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John Kelly is 69, retired and lives in Melbourne. He holds a Bachelor of Communications degree majoring in Journalism and Media Relations. He is the author of four novels and one autobiography. He writes regularly for The Australian Independent Media Network and on his own blog site at: The View from my Garden covering a variety of social, religious and political issues.

Website: http://johnbkelly.wordpress.com

Japan: a shining example

Professor Bill Mitchell’s blog, dated 22 November 2018, “Japan still to slip in the sea under its central bank debt burden” gives MMT advocates all the ammunition they need to present a case for greater fiscal participation in the economy.

It signals quite clearly that government spending, not monetary policy (RBA interest rate management), is the more effective tool to bring about full employment and maximise the use of Australia’s available resources.

For nearly 30 years now, the Bank of Japan, the nation’s central bank, has been buying government debt (deficit spending), to the point where its current holdings are now greater than the country’s GDP.

However, despite massive injections of ‘created money’ into its monetary base, Professor Mitchell says, “inflation (in Japan) remains low and despite low interest rates, economic activity is hardly booming.”

Mainstream economists seem unable to connect this reality with their more dire predictions that Japan’s fiscal policy over this period, must lead to hyperinflation. It has done nothing of the sort.

For the past 30 years, mainstream macroeconomists the world over, have been predicting the demise of the Japanese economy, claiming it will slip into the sea, that its debt burden is unsustainable, that there are limits to the amount of assets the Bank of Japan can buy.

What has happened is that, “the Bank of Japan continues to demonstrate the categorical failure of mainstream macroeconomics and, conversely, ratify the core principles of Modern Monetary Theory (MMT).”

Each time their predictions have been proved wrong they have been forced to invent excuses, such as closed markets and cultural peculiarities. It’s all hogwash!

What these Economists are really concerned about, is that by buying government debt and keeping interest rates low, the Bank of Japan is effectively preventing the commercial banks using the bond market to make profits.

By not issuing bonds to offset government debt, it is depriving the commercial banks off a risk-free asset from which they can make money. The BOJ has “effectively killed regular trading in the once lucrative bond market.”

It has defied claims that currency-issuing governments like Australia, are captive to the yields in play on secondary bond markets.

How terrible is that?

Australia currently has 5% of the workforce, or 700,000 people looking for work with a further 800,000 working less hours than most would prefer. This represents a huge underutilisation of available resources, yet our government and the media, via their economic “experts” claim our economy is humming along nicely. More hogwash! Our economy is underperforming.

By way of comparison, Japan’s unemployment rate as at September 2018 was just 2.3%

To the further detriment of our underperforming economy, it is just what our government wants. It might appear that they are concerned at the slow rate of growth and the low wages growth, but deep down, captive as they are to the demands of the big end of town, they do not want full employment, or any significant wages growth.

Such economically beneficial activity would impact on the profits of commerce and industry, the source of their political funding. It is corporate welfare by stealth. The state of the Japanese economy, proves that decades of deficit spending and huge injections of money into what was a stagnant economy, does not risk inflation when the injection is correctly targeted.

There is no reason why we, in Australia, cannot do this and achieve full employment, a higher GDP, which itself will attract further private investment and in the process, improve living standards for all Australians.

We can do this, if we can change the mentality that dominates current mainstream economic thinking. But, at the moment, our prime minister is so intent on fuelling an outbreak of anti-Islamic sentiment, for no other reason than to attract votes, that our economy is destined to continue underperforming.

As Bill Mitchell says, “All those commentators who claim that accelerating inflation would result if governments abandoned debt-issuance but continued to run deficits, have been repeatedly shown to be wrong.”

What will it take to get this simply message across to those in treasury who have the power to change government thinking?

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What Goes Around, Comes Around

In 2013, after Kevin Rudd had been reinstalled as prime minister, he bowed, quite disgracefully, to Coalition pressure and reopened both Manus Island and Nauru as detention centres for those refugees and asylum seekers who came to Australia by boat.

To his shame, he went one step further and made the political decision that such arrivals would never be allowed to come to Australia. In doing so, he believed he had shut down debate on the issue of the boat people. It was an attempt to clear the decks before calling a federal election.

He made it Labor policy, it was enacted by a Labor government, but also subject to review after 12 months. It was a disgraceful decision motivated entirely by the fear of being wiped out at the next election.

It was a blatant attempt to counter the relentless pressure being applied by the opposition who knew they were on an electoral winner.

As we know, the Coalition won the election (or Labor lost it, depending on which way you look at it) and the new prime minister, Tony Abbott, handed control of the boat people over to the new Immigration minister, Scott Morrison.

From that point on, the true colours of Scott Morrison and the more sadistic members of the new government were revealed. With the broader support of a soulless electorate, a quite deliberate regime of brutal, psychological bullying, that went far beyond anything Labor had intended, had begun.

It continued, despite riots, deaths and serious medical issues being ignored. It continued despite attempted suicides, hunger strikes, sewing lips together, bashings by staff, all well known to the relevant department at the time, but kept hidden from the Australian public, until a few brave whistle-blowers spoke out. While protests at their treatment were held in all capital cities, those protests fell on deaf ears.

But when the truth was out, it became clear to the government that their hard line was resonating favourably with the Australian people, so they did nothing to stop it.

Fast forward five years to today and it appears there has been a change of heart, a conscience kicker, that has impressed itself in the hearts and minds of that same, once-soulless electorate. How noble of them. How proud we should all be.

