Coalition Launches World War on Youth

Yves here. I must confess to not being anywhere near as on top of Australian politics as I’d like to be, and I have a great deal of difficulty understanding the ascendancy of Liberal leader and now Prime Minister Tony Abbott, save that in a parliamentary system, who winds up on top often has more to do with infighting skills than real leadership. This post shows that the latest Abbot scheme for addressing youth un and under employment is a serious contender for Worst Neoliberal Post-Crisis Policy Evah. And recall it has QE as a competitor. So this post serves to launch a watch for Really Horrid Neoliberal Policies so we can start creating a taxonomy, which helps in making fun of them.

For starters, how smart is it to throw young people under the bus in an economy that has become almost entirely a real estate one trick pony? Where is household formation going to come from, exactly? Chinese investors and Chinese-driven extraction boom have both provided a big lift to Oz over most of the last decade. Deflation across non-agricultural commodities is a strong tell that that game is past its sell-by date.

One of the things I noticed briefly about Australian policies when I lived there is that they were weirdly bimodal, as in either really well thought out or terrible. This was confirmed by some Canadian policy wonks I met who said when they were looking for policy ideas from other countries, they’d look at Australia first because they were most likely to have gotten it right. The new Abbott policy suggests that capability is being destroyed.

By Leith van Onselen who has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs. You can follow him on Twitter at Originally published at MacroBusiness

As reported today in Farfax, the Abbott Government has cited cuts to unemployment benefits, particularly for those aged under-30, as one of the key structural reforms that will increase economic activity by 2%:

“Employment welfare reforms” is ranked as the No 2 commitment, and notes that the changes will “strengthen participation and activation strategies”.

By cutting payments entirely to some unemployed and requiring jobseekers to search for more jobs to qualify for payments, the government argues it will spur the unemployed to look for work rather than live on welfare, thereby boosting economic activity..

The fundamental problem with the Government’s approach is that it does absolutely nothing to solve the demand-side of job equation. That is, unemployment is high because the domestic economy is weak and labour demand is low, particularly for Australia’s youth, where underutilisation is running at a whopping 30% and jobs have been lost since the GFC (see below graphics).

Youth underutilization Oz

Change Oz labor aggregates



Amazingly, the Coalition still seems to believe that if Australia’s youth simply ask for work, the jobs will magically appear, as articulated earlier this year by employment minister, Eric Abetz:

“When jobs are sparse, it means that you’ve got to apply for more jobs to get a job… What it actually means is that you’ve got to double and redouble your efforts to be able to attract the attention of an employer to obtain the job that is so beneficial to the job seeker.”

Moreover, not only has the one detailed study into the Coalition’s Work-for-the-Dole scheme found it to be highly ineffective, but it was also revealed in June that the Government announced the scheme without undertaking any modelling or analysis of its impact:

In senate estimates in June, Job Services Australia general manager Moya Drayton was asked by Greens senator Rachel Siewert if the government had any estimates of the proportion of unemployed participants that could expect to find a job within three months after finishing the Abbott government’s new work-for-the-dole program.

”The department does not have estimates on the number of job seekers for the under-30 measure expected to be in full or part-time employment three months after participation in work for the dole,” the department said.

The department also said it had no idea how many people it expected would move off income support as a consequence of being referred to the government’s work-for-the-dole program.

About the only boost to economic activity arising from the Coalition’s employment welfare changes would be the extra bureaucrats required in Centrelink offices to oversee compliance. So much for reducing red tape!

What we are witnessing here from the Abbott Government is a complete and utter absence of evidence-based policy making, whereby its welfare reforms have been devised for political purposes and/or based on ideology, increasing risks of adverse outcomes for taxpayers and the community in the process.

If the Coalition was truly interested in supporting growth it would look to unwind the highly distorting taxation regime that mis-allocates national savings into mortgages, along with the myriad of other tax concessions – which represent 8% of GDP, the highest of their kind in the OECD – that drive the politico-housing complex economic model.

While they are at it, why not argue to unwind the public guarantees for the nation’s banks that have prevented markets from-restoring balance to the system; the state government restrictions on housing supply; the record high immigration levels (including unfettered use of 457 visas) and un-policed foreign buying activity of existing real estate. Together, these policies explicitly degrade our national political economy and future standards of living for the expressed purpose of boosting baby-boomer dominated property-owner wealth.

In the Budget we had no attempt to address these failings of the economic model for young Australians. Instead, all we have received is draconian cuts to unemployment benefits and a radical overhaul of education funding that will dramatically increase the cost of higher education for future students.

It is generational war writ large, which the Coalition is now seeking to export to other G20 nations.

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  1. Jesper

    Exporting the model? Has already been done….

    The ‘credible’ profession has a theory to match the claim that unemployment goes down as job-applications increase. It matches quite neatly with the notion of meritocracy. For believers in the existence and prevalence of meritocracy it makes perfect sense to bring out the whip.
    Strange how economists always manage to find theories that keep themselves in the money….

    The two thirds society is making great strides. Two thirds of the population vote for benefits to themselves at the expense of the lower third. Any dissenters are kicked out and down to the bottom third. Yet the two thirds makes the claim that they have the moral high ground – the upper two thirds welcome more and more people into the bottom third to share of the bottom thirds resources.

    As a side-note, the ‘work for dole’ program sounds a lot like the ill-conceived idea of job-guarantee. A public sector job is a job and should be paid accordingly, a job-guarantee job is meaningless busy-work and is also paid accordingly.
    Am loathe to use the struggling artist argument but the job-guarantee idea does replace cultural work with meaningless busy-work.

    & as an end-note: If the young would fight anything that benefits the old over the young then they’ll be accused of inter-generational warfare. Surrender or be classed as a tool, dupe, useful idiot etc etc. Learn to be helpless.

