ECINYA FAREWELL
ECINYA will cease publishing on Friday 20 September 2013 and close down its web-site by 15 October. We had 9 years with E*Trade up to December 2008 and 4 years from 2009 as a stand-alone web-site. Our editor, George Sutton, has decided to retire or semi-retire on 13 December 2013. ECINYA thanks its confidants and associations over the years and has a measure of pride in what was produced over the 13 years of its existence.
REMEMBER …. EXERCISE CAUTION IN YOUR AFFAIRS
IF WE COULD HAVE JUST ONE SUGGESTION FOR AUSTRALIA
If we could have just one final suggestion for Australia it would be to extend the Federal parliamentary term to 5 years with a minimum term of 4 years.
Australia is an extremely talented and lucky country with abundant human and natural resources. Our potential will never be fully realised if we seek to change direction dramatically every three years because political expediency and striving for points of difference over-take common sense policy continuity. The economic and political cycles have become destructively disengaged at a time when economics and politics are more engaged than ever. Policies take time to work in a globalised world of shifting trade and political alliances and often need to be fine-tuned over several parliamentary terms. Good policy badly executed results in poor outcomes. Bad policy well executed or badly executed results in even poorer outcomes.
With the change of government from the bizarre and grossly inept Rudd-Gillard-Greens to the Abbott-led Liberals there is a chance that Australia can return to a more sensible and balanced view of its opportunities and challenges.
COROLLARY AND CONTEXT TO THE ABOVE
In 2005 Ian Macfarlane, Governor of the Reserve Bank said –
The principal contribution that monetary policy can make to economic well-being is to maintain low and stable inflation. I think it is true to say that if you wished to forecast the path of the Australian economy , and you were able to have fore-knowledge of only one economic variable, the one you would choose would be the path of the world economy. That is not to say that we have no influence over our own destiny – we can make the situation better or worse than it would otherwise be – but we cannot escape the influence of the world business cycle and the other factors that feed off it.
Australia is about 1.5% of world GDP and about 0.03% of the world’s population. This results in a high per capita GDP putting us easily within the top 10 countries.
It is relatively easy to say that there are four systems of government – capitalism, socialism, communism, and totalitarianism. Ecinya is of the belief that what we need for Australia is BALANCED FREE ENTERPRISE and we have been banging this drum for a very long time. Today, in developed economies we have governments in all of its various forms (federal, state, municipal) running at somewhere between 20 and 30% of the economy, squeezing the private sector. The capitalism vs socialism debate is not worth having for neither exists in abundance in the developed world, nor even in most parts of the emerging world.
Balanced free enterprise means that there is a valid and useful role for government including the provision of social and commercial infrastructure that provide appropriate community solutions. The genuinely disadvantaged have to be helped. Government is essentially an agency function where taxpayer’s money comes back to them via constructive government initiatives in education, health, infrastructure, security, law and order etc. Our editor’s recollection of the best years of government in Australia have been the Menzies era, the Hawke-Keating-Walsh years and the Howard-Costello years. The worst years have been Whitlam, Fraser, and then the disastrous Rudd-Gillard-Greens era.
GDP BEING DRIVEN BY TOO MUCH ‘G‘
It seems perfectly clear to us that Gross Domestic Product (GDP) is being driven by too much "G"…… an excess of Government which is ‘crowding out’ the private sector. Small business resides in the middle class where most of the employment is created so that when you crowd out the private sector you crowd out the aspirational middle class. The result is simple – less velocity in the economy, less income growth, less economic growth, less employment growth.
The simple equation for GDP is –
- GDP= C+I+G+Net Exports
GDP is the total market value of all final goods and services produced in a country in a given year, equal to total consumer (C), total investment (I) and government spending (G), plus the value of exports less the value of imports (Net Exports). GDP is adjusted for inflation using one of several inflation measures. In America it is the Implicit Price Deflator.
Over short periods the GDP numbers can be a bit rubbery, but in the longer-term they are reliable enough and when supported by other anecdotal and hard evidence, we can generally say the GDP is rising or falling at a near-enough-to-accurate rate. GDP growth is important because it is the source of company profits and company profits play a part in stock-market advances and hence national wealth. Healthy growth in GDP usually means healthy profit growth, but if GDP is expected to fall then expectations take over and the forward estimates for profits and GDP influence share market outcomes. Perceptions of sustainable periods of economic growth lead to higher share prices. Such perceptions are called ‘confidence’.
