Mangled Thoughts

It is due to keynesian policies, Central Banks and Statist Government. The question to keep in clear view is, how did it come to this?

Central to keynesianitis is the fallacy consumption drives economic growth. Hence the reliance on the aggregate GDP. According to this ‘indicator’, consumption is 2/3 of economic activity. To this, demand can be raised by central banks engaging in monetary expansion. The alarm over the credit crunch around the world, and heightened into panic by the collapse of Lehmen Branches, AIG, and Fanny and Mae, is due to these fallacies.

It is savings, capital accumulation, that fuels growth. Production is 2/3 of expenditure, against the misleading aggregate GDP. It is the disruption of the framework of prices and its impact on manufacturing that is the worry, and occurs before housing and share-market bubbles burst. This is the worry, how much damage has been done to savings?

The above points are neatly demonstrated here:

US Economy’s Bubble: Casting the Recession Runes

Some reactions to the crisis -

Have been appalling.

RBA
Comments such as as, ‘it’s not Glen Stevens’ (head of the RBA) fault’ and ‘he’s done a very good job in very difficult conditions’, have been generously published in newspapers. Thus, such dismal articles as this:

Reserve Bank not to blame for our sub-prime battlers

He’s not done a good job at all. He’s responsible for what is driving the recession in Australia.

It’s not him personally. It’s his and his seconds’ in the RBA keynesianism that is the culprit, as their predecessors for for past recessions and depressions, and it is reprehensible. Failure to nail this, and its rectification means the same will occur again in the future. It’s also a damning reflection on not only RBA, but also the commentariat and the Universities. Keynesianism is the ‘mainstream’ assumption.

Cabinet and Opposition

Last week things degenerated rather swiflty. Early in the week the bipartisan response to crisis was imposition of a ban on short selling. Short selling, and long selling are very important actions; banning them causes great damage in markets. Next, Rudd announcing an overall intensification and extension of controls over markets.

He finished on Saturday by announcing that he will use taxpayers to buy up bad debt. Swann expanded; this will “inject liquidity into the market”. Injecting liquidity is what caused the crisis, it is credit expansion. Yet, the government cannot do this, only the RBA can. This leaves only what he did declare:

They, Rudd and Swann dictated many Australian taxpayers are now liable for others’ bad debt. They will sap Australians’ savings to buy it and to cover the liabilities. Swann said, Treasury will ’securitise’ the bad debt and sell them to investors.

‘Securitisation’ was driven by keynesian credit expansion and it is this last that brought down Lehman Brothers, and AIG. Central Bank credit expansion and the mechanism of its distribution, fractional banking, is why they collapsed. There is no market, certainly not at the moment, for junk. Don’t take my word for it; here’s Martin Jacomb, who is a former director of that Central Bank the Bank of England in an article:

“Conditions in credit markets awash with easy money were made to seem even more benign with the growth of securitisation. This is the process whereby banks bundle up a package of loans, such as residential mortgages, and then slice these up into tranches of differing qualitiy, so that these tranches can be sold to incvestors outsid eof the banking system. Thus banks were thus enabled to expand the volume of their lending….It also supposedly diversified risk.”

(Sir Martin Jacomb, From Northern Rock to Lehman: who should share the blame? Spectator, 20/9/08).

It’s unamusing to note that while it is contained in the quote, Jacomb did not finger the villain, kenynesian policies (for which he is also responsible). Later in the article he briefly commented that in time; buyers of bad loans might reappear, and then only if the loans are sufficiently discounted. “Securitised” bad debt is, Mr. Swann, worthless; just a bonfire on which to destroy good money, money that government takes by coercion.

Some Media responses to Rudd’s decision

To foist bad debt on that hapless sod called taxpayer, over the weekend:

“It will ‘inject liquidity into the markets”‘; “restore markets”; “its a good thing because it means we can make profits again”‘; “business will recover”.

Janet Albrechtsen

Married to a mate of Murdoch’s (of course talent got her a job on The Australian), this wealthy, sympathetic economics expert blamed the modest man in the street and his and her reasonable desire to own a home:

“perverse incentives that allowed consumers to take a one-way bet when they borrowed money… for every episode of predatory lending there was plenty of predatory borrowing.”

They could get away with their crimes, according to Janet, because they faced no punitive consequences. Well, those who failed to meet their payments did pay: they have lost all that they did pay; it’s called homelessness.

These vicious bastards were, according to Janet, in collusion with another pack of “evildoers”, (non central) bankers, dealers, brokers and any other low-lifer making their way in markets. Together, they conspired to bring down some companies and the whole wide world.

What else is to be expected of Janet, who did her bit to undermine Howard, destroy the campaign for free labour markets and called for a nazi style coup de tat as her solution to defeating the hard Left. Janet fancies herself as warrior for Liberty. Destroying causes she claims to fight for is a weird notion of heroism before the enemy.

