the British Isles would have become involved in anything so sordid and anti-Christian as the African slave trade or the drugging of China with opium? But they did.

    I have no idea just what could tip the balance in decent, democratic Britain …. but removing so many alternatives to resorting to nuclear attacks has moved the fulcrum into the perillous zone.

  45. j_p_z

    Aieee!! The stupid!! It burns, it burns!!

  46. Brett

    Who would have thought that the noble Christians of the British Isles would have become involved in anything so sordid and anti-Christian as the African slave trade or the drugging of China with opium? But they did.

    They became involved in those things because they were pretty much unexceptional activities at the time, despite what we may think now. (That changed, particularly for slaving, which is why Britain first banned slavery and then fought to suppress it.) That’s not the case with nuclear weapons, the use of which would unite most of the world against Britain. They’d have to be in a position where they really didn’t care what anyone thought or did anymore. It really is not going to happen unless a lot of other very bad things happen first.

  47. Russ

    According to my sources, the UK Treasurer George Osborne has forgiven the tax debts of a number of quite profitable British companies – including 6 billion pounds owed by Vodafone. British bankers have just paid themselves 7 billion pounds in bonuses for their good decisions over the past year, roughly the same amount as the government has taken away from the benefits for the poor. Osborne, incidentally, is a beneficiary of a 4 million pound trust fund set up by his ancestors and which is operated offshore to avoid paying tax in Britain. Nice people.

  48. Chris

    Mindy @ 39 – a significant part of the tax cuts that happen every few years are just compensation for the increasing amount of income tax many people pay every year because of bracket creep.

    If the tax brackets were indexed it would be clear what is a tax cut and what is just adjustment for inflation. But governments of both sides like the stealthy tax increase each year so they can “generously” give it back every few years just before an election.

  49. Jamo

    What happens when the money runs out?

    The question economic socialists can not answer!!!!

  50. Paul Burns

    well, Jamo, in CAPITALIST America, they’re printing more!

  51. Steve at the Pub

    well, Paul, that is being done by that really smart new president guy they elected. He is many things, but Capitalist he ain’t.

  52. Katz

    What happens when the money runs out?

    The question economic socialists can not answer!!!!

    The money never runs out. In fact it becomes more plentiful. The trouble is, it buys less, but on the other hand, it is easier to pay off old debts.

    See? Your question is easy to answer.

  53. Zarquon

    He is many things, but Capitalist he ain’t.

    Aieee!! The stupid!! It burns, it burns!!

  54. Diogenes

    Jamo @ 51, if your question refers to the US, then Katz has given you the correct answer: it never runs out.

    Look up this site and find the truth of the US Federal Reserve who has control in the printing of money.

    http://www.gold-speculator.com/appenzell-daily-bell/5874-g-edward-griffin-discusses-federal-reserve.html

    Many people are shocked to discover that The Federal Reserve System is a cartel, no different than a banana cartel, a sugar cartel, or an oil cartel. It is a banking cartel composed of the largest and most powerful American banking institutions. This group wrote a cartel agreement in 1913 and then persuaded Congress to give it the status of law. In that way, the cartel can be sure that all the banks will conform to the agreement or be subject to criminal prosecution, a benefit that many cartels do not enjoy.

  55. Peter Whiteford

    MikeM at 26 – the fact that public spending in 2014-15 will be same as in 2007-08 does not mean that these are not very large cuts in public spending as unemployment then will be much higher than before the recession (and the population continues to age pushing up pension and health spending).

    SG at 27 said: “They also have had 10 years of high levels of government spending and nothing has been done to reduce inequality or to alleviate the plight of that large class of lumpen proles.” Actually I would argue that the child poverty initiatives in the UK were one of the largest programs of redistribution of any rich country in the post-war period. They (the Labor Government) also increased retirement pensions very significantly in real terms. Inequality did rise, particularly in the last term of the labour government but this was not due to the lack of initiatives to help the poor.

    Some of the changes proposed in the spending review are remarkably stupid – for example, a single earner family with taxable incomes over 45,000 pounds will lose their child benefit, while a two earner family with incomes of 40,000 pounds each will lose none.