A galaxy poll this week tells us that 80% now favour the part solution offered by the New Zealand government to take 150 detainees a year.

What has changed? Perhaps it’s the realisation that five years of torture, five years detention for no crime, five years of children knowing no other life, now suffering mental problems, is enough. Perhaps we have come to realise what a wretched, heartless mob of bastards we have become. But now we need to call the dogs off.

So now we hear the calls…..Release them! Bring them to Australia. The punishment has been far worse than the crime. Think of the children, the poor children. Let them go to New Zealand. Bring them here. And so on. How noble of us. How Christian!

Yet still, the government, now led ironically by Scott Morrison, the original architect of a system that brought about the torture, the deaths in detention, both physical and mental, is holding firm. His asylum seeker solution, that previously carried the support of the masses, is now seen in a negative light by the very same people who once championed his heartlessness. But, thus far, he is not listening.

The bulk of the Australian people, these conscience-pricked weaklings who never meant it to go this far, have suddenly got cold feet. How pathetic of them. They are running up the white flag. How ironic! Where was their conscience, two, three, four years ago when we collectively turned our backs on defenceless families who fled tyranny and political persecution in search of a better life?

Well, Scott Morrison is having none of that. This self-professed Christian, this happy-clapper, reborn of, and celebrating the gifts, of the Holy Spirit, will not bend. He can’t. If he did, he would be admitting his boat people solution, the one he hypocritically blames on Labor, was wrong.

So now, the relentless pressure he once placed on Labor, is now on him. What goes around, comes around. The Australian conscience, the one that went missing for five years, has found itself again. How so conveniently noble!

If justice is ever to be served on this shameful episode in our short history, both Manus and Nauru must be terminated in totality. But not the memory. That should live on and forever be etched in our consciousness. Those camps should be retained as reminders of our past failures.

Now, for the first time in five years, there seems to be an end in sight. But don’t hold your breath. It will take some doing for any politician to admit it has been a failed policy.

And to help prevent it happening again, we should teach our children that just as we persecuted our indigenous population in past centuries, we also persecuted and tortured those who came here and begged us to help them, as recently as 2018.

Well may we say, advance Australia fair. Because nothing will advance this shameful legacy. Labor may have started it, but Scott Morrison will forever, own it.

The Fallout from Wentworth

It takes a brave pundit to predict the outcome of the Wentworth bi-election just days before the votes are cast, but the actual outcome, either way, will be less interesting than the swing away from the government, the fallout from which, will be what determines its fate between now and next May.

A loss in Wentworth will mean the loss of the government’s one seat majority in the lower house. That, as proven by Julia Gillard, is manageable, depending on PM Scott Morrison’s negotiating skills.

Mind you, Scott Morrison is no Julia Gillard when it comes to securing passage of vital legislation through a hung parliament, but having said that, the government could survive a loss as it limped toward a May 2019 general election.

A narrow win in Wentworth, however, throws up a far more interesting situation. The government would retain its paper-thin majority, but at what cost to morale?

The ramifications of falling from what was a 17% comfort zone to a 2-3% nail-biting margin or thereabouts, is a frightening prospect for a party that has dozens of seats sitting on much smaller margins.

While a loss would precipitate a tremor of a most significant magnitude through the entire party, a narrow win would be just as scary, as various members are forced to consider their individual fates in a not-to-far-away general election environment.

For many, it would be the beginning of a downhill slide in confidence and poise from which they would be unlikely to recover. Morale would sink, blame would be apportioned, infighting would escalate and there would be very little effective governing of the nation going on.

One might envisage the press finally beginning to read the tea leaves and paying more attention to Bill Shorten and his highly visible team. Labor, in such a scenario, would begin to dominate the agenda. For the past two years, following their narrow election loss, Labor have barely put a foot wrong.

Various polls have had them as the preferred government for all that time. For the most part, they have been a model of discipline and attention to detail. They have been conspicuous in their policy development announcing well costed, highly detailed initiatives at regular intervals.

Doubtless the anti-Labor forces in the media would soon bear down upon them, spruiking doom and gloom for the nation as they continued to rant and rave, doing whatever they could to bring Bill Shorten to heel. But when you think about it, they have been doing that now for the past five years with little or no impact.

And they have done it because they have nothing to celebrate in their own camp, in the way of any Coalition government achievements. After five years, there is nothing of substance about which either they, or their government, could boast.

The Coalition is, and always has been, a policy vacuum. One suspects that the voters in the Wentworth bi-election have already worked that out and will effectively anoint them as lame ducks.

Let’s wait until Monday until we draw any definitive conclusions about the government’s fate, but the fallout from a loss or a narrow win, won’t give any of them any joy.

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What Can the Prime Muppet Do?

For Scott Morrison and his Muppet Coalition Government, time is fast approaching the nervy end of an election cycle. So far, he has given us every indication that the next federal election will be held on Saturday 18th May 2019, the latest possible date he can leave it, but will he wait that long?

The result of the Wagga Wagga state by-election on Saturday was a disaster for the state liberal government and suggests a rough ride is in store for both state and federal members across New South Wales.

With that in mind, a number of questions will be running through the brains trust of the Liberal party machine right now. Would it be better to go early? Do they want their campaign to be riding through the dusty, unpredictable trail of the NSW state election in March?

Can they minimize the ongoing fallout from dumping the best leader they had, electorally speaking? Can they appear united? Have they a believable policy structure? Have they enough money to mount a competitive campaign? Do they have any quality candidates?

