I was in the airport lounge yesterday and as one does I picked up the right-wing Australian Financial Review (which purports to present financial news and comment but is in reality a propaganda machine) and read an Opinion piece, which would serve as a classic demonstration for statistical students of how to confuse causation with correlation. It would also serve as a classic piece for macroeconomics students on how to completely misunderstand the role of fiscal policy and the dynamics that are associated with it. All round an excellent learning piece – in the right hands. But in the hands of the normal reader, not versed in these matters, the Opinion piece is a trashy piece of dangerous propaganda, which serves to indoctrinate the readership into believing that the correct policy path is, in fact, exactly the opposite of the responsible policy path for governments. It still amazes me how this sort of rubbish can parade as serious public offerings to the economic debate. It was an appallingly ignorant article. One of the worst you might read.

The latest survey data from the Bank of Japan is interesting and supports a growing awareness among policy makers that monetary policy has run its course and will have to work more closely with active fiscal policy to stimulate economic growth. These insights have been a hallmark of ideas advanced for many years now by Modern Monetary Theory (MMT) proponents (including myself). The data shows that the negative interest rate and large-scale quantitative easing programs that the Bank of Japan has been pursuing have not had their desired effect. It was clear when they were announced that they would fail to achieve their goals. I wrote about that in 2009 and 2010. But it seems that the mainstream policy debate has to be dragged kicking and screaming through a series of policy failures before any progress is made towards actual solutions that will work. The Bank of Japan Board meets later this week and I am hoping they announce their intention to work closely with the Ministry of Finance (fiscal policy) to introduce Overt Monetary Financing (OMF) where the bank provides the monetary capacity to support much larger fiscal deficits with no further debt being issued to the non-government sector. That would finally put policy on track to do something effective and productive. It would also provide some policy leadership to guide other nations towards a more prosperous future (like Britain).

Australia is at the end of a long federal election campaign (albeit not as long as the US) and the vote is on Saturday (July 2). Both major parties – the conservatives (who call themselves liberal but oppose many freedoms) and the Labor Party (who are conservatives in drag these days) – have gone to pains to convince the voters that they will get the fiscal balance back into surplus by 2021. The Labor Party, which was meant to be the political voice of the workers has proposed something like $A71 billion in spending cuts and tax hikes (or scrapping tax cuts promised by the conservatives). But both are content to leave more than 15 per cent of the labour force lying idle and to oversee rising inequality, rising poverty and social alienation, in a nation that is arguable in the top three wealthy nations of the world. Moreover, the obsession with pursuing fiscal surpluses is taking a heavy toll on public infrastructure and social and community assets in Australia. The latest data shows that there is a massive shortfall in expenditure on these assets and that more than 11 per cent of these essential assets are in a poor to very poor condition, which means that the assets are incapable of serving their function including supporting economic growth. As well there is increasing evidence that shows the transformative nature of public investment in innovation and education. We starve the state and public infrastructure development at our peril. That should inform a progressive agenda if nothing else does.

I do not have much time to write today. But this evening I am heading to a very exciting event in Newcastle run by – Sun Crowd. It is the first energy storage bulk-buy campaign in Australia and Newcastle is the first city to launch this initiative which will see hundreds of households go off the energy grid and rely on our copious supply of free solar energy. The bulk-buy campaign is a cooperative (not for profit) venture which allows many households to team up to achieve low cost purchases of storage batteries, panels (if you haven’t already got them) and receive technical advice to cut through the complexity of the technology. Our household, which already is ‘off the grid’ during daylight hours (thanks to our solar panels) will soon be able to store our excess electricity we generate during daylight hours and use it up at nights instead of exporting it into the national grid at ridiculously low prices (thanks to the power (excuse the pun) that the power companies have over state government policy. So we are off tonight to get a big mutha of a battery at discounted prices (due to the bulk buy) and free ourselves of the high charges the power companies. Our next step might be to set up a local community power company and generate free power co-operatively for all from the sun. So, pretty exciting. Today also marks the publication of Bloomberg’s – New Energy Outlook 2016 – which provides the latest data on the relative costs of solar/wind against coal fired power generation. The numbers are moving firmly in favour of renewables which should see many more households moving off coal-fired power in the next decade or so.