    1. Gerard Pierce

      A job-guarantee job wouldn’t absolutely have to be meaningless busy-work.

      In the early days of US welfare, they gave families money “to feed the children”. Naturally a few bucks went to buying a six-pack on Saturday night. After the Republican outrage, the Democrats instituted the “man in the house rule” which mostly wiped out marriage in the black community.

      Meaningless busy-work isn’t that meaningless if it let’s the man of the house buy his own six-pack – and if it shuts up the people who turned welfare into a disaster.

      It doesn’t have to be meaningless if education is one of the ways you get a raise in your meaningless pay.

      And on the bright site, some of those made-up jobs could be in the field of economics. Who knows more about poverty than the poor?

      Or how about a job-guarantee job providing constituent services for the local congress-critter?

      1. Jesper

        Either you allow JG to displace a real job with proper pay or it is meaningless busy work. Which one do you choose?

        1. Min

          False dichotomy. There are plenty of real jobs to be done that are not being done. The most obvious being to repair, maintain, and build infrastructure. Why the richest and most powerful nation in the world has let its infrastructure go to hell I do not know, but it has, and is doing very little to correct the situation.

          1. Spring Texan

            The New Deal “make-work” jobs are still benefitting people, including in my town of Austin, Texas:

            Is it better to have people waste their lives applying for non-existent jobs, or give them money to put up buildings and sewers and roads that will last (or even creating art and literature too)? Why is this not a big duh? And these infrastructure projects are NOT being done at present.

      1. Jesper

        Believe what you will, JG has been tried in Sweden and was an abject failure. Neo-liberals loved it though and are hating that it looks to disappear with the change of government.

        1. Kurt Sperry

          How could a JG “fail” except through either probably deliberate incompetent execution or underfunding? This isn’t clear to me.

          1. Jesper

            The short would be this:
            In Swedish, quite a lot of links to source material.

            But maybe a bit longer:
            -It did not make people more employable. If making people more employable was a criteria for success then – Fail.
            -A public sector job is a real job providing a useful job. Job-guarantee jobs could either displace the real public sector job with a lower paying job or it could be meaningless busy work. So, either an escalation of pace in the race to the bottom or meaningless busy work. Neither is a good option for anyone – Fail.
            -The ending of the program is eagerly by all who particpated – Fail on yet another criteria

            So what could possibly be good about JG? Theory met reality, reality prevailed and people in Sweden are happy about the ending of the failed JG.

            1. Min

              I expect that Sweden has more public sector jobs than the US, so that a job guarantee would work better in the US.

        2. Erick Borling

          I don’t have to know anything about the Swedish experience to say your first sentence conveys no robust information. That’s like saying “Obama’s stimulus failed” or “communism doesn’t work look at Russia.” Those things were not entirely what they were said to be, so let’s keep the discussion honest. As to the JG being a meaningless busy-work gig, verrrrry few market-created jobs are described by the workers as being wonderful places they look forward to going every day and make a difference (“meaningful”). It sounds like you’re an adherent to the idea that gubmint’s bad and private sector is good. But both sectors are just people. The public sector is people doing a job created by the democratic process, and the private sector is people doing a job created by market processes. I don’t see an argument proving that people suddenly become martinets in government and NOT in the private sector. Particularly with crapification well underway.

        3. Calgacus

          Jesper: True, the JG has been tried in Sweden. And it was spectacularly successful. The JG, the idea of full employment was at the heart of the Swedish model and the reason for its success, the reason that Sweden became a rich country under the Social Democrats after the 1930s. A widely believed lie is that a Swedish style welfare state is an expensive luxury for rich countries. The truth is that the intelligent Swedish welfare state policies turned a poor country into a rich one. I am not an expert on Sweden, but /L, /lasse, a knowledgeable and experienced Swede who has just been commenting here, is. And I am indebted to him for the link to Ernst Wigforss’s 1932 Har vi råd att arbeta? (Can we afford to work?) from the recent Ilargi post with quotes and a link to an old billyblog. Wigforss piece was a crucial element to the Social Democratic victory.

          What you are calling a JG, but is not a JG, appears to be a punitive workfare/work for dole scheme of the neoliberal era of the last few decades. Yet another ploy to degrade the 99%, yes. But that is not what the JG means. The JG is what plutocrats hate above all, because they have always known (and said) a real JG is a stake through their heart.

          Either you allow JG to displace a real job with proper pay or it is meaningless busy work. Which one do you choose? The prevalence of such magical, preposterous, utterly irrational beliefs is at the heart of the problem, and Wigforss is an excellent antidote. No, this is not true, any more than water freezes when heated. If you, I or the government give somebody a job, it does not magically “displace a real job with proper pay”. Yes, you, me or the government can decided to give someone a “meaningless busy work” job at crappy pay. This is stupid and/or evil. So you, me or the government can decide to give somebody “a real job” doing stuff for your, my or public purposes “with proper pay.” This advances your, my or the public purpose, and advances the private purpose of the jobholder and those he spends on. You or I can’t employ everyone we would like, anybody who needs a job. The government can. THE END. There ain’t no catch.

          1. Jesper

            I’ve read Wigforss.

            Using the logic of JG then we might as well bring back the 6-day work week with 10 hours work per day and reduce yearly vacations to one week. Since the proles can’t handle free time, or?

            Putting a JG in place where the government is bad is a recipe for disaster. Putting a JG in place where government is good isn’t needed.

            1. Min

              “Putting a JG in place where the government is bad is a recipe for disaster. Putting a JG in place where government is good isn’t needed.”

              Just full of false dichotomies, eh?