Looking at things from the outside, the answers to all those questions would appear to be a resounding, no! And the longer they wait, the fewer options they have. The Victorian State election to be held in late November is another hurdle to straddle.

Then comes Christmas, followed by the January holidays and the beginning of the school year. These are all periods where attracting the attention of the electorate is very difficult. There’s just too much going on.

Yet, that might be Morrison’s plan. The more the distraction, the less attention paid to important issues, the better their chances of not looking like idiots. Can Bill Shorten and Labor cut through those distractions and convince voters he, and Labor, are ready? In all likelihood, he may not have to.

After five years, we must wonder what Morrison has to sell that’s worth buying? Not much! Actually…….no, nothing. They have bluffed and lied their way through the most dysfunctional performance of this, or any previous conservative government.

Their internal bloodletting has been on public view ever since Malcolm Turnbull succeeded Tony Abbott as PM. Actually, it’s much longer than that.

So what can Morrison, the self-described muppet leader do? Current polling indicates his muppet coalition will lose government in a landslide. But, if he waited until May, could he reverse that?

Could he get some lipstick on his pigs?

One would have thought that trying to be heard across a minefield of distractions would be difficult enough. Expecting to come up with some jaw-dropping, knockout initiatives and reverse current polling trends, might just be a bridge too far.

And what of Morrison’s own legacy? The thought of lasting even less time as PM than Tony Abbott must be haunting him at the moment. Would he want to continue his parliamentary career as Opposition leader? One suspects he would. And he might also be thinking, the sooner the better.

Morrison’s best chance is to go before the end of 2018. Firstly, he can salvage some respect by relieving the voters of any more pain. But also, he can quite rightly, blame the loss, not on his leadership, but on the appalling behaviour of his party prior to him becoming PM.

This gives him a launching pad to begin rebuilding the shattered skeleton of a party, that was once a government. Mind you, his own record as treasurer will bring him some pain as Labor restores some of the heartless, unnecessary spending cuts he championed against the easiest of targets, the most vulnerable.

But, perhaps that’s a challenge he might find more appealing, rather than the humiliation that will await him, should he choose to wait until May next year.

Let’s hope so.

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So, the boats haven’t been stopped after all.

Who would have thought? An illegal vessel has made it to the Australian mainland. After all the boasting, the chest beating and bragging by the architects of the most brutal and repressive asylum seeker policy our country has ever implemented, it turns out that on at least one occasion, they have been gamed.

Their politically motivated action against defenceless asylum seekers attempting to find a better life has fallen on its face. Our once impregnable borders, policed so rigidly by the Australian Border Force, have been breached.

“You have to wonder how a boat like this would get so far without being detected,” Port Douglas Marine Rescue president Ross Wood said. Indeed! But should we be surprised? The distance between the southernmost point of Papua New Guinea and the Australian mainland is just 150 kilometres.

How long did it take Australian Border Force management to realise that people smugglers would eventually find a way to make the relative easy crossing?

While details are still sketchy and probably will stay that way if Home Affairs minister Peter Dutton has anything to do with it, perhaps seventeen or more asylum seekers have made it to Australia. How embarrassing!  A dozen or so have since been rounded up, but the remainder, now at large, may well be in even greater danger hiding in the mangroves and rainforest regions of the Daintree.

“There is no risk if they don’t go in the water. But if they aren’t familiar with the area, if they go in the water behind the beach where the river is or to stand on the edge of the deep water where it’s murky, there is a risk of a crocodile attack,” said tour operator David White, who has been taking people up the Daintree River for 20 years.

While concern for their safety should be paramount, politically, it is a disaster for the government. No longer can we accept the Coalition mantra, “we’ve stopped the boats.” It’s no longer true, if it ever was. And what do we do with them, now

Manus is closed. Nauru perhaps? Christmas Island? What are our international obligations when asylum seekers land on our shores? Stupid question! No one cares. We can send them anywhere we want. Who will stop us?

Doubtless, people in Far North Queensland will be horrified. They will fear for their safety, lock their windows and doors, keep their children home from school, even barricade their driveways. So they should! Monsters are on the loose, heathens who could murder them in their beds at night.

After the appalling events in Canberra last week, one cannot help but feel some sense of amusement at this latest event. The implications for a government that might, just might, have had one claim to fame in its miserable time in charge, has been destroyed. Now, they have precisely nothing to crow about.

With three prime ministers in five chaotic years, no vision for the nation’s future, no idea what they stand for, internal bitterness and disunity that dwarfs anything we have seen in three generations of politics, they have now had their signature tune blown out of the water.


It’s not a government. It’s a circus.

Is Scott Morrison really on our side?

Nothing sounds more hollow than a statement in need of some truth. As an opening salvo from a pretend new leader, it was an insult to our intelligence.

If the revolving door of leadership in the Liberal party has demonstrated anything, it is that their loyalty and dedication to serving the people has never been very high on their list of things to do. If it was ever there in the first place.

For our newest prime minister to feel the need to say that he is on our side, infers that he was concerned that we might think otherwise.
Why on earth would we think that our elected government was not on our side? Perhaps because it wasn’t? It isn’t?

If you woke up this morning thinking that you had just emerged from a nightmare of near inescapable despair, be assured you were not alone.

