Monday, December 8, 2008

OZ politicians - solving the crisis

Here is my take on some of the *contributing* factors around the current *crisis* and why it won’t be fixed anytime soon by our political class.

For over seventy years we as a nation have allowed our governments the freedom to attempt to *pick winners* at their sole discretion. Mediocre politicians have had a merry time with our money flashing it about to this or that cause – investing here or there – all in the hope that some of it will stick and that it will result in a sustainable and viable *industry* - creating that holy grail – "employment".

These same politicians would then go to confession and say "there – we did our bit for the nation" - in the hope that it would result in a gong or sinecure of some sort.

Seventy years ago they tried it with the car industry, then the aircraft industry, the defence industry, the oil and gas industry, the steel makers, the aluminium producers, the energy companies, the telco industry, the banking industry, the retailers, the wine industry, the mining industry, the fishing industry, don’t forget the farmers and the services industry. Have I missed anyone?

We have had just about every - old world industry on the planet asking for and getting some form of help, assistance, tariff or preferential treatment by our various governments – state and federal. And they are still at it.

Forget the lean, clean and modern IP based industries of the future - they are too complex for our political class to understand.

And here we are in late 2008 and strangely, we cannot point to any one of those needy - old world industries actually being world class, standing on their own and weathering the *crisis*. In fact they are all demanding yet more *assistance* to see it all through.

In a word – it’s "bullshit".

Our car industry is a classic – propped up by featherbedding, tariffs and government assistance – it has been in a class of it’s own – all because of the numbers of workers in the system.

Australian’s have been paying more than 20% too much for cars for eons. Government’s have been paralysed and unable to act for fear that they will be seen as the "bad guy" when the industry collapses – as it now has. Mind you the signals have been obvious for 5 or more years but the paralysis has just meant more inaction. It’s a tragedy – especially for the workers.

And Joe Citizen is not totally stupid – he has seen this unfolding and has reasoned that if the car industry can get away with it for so long then he will try to game the system as well. This is one of the reasons why Joe and his friends and family have been paying too much for houses – they reason that if governments can make us pay too much for cars for 70 odd years then what’s wrong with doing the same with houses for a few years? Good question.

And some of those same political class think that the future of the nation hinges on a $10 billion distribution to welfare recipients this week.

A welfare led recovery ;-) now that is unfrigginbelievable.

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