Hate to say, “we told you so” because that won’t pay the bills. But, remember, when we pointed out that China was slowing down and it was downright foolish to let the American Disease infect the thinking in Oz? Well, the mining boom’s last act is coming faster than you think–and that’s a huge warning to take seriously.

It’s upon us:

AUSTRALIA’S budget surplus has evaporated and its mining investment boom has only two years to run, according to Deloitte Access Economics.

The forecast marks a watershed in assessments of Australia’s prospects, implying in the words of this morning’s Access publication: ”The strong bit of Australia’s two-speed economy won’t stay strong for more than another two years or so”.

The sad thing is that it doesn’t have to be a rocky road. If the mining barons, and their political patron– the man in The Empty Suit, leader of the Coalition– would stop resisting, blocking or whittling back serious taxes on the staggering riches a few people are pocketing from every Australian’s birthright, there would be plenty of money to invest in economic strategically smart efforts that would help the country blossom even when the mining boom evaporates.

And if people would stop wringing their hands over a non-existent deficit problem, we could even be plowing money into projects now.

The head aches.

— Jonathan Tasini
@jonathantasini

Tony Maher over at the Construction Forestry Mining and Energy Union has a piece in the Daily Telegraph worth reading.

Feral cats amongst the carbon canaries

TONY MAHER Tony Maher is Construction Forestry Mining and Energy Union national president.

It’s a truism that Labor has done a dismal job selling its carbon pricing scheme. But that doesn’t tell the full story of how the 2012 carbon tax became so politically toxic. A key ingredient is the widely held perception that it is a Greens scheme developed under duress, with Labor held hostage to its Birkenstock-wearing overlords.

Most Australians in the suburbs and regions think if the Greens support something it must be bad for jobs, cost too much and be no fun at all.

Actually, the carbon pricing scheme of 2012 is substantially the same as the carbon pollution reduction scheme proposed by Labor, supported by the Liberal Party under Malcolm Turnbull and blocked by the Greens in 2009. If anything, the 2012 version is browner than its predecessor.

As the weeks roll on after Doomsday (July 1), the carbon price scheme is proving well designed and is working exactly as intended. It is not causing job losses because it was carefully designed not to cause job losses.

Billions of dollars have been allocated as free permits to heavy industry, precisely because the objective is to help keep them in business while investors adjust. No sector has been overlooked.

Likewise, the carbon pricing scheme has not fed into excessive price rises. The tiny price rises are exactly those predicted by the government.

This is not good luck. It is a result of careful design to cushion consumers and businesses. Labor listened to businesses, welfare groups and unions — designing tax cuts and welfare payments accordingly, while excluding petrol from any impost.

It’s no surprise that Tony Abbott can’t find a price increase horror story.

A question raised by many is — if business and consumers are both wrapped in cotton wool, what’s the point?

The point is it is a signal to investors making decisions today on assets that will last 20 to 50 years. It is not designed to force consumers to use significantly less energy — there will be other energy efficiency programs for that.

It is not designed to close heavy industry. It gives heavy industry — our mines, smelters and factories — an incentive to improve performance over time. It will drive investment in more efficient and lower emission products and processes.

The carbon tax is structural economic change — a change in the market which is gradual and smooth — by design.

The scheme proposed by Kevin Rudd in 2009 was substantially the same.

Both schemes were an emissions trading schemes with a fixed price at the start — oneyear fixed price in 2009 and three-years fixed price in 2012. Both schemes provided industry assistance through free permits.

In fact, the 2012 version includes more assistance to heavy industry. The 2009 scheme allocated $7.3 billion to power generators over 10 years. The 2012 scheme allocates $5.5 billion over five years.

The 2012 scheme includes an extra $300 million for the steel industry. It also gives more to coal — up from $750 million to assist with capturing fugitive methane emissions in 2009 compared to $1.3 billion in 2012.

Both schemes have the same targets — a 5 per cent reduction being the default. Targets supported by Labor and the Coalition but strongly opposed by the Greens are locked in by the 2012 scheme.

The 2009 scheme only excluded petrol for three years. The package the Greens voted for excludes petrol indefinitely.

The Greens point out that the Clean Energy Finance Corporation is an important new development. It is. It is a great new industry policy supporting manufacturing and that’s why unions and industry lobbied for it. This wasn’t the reason the Greens gave when rejecting the CPRS in 2009.