This excruciatingly, agonising charade of a mortally wounded government still has some life in it, albeit devoid of oxygen. The Hillsong happy-clapper’s, ‘I’m on your side’ gasp, was a plea for mercy; a mea culpa, an apology for his party’s appalling behaviour; an internal blood-letting vendetta that has made the Rudd/Gillard/Rudd episode look like a vicarage tea party.

What has Scott Morrison ever done that might lead us to think that he is on our side?

This hard-right conservative disguised as a moderate, who won the nation’s top job, not because he was the best candidate, but because he was less hated than the others, has presided over the most disproportionate allocation of public funding since Harold Holt was treasurer in the early 1960s.

Never have we seen a treasurer demonstrate such blatant disregard for public need in favour of corporate excess, as Morrison.
Our only positive hope is that his tenure will be short-lived. His time as prime minister will, more than likely, be shorter than that of Tony Abbott.

No doubt polling will take place over the weekend to gauge public reaction to what has been the most disgraceful week of Liberal party acrimony, in living memory.

But regardless, the next six months will just be more of the same, with the defeated continuing to plot, with more recriminations, more bloodletting, more destabilising activity.

The ‘I’m on your side’ mantra will soon fade from Morrison’s mind as he tries to hide the ongoing war inside his disintegrating party.

Don’t wait for the next challenge, Malcolm. Call an election now!

It would be safe to say that, as a prime minister, Malcolm Turnbull has been a disappointment. Displacing Tony Abbott, as he did in 2015, was supposed to be a new start, correcting the bizarre image of a bumbling, buffoon leading the country.

That’s how it was supposed to be.

Malcolm was seen as a move to a more statesman-like candidate, one who would not embarrass us either here or overseas. We had every right to expect, not just a more polished, professional approach to government and recognition of much needed social reform, but also a more mature approach to tackling the issues of climate change and energy.

The one social reform he did give us was same-sex marriage, but its execution was akin to extracting teeth while simultaneously amputating a limb after the patient had woken from the anaesthetic and fallen off the operating table. In other words, it was a horrible, bloody mess.

Since then, Malcolm has failed miserably in achieving anything of note during his three-year reign. He had an opportunity to be the man to drag the Liberal party out of the 19th century and effectively blur the line between Liberal and Labor party policies.

He could have been so effective, that Labor would have struggled to display its more socially-minded platform. He could even have surpassed John Howard’s tenure as prime minister.

So what went wrong?

For some inexplicable reason, Turnbull, in many ways a leftist, chose to be a prisoner of his party’s hard right. This hard right conservative element, led by Tony Abbott, operates in tandem with the highly sinister, clandestine group known as the Institute of Public Affairs (IPA).

It is so committed to turning back the clock, socially, industrially and religiously, it has lost sight of the principles that gave its party’s founder, Sir Robert Menzies, the legacy he enjoys today.

And Malcolm Turnbull has done its bidding from day one. As the saying goes, “if you lie down with dogs, you get up with fleas.” There should be another saying that explains how, if you don’t cleanse yourself of fleas, even the dogs will desert you.

That’s what is happening to Malcolm now. By sucking up to the hard right he has had to compromise his own belief system and forsake any chance he had of being a great prime minister.

In return, his party have demonstrated their contempt for him, time and time again. They have bullied him from post to post. A drover’s dog could have told him it was never going to end well.

So why would he reward them any further by continuing to lead them? Would he not be well justified in calling an election now and allowing the people to decide if they want this charade to continue? Isn’t that the way bullies should be treated?

Would this not be a way to repay the Liberal party for their treatment of him; reduce their tenure from three years to just two and let that reality sink into their dim-witted brain cells? After all, he has nothing to look forward to, beyond another challenge to his leadership.

Yes, he will lose the election, but would that not be the more honourable thing, rather than sitting around waiting for the next challenge?

Cut your losses, Malcolm. Isn’t that what bankers do?


When I bought my first home back in 1973, Australians were being advised not to pay more than 25% of their net income on their mortgage.

It was sound advice and one, even the banks used, to calculate whether the mortgagee would be able to meet the quarterly repayments. As a further rear guard action, banks would only loan up to 75% of the property valuation.

Back then, your local bank manager actually cared about your future ability to meet your commitments when interest rates were similar to today’s rates, at around 6%. But that is where any similarities, between then and now, end.

Today, homebuyers are paying an average 30% of their mortgage. It is symbolic of changing attitudes that work in favour of the banks, mortgage brokers and property developers. But not the mortgagee. Many mortgagees are paying over 50% of their net income on their repayments.

Today, they are clinging precariously to a tightrope, swaying in the wind. With wages stubbornly static and prices creeping up by stealth, the broader Australian mortgage belt is showing signs of stress.

The Household Financial Comfort survey of 1500 households in June, conducted by ME Bank shows that the average Australian is now eating into their savings to meet their weekly commitments.

“The report revealed housing stress is still prevalent among Australian households. For those with home loans, a broadly unchanged 45% of households reported to be contributing more than 30% of their disposable income towards mortgages during the past six months – a common indicator of financial stress.”

This is a matter of serious concern for the nation as a whole and especially for the Reserve Bank. It is household debt, not national debt, that has the capacity to bring our nation’s economy to its knees.

The report tells us that 10% of households are now spending more than they earn. That means they are either digging in to their savings and/or further increasing household debt (borrowing more).

So, here we are, listening to all this rubbish about jobs and growth, balancing the budget, a future return to surplus and other such meaningless policy directives, while ignoring the one issue that has the potential to undermine the entire economy, literally overnight.

