Bill Mitchell – Australia’s bushfire dystopia – another entry for the neoliberal report card

I decided that I would run the CFA Franc series in three consecutive parts to maintain continuity and allow me to edit the final manuscript which Pluto Press will use to finalise the book by Fanny Pigeaud and Ndongo Samba Sylla. That meant that my usual Wednesday snippets sort of blog post didn’t happen this week. So, given that I have to travel for several hours today, Thursday becomes Wednesday and I just want to write a few comments about the current crisis in Australia (from the perspective of someone who has done considerable research for the United Firefighters Union here over many years) and also announce the details of the first MMTed Masterclass to be held in central London in February. I will be in Adelaide for the sustainability conference and other commitments over the next few days....

Bill Mitchell – billy blog
Australia’s bushfire dystopia – another entry for the neoliberal report card
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — France has received its orders from the masters

Angela Merkel and Bundesbank's Jens Weidmann rain on Charles DeGaulle wannabe Emmanuel Macron's parade. There will be no fiscal union with the North picking up the tab for the South.

This is a long post setting forth the issues standing in the way and why they are unlikely to be overcome. The chief obstacles are cultural and political rather than economic. A federation among sovereign nation states is not possible without restrictive concessions that the German elite reject.

Conclusion

The point is clear.

Macron can say what he likes. But unless he can get it past the masters (Germany) anything he says will be hot air.

And it is clear from history that Germany will never tolerate the creation of a true federal fiscal capacity.

Which tells me the Eurozone is never going to work in the way the leaders claimed it would at the outset – it will always be prone to stagnation and crisis.

Macron destined to be another Hollande? Bill thinks so.

Bill Mitchell – billy blog
France has received its orders from the masters
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

John Helmer — Russia Lie Detector Catches Australian Prime Minister, Canadian Foreign Minister

MH17

The truth, revealed last week in Brandis’s papers, is that Brandis and Prime Minister Turnbull have been hiding what they, not Russian government officials, know about the incident. A source in Canberra close to these papers emerged following the release of this report last week. The source identified himself as privy to the classified intelligence on MH17 in the days and weeks which followed the incident. The source was also privy to the discussion in the National Security Committee of Cabinet (NSC), the topmost decision-making body in Australia for Ukraine and Russia.

According to the new disclosures, the Australian Government believed in 2014 — and Brandis and Turnbull believe still — that in the daylight hours before MH17 was shot down, Ukrainian Government military forces were using the overflight of civilian airlines in eastern Ukraine as shadow and shield for attacks against ground targets in the belief the separatist forces would not return fire for fear of hitting the civilian airliners.

The source has also revealed it was the Australian Government’s conclusion that the Kiev regime did not close the airspace in the Donbass region to civilian air traffic above the war zone because of the operational advantage Malaysian Airlines transit gave to Ukrainian Air Force operations. The Australian officials recognize this calculation to be a violation of the Geneva Conventions on war crimes. The source is sure the intelligence leading to this finding was American, so the implication is that the US Government also shares the Australian finding – in secret.

The Australian officials concluded — the source has reported — that what had happened to MH17 was an unintentional accident on the part of those who fired the BUK missile. Without intention, there was no crime on the part of those on the ground, whoever they were — if they were the Novorussian separatists, or a regular Ukrainian Army missile battery, or a unit of the irregular forces paid by Igor Kolomoisky and others.

Dances with Bears

Russia Lie Detector Catches Australian Prime Minister, Canadian Foreign Minister – Which Country’s Media Conceal the Lie Machine?

John Helmer

Sputnik International — UK to Lead Joint War Games in Persian Gulf Simulating Conflict with Iran

The US, UK, France and Australia will run a war games drill in the Persian Gulf that will simulate a confrontation with Iran.

While Trump and Putin are talking on the phone for the first time.

Is the Trumpster as crazy as Killary, or possibly crazier?

Sputnik International
UK to Lead Joint War Games in Persian Gulf Simulating Conflict with Iran

Bill Mitchell — All net jobs in US since 2005 have been non-standard

The Australian labour market has been characterised over the last 12 to 24 months by the dominance of part-time employment creation with full-time employment contracting. Over the last 12 months, Australia has produced only 84.9 thousand (net) jobs with 107.2 thousand of them being part-time jobs. In other words, full-time employment has fallen by 22.2 thousand jobs over the same period. This status as the nation of part-time employment growth carries many attendant negative consequences – poor income growth, precarious work, lack of skill development to name just a few disadvantages. Further, underemployment has escalated since the early 1990s and now standard at 8.3 per cent of the labour force. On average, the underemployed part-time workers desire around 14.5 extra hours of work per week. 

