Enforced poverty and torture for the victims of government policy failure – welcome to modern Australia

My Wednesday blog post with a few snippets. Don’t forget to enrol in our MOOC which begins next week. Also, some news from Britain that shows once again the British Labour Party has the gun aimed straight at its foot. And some comments on yesterday’s Australian government decision to increase the unemployment benefit by $25 per week and claiming this was appropriate – when it still means the recipients are $163 per week below the accepted poverty line. Enforced poverty by a government that refuses to create enough jobs and then punishes the victims of the policy failure. This all amounts to War and we can sing along to that after getting angry about the rest.

Modern Monetary Theory: Economics for the 21st Century – starting March 3, 2021

Don’t forget to enrol in the upcoming edX MOOC – Modern Monetary Theory: Economics for the 21st Century. The free course begins March 3, 2021 and over 4 weeks will provide an introduction to MMT.

The course is introductory and covers a wide range of issues.

We begin by improving the students’ economic literacy with terminology, concepts and language.

In Week 2 we get into history and the first steps in understanding MMT.

More detailed material emerges in Week 3, which helps us deal with policy questions in Week 4.

You will be required to spend around 3 hours per week on the material – videos, articles, discussions, quizzes, polls etc – to really gain from the course.

Skimming the material will likely lead to a less-than satisfactory outcome.

If all goes well, we will start building MMT201x which will offer a more complex, technical study course.

This marks the first venture for – MMTed – in partnership with the University of Newcastle.

Further Details:

From University of Newcastle:


From edX:


Sickening Australian government decision re the unemployed

I last wrote about the plight of Australia’s unemployed in this blog post – Unemployed in Australia forced to live in abject poverty and the business sector thinks that is fine (February 4, 2021).

I won’t repeat the details because they are current.

All we do here is see what the latest piece of inhumanity from the Australian government does to the analysis.

Yesterday, the Government finally bowed to pressure from just about all angles and announced it would increase the single, adult unemployment benefit payment by $25 per week to $307 per week.

What does that mean?

The poverty line for a single adult is around $470.

So it means that despite the so-called “appropriate” increase (PM’s words) of $25, the gap between the unemployment benefit and the poverty line is still $163 per week.

And I see lots of progressives in the ‘industry’ – the ones who have decided to be co-opted by government and regularly have meetings with government and engage in well-catered for talkfests about the plight of the unemployed – were calling for around an $80 per week increase, which would still leave the unemployed in abject poverty.

The following graph shows the evolution of the Single Unemployment Benefit and the Single Unemployed Poverty Line since 1973 until March-quarter 2021 (modelling the $25 increases as if it had been paid in the current quarter).

During the pandemic the government paid a temporary COVID-19 supplement to the unemployed which they have progressive cut and be replaced by the $25 increase at the end of March 2021.

The following graph take into account the temporary COVID-19 supplement as it impacted on single adult unemployed persons. It shows the data from the March-quarter 2019 in order to see the impact of the supplement more clearly.

You will note that for the first period of the Supplement the income support payment (green) moved above the poverty line (red).

But when that was cut in September to $A250 per fortnight the income support payment plus COVID-19 supplement once again pushed workers below the poverty line.

As of January 1, 2021, that situation has worsened even further and by the end of March 2021, workers will be back on the blue line.

The Government also ‘toughened’ the activity tests – as in made the torture more extreme – and, among other things now require an unemployment recipient to apply for 20 jobs every month to remain on the penurious benefits provided.

At a time when the labour market is in deep crisis and more than 14 per cent of available labour cannot find enough work, trying to find 20 jobs to apply for each month is nigh on impossible.

So employers just get flooded with applications that have no hope of success yet the sociopaths in Government and its bureaucracy are content that the bastards are not idle.

Sickening really.

Australia is a shameful place these days.

We should all hang our heads low for tolerating this.

British Labour proving that they still know how to go backwards

A few weeks ago, the British Opposition leader delivered what was described as a pathbreaking speech where among other things he unveiled his latest gee-whiz idea – Recovery Bonds.

The apparatchik came up with this idea should go into the halls of recommendations that make Labour unelectable – along with colleagues who gave Labour the Fiscal Credibility Rule.

All these ideas are cut from the same cloth.

The cloth of irrational fear of the power of global financial markets and tepid support for the framing and concepts of neoliberalism.

It isn’t a winner Keir, no matter how flash your business suits and silk ties are when you talk about this stuff.

You should be moving beyond the stifling and crippling government financial constraint narrative that always leads to questions of what tax or debt will be raised when government spending increases and thereby derails the actual narrative and reframes anything that might be progressive about the spending plans back into the ‘how can we afford it’ neoliberal, mainstream macroeconomics frame.

Defeat follows quickly.

The Tories know how to do it.

Just spend up big and don’t mention the War (the how are we going pay for it!).

They have no insecurities about the City of London.

But Labour always scores own goals, which includes going down to the City and begging the greedy speculators that inhabit that part of London to accept the Party as a viable government that will deliver as much corporate welfare and as little general welfare as the ‘desk jockeys’ think is appropriate.

The latest move to establish – apparently – credibility – is the Recovery Bonds.

Apparently, some advisor or another has convinced the leadership that changing the name government debt to recovery bonds is a winner.

The framing doesn’t change.

The cries of “how will you pay for it” won’t change.

The fears of tax hikes to ‘pay back all the debt, sorry, recovery bonds’ won’t change.

The ‘you’re burdening our grandkids’ cries will not change.

The Party should get real and use this period in oppposition, where they face one of the worst governments in British history, to educate the public and reframe the debate entirely.

And it isn’t as if the leadership is kicking too many goals.

The latest voting intentions see the Tories going further ahead as the Labour Party slip further.