We all saw how quickly the collapse of Lehman Bros set a cat among the pigeons on Wall Street in 2008. We have seen here in Australia how, despite the recent levels of jobs growth, unemployment and underemployment have not moved to any greater or lesser degree.

Our economy has been growing over the past two years on the back of immigration and deficit spending, not balanced budgeting or surpluses. We are now a country of 25 million, up 2 million since 2013. It is that increase that has kept us in growth nationally.

The Household Financial Comfort survey is now telling us that our national growth is masking a serious problem, that of over-extended household debt, a debt that is becoming increasingly harder to manage.

Reserve Bank Governor, Philip Lowe has expressed his concern about the slow pace of wage growth and its impact on economic activity.

Is the government listening? It would appear not. Their approach is to give tax cuts to big business while ignoring rising household debt.

What happens when the savings run out and credit cards have reached their limits? That day isn’t far away. It will require a massive injection of government spending to avoid a catastrophic collapse, one that would have a far more significant impact on the Australian economy than that of the GFC.

It’s one of those hidden dangers that only rears its head when it’s too late. The government is under the illusion that all will be well if we lower the tax rate for big business, because it will create more jobs. What hogwash!

Where are the economists’ warnings? Who is advising this compromised government indebted to its masters at the IPA and ignoring CEO pay binges? Who is warning of an impending mortgage meltdown?

For all those frogs in the saucepan, the temperature is rising.

Like Spoilt Little Brats

It was not paranoia, it was real. The past three weeks saw our supposed free press, our once proud doyens of truth and justice forsake their role and barrage us with a one-sided attack on Bill Shorten, in a manner not seen since their failed attempt to hang draw and quarter him during the Trade Union Royal Commission.

What spoilt little brats, they are!.

We can only speculate on what drove them to try and make Super Saturday Shorten’s funeral, but just like the Royal Commission, it failed.

Super Saturday was an opportunity for the media to scrutinise a government in disarray, to anticipate the result as a measure of considerable broader electoral discontent. But instead, they chose to personalise and vilify the alternative prime minister, make it a test of his credentials, rather than call a dishonest, deceptive, unfair government to account.

Not a clever move as things turned out. All the speculation about the possibility of Labor losing Longman and Braddon was used, once more, to mask the Turnbull government’s lack of performance, lack of policy, lack of vision and lack of true leadership.

All the speculation about Shorten’s leadership, about his poor preferred prime minister ratings, about his trade union connections, seemingly orchestrated across all the various media platforms, seemed too concentrated to be coincidental. Someone was directing it.

What was promised? By whom? How much? And how soon?

For whatever reason, the media had climbed into bed with the Conservatives to convince what they thought was a small and gullible voting block, to rewrite history. Shorten was even lambasted for not turning up to either electorate the day before the election. As if that was the last straw.

So what now? Their campaign failed, not marginally, not barely, it failed spectacularly. The voters from Queensland and Tasmania brought the media back to reality. It was the electorate who would decide who would represent them and the size of the margin they would extend to their elected choice.

They ignored the media, they saw through the shallow, thinly veiled attempt to concentrate on the opposition and instead, sent an unmistakeable message to the government: you have not been honest with us, you have not been fair, you favour the wealthy, despise the weak, the sick, the disadvantaged. For this, you will pay.

They have put Longman and Braddon back in the Labor camp. They have seen to it that Bill Shorten’s leadership is no more to be questioned, that the preferred prime minister polling is irrelevant and that Australian voters will not be hoodwinked when we go to a general election sometime in the next ten months.

It can’t come quick enough. So let’s see where the media apply the pressure now. They have been put back in their place well and truly by their true masters. Like spoilt little brats, they have been given a good spanking. They put their money on the wrong horse and now, go home with empty pockets.

What a miserable lot they are. Serves them right!


As a committed advocate of Modern Monetary Theory and one who thinks it should be renamed, Modern Monetary System, for reasons I will explain, there have been occasions when I have felt a sense of futility, trying to explain something so simple, but finding myself unable to convince even those who should know better.

Firstly, MMT should be referred to as MMS because it is no longer a theory. It is the way our fiat economy was set up to operate and does operate today. Its implementation took place in 1983 and the fact that it has never been used as it was intended, does not mean it is theoretical.

The fact that we still fear deficit spending, strive to balance budgets, lust for surpluses and consider bond issues as debt, is a hangover from a past era, that of the gold standard.

The fact that we fail to fully utilise our available resources, consider 5% unemployment near full employment, shy away from providing the necessary infrastructure for our industries and neglect our national health and education needs, when each of these represents real jobs and growth opportunities, is a travesty of mismanagement and failed leadership.

Last night’s Q&A which highlighted the difficulties experienced by those reliant on the NDIS, gave us a clear indicator that the government is not even spending its own budget allocation on this vital piece of infrastructure. The NBN rollout is just another example of this failed leadership.

And it seems that no matter how clear and concise we are in explaining the economic reality of MMT, successive governments still cling to the gold standard mindset. Why?

Michael Pascoe’s article in ‘The New Daily’ today, sheds some light on the truth of the matter. In discussing the latest on the never-ending tax debate, something the entire country is heartily sick of hearing, he points to what the government is really doing in pursuing this matter.

He writes, “In the short term, it’s a formula in keeping with the Institute of Public Affairs’ prescription for a new Australia – an Australia with less government, richer rich and fewer controls on markets – especially the labour market.”

