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What is only now starting to come into focus is the extent to which the whole economy is in hock to house prices. A sharp fall in the housing market will put intense pressure on our major lending institutions, leading to a deeply depressing effect on all parts of the economy. The regulators, as ever, are taking a hands-off approach.
Inequality is dangerous. And inequality is at a near all-time high. At its core, the Government’s recent budget not only engenders but actively exults in the creation and maintenance of inequality, a phenomenon rapidly expanding not just in Australia, but around the world.
As the Pope and economist Thomas Pikkety have observed in recent times, the inequity created by capitalism is a growing concern. But the problem with this argument is that 'capitalism' is too broad a term. The attack would be far better directed against the financialisation of developed economies. A new type of sovereign has emerged, and like all rulers they are cheerfully engaging in acts of plunder.
The Budget does not signal an end to the 'age of entitlement', as there are still plenty of beneficiaries of government expenditure or foregone revenue. You don't need to be an economist to see that collectively the Budget measures will impact negatively on the income levels of the poor and disadvantaged. The discussion now must be who will pick up the pieces left behind by Government in developing a system with obvious gaps.
French economist Thomas Piketty argues that current conditions have set us on track for a return to 19th century-levels of inequality. The Commission of Audit proposals suggest that the auditors and the Government are keen to expedite this neo-Dickensian era. It's all done in the name of 'incentives' toward 'personal responsibility', but this cannot remain coherent in the face of those who will be hit hard by the proposed suite of cuts and co-payments.
With the Australian economy in disarray, the Abbott Government is showing keen interest in New Zealand's projected unusually high growth. But NZ's status as a rock star economy is in question from commentators who say it has never recovered from major policy shifts 30 years ago. In particular its sexy image on the global business stage does not translate to a better life for those on low incomes, particularly women and children.
Malcolm Turnbull assures us that something will come along to fill the gap left by the demise in Australia of Toyota and SPC Ardmona. But new sources of employment do not magically appear because they have been foretold by economic doctrine. Only about a third of those who are about to lose their jobs in car making or food processing are likely to find new jobs on equivalent incomes. Another third will probably never work again.
Australia tied with Denmark, Finland and Japan for the title of the world's least bribe-ridden country in 2013. Our cultural resistance to corruption has long been a major contributor to Australia's reputation as a good global citizen, not to mention economic prosperity. Pope Francis said last week that we all have our own idea of good and evil, and each of us fighting against evil as we conceive it makes the world a better place.
The Economist's leader writer and other international international observers including Joseph Stiglitz judged that, by most objective measures, Labor's achievements should be preferred to the Coalition's offerings. The big picture went unacknowledged in Australia's dismal, dispiriting election campaign.
Being born in Australia is a huge advantage. And having parents with money, a good education and connections always helps. Some of us have an advantage before we've even started school. But like the players in American psychologist Paul Piff's 'rigged Monopoly' experiments, those of us who do well tend to think we've earned our good fortune through hard work, talent and creativity.
Throughout the election campaign, both major parties have pledged to address 'cost of living' pressures. But a quick comparison with the economies of other industrialised nations confirms that Australians have nothing to complain about. If prices rise by 5 per cent but incomes rise by 10 per cent, households are better off, even if the cost of a petrol reaches a new pinnacle.
In some ways the intense focus on chemical weapons and red lines is diversionary. Enough blood has been spilt to paint a thousand red lines. 100,000+ people have been killed already. Is it somehow easier on the International Community’s conscience to think of families being ripped apart by artillery shells than dying from chemical warfare?
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