Whatever one thinks of Donald Trump, there was something he said in his inaugural address today, that Malcolm Turnbull should note well.
Trump said,“We will build new roads and highways and bridges and airports and tunnels and railways all across our wonderful nation. We will get our people off welfare and back to work, rebuilding our country with American hands and American labour.”
This could be a blueprint for Australia as well. Does anyone think The Donald would be concerned about where the money comes from? Not likely. One suspects he is already ahead of the game.
Speaking a week ago to CNN’s Chris Cuomo, he said, “First of all, you never have to default because you print the money, I hate to tell you, OK?” He was answering a question on the $20 trillion of US bond issuance and added, “I understand debt better than probably anybody. I know how to deal with debt very well. I love debt.”
Compare that boldness with the Australian government’s obsession with debt and bringing the budget back to surplus. Whatever one thinks of The Donald, he is right. He certainly has no fear of private debt and realising, as he clearly does, that sovereign debt is altogether different from private debt, one can surmise he will use it to, “make America great again.”
Furthermore, Trump has no fear of the American media.
How we yearn for someone like that here in Australia. Take the latest labour force figures released by the ABS. They paint a dismal picture.
As Professor Bill Mitchell repeatedly warns us, “we always have to be careful interpreting month to month movements given the way the Labour Force Survey is constructed and implemented.”
What Prof. Mitchell tells us though, is that the latest employment figures for December suggest, “the Australian labour market remains in a weak state and confirms that the September-quarter GDP figures, which showed real GDP growth being negative were probably part of a downwards trend.”
Unemployment increased in December to 5.8% making a mockery of the Turnbull government’s “jobs and growth” mantra. Furthermore, the underutilisation rate (underemployed and unemployed) is at 14.7% unadjusted.
Over the last 12 months, Australia has produced only 91,500 (net) jobs with 125,500 of them being part-time jobs. In other words, full-time employment has fallen by a disturbing 34,000 (net) jobs over the same period.
The disturbing trend toward part time work continues at an alarming rate where today, one in three Australian workers are part time, compared with one in five in 1988. This has serious ramifications for demand, for tax receipts and overall growth.
If ever our mainstream media had the ammunition they needed to press for a Trump like approach to drag our economy out of the doldrums, they have it now. Will they use it? Not likely.
Will our government cast aside their obsession with deficit spending? Not likely. Unlike Trump, our government fears the media. Every thought-bubble they have is followed by the question, “how will the media react?”
It may well turn out that while the world looks the other way, waiting in fear for how Trump might manage China or ISIS or immigration or any other of his more outrageous claims, the man himself might just reconstruct American infrastructure and in the process, restore its flagging economy.
And it probably won’t cost a sovereign cent.