Cryoeconomics: how to unfreeze the economy

My RMIT University colleagues (Darcy Allen, Chris Berg, Aaron Lane, Jason Potts) and I are frantically writing up our next book:

Cryoeconomics: How to unfreeze the economy.  

The Australian government, like many governments around the world, wants to freeze the economy while it tackles the coronavirus pandemic. This is what the Commonwealth’s JobKeeper payments and bailout packages are supposed to do: hold workers in place and keep employment relationships together until mandatory social distancing ends.

Easier said than done. We are in completely uncharted territory. We’ve never tried to freeze an economy before, let alone tried to thaw it out a few weeks or months later. That’s why our new project, cryoeconomics, looks at the economics of unfreezing an economy.

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13 Responses to Cryoeconomics: how to unfreeze the economy

  1. Tim Neilson

    For all her intellectual failings Ayn Rand was quite perceptive and prescient about the “progressive”mentality.

    In “Atlas Shrugged” Mr Thompson’s government tried to freeze the economy, just till the crisis was over. It didn’t end well.

  2. Robber Baron

    Give everyone free money.

    They spend it.

    Everything is back to nornmal!

    If that doesn’t work, give them some more free money.

    Continue with larger sums until the economy is fixed.

    There you go Sinc. I’ve writren your book for you.

    You can thank me later.

    Signed. Josh Maynard Frydenberg

  3. Pyrmonter

    This was rather neat. Won’t go down well with the big government anti market types haunting the Cat though

  4. one old bruce

    I was thinking similar things as you touch on in the article Sinc, while trying to convince my fashion and cafe-mad daughter on those lines – things will not be the same, at least not right away. She’s a bit like Audrey Hepburn in Breakfast at Tiffany’s, anxiously awaiting the reopening of Myer and Witchery and so on. ‘It’s only temporary’ she insists.

    ‘Creative destruction’ isn’t it? Some things will become bigger, others will likely disappear.

  5. Rafe Champion

    She nailed collectivism and the progressive mentality. It is a great shame that she took on some weird ideas and generated a cult that disintegrated into warring factions. The Randoids might put their bodies on the line to defend freedom but they never made the effort to explain the importance of limited government and well-functioning markets in language that ordinary folk could understand. I suppose that begs the question, are we doing better?

  6. Rafe Champion

    PS and OT Maybe everyone should read Sapiens: A brief history of humankind by Yuval Noah Harari as suggested by the Doomlord. My wife is having a ball with it. But she loves wombats and she was sad to find that when Sapiens arrived in Australia they found two and a half ton wombats and a lot of other very large marsupials and they killed them all.

    Back on topic, there are people with some connections in the PM’s office who have done some work very quickly including economic and epidemiological modelling to make the case to keep as much as possible working instead of going down the NZ road of almost complete lockdown. They are not getting through to the NSW Government.

  7. Squirrel

    “As soon as the JobKeeper payments end, many of the jobs that they have frozen in place will disappear. ” (from the linked page)

    Precisely – the Dolce Vita economy, which has been enjoyed by many Australians over recent years, won’t be coming back at anything like its old level. The money, including “wealth effect” debt, won’t be there to pay for it, and many who have hitherto never experienced truly tough times will now be chastened when it comes to discretionary spending.

    Every effort will be made to avoid it, but this crisis should be the impetus for a long overdue rationalisation of the duplication/triplication between federal/state-territory/local levels of government.

    The broader culling of regulation in the economy should likewise fully apply within the public sector – there must be scope for BIG savings by cutting out the managerialist claptrap which would have proliferated (with lots of well-paid b/s jobs) in these past few decades of boomtime revenues for governments.

    The nation needs a lean and hungry, outwardly focused public sector with a minimum of back office bureaucracy.

  8. Peter Finch

    “In “Atlas Shrugged” Mr Thompson’s government tried to freeze the economy, just till the crisis was over. It didn’t end well”. Can some one please send a copy to Slomo?

    “The nation needs a lean and hungry, outwardly focused public sector with a minimum of back office bureaucracy”. Makes sense but will never happen while the PS is fat, overfed, inwardly focussed with highly inefficient back office systems. What is the catalyst to change all this? The Australian character has changed from the do anything larrikin (Anzacs) to the do nothing, ambivalent. I remember saying 20 years ago that when my generation moves out from managing business/politics/the economy et al then look out because the snowflakes will melt and everything will go down the toilet. All happening before our very eyes.

    Feel sorry for your grandkids and great grandkids and then their spawn because they are going to pay for the hopeless decisions of the current generation in control. If Slomo keeps going on his current ‘strategy wonk” then we are heading for an economic crisis beyond anything this country has ever experienced before, i.e. the Depression of the 21st century.

  9. TPL001

    Sorry, but no socialist can freeze an economy and believe that things will be the same after. The whole structure of production is changing. And the growing dependency on the state for handouts and for zero interest and easy money means that its tendency is to curtail the inherent drives of self interest in general. Are we setting the stage for the Japanification of a low-growth future Australia?

  10. MatrixTransform

    Give everyone free money.

    Dan Murphy’s laughing their arses off

  11. Tel

    In unrelated news, I’m requesting a few suggestions on how to uncrash this double decker bus that I appear to have driven off an overpass.

    Ideas soonish if you don’t mind because it’s starting to catch fire.

  12. 2dogs

    These economists are worried about too little economic activity after the restrictions are lifted?

    When it was imposing the restrictions that reduced economic activity initially?

    How big can that hysteresis be?

  13. Elizabeth (Lizzie) Beare

    Instead doing as they should to bring us back from the brink and claw back our economy, i.e. lifting stupid regulations, cancelling submarine fantasies and ditching crazy policies that kill our cheap energy I have a crystal ball to our future: they will turn to plunder, good and hard. Superannuation take overs and death duties cometh as the miasma of socialism descends over the land like a new virus. Prepare to be taxed.

    Face it. Nothing will change in the path that we are on.

    But good luck with that book, Sinc.

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