Australia on the way to becoming a banana republic

[Resurrection]

We would be stuffed if the resource sector wasn't doing so well. How is this post relevant to this forum? Look at what has happened to the manufacturing sector (of which automotive is included):

http://macrobusiness.com.au/2011/02/...g-capitulates/

[Dr Jekkyl]

It is certainly worrying but Australia has only itself to blame.

Case in point is the public preoccupation with the need for a high AUD.

Then again we are not people in a society anymore, we are just consumers in an economy.

[FTE72]

It is what it is. If we want to sell our goods overseas, we have trade agreements to buy stuff as well. Then there is the issue of trade partners not applying the same standards/conditions to their manufacturing that we insist on.
We are all adding to the issue when we go for the cheap TV,clothes,toys, gadgets, even building products and components.

The only way to fix the decline of manufacturing in this country is to make the global manufactured goods market as equitable as the commodities market is.(We all buy raw materials at the same prices)
The above solution is a fantasy without forcing developing countries to leap up to our standard...... so will never happen.

$'s rule. Get used to wharehouses instead of factories in your local industrial estate.

[castellan]

Originally Posted by Dr Jekkyl

It is certainly worrying but Australia has only itself to blame.

Case in point is the public preoccupation with the need for a high AUD.

Then again we are not people in a society anymore, we are just consumers in an economy.

That is right it's the "idolatry" of capitalism that will be and is going to be the down fall of our society but most people are to narrow minded and short sighted to see it.

[nuthin' fancy]

Originally Posted by castellan

That is right it's the "idolatry" of capitalism that will be and is going to be the down fall of our society but most people are to narrow minded and short sighted to see it.

So explain to me where capitalism has failed (and don't talk about tulip bubbles or the US), these are only adjustments to over excited markets, where has it failed and been replaced by a more successful model?

[fmc351]

Originally Posted by nuthin' fancy

So explain to me where capitalism has failed (and don't talk about tulip bubbles or the US), these are only adjustments to over excited markets, where has it failed and been replaced by a more successful model?

Wait, tell me what is so good about Fords, (dont talk about mechanical parts or body designs or materials). Yeah, that makes sense.

Well, there was the Great Depression. Whereby in the US as an example, you know because its the pinnacle of capitalism, the state had to spend money to get corporations going again. Then again, there was the GFC, in which again state money was used to prop up companies that were 'too big to fail', or simply to stimulate economies. Or do you regard these as mere 'tulip bubbles'?

Or how about the beginnings of a society, the period where rail was needed, but no-one wanted to provide it as its costs were prohibitive as far as the markets were concerned. Until state money as used anyway.

Or a faster internet infrastructure like the NBN. Agree or not with it as a plan, it did take state money to build something the business woirld will undoubtedly be all over to make money off.

Capitalism is the state stays out of it, and the market decides and pays. If that were adhered, youd still be driving on dirt roads in most parts of the country.

Im no fan of communism, but a blend of both systems has always been most effective. And more to the point, always employed by Aus and the US, to mention but two.

But that doesnt stop some idolising pure capitalism, and non state involvement. arguments about how the state has too much waste, and private does it better. And it is in these periods where bad things occur, eventually. It would be equally true, that if the tables turned the other way, that would be bad too.

[Jim Goose]

I wonder how many complain when government sells off public assests like water? electricity? telephone? railways? Or does everyone support these types of sell off?
Essential services should be provided for by the state, it no longer isnt in most places of this country.
These sell offs mean that profit is the motivation behind the running of these services, not service. Tell me how much better off are we all now?
Has electricity gone done? water? phone? improved rail service?

[MAD]

Originally Posted by Jim Goose

I wonder how many complain when government sells off public assests like water? electricity? telephone? railways? Or does everyone support these types of sell off?
Essential services should be provided for by the state, it no longer isnt in most places of this country.
These sell offs mean that profit is the motivation behind the running of these services, not service. Tell me how much better off are we all now?
Has electricity gone done? water? phone? improved rail service?

