Tag Archives: economy

Interest rates rise to 6.75 per cent

The Reserve Bank of Australia has lifted interest rates to an 11-year high of 6.75 per cent.

My question is: if the economy is going so well and both parties are suggesting that they are experts at managing the economy and keeping interest rates low, why are they both making huge election promises?

Answer: it wins votes.

But surely the Labor party could gain some ground on the question of their ability to run the economy, by ‘spending’ less on tax cuts and suggesting that the Liberal party’s sweeteners are economically irresponsible. Dah!

Meanwhile, I saw the interview John Howard did on 9am with David and Kim last week. This discussion was more influential than any other thing I have seen in the past year – even more so than a couple of Lateline interviews I’ve seen and the debate. If you like Howard, I would be spreading this one around!

Toothpaste will save Africa!

I was reading an article today and got really depressed.

(Azeem Azhar (2005). “Better and Faster than politics” New Stateman 18(878) p. 24.)

Here is a snippet:

The bottom of the pyramid is a new competitive business space, with new demands. If you want to sell toothpaste to an Indian villager, you need to know that he may not have access to running water, that he can’t afford to throw away the packaging, and that your main competitors are the twigs from the neem tree.”

And another:

“…the organisations best able to rapidly design and deliver the products and services that poor people need are the world’s multinationals.”

I totally understand his argument. Sure the world’s poor people are an untapped market for large multinationals and there is money to be made. But does this Indian villager really need to spend money on toothpaste when he can get free twigs from a tree to brush his teeth. I mean, is that really an effective use of his/her wage, over say clean water or a flushing toilet.

It really comes back to how we measure poverty. And I think we do that by living standards. Therefore the fact that someone has a toothbrush, raises their livings standards and moves them out of poverty. Please someone explain how this works in intricate detail.

This also doesn’t help the country that this new toothbrush owner lives in. All the money he spent on it his lovely toothbrush gets flown out of the country back to the United States (or somewhere else equally rich). The country doesn’t really benefit from the creation of jobs to make the toothbrush, nor any money from taxes (other than a value-added tax) earned from the manufacturing plant (land tax, capital gains tax, company tax).

The author finally gains some considered thought and suggests:

“Am I saying that there is no role for government in this sort of work, that politics is useless? Far from it. Government and civil society – politics, if you like – are urgently needed to foster the basic conditions, such as physical security, that allow the poor to connect to the world economy.”

Thank God (Side note: I don’t believe in God. Who should I thank?). The governments of developing countries need to apply restrictions on multinational companies operating in their country if they want to extract some of that wealth for themselves. Don’t sell out to McDonald’s!

Our young people are worried!

All this talk about global warming and environmental damage has my younger sister worried about the issues. She had a debate with me today about introduced animal species having a negative effect on the natural wildlife. She doesn’t want to eat meat because “what did animals ever do to us”. She blames farmers for clearing the habitats of native animals and leading to their extinction or endangerment, in order to grow crops and raise animals. She knows all about electricity creating CO2 and pollution.

She suggested people live in skyscrapers so we don’t use as much land. And planting more trees to provide habitats for native animals. I told her that the government should be thinking about those things and that she shouldn’t be worried about solving societies problems. I told her that she could try to save electricity and water in the house, recycle, keep the cat inside, write to her local MP about her opinions, and talk to her friends.

It is worrying that an eight year old is concerned about these issues.

Governments care about the economy. Well yeah, it’s important. But do you remember being a kid and actually giving a shit about native wildlife and air pollution. I do. Maybe I decided that I just couldn’t do anything about it. Maybe I caught up worrying about school, uni and getting a job. Society sucks.

The Planet – Swedish Documentary – SBS: Future Focus

The Planet is a beautiful and unique documentary. It really communicated to me the fragility of the Earth. It also gave an interesting and comprehensive picture of the whole global warming problem – from historical, environmental, social, economic, financial and political perspectives. Here are a few quotes from the documentary which resonated with me:

“The Earth provides us with a life support system; with clean air, with the right amount of oxygen, provides us with food, clean water… There are a whole series of services which are provided [for] free by nature that we are utterly dependent upon; that are not factored into economic equations yet are exceptionally important, in deed they’re essential, life could not exist without them.” – Australian National University

Imagine if every person and every business had to pay for the processes that provide them with water, air, soil, oil, plastic, metal and so on. If the Earth can no longer provide these things this may become a reality.

“Growth can be uneconomic; it can cost more than its worth. And that’s the new era that we’re moving into … here is the Earth’s biosphere, here is the economy. How does the economy live off the larger system? As the economy expands it takes in more energy, more matter. It takes it from where? From the biosphere. And as we consume more, we throw out more waste. Where do we throw it? Back to the biosphere. So that’s depletion and that’s pollution. And then we move into an era of uneconomic growth, in which growth increases the production of bads, faster than the production of goods, it accumulates ilth faster than wealth.”Professor Herman Daly, University of Maryland

“The common view has been that the Earth is very stable; it’s infinitely resilient, we can do basically anything we want and it just repairs itself all the time. We have just been living with that, we’ve taken it for granted. But this era is over; this sort of luxury phase for humanity is now over.” Professor Carl Folke, Stockholm University

So how do we save the planet? Well we could try one of the five solutions proposed in this documentary – Five ways to save the World.

BBC – One solution to Save the World is to place millions of plates of glass in space to divert the Sun’s rays away from the Earth.

Option One: Put millions of sheets of glass into orbit around the sun to divert rays away from the Earth. Up to 3 hundred trillion dollars.

Option Two: A fleet of boats which float around the ocean and spray sea water and salt up into the clouds so there are more clouds and they are more reflective in order to bounce radiation back out to space.

Option Three: Put tons of Sulphur Dioxide into the stratosphere in order to create a blanket around the Earth which would stop the Sun’s raise from reaching the Earth. But doesn’t sulphur dioxide cause acid rain?

Option Four: Add nitrogen or urea into the sea to radically increase the number of phytoplankton which convert CO2 into oxygen.

Option Five: Synthetic trees which remove C02 from the air. It would then be pumped into the earth below the ocean and would be unable to escape.

Or we could consume less… like the two families taking part in the Eco House Challenge on SBS.

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