Adam The God

Clayton Oliver by quite a way...

Government interest rates have been 0 since near the top of November. I still think bank interest rates will go down further, but it's certainly a good time to borrow providing you can service it. Interest rates should never go up again, but you're right. They'll probably go up in 5 years time if we're still bungling about with the same economics.

I'd start by reading RECLAIMING THE STATE mate. You're spot on about Australia's geographic superiority for renewable energy and even sustainable agricultural land. But the biggest hurdle we need to get past is the fallacy that free markets are too powerful and that the government needs to get out of the way. It is a lie and any possible situation you can think of, the government has the real control and markets depend on the government, and exist because of the government. Australia cannot be attacked on the foreign exchange, while we float our currency we will never suffer a balance of payments crisis and as long as we maintain monetary sovereignty (unlike the EU and many developing nations), we can greatly improve our domestic economy and then help others. When we help others, if we show leadership in the ecological space and provide financial support where necessary for developing nations to ensure they can develop their own nations without unsustainable ecological degradation, we can start to make a dint in the battle against climate change.

Thanks @dieter. I mentioned the ecological costs in my previous post. We need a just transition for fossil fuel workers and their families to ensure they don't immediately become unemployed, meaning our transition to sustainable industries would be negatively socialised. I've heard Bill Mitchell talk about a just transition, which would be anywhere between 10 and 20 years. You cannot simply close the mines tomorrow. You need to wind them down. Neoliberalism has had dramatic ecological impacts and if we're going to have an habitable planet, we need to deal with this, and quickly. Keating was a great orator but horrible on economics. His lasting legacy will be that he floated the dollar, but his deregulation of the financial sector, quashing of capital controls and wage suppression via the Prices and Incomes Accord of 1983 have been a disaster for our country IMO. Not to mention his sale of national assets like QANTAS (it'd be great for all those workers that just lost their lobs if the airline didn't have to run at a profit even in a recession) and CBA. He could also be credited with starting the depoliticisation of the RBA in this country too. The RBA is independent in name only, I may have written this already somewhere, but the RBA board is appointed by the Government, operates under legislation laid down by government (or politicians) and along with Treasury (the chief public servant in the Treasury sits on the board), decides on the Government interest rate. It's simply so politicians can defer to unelected technocrats that the RBA has been given any sort of 'independence'. As the former RBA Governor Bernie Fraser once said "Given that central banks are created by government legislation and derive their powers from such legislation, they cannot be completely separate from the government". That speech is available on the RBA website. Whitlam was a legitimate progressive, but his Treasurer Bill Hayden became a monetarist and turned the Labor Party into a fiscally conservative party that no longer represents working people. They've never recovered. The back end of the Whitlam Government saw the goal of tight full employment abandoned and when the Labor Party is telling people there is a natural rate of unemployment, then there's no chance of achieving what is laid out in the RBA Act legislation. What I've learned from the economics of Bill Mitchell and co is the importance of history and empirical evidence. The mainstream does not operate in the real world. It is based on a world of barter where money is neutral (anthropologist David Graeber's book DEBT blows this out of the water - there is no anthropological evidence to suggest economies ever operated on barter and markets have always been entwined with the state); households can make superhuman decisions all the time, based on information they could rarely predict consistently; there are no banks; and there is certainly no chance of an endogenously created financial crisis. The latter of course was how the GFC was created, with financial institutions expanding credit unsustainably across the financial sector. That is, because central banks cannot control demand for deposits in private banks, the endogenous demand for credit by households and businesses can drive private debt to unsustainable levels. This IMO is where Australia is currently at. Finally, the con of neoliberalism and its supposed free market approach without government intervention is that in order to privatise and deregulate, you need the government as a massive player to kick start anything. As for profits and wealth creation, it needs the government spending big to the rich in order to operate.

We don't need China. This is what RECLAIMING THE STATE shows us. Neoliberalism has taught us that we need globalisation to deliver prosperity and that the nation state cannot compete with the power of global markets, but that's utter rubbish. Apart from the ecological costs of continued mining, we need to reorientate our economy around the domestic and ensuring tight full employment and prosperity for Australians. The RBA Act 1959 specifically states all this. We need leaders who are prepared to ingest in Australians and ensure workers have jobs, rather than multinationals maximising their profits. China have managed their exchange rate brilliantly. They are a rare example, but they are still incredibly beholden to the US. Their currency has an unusual peg to the USD, but nevertheless a peg. So they're essentially operating in fixed exchange paradigm. Their working population gives them a great advantage though as you say. Labor is making noises about pivoting towards making things in Australia and full employment, but given who their economic advisors are at Federal level, I don't see how they're going to manage any of that.

Not sure.

Smith and Laurie are mates, so it'll be interesting to see if we pick up Smith.

