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Julia Gillard’s policy to prop up inefficient firms will be counterproductive

28 comments

In The Australian today (subscription required):
“According to Julia Gillard, things are difficult for Australian manufacturing as the resource boom threatens “to hollow out other sections of the economy”.

Written by Henry Ergas

February 4th, 2012 at 7:47 am

Posted in Uncategorized

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28 Responses to 'Julia Gillard’s policy to prop up inefficient firms will be counterproductive'

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  1. With friends like Julia Gillard, who needs enemies?

    Rafe

    4 Feb 12 at 11:23 am

  2. Having found the article – can someone explain the concept of productivity to these clowns?

    Do Keynesians ever talk about productivity?

    Rafe

    4 Feb 12 at 11:26 am

  3. Why, yes, yes they do. Usually around election time, where in order to do something different, they advocate throwing money at the problem. What could go wrong?

    entropy

    4 Feb 12 at 12:04 pm

  4. They frequently claim to have fostered strong productivity growth, usually in direct and undeniable contradiction of the facts.

    wreckage

    4 Feb 12 at 12:41 pm

  5. “boom threatens”

    The peculiar logic of the invaders from bizarro world.

    We should study their brains to find whether their crossed-wires problem is linguistic or perceptual.

    bruce

    4 Feb 12 at 12:56 pm

  6. Yes Bruce, and Gina is “raiding” Fairfax, and the Woolies discounting could get “worse”. It is a world of tops and turvs for these cross-eyed fairy fuckwits.
    Why don’t they bail out AWA so we can watch Aussie-made TVs?? Come on Dick Smith!!

    Ooh Honey Honey

    4 Feb 12 at 1:13 pm

  7. AWA made shit TVs in the seventies, and they still do, just with different owners.

    entropy

    4 Feb 12 at 2:58 pm

  8. Somebody might need to prop up Julia Gillard before she can on-prop anything.

    H B Bear

    4 Feb 12 at 3:34 pm

  9. Bear.

    You can’t prop up a dead (wo)man walking otherwise it will look like this time they’re plagiarizing Weekend at Bernie’s. She’s gone, one way or another.

    JC

    4 Feb 12 at 3:36 pm

  10. This is Hitler stuff, I go down ,you all go with me ! The follies of a dying ” government” that never really LIVED!

    Borisgodunov

    4 Feb 12 at 3:39 pm

  11. Calling them TVs is being very generous, “pixel bricks” might be a more ready description.
    By the way, does anyone know how we can maintain technological and manufacturing security/independence in this country if it’s not economically viable? I know throwing public monies at it isn’t the answer but what actually is the solution? If there ever is another serious war we seem to make nothing here, especially hi tech gear and weapons. Romans used to have state factories for such things but they also made money too.

    Simon

    4 Feb 12 at 3:39 pm

  12. FWA probably won’t be in charge of workplace relations!

    Forester

    4 Feb 12 at 4:06 pm

  13. Errr… you don’t have to tell us that here.

    Solyndra anyone?

    Alex Pundit

    4 Feb 12 at 4:33 pm

  14. By the way, does anyone know how we can maintain technological and manufacturing security/independence in this country if it’s not economically viable?

    There are only two things that can save Australia from conquest by a major power: one is neutrality and small-target status (best maintain open economic borders as it adds to the neutrality) and the other is powerful allies.

    If we wanted security in a military/manufacturing sense we’d also need more gun ownership and domestic arms-and-munitions manufacture. Since the majority don’t want that, it’s down to small target and/or powerful allies. Trade barriers do nothing to aid either cause.

    wreckage

    4 Feb 12 at 5:55 pm

  15. “…otherwise it will look like this time they’re plagiarizing Weekend at Bernie’s”

    Hahaha… that’s what the Sunday strategy meeting is: “Weekend at Julia’s” – an attempt to prop up her rotting corpse[1]

    [1]Not intended as a death threat

    Fleeced

    4 Feb 12 at 6:06 pm

  16. Labor policy: The problem with booming industries is that money then moves away from the failing industries. We should prop up those failing Industries with cash

    Fleeced

    4 Feb 12 at 6:09 pm

  17. Hahaha… that’s what the Sunday strategy meeting is: “Weekend at Julia’s” – an attempt to prop up her rotting corpse[1]

    hahahahahahhahahahahahahahahahahaha that’s right they actually are plagiarizing Weekend at Bernie’s with their weekend with the slapper.