    The cuts in housing benefit will have the biggest impact on low income households in London – particularly those with very high housing costs.

  56. James

    If those idiots cut hard enough they can expect to see government debt as a proportion of GDP rise. Maybe that’s the plan, drive the country deeper into recession and then cut some more. Unemployment should help the commonfolk remember their place.

  57. kuke

    I was stuck in a traffic jam with the BBC World Service talking about whether these cuts were “fair” and much discussion followed on fairness, MPs speeches and philosphy until one eminently eloquent lady remarked they were simply “necessary”.

  58. Razor

    bmitw @ 6 – if you can come up with an effective method of reducing social security reliance while also reducing the high effective marginal tax rates of coming off sociao security you will probably win the Nobel Prize for Economics.

  59. Razor

    Unfortunately, the conviction held by many here that the Coalition might ever haved the balls to reduce the size of govenrment as a proportion of GDP is sorely miss guided. Between the agrarian socialists, wets and political pragmatists – the true small government conservatives will never be in the ascendance.

  60. PeterTB

    Since the whole logic of NATO has now evaporated….because certain US President had the guts to stare down the Soviet Union.

    How quickly we forget

  61. James T

    I’m glad you reminded me, I almost forgot George Bush Sr’s regal survey of the Iron Curtain, his all-immolating gaze causing the Soviet horde to turn tail and flee back to, uh…

  62. sg

    peter whiteford, inequality increased or didn’t change, and education outcomes haven’t improved, so that “transfer” of money was a failure.

    There is no greater indictment of a labour party than that they failed to reduce inequality. Oh, except maybe if they killed a million foreigners in an illegal war of choice.

  63. Peter Whiteford

    sg

    Actually, inequality did fall in the second term of the labour government, and presumably without the transfer of money it would have increased more in the third term.

  64. Katz

    Since the whole logic of NATO has now evaporated….because certain US President had the guts to stare down the Soviet Union.

    How quickly we forget

    Arrant nonsense.

    The Russian people stared down the Soviet government.

    As ever, the CIA did not predict and missed this world-changing event.

    And if the CIA didn’t know, George Bush Senior could not have known.

    And in any case, NATO is still directed against Russia, proving that communism wasn’t the enemy. Rather the enemy was a geopolitical rival whose guiding ideology was irrelevant to the issue of spheres of influence and access to markets and resources.

  65. Mercurius

    Between the agrarian socialists, wets and political pragmatists – the true small government conservatives will never be in the ascendance.

    Just gimme a minute to get out my tiny, tiny, violin and play you a mournful tune, Razor.

  66. Katz

    One is paranoid only if one doesn’t have enemies.

    Several ex Soviet states have been invited to join NATO.

    Why not Russia?

  67. tssk

    For an entertaining read on the current political situation in the UK I recommend http://www.guardian.co.uk/commentisfree/2010/oct/25/charlie-brooker-nick-clegg

    It’s only a matter of time before the word “Clegg” enters the dictionary as a noun meaning “agonised, doe-eyed apologist”. Or maybe it’ll become a verb. Years from now, teachers will ask their pupils to stop “clegging on” about how the dog ate their homework and just bloody hand it in on time.

    Clegg’s most recent act of clegging was to explain to this newspaper that the Institute of Fiscal Studies was wrong to brand the spending review “unfair”.

    “I think you have to call a spade a spade,” he clegged, immediately before demonstrating his commitment to straightforward language by querying the definition of the word “fair”.

  68. Ken Lovell

    Exactly Katz @ 69. The USA is blatantly trying to entice states into NATO that used to be part of the USSR (with predictable results, e.g. the ridiculous response from many in the Washington establishment to the recent conflict engineered by Georgia in the expectation that the West would come rushing to its aid). There is no way this can be part of a defensive strategy – it is clearly aimed at limiting the scope for Russia to increase its regional influence.

    But @ 66 you are wasting your breath. That Ronald Reagan destroyed the Soviet Empire by sheer force of will is now received wisdom in the wingnut alternative history and nothing anyone can say will alter that.