Looking at world economic growth numbers from the IMF we see that world economic growth in the period 1992 to 2001 averaged 3.2%, and in the 8 years from 2002 averaged 3.6% but inclusive of a global recession of 0.6% in 2009. The peak years for growth over the last decade were 2006 and 2007 when GDP growth averaged 5.25%. In broad terms a 1% fall in GDP is akin to taking out of world growth about US$700 billion, about 75% of the entire Australian economy in purchasing power parity terms.
Another way of looking at it is, if the world economy grows at 3% per annum then it doubles about every 24 years, and at 4% per annum it doubles about every 18 years, a sizable difference.
Australia is a Federation of States and numbers are not available to us on a basis that consolidates the states and the Commonwealth, but numbers were given in a Ken Henry speech of 30 November 2009 that indicate that Government has become too large in Australia relative to the sum total of GDP. Because Government is funded by taxation, it is not being over-simplistic to state the following –
- more taxation = more government
- more government = less consumption due to less disposable income
- less consumption = less production
- less production + more imports = lower GDP growth
WHAT DOES THIS MEAN?
One of the great difficulties in the standard GDP formulation is that governments can increase their expenditures not only via increased taxation, but by increasing their debt. However, a couple of things result from this approach. Firstly, you have to pay interest on the debt and secondly at some future time you have to repay the debt. Ultimately, greater borrowings means that you have to have more income to repay debt and principal and/ or sell trophy assets (e.g Arnotts Biscuits, Speedo, Petersville Foods, and possibly GrainCorp).
For government the only source of income is taxation as all of their other services generally lose money. Higher taxation causes big businesses to want to pay less tax (by moving their tax base offshore, by transfer payments, by exploiting double tax agreements), or to reduce their costs of production. The easiest way for BIG companies to reduce their costs of production is to produce in lower cost countries. This means lower growth at home, less jobs, and over time can impact on the ability of a country to repay its debts in a timely manner. Then a debt downgrade results and a vicious circle begins. These processes take a long time to evolve and sometimes having evolved, take a long time to become a recognisable problem such as in Greece, Spain, Iceland, Italy, Portugal, Ireland, England, America etc.
However, there is no universal qualitative measure of GDP. For instance if the C …Consumption.. is debt funded/ leveraged then the quality is potentially diminished. If the G… Government… is debt funded/ leveraged then the quality is even more diminished because the empirical evidence is that governments misallocate resources (waste) on a regular and recurring basis. One wonders whether GDP should be adjusted each year by subtracting the net increase in private and/ or public debt from the equation.
Back in October 1985 Peter Drucker had this to say –
I think, there has been an irrevocable shift in the last ten years. No matter who is in government, he would no longer believe in big government and would preach cutting expenses and would end up doing nothing about it. This is because we, the American people, are at that interesting point where we are all in favor of cutting the deficit – at somebody’s else’s expense. It’s a very typical stage in alcoholism, you know, where you know you have to stop – tomorrow.
It is now apparent that Mr Drucker was an incorrigible optimist because the rhetoric that has come from the Blair, Bush, Obama, Hollande, Rudd-Gillard-Greens governments is not anything about small government at all. The universal mantra is "Markets have failed. When markets fail, governments have to "step in". This is despite the fact that it was government inefficiency, poor policy formulations, and lack of oversight that caused the markets to fail in the first place. The failure of national governments over the past two or three decades to follow simple economic rules is now reflected in the structural and systemic problems that now need to be overcome. Quantitative Easing (QE) seems more like a band-aid than a lasting solution. Most probably, the hole is so deep that only a unified plan will shift the role of government back to the centre. Qianlong in his Qing Dynasty proclamation of 1645 is speaking from the grave.
The Way of Heaven is profound and mysterious and the way of mankind is difficult. Only if we make a profound and unified plan to follow the doctrines of the centre, can we rule the country well.