It has clearly not occurred to Janet, nor has she bothered lifting a finger to find out, the massive credit expansion by central banks ends up somewhere. It ends up in mortgages and credit card debts. Then, why should she. The CIS and IPA are as incompetent as the newspaper commentariat, and the economics writesr of the Australian are also appallingly bad. Callous, ignorant, deaf, dumb, and blind, Janet has a snowflake’s chance of coming to grips with what is behind the crisis.

Andrew Bolt
According to this Cambridge don in economics, ‘inflation is the price you pay for a successful, booming economy’.

What else is to be expected of someone whose ‘economic advice’ comes from the likes of those clowns in the HR Nicholls Society. Oh, and whose vicious attack on Co2 taxes is to say, it means price rises, as opposed to destruction of capital. It’s understandable why Bolt avoids mentioning capital destruction: he fully supports capital destruction through a particular Co2 tax, ethanol production, and this is wiping out food production around the world.

John Quiggin He attributes the crisis to, in good hard Leftist fashion, to the ‘internal contradiction’ of capitalism. The disaster was inevitable. Except for one thing, keynesiantis policies are against free markets.

Quiggin believes he can get away with his oily deception and he is right up to a point. CIS and IPA are not engaged in free market economics and defence of free markets. They have done great damage in both endeavours.

What Quiggin runs away from is debate with those who can defend free markets, and it is clear why he does. Feeling superior,Quiggin used to smugly write very nasty ‘criticisms’ of Jackson and his work. His sense of his greatness did not last, it was beaten out of him by Jackson in searing articles. Mention the name Brookesnews and Jackson, and Quiggin flees to the hills, or at least under his bed. Yes, Quiggin is another gutless cretin whose equals are vicious fishwives.

It’s been the diseased Left’s chorus line, the crisis is the proof against ‘free market ideology’. Christine Milne of the Nazi Greens Party freely declared so in the Senate, and why not. There is no-one in the Liberal Party, in both Houses, capable of demolishing that lie and defending free markets.

Prediction

Not one of them predicted the crisis, not that they could. Arsenic purveyed as economic theory is no grounds for prediction. The exceptions are those who work from the within the framework of Austrian school monetary theory, and I retained in my pc from the 1990’s articles demonstrating this. Oddly enough, those pertinent to the Australian scene are by Jackson.

Here is one startling prediction, delivered in 2004 (US economy: storm clouds ahead):

“I’m betting on another recession in or around 2008. Of course it’s possible that the economy might begin to slow much sooner.”

Jackson over the last few years, has repeatedly warned of the storm that is now breaking, thanks to the RBA’s massive monetary expansion since the 1980’s.

He predicted the 1990’s recession -

Is Australia heading for a “recession we had to have”?

It was, however, temporarily arrested by the RBA. It engaged in a massive monetary expansion from January 1996 to June 2005.

Australian economy, recession and the trade cycle
Monday 22 August 2005

In, Now for the Clinton economy Bush has inherited( December 2000), he related:

“In the last few months at least 250,000 jobs have gone, with about 45,000 or more going in November. For the last five months jobs losses have averaged about 52,000 a month or more… the vast majority of job losses have been in manufacturing.”

In, American economy looking worse( March 2001) he observed:

“A few more figures will illustrate just how bad the monetary situation really is. Consumer credit grew by $135 billion in 2000, compared with nearly $100 billion in 1999, a 35 per cent leap, while 1999 was 50 per cent up on 1998. Not surprisingly, non-mortgage credit has been racing ahead. It has now reached the point where spending is exceeding income. This is what I call a real monetary shot in the arm — and it’s Dr Greenspan who wielded the needle. In the meantime the personal saving rate fell to –1 per cent in January….

“We have seen that though consumption is still rising manufacturing is still going south. Nevertheless, many commentators defy reality by parroting the argument that consumption accounts for about 75 per cent of final demand in the US economy consumption spending must be the key to recovery and prosperity.

“Wrong. Consumption is about 38 per cent of total spending, if that. The manner in which GDP is calculated conceals this vital fact. Therefore, it is not consumption spending that needs to rise but spending in the higher stages of production — and this means more savings. However, as there will never be enough savings to save the malinvestments that Greenspan’s reckless monetary policy created a shakeout is unavoidable.”

The mainstream media and the think tanks have been, to quote one of their number, “caught by surprise”. Jackson wasn’t, but it’s not him, its the framework of theory that ensured he wasn’t caught by surprise.

Returning to the beginning

What sparked this item is the actions of the RBA, Rudd and Swann, Turnbull and Bishop. It’s not clear how severe this recession will be but, this lot have given every indication that they will find a way to compound it. On the other hand, Rudd proceeds with Co2 taxes and central planning (which was the policy of the regime of the USSR and thus it collapsed), and the question of severity will seem, in retrospect, rather trivial.

It’s come about by ‘professional economists’ and a commentariat drilled into the arsenic of keynesianism. The RBA, and statist politicians committed to keynesian policies. The trouble this time is that the crisis is being used by the hard Left, and statist politicians as an excuse to attack free markets.