In 2009 there was bipartisan support for an emissions trading scheme. Tony Abbott wasn’t the leader as the Coalition contributed to the scheme’s design. It was the Greens who stopped it in the Senate, wanting higher targets and less compensation to heavy industry.

In 2012 they supported a virtually identical scheme, with the same targets and more assistance to heavy industry.

The Greens intransigence in 2009 has had profound knockon effects. The 2012 scheme, fundamentally the same but understood by the public as a Greens-negotiated deal, has fuelled the perception it is an extreme measure. It has helped Abbott turn an economically responsible, modest carbon scheme with public support into a hydra-headed monster.

No matter how effectively Greg Combet explains the scheme — and when he gets the chance he does it very well — the Greens factor is a barrier to popular acceptance.

Selling the carbon tax is hard. Selling the Greens is impossible.

Fridays are a great time to dig deep into the truth— you know, just before you make plans to pray this weekend at your favorite…watering hole. Not to let the air out of the fun-and-games on tap, but, let’s talk, indeed, about deflation. This isn’t about ego, or size, or anything other than: how the elites have totally screwed up the economy–here and in every corner of the globe.

It’s a teensy bit wonky here but don’t run and hide because this is going to be real easy— and it will give you an insight into the dangers facing workers everywhere, and why we should not stop demanding that the captains of the entire “free market” ideology (whose main man in Oz is The Empty Suit, Leader of the Coalition) be fired for gross negligence.

Let’s start with the wonky part. Across the ocean in Washington, D.C. sit the offices of the International Monetary Fund. Be clear: the IMF has done some really, really bad things over the years– as in demanding, in return for money for loans needed by really poor countries, that those countries open up their people to marauding corporations looking for cheap labor and new markets to suck dry.

But, a broken clock is right twice a day— and the IMF is ringing the alarm about a big deal: DEFLATION!

Looking at the deep crisis in Europe, the IMF is warning:

Inflation is set to decline significantly and could even become negative. Headline inflation is expected to fall well below 2 percent in 2013 and remain there through 2014. Although survey-based inflation expectations are still broadly anchored, market-based indicators are clearly pointing downward and core inflation (stripping out the most volatile components, such as energy and food prices) signals very low underlying inflation pressures (see Figure 2). Moreover, given the subdued growth outlook, there is a sizable risk that inflation could even turn negative in the medium run. Specifically, the IMF’s GPM projections indicate about a 25 percent probability of below-zero inflation by early 2014.

In English, what becoming “negative” and “below-zero inflation” means is: deflation. As in, prices going down.

Now, you might think: Whoopee!!! Prices going down. Stuff is cheaper. Hit the stores. Shop til you drop.

Well, careful what you wish for. Deflation is what happened in the 1920s in the Great Depression. People don’t have jobs. No one buys anything. So, prices go down. Think of it like a bath full of water— you pull the plug and the vortex sucks the water down, down, down…nothing stops it–unless you plug the hole.

Now, the important question to ask is: how did we get here? A simple 5-step explanation will do:

1. The “free market” zealots ran around the world for decades flogging a system of lower wages, no unions, no regulations and the glory of competition.

2. Peoples’ paychecks got smaller, in real terms. They had no money. They used credit cards. Or, cash poor, everyone took money out of their over-valued homes, primarily in the United States.

3. Bankers, mainly led by the Wall Street financial elite, committed moral, if not actual, crimes. Driven by greed and stupidity, they obliterated, in a short few years, trillions of dollars of wealth and millions of jobs.

4. Thanks to #3, people had even less money.

5. The people were told, “you now have to pay the bill for the failure of the system”. “Austerity for all” was the cry. Don’t raise taxes on the rich. And don’t dare spend public money to create jobs. The opposite: even though people don’t have money to spend, take away their jobs, take away government jobs and suck out of the system even more spending money of real people.

Voila! Deflation is upon us. Of course, the above five-step explanation of reality is entirely NOT part of the language used by The Empty Suit, Leader of the Coalition, or his sidekicks around the world. They want to continue to lead the people down the path to disaster. And this is so dumb even a theatrical farce could not it justice.

And, trust us, if deflation starts spreading, and China continues to slow down, the decline of the resource sector will continue here and…well, you get the picture.

You won’t like it.

— Jonathan Tasini
@jonathantasini

It is always a source of humor– dark humor, to be sure — that the traditional media is way, way behind the curve when it comes to understanding a story, particularly when it involves unions. So, you know how all those politicians are now rushing around, wringing their hands about the recent violence in King’s Cross? Well, hello, unions have been way ahead of the curve here.