IN AUSTRALIA THIS WAS NOT JUST A RUDD-GILLARD-GREENS PROBLEM
The increase in the size of government relative to the size of the economy in Australia is not just a Rudd-Gillard-Greens problem. It goes back to the dark days of Whitlam and Fraser which were over-turned by the very good years of Walsh-Hawke-Keating and then all but the last 3 years (out of 11) of the Howard-Costello era when Mr Howard decided to try to buy a final election, such a tactic having worked in the previous election to a substantial degree. Messrs Rudd and Gillard though presided over a massive and ill-directed spending effort just before China and Asia were slowing and our resource export prices and volumes were about to come under pressure.
In pre-election 2007 Messrs Swan and Rudd visited their economic tailor and donned clothes of conservative economic mien but when the GFC came along they overreacted in order to appear to be on top of a problem most unlikely to have had a lasting impact on Australia thanks to the then strength of the Asian connection and commodity prices.
AREAS THAT HAVE TO BE ADDRESSED OVER TIME
1. Australian personal taxes are far too high; extend the GST to food. The exclusion of the Goods & Servcies Tax (GST) from the Henry tax review should have caused Henry to refuse to write the review. The GST is a big, elegant tax and it is relatively easy to make the food inclusion neutral at inception. The end result of excluding the GST from the review was the stupid idea of a resources and carbon tax. Additionally, other stupid taxes such as payroll tax, and many property taxes remain, which distort economic decision-making and reduce the desire of business to employ people and/ or to grow their onshore businesses. ‘STUPID’ is an apt acronym… Silly Taxes Upset Proper Industrial Development. Probably the only exclusion should be education fees.
2. Capital gains taxes are too complex and counter-productive. The reform proposal is that all gains should be treated as ordinary income on a sliding scale: 100% gain taxable under year 1, 80% year 2, 60% year 3 etc etc. After 7 to 9 years all gains are tax free. This would bring a lot of residential property into the property markets. Capital mobility and capital velocity are important.
3. Create a minister for state liaison: Federal budget accounting is a shonky cash flow exercise. As an annexure the Federal budget should consolidate itself with all of the states distinguishing between capital works and operational expenditure so that we know where the money comes from, and where it goes to. With such a large share of GDP government needs to be more accountable.
4. Education should be handed over to the Federal government with state councils, including the responsible state and federal ministers, created to monitor results and direct policy.
5. Health should be entirely federal or entirely a state responsibility. It is easy to travel within Australia for better healthcare outcomes so states of excellence might result in healthy competition.
6. Jobs: It is impossible to be pro-jobs and anti-business. We are excessively focused on exports. We should have an import replacement policy as well. In fact we have gone backwards and even reversed many of the Keating work-place reforms. Small business, for purposes of the wrongful dismissal laws needs to be re-defined to something like at least 50 to 100 workers. The employment safety nets seem excessive – base pay+ compulsory superannuation+ workers compensation insurance+ payroll tax+ long service leave+ overtime in a 24/7 world+ parental leave+ legal compliance costs for rightful dismissal. In 2014 youth unemployment will become a major problem for Australian governments.
7. Water resources needs an agreed national approach.
8. Ethanol and other forms of energy saving needs a proper bi-partisan and appropriate policy response.
9. Aboriginals need dedicated colleges and broad curriculums encompassing the arts as well as the sciences.
10. Big business (market cap over say $250 million) should report ANNUALLY at the end of every quarter with their statutory reporting date remaining unchanged. Four quarters in aggregate removes the seasonal bias. Continuous disclosure and guidance has become something of a nonsense, more in the nature of spin than substance.
11. Auditors should read aloud their report to shareholders at the annual general meeting to remind shareholders, boards, and themselves, that they have a duty of care to shareholders and to a much lesser extent, creditors.
12. Generally accepted accounting standards have become unacceptable with asset revaluations flowing through the profit and loss account, impairments in one year leading to misleading comparatives in the next, and potentially non-recurring items distorting the real underlying profits. True we can rely on competent analysts to read the fine print but it does become confusing for the mug punter, citizen or layman whatever you wish to call him or her.
BIG ADDENDUMS:
(1) Political donations should be banned and an electoral bank established with distributions pre and post election to be distributed on a formula basis. Crony capitalism and crony socialism is pervasive. Vested interests have easy access and as illustrated in NSW and Queensland over recent periods, corruption has been in evidence. Tax deductions should apply for donors. Ecinya does not have a fully developed thesis on this , but we have written a discussion paper. This is not to say that external groups outside of political parties cannot run their own campaigns provided there is some scrutiny/ disclosure of source.