  69. Paul Burns

    For some reason deep in my half pommy DNA I find this particular piece of bastardry particularly shocking, (apart from the normal Tory ideology of “How hard can we bash the poor?”)
    http://www.guardian.co.uk/environment/2010/oct/24/forests-government-heritage-private-developers

  70. wilful

    Paul Burns, I can’t quite work out what that means, I don’t really understand what effect that will have on England’s forests, but 140 000 hectares is a whopping huge amount.

    Kennett was too afraid of the political backlash in the 90s to fully privatise 140000 ha. of pine plantations, let alone the almost mystical, sacred oak and beech forests of olde england.

  71. Paul Burns

    wilful.
    They can cut them down for profit. close them to the public. et.England would be better off if the Tories gave the forests back to the monarch. At least the Windsors would protect them.

  72. wilful

    England has notoriously strict planning and environmental laws, and many of these forests are already sustainably harvested, so I’m not sure that’s what it means. But yeah, I wouldn’t live in hope, people aren’t going to cough up a quarter billion quid just to let the trees sit there peaceably.

  73. Katz

    This C21 forest sell-off is more akin to the assertion of new property rights over the forests of England that drove promulgation of the Black Act of 1723. This act criminalised a range of traditionally sanctioned activities associated with use of common lands.

    Anyhoo, it was the Whigs (distant ideological ancestors of today’s LibDems) and not the Tories who championed this judicial privatisation of common lands.

    These Whigs were the upwardly mobile, aspirational nouveaux in the context of the early 18th century. The economically declining C18 Tories tended to resist privatisation of the commons, according to E.P. Thompson.

  74. Fran Barlow

    Wilful said:

    Paul Burns, I can’t quite work out what that means, I don’t really understand what effect that will have on England’s forests, but 140 000 hectares is a whopping huge amount.

    Unless my maths is very wrong, isn’t 140,000ha the equivalent of an area bounded by a circle with a diameter of 42.2116km?

    Ok, it’s a fair sized area (an area roughly 85% of the area of Sydney) but not huge.

  75. Hal9000

    Bligh has of course already sold Queensland’s plantation forests.

  76. Graham Bell

    Katz (66):

    The Soviet Union collapsed because everyone was bogged down by bureaucracy and because everyone was at interminable meetings or else because everyone was working their guts out fulfilling mindless useless objectives …. just like in Australia in 2010.

    Brett (48):

    No, no, it would take only TWO bad things to happen, only TWO,for Britain to resort to flinging nuclear weapons around. First: A change of government. Two: For that government to FEEL that it was threatened …. that’s all.

    Everyone:

    I’m surprised that nobody responded to my suggestion that if the taxpayers demanded a lot more accountability in defence matters, we would be rolling in dough.

  77. Paul Norton

    Fran Barlow #77:

    Wilful said:

    Paul Burns, I can’t quite work out what that means, I don’t really understand what effect that will have on England’s forests, but 140 000 hectares is a whopping huge amount.

    Unless my maths is very wrong, isn’t 140,000ha the equivalent of an area bounded by a circle with a diameter of 42.2116km?

    Ok, it’s a fair sized area (an area roughly 85% of the area of Sydney) but not huge.

    We need to think of this area relative to the overall size of the forest estate of the UK, which is 2.8 million ha (compared to 149 million ha in Australia), and also (although the Grauniad link doesn’t look at this) the specific environmental and heritage value of the areas which constitute the 140,000ha being sold off.

  78. Brett

    Graham, you can lose sleep over the possibility of Britain nuking somebody if you want, but I’m not going to. There are too many real problems to worry about.

  79. moz

    [email protected]: banning slavery in 1957 is hardly radical politics, any more than recognising Aboriginies as human in 1968 was. Radically backwards, perhaps.

    The forest sell-off is not even slightly parallel to Australia because their system is so different. They have much less forest, much greater traditions of public access, much lower mobility and no wild forest to speak of it – it’s closer in effect to Queensland forest privatisation but might be more reasonably likened to privatising the various bush reserves in or immediately adjacent to our cities. Probably closer to selling off the Dandenong Forest or Royal National Park.

