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October 17, 2007
Alan Woods argues in The Australian that if we are looking for an economic explanation for why the Government is facing defeat in a buoyant economy, then market reform is the area where we should start.
More than two decades of economic reforms and globalisation have created a new, more flexible economy, with upward mobility, rising aspirations, dramatically changed industrial and institutional structures, shifting patterns of employment and family life, dramatically changed family finances and greater individual responsibility. Economic reform and globalisation have been overwhelmingly beneficial, as our economic prosperity attests, but they have also created unease, uncertainty and insecurity, as rapid change always does.
So there is fear and anxiety as many Australians have high debt and they fear the effects of a rise in interest rates.
Alan Moir
Economic explanations are not everything , but Woods is right about this. The tax cuts lauded by the neoliberal economists---such as Sinclair Davidson and Alex Robson---won't really help to ease the underlying anxiety caused by rapid economic change.
Ours is a time of low inflation, low interest rates and rising asset prices, which have encouraged a huge rise in household gearing and debt. Wood says that so far this debt isn't a problem, because debt is concentrated in households best able to service it, and households are benefiting from rising asset prices.
Fair enough as far as it goes. But, as we live in a climate of rising interest rates, our unease increases. It becomes a general anxiety about economic management and the future.
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Still getting past the shock of the thought that Wood is anything but the most slavish of Tory apologists.
Will eventually get to read article mentioned, but for now will content myself withmention of the inclusion of the post and the general sentiments seemingly contained within.