(2) We live in a 24/ 7 world. So abolish penalty rates for weekend work and overtime even for priests, rabbis, and ministers who have to work on Saturdays and Sundays. People who work over 40 hours per week can enter into separate contracts in relation to overtime. Job protection does not work, and Greece is just another good example of the folly of job protection and uncontrolled welfare, albeit in a context where tax evasion is rampant. The Henry report recommendation on centralising welfare was totally ignored. Youth unemployment a looming problem as is the level of general under-rmployment.
AMERICA
We believe that the best of economic America is the best that is currently available and though we decry the concept of American exceptionalism much of what the world enjoys today has come from American enthusiasm, creativity, and engineering skills. But America now finds itself in a horrendous situation with huge federal debts running at 100% of GDP, a seemingly intractable domestic deficit, a current account deficit, insolvent states and municipalities, volatile house prices, high unemployment , often a pressured currency, and ongoing wars. However, we see a more ‘normalised’ and recovering America emerging out of the electorates disdain for foreign policy in the context of rising energy independence and falling real wage costs. Mr Obama still appears to be somewhat out of his depth and Mr Bernanke is looking like the charlatan that Mr Greenspan ultimately became.
America seems to have major structural problems in deficit spending and debt. Mr Bernanke seems to be following his predecessor Alan Greenspan and is in the process of creating another monster bubble via excessive money printing. Inflation at the asset level is just as dangerous as goods and services inflation and there seems to be a lot of money chasing a shortage of stable and viable assets. QE tapering is most likely to be too late and too little.
FINALLY SOME WORDS FROM THE WISE WITH ATTACHED ECINYA COMMENT
When Keynes’s masterpiece ‘The General Theory of Employment, Interest and Money’ came out in 1936, Schumpeter, by then the senior member of the Harvard economics faculty, told his students to read the book and told them also that Keynes’ work had totally superseded his own earlier writings on money. Keynes, in turn considered Schumpeter one of the few contemporary economists worthy of his respect. Yet Schumpeter considered Keynes’ answers to most economics questions as wrong. Schumpeter and Keynes are often contrasted politically with Schumpeter being portrayed as the ‘conservative’ and Keynes the ‘radical. The opposite is more nearly right. Politically Keynes’ views were quite similar to what we now call ‘neo-conservative’. His theory had its origins in his passionate attachment to the free market and in his desire to keep politicians and governments out of it. Schumpeter, by contrast, had serious doubts about free markets.( Peter Drucker’s ‘The Frontiers of Management’ , 1983.)
Ecinya Comment : Peter Drucker is acknowledged as one of the leading economic and business strategic thinkers of his age and his bio is obviously available on Google. From our readings over the years we believe that Drucker favoured Schumpeter over Keynes. Schumpeter held that a modern economy was always in dynamic disequilibrium, it is forever growing and changing, and is biological rather than mechanistic in nature. Keynes was more inclined to believe in the certainty of macro economics, a more prescriptive approach.
The mistakes of the past are oft repeated and economists are said by Drucker to be the slowest learners of all as they are ‘prisoners of totally invalid but dogmatic theories’. The last term of the Howard government spent too much and expanded the role of government beyond reasonable limits. Mr Rudd then got elected by portraying himself as a conservative and when the GFC came saw it as his opportunity to be a revolutionary. He was resisted in this by Lindsay Tanner, but encouraged by Messrs Gillard and Swan and then influenced Treasury, or was encouraged by them, to attack the American and European financial crisis with massive Keynesian expenditures lest we became ensnared in the sub-prime crash web. There are more than enough natural disasters to challenge our finances without wasting resources through ill conceived or badly implemented policy – NBN, pink batts, $900 refunds aggregating over $10 billion to buy a TV or go to Bali etc.
Ecinya comment: To compound the problem Keynesian theories are being twisted to cover-up inept policy and inept execution. For example, Labor embarking on a National Broadband roll-out of dubious merit, proposing to tax the mining industry, and proposing a carbon tax which at a time when the consumer was going on strike and committing the unpardonable sin of saving rather than borrowing to consume at elevated interest rates. Also we built a number of high cost desalination plants around the country and other infrastructure errors which soaked up scarce resources. Policy had become a patchwork that seemed to reflect massive disequilibrium without Schumpeter’s dynamism.
