The Murray inquiry's observations on financial advice, household debt and super are commendable, but its boneheaded proposal for the government to underwrite RMBS is a concern.
A government report is always a Parson’s Egg, and I’ll start with the parts of this one that were excellent. These were its wariness about and observations on superannuation, financial advice and household debt.
The Commonwealth Bank’s response to the Senate investigation of ASIC blames incompetence and individuals for the scandals at Commonwealth Financial Planning Limited. Chief executive Ian Narev: “Poor advice provided by some of our advisers between 2003 to 2012 caused financial loss and distress and I am truly sorry for that.”
This is the predictable ‘rotten apple’ defence to allegations of impropriety. And it is simply absurd to describe some of the alleged actions of those advisers noted by the Senate Report – such as “forgery and dishonest concealment of material facts” (Senate Inquiry Executive Summary, p. xviii) — as merely “poor advice”. If the bank can describe that as “poor advice”, then a bank robber would be entitled to describe his profession as “making withdrawals”.
The Abbott government has reacted with predictable disdain to attacks over its policies on refugees, homeless, university students, unemployed, and welfare recipients. And why shouldn’t it? These are complaints from people who normally wouldn’t vote for them anyway, while the policies themselves appeal not only to “bolted on” Liberal voters, but also to disaffected Labor voters. It’s good politics, even if the bad press means a temporary hit in the opinion polls.
The European Stability and Growth Pact is based on the principle that stability and growth are enhanced when government deficits are either minimised or eliminated. I want you to dispassionately consider an argument that reaches a different conclusion. It may sound like something you have heard before from others and already dismissed. But bear with me.
I’ve spent the past two weeks in Europe, with speaking engagements in Italy, Greece and Austria. This was my first visit to Greece, and my first chance to get an admittedly superficial tourist’s view of what a country with Great Depression levels of unemployment looks like.
It didn’t look like anything in particular until the drive from Athens, Greece’s capital and largest city, to Thessaloniki, its second largest. Then it struck me: the roads were near empty — as the toll booth shown in Figure 1 illustrates. My host Nikos reckons he has done a million kilometers over the years on this 500km drive, and he confirmed that roads which were now virtually empty were once full of cars, and especially trucks — that mobile sign of a thriving economy.
This is the talk I gave on this topic in Vienna yesterday. Once I have time, I’ll post the slides and the data.
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This is the talk I gave at the Finance, Mathematics and Philosophy seminar organized by the Department of Philosophy and the Department of Physics at Sapienza Universita de Roma. It was an extremely good conference, with the special bonus that I got to meet one of my heroes in nonlinear dynamics, Ping Chen.
PS Video below initlally linked only to the advertisement before my video. That is fixed now, and I only hope my bags also get found after going astray in Rome airport.
I’ll follow up with my paper shortly, once I have time to complete it.
Kingston University has advertised three fixed-term lecturer positions with a very tight deadlline of June 22nd, with interviews to be held on July 1st. Applications from economists with a research area in heterodox economics are welcome.
For queries please contact Julian Wells (J.Wells AT kingston.ac.uk), who is the Director of Studies.
The formal details of the positions are below.
Reference Number: 1264
Faculty / Department: Faculty of Arts & Social Sciences
School / Section: School of Economics, History and Politics
Location: Penrhyn Road Map & Directions
Permanent/Fixed Term: Fixed Term (FTC)
Full Time/Part Time: Full Time
Australia could have been the world leader in laptop computers — if we didn’t have a brain-dead financial sector.
Hannah Francis’ article last week about the Vixtel Unity – a new Australian-designed multi-function Tablet/Laptop/Phone (The three-in-one Aussie device that could kill the PC) — seriously stopped me in my tracks when I saw that its developer was Terry Crews. For that reason alone, I popped over to the Indiegogo site where Vixtel is running a crowd-funding campaign and chipped in $645 towards its $100,000 goal — for which I’ll receive one of the first production run tablets that will be available in July (about 4 to 6 weeks from now).
Diversity — not specialisation — is the advantage.
When I was invited to speak at a conference in Bonn some years ago, my host insisted that I stay with him, rather than in the conference accommodation. I expected to find myself in a suburb of Bonn, but instead we drove to a tiny village with just 5,000 inhabitants 130km away.
The bonus was that this was July 4, on which date each year a local Philharmonic group put on an open-air concert on the banks of an nearby extinct volcano’s caldera lake. The whole town was there for the event, and my host introduced me to a lovely old couple sitting on a park bench.