On protectionism

Colin Edwards writes: Re. “Protectionism provided few jobs and made life tougher for working families” (yesterday). I largely agree with Bernard Keane’s assessment of the history of unemployment rates, but how far back was it when ABS unemployment figures were made to look lower by defining  persons as employed if they work as little as one hour a week!?

Joe Boswell writes: Bernard Keane again argues passionately that a return to protectionism is a mistake. But what if the conditions that made free trade a better choice a few decades ago have gone? As this article in The Atlantic says:

“Increased globalization may make less sense now than it did in the recent past… free trade was a win-win proposition, but only as long as a few key assumptions held true: There needed to be fixed exchange rates, full employment, an absence of international flows of labor or capital, an absence of economies of scale, and perfectly competitive markets.”

Something like those conditions existed after WWII until the late 1970s. Now the world economy is very different. So, all we need is a government with the deep expertise, skill, rectitude and courage to recognise the implications, develop and explain its strategy, gain popular support and carry out the necessary reforms; rather than just panicking, sticking to dangerous outmoded dogma and thinking only of the short term while grovelling to party donors. No worries.

On the economy

John Kotsopoulos writes: Re. “Costello could have saved the economy, ScoMo blew it up” (yesterday). Far be it for me to defend Scott Morrison, but it is Peter Costello’s unasked for gift of tax free super to the over 60s, a $100b lead weight on the federal budget over 15 years, that has helped create the current budget problems. Economist Saul Eslake declared the changes unaffordable  11 years ago when they were introduced. Morrison has acknowledged as much with his frequent references to the unsustainability  of current arrangements as he battles his own party room  to claw back some of Costello’s largesse.


John Richardson writes: Re. “MYEFO’s coal in the stocking not enough to save ScoMo” (yesterday). While Treasurer Scott Morrison vainly clings to the hope that Australia’s deteriorating budgetary problems won’t see the country lose its prized AAA credit rating, does anyone-else really care?

After all, it was only three years ago that executives of major credit ratings agency, Standard & Poor’s, were accused by then US Attorney-General Eric Holder of making “false representations to investors and financial institutions and took other steps to manipulate ratings criteria and credit models to increase revenue and market share”?

Maybe, just maybe, our politicians have cried “alarum, alarum” just once too often in their cynical pursuit of political advantage and Australians have stopped listening or caring; or maybe, just maybe Australians have woken-up to the fact that the entire economic edifice is rigged to serve a few very narrow interests, not including them?


Peter Fray

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Peter Fray
Editor-in-chief of Crikey