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………..
A conventional valuation which is established as the outcome of the mass psychology of a large number of ignorant individuals is liable to change violently as the result of a sudden fluctuation of opinion due to factors which do not really make much difference to the prospective yield; since there will be no strong roots of conviction to hold it steady. In abnormal times in particular, when the hypothesis of an indefinite continuance of the existing state of affairs is less plausible than usual even though there are no express grounds to anticipate a definite change, the market will be subject to waves of optimistic and pessimistic sentiment, which are unreasoning and yet in a sense legitimate where no solid basis exists for a reasonable calculation.
It might be supposed that competition between investment professionals possessing judgement and knowledge beyond that of the average private investor would correct the vagaries of the ignorant individual left to himself. But many are concerned not with what an investment is really worth to the man who buys it ‘for keeps’, but what the market will value it at, under the influence of mass psychology, three months or a year hence.
Games played amongst even professional investors of Old Maid, Snap and Musical Chairs can be played with zest and enjoyment, though all the players know that it is the Old Maid which is circulating, or that when the music stops some of the players will find themselves unseated.
Thus, professional investment may be likened to the newspaper competitions in which competitors have to pick out the six prettiest faces from a hundred photographs, the prize being awarded to the competitor whose choice most nearly corresponds to the average preferences of the competitors as a whole; so that each competitor has to pick, not those faces which he himself finds prettiest, but those which he thinks likeliest to catch the fancy of the other competitors, all of whom are looking at the problem from the same point of view. It is not the case of choosing those which to the best of one’s judgement, are really the prettiest, nor even those which average opinion generally thinks the prettiest. We have reached the third degree where we devote our intelligences to anticipate what the average opinion expects the average opinion to be. And there are some, I believe, who practice the fourth, fifth and higher degrees.
Ecinya Comment: John Maynard Keynes was one of few economists who achieved success in financial markets trading on his own account thus the thoughts above are interesting in themselves and in that context.
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
In just about every rich country, the global financial crisis has morphed NOT into the triumph of Keynesian economics but into the fiscal crisis of the modern welfare state. The Tea Party rebels and the bond kings are advancing on Capitol Hill, the British are enduring their most bracing budget austerity in generations and there are street riots in European cities. This hasn’t happened here for one reason: Australia escaped the rich world recession not because our budget stimulus was much bigger or better than the rest, as Wayne Swan suggests in his weekend ‘Keynesian in the Recovery’ essay for the Fabians. We’ve stood out because of the unique China boom…. The Treasury calculates that Swan’s 2012-13 budget surplus still would be propped up by the unsustainable high iron ore and coal export prices. The budget will remain in an underlying "structural" deficit until 2019-20 on its reckoning. This amounts to a serious national vulnerability. (Michael Stutchbury, Economics Editor, The Australian 12/4/ 2011.)
Ecinya Comment: Michael Stutchbury, in our view, is an extremely balanced economics writer and takes issue with the self-serving and convoluted approach to Keynes adopted by Treasurer Swan. Keynes did not promote unfettered or loose government spending as the path to prosperity.
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
I finally saw the light. Slowly, I discovered that the left was inherently totalitarian…… The Reagan revolution could never be won unless the establishment politicians and opinion makers gave our ideas a fair hearing. They had to be convinced that sound money, lower tax rates, and a vast curtailment of federal spending, welfare, and subsidies was the only recipe for sustained economic growth and social progress…… The abortive Reagan revolution proved that the American electorate wants a moderate social democracy to shield itself from capitalism’s rougher edges. Recognition of this in the Oval Office is all that stands between a tolerable economic future and one fraught with unprecedented perils.
From the cover sheet: Despite the powerful mandate given to President Reagan by the American people, his program faces increasing difficulties as it encounters political realities. Even those members of Congress who favor spending cuts in principle hastily vacate the battle field when this conflicts with powerful demands of their own constituencies. Eventually Stockman, the revolutionary, is forced to accept the reality of his theories, which looked so convincing on paper, have been based on a profound misjudgement of the American political system. ("The Triumph of Politics: Why the Reagan Revolution Failed’ by David Stockman published 1986, Director of the Office of Budget and Administration 1981-1985.)