Agree 100%.
I'd much rather take a tax hike for a period of time in order for the state to purchase back essential services, rather than leave it in the hands of the private sector that continue to get greedy.

[SB076]

Originally Posted by Resurrection

We would be stuffed if the resource sector wasn't doing so well. How is this post relevant to this forum? Look at what has happened to the manufacturing sector (of which automotive is included):

http://macrobusiness.com.au/2011/02/...g-capitulates/

Thats not good, manufactring is currently the largest employer of people in Australia (approx. 1 million jobs are in manufacturing) If the report is correct, we will see an increase in our unemployed rate. Interesting Julia Gillard made reference to 2 million aussies who are underemployed, which casts a whole new light on our current unemployment rate.

[XD 351 Ute]

Originally Posted by MAD

Agree 100%.
I'd much rather take a tax hike for a period of time in order for the state to purchase back essential services, rather than leave it in the hands of the private sector that continue to get greedy.

+1.

Everything is going through the roof......

Ed

[castellan]

Originally Posted by nuthin' fancy

So explain to me where capitalism has failed (and don't talk about tulip bubbles or the US), these are only adjustments to over excited markets, where has it failed and been replaced by a more successful model?

I am on about people who idolise it. IDOLITRY

It's just a system and it has good points and can have bad points.

The problem is it can get out of control and one reason is it's foundations are not built on a rock.
And two is a lot of people are so ignorant of it all.

And we could have a much more successful type of capitalist system than what we have now.
I am for a superior capitalist system, than the stupid low life rubbish that's been dished up to us.
like come on! as if we could not see that the bubble was going to burst, like the whole thing is a joke! and we the workers are the ones who cop it all in the end. and the criminals in it all, run with the money. and they just sit back declaring people are just so naive stupid and gullible.

And then we have some clown siting back saying these are just adjustments to over excited markets, what about the innocent hard working honest decent people who coped a hell of a hiding from it all. bro!

[castellan]

Originally Posted by MAD

Agree 100%.
I'd much rather take a tax hike for a period of time in order for the state to purchase back essential services, rather than leave it in the hands of the private sector that continue to get greedy.

I'd much rather that we did not have such a 3rd rate bunch of criminal schmucks running this State.
It did not have to come to this.

[ILLaViTaR]

Originally Posted by nuthin' fancy

So explain to me where capitalism has failed (and don't talk about tulip bubbles or the US), these are only adjustments to over excited markets, where has it failed and been replaced by a more successful model?

Capitalism makes the rich richer and the poor poorer yet justifies it through the ignorant belief that EVERYONE can get to the top if they want to work for it and that there's risk involved with investing which basically is insignificant to the endgame. It's founded for a rich minority at the expense of an equally contributing/hardworking majority.
It's operates on luck and power, deception and manipulation, saying one thing but doing another, but mainly greed.
It's there for people who only care for themselves and feel the need to put others below them, or just want it all (Who doesn't) which due to how the system operates, comes at the expense of others, which is exactly how this system fails in answer ot your question). The freedom is a nice concept doesn't work, because the richer a minority becomes, the poorer the majoirty comes. Privitisation turns into monopolation. And we're told privitisation is good, businesses are good, it all promotes fair competition, what it promotes is how much can they suck out of the average worker until his heart stops beating. It's a ruthless system not much less ruthless than communist countries. If you're talknig in a business sense however, it will never fail it is the most ruthless greed satisfying tool out there.

Communism (within reason) imo is the better option however there has never been a proper communist country, all the communist countries that are around and have existed are basically dictatorships. I don't believe that janitors should earn the same as lawyers. I believe a lawyer working for Telstra shouldn't earn 10 times the amount as a laywer of the same standard
or get a job over someone with a degree because his mate put in a good work for him. Problem is it's too easy to manipulate, it will always turn into the government stealing from the population.