            2. Calgacus

              I’ve read Wigforss.
              Well, then I suggest rereading. Was it just a coincidence that Wigforssian, classical Swedish Social Democracy turned a poor country into a rich and widely admired one? Was it just a coincidence that the worldwide abandonment, including in Sweden, of this full employment thinking, in the 70s & 80s led to the neoliberal hells, where “homelessness, beggary and mass unemployment … is the new normal”? (/L)

              Again, where is the logic in “Either you allow JG to displace a real job with proper pay or it is meaningless busy work?” Just how does a non-meaningless JG job displace a real job?

              Using the logic of JG then we might as well bring back the 6-day work week with 10 hours work per day and reduce yearly vacations to one week. Since the proles can’t handle free time, or?
              Ummm, no. This statement has nothing to do with the logic of JG, with MMT/Keynesian/ Swedish Model economics. JG/Keynes/Swedish Model says: People who WANT to work should/must be given “a real job with proper pay”.

              What conceivable,speakable reason is there to oppose this? How can one logically think that denying people jobs that they want, can do, and would help everyone is pro-freedom? Why deny them income? Anti-JGism explicitly says “proles can’t handle free time”. A JG says the opposite. Which is why “the proles” have always and everywhere supported a JG over fake replacements like jobless BIGs/ welfare. They are thinking logically, unlike anti-JGers.

              /L gave us another good Wigforss quote in that thread:

              ”Om målet med samhällsutvecklingen skulle vara att vi alla skulle arbeta maximalt voro vi sinnessjuka. Målet är att frigöra människan till att skapa maximalt. Dansa. Måla. Sjunga. Ja, vad ni vill. Frihet.”

              “If the goal for society’s evolvement were that we all should work at maximum we would be insane. The goal is to liberate man to be maximum creative. Dance, paint, sing. Yes whatever you want. Freedom.

              A JG, “Can We Afford Work?” is in no way inconsistent with the second sentence, and in fact is necessary for it to become reality in a monetary economy.
              The logic of the JG boils down to the plain idea that nobody ever has a moral right to make demands, even otherwise justifiable demands, on you that he then prevents you from fulfilling, demands that he makes impossible. Do you disagree?

              Putting a JG in place where government is good isn’t needed.
              No, it is absolutely essential, a sine qua non. No government can be “good” without a JG, without full employment. Unemployment is a vicious, insane crime against the unemployed. A monetary society that insanely, flatly denies one sole member of it the monetary income he or she wants and could earn by performing a job for that society is a criminal organization. Just like a society is still a slave society, a criminal society, even if it has just one slave. The slave, the “prole” has every moral right to “assault”, to “rob”, those who are robbing and assaulting him.

              Careful, logical thinking, MMT, the dispelling of weird neoclassical/neoliberal ideas like ‘JG jobs displace real ones or are busywork’ above PLUS the entire economic history of the world everywhere all show that full employment (= a JG more or less) is the most needed thing of all for “a good [monetary] society”, even if one just looks at overall wellbeing, and not the right to a real job with proper pay.

              Anti-JGism is superficial, limousine leftism, that in essence despises ordinary people and their actual, entirely rational desires and thoughts. “The proles” have every right to “steal” such a “leftist’s” limousine and sell it to a chop shop. Unfortunately, many who do not think carefully enough, who are too comfortable, fall for plutocratic ploys that sound good, that sound well-meaning, mistaking them for true support for the working class, the 99%. But they are actually tying a noose around the working class’s neck today, one that will be used on them tomorrow.

              1. Jesper

                The Social-democrats of the 1930s used counter-cyclical policies without legislating for a JG. They saw idle resources, a productive use for those resources and acted (like a good government).

                Legislating for JG would give the government and its officials a lot more power. A bad government would abuse that law, change that law or ignore the law. So legislating for a JG would do nothing to improve the situation with a bad government.
                A good government has counter-cyclical policies without the law.
                Now do you understand why a legal JG is at best pointless and at worst damaging?

                & this quote:
                “Which is why “the proles” have always and everywhere supported a JG over fake replacements like jobless BIGs/ welfare.”
                is interesting and indicative of a limousine leftie.
                Many people play the lottery for the sole reason of not having to work again. Once the income is secured then meaning is looked for. And they then get to choose how to find this meaning – like the BIG allows them the freedom of choice, the JG (like the totalitarian thing it is) forces a choice on them.

                1. Calgacus

                  Legislating for JG would give the government and its officials a lot more power
                  No, it would remove power from the government and officials – their power to say “no paycheck for you”. A JG would directly remove the primary power of the ruling class – their stranglehold on everyone’s livelihood, through their control of their own wealth and their corrupt control of the government’s far greater wealth and power, of which 99% belongs to the 99%. A BIG without a JG gives far more power to the government and officials, and crucially takes power AWAY from ordinary people, takes away their power to determine their own income.

                  A bad government would abuse that law, change that law or ignore the law. So legislating for a JG would do nothing to improve the situation with a bad government.A feeble argument. One could say the same thing about any law, like against murder. So as an objection to a JG law, it as serious and helpful as suggesting repealing laws against murder. This is a particularly bad argument for the case of Sweden. Olof Palme was hardly a bad man running a bad government. But he didn’t understand economics well enough to resist monetarism and neoclassical nonsense, which appears to have affected your thinking too, e.g. the “false dichotomies” above. Though surely, unknowingly, against your will. It affected mine until I decided to learn some sound economics. Tim Canova’s The Swedish Model Betrayed describes how some crucial steps in destroying the Swedish Model were taken by Olof Palme, unintentionally. So his assassination probably had great effect as he would not have tolerated the great rise in unemployment afterwards. True, a JG would not have done so much before the end of the Swedish Model, but it would have kept it from ending. Sweden would be a far better place to live in today if Palme had signed an apparently then-unnecessary JG law instead of having been harried into okaying neoliberal nonsense.