In the case of the Rudd Cabinet, free markets is totally incompatible with their fascist aims. Worse, the ‘Right’ and their anti-free market think tanks are also causing great damage.

This morning the Premier of Brackistan, Brumby, declared Rudd should follow the keynesian prescription, a massive increase in Federal Government consumption. The Rudd cabinet needs no such encouragement; it has already rocked up billions of extras in squander. Brumby also called on Glen Stevens to commit another round of credit expansion. He said he will advise Rudd this afternoon. Great, just spiffingly wonderful.

As I write this, Glen Stevens has announced another round of credit expansion. Echoes of 1991.

It truly is appalling that despite the record of Keynesianism, one disaster after another, it is nonetheless adhered to. It is the crisis is not a spur to return to something tried and true, sound money.

More tomorrow.

The shocking truth behind the fraud of ‘green shopping bags’

Well, their are several appalling truths. There is the shocking economic truth behind the efforts of the Brumby and Rudd Cabinets to ban plastic shocking bags. Since Jackson has neatly laid this out, one only adds:

Manufacturers of plastic bags are being strangled to death by the absolutist bastards. I had this related from some-one connected to this genuine free market enterprise. What we have is: a fascist contempt for consumers plus State and Federal administrations deliberately exterminating capital, while propping up the fraud of ‘Green friendly bags’. Bye the bye, where are the cowards of the “Right” on this? Hiding behind locked doors.

Plastic bags v. greenie bigotry

Forced Labour

It turns out that the economic thuggery involved is far worse than Jackson’s analysis shows, and this is chilling enough.

A source related to me over the weekend:

The “Green Friendly” bags are made not by free market enterprises. They are produced in prisons, in China. Prisons in China, to remark, are filled with political prisoners.

This is quite a dirty secret that, plainly, the diseased Left dominated media are also suppressing.

Free market production in China is matched by solid capital accumulation, raising real pay rates, as sound economic theory predicts. Free market firms are not producing the “Green Bags”. They don’t because it would result in capital destruction and not accumulation. To get around the thorny problem:

Australian fascist polticians, the Greens, and Planet Ark happily force consumers to buy bags that consumers don’t want (they want plastic bags). To do this, they have had to concoct an anti-market basis to produces them at prices that won’t see consumers do what they should do; rise up and take a pitchfork to the bums. Therefore, they have sourced the “Green Bags” through the Chinese Government, establishing ‘factories’ in prison using forced labour.

What we have is not only intellectual fraud in economics, matched by totalitarian contempt for Australians. We have a pack of thugs who are using forced labour in order to perpetrate the fraud.

Be sure of it, it is not the Chinese Government alone. It is the thugs in Australia who are responsible for it. Otherwise, the Chinese Government would not be using forced labour to supply this scam against Australians and political prisoners. This is what the Bracks, Brumby and Rudd Cabinets are culpable of. They are making many Australians, by naked coercive power, party to a practice modest Australians would rightly condemn as savagery. I, as an Australian, condemn these rotten mongrels.

This is what the Watermelon Red Nazi Greens have demanded and Rudd, Bracks and Brumby are delivering on. The Watermelon Reds and the rest of the gutless Right are also culpable of it, because they have supported to the hilt Greens demands. If they had stood up on principles and sound economics decades ago, and persisted, this would not have come about. This is what this pack of liars, Left and Right, have done.

I’ll stop here, readers, because the boiler is heating up. But, heads must roll over this terrible disgrace.

In the fight for labour market reform there were and remains two opponents, the ACTU and the fungus brained “Right”. Who caused the damage, and continues to damage this grave and highly moral cause? The second. Incredibly, this lot blamed Howard for the defeat and for the 2007 election loss, and continue to do so.

Peter Brown commented in, RBA in a fluster: reply to “Anon”. He took exception to the reply to “Anon” on the subject of labour markets:

Gerry is that you? If not, then Douglas you are a total lunatic. You are sick. The lawyers are on their way to you and Rumcorps

This is in two parts. The first fixes an upset stomach. The second part is more damning indictments of what the frozen “Right” did and continue to do to labour market reform.

1. What is wrong Brown? Upset stomach?

Brown is free to hurl even the most offensive of invectives against me, I’ve no complaint because I happily throw in a few telling adjectives. But this alone is no good. Rule one, Brown, make sure abuse is surrounded by argument.

If wrong, Brown should have attached an argument as to why. Instead, his response is the Right’s typical notion of cut and thrust, jerk knee and come out smearing. Secondly, while the inert “Right” whine about hard leftists censorsing opponents, consider the record of the “Right”.

It is a profound insight into the Statist “Right” that it was they, through the Kennett administration, who turned the STO and OPA into a criminal racket it still is. They prepared the Victorian anti-Bill of Rights and, in view of the timing, it is reasonable to infer that they might have aimed at strengthening the criminalisation of free speech in Victoria by preparing the Blasphemy Act it was Brumby’s pleasure to have passed.

