Bits and Pieces.

I think we can give up hope this third consecutive La Niña will be any better than her two previous sisters.

On Thursday 6th Sydney broke the record for the rainiest year since data collection began in 1858: that day rainfall over Observatory Hill meteorological station totalled 2,206.8 mm. The previous record (2,194.0 mm in 1950) had stood for 72 years.

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To give readers – particularly European ones – an idea how much rain that is: in the 278 days of the year from January 1st to October 6th 2,606.8 litres of water fell over every square metre around Observatory Hill (1,000 litres of distilled water weigh 1,000 kg: one tonne).

From October 6th to the end of the year there are 87 days.

Anthony Albanese’s Self-Imposed Constraints.

Given the news, it’s hard for an environmentally-conscious socialist worker to focus on a single topic.

Think about it. Should I focus on the catastrophic drought, heat wave and/or wildfires afflicting Europe, north Africa and Asia? What about the megadrought that left Lake Mead dry? Should I focus on it, instead?

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Or, rather, should I report on the unprecedented rainfall – and unusual snowfall – in southeastern Australia?

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Some parts, registered four major flooding events since March:

Quotable Quotes.

“I don’t know how they want to get undressed, above or below the waist, but I think it would be a disgusting sight in any case”, Volodya Pew-teen, as quoted by AP.

I’m just a low-income, sort-of white, ageing, male, semi-educated Aussie worker: a pleb. To rub shoulders with such VIPs is not one of my many privileges, so I have no direct, personal knowledge on those matters and it’s impossible for me to say either way.

Hoisted with Our Own Petard (Updated).

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There’s little need for words: Western economic sanctions on Russky gas and oil. Fuel prices go up. Price of everything follows (“Putin’s price hike”). Fed lifts interest rates. RBA follows.



Next … recession?

Productivity.

The Tailor of Folk Suits. [A]

Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker. – Paul Krugman.

It’s an election campaign and pollies are not debating productivity. Imagine that.

Well, they aren’t debating many things. For example, last year, by this time, all the talk was COVID. Today? Not a peep. More importantly, climate change is at best an afterthought.

 

But it’s productivity that the economically-minded Very Serious People, like Laura Tingle, have in mind as the most important thing ever:

The good news is that growth and employment are strong. The bad news is inflation and interest rates are rising and are going to keep rising and wages are only just starting to pick up. That brings us back to one of those issues we just aren’t talking about in this election.

Which is? Cut to Danielle Wood, CEO of the Grattan Institute:

If we’re serious about getting real wages growth for the longer term, we really need to be talking about productivity and that is actually something that’s been missing from this election campaign.

May Day, May Day! Wages Down! Wages Down!

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In the last 23 years nominal wages growth in Australia peaked in the second half of 2008 (4.3%). Since then, with partial and short-lived recoveries, the general tendency has been to a fall. We seem to be in the midst of one such recovery: from a low of 1.4% in the second half of 2020 to 2.3% by the end of 2021. When will this recovery, very partial as it is, stop or how much ground will it regain remains to be seen.

Although not ideal, in the low-inflation environment prevalent in Australia for much of the time since September 2013 (when the incumbent COALition took power), federal policy-makers found little political pressure to lift wages: wage-earners may not have felt financially buoyant, but on average they could keep pace with the cost of living.

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Scott Morrison as Manager of the Economy.

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The election campaign is on. Scotty from Marketing went to the National Press Club to spruik his credentials as economic manager.

In a long, long speech – so long, in fact, that Deputy PM Barnaby Joyce seemed to struggle to stay awake – Scotty uttered more than 5 thousand words, not counting his answers to the journos present for the Q&A session following the speech.

In well over the half an hour allocated to the speech, he spoke about a lot of things, among them “jobs, jobs, and more jobs”.

Bits and Pieces: The Big Apple.

It’s often said that “if you can make it there, you’re gonna make it anywhere” and Scotty from Marketing is virtually there, baby, New York City. And he is trying to make it there, but equivocating here.

Often forgotten, however, is that old advice – “fake it, till you make it”. That seems to have worked a treat for Scotty when dealing with Nancy Pelosi, the US House Speaker. The 81-yo Pelosi, impressed by his “meeting and beating” climate targets bullshit, said that Australia is “leading the way” on climate change action.

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That’s how Australia will save the world, Nancy: leading from the rear.

Workers’ Mail: Australian Workers’ Wages are Going Backwards.

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ACTU media release:

Workers’ wages in Australia are more than remaining dismally stagnant – they are in fact going backwards in real terms.

The latest Wage Price Index data released today shows that real wages have fallen by 2.1% over the last 12 months. In this quarter, wages growth has been only 0.4%, while inflation in Australia has increased to 3.8%.

In addition to those shocking figures, the public sector recorded wages growth of only 1.3% this year - its lowest annual rate of wages growth since the ABS started tracking this in 1997.

Prof. Bill Mitchell gives a panoramic view of the Australian labour market: wages, employment.

Nothing New Under the Sun (Updated).

 

 
Maybe things are different elsewhere, but in Australia you can hardly read the news or watch TV news reports without hearing about how hard it is for local businesses to recruit staff. And you hear those tales of woe whether unemployment is high or low, in good or in bad times.

After a while, if one pays attention, one realises that kind of story seems to follow a template or a script.

Are You Sure You Can Read?

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Well, that’s an unusual, even odd, question, isn’t it?

Indulge me.

Union News: the Good, the Bad, and the Ugly.

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After six weeks the McCormick strike is over … and the workers won!