Ecinya comment: Reagan sowed the seeds of the modern welfare state into the fabric of the American dream and Congress and various presidents have compounded the problem. It has probably been facilitated by the fact that the $US is the world’s reserve currency and America has historically been regarded as a safe haven and hence able to borrow at favourable rates.
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Adam Smith, at least, lived to have high hopes for the new country. He thought it was normal for human beings to want to live in a prosperous society, but that it was also normal for them to live in a broadly just society. Their desire for self-improvement was in many ways mysterious, but in the end it was inherently social, rooted not only in the love of acquiring but in the love of haggling, bargaining, interacting – the whole work of building worlds out of wishes. What then moved men to make markets was ultimately their love of pleasure and happiness, and who Smith wondered, could live happily in a society where all the wealth had been confiscated and kept in a few hands? He believed not that markets make men free but that free men move towards markets. This difference is small but decisive; it is most of what we mean by humanism. (AFR 29 December 2010 – Adam Gepnik of The New Yorker writing on Nicholas Phillipson’s "Adam Smith: An Enlightened Life.")
Ecinya comment: Wall Street is the tail that wags the American body politic dog and America seems relatively ungovernable at this time.
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
All countries which accumulate debt and habitually run big current account deficits are vulnerable. And for many centuries societies have been susceptible to irrational booms, South Sea Bubbles, tulip bulb booms, and dot com busts. But no central bank can offset the cascading effects of bad government policy. (Peter Walsh former Labor Party Finance Minister, Financial Review 10 December 2003.)
Ecinya comment: Peter Walsh is Ecinya’s most highly regarded post Menzies politician and was for a long time the real power behind the Hawke Keating era.
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
The propensity of Congress to create benefits for constituents without specifying the means by which they are to be funded has led to deficit spending in every fiscal year since 1970, with the exception of the surpluses of 1998 to 2001 generated by the stock-market boom. The shifting of real resources required to perform such functions has imparted a bias toward inflation. In the political arena, the pressure to make low-interest-rate credit available and to use fiscal measures to boost employment and avoid the unpleasantness of downward adjustment in nominal wages and prices has become nearly impossible to resist. The American people have tolerated the inflation bias as an acceptable cost of the modern welfare state. (Alan Greenspan in "The Age of Turbulence", September 2007.)
Ecinya comment: It must be a source of regret for Mr Greenspan that he waited until his retirement to be so clear and forceful about the role of fiscal policy in shaping a sustainable and viable economic destiny for America rather than pandering to the political establishments that he served for such a long time. A lot of commentators have a low regard for Mr Greenspan and Ecinya would be amongst them.
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
Treasury was at its most influential during the term of the Hawke government, but I give credit for that to our greatest ever treasurer, Paul Keating, a man with a deep understanding of how to obtain and use political power, and who needed a purpose to fight for. Treasury supplied that purpose, affecting his conversion to economic rationalism. Treasury’s highest institutional objective has long been to dominate the economic advice going to the government, and no secretary has been more successful in this than Ken Henry, thanks to the arrival of the deeply insecure Rudd government, which sought to hide behind the authority of the supposedly independent Treasury. (Ross Gittins, The Sydney Morning Herald, 27 December 2010.)
Ecinya comment: Ken Henry never appealed as anything other than a compliant conspirator in a period of extremely poor economic management.
………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….
Global economic recovery more superficial than real: Liquidity injections and bailouts can buy time, but are not the solution for economies in need of structural repairs….. Time is not the answer for economies desperately in need of structural or fiscal consolidation, private sector deleveraging, labour market reforms, or improved competitiveness. Nor does time cushion anaemic post crisis recoveries from the inevitable next shock. (Stephen S Roach, Non-Executive Chairman Morgan Stanley Asia, Financial Times 5 July 2011.)
Ecinya comment: It is difficult to imagine Stephen Roach as an advocate of rampant QE policies.
…………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket, and trying to lift himself up by the handle. (Winston Churchill)
Ecinya comment: Taxpayers are reluctant contributors to fiscal waste and economic vandalism.