Moreover, Federal MPs of the scrofulous Right clamoured, in the final couple of years of the Howard administration, for ‘censorship’ of the Internet. What they meant was suppression of free speech - there are blogs and websites that hurt them as much as they do the diseased Left. Now what do we see:

Peter Brown, for some reason peculiar to the scrofulous Right, likes neither what Mr. Gerry Jackson writes and publishes in his news magazine, and doesn’t like what I write. His answer is not refutation but intimidation, threatening to “sick” lawyers onto Jackson, and onto me. I thank Peter Brown for providing another crystal clear insight into the treacherous but comatose “Right” for readers.

Oh, to reinforce: it is typical of the Right’s notion of ‘debate’. That was their reaction to Jackson’s devastating criticism of the IPA’s totally false ‘Islam and the free markets’ by Andrew “Andy Pandy” Kemp and Chris “the brain challenged Kid” Berg. It was their reaction, through the Centre for Independent Studies when Jackson delivered a strict Austrian economic criticism of their position paper boosting mass capital destroying carbon taxes. We know why they immediately reach for the knee jerk and smear.

They can’t defend what they write, they refuse to defend what they put, and are afraid of a direct encounter that will expose them for the hollow men that they are. They also know Jackson is solid, his defence impenetrable and that is why, instead of challenging him directly, they run about smearing him elsewhere, as Brown has done on this site. After all, millions in donors’ funds into their bank vaults is at stake and their hubristic conceited estimation of their prowess and grip.

2. What the frozen “Right” did and continue to do to labour market reform

Wreck the fight for it.

The economic case is rock solid. This they cannot wreck.

They wreck the fight for reform, and persist in wrecking it. One part why they do so is: they don’t have a clue as to what the case is. It is important to observe that from 2005 - the official launch of the campaign to the present, they have not defended what they put as the ‘case’ for reform. They ensured that they never faced open, direct exchange with, say, ACTU guns. They ran away and the reason is clear, cowardice. They have enough sense to realise, they would be shot up all over again,and they are bleeding their gizzards out as it is.

In regards to labour markets, it is plain that what pains Brown is exposure of the sheer stupidity of his heroes in the “Right” and in particular, the HR Clubmen and the fact that they are ignoramuses who have caused great damage to a rock solid and thus highly moral cause. Let’s see:

I draw attention to, for example, Walter Block and William Barnett II, An Austrian Critique of Neo – Classical Monopsony Theory.

This paper is a thorough examination of the false assumption on which monopsony, and oligopsony rests, ‘perfect competition’. Monopsony is the extension of the root fiction. They demonstrate perfect competition is the anti-free market fiction it truly is - pseudo economic theory. [There is nothing new in this demolition by the way, as Jackson’s articles also shows - from history of economic theory.] What is the importance of this?

Des Moore Moore, for instance, concedes the ACTU false claim of indeterminacy of wage rates, and of “balance of power”. The second is rooted in the falsehood of monopsony. The ACTU latched onto Card and Krueger in an attempt to lend credence to it. Jackson nailed a suicidal qualification made by Card and Kreuger, an escape hatch as it were.

The crux is: neither employer nor employee has power. There is no power to be ‘balanced’. Free markets and the marginal productivity of labour explains why, and why labour is justly paid.

The error of perfect competition involves a whole nest of errors including horizontal curves. The HR Nicholls club committed the lot, and in truly clownish style. They compounded the mess by their own idiosyncratic notions.

The ACTU’s assessment of the “Right” in the labour market wars

I had the hot flash from an ACTU heavy that they were delirious with joy when they found out the HR Nicholls Society were supplying advice to Cabinet. That, no alternative sources were involved. This was early in the piece, when the Cabinet began preparing for reform.

Futher, they were surprised Cabinet had not turned to Jackson for advice. That, they fear Jackson and their concern was, if Cabinet had turned to Jackson, they would have been smashed. Remember, not only the ACTU but also the ILO attend to Jackson’s work very carefully.

Further, they checked to make sure it wasn’t a ruse. That, the Cabinet might have been holding Jackson as a secret weapon, concealed by the screen of buffoons in the HR Nicholls Society (Bob Day is a worthy member of this circus of wreckers). This is what the ACTU did; they could not believe their lucky stars that it was true, Cabinet was hanging itself by relying on the troupe of jokers.

In March 2005, Hugh Morgan puckered up for ABC cameras (he believed Auld Bolshevik Cow’s cameras loved him and for once he got something right). Fresh from buying a $700,000 oil painting that very day, and reciting his novel theorem, told modest Australians they are paid too much.

In a few minutes, the final disasterous demolition of the campaign had been accomplished. Cabinet was warned and it ignored the warning - dump this lot and find a gun to get it right. Here’s the confirmation:

Joe Cambria, in Are Liberal Party blue bloods sinking the Government’s workplace reforms? (Nov. 2005), informed the public that the ACTU had hired the highly experienced US national pollster Vic Fingerhut (which also means the ACTU shelled out a hefty sum for his servics). His findings?

