Our business leaders are amusing themselves at the moment sailing large and expensive yachts in various summer regattas and races and lecturing us on how our democratic choices (to elect parliamentarians) is holding back the country – “ill-equipped for life after the mining boom” is the code words used (Source). Apparently, we should not elect parliamentarians that oppose their conservative agenda to transfer increasing volumes of real income to the top-end-of-town (that is, them). Their mantra never changes – its all about them not us. This article in the New York Times (September 26, 2014) – The Benefits of Economic Expansions Are Increasingly Going to the Richest Americans – not only promotes the excellent work of MMTer Pavlina Tcherneva but is apposite to the message of today’s blog. Which brings me to a recent decision by the UK government to allow rail fares to rise well in excess of the inflation rate and the growth in wages.

The deranged individual who held the people hostage in Sydney over the last 24 hours wasn’t an Islamic State terrorist despite what the commercial news frenzy tried to tell us. He was a deranged individual. But while the news frenzy was as deplorable as his act (see this more sober account), it did one other thing – it kept Joseph Pinstripe Bulgington Hockey off the front page. Who is JPB Hockey? The Australian Treasurer and yesterday he released the Federal Government’s – Mid-Year Economic and Fiscal Outlook – which was comedic, hypocritical and demonstrates that we haven’t come very far since the days we believed the world was flat. The hostage drama in Sydney meant JPB had to take back stage and the 16 ridiculous pages that the News Limited rag the Daily Telegraph in Sydney devoted to what they called an “attack by the Islamic State”, effectively choked the coverage of the MYEFO. Some saving grace.

The condition known as – Schizophrenia – describes “a mental disorder often characterized by abnormal social behavior and failure to recognize what is real”. Then again, the condition known as – Dissociative identity disorder – describes a condition where a person has “at least two distinct and relatively enduring identities or dissociated personality states that alternately control a person’s behavior”. If these states can be applied to institutions, then the OECD needs urgent medical attention. The OECD released a working paper yesterday (December 9, 2014) – Trends in Income Inequality and its Impact on Economic Growth – by Federico Cingano. It provides evidence that destroys the basic tenets of neo-liberal economics and supports a wider social and economic involvement of government in the provision of public services and infrastructure, particularly to low income groups. The fiscal implication is that deficits need to be higher.

It is almost unbelievable what some journalists think passes for quality writing. Today (December 9, 2014) Australians were trying to deal with the vicious new scheme designed by the Federal government to herd unemployed indigenous people in remote communities into below legal wage work-for-the-dole schemes because the government refuses to use its fiscal capacity to generate jobs where there are none, and then, just after lunch we were confronted with an article in the Fairfax press – Australia adrift: Lost decade beckons as good fortune wanes – that beggars belief. Australia will have a lost decade if it continues to elect governments, which work against the national interest. There is nothing predetermined about it. The rise and fall of the mining sector is an historical given – we have been through these cycles before. It all depends on how the Federal government deploys its fiscal policy tools. If it continues to run pro-cyclical policy (cutting when private spending is weak) then things will get worse. It we break out of the austerity trap, then the Government can easily redirect growth back to domestic spending. A major public sector job creation program and a large-scale public infrastructure redevelopment would be ideal ways to begin this policy shift.