He goes on to say, “The IPA has emerged as not just the favoured right-wing think tank, but the government’s guiding light. It is too tempting to not again repeat one of John Kenneth Galbraith’s many golden quotes:
“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.””

We have known from the beginning of the Howard years, and perhaps from some of Paul Keating’s decisions, that it is the rich who run the country. They run it for the rich and they get the best results by supporting conservative leaning parties and their politicians.

Trying to establish a tax system, using confected figures to present fairness and equality, as Scott Morrison has done suggesting average workers are expected to earn six figure sums in a few years’ time, displays a height of arrogance as bold as his government’s self-serving aspirations.

It is a disgrace. But, we know that if you tell a lie, big enough and often enough, people who don’t know any better, will be inclined to believe it. And therein lies the difficulty with people like me who are trying to explain MMT to the average person in the street. How could anything so simple be right. It must be more complicated than that, surely. No, actually it isn’t.

As Michael Pascoe says so eloquently in his article, “In the longer term, flattening our progressive tax system is a tiny part of one of history’s repeating cycles: wealth and power being used to entrench and extend wealth and power until it becomes unsupportable.”

Notwithstanding the difficulties of explaining MMT, there is progress. But it is painfully slow. Much like the NBN. However, one day we will get there, even if it is only a partial implementation. The alternative is the status quo, which, for those who haven’t yet worked it out, is all about keeping the average worker at arm’s length from the rich.

And that really is an unsustainable option.

Are You Feeling Lucky, Malcolm?

My question is directed to the Prime Minister. Your treasurer has just brought down your 2018/19 budget laced with tax cuts to woo the low paid. Some of it will be delivered in a year’s time when everyone files their tax return. The rest over the next seven years.

You have your party’s future in mind and, dare we suggest, your own with this budget. You have been telling everyone that the next general election will be held a year from now, while quietly contemplating the likelihood of going early, perhaps September or October this year.

Suddenly though, there’s a new issue on the horizon, courtesy of the High Court. It comes in the form of five bi-elections. What are you to do? Should you go ahead with the five bi-elections knowing secretly, that those same seats will/might/could be recontested in as little as three months?

If you were to lose all five, which is probable, how would that play with your colleagues and their view of your leadership? What if your support group panics and decides to tap you on the shoulder in the interests of their own self-preservation?

Which would you rather: face them on a cold, dark Canberra night, or place yourself at the mercy of the people? Is it possible those tax cuts, as pitiful as they are, could swing enough voters in marginal seats?

Watching some of the post budget interviews given by Scott Morrison as he began his big sell, one could be forgiven for thinking he really believes all the rhetoric he espouses.

His/your budget has revealed a seductive set of numbers that might fool the person in the street, although, when one compares your generosity with that of Bill Shorten’s, you could be found wanting. You also know that it’s all based on some pretty ambitious forecasts.

Except for a flush of extra cash generated by new tax-paying migrants, the numbers would have painted a very different picture. But, as usual, the party’s conservative ideology continues to reign supreme: Give the biggest share to the wealthiest. Your party does it every time.

How long will it take for the electorate to realise they have been duped….again?

Then, there’s that looming re-distribution. Could you call a general election before that wretchedly unfair re-adjustment of the boundaries is finalised? Once that goes, you know you’re stuffed.

What are you to do? Might it be, that the best course of action, is to call a general election now, rather than proceed with the five bi-elections? It will certainly save a lot of money, not to mention the embarrassment of losing all five.

We know the people don’t like early elections, but this is different. It’s all Labor’s fault when you think about it, Bill Shorten has a bit of egg on his face after boasting that no Labor member was holding dual citizenship. Can you exploit that?

Surely your spin doctors can come up with something to explain why going early this time, has been unfairly thrust upon you and calling a general election, rather than five bi-elections, will save the tax payer millions of dollars?

But the polls, those wretched polls. People believe them. People are influenced by them. What are you to do? Perhaps you would prefer the verdict of the people rather than the party room. Gallant in defeat, something like that? History might be kinder to you, if not your party.

Perhaps you can muster all your charisma, your preferred popularity and go head to head with the guy that ripped all the goodness out of your budget in his reply speech. Let’s face it, no one else in your party could.


Expect some Rubbery Figures in the Budget

It is perhaps a tad unwise to try and second guess the budget to be handed down next Tuesday, but some things need to be made clear, especially to those who might be fooled by what is expected to be a pre-election handout.

Regardless of how Treasurer Scott Morrison might try to sugar-quote the numbers with his breathtaking rhetoric, be assured at least some of his forward projections will be based, not on hard numbers, but more likely, on aspirational and ambitious expectations.

In other words, it’s going to be a budget fit for purpose, but not the national purpose. We can expect some rubbery forward projections that will pave the way for some pretty ambitious outcomes that his party can spruik as we head toward the election, later this year.

The ever-optimistic Morrison who foolishly convinced himself that a return to surplus was only two years away, might be of a mind to project a surplus as soon as next year. If he does, don’t believe a word of it.

He has the figure of 23.9% of GDP in mind as the maximum amount he can receive in tax (it’s a Liberal party yardstick). BUT, should we be watchful of what GDP figure is he basing his projections on? Yes we should. Expect a rosy one. If he can inflate the expected GDP for 2018/19, he can spend a little more and still show a reduction in the projected deficit.

That’s what creating rubbery figures is all about. And if he creates enough rubber in 2018/19, to show a reduced deficit, that makes creating rubber for 2019/20 and the subsequent forward estimates that much easier.

