Employer group demands free labour from Government

Last week, the peak body representing small business in Australia, the Australian Chamber of Commerce and Industry (ACCI) called on the Federal Government to hand over free labour under the guise that “making coffee” will enhance the skills of the workers. The free labour they want to get their hands on are the unemployed on income support. They want the Government to continue to pay the below-poverty income support but force the recipients to work in small and medium-size businesses “making coffee or serving customers” as a solution to youth unemployment. This is the same group that thinks the pay of the lowest-paid workers (like kitchen hands, cleaners etc) should be cut. They also claim that rising unemployment in Australia is being caused by structural rigidities in the workplace (job protection, occupational health requirements etc). There is a wide-ranging attack on workers going on at the moment. This is just one aspect of this attack. Austerity is forcing more onto the unemployment pile. Once there they are being increasingly subjected to pernicious policy requirements (see yesterday’s blog – Job Services Australia – ineffective and rife with corruption – scrap it!). Then employer groups lobby government to cut wages and conditions and scrap regulative environments that protect workers. It is an important era for social democrats. Either we regain some political equanimity and coherence or we continue to call parties Socialist that impose austerity and talk about being ‘pro-business’, while attacking pensions, wages, and employment.

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Job Services Australia – ineffective and rife with corruption – scrap it!

The ABC – Four Corners – program tonight will highlight the corruption and inefficiency within Australia’s privatised labour market services sector. The program – The Jobs Game – will screen at 20:30 Eastern Standard Time. I participate in the program although the extent of that participation is at the time of writing not known. I did about 2 hours of filming for it in December. Unfortunately, the ABC geo-blocks its iView service which allows Australians to watch past programs via the Internet. If the program is available via YouTube I will post a link. The flavour of the program is summarised in this promotion piece published by the ABC News service today (February 23, 2015) – Government recovers over $41 million worth of false claims after ‘rorting’ of Job Services Australia scheme. The Guardian newspaper will also publish an article based on this blog for tomorrow’s edition (sometime during the day). So the issue is getting out there finally after successive Governments have been trying to hide the issues. After all, its ideological baby is terminally ill and they don’t want to admit that.

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Friday lay day – Cave in or Trojan Horse?

Its the Friday lay day blog and I have a day ahead full of meetings with research partners, other parties and related matters. So I am glad I told myself I wouldn’t write much today. But we have to mention the discussions in Brussels yesterday – extraordinary on all sides. Late last night I read the letter the Greek Minister of Finance wrote to his suited confrères on the Eurogroup committee. I had to read it more than once and convince myself that I was reading it correctly rather than being duped by the hour of the evening and the flight I had taken to where I am today. I read it and read it. Each time I concluded cave in! Sure the words were still a bit like those that a proud, independent people might write to international partners. But once you cut through the defence of self-esteem to the substance the conclusion resonated strongly – the Greek government, for all their talk and bluster, have caved in. Then I read the memo from the German Ministry of Finance in all its Teutonic clarity – Fuck off, we want you to get down on your knees when you cave in not stand there without your ties and suits smiling about it. Amazing really, on all sides.

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The Australian government is not akin to a household

There was an extraordinary article published on the University of New South Wales News page (January 29, 2015) by a Professor of Finance (Peter Swan) entitled – Federal finances and family budgets have a great deal in common. Juxtapose that with a blog I wrote in December 2012 – Government budgets bear no relation to household budgets. Seems – we have a problem, Houston. Well, Peter Swan has a problem and along with him a raft of mainstream economists, including some who claim to be progressive. They are coming out of the woodwork where they hid during the peak of the crisis, as fiscal stimulus packages were saving the World economies, and are now rehearsing their usual erroneous claims about the dangers of on-going deficits. Their grasp of history and facts appears to be flimsy and their logic nonsensical.

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Friday lay day – federal government has demonstrated its incapacity to lead

Its the Friday lay day blog – where I roam free. This week we have had three damning reports released which provide more than enough evidence that the federal government of Australia is way out of its league as visionary leaders of the nation. On three major fronts they have demonstrated their incapacity to lead the nation: the labour market (yesterday, the unemployment rate rose to its highest value in 14 years and is biased upwards; indigenous affairs – the release of the – Closing the Gap 2015, and the release by the Australian Human Rights Commission report – The Forgotten Children – on children in our immigration prisons (so-called detention). Unfortunately, the national election is still 18 or so months away, although the Opposition Labor Party is going to need that time to abandon its own neo-liberal ways. These three reports this week indict them as much as the conservative government in power!