This might sound strange, but given the league wide austerity measures, I wonder if clubs will take on less wages and save dollars that way. Particularly, given our likely $2mill loss. If we could eat into that by not taking an additional player or two, we might save a few $100k there...

Well, this is why the Government (or its central bank) acts as a lender of last resort, which is to basically act as a backstop to the major licenced financial institutions and ensure there's no run on the banks. The Government can pay can debt owing in AUD as it issues the currency, so that's not a problem. But the private sector running on credit is simply unsustainable. It can work for a little while, particularly if debt levels are relatively low and perhaps there's a demand on the trade account (ours was a once in a 100 year occurrence between 2000ish-2007), but ultimately the private sector buckles unless the government deficit spends (that is, puts more money into the economy than it takes back out in taxes). Households and businesses cannot pay down their debt if they're in a perpetual state of debt financing. Government spending enables the private sector to save and either pay down the debt or invest in assets. In other words, government spending crowds in, despite the common economic mainstream myths. I'm beginning to think that the LNP will keep JobKeeper going past March next year, which will mean parts of the private sector will be able to save, meaning the crash may be delayed, but unless the government starts spending, it's all over at some point in the not too distant future. There's a terrific graph one of the journos posted on Twitter the other day, which basically shows that the Government didn't spend a dollar in the 2nd and 3rd quarters outside of JobKeeper and JobSeeker. Next year, their 2021 budget is so small that if JobKeeper is stopped and JobSeeker is halved (back to what it was prior to the pandemic), in terms of GDP, we won't just stagnate, the economy will crash. Meanwhile, you've also got a property bubble and a share market bubble. The financial system is on a cliff top ready to tumble and take millions of families with it. What might actually happen though is that the states and territories will shoulder the deficit spending that the Federal Government can't be seen to do (ideologically), and in the background, the RBA (so the Government) is buying up billions of state and territory debt and effectively financing the spending of the states. This could help keep the wolf from the door a little longer too. Here's that graph by the way.

Are you connected with Chelt Secondary College, Bob?

I thought he was midfield?

I suspect you're right, although I'm not comfortable with Richardson taking over list management. He didn't exactly set the world alight with his list building at St Kilda... I reckon there might be one more face to join the FD. Is list management and game day strategy an odd combination for a single role?

You really are a gronk. Thanks for your service, Josh. Would have loved him in our corner for this draft, but the time was probably right. I never like former employees having IP on you. Hopefully Essendon won't be competing with us any time soon.

Echoing the rest of this thread, really excited about Williams' appointment. I wonder if Mahoney's leaving will open up some soft cap space for another coach in there? Say a strategy coach...

If he says there is no fiscal policy that can replicate what the World Wars did, I'd say he is utterly wrong. Firstly, the lack of adequate fiscal policy and regulation over the private banking sector caused the 1929 crash. Secondly, the fiscal policy position taken by governments post WW2 was a full employment agenda. That agenda is still absolutely possible, but what happened eventually is that the market lost its discipline and so slowly lobbied for deregulation in search of higher profits. Things that were previously illegal were now okay and the financial system grew increasingly unstable. This is why I follow Minsky and his disciples. His belief was that stability breeds instability in the capitalist system. He was a Wall Street insider and had a very good handle on private banking and central banking operations. He said that the Kennedy jobs program would fail in the 60s because there was no employer of last resort. He was right. He was big on the lender of last resort too, in terms of the central bank stepping up and backstopping the system from failing. He would not have liked what the US did in response to the GFC though. He'd be shaking his head at Frydenberg's approach to the banking sector also. That guy is a deadset loser. I wouldn't let him handle my company accounts, let alone the country's. He even managed to get the Herald Sun off side by trying to run a surplus in 2018-2019 that triggered two per capita recessions and he didn't even managed to run one. I will be surprised if the LNP in its current form and the ALP in its current form exist in ten years time. They're both utter disasters who represent no one but corporate interests, maybe some religious interests too and that's about it.

The government interest rate is now 0 and has been for a month. The Gov announced at the start of November that it would stop paying interest to ES balances, which was the last interest bearing route that was initially the support rate (0.10%) below the 0.25% cashrate. But when they announced that 0.25 cashrate in March, they introduced QE too, so due to the excess deposits in the banking system resulting from QE (QE is an asset swap - gov bonds or highly rated corporate bonds for new reserves in the private banking system), the interest rate dropped to the support rate 0.10%, which is what the RBA paid on ES balances. There hasn't been a real reason other than maintaining interest rates to issue debt since we floated the dollar in 1983, but now there is certainly no need to issue debt. So gov/public/national debt will start to come down now, as shorter bonds mature, providing interest rates stay low. The New Daily wrote this piece today about market sentiment and how market confidence is back and then proceeded to cite CBAs household credit numbers being higher than 13% at this time last year. In other words, households are driving the economy with debt. I read the Fin Review a bit and one of my best mates is in property and all I hear from both is deluded blue sky junkiness. I'm constantly saying, the private debt level is unsustainable, nah, nah, we're back on track. No we're not. 21% of new loans are interest only. As Minsky would say they're somewhere between a speculative position and ponzi position. And yet the Federal Government wants to continue deregulating the banking sector. Absolute nightmare on the horizon.

