Couple of things

[Jovial Monk]

First, Morgan Face to Face conducted b4 the second stimulus package was announced was 56:44 down from 59:41. Within margin of error (MoE) and no real conclusions to be drawn from the most unreliable poll around.

Second, the Pineapple Party in Qld is way behind the ALP with deep fundamental splits between metro & rural righties.

[skippy]

I saw a poll somwhere this week that had Labor on 61-39, Labor are safe as houses.
I notice John Hewson is out there spruiking a double dissolution election some time this year, maybe kevvy might pull a quicky before the Libs get a chance to put Costello in, assuming he stays, which we'll know soon if he still hangs about after march.

[Jovial Monk]

Nah, Costello gets in wait a year. He will make numerous stuff ups on the economy like he did even with Treasury briefing him!

But he will leave next month.

[Ethnic]

I'm glad I don't live in Queensland. Imagine having to choose between Bligh and Springborg as your preferred premier. It would be like having to choose between getting stabbed or getting shot as your preferred way to die.

[Jovial Monk]

What might be interesting about the Qld elections is HM independent Fibs get in. Most Fibs not happy about the merger!

There is a deep country/city or reactionary/progressive divide in the Fibs nationally and the LNP in Qld. Since they are not in government nationally or state they don't have the patronage to porkbarrel which means they could play mainly to the metro wing in policy terms and placate the rural socialists in porkbarrel terms.

If the Fibs/LNP don't win the next election (and neither will) expect them to split pretty deeply.

As well as the leftwing v rightwing trouble, the pre-baby boomer generation which are the Coalitions strongest supporters are dying off meaning a loss of votes that could mean TWENTY seats federally are lost to the Lieberals! With a weak leader like Attabull they will not be able to reform themselves. Hmmm trubble at mill!

[JW Frogen]

Turnball is making the political gamble that if this huge spending does not protect Australia from the global financial crises can then turn it on the government and say not only are we in trouble but now we are in deeper debt.

Then he reiterates the tax cut mantra.

But neither party is really addressing one of the fundamental problems both Australia and the US (to a much greater degree) have. That is part of this huge, decades long expansions of credit was caused by declining living standards. People have to borrow on a greater percentage of their income to buy a home, car and necessities of life than they did in the post war period. Most also need to be two income families where as in the past one income could provide these necessities on far less credit.

The cost of things has exceeded income levels and income levels are stagnating because neither country is making things of value that can keep productivity gains in line with global prices.

You cannot have a primarily consumption based economy and see wages equal inflation in the long term.

So either Turnball’s tax cuts or Rudd’s stimulus handouts may save us from the economic crises in the short term by re-inflating the consumption-credit bubble but it will not fundamentally change the underlying problem with economies based on this model.

[Jovial Monk]

Yup. hopefully house prices will continue to slowly fall, an orderly retreat, and wages remain at their present level and so housing affordability slowly increases. Rudd was very smart with those first home buyers grants.

But I agree we need a mixed economy, we should MAKE things and Howards tax cuts for the rich hopefully will be eroded by bracket creep. A more equal distribution of wealth and income (the opposite, as JW said, has been happening) will lead to a more robust economy.

[Ethnic]

JM careful with that thinking of yours. Perhaps the pre-baby boomers are the Liberal's strongest supporters but in no way does that mean Liberal support is dying off. Plenty of baby boomers, gen x, gen y and immigrants become more conservative as they get older and vote for conservative parties. The Liberals will still have strong voter bases for many decades to come. Don't assume people remain with the same party for their whole lives.

[JW Frogen]

The distribution of wealth has little to do with producing value and productivity necessary for wages to go up in the first place, wages are based on wealth that is produced, just moving around the same slices of the same old pie without attempting to make the pie bigger does little to help the problem long term.

Long term the economy must invest on producing value; things the rest of the world wants to buy which will then witness increased profits and wage pressure upward.

Mining for example, although mining is really a dumb economy (any lucky country can sell expensive rocks the rest of the world wants) nonetheless it proves as profitability goes up so do real wages.

Mining wages during the boom raised above the inflation rate.

There is an argument to be made that the government should do nothing at all (except perhaps help ameliorate the suffering of the unemployed) let the bubble completely pop and prices find more realistic levels, those who remain in work would see an improvement of their wages, even if they remained static, in relation to the cost of living.

This is being seen in falling house prices, if one has the same wage they had three years ago in WA they would be much better off now if they bought a house than if they bought one three years ago.

[Jovial Monk]

Trouble is, mining when it really booms like it did up till late '07 destroys manufacturing. China keeping currency low did not help!