We need a mix. Our government is incredible and golden compared to most of the world, but really it's the best of the crap. Too many people can't even afford their first home while we have scum complaining about how the interest rates are going to affect their 10th home. All you need to be is a micrometer above the average person and you can convert that micrometer into millions. Say you buy your first investment property, there's like a ginourmously massive 0.00000000001% risk that it may send you bankrupt because housep rices dropping is still considered a risk for some reason in this day and age. Once that property is paid off, you borrow against it and mortgage 10 000 more properties off that property and if you lose somehow lose everything you still have your home residence that the majority of the population could only dream of owning. Oh my poor you! Greed creates some incredible standards.

[fmc351]

Originally Posted by ILLaViTaR

... there has never been a proper communist country, all the communist countries that are around and have existed are basically dictatorships.

And never will be. Absolute power corrupts absolutely. It is also the same reason a system where money makes the decisions, will also be unfair.

[nuthin' fancy]

I hoped I would incite some conversation

We have a mixed economy and at the heart of this, I believe the Government should provide necessary functions and services that cannot be provided on a commercial basis (public transport as an example). I don't claim that privatisation has been correct in all circumstances, e.g. water

The opportuities are available to all, not all of us have the knowledge or control to take advantage. Some make choices about where they live or the sort of work they want to do, some never learn to spend less than they earn, some are victims of circumstance. Many who claim to be downtrodden lack skills or commitment or can just be totally risk averse.

For everyone who lost money in Storm Financial or Chartwell or property in Western Sydney, nearly all of them failed to undertake proper research before they made a choice and they paid an awful price. Hindsight makes these assessments easier but there were fundamental problems that could have been identifed before the wrong choice was made.

Communism is a perfect theory but has always been tainted with corruption. They say the most efficient form of Government is a benevolent dictatorship (i.e. one person makes the decisions but has everyone's best intersts at heart. Lee Kwan Yu was an example, Robert Mugabe is not).

Capitalism is not perfect but educating yourself, making your own decsions (and not just doing what someone else is) and at the root of it all, spending less than you earn will leave you in a better and better position year on year.

[mik]

Originally Posted by Jim Goose

I wonder how many complain when government sells off public assests like water? electricity? telephone? railways? Or does everyone support these types of sell off?
Essential services should be provided for by the state, it no longer isnt in most places of this country.
These sell offs mean that profit is the motivation behind the running of these services, not service. Tell me how much better off are we all now?
Has electricity gone done? water? phone? improved rail service?

totally agree Jim Goose, qaulity service is no longer a priority sadly all of these services have gone down hill.

As for the banana republic, imo we long past that post years ago, the pollys have been sending us down the creek without a paddle for decades

[NC_Lane]

Hmm I think the more appropriate solution is a socialistic model, where the government would still have some control.

Eg: Government also has its banks, insurance corps, utility services, servo etc to keep the private sector in check.

The government keep on bleating about the banks putting up interest rates, petrol prices etc.
If they did have their own bank there is a lot more that can be done

[Perko]

The point that the article is trying to make is that to compete in the marketplace businesses must be looking at R&D and efficiencies to survive. Problem today is that the average consumer doesn't give a rats **** about the development that went into the item, they just want it cheap. This is why electronics, etc are all now made overseas. This is also why the resource sector is also attractive. Good margins, moving alot of product in the quickest, cheapest method possible.

I work for a company that spends thousands on research and we struggle in the market at times because the consumer wants the cheapest product. Not because it is better but because it is cheaper. Australia's decline in manufacturing has been for a number of reasons, none of them more important than the other. These include protection by government in the past leading to inefficiencies in processes, lack of trade protection by government (it is good to have free trade, but not good when the rest of the world is not on the same playing field), lack of incentives from government to encourage new technologies, and the general public putting their money where their mouth is and supporting local businesses. This last point is a very broad statement. I personally try to buy Australian goods at all times and support local businesses, even it cost a few dollars extra as long as the service warrants it.

In the end businesses have to start investing heavily in R&D if we are to survive in manufacturing. But it is also up to us as consumers to vote with our wallets and ensure that these investments get a return, so that businesses will stay.

I am getting off my soap box now...

