Last week the former RBA governor, Bernie Fraser said that Australia was suffering from the “stupidity of government” by pursuing a budget surplus in present circumstances. He described our fiscal policy approach as being “just plain dumb”. It seems that the politicians are reflecting the standards that are now apparent in our educational system. The nation was shocked today with the news that we are not as smart as we like to make out. This Sydney Morning Herald story (December 12, 2012) – Australia’s disaster in education – is representative of many articles and discussions across today’s media offerings. The reports said that our children achieved “disastrous results in the latest international reading, maths and science tests”. The shock that the nation is experiencing is large today, about as large as the collective indifference to the damage that two decades or more of poor fiscal policy practice has been. We have allowed our governments to run down public infrastructure in pursuit of budget surpluses. We have let them deliberately reduce the capacity of our schooling system so that we can no longer keep pace with international standards. We have believed that this strategy exemplified responsible fiscal policy. It just shows how dumb our society has become. It also reveals, once again, the failure of the neo-liberal policy regime that dominates.

I have written before about the obscene way the Australian Federal Government is treating the people who have been forced to live for extended periods on unemployment benefits as a result of the Government’s refusal to create enough jobs. The current dole payment is well below the poverty line in Australian and the Government has refused to lift it saying it would undermine the incentive for the recipients to seek work. The problem is, of-course, that there isn’t anywhere nearly enough jobs or hours of work being generated in the economy and at least 12.5 percent of workers are unemployed or underemployed and that proportion will rise in the coming year as a result of the Government obsessive pursuit of a budget surplus. But in Australia, not only does the government deliberately create unemployment but it then forces the victims of that failed policy strategy into humiliating schemes of income management, which the evidence now confirms is nothing more than another layer of managing the unemployed rather than advancing living standards.

Yesterday, I indicated that I would comment on an article that was published in the Melbourne Age (December 3, 2012) – Dimming of the light on the hill – which documented the Federal government’s abandonment of any commitment to achieving full employment. The by-line of the article read that “(o)nce it was a political mantra for the Labor Party, but the goal of full employment has dwindled to a distant memory”. This article is one of the first I have seen in years that tackles this question. It is a topic that most regular readers will realise is one that I have spent most of my career promoting for discussion. My Phd is about it. Many of my published articles and books is about it in one way or another. Modern Monetary Theory (MMT) is about it. But the mainstream media avoids discussing it and, instead, accepts the line peddled by the government and its crony economists that a lie is the truth. That 12.5 per cent labour underutilisation rates are in some way consistent with full employment. Our grasp of history is poor in this nation and this article serves to remind us of what was once a truth. It also reminds us that the abandonment of full employment as a policy objective by our Federal government ranks up there with the other (many) national disgraces, including, for example, our treatment of indigenous Australians and our treatment of refugees. Why do we gain succour from (unnecessarily) treating the most disadvantaged among us so poorly?