Comments on: Economics for Dummies, aka, trade union leaders

By: Andrew Watson

Andrew Watson — Thu, 01 Jan 1970 10:00:00 +0000

Bernard, you left out of your little rant the reality of unequal income distribution. That being the case, you are just another shill for the divine right of kings set. Go fuck yourself and your crikey subsciption.

By: Wbetts

Wbetts — Thu, 01 Jan 1970 10:00:00 +0000

I hope Bernard Keane has made it clear to his employers at cricky that he will accept nothing but a 2.5% rise, or perhaps if he is so concerned about a ‘wages brake out’ perhaps he should demand a cut in his pay!

It seems to me that it is always “ordinary working people” who are at ‘falut’ when there is any type of economic crises dispite their minimal power to over it’s function. It is also those of us who are ‘ordinary’, ‘Dumb’ plebs who must suffer for it.

Also before Bernard stats labeling people as idiots or ‘dumb’ he may wish to refresh his own knowledge of the role of unions and why union members pay their dues.

By: Tom McLoughlin

Tom McLoughlin — Thu, 01 Jan 1970 10:00:00 +0000

I’m a little confused (ahem), isn’t it the famous 2 speed economy causing inflationary impacts? I am the proverbial economic dunce but just reading the ‘experts’ I seem to recall …. increased profits in the resources sector and thus money to splurge from those beneficiaries (presumably combined with - as comments say below - higher prices in sectional affluent sectors that can bear the extra cost). Meanwhile prices have increased on essentials (food, petrol for supply constraints, mortgage rates eg sub prime credit crunch, collective punishment by reserve bank interest rates) and lowered price on inessentials like flat screens etc (higher value of our currency for imports). Mmm that’s about where I fall over actually. ????? Anyway go the workers! Down the banks.

By: Seán Marshall

Seán Marshall — Thu, 01 Jan 1970 10:00:00 +0000

The basic premise of your article is demolished by recent ABS data see summary of 040308 SMH Article below

Figures released yesterday by the Bureau of Statistics show the share of nominal gross domestic product going as profit to companies - excluding mining companies - grew by 15.5 per cent in the past 18 months.
In contrast, wages and salaries increased by 0.9 per cent in the three months to December, which was the smallest increase in three years.
Company profits increased by 3.9 per cent in the same period, outstripping the 2 per cent rise expected by economists.
The big winners have been construction and retail firms, which have capitalised on strong demand by increasing costs and profit margins while holding wages steady.
The chief economist at ABN Amro, Kieran Davies, said: “The increase in profit share suggests that firms are raising prices above and beyond what their costs are going up by, and they can afford to do that because demand is so strong”.

By: Kevin Cox

Kevin Cox — Thu, 01 Jan 1970 10:00:00 +0000

Sean is correct and Bernard is wrong. Today’s inflation is caused by too much money in the economy not by too much demand. We get inflation when we print too much money to pay workers too much or we allow business to charge too much (perhaps by monopoly pricing or regulation) or we allow asset prices to increase beyond what is economically justified or some other reason…. The current round of inflation is mainly caused because there has been an asset bubble in real estate and some business profits are too high - most notably in finance. Real estate asset valuations are too high in relation to other asset classes because we have created too many housing loans. Workers share of the national “profits” has not kept up with the owners of capital share and the union leaders should be agitating for a “fairer” distribution.