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It’s the stupid economy, everyone!

Unemployment, inflation, and climate change

Here is my go at a “zero stats” summing up of the economy in the context of the federal election.

Not long ago it was covid19 up and dangerous, unemployment and underemployment up, insecure work high, wages down, interest rates really low, rents high, inflation stable.

A recession, the “covid recession”, as some called it.

What’s the difference now? Unemployment now down (the headline number), wages still down – contrary to mainstream economic theory – prices rising, sudden and dramatic inflation and now interest rates up, covid19 still raging but, apparently, less dangerous. Foodbank usage heading north. Rents rising and unaffordable for more of the low paid and welfare benefit dependents.

This is a recovery. Apparently. So we are sold. How long can it last, you wonder?

Along the way, carbon emissions and atmospheric temperatures leading to crazier weather and climate change that destroys communities, jobs, productive assets, infrastructure and livelihoods for the majority, all of whom dependent on wages.

Grizzling about low wages continues to increase but doing something about it remains stagnant; occasional enterprise bargaining struggles stay occasional. The minority can now make money trading in carbon pollution.

Profits remain rarely discussed and if possible avoided. They have been rising – although little jiggles up and down – over several years. The message? Profits have nothing to do with anything. Yet we still live in a profit system. The productive investment from those profits has been going down. Unproductive "investment" very high. Profits relative to total investment probably stagnant, maybe worse.

The answer? Billions of dollars of government-funded pump-priming – direct fiscal funding for a year or so, monetary policy billions from the Reserve Bank for a longer time that allowed the recipients (a variety of financial corporations) to spend on the stock and money markets. That would not have been the Morrison-Fraudenberg answer if it was an ordinary recession rather than a special, covid recession.

Thus, public sector debt is high and growing. Ditto private sector, mainly private corporations. Ditto for households.

The recovery emerges out of the “covid recession” that was managed by the Morrison government using laborist economic tools instead of its usual devotion to neoliberal tools (harsher austerity).

Again, how long will it last? We all know that it won’t be for very long. Recession is already being discussed in other capitalist economies. The number at national and global levels who live closer to and in poverty ratchets upwards in every cycle.

So, recession produces recovery that, in turn, produces recession. Why is that, really? A reasonable question still kept off the agenda, except for the contest of who is better at managing it?

So, inside the Morrison-Fraudenberg recovery are the ingredients of the next recession and further hardship for a bigger part of the majority in community-destroying climate change impacts, unemployment, underemployment, working multiple low paid jobs, downward pressure on wages, wasteful social wage spending in aged care, child care, privatized social housing and so on.

Wow! What a system. Is there anything more stupid?

Maybe there is? The majority complaining but, in the end, giving its consent so that it continues?

(This is a work in progress, and I welcome your critique. It’s also mainly a description with barely a hint of cause(s). Let me know if you would like a version with some stats and a graph or 3. Don’t rush me.)

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