Not happy with having denied their essential workers any pay rise the last five years, this year – after having its workers working throughout the Victorian lockdowns – McCormick wanted a repeat. But not even that was enough for McCormick: they also wanted to slash working conditions.

Workers’ Mail: IR Omnibus Bill and Superannuation.

 
Michele O’Neil, ACTU President, emailed workers these days. I want to share some passages from her email, so as to explain Australian readers the situation we face and to ask for their help.

O’Neil explains what the Morrison regime wants with their IR Omnibus Bill:

• “Give employers the power to bring in workplace agreements that reduce workers’ job security and cut take home pay and conditions. Specifically, the Bill will allow workplace agreements to be exempt from the Better Off Overall Test (BOOT).
• “Wreck secure jobs by giving employers the power to wrongly classify workers as casuals even when they have ongoing regular work.
• “Remove overtime payments and certainty about hours from part time workers.
• “Hand multinational corporations the power to dictate wages and working conditions through 8-year long ‘Greenfield’ agreements - leaving workers on large construction projects with no say over their conditions and rights, and no ability to address serious work health and safety concerns.
• “Weaken the wage theft laws that are in place in Victoria and Queensland.”

I subscribe to her appraisal and will try to complement it.

The War on Superannuation.

Superannuation always was a dumb idea, from the very start. It’s not just that often super funds are terrible at doing what they are supposed to do: provide decent returns to account holders. It isn’t either that that poor job frequently costs account holders an arm and a leg; or that bosses steal the contributions their staff make to their super accounts; or that it creates a pot of money lots of greedy bastards have their greedy minds set on; or that it allows COALition governments to shower their supporters and only their supporters with all sorts of handouts, which then become untouchable.

Bad as all that is, it’s mere manifestations of the idiocy intrinsic in superannuation, not the main reason why it’s a really terrible, terrible idea.

Unions in Australia: Reality and Fiction.

 
After some fifty years of relentless “neoliberal” onslaught, unions still make a difference for Australian workers.

You don’t need to take my word for that. According to the latest ABS release on trade union membership, “median weekly earnings for employees who were trade union members in their main job were $1,450 per week”: $350 (or 32%) more than their non-union counterparts.

With only one exception (salespeople), that holds for staff ranging from managerial and white collar down to blue collar workers. Indeed, for community and personal service workers the difference is a whopping 60%.

The UBI in Australia?

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Before talking about something, it’s always a good idea to understand what is it one is talking about. That applies to everything, the much-talked about UBI included.

It’s not clear, however, that people talking about the UBI really understand what it is.

So, let’s try that.

UBI stands for Universal Basic Income. “Basic income” refers to “a periodic cash payment unconditionally delivered to all on an individual basis, without means-test or work requirement”.

“Universal” highlights something present in that definition: all members of a community are entitled to the UBI. In Australia that would mean that the Government regularly pays every citizen/resident an amount of money – presumably equal – no strings attached.

Last but not least, implicit is the idea that the UBI is permanent.

By itself this definition raises some evident questions (for example: How much money those individuals would be paid? Where is that money coming from?). They are important but the answers to them depend on many things, including what money is. So, we’ll bypass them.

So, Where do Profits Come From?

There we go! Geronimooooo! (source)

For the first time since 1991 Australia registered two consecutive falls in its quarterly GDP figures: we’re officially in recession.

Today ABS released national accounts data corresponding to the June-August quarter and the picture ain’t pretty: GDP growth of -7.0%, the largest quarterly fall on record.

Those interested in those numbers can go here:

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So, I Actually Hate the JG, Who Knew?

This is not rocket science, Brian (see also).

A recent exchange I had with online MMTer Brian Romanchuk -- from Canada -- about one of Chris Dillow’s posts turned out to be full of unsuspected revelations. Readers may find it as enlightening as I did.

Dillow, following Michal Kalecki’s famous 1943 essay “The Political Aspects of Full Employment”, argued that full employment (therefore a Job Guarantee) is unlikely in democratic capitalism.

(Arguably, the priority for so-called Keynesian economics should go to Kalecki and not to Keynes, at least if one believes Joan Robinson – probably the second name in the pantheon of “Keynesian” economists and contemporary of both men – and Prof. Bill Mitchell, one of MMT’s founders.)

Bear with me.

The Week that Was.

The talk of the week was the Economic and Fiscal Update delivered jointly last Thursday by federal Treasurer Josh Frydenberg and federal Minister for Finances Mathias Cormann.

The main figures? Here goes, courtesy of The New Daily:

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And this:

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The IPA and Per Capita: Two Peas in a Pod.

Yesterday Alan Kohler published a piece calling to end the debt and deficit fallacy. He is -- as I am -- worried about all the talk of paying the debt. Not just that, in that column he makes a positive reference to MMT and to Stephanie Kelton’s new book “The Deficit Myth”. And, get this, that appeared in the pages of The Australian, flagship of the Murdoch presstitute.

The panic scorn from COALition bigwigs was as predictable as it was quick to come. First in order of seniority in the federal Government was Mathias Cormann (the Arnie Schwarzenegger soundalike, who is -- or might have been -- a lawyer in his native Belgium):

“The worthlessness of Venezuela’s currency is the result of inflation, 46,000% a year, which in turn is largely caused by the printing of money to finance the government’s deficit of 30% of GDP.“ #wrongdirection #budgetrepairmatters @TimWilsonMP https://t.co/15kMNkd8uW https://t.co/AXPy800uW0

— Mathias Cormann (@MathiasCormann) June 22, 2020