    But I think the overall action is much closer to looting the remains than any kind of government. Overall it seems to amount to a massive tax hike for most people so that the rich can get richer. I’m not surprised that it’s happening, only disappointed. SATP, “massive tax hike” means unquestionably not getting a tax cut proportionate to the reduction in services. It’s the old “same price, less product” trick.

  80. Brett

    [email protected]: banning slavery in 1957 is hardly radical politics, any more than recognising Aboriginies as human in 1968 was. Radically backwards, perhaps.

    Not sure where you got 1957 from, as the relevant dates for Britain were in the 18th and 19th centuries. In any case I didn’t say banning slavery (which Britain did for in its Empire in 1833) was radical; I said that in Britain, trading in slaves was unexceptional at the time (meaning sometime before 1807, when Britons were banned from participating in it). There was a legal case in 1772 which deemed slavery in England illegal, and the Quakers and other abolitionists started their campaigns in the 1780s. My point to Graham was that the decisive turning of British opinion against slavery took a long time, generations in fact; and to suggest that because ‘noble Christians’ once bought and sold slaves that British national morals are likely to spin on a coin and condone the nuking of foreign places for pretty much no reason is therefore, shall we say, strange.

    I can think of much better historical analogies Graham could have used (hint: look at my blog) but this thread is about bullets dodged, not bullets never remotely likely to be fired so I won’t go on [more than I have already].

  81. PeterTB

    George Bush Snr?

    I was thinking of Ronald Reagan and the SDI

  82. bmitw

    Razor @ 60.

    Doubt that I could stay awake for long enough to get a Nobel prize in the dismal science. But I have been to enough seminars and read enough speeches/announcements/bs to know that the knowledge of how to do this is there, and what is lacking is the cojones to carry it out.

    JWH did a great job of upending the social justice norms in this country. These days the more you have the more you think you deserve and these people have a vote.

  83. OldSkeptic

    The UK Govt (and we) had a clear alternative, wind back the transfer of wealth from ordinary people to the rich plus stop the crushing of entrepreneurial capitalism by the corny capitalists/oligopolies/speculators that has been going on (here in Oz as well) for the last 30 years.

    Instead they are just perpetuating the rentier driven class war.

    How to do it? Up taxes on capital gains and investment income except for new companies (very Adam Smith this, tax rentiers heavily at greater than the highest marginal income tax rates) and the very wealthy (say 90% on incomes above $1,000,000), cut taxes on payrolls (jobs tax) and income at 2x median and below income levels. Drop taxes on ordinary peoples’ levels of savings. Up death taxes a lot to break up the dynasties. Index tax bands to stop Govt stealth tax increases.

    If (say) bank execs complain, give them $5 each as a contribution to their airline ticket, let them go and destroy other economies. Think of them as weapons of mass economic destruction.

    Partially offset the payroll tax cut (and I mean to zero) with a large minimum wage increase. Change the GST structure to tax luxury goods more heavily with lower rates (or even zero) for day to day necessities. Wind back the nonsense Govt transfer payments that are merely churn, use the savings to further cut income tax on average/lower incomes. Transfer payments should be from the higher to the lower only.

    In other words return to the level of inequality we had in (say) the mid-late 70’s. And stop taxing jobs.

    Save capitalism from the crony capitalism/oligopolies that we have now:

    Raise corporate tax rates (I’d double them except for small/medium businesses), offset with vastly better depreciation/investment/R&D/etc allowances. Tax pure speculation at 100% (e.g. hedge funds), these damage economies and should be eliminated. Make shares time limited, after a period of time they disappear. Tax speculative overseas capital movements to cut the dollar speculation that destabilises our economy. Hopefully the dollar will fall a lot and stay down.

    In other words skew towards growth companies and reward entrepreneurs which create wealth, rather than the rentiers and speculators that simply extract wealth. Rent seeking companies such as banks and the other oligopolies would contribute far more to the public purse (hopefully even break up). Note: mining is another rent seeking industry and should be treated as such.

    Newer growing companies would get a virtually free pass. Which is how it should be. Might even get some real competition as a bonus.