Yep, Reclaiming the State blew my mind. It really is the roadmap for getting out of our current mess. If you see the debates about China at the moment. We don't need China. One of the most dangerous things the Liberal Government did was allow Lib MP Andrew Robb to lease Darwin Port to the Chinese on a 99 year lease. The company it was leased to, he then sat on the board of after politics. It's utterly traitorous IMV. I don't mind Chinese companies holding state bonds or federal bonds, because we issue those in AUD, so can always pay them back. But I don't agree with the idea that we need them for infrastructure or resources whatsoever. The state has the power and crowds in with its spending. Without it, the private sector relies on debt to drive spending and higher profits. The latter is not always possible, because the economy is inherently unstable. Our Federal Government has the capacity to purchase anything available for sale in AUD. It issues the currency. We should not be selling bonds to China, although it's fine, it means they're looking to invest here. But even allowing direct foreign investment is a political choice. Japan doesn't. It's a very closed economy. I'd be looking at what they've done with their private debt levels too in Japan. We have the second most in the world to GDP, and the Japanese, the Brits and even the Americans have less household debt to GDP than we do. This is where the crash will come from - the housing market. As for Keynes, his General Theory, which inspired the so-called Keynesians is still an important work today, but Keynesians (neo and New) have bastardised the General Theory and Keynes' ideas. One of his fundamental ideas was the economy was unstable. The mainstream has completely butchered Keynes and as his contemporaries once said it's a bastard form of Keynes, with its roots in Ricardian Classical Economics and Walrasian General Equilibrium. The mainstream does not describe the real world. It describes a barter world with no anthropological evidence to back it up. But that doesn't matter, because it's just a story. It's wrong though. He effectively says that Friedman predicted the GFC and that the only reason the central bank targeting the money supply didn't work is because the central bank had moved away from it. For starters, they moved away from it, because it didn't work. Friedman used Marx's idea of Reserve Army of Labour and created NAIRU. I think he was a dangerously wrong economist whose ideas were proved to be incorrect within a decade of winning Sweden's central bank economist award (sometimes called the Nobel Prize - it is not a real Nobel Prize...). His economics are still part of the foundation for the New Keynesian movement. New Keynesian has its roots in Friedman's monetarism too. Deregulation has been an absolute disaster and caused the GFC. It's completely disingenuous to suggest otherwise. Keating, Clinton and Blair's deregulation have absolutely smacked our three countries. He had no idea about institutional operations, unlike Minsky who worked with private bankers and central bankers all the time. And Ferguson is an absolute hack, and either liar or deluded. He holds up his phone and claims the free market is responsible for it. Except that the R&D that took the chance on tech companies like Apple was the Government itself. The big giants all started with R&D grants and loans from the Government. Again, disingenuous. He also cites Krugman twice as some sort of left wing intellectual. The guy is the king of the neolibs and his career relies on continuing the lie of his economics. His quote from Friedman that he uses to cite the importance of the free market hinges on the corporations acting within the law. Moments earlier he talks about the importance of Friedman to the idea of deregulation. It's only legal if someone deregulated it. It used to be illegal for banks to deal in many things they are currently allowed to deal in, and yet those very risky practices are what caused the GFC. And yet this bloke is up there talking about Friedman and the GFC in the same sentence and not realising (or again, not caring) that his ideas caused the shift from a stable robust system of capitalism that gave us the golden age of capitalism, to one that is either in crises or stagnation. The only reason Friedman went mainstream was because the Neo Keynesians like Samuleson had no answer to the real world problems (like the OPEC oil shocks) of the 1970s. If they'd used more of Keynes' ideas or Abba Lerner's ideas, along with Minsky's, they'd have found it quite possible to beat off the inflation and there would never have been the unemployment that followed. Minsky was calling for an employer of last resort from the 1960s. That idea is today's Job Guarantee proposal. That's how slow this stuff moves. I agree with Ferguson on his views about the EU, but he flip flops so much you wouldn't know what his new view is this week. Yeah, we need to get serious about R&D in this country. If we do, we'll have everything we need at our finger tips. We need nobody and we do not need direct foreign investment either.

I don't really buy this angle. We're looking at picking kids. If we're resting our hopes on 3 or 4 new kids coming into the team and radically changing it ala Port a few years ago, I don't believe that's a sound strategy. Way too much of a lotto. I think we have our eye on 2 or 3 we think might slide to our picks and we're happy enough with our position in 2020 that a few interesting kids could slip. 2021, we simply do the same thing again and trade in. It's a credit strategy and I like it.