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US labour market improving slowly – Eurozone falls further behind

Last week (February 6, 2015), the US Bureau of Labor Statistics (BLS) released its latest – Employment Situation Summary – which suggested that “Total nonfarm payroll employment rose by 257,000 in January, and the unemployment rate was little changed at 5.7 percent”. That is a relatively strong result and job gains were reported across all the major private sectors. Public employment continued to fall. The data has already been analysed to death within the media so I wanted to concentrate on some comparisons with other nations, which are quite interesting. Further, the BLS released the related – Job Openings and Labor Turnover – dataset yesterday (February 10, 2015), which allows us to dig deeper into the raw aggregate numbers to make better assessments of what is going on.

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Tracing the origins of the fetish against deficits in Australia

Next week (Wednesday), I am giving the annual Clyde Cameron Memorial Lecture in Newcastle. Details are below if you are interested. Clyde Cameron – was a former Labor government Minister of Labour and other ministries (1972-75), a dedicated trade unionist, a defender of workers’ rights, and was aligned with the old-fashioned left-wing of the Party. He fell out with the Prime Minister at the time (Whitlam) over economic policy, in particular wages policy. The period of his demise is particularly interesting from an economic policy perspective and marked the beginning of the neo-liberal period in Australia and the rise of Monetarism as a macroeconomic policy framework. The type of propositions that were entertained by the Australian Treasurer, which were presented as TINA concepts in the public debate were flowering in policy making circles throughout the world. To some extent the current austerity mindset is the ultimate and refined expression of the trends that began around this time. The fetish against deficits first appeared in detail in the 1975-75 Commonwealth ‘Budget’ Papers. Cameron’s political demise in 1975 was intrinsically linked to his resistance against that fetishism, although his own solutions were similarly based on macroeconomic myths about the capacities of a currency-issuing government.

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Time is running out for neo-liberalism

You get a sense as to why the public are confused about economic issues when you read this article in the Fairfax press this morning (February 3, 2015) – The brutal politics of privatisation stark after Queensland election shock – written in the aftermath of the conservative electoral bloodbath in the state of Queensland last weekend. The writer is a ‘well-respected’ business journalist, which just goes to show how ‘respect’ is easily gained if you sing from the appropriate hymn sheet. It is all in the conclusion: “The clock is ticking for Australia. With an infrastructure backlog and big budget deficits, we can build the infrastructure we need only by selling assets and attracting private capital”. Which is a barefaced (and ignorant) lie, even when applied to a state government that uses the currency issued at the federal level. Privatisation is not TINA. But while the public might be confused at the level of understanding (about how the monetary system operates etc), it is clear they are becoming increasingly focused at the level of feelings/sentiment. More and more people are seeing that neo-liberal remedies – privatisation, austerity, structural ‘reform’ etc – do not live up to their claims. Increasingly, we are seeing rising income and wealth inequality being associated with these attacks on workers. Several recent election outcomes around the world have categorically affirmed the obvious – citizens all over are starting to rebel against austerity and neo-liberal so-called ‘solutions’ (such as privatisation and public sector job cuts). In Australia we have just witnessed a remarkable electoral rout in the Queensland State Election where the neo-liberal, privatising conservatives were tossed out of office on Saturday exactly as a result of a widespread rejection of these policies. The Greek elections a few weeks ago provided a more profound signal of this trend. The European Parliament elections in May last year another. Time is running out for neo-liberalism. The smugness that the elites have had is

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Friday lay day – The myth of equal opportunity

Its my Friday Lay Day blog, which was meant to mean a smaller writing commitment but sometimes doesn’t turn out that way. But today I plan to stick to that ‘pledge’. I have just arrived back from 2 weeks working in Sri Lanka and have things to catch up on back here. I read an interesting book a few years ago – Whither Opportunity: Rising Inequality, Schools, and Children’s Life Chances – by Greg Duncan and Richard Murnane (2011), which studies “the consequences of rising in- equality for America’s education”. While there are national differences, the dynamics uncovered in that book apply to most nations (that I know of). I am currently engaged in a project on equity and opportunity and the link that this has with income inequality. We are now well informed about the rising income inequality that has occurred over the last 20-30 years. But we are less informed on how this is reinforced and reinforces itself by a stark inequality in opportunity.