“Despite the incredibly stupid headline in the Financial Review (IR bluster fails to rouse most voters) the figures show that your campaign has made an enormous impact.

“These are powerful numbers… you’ve increased the proportion of voters who saw the issue as important to 49 per cent of the electorate and Labor is now seen as best to handle the issue by a 24 point, 50-26 point margin.

“Also, you’ve hit one of the key target audiences [the $50-$75,000 income range] with a full 40 per cent saying they are now less likely to vote Coalition as a result of its planned workplace changes.

“These are great numbers. Very few independent media campaigns –– anywhere –– do this much damage.

“These findings are absolutely devastating for the Government and its advisers, and must surely be cause for considerable alarm among Coalition MPs and Senators.”

Cambria then names the culprits for this massive defeat:

Friends of mine in the City have complained for years about Michael Kroger, Morgan and Calvert-Jones picking incompetent advisers and funding self-important twits.

Oh, defeat wasn’t inevitable. It hung on whether the Cabinet would reach for brains, but they didn’t and they stuck with the arsenic the HR Nicholls clubmen poured into them. The odd thing is, they did cut Des Moore, Ray Evans, and Hugh Morgan loose.

It was not appreciated at the time, Senator Nick Minchin, as a Cabinet Minister, had failed in his oath sworn duty by unilaterally rejecting material prepared for Cabinet. Why? His fellow HR Nicholls Society clubmen? Oh, yes, what Minchin did stinks, marked by his grovelling before his fellow clubmen over the disaster Howard was not responsible for but them.

An amusing blackwash

Des Moore and Ray Evans each made a submission to the July 2007 hearing of the Fair Pay Commission. Being absent of economics, the submissions are revealing for entirely different reasons to these:

Any submission to the Commission would, presumably, contain a proposition and the case for why the proposition is sound. An economic case in fact.

Moore’s paper is 2½ pages long, bears a grandiloquent title, and littered with the perpendicular “I”. He showed his “classical literary learning” in a nice, callous touch. He quoted Luke 6:20. Not a few have noted Moore’s ‘delicacy’. He, as Evans did, told the Commission to read their classics on labour markets for all that they need to know.

Ray Evans’ paper has a modest title but overtook Des in the “look at me stakes”. His paper is 5½ pages, on the HRNS letterhead, with a postscript: “Mr. Ray Evans is the President of the HRNS.” [Is that for life, or just all eternity?]

I showed the ’submissions’ to a senior executive of a large concern. Finished reading, he remarked : “They make me cringe.”

Here begins the scrofulus “Rights” decision to blame Howard

For the caranage they caused:

Evans declared to the Commission; the Howard Government accepted

“the Marxist dogmas which inspired the trade union movement of the 1880s and 1890s.”

He insouciantly concluded:

“…imbalance-of-power argument used to justify collective bargaining is the last remnant of a “Marxist class-war mindset”.

Unionism in the English speaking world in the 1880s and 1890s was not inspired by Marxism. This is not the first time that Mr Evans has asserted “the entire regulatory edifice of unions, tribunals, employer bodies, is based on the Marxian fallacy of class struggle”. It was the HR Nicholls Society, as above, that ‘conceded imbalance of power’ - from perfect competition.

Evans then accused Cardinal Archbishop Pell of being a neo-Marxist! He recieved it through Aquinas!

Pell is no neo-Marxist - not even protean. Neither were Aristotle, Aquinas, and the scholastics who seminally drove economics. Pell is only in need of sound economic advice. Evans has no excuse for his completely stupid defects in economics and history. For the ostrich “Right”, history begins when, risen each morning, they’ve had their first cup of coffee/ tea.

This is typical of the Right, they are impervious to correction of major mistakes in facts and in explanation (theory). Remarkable. Slothful, intractable, and arrogant clutzes are a few apt adjectives. And cowardice:

Evans, Moore, and the Institute of Public Affairs smeared Howard and Pell in safety; they know as well as anyone else, they were not as Prime Minister and Cardinal Archbishop of Australia in a position to defend themselves and are still not in a position to do so. Other bishops and parliamentarians can but not anyone in their positions is free to engage in such a public exchange.

The trouble is, they have caused great, extensive damage. Their collapse on Co2 taxes and the Greens’ lie Co2 emissions causes global warming draws it out: they don’t give a stuff about the sheer havoc they can wreak on lives of many others, so long as they are at the fore and, in the case of the Centre of Independent Studies and the Institute of Public Affairs, their bank vaults are lined with bundles of cash.

Back to Peter Brown

A. I haven’t met Mr. Jackson. I am not defending him, he demonstrates on Brookesnews that he is very capable of defending what he puts forth. The point is why the mention of Block and Barnett II: Jackson, as an exponent of and theoretician in the Austrian school of economics, reasons from solid principles - theory. He makes predictions from these grounds and they have shown out, demonstrating the soundness of theory he is solidly grounded in. Along with Dr. Shostak, these are the only two fine economists who write for the public and are fighting good causes.

