Mangled Thoughts

The ACTU claims increases in the dictated minimum wage won’t fuel inflation. They are correct - inflation is what no one is advised by their barrister to do at home, ‘money creation’. No, it can do something else, give many Australians a large pay cut to a 100% pay cut, it’s called unemployment.

Unemployment, according to reports, is already climbing. “The Fair Pay Commission” is to prescribe today an increase in the minimum rate. As I write this, it has been handed down, $20 per week. The ACTU pushed for a $26 increase (some) employers for $10-13 (it sounds like the 1970’s all over again). What is the problem?

So long as the minimum pay rate is no greater than the market rate, unemployment does not ensue. Prescribed minimums higher than market rates, while the lucky ‘protected’ few might be given the increase, it cannot increase total payroll. Instead, it entails an instant, 100% pay cut for many and it is called unemployment.

Even before the current rise in unemployment, real unemployment has been running higher than official figures. Those working far fewer hours than they seek is unemployment. ‘Make work’ schemes is unemployment, as are many university courses - as a means of disguising unemployment (Hawke and Keating hit upon this wheeze in the early 1980’s - ’see, low youth unemployment’).

Has The Fair Pay Commission sent rising employment exponential?

It must be stressed that the only basis on which real pay rates can by increased is capital accumulation. While the ACTU asserted the falsehoods of indeterminacy and monopsonistic ‘power of employers over employees’, they steered clear of touching upon the work capital accumulation does in raising pay.

It is the ratio of labour to capital that sets how much a job in a particular firm is paid. It’s the difference between using hand and fingernails to turn over a field to grow spuds or using a large, air conditioned tractor with PTO powered ploughs and seeding and cropping machines. This contrast illustrates who will be paid the most.

Who, really, is responsible for a new epoch of squalor?

The labour market debacle is about to be shown out with appalling force. This is the wash up of the stupidity of the HR Nicholls Society and its ‘heroes’ Senator Minchin, David Kemp, Michael Kroger, Peter Costello, Des Moore and Ray Evans. Then there were the immediate advisers to former Liberal ministers such as Mr. Jamie Briggs. How bad were they?

They ran the falsehoods the ACTU also relied on to attack freeing labour markets. They ACTU could not believe their luck. Hugh Morgan added his novel contribution to stupidity with his novel notion of “the ratio of the minimum wage to the median wage and when it is too high mass unemployment ensues”.

They, as the Centre for Independent Studies, are also a vacuum on the theory of capital in basic truths. The Cabinet swallowed their line that in free labour markets production increases without capital accumulation. The rot involved is illuminated by pressing it to the reductio ad absurdum that does follow from that notion, stone age man was as productive as capital working man, using his bare hands labour should produce more than the machine driving spudman.

The destruction of the campaign for labour market reform, otherwise a throughly sound and thus highly moral case, by those illiterates and with it the Liberal Party, was predicted by Mr. Jackson before the reform was launched, and so in 2005 he couold write,

Liberal Party labour market reform founders on ineptitude

Ignorance and illiteracy gave oxygen to the likes of The ACTU’s hired guns, Belchamber and Godfrey, and that devotee of Stalinists Kenneth Davidson. Davidson used an appallingly bad New Zealand Government paper as ’solid evidence’ against free labour markets. Mr. Jackson also read it and, evidently, found it very bad and, based on his article, for the same reasons I did:

Liberal Government and labour market reform: more fallacious attacks

As the false campaign unravelled in 2005, the HR Nicholls clubmen ran for cover and left the Ministers responsible for running the Cabinet’s reform hanging. Panicking, Cabinet sought to rescue itself by raising the substitute for the old IRC, “The Fair Pay Commission” and imposing the “Fairness Test”. Who was responsible for this final collapse? One Jamie Briggs, adviser to Prime Minister Howard, as Landeryou documents here.

Seeking Alexander Downer’s blue ribbon seat, Briggs tried to paper over his spineless and overall incompetence as a adviser to Prime Minister Howard in an interview:

In effect we declared that in May last year when we introduced the fairness test which was the key issue with WorkChoices

There is no “We” about it. It was Briggs, Minchin, Kemp, Costello, Evans, Korger, Morgan and Moore who totally failed in their duty to Cabinet, Parliament, Australians and the Liberal Party, and completely wrecked the campaign, and blew the Liberal Party out of office with it.

So the day has arrived for the final immiseration of Australians. “Professor” Ian Harper, Chairman of the Fair Pay Commission declared today, the increase he ordered willl:

1. Deliver a real pay increase to all “workers”
2. Will increase total payroll.

Harper has no justification at all for both claims. At a time of already rising unemployment, the indication is that Harper has consigned even more Australians to the abyss. This is not what Rudd and the ACTU are guilty of. It is what the “Right”, who wrecked labour reform and the Liberal Party are guilty of. By their ignorance, venality, hubris and thuggery, they brought this about.

It is genuine abuse of many Australians and on two counts. They cannot enjoy higher pay without capital accumulation. Many will be delivered a real pay cut.

Rudd muddied things further by bestowing on top bureaucrats a staggering 18% increase this week. The ACTU, for obvious reasons, latched onto this act of larceny for its emotional impact on the public. Mind, what will it matter, since Rudd will annihilate Australiansthrough carbon taxation - thanks, again, to the duplicity of the “Right”.

P.S.

1. “The Right” still blame Howard for what they did, wrecked labour market reform. I remind readers of the disgusting antics of Moore and Evans, when they smeared both Howard and Cardinal Pell before a hearing of the Fair Pay commission, asserting they had been captured by neo Marxists. This was their ‘expert economic submission’.

Moore’s outstanding heroism was followed by the IPA’s “let’s blame Howard for our errors” bumper issue. These deeds were preceded by his greatest ‘daring do’ in 2005 - he smeared Howard ‘out in the open’ in The Spencer Street Soviet Age, Gutless reform dash Liberal hopes

2. It is interesting to note Hugh Morgan and the Business Council of Australia pushes for large increases in immigration. They also hold the fallacy consumption drives economic growth, instead of capital accumulation.

What they are totally blind to is, besides the very nasty implications of mass, unrestricted immigration, without capital accumulation the increase they are pushing will drive down pay rates. Unfortunately, Rudd is about to oblige them with this desire to impoverish modest Australians. That the BCA are worse than economic illiterates is shown in, for example:

Lopping the Root and Branch Tax Review Cuts Opportunity
26 June 2008, by BCA President Greig Gailey

So, Greig, why not argue for a 100% tax rate? A major assumption is the fallacy of consumption drives economic growth, instead of savings.

Well, it’s understandable with such economic geniuses as members and former board members, eg. Hugh Morgan, whose notion of business is Government transferring billions his way viz the Morgan-Walker “Nuke the coal firms Power Plant” and destroying genuine enterprises such as WMC, larceny must be the definition of economic growth.

Australia’s Emissions Trading Scheme: An Opportunity – Speech by BCA President Greig Gailey

As the CIS, Greig and the BCA run the lie of “costless carbon taxation”. The Victorian equivalent of the BCA, the Victorian Employer’s Chamber of Commerce and Industry are no more literate in economics but even they have twigged onto, carbon taxation is capital annihilation.