Time to talk solutions

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Lead Editorial

20 July 2022
Vol. 24 No. 29

Failed economic policy is felling political leaders across the world, from British Prime Minister Boris Johnson to former European Central Bank head turned Italian Prime Minister, Mario Draghi, who resigned 14 July after coalition partner, 5-Star Movement (M5S), boycotted a confidence vote. M5S leader, former PM Giuseppe Conte, warned that Italy is “on the brink of the abyss”; “I have a strong fear”, he added, “that September may be the month when social conflict will escalate in the streets, families will be faced with the lacerating choice of whether to pay their bills or buy groceries.”

The Sri Lankan government fell at the hand of the same failed economic policies. And insane environmental policy, which banned fertilisers, forcing all farmers to go organic and destroying the nations’ crops. Farmers are protesting and workers striking across Europe, particularly in the Netherlands, where limits have been imposed on the use of nitrogen in fertilisers (p. 13). These policies penetrate the globe, and with virtually all economies at breaking point, expect the backlash to spread fast. UK rail workers will strike on 27 July over pay and conditions; US rail workers are threatening to strike in protest at dangerous understaffing, pay and conditions.

The World Bank has warned that a dozen other developing nations may soon follow Sri Lanka into bankruptcy, a prospect elaborated in a 15 July Reuters feature “The Big Default? The Dozen Countries in the Danger Zone”. On 16 July at the G20 Finance Ministers and Central Bank Governors meeting, IMF Managing Director Kristalina Georgieva warned that the global economic “outlook has darkened significantly, and uncertainty is exceptionally high. Downside risks about which the IMF had previously warned have now materialised.”

Instead of reacting with adjustments to inputs or outputs within the current economic machinery, via monetary mechanisms or by rationing power and workers, it is time to cast aside economic theory. An alternative exists in practice, not only evidenced in history (such as facilitating the growth of the young American republic after the Revolutionary War) but currently in use—in China. By force of circumstances, Russia is being pushed in a similar direction to achieve economic sovereignty. Australia is faced with the interesting prospect of at once regaining sovereign control over our economy (including renationalising resources and infrastructure), while simultaneously repairing relations with China. This is not a contradictory proposal, if we overcome contrived divisions and concentrate on the collaborative effort to rebuild the physical economic capacities necessary to produce what is required to support the populations of our region.

It starts with creating credit as we did in wartime through the government-owned Commonwealth Bank. Then it was housed in post offices, and again today a public post office bank can provide access to credit at the local level, for citizens, businesses and local authorities. From housing, to flood control, to cash access, funds must urgently be funnelled into vital infrastructure.

While this is unlikely to be the motivation for Treasurer Jim Chalmers’ announcement today of a long-anticipated review of the Reserve Bank, we can use the review to force recognition that the RBA can be utilised by the government to direct credit into the productive economy, as provided for in legislation. Otherwise, if Chalmers’ review is anything like New Zealand’s ongoing monetary review the aim will be something quite different—including hastening the drive to loot citizens to save the banking system! (p. 9)

The announced ANZ takeover of Suncorp, along with other potential takeovers and mergers, suggests a banking shakeup is under way. And while ANZ claims it will not close branches, Dale Webster of The Regional tweeted that Suncorp has 28 branches, 22 in places with an ANZ bank. ANZ has closed 89 Queensland branches since 1975; what are the chances it won’t close at least 22 more? With such ammunition and the new parliament sitting next week, our post bank mobilisation is hitting high gear—join in! (p. 3)

In this issue:

• The economic solution every Australian can get behind
• Sterling First Lobby Group letter to PM Albanese: ‘End three-year misery for victims’
• Exposed! Secretive annual talks influence Australian foreign policy
• Huawei: Canberra’s ‘national security threat’ is Jakarta’s ‘trusted cybersecurity provider’
• How New Zealand pioneered ‘bail-in’
• Bank of England starts NZ’s central bank
• Basel rules, Asian financial crisis precipitates bail-in
• Wanted: a US national industrial policy
• Dutch farmer protests expand
• The economic solution is in the post!
• Review: All the light we cannot see
• A new view of our past, and our future!
• ALMANAC: How the British Empire wrecked Russian-American cooperation and launched the Cold War

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