[trippytaka]

Originally Posted by nuthin' fancy

So explain to me where capitalism has failed (and don't talk about tulip bubbles or the US), these are only adjustments to over excited markets, where has it failed and been replaced by a more successful model?

I think you're asking the wrong question.

Capitalism, in its purest form, clearly doesn't work because it is too easily corrupted - think transformation of America (will get onto that in a second).

What works best is a mix of socialism and capitalism - think France, Sweeden etc.

Back to America: It's a society that is steering wildly right towards pure capitalism (as is evident in the Tea Party movement and even Obama's inability to pass meaningful changes to help regulate the financial sector).

Americans pay extoritionate amounts for health care. If you can't afford the 30k a year, or don't have it as a part of your plan from work, you're ********d. even when you do have it you get screwed and have to take out loand when you get sick.

America has a woeful education system because it is being bled dry. The future is bleak.

Tax breaks have been skewed towards the top 1% of the populus since the '80s.

Big business, it seems owns everything... the entire political system is run on donations from lobbyists. The people are NOT represented, big business is.

On that point, the media owns public thought and perception. The problem here is that a large majorit of aAmericans get their news from FOX News - a hard right. Do yourself a favour and watch OutFoxed.

At the very base of the pure capitalism is a selfishness that seems to permiate, showing itself in the ideals of "well, I work for this, so it's mine. I don't owe my fellow man anything." Hence the lack of free healthcare and the public reaction to the idea! It was distgusting to watch the American public rally against Obama's health care reforms. How low has a society become when they oppose free healthcare, calling it communism?

Now, I am in no way in favour of a hard left society. I believe that we all need incentives to work harder - personal wealth etc. But I defintely do believe that there are basic obligations that we have. No one should have a problem with providing a socuiety where everyone gets the follwoing:

- Access to free and high quality healthcare for every member of our country.

- access to free (world-class) primary and secondary education at a minimum. I would like to see tertiary education and training programs for trade to be refunded to anyone who passes them.

- Affordable housing for everyone. I don't mean housing commission, I mean housing that is free of speculation. Back to the days where housing rose just above the line of inflation and investors relied on rent to pay their mortgage and capital gains only really showed after 20 years.

- Federally run child care for working mums. Need funding for this? Take it from the teenage single mums. While we're at it, fully subsidise contraception for under 21s.

So... if we were to implement things like this, where would we get all this money from?

Well, back to the beginning of this thread. We need to invest the money coming from the mining sector and put it into building a future. Stop pi**** around and sitting on our back sides thinking that this resource boom will last forever. Even before we run out of iron ore the Chinese will hit an economic snag, then we're screwed.

How about a bigger share of the mining profits? Create a fully accountable super tax, where all the money raised from taxing the mining companies is put into national development. The development of industries that will build long after the resources are gone. Science, technology, green technologies, there is so much we could be investing in to create a buffer for when the resource bubble pops.

Anyway, bring back the bears in 2012. (this comment inserted to see if anyone bothered to read past the forst paragraph of this ridiculously long response.

Apologies for the length of this.

[Perko]

Brilliantly said. You have forgotten about the primary industry sector. This sector is currently being bought out by overseas interests extremely quickly. Why??? Because they have seen that food is going to be the next huge resource. Unfortunately, while other countries are investing in their primary sectors Australian governments are withdrawing funding from research, trying to buy back and restrict water rights based upon research that is preschool grade at best , and allowing mining companies to explore land with no regard to farmers rights or needs. Look at who is investing in our farms at the moment, the Chinese and the Arabs. Why? Because they will need extra food resources due to their current situations. Where do you think they will send this food in the future???

[trippytaka]

Originally Posted by Perko

Brilliantly said. You have forgotten about the primary industry sector. This sector is currently being bought out by overseas interests extremely quickly. Why??? Because they have seen that food is going to be the next huge resource. Unfortunately, while other countries are investing in their primary sectors Australian governments are withdrawing funding from research, trying to buy back and restrict water rights based upon research that is preschool grade at best , and allowing mining companies to explore land with no regard to farmers rights or needs. Look at who is investing in our farms at the moment, the Chinese and the Arabs. Why? Because they will need extra food resources due to their current situations. Where do you think they will send this food in the future???