The latest – February polling:

Conservative 43% (+2)

Labour 37% (-1)

Liberal Democrat 7% (-1)

Scottish National Party 4% (-1)

Green 5% (-)

Reform UK 3% (+1)

Plaid Cymru 0% (-)

Other 1% (-)

The “highest lead since early September”, lockdowns, virus out of control, Brexit, and all.

The results from Politico are not that much different.

Go figure all you genius advisors and New Statesman commentators.

Webinar – MMT and the new social contract: Lessons from Covid-19 – Coming this Weekend!

I will be sharing the stage with my good friend Dr Pavlina Tcherneva and talking about how MMT economists talk about the social contract.

We will be considering the role of the Job Guarantee and lots of other things.

Go – HERE – for details about enrolment and participation.

It will run on Saturday, February 27, 2021, from 10:00 Australian Eastern Daylight time.

Music – Now for the War

Regular readers will know that I am partial to reggae and dub music – and even started Australia’s first live reggae/dub band in the 1970s which is still going strong – Pressure Drop.

I always like Bob Marley’s music but moreso his early 1960s recordings as the – Wailers – rather than the later more Americanised, pop reggae.

But he was a genuine and pushed issues that we should all care about.

His song – War – was on his 1976 album – Rastaman Vibration – his 8th studio recording released.

This album really set him up in the US market because it was poppy and the consumers were probably more likely to ignore its political messages, which were anything but representative of popular US culture.

I didn’t like it much but two songs, War and Who the Cap Fits – were excellent.

Anyway, more recently a multi-talented American guitarist and singer – Molly Tuttle – recorded a version of the song while streaming a live concert at The Basement in Nashville.

She is a magnificent guitar player although in the Bluegrass and Country tradition (which is not to my liking).

She has recently been doing a series of cover songs across a range of musical forms that display her versality.

This version of War with just a bass and drums backing is as good as the original and I rarely conclude that with a cover song. There are no Bluegrass licks and the singing is full of soul and fury with no country twang.

This is not her usual band. She put together the powerhouse backing band especially for this concert (Annie Clements, bass; Megan Jane, drums). They do do a lot of work in Nashville. These two woman can really play as well.

And for you guitar afficianados – her Collings single pickup Eastside LC – is one great instrument with one of the best tones known to humankind. How about that?

Sing along – two chords and a riff – “War in the East, War in the West, War up North, War down South … And we know we shall win, as we are confident
In the victory, Of good over evil, Good over evil, yeah …”

That is enough for today!

(c) Copyright 2021 William Mitchell. All Rights Reserved.

This Post Has 12 Comments

  1. UK Labour’s “Tony Blair Tribute Act” is going down a storm.

    Economically illiterate. Politically irrelevant.

  2. We are indeed truly thankful to the City of London for loaning our government the funds to keep us from penury. Where does it get such limitless funds to keep our government from bankruptcy? I’ve forgotten – who bailed out who a few years ago?

  3. I was hoping Bill would comment on the Starmer proposal because I felt it was just a neoliberal fudge. When Richard Murphy wrote praising the idea I realised it was BS. Murphy seems incapable of breaking the neoliberal shackles. A few years ago he wrote a book called The Courageous State but his utterances are really The Spineless State. I can’t comment on his blog because he has banned me for not calling him the Messiah. God help us. I think David Cameron’s latest ideas are more courageous.

  4. Evolution made us like salt, sugar, fat, overeating and lethargy. No wonder we are attracted more to lies than truth and more to who seeks to destroy us in the political, economic and social sphere than those that seek to improve our situation. Damn!

  5. The polling does not take into account those who will not vote. In the 2019 election nearly one third did not vote.

  6. @ Neil,

    Starmer’s Labour Party is certainly not politically irrelevant; it’s highly relevant, and is there as a lesson to the UK that the establishment (and US interests, as evidenced by Mike Pompeo’s threat) will never allow a socialist-led party anywhere near power again.

    It’s not just about Jeremy Corbyn; Jesus Christ himself could run as Labour Leader – but if he advocated the same kind of policies that Corbyn campaigned on, he would be destroyed just as enthusiastically by the right wing and liberal media, doing, as ever, the bidding of the political and business establishment.

    Starmer’s Labour Party deliberately shedding not only members, but leftist voters too, is performing its usual role of keeping Toryism in power – and any hint of socialism out – for the forseeable future.

    In other words, Starmer’s not a bug; he’s a feature.

  7. As I see it, Starmer’s mission is to provide the second head for a Two-Headed Uniparty, such as runs in the USA, and of necessity draws most of the votes in every election. With the Uniparty constantly in power, the Unipolicies can remain in force basically forever.

  8. Humans are not robots, we have emotions and dignity.

    Telling people to apply 20 jobs is bound to destroy people’s self-esteem.

    How heartless can the the elites be?

  9. @Tom Y

    How heartless can they be? As heartless as they like.

    When in the UK nearly half of people believe that those who lost their jobs during the pandemic were underperforming.

    If you can convince enough people that their impoverishment arises from a moral failure, that their failure arises from a lack of personal responsibility, then you can pretty much do what you want.

    You can also convince large sections of the population to vote for policies which are against their best interests.

  10. IIRC When Morrison announced the increase in jobseeker rate. He justified the amount in stating that when the Unemployment Benefit was originally introduced, it was 40 percent of the “minimum wage” and he had restored it to that. If I heard him correctly, if this is true. Why is any income support a percentage of the minimum wage? As it is those only receiving the minimum wage are living in relative poverty (aka the “working poor”)
    Yes, ideally, in this day and age,, we should be aspiring to a living wage and full employment.
    Although at the press conference why didn’t one journalist nor in any articles since that announcement .. why hasn’t anyone taken Morrison to task on this archaic formula .. percentage.. justification?

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