If we look at the US labour force survey data quite a different picture emerges, which is interesting in itself. Does this suggest that the US labour market has been delivering superior outcomes. In one sense, the answer is yes. But recent research based on non-labour force survey data (private sampling) suggests otherwise. That research finds that “all of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements.” That is, non-standard jobs have disappeared and are being replaced by more precarious, contract and other types of alternative working arrangements. The trend in the US has not been driven by supply-side factors (such as worker preference) but reflects a deficiency in overall spending. Not a good message at all.

Deconstructing the narrative that the US economy has returned to or is closely approaching "full employment."

[Paragraphing added for online readability.]

Bill Mitchell – billy blog
All net jobs in US since 2005 have been non-standard
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — Australian national broadcaster gives ignorance the national stage

There’s no such thing as Government money. There’s your money and my money. And that’s where the money comes from – it comes out of our pockets…

This is on a news program, not from a comedy show. Beyond Moronism.

Bill Mitchell – billy blog
Australian national broadcaster gives ignorance the national stage
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

John Helmer — Australian Armchair General Weaponizes Himself In War Against Russia

Paul Dibb, the former head of two Australian spy organizations and a deputy defence minister, has just published a call for Australian troops to be ready to fight in Europe against “Russia’s refusal to act in ways consistent with international law and standards of behaviour.” Dibb is known in Australia as “the country’s leading Cold War Russia expert.”

The Dibb report appeared on June 29, on the eve of last week’s Australian parliamentary election, when voters repudiated incumbent prime minister Malcolm Turnbull. He had called the snap poll, confident of expanding his majority in the two houses of parliament. He has now suffered a 3% negative swing by the voters; the loss of at least 23 seats; and months of political uncertainty ahead, including the possibility his party will replace him as leader.

Among Turnbull’s last-minute ploys to attract votes, one was the leak last month of Australian cabinet plans for an Australian Army force to fight in eastern Ukraine, alongside Dutch and other NATO units, to destroy the Donetsk and Lugansk rebellion against the regime in Kiev. Turnbull’s leak had suggested that Tony Abbott, the prime minister Turnbull had pushed aside to take the job, dreamed up the plan of Australian war at the Russian frontier by himself. The new report by Dibb now corroborates the idea of an Australian military expedition against Russia, in exchange for improved American commitments to defend Australia from the Chinese closer to home, in the Pacific. “How things work out in Europe,” Dibb claims, “ will affect Washington’s ability to reassure allies and partners everywhere, including those in our region who must contend with increasing coercion by China.” Unless Australia does more fighting with the Americans on the Russian front, he concludes, “China will take advantage of this, and allies and partners of the US in the region—including Australia—would be subject to further uncertainty about American military commitments to Asia.” Combating “Russia’s aggressive military behaviour “is necessary because, otherwise, “both Moscow and Beijing will be seen as getting away with it.”…

Heads up down there in Oz. Get ready to go to war.

Dances with Bears

Australian Armchair General Weaponizes Himself In War Against Russia

John Helmer

Economy Watch — Australia The Biggest Loser from A Slowing China, IMF

The International Monetary Fund (IMF) recently released a report regarding which nations will suffer the most loss resulting from China's slowing investment growth. According to the IMF, Australia will be the worst hit advanced economy, with only developing economies Iran, Kazakhstan, Saudi Arabia, Zambia, and Chile suffering a bigger loss.

I am not bearish on this, although China's rebalancing away from an investment-export driven economy to a consumer-services economy will result in a ripple effect around the world. But in the end the demand created by more prosperous Chinese consumers and a growing urban middle class will be a huge boost to global demand that just about everyone will profit from.

Before very long, the US will not longer be the world's market place and the US consumer, king of the roost. This will be good for everyone since the world needs rebalancing, not just China, and it is happening now, albeit not without fits and starts. Just don't listen too much to Western-trained economists, who have the wrong model.