    Throw in some proper nation building investments such as MD saving, brand spanking new national electricity grid and some fast train links and fully updated freight train and commuter links plus some big spending on technical training and science/technology plus environmental (those that reverse current damage) projects.

    Split Govt bond issues into 2 types, those for investment projects and those just for normal expenditure, add in some tax breaks (or better higher interest) for the investment type. Tax all PPP’s out of existence, as they are just scams.

    Adam Smith and Keynes would approve. Heck we might even get a real economy again instead of the dying ponzi nonsense we have now.

  84. Steve at the Pub

    Er.. Old Skeptic, the UK Govt is trying to get the country out of strife, not into eternal penury! 😉

  85. OldSkeptic

    For those who don’t believe how crony capitalism/oligopolies crush innovation and development try this thought experiment.

    Now peak oil is coming (or even here) everyone with half a brain is investing in electrically powered rail networks; commuter, freight and fast train.

    The need for a totally upgraded freight train network here in Oz is a no brainer. As is a Melb/Syd/Bris fast train link.

    But think who it would hurt:
    Qantas (et al), airport owners, road freight companies, road builders, etc, plus the investors in them.

    So likelyhood? In the current economic/political environment I can confidently predict that we will have horses and carts long before we have fast trains. (At least we will have horses and carts, the UK will be down to packs on backs by then).

  86. The Low Spark of high heeled boys

    There is no comparison of Asutralia and the UK.

    Howard left a structural deficit of 1% of GDP. In The UK it was 3-4 times that.

    Thus we were able to stimulate very very successfully and have a defcit that was easy to consolidate from.
    the UK ‘s deficit got to double digits.
    This makes fiscal policy much harder to be effective and thus so too fiscal consolidation.

    Chapter 3 of the latest IMF outlook shows fiscal consolidation doesn’t work unless you can:
    1. can reduce interest rates significantly
    2. have your exchange rate depreciate/devalue significantly
    3. have your major trading partner in rude economic health.

    Perhaps that is why most of the cuts are some way off at present.

    chapter 3 also buries classical ecoonmics

  87. David Irving (no relation)

    Although we’ve dodged this particular bullet, we may be setting ourselves up for a different one with the Singapore stock exchange’s bid for the ASX.

    It’s being hailed as a wonderful thing, as it will enable Australia to become a financial services hub in our region. (I think I’ve heard that one before, BTW.)

    Bewdy! We could be the Iceland of the South Pacific …

  88. OldSkeptic

    Couple of points. Debt is debt. This eternal mantra that ‘public debt bad’, ‘private debt good’ is nonsense. In fact public debt is often better because it is cheaper and worse comes to worse can be fed (for a short time at least) by Govt printing (as we did in WW2).

    Australia’s private debt to GDP is near US levels. And we depend every month on billions being borrowed from overseas. Why do you think the Govt panicked when the GFC hit? All the money markets seized up. A month of so of that and we would have had petrol rationing here, to name just one impact, when we ran out of foreign currency. Plus our internal debt markets would have froze, as we don’t generate enough savings even to just fund our mortgage market.

    Little known fact, Australia was a large beneficiary of the US Fed pumping out trillions of dollars in swaps with other reserve banks all over the world. Without which (plus the Govt guarantee of bank debt) the Australian economy would have had a stake driven through its heart.

    Now the UK is about to firmly push itself (as it did in the 30’s) right into a debt deflation depression. Take out 9% of GDP in spending and get rid of half a million public service jobs .. and yeah right the economy will boom.

    The debt servicing ratio, for both the private and public sectors, will get a lot worse due to lower income and taxes, just like the 30’s. So their actual debt issue is going to get worse. Debt peonage for a generation.

    Plus a lot of their public debt (as per Ireland, US, etc) is actually due to bank bailouts.

    Ireland, Latvia, etc have done this and wow all their economies are booming, booming I say. If you can call cliff diving GDP and skyrocketing unemployment ‘booming’.

    Just watch and wait. Even the UK’s massively fiddled unemployment figures will skyrocket to 1930’s levels (real figures will be worse than then).

  89. Graham Bell

    David Irving (N.R.) (on 90):

    The term for it is …. Recolonization.