Two years ago– TWO YEARS AGO — a coalition of unions representing doctors, nurses, paramedics and police officers demanded that politicians act to stop alcohol-fuelled violence. You don’t have to be a rocket scientist to understand why: those front-line workers have to deal with the violence and it’s an occupational hazard. While politicians– the same ones rushing to the microphones now — sit home in comfort, its the union workers who have to transport injured people to hospitals, stitch up the wounds, and restore order in the streets.

The campaign, called Last Drinks, was pretty clear about what needed to be done:

The coalition believes strongly in evidence-based policy solutions.  And the evidence shows that the most effective way to reduce alcohol-fuelled violence in the Australian context is by placing restrictions on the late night sale of alcohol.  In particular, the recent experience in Newcastle has shown a sustained decrease in the number of night-time assaults of over 30 per cent – which was achieved after a number of restrictions were placed on licensed venues in the Newcastle CBD.  These restrictions include:

• 3am closing time for all venues;
• Lock-outs at venues from 1.30 am; and
• Restrictions on the sale of high-alcohol content drinks (such as shots) after 10pm.

By the way, it’s already worked, as you can see from this news report:

The Last Drinks coalition, a group of union-led police, doctors and nurses, says the measures have helped reduce late-night violence since being introduced in Newcastle.

‘We know what works – a suite of simple measures like reduced trading hours and lock-outs,’ Police Association of NSW president Scott Weber said.

So, here you have one shining example of the wiseness and knowledge of workers, and the union leaders who represent them, on the one hand, versus the short-sited rantings of craven politicians, on the other hand. If it wasn’t for ideology– meaning, why should we listen to unions? — politicians might have listened to the people leading the Last Drinks campaign, and, maybe, just maybe, one young man, Thomas Kelly, would still be alive, and a lot more people would have returned home to sleep in their beds, with no injuries other than a bit of a hangover.

— Jonathan Tasini
@jonathantasini

If you ever wanted to try to make a difference, in a small way, listen to what Cate Fogarty has to say about the importance of the National Disability Insurance Scheme. And, then, sign the petition to the prime minister TODAY because TODAY is your last chance!

The timing? An important meeting between the PM and all Australian Premiers and Chief Ministers will be held next week at the Council of Australian Governments’ (COAG). On 25th July at COAG they will discuss funding and other arrangements for the National Disability Insurance Scheme.

From Cate:

My son has Prader Willi Syndrome. At the moment I receive little to no support for him. He is 15 years old!

I am looking down the barrel of a loaded gun now, trying to find suitable accommodation for him once he reaches adulthood. All people dream of living an independent life, and he is no different. The sad reality with PWS is that this is never really likely to happen. However, with the assistance of a housing situation that is geared for specifically people with Prader Willi specific these young adults can live an independent, productive life (away from Mum and Dad). The NDIS can help me achieve steps toward making happen.

People who aren’t necessarily in a personal situation also see the need for the NDIS– the site has been flooded with thousands of messages all across Australia, including one from Suzie Hamilton:

The NDIS is such an important step for people with a disability. Every person deserves to be able to reach their full potential and every person deserves to live their life to be comfortable, happy and free of worry. Our future as Australians depends on us to stand up and make the changes that are necessary for all of us. The NDIS will help this happen. Please hear our support and make it a reality.

Sign it. Spread the word. You’ll feel good.

— Jonathan Tasini
@jonathantasini

Have we got a bank for you! If the community-helping tasks like interest-rate fixing and bad mortgages wasn’t enough, HSBC has a whole new line of offerings for you…

Per this report:

The global bank HSBC has been used by Mexican drug cartels looking to get cash back into the United States, by Saudi Arabian banks that needed access to dollars despite their terrorist ties, and by Iranians who wanted to circumvent United States sanctions.

Gina, here is your kind of bank– need someone to move money so you can snap up shares of the Sydney Morning Herald? HSBC is your kind of place.

— Jonathan Tasini
@jonathantasini

The media can’t get enough of the blood-and-guts in the streets–give me a little crime, a little violence…all over it. Not that we shouldn’t care about crime but compare the impact of the hysteria and sensationalism to the real crisis: the fact that half a million people do not have access to legal help when they need it.

Honestly, this info coming out of the newly launched campaign by Community Law Australia is infinitely more shocking than any single crime:

• The Australia Institute has conservatively estimated that 490,000 Australians each year miss out on legal help for financial reasons or lack of knowledge.
• Over 80% of the people helped by community legal centres earn under $26,000 a year.
• The Australian Government Attorney-General’s Department has noted that “98 per cent of legal aid recipients [receive] an income that could be considered below the poverty line. This leaves much of Australia unable to afford legal representation but nevertheless ineligible for legal aid”.

Worth adding this badge to your site–you’ll be thankful the next time you need a lawyer.

– Jonathan Tasini

If you offer people two options to choose from–vote for a lite version of political ideology or the real thing–most people will vote for the real thing. It’s an emotional reaction–not entirely rationale. And, therein, my friends, lies a big problem faced by Labor.

I thought about Labor’s problem this morning after reading a fine column by Ross Gittins, entitled, “Prejudices rule when judging Labor”. I think Gittins misses, or under-emphasizes, two very important points. But, let’s start with what he gets right:

The conundrum is why so many people could be so dissatisfied when almost all the objective indicators show us travelling well: the economy growing at about its trend rate, low unemployment, low inflation, rising real wages, low government debt – even a low current account deficit.

That is correct. We got it good here (see: US unemployment above 8 percent, for example). Hang on to that thought for a moment…

And:

Similarly, only the one-eyed could believe an Abbott government would have much better policies. It’s likely to be less populist in government than it is opposition but, even so, Tony Abbott is no economic reformer.

Yup. The Empty Suit, leader of the Coalition, is vapid, entirely void of anything to say that is either true, new or useful about the future.

It gets even more bizarre. The Empty Suit, and his shills in business, are so craven, they resort to the Big Lie, as Gittins observes:

So, for instance, a favourite commercial tactic at present is to search for, and give false prominence to, all stories that portray our almost-dead union movement as a threatening monster about to engulf big business.

Boosting productivity equals making industrial relations law more anti-union. End of story. [emphasis added]

Ah, yes, the Big Labor fear campaign. Again, The Empty Suit is fully engaged with the American Disease–the Big Labor threat figures prominently in the US where Republicans use it at every turn, even though “Big Labor” is, representing 7 percent in the private sector and maybe 11 percent overall, more like “Big Labor”.

The Prime Minister also has a host of other issues, not the least of which is sexism in politics–there is always a higher barrier women have to leap over when it comes to the judgement of the chattering media and know-it-alls (see: Hillary Clinton–after all, though she may have actually believed in it, her vote for the Iraq War was, at least, partially driven by the conventional wisdom that, to run for president, she had to look “strong” i.e., appear to be willing to spill blood like a man…well, that didn’t work out too well but I digress).

But, Gittins sidesteps two really fundamental points. First, remember where we started? That given the choice between ideological “lite” and the real thing people opt for the real thing. So, for example, if you run around harping, stupidly, about the need to have a balanced budget, which Labor is doing, you sound just like The Empty Suit.

For the love of God, there is no friggin’ debt crisis or even a serious debt problem–as Gittins points out. The end result of sounding like The Empty Suit–government spends too much and needs to cut back–is that (a) it leads to bad policy and people losing their jobs because of an obsession with cutting public sector jobs and (b) voters actually start believing the nonsense.

And voters are inclined, then, to vote for the real thing–because The Empty Suit, and his chorus of ideological midgets, actually hate government.

Second, and to the bigger point–and a bit wonky. People vote not based on reason, but emotion.  It is a huge–fatal–mistake to hang on to polls that say Labor’s actual policies are supported. That is a path to defeat.

May I suggest people read “The Political Brain” by Drew Westen. Here is the upshot:

In politics, when reason and emotion collide, emotion invariably wins. Elections are decided in the marketplace of emotions, a marketplace filled with values, images, analogies, moral sentiments, and moving oratory, in which logic plays only a supporting role. Westen shows, through a whistle-stop journey through the evolution of the passionate brain and a bravura tour through fifty years of American presidential and national elections, why campaigns succeed and fail. The evidence is overwhelming that three things determine how people vote, in this order: their feelings toward the parties and their principles, their feelings toward the candidates, and, if they haven’t decided by then, their feelings toward the candidates’ policy positions.

The political types, and the wonky types, might not like that. But, if you ignore what people emotionally feel, you are dead politically. And, it seems like this is what Labor is banking on to save its bacon–once people focus on how great are policies are (see: carbon pricing), all will be good.

Nope.

— Jonathan Tasini

Twitter @jonathantasini