EconMatters
Australia The Biggest Loser from A Slowing China, IMF

Economy Watch

Nick Derewlany — Australia Caught in Middle of US-China Power Tussle

Chinese President Xi Jinping mentioned that the AIIB and the New Silk Road initiatives were an “Asian solution to Asian problems.” Similarly, his U.S. counterpart Barack Obama, in his State of Union Address 2015, stated that “We (America) should write the rules” for the Asia-Pacific.

The Diplomat
Australia Caught in Middle of US-China Power Tussle

Nick Derewlany

Xinhua — Urgent: Australia has decided to join Asian Infrastructure Investment Bank: PM

Australia has decided to sign a Memorandum of Understanding on the Asian Infrastructure Investment Bank (AIIB), which would allow Australia to become a founding member of the bank, said a statement released by Prime Minister Tony Abbott Sunday morning.

In the carefully worded statement, Abbott said the signing of the MOU will enable Australia "to participate as a prospective founding member in the negotiation of setting up the bank."

"The Government has discussed the AIIB extensively with China and other key partners inside and outside the region," the statement said.

Xinhua
Urgent: Australia has decided to join Asian Infrastructure Investment Bank: PM

Et tu, Tony?

Zero Hedge
US Attacks "Closest Ally" UK For "Constant Accommodation" With China (3/13/15)

John Helmer — Putin Submarines Surround Australia Within Range Of US Bases – Ray Atomizes Australian Politicians

Some highlights.

The strategic purpose of the new [Australian] submarines, according to the US Pacific Fleet commander, Admiral Harry Harris, is to combine with the US fleet to attack the Chinese Navy and threaten China. Presentations to the Australian Strategic Policy Institute (APSI) by a group of US Navy officers and US consultants in Canberra a year ago emphasized that it is US strategy to deploy the proposed new Australian Navy submarines for “strategic effect through offensive operations …by operating forward and up-threat.” Discussion during the presentations identified Russia as a “forward” target, as well as China. “Up-threat” was military jargon for preemptive attack.…

Several years on, the APSI papers reveal that Australian-American targeting of “Putin-Class submarines” extends, not only to China and Russia, but also to Vietnam and possibly Indonesia.…

A US Navy presentation of the flags of the attack submarine fleets in the Pacific and Indian Oceans indicates that much faster growth is planned for the submarine fleets of US allies – Australia, Indonesia, Japan, and South Korea – than for Russian allies – China, India, and North Korea.…

The “Vladimir Putin submarines” to which Abbott referred last week are currently operated by the Russian fleet based at Vladivostok. Russian built analogues and domestically modified designs of “Putin class” submarines are also operated by the Chinese and the Indian Navies. All are capable of launching nuclear-armed missiles, some by ballistic trajectory and some by cruise flight. According to a survey of Russian naval experts this week, all three submarine fleets now have the launch capability to strike the bases in Australia on which the US depends for warfighting in the southern hemisphere. 

The Russian plan currently calls for six Borey-class attack submarines – three, the Yury Dolgorukiy, the Vladimir Monomakh (below, left) and the Alexander Nevsky (right) – are already operational. Each armed with 16 intercontinental ballistic missiles, the primary mission of these craft is to attack the continental US and US nuclear bases in the north western hemisphere. By the time all six are deployed in 2018, one is likely to target US bases in Australia. A new Australian submarine fleet moves this targeting up the probability scale from likely to certain.…

Gennady Nechaev, a military analyst at Vzglyad in Moscow, acknowledges that the extent to which Australia is a carrier for US military operations against China and Russia, makes it inevitable that Russia, China and India will deploy counter-measures, particularly against Pine Gap, in central Australia. In this essay Nechaev reviews the growth of Russian, Chinese and Indian aircraft carrier strike forces. He concludes that current Kremlin thinking favours investment in submarines over aircraft carriers. Indian and Chinese calculations are a little different. 

Nechaev is sceptical that the Putin flotilla in the Coral Sea last November was accompanied by a submarine. The Russian Navy declines to comment. Nechaev is more confident that as Australian bases and weapons are expanded for new US strike strategy, they will be countered by Russia, China, and India. 

Also, as the Putin submarines approach firing range, they will be undetectable. This is confirmed by evidence of recent failures by US, UK, Swedish and NATO submarine defence units to find Russian craft off the coast of Scotland, and within the Swedish archipelago.… 

Expect vastly more military spending.

