Gerard JacksonÂ
Any period of prolonged widespread unemployment or rapid technological change invariably resurrects the myth of technological unemployment, even though history and economics have long since discredited it. As expected, the Liberal Party has found itself singularly inept in tackling this anti-investment fallacy.
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Gerard JacksonÂ
Union leaders, clerics, labour politicians and most journalists are claiming that the Liberal Party’s labour reforms will have terrible consequences for real wages. Ross Gittins, Sydney Morning Herald’s economics editor, used the work of Professor Bob Gregory to assert that it would take massive wage cuts to clear the market for unskilled labour (Reform push needs more evidence, March 13, 2006).
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Gerard Jackson
Many economists hold to the view that when the NAICU (non-accelerating inflation rate of capacity utilisation) reaches 82 per cent inflation will pick up in the US economy. Capacity utilisation for last March was nearly 82 per cent. This figure is giving some economists heartburn.
The thinking here is that when utilised capacity reaches 82 per cent prices will begin to rise because output will no longer be able to keep up with demand. Shortages of factors will emerge and wages will rise as firms compete for against each other for labour. A rather novel variation of this explanation has emerged. It holds that because the world has opened up enormously during the last 20 years the idea of using capacity utilisation as an indicator of future trends in prices has been rendered obsolete.
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Gerard JacksonÂ
I have been warning for years that socialism is a cult that simply will not die. No matter how many times reason and history refute socialist fantasies its adherents always manage to dress it up in new garb. Race Mathews (a minister in the disastrous Cain government that nearly wrecked the Victorian economy) is one such adherent. In his book Building a Stakeholder Society: alternatives to the market and the state (Pluto Press and Comerford and Miller, 1999) he gave us “distributist mutualism�.
Despite the success of free markets in raising living standards to undreamt of levels the likes of Race Mathews are still vainly looking for “alternatives� to this wealth creating institution. It seems to me that Mathews was inspired by Will Hutton, former editor of Britain’s left-wing Observer newspaper and a complete economic illiterate. Hutton is also the author of The State We’re In, a virulent attack on Margaret Thatcher’s economic policies.
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Gerard Jackson
Comments by Labour Party officials and unionists regarding economic policy convey a strong impression that ownership does not really matter. Of course, there is nothing new about this fallacy. Some years ago Deborah Brewster from Murdoch’s Australian seriously asserted “that there is little evidence that privately owned companies are more efficient than government-owned ones.�
She then used state-owned Renault and Volkswagen as supporting evidence. Her assertion, in turn was based on the alleged views of Professor Greg Bamber, Griffith University Graduate School of Management. (I say alleged because I have no knowledge of Bamber’s work). To these commentators and those like them competition and entrepreneurship can by some mysterious means be divorced from ownership.
Gerard JacksonÂ
The Australian-born British journalist John Pilger has a natural flair for self-promotion and moral posturing. In about 40 years or so Pilger has established a reputation among leftwing journalists and academics as a fearless enemy of injustice, Western hypocrisy and exploitation. Like I said, he’s got flair. He’s also a liar, a political bigot, a callous humbug. A man who uses the misery of Third World victims of domestic oppression to malign the West in general and the US in particular.
Liberal Party & Labor Markets 17 Apr 2006
Gerard Jackson
Economic modelling for the Government has shown that over 500,000 jobs would have been created during the last ten years if the labour regulations had been loosened. Moreover, a study commissioned by The Department of Employment and Workplace Relations commission found that if the ACTU’s wage claims had been successful employment would have dropped by 3.8 per cent. Naturally ACTU secretary Greg Combet challenged the findings.
I am in no position to testify to accuracy of these findings. However, what needs to be understood is that we are dealing with fundamental economic laws, laws that we defy at our peril. One such law is that if we raise the cost of labour (its gross wage) above the value of its marginal product unemployment will emerge. The greater the gap between the two the higher and more persistent will be the unemployment.
Gerard JacksonÂ
The Democrats’ opposition to tax cuts borders on the hysterical at time. Apart from their insincerity (the only kinds of tax increases they support are those their fabulously rich supporters can easily avoid) there is the utter bankruptcy of their so-called economic arguments, one of which is that the rich — meaning merely the better off and not their super rich pals — will save the additional income rather than spend it. The effect of this, according to their brilliant economic analysis, would be to send the US economy into recession.
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Gerard JacksonÂ
The free market is a truly callous place, or so Victorian Attorney-General Rob Hulls seems to think. This economic whiz kid believes that labour market reforms could drive some wage rates down from $13 an hour to $7 an hour — and all “at the whim of the employer� (Pay could drop to $7 an hour, warns Hulls, The Age, 26 March 2006). What the brilliant Mr Hulls is arguing is that economic laws, if they exist at all, do not apply to the services of labour.
It follows that without unions or caring politicians like himself the workforce would be grossly exploited by ruthless employers.
Robert Shiller’s book Irrational Exuberance made quite a splash when it appeared on the scene back in 2000. It now seems that it is about to repeat the performance, or so thinks Geoffrey Colvin, Fortune’s senior editor-at-large (We’re still too exuberant, 17 December 2005). Martin Bashir of the ABC thinks likewise (Robert Shiller, the Prophet of House Prices). Other commentators are also jumping on the Shiller bandwagon inspired, I suspect, more by the possibility of embarrassing President Bush rather than an urge to educate their readers.