B. I correspond with a couple of economists overseas, who are also very fine. I take their advice. They can’t serve Australians. They have their own countrymen to serve. They can’t engage in Australian affairs, they are engaged in the affairs of their countries.

Here we have in Australia the only site one has come across writing for Australians, from solid economic reasoning and they hurt the Hard Left. They hurt the Right too for the reasons indicated above, and one has banged on about for some years now. The economists I correspond with have no difficulty in concurring with Jackson, and in damning the efforts of the cretinous “Right”. It’s not Jackson, it is what he works from and puts. When I read Block, I read nothing new for it is solidly grounded too.

C. The Institute of Public Affairs in its December edition of the IPA Review, bashed Howard. This was the core of what the edition was for, self-exculpation of their part in the destruction of reform and the election. With the Centre of Independent Studies , this is not the only damage they have caused, damage that is certainly hurting many a Victorian, who now also face blackout because of their rubbish.

D. Stupid people are callous, destructive types. Confined to themselves, they only hurt kith and kin. But when in the Executive and advising, they hurt many.

Defective and worse economics will do this, hurt many Australians, as Co2 taxation will do - thanks to the rotting “Right”. This is of no concern to them. Their concern is themselves.

Truth counts, truth in economics counts, because the impact is great and the ruination can be great when in error. We are talking about the lives of millions of Australians and this lot conduct themselves as narcissistic, shallow, delinquent children do.

E. It is clear where Brown stands. It is clear what he ‘defends’, his completely stupid “Rightwing” heroes. His reaction tells me he is one of them.

‘Labour market wars’, it alludes to the publication, The Labour Market Wars, Jackson, which works through the case and hits targets that had to be hit, and still have to be hit. Go blow bubbles Peter Brown.

The economic commentariat are truly dreadful. They are in a flap, saying they have been caught out by surprise ,and the RBA too, in a single day. This very morning in fact, over this:

THE Reserve Bank is predicting an economic slowdown so severe that 100,000 people will be thrown out of work in the next 12 months…

But unemployment would rise by as much as 175,000 if growth in the number of job-seekers keeps rising at the same rate as in recent years. While unemployment remained low at this point, with….

Access Economics declared the RBA had done a good job “targeting inflation but that it is not easy forecasting”. By ‘inflation’, they stated price rises, and not keynesianitis. Access Economics stated that despite the ’surprise’, the RBA does a very good job. What else is to be expected; they live in the same closed loop. So what else is to be expected but the sudden onset of headless chook syndrome.

By ‘economic slow down’, they were stating the fallacy of consumption drives economic growth, rather than the truth capital accumulation is growth.

Against the commentariat, and the RBA, Mr.Gerard Jackson has delivered solid analysis and predictions (and not to omit mention occasional articles from Dr.Frank Shostak for Brookesnews). It’s proving out, again. Then, it’s all down to sound theory and not keynesian hocus pocus oracular consultation. Against the commentariat this morning, why only the last fortnight, these items:

Will the Reserve’s monetary policy sink the Australian economy

It looks like the Reserve is going to give the Australian economy another inflationary shot in the arm

These are proceeded by repeated warnings, over many years now.

Contrast the abysmal performance of the IPA, CIS, HR Nicholls Society, the news commentariat and the RBA. Their ‘efforts’ are inchoate pronouncements absent of analytical content and predictive force, delivered ex Cathedra. It shows. They ran around this morning like so many headless chooks crying, ‘What happened?’

To drive in one nail only to point up the above:

The end of the stock market boom is over. It’s been tumbling for a few months now. Look at the fact, a considerable amount of buying and selling was on credit, and it drove prices up. Then came the credit crunch and bang, the markets are correcting. It’s deflation. The commentariat are a complete blank on this, even though it’s still unfolding before them. To quote Jackson and Machlup in one:

Fritz Machlup (a member of the Austrian school of economics) explained that a stock market boom requires a continuous flow of bank credit. In other words, credit expansion. Therefore a

“… continual rise of stock prices cannot be explained by improved conditions of production or by increased voluntary savings, but only by an inflationary credit supply. (Fritz Machlup The Stock Market, Credit and Capital Formation, William Hodge and Company Limited, 1940, p. 290).”

He also observed that

“. . . monetary factors cause the [business] cycle but real phenomena constitute it”

The economic depth of the Commentariat and RBA is proved up in rather a stark fashion. A child’s paddling pool is deeper.

Rudd and Cabinet

Leaving explanation of money and inflation to Brookesnews, the focus is on the question of unemployment. While Swann is right to say that inflation is a real problem, set in train long before the sclerotic “Right” flung him and Rudd into office, he is an economic ignoramus too.