                  Which is why “the proles” have always and everywhere supported a JG over fake replacements like jobless BIGs/ welfare.”
                  is interesting and indicative of a limousine leftie.

                  There are polls. Here is one by Yougov or more complete results. The JG was the most popular proposal of five including a BIG, with 53% support of those who expressed an opinion. Support for either a JG or a BIG declines as income goes up. IIRC Lambert posted another poll here that had such questions a few months or so ago. They support my statements. Talking to actual poor or unemployed people and presenting the proposals fairly might surprise you.

                  Yes, poor people play the lottery. I have played the lottery. But most people who play lotteries understand that a lottery that paid off for everyone is absurd. That is what the classic, van Parijs BIG / UBI is – pay a buck for ticket, get a million back. A real, universal income paid to everyone is either chump change – or is the most inflationary policy of all time.

                  Again, what you have been calling a JG in Sweden is NOT a JG. We may be talking about different things, and you may be misunderstanding the MMT proposals & historical sources like the Swedish model. A Job Guarantee, on the Swedish Model, on the model of the US WPA is not something mean to replace any sort of “welfare benefits”. It is just a public sector job. Such jobs and programs were very popular in the USA, particularly with the New Deal workers. Ruling classes have worked hard to destroy real (quasi) JGs, to replace better thought out economics, Swedish, Keynesian economics, with antiquated, exhausted ideas dressed up with a 3rd rate pseudomathematical veneer. This period of brainwashing has had enormous effects.

                  like the BIG allows them the freedom of choice, the JG (like the totalitarian thing it is) forces a choice on them. This gets it backwards, as so many do. The BIG prevents free choice, is totalitarian. A JG, a real JG, the Swedish Model, the WPA gives people the right to decide what to do with their free time, while a BIG prevents them. Thinking a BIG without a JG is a solution is like thinking that the Senate’s Bread and Circuses program is going to cause the downfall of the Emperor’s and the Patricians’ power and abolish slavery.

                  It boils down to the question: Why do you think that anyone whatsoever, rich or poor should be told by the rest of society: There is no way whatsoever that you can get more income. Your desires and your labor are nothing. We, the government, the officials, the masters of the BIG, are all-wise. Nobody is that wise, nobody wise is that dictatorial.

                  1. Jesper

                    So much nonsense, false facts, false assumptions and false logic. Learn to read Swedish and then you can get access to the facts.

                    & read this one:

                    A quote from the end:
                    “It seems to me that the fundamental difference between JG proponents and supporters of basic income lies not in their economics but in their view of human nature.

                    JG proponents are essentially managerialist. They think that people have to be told what to do or they won’t do anything useful. Basic income supporters, on the other hand, are liberals: they believe that if people are supported and their basic needs are met, they will find useful and productive things to do.”

                    1. Calgacus

                      Sorry to take so long to reply. On the chance that you see this – I have read Coppola. I have even used that post as an ideal example of getting things exactly wrong, of conclusions antithetical to the premise. I am fully in sympathy with Coppola’s well meaning intentions. She & other BIG proponents / JG opponents do not think carefully and slowly enough. They always put themselves in the position of the master, not the servant; put their good intentions above the considered thought of the poor, the servants – and a few keen-eyed philosophers. They have been blithely paving the road to hell with their good intentions for centuries.

                      For it is such anti-JG BIG proponents who are managerialists, who are telling people what to do and what not to do. And who therefore favor inflicting unjust, absurd and tyrannical punishments on the people they implicitly think of as their inferiors when they propose to foist an unwanted BIG on them and who then don’t dance to the BIG managerialist whim. The logically inevitable behavior of welfare bureaucrats everywhere.
                      JG proponents are the ones who are “shockingly liberal” [US usage], who think that adults are capable of making their own decisions of what to do. In particular the decision to work for society for decent compensation, when they themselves say.

          2. Jim in SC

            Your paean to Sweden reminds me of Gunnar Myrdal’s possibly apocryphal comment to Milton Friedman, and Friedman’s response:

            GM: We have no poverty in Scandinavia.

            MF: We have no poverty in the United States among Scandinavians.

            1. Erick Borling

              You need to substantiate your comment if you don’t want to be known for talking out of your hiney. ;-)

      2. James

        Of course, if people want real work, there’s always Walmart…

        That greeter gig’s really got potential! I hear a lot of CEOs are graduates of the program. Heavy on the PR and light on mental capacity. Sign me up!

  2. Petey

    “I have a great deal of difficulty understanding the ascendancy of Liberal leader and now Prime Minister Tony Abbott”

    Isn’t right-wing ascendancy a semi-inevitable consequence of being a fossil-fuel nation?

    1. Newtownian

      Alternatively – the answer is a combination of:
      – Murdoch, Murdoch and more Murdoch.
      – Ideological dominance of neoclassical economics and managerialism i.e. neoliberalism
      – The Dutch Disease – arising from the look derived for the few from mining and especially the coal industry and political corruption arising from this on both sides of politics.
      – The selling out of social democracy by the Australian Labor Party in the 1980s with its replacement by Thatcherism/Reaganisms Lite – and the uselessness of the Greens
      – Too much profit in asset (mainly land and other property) inflation which is not called inflation but provides the illusion of wealth and is massively subsidized (negative gearing).
      – Increasing concentration of national wealth in the hands of the aging (superannuation) who are now in effect all petty bourgeois rentier capitalists focused on their short term future (also massively subsidized).
      – The movement from Government as driver of progressive social change to facilitator of markets which will drive change that suits them – mainly changing/removing tax laws and corporate governance constraints.

