Gittins all in for Dutch Disease. Ross Gittins, Alan Kohler
Parity porn from the Treasurer. SMH
I will post on these three later today.
ForclosureGate smashes everyone. Megan Mcardle
Week ahead for the DOW. Calculated Risk
Solving Ireland's pain. Businessweek, FT Alphaville
Sun King shadows Obama. FT
Dot-com over again. Robin Bromby
Ban these now. FT
OPEC and the weak dollar. AFP
Shark chewing through the babes. The Age
3 comments:
Do you know where I can get a Ross Gittins punching bag?
My thoughts too Lorax. Gah! If we take his piece ot it's logical conclusion then the a number of the struggling cafe and restaurant owners, tourism operators and retailers in my local are should either:
a. Voluntarily shup up shop, learn to drive a truck and move west to the mines
OR
b. Keep on fighting until they go under (some of them are beginning to think this is inevitible) and learn to drive a truck and move west to the mines.
The thing is, even in this scenario as soon as our terms of trade reverse they get to come home and either be unemployed or try starting up a business in... retail, hospitality or tourism.
Gittins makes the same silly assumption as most mainstream economists. They think the boom will run almost uninterrupted for at least two decades. While I'm bullish on China and our resources sector long term, the GFC showed just how quickly this boom can come to a Road Runner-like stop and my home state of QLD is a good example of how even a temporary bust in the resources sector can have ugly lingering effects.
The example above is vastly oversimplified but then again, I'm writing a retort to a Ross Gittins' article so I don't have to aim terribly high.
One small problem with Gittins' idea that labour is being "freed up" in manufacturing and tourism for the resources sector.
THE RESOURCES SECTOR ONLY EMPLOYS ONE PERCENT OF THE WORKFORCE!
You'd think Ross would have noticed that by now.
The biggest growth sector for employment over the past decade has been social services. In other words, we are becoming a welfare state supported by mining income.
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