Swann is equal to Peter Costello, the HR Nicholls Society’s Nobel Prize winning economist. Thus, on inflation both are blanks. It was Pete who once declared that he’d defeated what he means by a bout of inflation with mass banana tree plantings.

The Cabinet is in a panic over unemployment:

Irrespective of who won the 2007 election, emerging rising unemployment was set in train by inflation. Irrespective of who, it was unavoidable. What, it seems, has panicked the Cabinet is that it might be aggravated:

If they do as they promised and reverse labour market reforms, such as they are, and unleash the ACTU and their aim - forcing effective minimum rates above market rates.

This would compound rising unemployment. By how much this would aggravate it can’t be answered, only that it would happen if Cabinet commits the reversal. This is the frightener that has decided the Cabinet, as Gillard has announced, it will not reverse the reforms. At least, not in the next 12 months.

Oh, by frightener, I don’t mean they are no more worried about tossing some onto the unemployment heap than are thugs in the ACTU. No, it’s the frightener called very many more angry voters on a 100% pay cut called unemployment that has them in a flap. With the ACTU standing over them, demanding payment for the 2007 election win in the form of price fixing.

Cabinet is in a right panic. The Liberal Party could inflict real pain but for a few obstacles:

On Labour Markets

Credit where credit is due. The HR Nicholls society won the election for the ALP, and not the ACTU. [Oh, alright, let’s be gentlemanly about it and divide the kudos 50 - 50 each]. Their ‘analysis’ is idiotically wrong, and the advice they supplied Cabinet worse. It reflects also on the former Ministers such as Peter Costello and their advisers. Just to check, here is former Treasurer Costello adviser, David Alexander, still parroting some of the many appallingly bad errors they cooked up between them:

“Labour market reform was considered important in its own right in improving our economic performance… it was also seen as crucial in the face of a developing mining boom… booms have often ended in recession through breakouts of wage inflation…

“The Coalition government’s industrial relations changes, while flawed and bureaucratic, were made in the context of those evolving arguments of lifting productivity and containing inflation…”

[Labor on ropes over rollback pledge, David Alexander, 17/3/08, The Australian.]

This is appalling stuff. Between Alexander and Jamie Briggs alone, Howard didn’t need the HR Nicholls Society to blow reform and him out of the water. It is important to ram home that capital accumulation raises marginal productivity, and rates of pay. Then, they are complete blanks in capital theory too.

Their ignorance, novelties, and contempt for modest Australians combined to destroy the campaign for a thoroughly sound and highly moral cause. Mind, if Peter Costello is the great economist that his chums pretend he his, he would have known the flesh and bones of their advice was garbage and rejected it.

That last sentence is crucial. Efforts were made to supply the correct advice but the HR Nicholls Society, with Costello, Nick Minchin, David Kemp, and Michael Kroger, buried it. Minchin himself unilaterally rejected material that was prepared for Cabinet and not for his private amusement. Then there was Bob Day; he has played a nasty part in blowing the fight for freeing labour markets [more on Day in another item].

What is worse is, due to their hubris they blunder about and cause further carnage to great causes and discredit sound principles. With their knee-jerk reactions to even straight analytical criticism of their defective economics papers and advice, it is plain they do not have a single clue as to what they have done and continue to wreak, havoc.

Neither do they realise what the final force of this damage is, sapping and wrecking the prosperity and progress of millions of Australia. Their full support for Co2 taxes is another telling demonstration of this strange insularity worthy of narcissistic delinquents.

Oh, darn, all this and without mentioning the compeletely stupid responses from such as Julie Bishop to recession and rising unemployment. Bishop’s notion of theory is - it is a skill, as is championship tiddlywinks. Her response, as the article in the Australian quotes, is as cringeworthy as the mush the brainless brigade in the CIS, IPA and HR Nicholls Society have produced.

Unbelievably, on labour markets this lot is still pumping out the same bilge. The point being, the problem of unemployment due to pricing many out of jobs would have been finished if the true economic case and a sound, vigorous campaign to fight it had been submitted to Cabinet and accepted. They put the 2007 defeat down to an ACTU ’scare campaign’. To the contrary. They are now busy trying to finish off the fight completely, through their incompetence and illiteracy.

To cap it all off, recession due to defective/non-existent economic theory and rising unemployment. Now all that is left is to find out as it unfolds how bad it will be. Thanks RBA.

The ACTU is silent on the claim broadcast last Friday funds in super firms controlled by unions are being siphoned into ‘alternative energy schemes’.

Will engineers employed in ‘alternative energy companies’ defend the claims made by their ‘employers’ for windmills, ethanol, and solar ‘energy’, against those equipped to debate them? To date none have and the reason is straightforward, they cannot.

ASIC (Australian Securities & Investments Commission) is investigating one ‘alternative energy company’ that has, unsurprisingly, folded - “Firepower”. Unsurprisingly, Firepower too was subsidised by the Federal Government.