Gee, this makes the Bulldogs look pretty [censored] poor too.

Right. Because antifa is a decentralised movement. Much like Black Lives Matter. It's not organised like the KKK or other white supremacist organisations. It's another Trump furphy. And as for anti fascist, I genuinely can't believe anyone would be pro-fascist given what the fascists did to Italy, Germany and the rest of Europe not that long ago. Anyway, Twitter, Facebook and LinkedIn are all owned by the mega structures that prop up the the two party establishment. I've always found it funny that the tech giants are being demonised (don't get me wrong, they're a massive problem), but certain billionaires are being lauded. Trump being one of them. Musk another. They're billionaires that have increased their wealth, while working people are [censored] upon. While in the case of Facebook, they're linked with not doing enough to stop genocides in various African nations. They all need to be regulated. It's tricky, but possible.

That's completely fair. I withdraw my previous post.

I tried googling Eric and nothing really comes up. I assume this is an algorithm thing... Can you explain who he is and what he's done?

I'd say it's moved to the neoliberal centre, but that's just my opinion.

This is the thing. It's unemployment. The mainstream (ie the two major party establishment) think 5% of the working population should be kept unemployed to prevent against inflation (NAIRU - https://www.rba.gov.au/publications/bulletin/2017/jun/2.html). What sort of [censored] up mind would come up with that plan for price stability? As I said, Marx had those sort of ideas, but so did the monetarists and now the neoliberals. This is why the Federal Job Guarantee is a far better bufferstock and helps everyone. The people that would otherwise be unemployed, businesses and wider society. And the RBA are mandated (via the RBA Act 1959) to maintain full employment, price stability and prosperity for Australians. The Federal Job Guarantee should replace NAIRU in the macro structure and it will improve price stability, will achieve tight full employment (with price stability), aggregate demand and our economy will boom (sustainably - when the government spends into the private sector, it allows the private sector to save, rather than lean on debt) as a result. Biden has just appointed Yellen as you mentioned, so expect the debt conversation to go on and on. She's a massive neolib. America will not get change with her, unless she's suddenly learnt new lessons. I'd also say that while decentralising the jobs is a great idea, I think we need to renationalise some sectors or at the very least semi nationalise certain sectors. We can't expect the private sector to be able to provide all the jobs, and also have liveable wages. The financial sector, of which my old man was apart, needs to be completely reformed to serve the public purpose and ensure price stability and capitalist stability. We don't agree on a lot of politics, but he'd agree with me on that one. Then you've got the energy sector. That needs to have a government player as a price lever (privatised energy prices have not led to better outcomes for consumers, we are being ripped off). The aged care sector and healthcare as a whole needs to be completely renationalised. You cannot expect businesses to run at a loss in aged care, so you remove the profit motive from care altogether. There's plenty of other realms business can partner with government to achieve profits and equitable wage share for workers. If you look at how some of the big tech giants in the US started, they were financed through R&D grants from the US Government. The US Government (like our federal government) is not financially constrained, so can crowd-in investment and support the private sector as it tries to find the next big thing. But that requires money, so R&D is a big thing I'd be investing in and sciences. Australia could be a powerhouse in the sciences. We have incredible minds. Instead of looking outside of Australia, I'd be empowering businesses through these grants to hire Australians. It's all no brainer sort of stuff with the right economics.

Absolutely. Neoliberalism is rendering the masses powerless. It's very deliberate. The problem is there is always a point where there are more people than say 20% getting [censored] over. In actuality of course it's closer to 90%, but I think we're getting nearer to the point where almost 50% realise it's rigged and they'll agitate for something else. I mean, that is essentially what Trump represented to America. I think it could happen here in the next year or two because private debt levels and stagnant wages are too much. Marxism to me always seems like a ridiculous pursuit, each to their own, but the idea of an society society of workers controlling the means of production is based in a very similar fantasy to neoliberalism and that is, it forgets the power of the state. Besides, the monetarists (some of the hard core conservatives and their right wing think tanks) used Marx's natural rate of unemployment and used it to enable governments to shift profits from workers wages to corporate profits. Anyway, that's all I'll say on that front. I agree with a lot of what you've written there. I find the disaffected Christians a really interesting group. There's clearly a similar yearning for the past amongst more evangelical Christians. If you look at the Labor Right faction, their fundamentalist approach to Catholicism has shown them to be essentially small l Liberals. My grandfather was a lay preacher. He'd be rolling in his grave the way some modern Christians treat others, particularly the vulnerable. But I think neoliberalism simply comes down to greed, not any one group, except those with big capital in the first place. One of the world's most important economists you may never have heard of, is Melbourne Demons-supporting Bill Mitchell. His book Reclaiming the State is a must read and explores the left's surrender to neoliberalism. Fascinating stuff.