Of course, we face Christmas 2023 with much unpleasantness in the world and far be it from me to offer any solutions. Sadly, perhaps humanity is simply destined for conflict albeit we must never give up hope.
And on that solemn note let’s focus on a problem brewing at home that I think we do have the capacity, if not the will, to rectify. To quote James Carville, senior advisor to that sax playing, intern chasing larrikin Bill Clinton, “it’s the economy, stupid!”. At the time, George Bush Senior was El Presidente and the US economy was recovering from a recession. It was 1992. George H W was seen to be out of touch with the ordinary punters. Clinton won in what was, compared to today’s standards, a landslide! Interestingly enough, billionaire Ross Perot ran as an independent on a largely economic management platform and scored an unprecedented 19% of the popular vote.
Turns out Carville was on the money. It was the economy stupid, and I would suggest the good people of Oz have landed right where Clinton and Bush found themselves in 1992. While they had endured the recession they had to have, the wounds were fresh with consumers who had been paying fixed rates of 18%. By the time Clinton had introduced his policies, rates were back to 9%. Albeit to give Bush H W some credit, the trend was already pretty clear in 1991.
And so, the trend here in the best country on earth is also clear. Productivity has tanked, we don’t make anything except soy lattes anymore, rents are unaffordable, people don’t want to work and mortgage holders are getting smashed. It is clear to all, except the geniuses who run the place, that government subsidies, increased inward migration, incentivised laziness, poorly planned and hyper expensive energy transitioning, and insane levels of regulation are harming our economy. All these policy settings are inflation contributors, so what do we do. We hit the families and businesses with mortgages, using the bluntest tool in the economic tool kit… interest rates.
It beggars’ belief that nearly every economic and social justice policy employed by our current governments, both State and Federal, adds to inflation pressure. All the while non-discretionary spending drivers like fuel prices and rent spiral out of control. Flogging families and businesses in the suburbs with rising mortgage payments, horrendous fuel bills and record rental costs isn’t going to stop them trying to get to work or put a roof over their heads. Economic and social policy needs to change.
The situation is best evidenced by those geniuses who want to turn off reliable fossil fuel and gas-based power in favour of so-called renewables. Setting aside the farce that is “renewable”, let’s get the alternate power sources sorted before killing the current ones. There’s a transition stage.
No one went out and shot all their horses the day Henry Ford rolled out the Model T. In fact if they had, the result would have been inflationary and Henry’s product would have been a whole lot more expensive.
It’s all pretty grim to be sure, but I see light at the end of the tunnel and I’m hoping it’s not a train. Not that many years ago we had dodged the GFC bullet and were all living in an economic paradise. Debt was cheap, rents were reasonable, and we were mostly not living in our cars. In fact, times were so good there for a while, that the population could afford to support some woke causes and dream of a better world. Covid, in the form of out-of-control money printing, laid that dream to rest. In fact, I’m sure a growing number of the great unwashed out there in the ‘burbs have lost all interest in being social warriors and virtue signallers. Given a choice between keeping the lights on and a roof over their family’s heads, as opposed to filling Bass Strait with wind turbines, I’m very sure I know how that choice would play out.
Here’s a final thought. I reckon the general population was fed up with how the place is being run long before the Yes/No referendum campaign gained full steam. Sadly, as I have some sympathy for the issues facing our indigenous population, the vote was a chance for voters to tell our ruling politicians exactly how they are feeling. I suspect in happier economic times, the result would have been much closer.
So… P Dutton, grow a pair and give the electorate a real alternative. Better to go out in a blaze of glory, albeit I suspect some bravery will be well rewarded.
I’ll leave you with Winston Churchill. For you young people, look him up. He was quite the achiever back in the day!
“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Disclaimer: Contrary to popular belief, I am not a rusted-on Liberal voter. If Bob Hawke and Paul Keating were running today, I’d back them. Sadly, we’ve got latter day Gough Whitlam and Jim Cairns. Like our current Jim the treasurer, Jim Cairns had a PhD in economics and zero grasp of real world policy outcomes. Read the Wikipedia entry on what was a very “colourful” life. Nothing’s really changed.
Mike Phipps F Fin
Director | Phippsfin Pty Ltd