      The contrast and failures are brilliantly captured by despairing speakers at Gough Whitlam’s (1972-1975 social democrat(Labor) PM) memorial who itemized a time when the economy was seen as a servant of the nation and not vice versa…

  3. David Lentini

    When will people understand, neo-liberalism is not about expanding wealth or opportunities; it’s about domination and ownership. The “winners” want to own everything and everyone. That means limiting and even eliminating opportunitites. The goal is to create a small, even single, winner-of-all who rules over or just igores the great mass of humanity. It’s a true Randian wet dream.

    1. NOTaREALmerican

      “People will understand” that “neo-liberalism is not about expanding wealth or opportunities” roughly about the same time they understands how to use the word “neo-liberalism” in a sentence. Which means never.

      Let’s try a sentence “da common man” would use “neo-liberal” in: them goddamn limousine neo-liberals are always uh, always what? -OR- I’m not votin’ for some goddamn neo-liberal I’m votin’ for uh, for what?

  4. vlade

    Eeek. Well, it could create 2% growth in GDP if you include increase in crime, drugs dealing etc. that the unemployment (especially amongst the young) tends to increase.

  5. Kim Kaufman

    I heard Richard Wolff, the socialist economist, on the radio a couple of years ago saying when you have a whole generation, or two, who are young, single, educated and energetic with no or few good job prospects, and high debt… historically, this kind of a situation does not work out well for the 1%. Bring on the pitchforks!

    1. vlade

      Nope, Oz will still gets it share of Poms who know only that it has much better weather and beaches than the UK, and don’t give a toss about youth unemployment policies.

  6. Erik Strom

    I lived in Australia for many years. I just couldn’t believe how the country could have such a high standard of living. While travelling around the U.S., I found myself a “stranger in a strange land”.I now mourn at the ever sinking standard of living and the desperation of the “desperiatariat” and how they keep swinging back and forth between bad choices . What makes me more morose is that many around me now no longer talk to each other about anything except the most ”safe” topics. I live in California and feel afraid to state my opinion that there is “too much sugar in food”. Everyone just goes silent. I now just keep quiet, and prepare myself for something that looks like the Walking Dead.

    I can see that Australia is headed down the same road. In short for Americans, there is soon going to be nowhere to run, nowhere to hide unless their is a drastic change in the U.S. political and socioeconomic scheme.

    1. NOTaREALmerican

      The best place to move is someplace you can’t speak the language. That way you’ll never comprehend that your new society is just as dumb as the one you left. Everything sounds better in a foreign language you can’t understand.

    2. Chris Geary

      Really, what part of California are you in? I feel safe there’s too much sugar and salt! in many foods.

  7. kapala

    you obviously had a good time when you lived in Oz and met some nice people. Your view (which I can only gather from your comments) seems highly skewed to the positive. I suppose coming from the US, any other 1st world country can seem comparitively wonderful re. politics and policy.
    You are so clear-eyed on pretty much all else you write/comment on, so this warm/fuzzy treatment of Oz for me sticks out. No wonder you are “surprised” by the ascendancy of Abbott.
    I have lived there on 3 occasions, and my takeway is overall a bad mix of american and british influence, a little worse than the other 2 “little eyes” Canada and NZ. Though Canada is certainly taking a run at the title of slavish anglo lap dog over the last decade or so.
    Just some wonderful things about Australia:
    treatment of aboriginals
    treatment of refugees
    climate policy
    foreign policy (every major US war since Korea!!!)
    sexism (aussie sheilas are tough for good reason…)
    urban development

    In the end, IMHO, as a “body politic” australians finally lost their bearings during the Howard years with the whole immigration / asylum detention thing. Any group that can countenance such policies can be led to support anything, really.

    1. Yves Smith Post author

      You appear not to know the US at all, or to have a badly distorted view of it.

      1. THe US has far and away the highest prison population in the world in percentage terms. We prosecute, convict, and incarcerate black men at vastly disportionate rates to whites

      2. Have you ever been to a reservation? Indians were rounded up and interred on the worst land. The result, even with the boon of casinos, has been high rates of unemployment, alcoholism, and drug use. The US did not engage in behavior like stolen children, but the flip side is Australia didn’t subject aboriginals to medical experiments (injecting blacks with syphilis and not treating them).

      3. Our behavior towards Mexicans who get caught crossing the border is not different than Australia’s toward boat people. We can hide it much better because the boat people incidents are hugely visible. Our border patrol does shoot at people and sometimes hits them:

      4. Re sexism, the gender pay gap is lower in Oz than in the US:

      Australians are indeed tolerant of forceful women. And I find overt sexism much easier to contend with than the “let’s pretend we don’t have it” kind

      5. Australians are WAY more tolerant of gays

      6. Our climate policy sucks. Australia’s sucks. The US is the world’s hegemon, so our bad policies are far more consequential

      7. What is wrong with urbanization? More densely located populations consume less energy, PARTICULARLY apartment-dwellers. Australia goes to some lengths to have good public transportation and push people to use to to commute (in Sydney, parking is deliberately scarce and extremely costly in the central business district).

      8. Australia was, and I gather is becoming less so, of a fiercely egalitarian society. It has high minimum wages and strong unions. People mix across class lines, which is something that pretty much never happens in the US.

      9. The Australian public polled at 94% opposed to the war in Iraq. You NEVER see numbers like 94% in polls. But have you ever seen the Australian navy? It consists of about six ships. I’m exaggerating but not by much. Australia depends on the US for defense and so goes along with our misadventures.

      10. Australia does have some ridiculous bureaucracy, like their ATO. But I’ll take that over militarized policing and the suppression of public protests any day. Oh, and how about the fact that the US takes the view that within 100 miles of the border, they can treat anyone, including citizens, as being in the border zone, which means no restrictions on searches and interrogations? And you can’t call a lawyer.