    No big changes expected …. except that “C of A” no longer stands for “Commonwealth Of Australia” but instead for “Colony Of Australia”.

    See, that didn’t hurt a bit, did it?

  90. OldSkeptic

    And ref to the title of this thread.

    We just dodged a bullet by the skin of our teeth. House prices dropped 10% in one qtr and huge numbers of companies went under in the space of a few months.

    But because we have changed nothing structurally (you could argue we have actually made things worse) and the gun is reloaded and ready to fire again… will we get lucky again?

  91. Marks

    Speaking of bullets we dodged, I note that the Kiwi $ is now $1.30 to ours. Unemployment 6.8% in NZ under those sterling nationals vs 5.1% in Oz under the terrible left wing socialists. Growth rate in economically responsible without stimulus NZ 0.2%, growth rate in wastrel useless moneythrowing away incompetence in Australia 1.2%(seasonally adj) .9% (trend).

    IIRC when the Conservatives got into NZ a couple of years ago, right wing blogs like ABolt crowed about how we were now going to see the Kiwi economy zoom ahead of the incompetent Australian Labor Party misgoverned country.

    I wonder if Kiwis are going to ask on some of the conservative blogs around the place: “Er, exactly when is this bad medicine going to do any good?”

  92. David Irving (no relation)

    Turnabout’s a fair thing, Graham.

    It doesn’t worry me in any real way – I’ll probably be dead in 20 years. My kids may suffer, though.

  93. Graham Bell

    Marks (at 94):

    Sadly, statistics on employment/unemployment in Australia mean whatever the speaker/spinner want them to mean.

    Full-time? Part-time? Permanent? Temporary? Casual? Permanent casual? Permanent temporary? Project permanent? Contractor? Wage-earner? Employed? Partly-employed? Multitasked? Semi-multitasked? Misemployed? Under-employed? Over-employed? Employed in Category xxx? Unemployed? Seasonal? etc., etc.

    At least believing in the Easter Bunny is fairly straight-forward.

  94. Graham Bell

    OldSkeptic (on 93)

    That’s why I’m ducking ….

  95. GregM

    Speaking of bullets we dodged, I note that the Kiwi $ is now $1.30 to ours. Unemployment 6.8% in NZ under those sterling nationals vs 5.1% in Oz under the terrible left wing socialists. Growth rate in economically responsible without stimulus NZ 0.2%, growth rate in wastrel useless moneythrowing away incompetence in Australia 1.2%(seasonally adj) .9% (trend).

    Marks, if you bother to inform yourself you’ll find that the NZ economy is completely differently structured than the Australian economy. They don’t have any of the basic commodities that East Asians need and desire (coal, iron ore, bauxite, nickel, etc, etc) to keep their economies going. They deal in luxury goods like fruit, dairy products and wool that others put aside when their economies contract.

    I don’t ctiticize our government’s handling of the GFC. They did it well and I don’t believe that if the coalition were in power they would have done it any better. They’d both have taken the advice of our pretty competent Treasury and while they may have quibbled around the edges the outcome would have been much the same.

    NZ faced a different scenario though and took a different course according to their different circumstances. They are doing pretty well with (as you quoted) 6.8% unemployment even if part of their economic strategy is, as it must be, to ship their unemployed off to employment in Australia.

    Their lower dollar is nothing to sneer at. The floating of the Australian dollar, a great and courageous reform of the first Hawke/Keating government, has seen us well through a number of economic crises, most obviously the Asian economic meltdown of 1998 which saw our dollar value collapse to less than 50 US cents but our economy sail ahead.

  96. joe2

    They’d both have taken the advice of our pretty competent Treasury and while they may have quibbled around the edges the outcome would have been much the same.

    So I guess that means they are now lying about how differently they would have handled things. You know, so much more prudent, responsible and all.

  97. David Irving (no relation)

    Of course they’re lying, joe2. They learnt well from Howard.

  98. joe2

    Yer, David, he even lied about how he would not comment further about domestic political matters when he supposedly bowed out of politics. And how he would do voluntary work in areas of strong community need rather than for right wing think tanks.

