Friday, 30 October 2015

Control of the Australian Economy and Industry: A Letter to Prime Minister Malcolm Turnbull


Dear Prime Minister,

The power to control what happens to our economy rests upon simple decision making. We ('the Government') can decide what sort of industries should be retained (within reason) and what sort of controls are placed against outsourcing, in order to avoid the US model in which there are not enough jobs available for the general population.

Over the last few decades US industry exported, largely to China and Mexico, its productive base, in the interests of garnering ever increasing profits (which is excused by invoking the 'uncompetetive industry' meme). What we saw was an example of capital chasing after cheap labour at the expense of domestic jobs. The loss of these jobs undermined the US taxation base, caused a huge trade imbalance and has thrown vast numbers of the population into poverty that causes a further financial burden on the economy. Australia must look at the US situation and learn from this mistake.

Two points about the present state of the US economy.

1. Their real unemployment rate is not 5%. According to the more accurate official U6 figures the unemployment level is at least 9.6%. Independent analysts, from sites like Shadowstats.com, show the US unemployment rate is closer to 20% if calculated using 1990s methods.

2. The rise in the US stockmarket is not reflective of the wider US economy. It is a product of financial engineering with central banks (including the Swiss central bank and Wall Street proxies acting on behalf of the Fed) buying key stocks that have boosted the Dow Jones to record levels.

Money printing and financial gaming is not 'the economy'. Finance is supposed to support productive activity. Today we see that finance has largely replaced real productive activity - at least in large sections of Western economies.

To enable a truly vibrant economy, multiple levels of activity and innovation need to be encouraged and kept operational within sovereign borders. Various industries should not be sold out from under sovereign control. To fully understand the issue I urge you to either read Dr Paul Craig Roberts' book 'The Failure of Laissez Faire Capitalism', or watch the following interview with Roberts by the Henry George School of Social Science (https://www.youtube.com/watch?v=vRw3HeTCLFc), in which he explains the decline of the US economy.

Understanding what happened to the US is vital.

Prime Minister, with this in mind I ask that yourself, and Cabinet (after they are briefed on the above material), reconsider the decision to no longer support the Australian car industry. The damage to employment, by many estimates, will exceed 100,000 jobs, perhaps double.

We have been told that our car industry is 'not competitive', but does this simply mean that the automakers are taking the opportunity to offshore production to increase their profit margins?

What we do know for a fact is that there is no level playing field when it comes to manufacturing. Foreign Governments support domestic production and past Australian Governments were wise to do the same. Ideally, it would be good if an Australian-based company produced cars or alternatively, if the existing manufacturing plants were purchased by sovereign interests.

If we do nothing we will simply be victims of this wealth destroying process. Push the situation to an extreme, where you ask, is it beneficial to 'outsource all production to increase profits?' The answer is obviously no. A large section of the population without jobs won't be able to buy anything, even at reduced prices. Therefore you must take action and decide at what point to impose outsourcing restrictions.

Losing our car manufacturing capability will certainly be a disaster. The idea that new industries and jobs will arise is a fantasy. This did not happen in the US and it will not occur here. What we will get is an increased trade imbalance.

The idea of 'free trade' originally was for fair trade. 'Like' for 'like' trading. Please keep that in mind.

Prime Minister, the aim of the Government, is to serve the interests of the people at large, providing stability, and in regard to the general economy, to grow and/or retain wealth within the sovereign borders of the country. Please take seriously the information and argument I offered here in good faith.

Sincerely
 
XXXXXXXXXXXXXXXXXX

[Posted at the SpookyWeather blog, October 30th, 2015.]

No comments: