The problem with the housing bubble is not a shortage of housing, the problem is an excess of money. The solution is to restrict the amounts banks can loan. The solution is a credit squeeze. But it would have to be done carefully and the government would have to be willing to spend.
The housing market is rebounding. It is through the slump. The downturn is over and the market is making gains. So say the media reports, written by the property industry. Rising house prices are good.
[This is a talk given to the Canberra Hub of New Economy Network Australia, 23 June 2019 on the topic ‘What could our economy look like in 2030?’ Check out NENA, I think it is a very promising network.]
At present our economy is structured and managed in ways that subvert the many good things people like us are trying to do.
I think it is possible to change that, so the larger economy supports clean, local, healthy living, strong communities and a thriving planet.
First, a few examples of good things that are already happening and just need to be promoted, examples involving food and energy: Continue reading →
A recent exchange between Jason Hickel (and here and here) and Dean Baker (and here) on whether humanity can have a viable future and still have ‘economic growth’, nicely highlights the way old concepts and words can trap us in unproductive debate and action.
The way forward is to recognise the need for a fundamental re-framing of the nature and purpose of our societies, and their economies. The terms growth, GDP, capital and capitalism are so ill-defined, confused or inappropriate they only hinder debate.
The economic ‘reforms’ of the 1980s are supposed to have set Australia up for an unprecedented run of prosperity: 27 years, and counting, without a recession. The economy’s robustness is supposed to have saved us from the Global Financial Crisis. In fact our economy has been unstable, and its performance has been mediocre verging on anaemic. Any appearance of robust prosperity is due to a huge run-up of debt, some direct intervention, high immigration, overwork, selective blindness and over-active imaginations.
I attended the New Economy Network Australia conference in Melbourne recently (19-21 Oct). There I met in person Karl Fitzgerald who does a spot call Renegade Economists on radio 3CR , and with whom I’d done an interview a few years ago. We didn’t manage an interview at the conference, but did one by phone a couple of days later.
I found NENA to be a very diverse group very engaged with each other. They even listened to my pitch about The Little Green Economics Book and bought copies. There are so many people and groups doing good things, my impression is that NENA is likely to spread rapidly and link us into a more powerful movement. It was just their third annual conference.
The right-wing ideology of the past 40 years has failed. It was always going to fail, because it is based on nonsense ideas, and because it harms people and the natural world. Australian politics has been dragged far to the right since 1980 because both major parties embraced an agenda promoted by right-wing radicals. Now the radical right’s grip on power is finally slipping. We are poised for a major political re-alignment.
Tony Blair, like a lot of mainstream people, is mystified why anyone would support Jeremy Corbyn for the leadership of the UK Labour Party, but then he’s mystified why anyone would think invading Iraq illegally based on a lie was stupid and wrong, so his views are not worth discussing.
The useful thing to discuss is whether it can be sensible to oppose austerity, and possibly some of the other ills of the modern world like rising inequality and social discord, and a feral and destructive financial system. Young Labourite Rosie Fletcher is right, this is not 1980, and a few things have become clearer since then, to those who will look.
For example, economic performance in the neoliberal era has never equalled the economic performance of the postwar mixed social-democratic economies.
[The recent TV series by George Megalogenis on how neoliberal market reforms allegedly saved Australia from the Global Financial Crisis caused me to read his 2012 book on the same theme, wondering if any evidence at all might be found for such an unlikely (but widely believed) claim. I have written my response into the book I’m working on, as follows.]
Despite their mediocrity and failure, and their lack of basis in human nature or defensible theory, the rightness of free competitive markets is taken almost completely for granted in mainstream discussion. That was true when neoliberalism was introduced in the 1980s and it remains true today. Back in the 1980s, I would look out for the basis for the praise being heaped on the latest reform. All I ever seemed to find was the circular reference back to free markets, which were self-evidently good. The mantra of the open, competitive economy is repeated a thousand times a day. Such immersion can lead one to doubt one’s reason and common sense, so it may be useful to search for any robust logic in the daily deluge.