Dances with Bears

Putin Submarines Surround Australia Within Range Of US Bases – Ray Atomizes Australian Politicians

John Helmer

Bloomberg — Bank of China Named Sydney Yuan Clearing Bank, Signs ASX Accord

Bank of China Ltd. has been named as the official clearing bank for the yuan in Australia and agreed to boost cooperation with ASX Ltd., operator of the country’s main stock exchange. 

The People’s Bank of China yesterday anointed BOC’s Sydney branch following the designation of the city as a yuan trading hub and the signing of a free trade deal between Australia and its largest commercial partner during a visit this week by Chinese President Xi Jinping.

The accord between BOC and ASX is aimed at lifting transaction volumes in an existing settlement service for the renminbi as the yuan is also known, often abbreviated to RMB. The companies will encourage the use of yuan-denominated fixed-income products and promote ASX across Asia as a venue to raise equity capital both in Aussie dollars and renminbi.

Bloomberg
Bank of China Named Sydney Yuan Clearing Bank, Signs ASX Accord

Benjamin Purvis

Peter Symonds — New warnings of war in Asia

A significant report released Monday in Australia entitled “Conflict in the East China Sea: Would ANZUS apply?” points to the risks that the country could be drawn into a war over the disputed Senkuku/Diaoyu islands, pitting China against Japan, backed by the US. ANZUS refers to the 1951 security treaty signed between Australia, New Zealand and the US in the wake of the Pacific War with Japan.

The paper reflects ongoing disagreements within the Australian political and strategic establishment over the wisdom of unambiguously aligning with the US “pivot.” The economic costs to Australian capitalism were underscored late last month when the Obama administration, on security grounds, pressured the Prime Minister Tony Abbott’s government to reverse an in-principle cabinet decision to join a new Chinese-backed infrastructure bank. 

The report draws attention to the real and immediate dangers of war by detailing scenarios that could trigger a conflict in the East China Sea: a clash between Chinese and Japanese aircraft, a collision between a Chinese submarine and a US warship, and a confrontation between the Japanese coast guard and a Chinese tour ship. In each scenario, events rapidly spiralled out of control and posed the issue of an Australian government joining a war against China. 

At the report’s launch, one of its authors, Professor Nick Bisley from La Trobe Asia declared: “It [conflict] is something that we think is very plausible. This is not some imaginary risk.…

Asked about a war in Asia, another critic Hugh White, ANU Professor of Strategic Studies, drew a comparison with the outbreak of World War I, saying: “It is a bit like what happened in 1914 and a series of miscalculations by either or both sides could produce a situation where both sides push forward into crisis expecting the other to step back and surrender and they end in a fight that neither side really wants. That is the kind of possibility that we really do face in Asia today and that’s one of the reasons why I think Asia is much more dangerous at the moment than most of us realise.” 

WSWS

New warnings of war in Asia
Peter Symonds

John Armour — Why, sometimes I’ve believed as many as six impossible things before breakfast.” (or what’s so hard about MMT)

Proponents of MMT generally can’t understand why people don’t “get” MMT as it seems so obvious. They may have forgotten however, that at their critical point of ‘enlightenment’ they had to jump a number of conceptual barriers to get to the other side. 

In my experience, these are the six (seemingly) “impossible things” you have to believe (before or after meals, it doesn’t matter) to have any hope of ‘getting’ MMT. Once you believe these “impossible things” however, the getting of wisdom follows quickly and logically.

The order of priority is based on my experience of the degree of ‘jaw dropped-ness’ as I’ve sought to explain to friends, family, and household pets.

(1) Taxes don’t fund anything

(2) The government doesn’t borrow from anybody to finance its spending

(3) The government’s fiscal balance (deficit) is the non-government sector’s surplus.

(4) The government creates currency by fiat (‘out of thin air’)

(5) Bond issuance is not borrowing.

(6) Banks lend without reserves constraints imposed by the central bank.

They are of course not “impossible things” but the absolute reality of the sovereign fiat monetary system we actually operate under.

I could’ve added a few more but I needed just six to fit my literary allusion (“Through the Looking Glass”).