      1. Tara

        Hi Yves- the US did have a policy of “stealing” children of the indigenous. Boarding schools were created to “assimilate” the natives to the dominant white culture. These schools had a lot of the features of a Magdalene school in Ireland- forced labor and sexual abuse. The people coming out of these schools were cut off from their culture and appropriate parenting models. Many of the problems on the res can be attributed to this policy.

      2. kapala

        I never meant to imply that the US was *better* regarding any of the issues I brought up. Indeed, I opened with saying that “coming from the US any other 1st world country can seem comparitively wonderful…”.
        I will respond to your mostly strawman response by saying I pretty much agree that the US is worse on most/all those points.

        Regarding your point #4: I am not a woman, so I will leave it to other to argue the merits of your assertion that “I find overt sexism much easier to contend with than the “let’s pretend we don’t have it” kind”
        Regarding point #5 – uhhh OK if you say so. Oz has Sydeny, US has San Francisco. lots of rednecks both places.

        point #7: my bad, I was not clear; urbanisation is imho a good thing. But not the way they do it in Oz, which is the great example of urban sprawl. Melbourne and Sydney are HUGE. They have been stuck in the “quarter acre block” mentality for way too long. So transport suffers. Having lived and commuted in Melbourne and Sydney I can say that public transport there SUCKS. Maybe not compared to the US, but….

        point #8: I’d like aussies to chime in on this one – but I feel that that whole “little battler” egalitarian motto is just that – a motto. Classes are pretty rigd in Oz, and they do their best to keep the wogs out.

        point #9: public polls don’t change the fact that they have followed uncle sam in every major military adventure since WW2.

        So we can play this game some more if you like. Oz is 1/15th population of the US. Even if they are “as bad” (which they are not) at all these issues as the US, obviously the US has the much greater impact. Duh. Don’t discount the role that the smaller lap dogs like Oz and Canada play in legitimating the US position on these issues.
        And it is in that spirit that I made my orignal critical post. Too many americans get all starry-eyed over canadian healthcare (which is imho second worst in the industrial world) and aussie egalitarianism and whatever else they experience on their stints abroad for the simple reason that it is worse in the US. And so critical thinking seemingly goes out the window. And believe me, too many aussies and canucks do the same thing – compare their systems to the US, and feel oh-so-good about being better than last place that we have become comfortable with next-to-last place.

    2. RBHoughton

      I will not disagree with Yves but I compliment you on your last paragraph. Australia’s problems started with the nipper Howard. There was some new influence on him that was absent before. That’s when the country began to go bad.

      1. Newtownian

        Regretably the rot started earlier and more subtlely under Labor with Hawke and Keating in the 1980s/early 1990s.

        After Whitlam’s tumultous 3 years we had 13 years of Labor government. But it was of a Blairite New Labor type, and indeed there was cross feeding between the mates. They pushed the replacement of the old egalitarian social democratic traditions with Greed is Good. Meanwhile the unions professionalized and severed their grass roots links. It wasn’t only Oz. New Zealand followed the same road as also it appears did Sweden and Denmark albeit slightly less ferociously.

        What outsiders have to understand here is the Anglosphere economic/political/bureaucractic/academic elites are now thanks to communication now nearly in lock step with once another. This also means if you are ambitious you borrow as Yves noted, one another’s paradigms and paradigm shifts and rebadge them as your own. And so succeed not through imagination but parroting, syncretism, plagiarism and ruthless winner takes all competition with our peers, supported by the plague rats of the modern world ‘consultants’. Its all part of globabilzation but its more ferocious when having a common language and opportunity for cultural and many other exchanges.

        1. Glenn Condell

          You have pretty much covered it in both your comments, thanks. Not much left to say, but for ‘borrowing one another’s paradigms’ I would substitute ‘all aligning with The Paradigm’.

          ‘And so succeed not through imagination but parroting, syncretism, plagiarism and ruthless winner takes all competition with our peers, supported by the plague rats of the modern world ‘consultants’

          A silent plague which stalks the land, gutting good functioning bureaucracies by way of overpaid new management employed on the tacit understanding that they make their workforces more ‘client-focused;’ or whatever, code for ‘too scared to say boo’. Apparently goal-driven restructures are really just clean out exercises, expunging experience which may want occasionally to contribute, or even oppose. Can’t have that, so consultants are paid to come in and ‘consult’. Months of this pass, chins are stroked ostentatiously, then the suggestions, cavils, warnings, etc are completely ignored and the original plan ploughs ahead.

          Consultants are an expensive fig leaf, a ‘cost of doing business’, kayfabe and kabuki.

  8. susan the other

    What exactly did the AU gov do to eliminate Steve Keen’s position? He was saying a lot of stuff that got him axed. He now teaches at an economix college in the UK where they and several other colleges are receptive to his new ideas. His big one still being the devastation caused by private debt. So in a country so willing to obliterate its best professor, why coddle students and unemployed youth? And lest we become judgmental we should acknowledge that youth unemployment is thru the roof here as well. No Western government wants to do anything about it. Clearly, they even seem to want to stoke a generational war.

    1. Yves Smith Post author

      This was not the “Australian government”. It was a reoroganization of a department. They were cutting heads and Keen did not have tenure. They were organizing away from what Keen was teaching. If you teach heterodox economics, you are much less likely to get tenure. That’s the way it is everywhere.

      1. Anon

        I worked for a while at the University of Western Sydney where Steve Keen was and there always was a reorganization every five years or so. One idea was to create new schools that could only consist of six existing departments. When one senior academic complained, her department was axed with the official reason being that if her department was not eliminated then their would be a school that would have to have seven departments. Thus the joke that “six was the magic number, not five nor seven”.