  99. GregM

    Joe2, if you are referring to the Opposition, then yes I think they are, or they are quibbling around the edges and making a big thing about it, which is what a lot of Australian politics is about.

  100. joe2

    “if you are referring to the Opposition”

    Yep, I was. Sorry, I was unclear there.

  101. Marks

    GregM @ 98 perhaps you might condescend to try to understand my point @ 94.

    Hint: it is in the last sentence for which the preceding was a bit of background.

    Further Hint: I was commenting on the various right wing opinion about the time of the NZ election which was pretty uniform along the lines of the NZ economy was going to take off now that ‘proper’ party was in power.

    About the exchange rate question. Yes yes yes, economics 101 you must have done. Now let’s dissect it a bit. Just before the last election the rabid socialists wanted to put in a great big new tax on the miners, which would have clipped their wings a bit and no doubt reduced the exchange rate – a good thing according to you, and to me at the time. (accompanied by a reduction in tax rate to help redress the imbalance in the two speed economy).

    The miners and the opposition went ballistic, those who should have supported it, like various industry and farmers groups, said nothing in support of it, and thus it fell over.

    I have to say at this point that I am in the fast part of the two speed economy, and imports are cheap, and life is good. Those who had their opportunity to support the government in reducing the value of the $ did not do so. Thus I find no reason whatever to regard the high dollar (which benefits me) as a problem at all. If those who should have supported the government’s mining super tax, did not do so, their bad call. So yes, I sneer at the low NZ dollar. If you think that my choice of indicators of the NZ vs Aust economies was wrong, are there any that show how terrific NZ is going at the moment? Which was my point after all.

  102. GregM

    Marks,I think that you believe that my response to your comment @94 was condescending. It wasn’t. I take this stuff seriously. One day our dollar will go down and, if we have good economic management that will not fuss us too much because the Hawke/Keating reforms will have given us the flexibility to ride that out and get the benefit of it just as happened in 1998.

    But I won’t crap on another country because they don’t have the same economic circumstances we have. You seem so ignorant of basic economics that you will do so.

    Also don’t give me that shit about Economics 101. The comment I made about NZ’s economic structure are based upon a knowledge of economics informed by post graduate study.

    Your knowledge, as far as I am aware from all of your posts, is non-existent, and doesn’t even include Economice 101.

    But surprise me. Tell me that you are a lecturer in economics, a professor even, at a Dawkins university, and Jesus wept for your students if you are.

    Katz has become boring so I’ll be quite happy to turn my attention to your smug ignorance for a change.

    Katz, don’t feel neglected. I’ll give you a rough-up as well when the pleasure takes me.

    PS. Have you worked out yet why I haven’t replied to your great conundrum about the lack of Toyota exports to Korea after 1960? Of course you haven’t.

    I’ve not replied until now only to spare you embarrassment for a while. Look up the date. You will find that in 1960 Toyota entered a joint venture with Korea for car manufacturing. They weren’t excluded from the Korean motor vehicle market. They are the mother of it.

    You’d know that if you did a bit of research.

  103. Marks

    Jeeezus Greg.

    If one wanted to do a serious comparison of the NZ and Aust economies, then it would take several pages just to summarise.

    That was not my intention, and I don’t think you can seriously believe it was. Such a dissertation (and such would be required to do a serious comparison) would have been way OT.

    However, to point out a few common economic indicators, understood by most people, and then to point out that several right wing blogs had predicted the super growth of the Kiwi economy is what I did. That those blogs tend to use the same sort of indicators and therefore, gasp, your comments might be just as relevant to them was something I thought people might get without having to have it spelled out.

    Perhaps you might like to respond in terms of the topic, which was more politically oriented, than try to insist on an economics paper. I dunno, perhaps, given that the topic is about the bullet(s) we dodged, you might like to suggest what economic indicators we might look at for the UK over the next couple of years to see whether or not the UK did get a bullet. (Exchange rates, employment and growth will or will not be in?) Or even NZ since they have had a right wing Govt the past couple of years?

    I was trying to make a political/right wing blogging type comment. You could always make it an economic one.