Modern Monetary Theory: Real Economics“
Why, sometimes I’ve believed as many as six impossible things before breakfast.” (or what’s so hard about MMT)
Guest Post by John Armour

Peter Symonds — Australian budget ends “Age of Entitlement”

This week’s Australian budget is a stark warning to workers internationally of the sweeping social reversal being demanded by international financial capital in every country. In what has been depicted as the “lucky country,” which seemed to escape the 2008–2009 global financial crisis, the framework has been set for dismantling every aspect of the welfare state established following World War II.
The Abbott Coalition government’s first budget will have an immediate impact on the lives of every section of the working class, especially the most impoverished. The screws have been tightened on welfare payments across the board to ensure that the unemployed, the disabled and the elderly wait longer, receive fewer benefits or get nothing at all. Working-class families are being stripped of tax concessions. The principle of “user pays” has been extended to visits to the local doctor and other medical services, as well as to giving universities free rein to make massive increases in student fees.

The budget sets a number of new benchmarks that will be exploited to impose similar measures internationally....

The budget has a far broader significance, however. In his speech to parliament, Treasurer Joe Hockey declared that the “Age of Entitlement” was over. In other words, no one should any longer expect governments to provide essential social services, such as education and health care, or assist the most vulnerable layers of society. Instead, the onus is on individuals to provide for themselves. This is nothing but the law of the capitalist jungle, which ensures wealth and opportunity for the few and consigns the majority of society to a desperate struggle for survival....

Budget outlays must be reduced to make way for lower taxes on business and high-income recipients. Insofar as government spending is necessary, it should be paid for from regressive taxes, such as the Goods and Services Tax that hit those on low incomes the hardest....

In his budget speech, Hockey declared that the Australian economy had to meet the challenges of “the emerging competition in Asia.” Above all, for Sydney and Melbourne to compete with international financial centres such as Hong Kong, all social entitlements have to be slashed to make way for huge reductions in taxes for corporations and the super-rich. This is not just the program of the Abbott government, but of the whole political establishment. The foundations for the present budget were laid by the previous Greens-backed Labor government, which had already begun to lift the pension age and axe welfare benefits....

The program of austerity is intimately related to the drive to war. One of the few budget items to increase was defence, in line with the bipartisan goal of lifting military spending to 2 percent of gross domestic product. The increase is part of Canberra’s commitment to the Obama administration’s “pivot to Asia” and US preparations throughout the region for war against China. The interests of Australian financial elites are completely bound up with Wall Street and continued US hegemony in Asia and internationally....

The working class in Australia and around the world should begin drawing its own conclusions. If capitalism has nothing in store but war and the Dickensian world of 19th century Britain, then it must be abolished and replaced by a society structured on socialist principles to provide for the needs of the majority, not the super-profits of a wealthy few.

World Socialist Web Site
Australian budget ends “Age of Entitlement”
Peter Symond, National Editor, WSWS

Steve Keen — Applying some MMT arithmetic to Australia’s budget

NOTE: I made an error in my arithmetic in this post which I’m fixing up after too little sleep last night thanks to the post-Budget lockup drinks: the basic logic is OK but the numbers are wrong. I’ll link nonetheless and amend the numbers tomorrow.

Steve Keen's Debtwatch
Applying some MMT arithmetic to Australia’s budget
Steve Keen

Speaking truth to power (video)

Trending — Speaking truth to power.

Senator Ludlam welcomes Tony Abbott to WA

(h/t John Zelnicker)

Unconventional Economist — US trade shocker one step closer to reality

The TPP from an Australian POV.

I have written previously about the risks posed to Australia’s sovereignty and consumer welfare from the Trans-Pacific Partnership (TPP).

If the TPP goes ahead, it will establish a US-style regional regulatory framework that meets the demands of major US export industries, including pharmaceutical and digital....

Australia’s Trade Minister, Andrew Robb, has signaled Australia’s unbridled support for the TPP provided Australia gains significant access to agricultural markets, even labeling the agreement as a “platform for 21st-century trade rules”....

Neoliberalism at work. Firms benefit selectively, while the public at large pays for it with a reduction in living standard.

MacroBusiness.au
US trade shocker one step closer to reality
Unconventional Economist

Peter Cooper — The Left, Elections and Macroeconomics

Australian Peter Cooper explains what's going on down under with the recent election of a conservative government and how politics is impacting economics there. BTW, media is under billionaire control in Oz, too, led by Rupert Mudoch's evil empire.

Heteconomist
The Left, Elections and Macroeconomics
Peter Cooper

Max Keiser — Steve Keen was right!

Australian Dollar Plunges as Home Loans Dive; Australia Insolvencies Hit Record; Worst is Yet to Come

Max Keiser
Steve Keen was right!

Max links to Mish.