Hence, the temptation to project a small surplus in 2019/20, one year ahead of previous estimates. Again, if he does, don’t believe a word of it. There’s no good reason why the figure of 23.9% needs to be adhered to. Most OECD countries have higher levels than that.

But, 23.9% is dogmatically enshrined into the psychology of Liberal minds. So, if Morrison wants to spend more as he searches for election sweeteners, all he has to do is increase his estimate of what the expected GDP for 2018/19 will be and still appear economically responsible.

From there, he can estimate a higher tax take and a lower deficit. Simple. After all, it’s just numbers in a computer and they can be changed down the line as circumstances require.

So don’t be fooled by whatever comes out of Morrison’s mouth on Tuesday. In fact, the rosier it looks, the less likely it is, that it will be true.

It is unfortunate that Morrison seems to think that running a national economy is the same as running a household. It is not. A currency issuing government is only constrained in its spending by the available resources. It’s “debt”, issued in its own currency, can always be repaid.

No one will be knocking on the government’s door to repossess anything. Sadly, Morrison does not understand this, and neither does his government. He should, however, be concerned about private debt. That is the great threat to the Australian economy, not magical numbers expressed as a percentage of GDP.

It is private debt that threatens to bring the country down. RBA chief, Phillip Lowe knows this and has said as much. But Morrison is not looking at private debt. He has a fixation with government debt.

As the currency issuer, the government can safely spend 100% of its GDP without the fear of inflation so long as that spending leads to productive outcomes. And, it never needs to borrow.

Borrowing, via the issuance of bonds is a political choice, not an economic one. It’s high time economists started stating these simple facts, rather than the emotion-charged, political claptrap they sprout forth now.

They won’t, of course. They will fall into line and spread the gospel according to their media owners, who just happen to believe in the household economy myth.

Morrison will talk a lot about that on Tuesday night.

Get ready! An early election is coming

Get ready! We are 4 months out from a federal election. It’s not the polling that has determined this will happen, it’s the roadblock ahead.

Between the 4th August this year, the earliest an election can be called and the 19th May next year, the latest, there is a minefield of events that the Coalition will not want to compete with, in its attempts to stay in power.

The most difficult are the Victorian state election in November and the NSW state election in March 2018. Throw in the AFL and NRL football finals in late September/early October, Christmas, School holidays and Easter and it’s obvious.

Politically speaking, this August or early September is the only clear-air time realistically available for the government to try to redeem itself.

And the first opportunity for redemption will be the May budget, next week. Already, the signs are that it will be as generous as it can be for a government that realises it needs redemption.

The promise of tax cuts resulting from higher company tax revenue, a higher job participation rate, the abandonment of the Medicare levy hike, all indicate the government has already locked in a date with destiny.

They will be able to spruik a lower than expected deficit and a better than projected surplus in 2020/21. They will tell us that the economy is strong (it isn’t), that business is investing ((they aren’t), that they stopped the boats (actually we don’t know) and that Labor will be soft on immigration (simply not true).

They will tell us that without them in charge, the economy will collapse, that our international relations with the USA will be damaged, that Indonesia will invade us, that the sky will fall in, that God has chosen them to rule.

These are the credentials they will present to us over the coming months. This is what they believe will save them. Never mind their incompetent handling of the Banking Royal Commission or their massive accumulation of what is wrongly referred to, as the national debt.

Never mind the absence of meaningful policies, their internal squabbling, the Abbott factor, the Joyce factor, the Cash factor, their broken promises, the savage spending cuts that have devastated community groups across the country, the NBN debacle, the shameful inaction when dealing with Manus Island detainees, never mind all that and more.

They realise too, that the planned electoral redistribution, which does not favour the Coalition, may not be finalised in time for an early poll. That redistribution renders two liberal seats notionally Labor and several others marginal.

Labor, in the meantime, have not been asleep at the wheel. They realised an early election was probable a year ago and have been on an election footing for some months.

Their recent policy announcements on franking credits, no company tax cuts, removing the GST on tampons, the establishment of a federal ICAC, all point to a party ready to go to the people.

The election battle will be a tale of two parallel approaches. Labor will concentrate on micro issues, that of household debt, housing affordability, wages, the cost of living and equality, while the Coalition will present the broader picture of company profits, employment growth and projected budget surpluses and union thuggery.

From the Coalition’s point of view, the rhetoric will be mind-blowing, perhaps overwhelming. In the absence of a policy framework, they will be relentlessly attacking Labor, saying anything to mask their deception and their ignorance.

They will try to scare the bejesus out of us. The truth of it, however, will be easy to discern. They will say, “judge us on what we say, not on what we do,” a clear indication that they are a policy vacuum.

Without a proper policy framework, the coalition are always reactionary. Labor, on the other hand, will demonstrate how proper economic management should be, when fit for purpose. Malcolm Turnbull is also conscious of the possibility of a leadership challenge before the end of the year, courtesy of a slip of the tongue by Barnaby Joyce.

They are a desperate rabble and determined to stay in power. However, it will be up to us to decide and that will happen either in late August or early September,

The Hypocrisy is Mind-Blowing

It’s hard to recall the last time we saw Barrie Cassidy take a blowtorch to a government minister on Insiders, but that’s what happened this morning.

And it was obvious that his target, Kelly O Dwyer, never saw it coming, either.

