Here’s the front page story in The Oz today: Aussies no better off since GFC: household incomes stagnant for past decade. From which:
“Over the eight-year period from 2009 to 2017, average household income grew by only $3156, or 3.5 per cent, while the median in 2017 was $542 lower than 2009,” the report, which has tracked the circumstances of more than 17,500 Australians since 2001, finds.
The share of households in relative poverty — living on less than half the median income — rose to 10.4 per cent, according to analysis released today by the Melbourne Institute that will add to the controversy about the adequacy of Newstart, the government’s jobless payment.
All as obvious as the morning sun, if you can do away with modern macroeconomic trash and return to pre-Keynesian theory. From my tenth anniversary warning on the stimulus published in Quadrant:
Just as the causes of this downturn cannot be charted through a Keynesian demand deficiency model, neither can the solution. The world’s economies are not suffering from a lack of demand and the right policy response is not a demand stimulus. Increased public sector spending will only add to the market confusions that already exist.
What is potentially catastrophic would be to try to spend our way to recovery. The recession that will follow will be deep, prolonged and potentially take years to overcome.
— Steven Kates, Quadrant, March 2009
Why have the IMF, the OECD, the ILO, the treasuries of every advanced economy, the Treasury in Australia, the business economists around the world, why have they got it so wrong and yet you in your ivory tower at RMIT have got it so right?
— Question to Steven Kates from Senator Doug Cameron,
Senate Economic References Committee, September 21, 2009
I caught on to classical economic theory in 1980 and have spent the years since watching in every circumstance how accurate the economics of John Stuart Mill actually is, from the failure of every single “stimulus” put in place anywhere in the world to stimulate, through to watching the recovery that followed the massive cuts to public spending brought on by Peter Costello’s budget in 1996 and the return, not just to balanced budgets but zero debt. Modern Keynesian economics is junk science and has never worked on a single occasion during the entire period since The General Theory was published in 1936.
Read my text if you are interested: Free Market Economics, now in its third edition. And here is the endorsement from Art Laffer, the genius behind the Reagan recovery and now also complicit in the recovery in the United States:
‘This book presents the very embodiment of supply-side economics. At its very core is the entrepreneur trying to work out what to do in a world of deep uncertainty in which the future cannot be known. Crucially, the book is entirely un-Keynesian, restoring Say’s Law to the centre of economic theory, with its focus on value-adding production as the source of demand. If you would like to understand how an economy actually works, this is one of the few places I know of where you can find out.’