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Conceding to Greece opens the door for France and Italy

The economics news is currently dominated by the Greek election results and their implications, and, rightly so. Without assuming anything about how much Syriza will compromise (although I suspect too much), the voting has demonstrated that a large proportion of voters in Greece have rejected the basis of the European Commission strategy. The Greek voters know from personal experience, what armchair commentators like me know from theory, that fiscal austerity fails to achieve its aims. It is not rocket science – spending equals income and if you hack into it then the economy contracts. A private spending resurgence is not going to happen when sales are falling, unemployment is sky-rocketing, and incomes are being lost. The basis of Keynesian economics – that when the private economy is caught in a malaise the way out is for government deficits to kick-start economic activity, which, in turn, engenders confidence among private spenders and allows a sustainable recovery to occur – has been amply demonstrated by the GFC in all nations. Where that strategy has been employed the nations have been recovering (at a macroeconomic level). Where it has been defied, such as the Eurozone, the economies have stagnated. Thinking ahead (speculating) the election results have clearly shocked the cosy ECOFIN club, which has smugly swanned around Europe over the last 6 or so years dishing out misery to the disadvantaged citizens in the Member States. But I doubt that they will agree to a 50 per cent write-off in Greece’s debt because then the citizens of Spain, Italy and, even France, would line up for the same. Then it is game-over for the Eurozone. More likely, if Syriza sticks to its promises, then there will be an organised way to ease them out of the game. Greece will win either way.

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Friday lay day – neo-liberalism has compromised the concept of a citizen

Its my Friday lay day – which means I don’t write as much as I usually do and perhaps focus on different issues to my normal considerations. Remember back to 2007. In March 2007, an Australian citizen named David Hicks pleaded guilty to charges that he intentionally provided material support or resources to an international terrorist organisation engaged in hostilities against the United States. It set in place his return to Australia after he was illegally detained by the US, tortured and incarcerated at the Guantanamo Bay gulag without trial for more than five years, and deprived of his rights as an Australian citizen by the very government that is entrusted with defending our rights – our own Federal government. Upon his return to Australia he was incarcerated for a period of 9 months before being finally released. Today, the ABC news report (January 23, 2015) – US agrees David Hicks is innocent, lawyer says – reported that the US government has admitted that David Hicks was not guilty of any crime and a full pardon will be forthcoming. Why is this important?

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Rising inequality – fundamental changes required

I am currently working in Sri Lanka at a very interesting time in the nation’s history. Ten days ago the nation elected a new president and ousted the bevy of officials that had been linked to the previous, rather dictatorial and seemingly corrupt regime, that had held a iron grip on power for years. The daily newspapers in Colombo each day are now devoting multiple pages to discoveries that are coming to light about the ways of the previous regime. Some previous officials have had their passports confiscated amid rumours of other politicians and their families making quick getaways to Middle Eastern nations to avoid prosecution. Arrests are being made to roundup the corrupt former government officials. The editorial this morning said that the past government had allowed “a certain person, who was accused of corruption amounting to billions of rupees, to leave the country soon after the presidential election results were announced”. I guess everyone knows who Mr Certain Person is. There was a cute report about the discovery of a ‘double cab’ (truck) which had gone missing from the Presidential secretariat’s car pool being found hidden in a saw mill. What you find in the poorer nations is that the corruption is fairly transparent and crude in its implementation and is often enforced by a martial regime. In the more advanced nations, the corruption is more subtle and harder to detect. Oxfam’s latest report (January 19, 2015) – Wealth: Having It All and Wanting More – considers the manifestations of this corruption and its pervasive nature.

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Who are the British that are living within their means?

The British Prime Minister gave a New Year’s speech in Nottingham on Monday (January 12, 2015), where he railed about the “dangers of debts and deficits” as part of the buildup to this year’s national election in Britain. There does not appear to be an official transcript available yet so I am relying on Notes that the Government released to the press containing extracts (Source). However, it is clear that the framing used by the British Prime Minister was seeking to personalise (bring down to the household level) public fiscal aggregates and invoke fear among the ignorant. The classic approach. There was no economic credibility to the Prime Minister’s claims. But that doesn’t mean that it wasn’t a politically effective speech. So woeful was the response by the Opposition that it suggested Cameron’s speech was very effective. That is the state of things. Lies, myths and exaggeration wins elections.

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While Europe debates a placebo the disaster deepens

The youth are our future. The future is for our youth. Poverty used to be a problem of the aged as they left employment and entered retirement. Shorter life spans than now meant it was a relatively short-lived but deplorable state for people to end in. All that has changed. The youth are still our future but there is a much diminished future for them. Poverty risks and burdens have also shifted from the older members of the population to the younger members. From the retired to the jobless and casualised worker. And we get angry when young people get lured away by what they see as attractive, hope-filled futures, that may or may involve remaining alive in the here and now, and wield guns and bombs. Yet the policies we support close the door on any future that might be more acceptable to the rest of us. Neo-liberalism is creating a ticking bomb. The GFC was just the first act. Societies around the advanced world are undermining their own longevity as they accept that fiscal austerity is the only alternative. To what?