Austrade … played quite a role in the “success” of Firepower. It provided the group with almost $400,000 in development grants.

Yet Firepower’s chairman, Tim Johnston, told shareholders for more than three years that Firepower would make tens of millions of dollars selling its products to the Russian Railways network - a business that was duchessed at the Australian ambassador’s residence in Russia.

But internal Firepower documents obtained by the Herald show Russia refused to buy the product after it discovered some trial results had been falsified. Firepower blamed one of its Russian distributors for the forged results, but kept the news from its 1200 shareholders. New tests were conducted, which showed no fuel savings. Again this was kept from shareholders.

The Herald has also learnt that the scientist Firepower claimed was going to rewrite the fuel specification was being paid as a consultant by Firepower. And the price of the consultancy was being costed against the Australian taxpayer in export grants handed out by the Australian Trade Commission.

But the documents obtained by the Herald show Firepower knew all along there was no scientific proof to back any of its fuel-saving claims.

Its former chief executive, John Finnin, a former senior Trade Commission official, warned the company in November 2006 that Firepower’s “passion and enthusiasm” for its products was not worth “a pinch of shit in the marketplace” without that proof.

THE Australian Trade Commission signed a deal with a phantom subsidiary of the controversial fuel technology company Firepower…

Austrade offered the services of Australian trade officials to the company for $190 an hour, a price that also bought it official “endorsement” from the Federal Government.

But one of the service agreements - dated December 1, 2005 - was with Firepower Group Pty Ltd, a company unknown to the corporate regulator.

Firepower claimed it had invented:

Fuel Pill showed an increase in the octane rating of fuel, thus leading to an increase in power, faster burn and decreased chance of detonation under high load. Improved performance and fuel economy and the reduction of exhaust emissions thus resulted…

The superior performance of environmentally compatible fluids means that operators can improve operations safety and performance, without putting the environment at unnecessary risk – prolonging business success and ultimately, the protection of the environment.

Firepower raised $80m in funds from investors, and it’s gone. There was nothing there and thus the funds went right down the sewer. Well, Firepower and the Government had a good time squandering over $100 millions of dollars on sponsoring sports clubs. A number of sports ’stars’ believed the bunk and sunk savings into the scheme, and lost every cent.

Firepower was, in short, a shell, as are the other ‘alternative energy companies’ into which Unions, according to the reports, are siphoning member’s savings into.

To repeat, ‘alternative energy companies’ are nothing less than shells for the commission of larceny. They do not rate as even completely new start up enterprises. Due to the risks involved, super funds cannot allocate savings held in trust as venture capital, unless it is a type of fund under which savers can allocate some amount, and only after the risks have been understood and the saver signed a document expressly authorising the allocation. Even then, the allocation is small as a ratio of their total fund so that if risk is realised the loss does not detract from the overall and long term performance of their fund.

Unions siphoning super funds into ‘alernative energy’ schemes satisfy none of the above conditions. Indeed, to siphon funds into shells and behind the backs of the owners of those funds indicates criminal action under common law. This is before regulations enforced by ASIC, and the extensive regulations under the Tax Act. Therefore, will the ATO also investigate the ACTU in view of the serious allegations broadcast by Melbourne radio stations last Friday and not yet refuted?

Will, ASIC investigate ‘alternative energy companies’? Their claims are no better than those made by Firepower. Will ASIC investigate them for violations under the legislation it is bound to enforce.

Will the Federal Police investigate for other offences bound up with such schemes that may have been committed to date by the parties involved?

These matters are all the more urgent as it was reported this morning that an ‘alternative energy company’ is trying to convince Victorians to switch to its ‘windmill power’ scheme. This must also trigger Federal and State Government’s Acts governing such matters ‘false advertising’, and measures governing selling of products (real, or non-existent as in the case of ‘alternative energy).

While I am at it, will the ACCC investigate the ACTU for price fxing in labour markets, since this comes under the Act it enforces and would thus be a gross dereliction in their duty if they do not proceed?

Both the ACCC and ASIC claim to ‘protect’ consumers and investors. It is clear they are refusing to do their statutory duty in not investigating and acting againts ‘alternative energy schemes’.

NB. I have searched to discover whether ASIC has launched any investigations into ‘alternative energy companies ( apart from Firepower). The result, so far, shows ASIC has not pursued such ‘companies’. Why not! Why do they refuse to tackle them for what is deliberate deceit of investors, as well as consumers!

Are ASIC, ACCC and ATO refusing to do they duty because of cowardice? Or, are they motivated by ideological correctness? What is their excuse, because whatever it is, it is a bad one.

This renders the inaction of ASIC all the more curious:

AUSTRALIA’S securities watchdog was warned that the fuel technology company Firepower “may in fact be a scam” more than six months before it became a public issue, but allegedly chose not to investigate.

…accountant whose client was offered shares in Firepower made a complaint to the Australian Securities and Investments Commission in May 2006 alleging it could be a scam. The commission said it was “taking no further action at this time”.