Great point. And interestingly I read that there is international investment of properties in NT at the moment as well... apparently the big value there will be the water during the wet season. I s*** you not, looks like we're selling that o/s too. I have to do some more reading on this.

[aussie muscle]

Originally Posted by fmc351

Im no fan of communism, but a blend of both systems has always been most effective.

i think Australia has a pretty good blend actually (from my brief class on economics)

[JG34JA]

Oh dear.

Some folks have a pretty mixed up idea of what pure Capitalism is.

More truly us (and the US) have been in the grip of 'Corporatism'. This is where the big companies coerce with the state to thwart competition, and then pursue monopoly power. This is exactly what has happened, and it's grown hand in hand with big government and the entitlement welfare state. It's in everything from the auto industry (a purely capitalist GM would have been left to fail) to money (such as the central banks, some of which are private institutions being in charge of a nation's currency) to public servants' pay and conditions.

A marriage of big companies, state over-taxation and over regulation, large and powerful unions, incredibly generous workers' standards, has resulted in massive costs and red tape to actually do business in Australia. The whole game is designed to make entrepreneurs think twice about doing business here. Indeed, I believe you are actually assisted to ship production offshore and then import from a 'most favoured' 3rd world developing nation as part of policy. This is not Capitalism! Why would I want to set up business here and employ Australians under very generous conditions when I can set up overseas, pay far less tax (sometimes be paid), not have to worry about employing also all the OH&S, environmental, legal, regulatory, supervisory government employees from my taxed profits? Recently legislation has been raised that the number of women in a workplace must meet a certain quota and their relative conditions to men must be documented and monitored by yet another government body - more costs despite a nobel goal. When the minimum wage level is increased by a bureaucrat on a great salary, all those jobs under the minimum wage are shipped offshore where people are allowed to bid for them, contributing to youth unemployment. Then there will be the Carbon tax. The end result is sadly that the products are produced with scant regard for the environment or the people making them, "under the rug" offshore. Australians then flock to buy the products as they are cheap. This is not pure Capitalism.

We have never had a purely capitalist system. Atlas shrugged.

[Jim Goose]

JG34 i think you have managed to mix up mostly political government policy.
Capitolism is not party policy.

Its means basically private enterprize owning all business and operating to make a profit. Owning capitol.

This is the economic way we all generally do things.

Our governments have sold off "our" assets to private enterprise, so businesses now own our assets and make big profits. If the eneterprise is no longer capable of turning over a profit, then companies look at how to find other ways, which yes it means it goes offshore.

They are interested in making more capitol.... more money.
Expanding like a virus.
Look at Woolworths and Coles.
These companies have expanded and destroyed their opposition, expanded their capitol.
They arent interested in paying fair wages OH@S etc....
a company floated on the stock market is concerned even more with turning a profit as it needs to report to its share holders.
CEOs are only interested in paying themselves a obcene salary, owning more and more... mansions, boats, planes, shares... more capitol.
A greed driven system is what it is

In the smaller end of town the individual or a married couple strive to make money so they buy a house, buy more shares, buy an investment property, buy that tinney, plasma, a shed full of cars... more capitol.

Corporate greed is the dark side of capitolism and has given a lot of grief to the average person just as much as bad government policy.

Bureaucracy, red tape etc is part of politics and government "management".
That is a seperate issue...

[JG34JA]

Hi Jim,

You make some good points. Yes the big retailers have moved to eradicate competition, and some see this as what Capitalism truly is, taken to its extreme. Yes, ideally a company wishes to lower its costs. How many CEO's do you know? Those that I have met are not wholly interested in "paying themselves a obcene salary, owning more and more... mansions, boats, planes, shares... more capitol (sic)". They are more concerned with prudent management of their company. Reality differs considerably from a Michael Moore movie.


