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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

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June 14, 2012

Glenn Stevens, the Governor of the Reserve Bank, Glenn Stevens, in a speech titled, "Glass Half-full" last week has observed that the nature of public discussion is unrelentingly gloomy despite reasonable growth, low inflation and unemployment.

This gloom and negativity has intensified over the past six months. even before the recent turn of events in Europe and their effects on global markets, Australian's were grimly determined to see their glass as half empty. This is in the context of the multi-speed economy undergoing structural change due to the mining boom.

PopeD hell.jpg David Pope

Why the gloom? Steven's says that one reason is that the period of real household assets per person rising at 6 per cent or more per annum and households actually to withdraw equity from their houses, to use for other purposes came to an end in 2007. Households began to save to reduce debt levels and their consumption patterns have shifted from goods to services. That impacts on the retail industry.

Stevens adds:

the key message for today is that the multi-speed economy is not just about the mining sector squeezing other sectors by drawing away labour and capital and pushing up the exchange rate. It is doing that, but slower growth in sectors that had earlier done well from unusually strong gains in household spending would have been occurring anyway, even if the mining boom had never come along. It is these changes in behaviour by households, in asset markets and in credit demand, that I think lie behind much of the disquiet – dissatisfaction even – that so many seem to have been expressing.

This post-boom depressive public mood is in flight from the structural adjustment currently happening behind our backs in the sense that is expresses an unwillingness to adapt to the changes.

You can see the negativity in the fears that fears that widespread deployment of solar PV and wind could not be supported by the national electricity grid. Behind the fear of fluctuations is the resistance to the development of a highly flexible electricity grid and one that is designed or adapted for renewable energy sources. Behind that resistance stands a refusal to change, let alone end, the dependence on centralised fossil fuel generation (ie coal) and shift to to renewable energy based society.

| Posted by Gary Sauer-Thompson at 10:20 AM | | Comments (5)
Comments

Comments

I've understood that the demand for electricity has been decreasing due to the the combined impacts of state-based efficiency schemes, moderating demand from manufacturing closures, the impact of rising retail prices, and the growing incursion of solar PV.

Energy demand is now at least 10 per cent below where it was expected to be less than four years ago. Wholesale electricity prices in the National Electricity Market have never been so cheap

"Behind the fear of fluctuations is the resistance to the development of a highly flexible electricity grid and one that is designed or adapted for renewable energy sources."

The actions of the fossil-fuel vested interests have sought to delay the deployment of renewables.They've done this by challenging the climate change science, then demonizing renewables as costly and useless, and then by fighting incentives and now through regulation.

The media continually focus on the cost of green energy incentives, even though it was clear that the single greatest contribution was the costs associated with more poles and wires and keeping track of the surging demand for air conditioners.

Glenn Stevens had a clear policy message - the Reserve Bank will not run a soft interest rate policy "to try to engineer a return to the boom". The economy does not need the phoney confidence based on runaway house prices and excessive leverage.

Morning after stuff.
And of course Australians are now so habituated and addicted to their junk that any curb brings withdrawal symptoms with lots of melodramatic victimhoood entitlement stuff.
Really pomo in a way, the election is going to be fought out on fantasies dislocated from any basis in objective subjectivity, contingent on other stuff we don't know about that will be fed us when it is decided appropriate, to ensure the "right" context in which we "decide"
It's the election to be fought fought on Gillard's jacket cut and length, hedged against rumours of the price of blue corn on the Mongolian widget market.This is complicated by subsequent speculation is to what this may infer as to violet two headed caterpillars at Club Med sites on Neptune.
I tell you, heads will rolllseats will fall like dominoes.
The people will rise in righteous indignation. Murdoch will reveal it's the latest socialist plot and the Soviet catering battalions hidden under Uluru will attack, since Gillard is surely responsible for the impending collion between the Andromeda Galaxy and the Milky Way, in four billion years time.
Sometimes I wonder if I ever did come down from that last mushroom trip back in the seventies, bizarre!