The first thought that came to mind while watching the interview was, can you believe the hypocrisy? After calling Bill Shorten’s announcement in 2016 that Labor would set up a royal commission into the financial services industry, reckless and ill-conceived, very dangerous, and bad for the economy, here she was trying to take credit for this week’s revelations.

As hard as she tried to put a positive spin on the government’s belated decision to establish a Royal Commission, she was unable to withstand the blistering onslaught she experienced with Cassidy.

His grilling of her was a true reflection of current public sentiment. The hypocrisy from the government has been mind-boggling given that her party never wanted a Royal Commission. It only backflipped after being dragged into line, kicking and screaming, by members of the National Party who threatened to cross the floor in their determination to get one.

While trying to gain some credit for her government setting up the Commission, O Dwyer refused to address questions concerning her criticisms of Labor’s election promise in 2016.

In trying to defend the indefensible, she struggled to cut through with anything that was remotely beneficial to her party’s credibility. If anything, it highlighted what a nasty piece of work they are.

Everything she said, stood in stark contrast to her party’s persistent opposition to it, for so long. Meanwhile, revelations during last week’s hearings that customers were given poor financial advice, were charged fees for no service, that a dead person was charged ongoing fees, that the corporate watchdog was deliberately misled for years, makes us salivate over what might be revealed when things resume next week.

Client theft, more compromised financial advice, financially ruining peoples’ lives; who knows what other surprises are in store.

This government’s actions in cutting funding to a multitude of community services shows us only too well, how concerned it is for the welfare of its constituents.

So, for Kelly O Dwyer to try and convince us that her government’s first concern was for consumers, beggars belief. It was simply a bridge too far, particularly considering their 2014 attempts to water down ethical constraints on financial advisers introduced by the Gillard government.

Thankfully, that attempt was blocked by the senate with the help of Nick Xenophon, Jacqui Lambie, John Madigan and Ricky Muir. Unsurprisingly, it was the major banks that led the campaign for the Federal Government to roll back parts of Labor’s Future of Financial Advice laws (FOFA).

The hypocrisy endemic in this government, is such that it reinforces our ongoing contempt for their political manoeuvring, point-scoring and protection of favoured interests, all of which comes at the expense of governing for the people.

A federal election cannot come quickly enough.

Why a Universal Basic Income is a very bad idea

It is difficult to understand how an intelligent, highly trained man like Richard Di Natale could seriously suggest that Australia should introduce a Universal Basic Income.

It was even more surprising to hear channel 10 television host, Waleed Ali give some credence to the idea on The Project, last night, suggesting it was “no lefto pinky nonsense”.

Natale made his announcement at the National Press Club luncheon this week. For those unsure of it, a UBI is a basic, liveable payment to all citizens without any conditions attached.

Economists tell us it could replace all government spending on welfare, as well as housing, health and education. Even if that were true (it isn’t), it would still be a very bad idea.

According to Professor Bill Mitchell, a UBI is nothing more than, “a scam to absolve the government from its responsibility to create full employment.”

An article by Chris Hedges (April 1, 2018) – The Oligarchs’ ‘Guaranteed Basic Income’ Scam – published by Truthdig explains very succinctly, the purpose behind the recent push for a UBI.
He says:
“A number of the reigning oligarchs … are calling for a guaranteed basic income. It looks progressive. They couch their proposals in the moral language of caring for the destitute and the less fortunate. But behind this is the stark awareness, especially in Silicon Valley, that the world these oligarchs have helped create is so lopsided that future consumers, plagued by job insecurity, substandard wages, automation and crippling debt peonage, will be unable to pay for the products and services offered by the big corporations.”

We are being told that we are on the precipice of a technological revolution where robots are being assembled as we speak, to take over 40% of existing jobs. Never mind that those robots will still require human management.

Never mind also that the computer revolution that began 40 years ago was also going to put most of the workforce out of a job. It’s a familiar projection of future trends that keeps us both enthralled and intimidated at the same time.

A UBI would be another win for the top end of town. They are concerned that the downside of the technological revolution is that no one will be able to afford their products in the future. They are positioning themselves to put pressure on governments to spend money for no return, just to keep them in business.

The result is, the rich would continue to get richer as the poorer continued to be the victim. Paying people to do nothing, is as silly as it sounds. It is, as Bill Mitchell says, “a neo-liberal strategy for serfdom without the work.”

“Business leaders want to avoid attacks on their power as they kill off jobs in swathes. But they also will continue to work out ways to maintain control over workers and what better way than dishing out a little consumption bundle and keeping them out of the workplace,” he says.

A UBI would create a society where people become mere consumption units, where the demand for labour goes into decline, wages and conditions suffer and the inequality balance shifts even further in favour of capital.

National GDP levels would fall as people opting not to work, lowered their expectations and their living standards, forcing production rates to spiral downwards, prices to rise, inflation to run amuck and the only winners are guess who?

Little wonder business CEOs support the principle. It would mean more money for them, less overhead and bigger profits. This is not the society we want for the future, it’s the society from which we have been escaping these last 100 years.

If our business leaders were truly keen to care for the destitute and the less fortunate, they would support a job guarantee where the government provided a job for everyone who wanted work but were unable to find it.

A job guarantee would ensure a pool of workers ready to join the mainstream workforce when the economy was in recovery, help maintain production levels, increase taxation revenues and overall GDP.

Strangely sinister, is it not, that the wrong message, sugar-coated to appear electorally popular, is always the one that seems to get the most media attention, while the more beneficial option, the one that best serves the interests of the majority, languishes in the “it won’t work” basket.

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