After yesterday’s shock admission that our Federal Finance Minister Lindsay Tanner was losing sleep because he was worried about the Federal debt buildup, there he was on the ABCs 7.30 Report last night giving us more cause for concern that his sleeplessness is having a negative effect on his ability to conduct reasonable dialogue on economic matters.

One of the advantages of running the economy at “high pressure” – that is, with low unemployment is that some of the more malevolent aspects of human behaviour are suppressed. We know that when the economy goes into a downturn, firms increase their hiring standards because they have the upper hand – lots of workers are unemployed and so the firms can pick and choose more readily. One of the worst aspects of these adjustments is that pure prejudice begins to reveal itself more openly. The most recent data from the US suggests this is the case.

Senior journalists often do more harm than good when they write about technical issues that they clearly do not understand. In many cases, they rely on the technical knowledge of their favourite economist or the flavour of the month economist and they are not skilled enough to know when their “economist” is also talking rubbish.

Australian governments have not yet understood that privatisation was yesterday’s strategy to abrogate their legitimate responsibilities. Today it has no place in a return to a viable sustainable and balanced mix of public and private activity. Privatisation was part of the swing to market-based allocations and a blurring of public interest with private profit. The two rarely go together if ever. While the NSW Government is still trying to push the sale of the electricity generators, the other major privatisation push is to extend the private ownership and operation of our prison system. There is no way that we should ever give monetary incentives to imprison people. Here is what happens …

The long-awaited National Account data was released today by the ABS and shows that the Australian economy is now sliding along the zero line. The headline result was that the measure of overall economic activity, Gross Domestic Product (GDP) decreased by 0.5 per cent in the December quarter. This is the first negative result since December 2000. So one more negative quarter and we will all cry recession. For the 12 months December 2008, the economy grew by the very modest 0.3 per cent but this was driven by agriculture. Non-farm GDP did not grow at all over that same period. What are the signs for employment and what is the government doing? Here are some of my thoughts …