Monday, February 11, 2013

Falling Between two Stools

I have just posted a set of articles on MagusInk, celebrating the creative genius born out of the Dust Bowl phenomenon in the USA during the 1930s - The Muse does some hardtravelin This set of stories looks at the contributions of writer John Steinbeck, photographer Dorothea Lange, and ‘The Dust Bowl troubadour’ Woody Guthrie.

Two aspects really struck me out of my research, first was the difference a little dignity can make to the degradations of poverty. It is bad enough to be cold, hungry and homeless, but adding social pariah status and blaming the victim  makes breaking the cycle nearly impossible. The voices and images of this trio at least gave a human face to these victims.

The other revelation, to me at least, is that I’m not the only one to constantly fall between two stools, and into an odious pile of shit. Perhaps the only thing I have in common with Guthrie and Steinbeck, and it did help to relate better to them. Both had a strong social conscience, and  neither was comfortable with aligning that with any particular fixed and organised group thinking.

Steinbeck in particular was reviled by the political right and left in the USA. On the other hand he attacked capital and labour organisations with equal intensity. If  he, or Guthrie dallied with socialism and communism at times but was clearly incapable of becoming embedded with organisations. 

Both he and Guthrie were really only at home with their subjects, the dispossessed and the grafters and showed little interest in ideologies and dogmas. Having to compromise or stay quiet for the sake of being part of a group was simply not in their DNA. Not that that stopped the right from labelling and attacking, especially during the McCarthy Era. However both seemed to take those attacks in stride and often somewhat humorously.  

I guess the real point is that they could have made their lives a good deal easier in some respects, no doubt at the cost of being able to live comfortably with their deep passions. Sometimes the trade off is not worth it and thankfully that pair were never really tempted by it. Instead, along with Lange, they have left a valuable and instructive legacy.


Lindsay Byrnes said...

Great post.

On the economy I think we need to have a more credible sustainable long term plan to rein in our ballooning debt.

This is necessary to ensure we avoid becoming engulfed in the same chaotic debt trap evident in much of Europe.
The claim that the government’s stimulus measures insulated us from the adverse effects of the global financial crisis is a tenuous one; what we can say is the combination of previous surpluses and extremely favourable terms of trade fortuitously acted as a temporary boom to the economy.

But the resource boom is coming to an end, with the government’s tax take sharply down.

What I think is now needed is a fresh approach to ensure current outlays are covered by more realistic income projections as distinct from long term investments. Long term investments in infrastructure can still be funded from the sale of government bonds provided the investments have a payback in the form of improved productivity. The aim should be to reduce total government outlays from 35% back to 30% - but gradually and combined with capital spending to enhance our productivity - not more unfunded election promises. what do you think ?

Cartledge said...

G'day Lindsay, thanks for the thumbs up. On your economic thoughts, it seems an area where we generally have broad agreement.
I personally feel our various governments have missed some great opportunities to position the country for another generation.
The lock step refusal to invest in our future has almost seen the pass us by completely, once again.
With the ill-founded drive to make the Aussie dollar supreme coming to fruition we now have even more pressures on delivering essential infrastructure projects.
Your suggestion of a government bond solution, state as well as federal I hope, make total sense. Better than the ill-founded PPP scenario which still seems to occupy the feeble minds of our policy makers.
For a start it would perhaps give some certainty to the country's huge superannuation investment, save it from the vagaries and panics of the market.
Along with the fact that it anchors the funds here, it avoids the issues of the dollar movements. Money within the country retains its absolute value as opposed to overseas investment.
No doubt we would still be in a user pays mode, however industry should be expected to pay equitably for its use of infrastructure, with limits on what can actually be passed back to consumers.
The blackmail threat on jobs by industry is old hat. Perhaps it is time to move back to governments taking responsibility for major infrastructure development, and consequent job creation.
Another consequence of that might be the increasing need to train skilled trades and other workers, once the province of government corporations.
Private industry has let us down badly, but I'm not sure we have any leaders left with courage or strength to recalibrate the system.

Lindsay Byrnes said...

Agree and as far as an “ Overvalued Aussie dollar” I remain concerned at the lack of action by our Reserve bank.

Note the “Russian central bank is behind the strong $A” (AFR, November 12), according to Joanna Heath who reported on yet another increase in deposits held at the RBA by overseas institutions, a group that includes central banks.

Not much has changed to the position since then - if anything the position is worse when deposits ratcheted up to be at their highest since May 2009, having increased by just over $1 billion in just 11 weeks, and include overseas institutions believed to be buying $A from Europe, the Far East and Asia. This increased demand for our currency is exasperating existing temporary high levels of demand arising from increased capital flows to support large-scale mining investment. The last set of national accounts show capital inflows are continuing
Although the RBA is attempting to limit any upward demand pressure on the exchange rate from these latest capital flows with off-market deals to in effective print currency, much more needs to be done.