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Friday lay day – unemployment is a pernicious state

Its my Friday lay day blog and today I have been working on social psychology and group dynamics today. I am trying to dig into how economic ideas forms and how they are reinforced by language, media, and the educational system. Many people have researched topics like this but we are aiming to bring it all together into a coherent framework with the added aim of developing a progressive language guide to advance the conceptual ideas that I research and write about. The events in the last few days in Paris have also given me cause for thought within this overall research agenda, given the obvious link with a particularly zealous interpretation of a religious script and the role of economic disadvantage and austerity in fostering what some might call medieval, at best, behaviour. The role of language and conceptualisation is also implicated. I don’t intend to write about the events though. I am not professionally qualified to provide any meaningful input and as an individual I have mixed views on it. I certainly wouldn’t be perpetuating the ‘Je Suis Charlie’ campaign but that doesn’t mean I excuse the behaviour of the barbarians. But barbarism has many forms as does terrorism, and one could easily argue that the sort of austerity that has been inflicted on nations like Greece and France has created a responsive form of terrorism that is more random and very dangerous.

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Germany should be careful what it ‘allows’

The German Magazine Der Spiegel ran a story over the weekend (January 3, 2015) – Austritt aus der Währungsunion: Bundesregierung hält Ausscheiden Griechenlands aus dem Euro für verkraftbar (Exit from the Monetary Union: Federal government considers Greece’s exit from the euro is manageable). This so-called “radical change of position” is presumably designed to impart external pressure on the Greek democratic process, which is about to elect a new national government presumably on January 25, 2015. The claim is that the German government is prepared to make Greece expendable because it thinks it has shored up the rest of the Eurozone so that what happens to Greece is immaterial. I think Germany should be careful what it ‘allows’.

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Friday lay day – wage subsidies do not work

Its my Friday lay day and a shorter blog day than usual. Today, it was revealed that one of the Australian government’s premier measures to combat unemployment has failed. Not just a small failure. Rather, the data just released shows the plan is a disaster. It was always going to be. The supply-side measure to provide wage subsidies to firms to take on unemployed workers who were above 50 years of age and were enduring entrenched unemployment failed because it doesn’t address the problem. Mass unemployment arises not because wages are too high relative to productivity (the mainstream myth) but because there is not enough sales to justify firms putting on extra workers. The lagging sales are because there is deficient total spending. Firms will not employ more workers if they cannot sell the extra output, no matter how cheaply the workforce becomes. The data we were apprised of today categorically supports that view. The data accompanying such programs always supports the view that demand is the problem not supply.

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News from Europe continues to deteriorate

I am travelling for most of today and so have very little time to write. But I do comment on the latest French unemployment data released the day before Xmas which signals that things are getting worse in France as the European Commission bolts down the austerity clamps even tighter. While I thought that Italy might be the jewel in the crown and be the ones to exit the unworkable Eurozone first, I am now thinking that France might be the straw that breaks the back. Things are certainly going to get worse there and their political system is veering towards an anti Euro sentiment. Not before time, although the parties promoting the anti-euro feeling are not very nice at all. Where are the Socialists? Oh, I forgot, they are in power – spearheading the austerity. What a mess. In addition, as a sort of stocking filler, I also thought I would post the Q&A section of the presentation I made in Rome on November 24, 2014 – Framing Modern Monetary Theory.

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Friday lay day – conservative attack dog unleashed on unemployed in Australia

Its the Friday lay day blog. I was travelling back from the South coast of NSW one Sunday a few years ago after giving a talk to a workshop on regional development. We stopped for a break in South Sydney where there was a street fair going on – the normal run-of-the-mill affair. It was centred in the main street of the electorate where Scott Morrison was (and remains) the Member of the Federal House of Representatives. He had a stall at the fair, touting his policies – then as the Opposition spokesperson for immigration. His helpers were nasty types who were raving on about illegal boat people and what Morrison would do to them once they won the next election. They did win it, and he did do it to them. As he shifts his ministerial portfolio from immigration to become the Minister for Social Services, it is worth recalling what his record has been in his last job. Julian Burnside captures it beautifully in his article last Tuesday (December 23, 2014) – Morrison’s calculated cruelty is his legacy – although the sociopathy revealed is anything but beautiful. But there is worse to come.

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Greece – two alternative views

When I was in Europe recently, I had interesting discussions about the future of Italy, Greece and Spain with various people, particularly in relation to trying to understand the apparent dissonance between the strong support for the euro and the devastation that membership of the common currency has created in these countries. It is, of course, a very complex issue that goes well beyond economics (as most things do). I formed two alternative views from what I was heard from those on the so-called progressive side of the debate. Either they are kidding themselves or that they have crafted a plan to force Germany (mainly) to break up the currency union. The alternative scenarios was also quite distinct along national lines with Italians more likely to be in the former group and Greeks in the latter group, although my sample sizes were relatively small.

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