The British Prime Minister gave a – Speech – to the Confederation of British Industry Conference on November 19, 2012, where he outlined how tough his government had been in terms of imposing fiscal austerity. In other words, he was taking responsibility for Britain’s appalling dive back into (double-dip) recession, although it is hard to find that confession in his actual words. Over the English Channel, the EU is busily preparing the champagne and fine foods for its upcoming summit on the 2014-2020 EU Budget. The EU leadership is talking tough and proposing large cuts in EU-level spending not the least being harsh cuts in the Overseas Development Aid (ODA) budget. The cuts are, of-course, based on false premises – that the economies are broke and have to live within their means – even though millions of workers lie idle. The idiocy is exemplified though in the failure to understand that ODA, while perhaps provided for ethical reasons, actually improves the outcomes of the donor nation. So these so-called free marketeers cannot even identify self-interest when it is staring them in the face. So they busily go about cutting their noses off!

Yesterday, the Australian Prime Minister launched the latest Federal Government statement, the – Australia in the Asian Century White Paper. The White Paper is full of jargon and superficial tags – such as “Australia’s 2025 aspiration”. While I am not critical of shorthand statements to capture a policy aim, when the substance that lies below the tag is either missing or based on false premises, then the hollowness of the policy statement is revealed. Such is the case in this document. It is littered with neo-liberalism and like previous statements, such as, “by 1990 no Australian child will be living in poverty”, which was made by a previous Australian Prime Minister in 1987 – to his regret ((Source). The pledge was not only impossible to achieve given the scale of the problem faced and the time before the pledge was due but the explicit embrace of neo-liberalism by that government also rendered the goal impossible. Poverty rates and inequality have increased since then as successive governments – Labor and conservative – have abandoned the government responsibility to achieve the related goals of full employment, equity in income distribution and broad social inclusion in economic outcomes. Yesterday’s White Paper release just continues that trend.

One of the complaints that critics of a Job Guarantee raise is that it might compete with the private sector for labour, which they say would be unfair given the unequal capacities of the two sectors (government allegedly has an advantage) and the undesirability of allocations being based on so-called “non-market” criteria. Mostly these complaints reflect the fact that the critic hasn’t read any of the relevant literature about Job Guarantee design and rationale (it employs workers which have no private sector bid). However, when the government becomes a speculator balancing risk and return in private capital markets and, in doing so, contributes to asset price bubbles and uses its financial might to “distort” market outcomes, it is praised for being financially prudent. Welcome to the hypocrisy of the Future Fund, Australia’s so-called sovereign fund. But it gets worse. We have now learned about the types of products that the Future Fund is investing in. It comes down to the Australian government promoting increasing cancer incidence in our nation. And all because they lie about their economic capacities as a sovereign currency-issuer.

I went for a walk at lunchtime through a main shopping area where I am working today. In the past you saw Sale signs twice around twice a year – post Xmas and mid-year. The advertised discounts at this time were modest except for some enticement items that might have been discounted by 30 per cent or so. You may check this out going through archives of Catalogue AU. You rarely saw Closing Down/All Stock must go signs. You rarely saw massive discounts – such as 80 per cent off and the like. Times have changed and there seems to be a permanency to these sales and the discounts are huge. Previously well-to-do shopping strips are now slowly being punctuated with empty shops so the Sale/Closing Down signs are now interspersed with For Lease signs. And Australia is meant to be going through a one-in-a-hundred years mining boom and the Government tells us we are doing so well that they have to undermine aggregate demand by running a surplus to give the economy room to grow even more. The problem is that our political leaders are in denial and continually bombard us with lies to perpetuate their ideological stances which work against the well-being of the majority of citizens. It is clear that the system is failing and that means we have a choice. The problem is that we first have to identify that we have that choice.

Amidst all the political turmoil in the Australian government this week, there was a highly significant report issued by the government (finalised December 2011 but released by the Government on February 20, 2012) – Review of Funding for Schooling – which showed not only how unequal our education system is but also how far behind we have fallen relative to other nations (particularly those that are more important trading partners). For a government which pretends to be concerned with equity and efficiency the Report posed huge challenges. Not only did it suggest current policy was failing, the Report estimated that over AU$5 billion should be invested in education reform to not only improve standards but also ensure that the massive inequalities between rich and poor with respect to educational access and outcomes are reduced. The response by the Australian government was that its priority remained the achievement of a budget surplus in 2012. Here is a classic demonstration of how a failure by the Government to understand the characteristics of the monetary system that it runs leads to poor outcomes in the short-run, but also undermines the future prosperity of the nation.