Our current high exchange rate is crippling exporters and import-competing industries.

The exchange rate will stay stubbornly higher until such time as these temporarily increased capital flows fall back to more normal levels.

In the meantime, the RBA needs to actively intervene to bring down the currency to its fair value until such time as it begins to depreciate in line with our declining terms of trade.

Cartledge said...

I'm not convinced that the RBA has much clout anymore Lindsay. Between poor government policy developments and the global market they seem increasingly neutered.
Perhaps it is time government resumed its responsibility, though despite the good record of Treasury there does not appear to be much coherent economic policy now.
Is it time for a radical makeover? Not so much an isolationist approach, but one which would at least insulate the Aussie within Australia.
The vital infrastructure development we've mentioned and rebuilding our manufacturing sector would both work to that end.
The key part is getting over the fixation on free trade and global markets. If our products are good enough they will sell, if not we will still be looking after our own needs.
We don't need a tariff wall, just a targeted picket fence. The value of the Aussie is only a problem externally. Problem is that we need to give some intelligent people control of the levers, and petty politics would no doubt preclude that.

Lindsay Byrnes said...

True – What is needed is a pragmatic bold leadership with a plausible vision for the future.
The absurdity of the RBA constrained to monetary policy is apparent. Urgent action is required to change its mandate so that its narrow focus is expanded to be responsible for the maintenance of full employment independent of government influence.
This would also require an expansion of its Balance Sheet to ensure it has the firepower to actively intervene in currency markets to reduce or increase an exchange rate temporarily where it got out of kilter to ensure economic settings supportive of full employment.
Government infrastructure bonds amd alliances with Asia
NBL – accelerate funding and expansion into regional areas with issuances to eland expenditure another 50 Billion
-Joint economic infrastructure, environmentally sustainable – with Asia - up to 1 trillion over the next decade
Since the global financial crisis Australia’s reliance on Europe and the US for investment and trade has dried up but we have been shielded by increased demand flowing out of Asia. The reality is that the old ties of Europe and the United States, now weakened by excessive debt, will be unable to support us as they have in the past.
We are now much more reliant on Asia for our future, but this reality does not seem to have penetrated our anglicised ideology. What is not understood is that “Australia’s AAA credit rating would look very vulnerable if we were red-lined by offended state capitalists”.
In marked contrast conservative Canadian Prime Minister Stephen Harper is actively courting Beijing. In a deals recently announced worth $15 billion, China National Offshore Oil Corporation has now agreed to pay a 61 per cent premium at $US27.50 a share for Nexen in Canada with an intended listing on the Toronto Stock Exchange.
Granted, Australia’s geographic location contrasts to Canada, but surely it is overdue for the Coalition to commission an independent expert review on investment and trade policies relevant to our present circumstances.

Lindsay Byrnes said...

And I’m afraid the Greens leader Christine Milne , who recently said that the RBA used certain assumptions and multipliers in its figures to overstate the figure of over 1 million employed in the mining industry calculated by the RBA – continues to downplay the reality of our changed employment patterns !! Her response may have been applicable to previous individual industry analysis, but it is certainly not relevant to this latest RBA research, since researchers only included direct and relevant industry aggregates. The analysis is a wake-up call to the dangers of only considering direct employees when focusing on likely future economic policy outcomes.!

Cartledge said...

Good old Christine Milne. I recall when she first launched into state politics on the back of the anti-Wesley Vale pulp mill in Tas.
I agreed with her arguments there, but found her strident primary teacher delivery and thinking a bit much.
She did improve as a Senator, but leadership is obviously not her strong suit.
You know I am an economic and social progressive, but I hope with some balance. Milne concerns me just as Stephen Harper, who you mentioned earlier, does.
I wrote my previous post while being excited about my Bendigo Spirit playing the WNBL final. We won, but I was distracted.
I really never feel comfortable with extremes, and Harper and Milne need to accommodate extremes. For Harper it is the right wing Christian lot, and you know i have issues with that as much as I do with the far left.
The thing that I really find difficult with Harper is his claim to having an economics degree. Yes he does, but he simply passed the tests and has no real idea of economic dynamics.
That is my anti-Harper rant, but I should also say that Canada has a close geographical link with China, at least on the West Coast.
With the Canadian rail network, which has its own problems; and a growing network of pipelines to the coast, resources can be delivered to that enormous, hungry country.
For Canada China is a lay down misere.
Canada is so much like Australia, in so many ways, they must be seen as part of Asia too. Though I doubt they really recognise the fact. That big gorilla over the back fence doesn't help.
Still Australia would do well to develop a stronger economic relationship with them. It would still be a small lobby against the giant China, but better than being fragmented.