  9. Ed

    During times of economic contraction, governments tend to cut unemployment benefits. An early example is the Labour government in the UK which collapsed over this very issue in 1931. The reason is that during contractions, governments get less revenue, while the amount they pay out in unemployment schemes increases, so when the bankers demand that expenditures align more than revenue, you cut the category where the expense increases, especially as the people who will complain most by definition have the least power.

    The National Government in 1931 actually used the rationale I just gave above. What has changed is that now politicians and commentators can’t state things straight, but have to use intelligence insulting bullsh–. And whatever the economic features say, cuts in unemployment benefits are one of the features of economic contractions. They never happen during boom periods, though the total amount paid out in unemployment goes down for obvious reasons.

    Its a particularly stupid policy now, however. The fact is that there is a worldwide labor surplus, a product (predicted at the time) of the worldwide population explosion, exacerbated by increased automation, which during an economic contraction replaces labor to cut costs instead of being used to meet new demand. So you have all of these literally redundant workers. The options are either to shoot them like Stalin did, or put them on some sort of benefit, though given the problem of overpopulation, which affects Australia too, making it more difficult for young people to form families is probably a good thing.

    1. Generalfeldmarschall von Hindenburg

      The Stalin Option is much more likely. A total neo feudal terror-state on the lines of Guatemala is at last within the grasp of our elites. Anyone who thinks they won’t gun down homeless people, unemployed people or anyone else whose existence offends the delicate sensibilities of Gods Elect should look at anything Howard Zinn ever wrote.

  10. JohnnyGL

    To help get things moving on the list for “Really Horrid Neoliberal Policies”, I’ll rattle a few off the top of my head in no particular order, but I think 1 and 3 are strong candidates

    1) NAFTA/CAFTA – drug war/immigration problems/farm subsidies/outsourcing/de-regulation/union smashing all rolled into one big neo-liberal sandwich.
    2) Commodity Futures Trading Modernization Act of 2000/Bankruptcy Abuse and Consumer Protection Act of 2005 – big supporting roles in the run-up to the financial crisis.
    3) Whatever you want to call the horror show that was done to Greece starting around 2009ish. – It’s got to be considered neo-liberal as I recall reading the Germans made the Greeks lower the minimum wage as part of the plan. How on earth does lowering the min wage help pay debt???

    1. JohnnyGL

      Re: 1) I almost forgot the Investor State Dispute Settlement provisions….I’m thinking NAFTA has got to be a leading candidate.

  11. rijkswaanvijand

    such policy has been implemented by Dutch policymakers in various degrees as well.. No need for export as this seems a generic neolib product. A dime a dozen (although this is probably quite overrated due to certain sinister practices).

  12. kevinearick

    Veterans Day Empire Education

    …new same as the old, with another dress.

    We have reached the point where the critters can only employ probability and computer diagnostics, in a closed system, where everything affects everything and combinations escape even the cloud, an Internet social media derivative, chasing its own tail to confirm the status quo. “This is not another bubble!”

    If you want the hassle of being the top 1%, creating economic mobility for the majority, while it tries to put an ax in the back of your head, you must be able to troubleshoot intermittent failure, which, if you paid attention, I told you how to do.

    Most kids just want a derivative version of the problemsolution, technology. Labor is looking for kids seeking life, and they are easy to spot. Recessions are about applying increasing pressure down the credit gradient to create income inequality, raising the disposable income bubble, until your own throws you under the bus.

    But closed systems are only closed by false assumptions. Test the crap, especially the false assumptions about how it works, before the crap stops working. You can always replace the control with a switch. How did the critters alter Archimedes Screw to create artificial scarcity?

    The majority wants the privileges of marriage without the responsibilities, increasing return on decreasing risk. Civil Law is all about assigning you the responsibility, with none of the privilege, feeding the insurance ponzi with natural resource exploitation, until it can’t.

    Once upon a time, the bankers were on the bottom floor, and the poor walked to the top. All technology is about building the global city, employing gravity. Keep your head, while all others lose theirs. Beware positive feedback; turn it on its head.

    The politicians slice and dice, employing each other as scapegoats, until all that remains is in the hands of fascists, which isn’t much. There is no such thing as traditional marriage, and all civil contracts are made to be broken, with a duration mismatch. Plot your own course.

    Social skills are productive, but worth no more than 10% of your time. Life is about living in your own time. Marriage is about finding time with your spouse, in an empire frightened by change. Empire, behind in time, is designed to rotate you behind it, to maintain the status quo, with your work back to the front.

    As you can plainly see, the ‘banksters’ are just the terminal part of the bait and swap, building up a head of steam to justify fascism. The majority is coming after you, the thinking individual, because private marriage is the only relationship capable of quantum advance. For labor, the choice is simple. Seek one that is grateful, and increase distance from others.

    Pay your spouse, your children, your extended family, your business partner, and the FILO Bankruptcy Queue, with your time, in that order. Empire jobs are just noise, heading in the opposite direction, all hoping you will pay for them before your own, accepting money, time chasing its own tail, to compound interest.

    Why do you suppose Wall Street calls the electoral college The Bank?

    Now, I have other things to do, like listen to my wife tell me how beautiful and wonderfully made people really are, fix her automatic crap, and watch her walk blindly in and out of traps, set for me, because that’s what you do for your spouse, expecting the passive aggressives to attack your children.

    Meanwhile, I’ll pretend that I am trapped in an elevator, in the basement, by the evil empire, and we end where we began; fire the upper middle class gatekeepers, or be about your business, until you have the habits to do both.