You neglect to mention the influence that firmly established large conglomerates have on government and government policy. This includes the unions, who move to make their trade exclusive to members, artificially distorting the market in the trades they represent. Their wicket is protected, the companies protect their wicket and legislation backs this. This is why I mentioned that the system is 'Corporatist', for it benefits the corporations - both listed and voluntary. When wages are pressed lower, conditions lower, when farmers are given 5% of the price of the food at retail level, and when entrepreneurs are choked in the beginning stages of business, when artificial levels are raised, this all benefits the Corporatist hegemony, and their government/union allies. Think of big software companies' actions against other smaller emerging companies/devices, and 'no ticket no start', and farmers being royally screwed equally as examples. From time to time the factions clash, but generally it's business as usual. In this regard I am not confused in my interpretation of Capitalism; (we don't have it), and I labeled it 'Corporatism' where others of a more libertarian bent would go further and suggest the fascism of Mussolini's Italy is a more apt description of the current relationship between state, business and labour organisations.

Everyone is entitled to a differing view in a free market of thought, so I doubt I will convince many here this is the case. I'd just caution those who wish for socialism as some kind of antidote to current malaise, it'll be an antidote all right, and take everyone to a place they don't want to go, a place that's been visited many times before and ended in misery far more often than not.

[Jim Goose]

JG yes i think i understand what your saying there....
One could also label us "the people" as being far to materialistic and deep in consumerism? (if thats the word?).

I dont think people think its an antidote, I think people are just sick of the way things are and want change. Finding a nice balance between different aspects of capitolism and socialism (without the politics if that is ever possible?) wouldbe ideal, but we dont live in an ideal world.

However what we (as aussies) can do is to speak up en-masse whenever we see our "leaders" do something wrong. We used to hold loud protests and be interested in what was happening around us. Today we see barely a reaction whenever something which is so blatent and wrong we dont even raise an eyebrow.
Our fighting spirit is gone.... (a glimmer of that old spirit was shown during the brissy floods during clean up!)

[98TLS]

Originally Posted by Jim Goose

JG yes i think i understand what your saying there....
One could also label us "the people" as being far to materialistic and deep in consumerism? (if thats the word?).

I dont think people think its an antidote, I think people are just sick of the way things are and want change. Finding a nice balance between different aspects of capitolism and socialism (without the politics if that is ever possible?) wouldbe ideal, but we dont live in an ideal world.

However what we (as aussies) can do is to speak up en-masse whenever we see our "leaders" do something wrong. We used to hold loud protests and be interested in what was happening around us. Today we see barely a reaction whenever something which is so blatent and wrong we dont even raise an eyebrow.
Our fighting spirit is gone.... (a glimmer of that old spirit was shown during the brissy floods during clean up!)

Mate if you think your country has lost its voice take heart that theres always someone/somewhere worse.New Zealand and it seems New Zealanders have lost there spine as well.One has to wonder what the old Anzacs would make of all this.

[castellan]

Originally Posted by Jim Goose

JG yes i think i understand what your saying there....
One could also label us "the people" as being far to materialistic and deep in consumerism? (if thats the word?).

I dont think people think its an antidote, I think people are just sick of the way things are and want change. Finding a nice balance between different aspects of capitolism and socialism (without the politics if that is ever possible?) wouldbe ideal, but we dont live in an ideal world.

However what we (as aussies) can do is to speak up en-masse whenever we see our "leaders" do something wrong. We used to hold loud protests and be interested in what was happening around us. Today we see barely a reaction whenever something which is so blatent and wrong we dont even raise an eyebrow.
Our fighting spirit is gone.... (a glimmer of that old spirit was shown during the brissy floods during clean up!)

I think the days we had a lot of protesting was only due to unions pushing their own agenda, as they spun a lot of nonsense to there dopey members.
I think the unions have gone into hibernation nowadays and there is a good reason to do so, as they are set to come back stronger then ever due to the foolishness of simplistic ignorant liberals.