Author: <span class="vcard">Josh Adamson</span>

Central bank monetary meddling spells Groundhog Day for the global economy

The stock market dip in October saw an onset of hysteria regarding the state of the global economy, with many analysts asserting that another sweeping worldwide downturn is imminent. Trade tensions, a poorly timed US fiscal stimulus, slowing Chinese growth, and a messy and uncertain Eurozone have signalled to many that the perfect storm is brewing which may spur another global recession.  

But as most of our economists, policymakers and journalists mull over economic indicators and look towards the horizon for an impending crisis, others argue the symptoms of another global economic catastrophe have been unequivocally fixed in the rear mirror since 2008.

September marked a decade since the bursting of the housing bubble in the US which triggered the collapse of the stock market and economic meltdown felt around the globe. Governments and central banks subsequently took actions to stimulate demand by pumping money into their respective economies and Read the rest

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Intervention will NOT solve our energy crisis

The Liberal cabinet have officially dumped the contentious National Energy Guarantee (NEG), but Scott Morrison and new Energy Minister Angus Taylor are now faced with a policy vacuum which they urgently need to address.

The combination of modest wages growth and higher electricity prices are hurting Australian households, who have been forced to endure a 56 per cent increase in real terms on their electricity bills over the last decade. The NEG, formulated to address the “energy trilemma” of security, reliability and affordability on a national scale (excluding WA and the NT), was the Turnbull government’s answer to the crisis, but ultimately sparked  its demise.

In their rejection of the defunct NEG, the new Ministry stressed that emissions reductions have been stripped away from the energy portfolio. Taylor instead has revealed a renewed focus on affordability for households and businesses, and hopes to be recognised as “the Minister for reducing Read the rest

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We’re all Keynesians now

Classical economic theory is all but extinct within the lecture theatres of universities worldwide, and Keynesian thinking dominates the decision making of governments internationally. Keynesian economics advocates for state intervention in the economy, arguing that it is necessary to moderate the business cycle and provide overall economic stability.  Regrettably, most modern policymakers now accept Keynesian economics as truth, rather than as contested theory.

But this was not always the case. In 1981, Margaret Thatcher went head to head against 364 distinguished Keynesian economists, and won.

Among the 364 economists were seventy-six past or present professors, a majority of the Chief Economic Advisors to the government in the post-WWII period, as well as 11 senior members of the Royal Economic Society.  Each of them disagreed with Thatcher’s strategy to decrease the British fiscal deficit by raising taxes and cut public spending in a time of recession, but by showing a … Read the rest

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