    JC

    4 Feb 12 at 6:13 pm

  18. It’s not even a weekend. The butchers paper and textas brainstorming session to “solve the country’s problems” starts at 2pm Sunday followed by a BBQ at 5.30pm. So in 3.5 hours the the brains trust that is Labor will solve all our problems.

    Let 1000 flowers blossom.

    Gab

    4 Feb 12 at 6:41 pm

  19. brainstorming session … starts at 2pm Sunday followed by a BBQ at 5.30pm

    What’s the bet no one is on speaking terms by 5.30PM?

    ar

    4 Feb 12 at 6:48 pm

  20. What’s the bet they don’t start the brainstorming session with Wayne Swan, Tanya Plibersek, Joe Ludwig or Kate Ellis?

    H B Bear

    4 Feb 12 at 9:41 pm

  21. Being an economic ignoramus I have some questions that I hope someone can answer. Re the car manufacturing industry, what weight should we put on maintaining a heavy manufacturing industry as a strategic asset? Car manufacturers complain that all governments subsidize their own car industries. Is this true?

    Peter OBrien

    5 Feb 12 at 8:15 am

  22. How right she is: Government “help” to business is just as disastrous as government persecution… the only way a government can be of service to national prosperity is by keeping its hands off – Ayn Rand

    Calpurnia's Cat

    5 Feb 12 at 9:31 am

  23. Does the opposition have a policy? A plan? No, thought not. See how far Abbott’s aspirations will go :)

    Chris Grealy

    5 Feb 12 at 12:55 pm

  24. Peter

    You asked ‘what weight should we put on maintaining a heavy manufacturing industry as a strategic asset.’ Answer is none. Protected industries are a liability, not an asset.

    You also asked ‘Car manufacturers complain that all governments subsidize their own car industries. Is this true?’

    I don’t know if all governments subsidise their own car industry, but even if it was true, that is not a good reason for the Australian government to subsidise the Australian car industry.

    Any subsidy, regardless of what other governments do, is a complete waste of taxpayer’s money. Give the money back to the taxpayers and make the car industry get it off them by providing them with cars they are willing to buy. If an industry can’t do that, they don’t deserve the money.

    johno

    5 Feb 12 at 1:40 pm

  25. Johno,

    Thank you for your reply. What about the argument that our car industry cannot survive without exporting and that the current exchange rate makes this prohibitive, but it won’t always be thus so subsidies are just a means of tiding the industry over? Can such subsidies be justified if they are, for example, interest free loans?

    Peter OBrien

    5 Feb 12 at 5:18 pm

  26. The car industry has been subsidised since the dollar was at 60c. It is nonsense to claim this is emergency or special case funding, which personally I’m not against, especially if an industry can’t insure against the particular risk that’s biting them.

    Problem is that usually those one-off payments become entrenched. I’m also extremely suspicious of anything based on economic hardship, as that’s subjective; take stimulus for example. When is the slump bad enough to stim? When is the recovery good enough to stop? How do you decide that it’s a long term trough and can’t feasibly be stimulated away?

    wreckage

    5 Feb 12 at 6:20 pm

  27. Peter,

    Using Australian taxpayers to subidies the Australian car industry so it can export means Australian taxpayers are providing people overseas with cheaper cars.

    How does that benefit taxpayers?

    It makes no difference how the subsidy is provided, whether through interest free loans or direct payment, industry welfare can not be justified in any shape or form. Make industry earn their money by providing customers with something they want and let taxpayers keep their money to buy the things that they want.

    johno

    6 Feb 12 at 7:00 am

  28. Johno, Wreckage

    Thank you

    Peter OBrien

    6 Feb 12 at 7:27 am

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