    Funny, the skills you acquire in war make you the enemy, and I entered MCRD when I was nine. The tip of the spear is when and where you choose to be, and Government is nothing, to fear. Admiralty is not admiral if it cannot mobilize labor.

  13. scraping_by

    Divide and conquer is one of the favorites from the fascist playbook. Black vs white, north vs south, gun guys vs the rest of us, religious vs rationalists, and so on without end. As long as you can call out sides you can convince people into joining them.

    Young vs old can hook into family tensions, the inevitable disappointments of later life, youth’s lack of experience, fear of status loss, frustration at an indifferent world, any number of personal views recast as grand social forces. You took it all vs get off my lawn.

    Many people are handicapped when they see evil. They’ve been brought up to give everyone the benefit of the doubt always and all the way. These days, it’s ignorance or fear. No. Evil.

  14. ChrisPacific

    Finally, I understand the problem. Unemployment has nothing to do with the end of the real estate bubble, or the mining bubble. No, it’s all due to laziness on the part of the young, who aren’t looking hard enough for jobs (curiously a kind of cyclical laziness, which peaks during recessions and nearly vanishes during economic booms).

    Taking away their ability to afford food, shelter and clothing should fix this right up. There’s nothing like a whiff of desperation and impending homelessness to make applicants attractive to a potential employer!

    1. James

      I think you’ve got it! Write up a dissertation in your spare time (you can probably get the tedious parts ghostwritten if you play your cards right) and I’m sure academia will find a place for you. A Theory of Cyclical Laziness: It’s Causes, Effects, and Treatments. No doubt big Pharma, big Law, and big Corrections will want a piece of the action too. Build it and they will come my son! Could be next big wave.

      1. ChrisPacific

        Maybe I can score some cheap research assistants under the work-for-the-dole program. I’ll pay them minimum wage to write about how lazy they are, while I attend extravagantly catered conferences in Europe.

  15. skippy

    Corporatism has come to rule our politics on both sides of the bench, the center side is just more concerned with with progressive brand imaging, where the hard right management will lean – in and out on – such topics to steal the thunder.

  16. NOMAS

    This is not a badly thought out plan to lower youth unemployment . Its a brutally fascistic move of late – stage western capitalism’s ruling financial aristocracy , by means of their captive legislature and hired poli-prostitutes (like Abbot), to ruthlessly depress wages even further .Nothing more, nothing less. Lets call a spade a spade, and stop granting these criminals the insanity/incompetence defense.

  17. J

    I can only speak for myself, but the last 6 years and counting of working for scraps, when actually employed, has taken a toll and will not be forgotten. For everyone casually shrugging off these issues, or cruelly relishing the chance to beat on the young and powerless, as this move in Australia appears to be, remember that the tables may turn some day.

  18. Glenn Condell

    ‘I have a great deal of difficulty understanding the ascendancy of Liberal leader and now Prime Minister Tony Abbott, save that in a parliamentary system, who winds up on top often has more to do with infighting skills than real leadership’

    He certainly has those in spades, and relies on his tough guy image; it plays well here in a Murdoch dominated press and shock jock dominated airwaves. He doesn’t have much else though; he doesn’t need it to perform the services expected of him. Like Obama he will melt into the lower rungs of the ruling elite, his kids guaranteed to attend leafy private schools for at least a few generations.

    They used to say you get the leaders you deserve but that hasn’t been true for a very long time. We get the leaders chosen for us by political elites plugged into the neoliberal playbook, which weeds out anyone remotely capable of threatening real change. No more Gough Whitlams I’m afraid.

    Funny to see the Abbott/Obama meet written up here as cool to begin with, but warm enough thereafter. What a joke, they pretend not to like each other because one has a blue jersey on and the other red, but they work for the same interests and are probably quite chummy, sharing a chuckle together when the cameras have gone.

    The other thing is of course the alternative, or lack thereof… Bob Shortass, err Ben Shortstop, who knows and who cares? Small target strategists tend to disappear in the rearview mirror, again this being probably a feature not bug. Are they insipid and uninspiring but genuine alternatives, or carefully disguised doppelgängers posing as opponents? They could be the latter without being aware of it…

    Abbott is a cheerful, almost gleeful born-to-rule wingnut, hilariously monarchist and consciously old-fashioned, but wielding a shiv for workers and those left behind by neoliberalism. I dislike the bloke as you would expect, but I have to say I find his direct awfulness rather refreshing next to the hopey changey betrayals of the Drone in Chief.

    1. skippy

      Should we show them???

      Alan Jones must have thought he met his kindred spirit.

      Finally, the long-haired, latte-sipping, quinoa-eating, over-educated, under-appreciating yahoos of Sydney had met their match.

      Their biggest crime? Booing former Liberal prime ministers at Gough Whitlam’s funeral.

      skippy…. First as Tragedy, Then as Farce, Then as Parody, Then as Life imitating Art thingy….. whats next???

      1. OIFVet

        This is a brilliant satire. I wonder if Rush Limbaugh would have ever realized it if he was being had like that.

  19. Chauncey Gardiner

    Re: … “[T]he latest Abbot scheme for addressing youth un and under employment is a serious contender for Worst Neoliberal Post-Crisis Policy Evah. And recall it has QE as a competitor.”

    Respectfully, I believe QE is the bigger catastrophe FOR THEM because they have no exit other than the destruction of either their beloved “free” markets or the existing currency system. $100 billion in combined QE from the BoJ, ECB and Fed for the week ended October 31, 2014 is reflective of this stark state of affairs for the Neoliberals. Better start pushing those “bipartisan Trade Agreements”.

    1. jrs

      Embarking on QA was the death of “free markets” as an idea (free markets that need billions a month in subsidy). Free Markets are Dead.

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