Webdiary - Founded and Inspired by Margo Kingston

Anthony Nolan: "Growth is driven by the need for capitlists to produce sufficient surplus for ongoing investment in fixed capital.  Investing in fixed capital allows the development of a competitive edge in the market - greater efficiences per unit produced and so on where fixed capital means plant, equipment, internal infrastructure and so on."

Growth is driven by production. Production is driven by investment. Investment growth is driven by entrepreneurs.

Now, according to Paul, the real function of money is misunderstood.  OK, go ahead, what is it?

Money (as we commonly understand it) is the means for exchange. Simplistic I know. Simplistic, though, is often best.

If the above was truly understood, and accepted as money's true function, governments would automatically make money a neutral (should be a foolproof system) by understanding it's definately not neutral.

Every boom-bust cycle in history has been caused by manipulation of the monetary system (as understood at the time). Every single one. Including the current one.

You can only ever find a cure after understanding the disease.

Eliot Ramsey: "And what of the stimulus package, that $10-billion fistful? Well, it looks as if the bulk of it was saved or used to pay down debt."

Of course it didn't work. It hasn't worked anywhere in the world. Packages such as these have never worked. On the contrary, they make things much worse.

Keeping it in simple speak: if one is to own something during troubled times (with shelves stocked), one wants to reduce the inventory. One doesn't buy new inventory, and hence uses any short-term spike (as a one off payment should be) in consumer spending to reduce remaining stock.

The consumer of course also has his or her own built up inventory, known as debt. The need to reduce that "inventory" works in exactly the same way. This is plain common sense, and why people wouldn't think this would be the case throughout the economy (both big and small) is beyond me.

It's the complete folly of believing consumption drives growth. When one directly takes from production, and places "stimulus" in consumption the above result is what's achieved. Hence the economy is now in a worse position, then it otherwise should've been.

This utter economic illiteracy, and indeed vandalism, is replicated across the world. Until the clowns running such policies understand the true function of money, things won't be improving any time soon.

"And what of the stimulus package, that $10-billion fistful? Well, it looks as if the bulk of it was saved or used to pay down debt."

Well, obviously that didn't stimulate anyone's private sector very much...

"Consumer spending only grew by 0.1 per cent. Now that's way below trend. It's about the same as the pace we had in the December quarter but bear in mind that we had this huge cut in interest rates and we had this very sharp fiscal payout in early December and yet growth didn't pick up."

- Bill Evans, chief economist at Westpac

Paul Walter: "I think I understand what you're getting at. We go into debt now but if the money doesn't go where it should go, there won't be any capacity left to regenerate and cover the debt on installment later at the other end of it all."

What I've tried to get across, maybe unsuccessfully, for a period of time, is that every action causes a reaction. All actions are based on the information available. Reactions are then understood depending on a person's particular bias (understanding). This skews (directs) any particular further action etc.

It's near on impossible to predict with certainty a particular action people will take, which makes trying to understand it so much fun (challenging), and indeed in the case of a market, so profitable or unprofitable. The best case scenario is thus based on the most likely, and again enter the true science of mathematics.

In common speak, Australia is faced with a great challenge and, because of this, a great opportunity. If a man wishes for a successful marriage, one doesn't stay out every night with other women. Every success of course requires effort and work, often at many times contrary to one's first base, and preferred short-term choice. A successful economic outcome isn't any different.

By concentrating on short-term feel good measures, such as obscene levels of executive pay (meaningless in the bigger picture) say, Australians are missing the forest for the trees. Their actions are also being skewed, and this could (or more likely will) lead to reactions that are not in the overall best interest - causing further actions, reactions, actions, etc, etc etc......

It's seize the day or lose the day. It can't be, and it'll never be, any other way.

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I think I understand what you're getting at. We go into debt now but if the money doesn't go where it should go, there won't be any capacity left to regenerate and cover the debt on installment later at the other end of it all.

Instead of using a few of  the bickkies to buy a good heater,  we are using all the bills unimaginatively for bonfire fodder.

Seriously, please continue - maybe a thread starter?

But not too much polemics, eh?

Just walk us thru in common speak.

The Bank of England officially begins printing money!!!!!! Not only should those involved never be in that position, they should face future jail terms.

England and indeed much of wider Europe no longer deserves economic survival. Many a consensus is that they're already walking dead. Life in social paradise Europe is about to change. Major change.

Zimbabwe officially congratulated the UK on their decision (I shit you not). Stating they've been running an identical policy for the last few years. It's so funny it's sad, then funny, and of course very sad again.

Anthony Nolan: "My estimation of the capacity of the Australian workin' classes to turn to the irrational right is no mere phantasm of middle class anxiety."

Of course it is. They've no more to lose than the middle class at any rate. Much less in fact. Why bother with an outbreak of revolution? And wasn't the outbreak of Obama love meant to finish this worry once and for all?

Hell, the "working class" got one shot at the title this last decade - now unfortunately all over. And the professional middle invented climate change. Which we'll see a decline of hysteria in conjunction with a decline of wealth. No surprises there.

Hell, "Joe the plumber" presented to fix the bathroom, in his brand spanking new Lexus, and the world was entering armageddon. A natural order has of course been disrupted. Any close inspection of the "destroying" industries, and those that inhabit their corridors tells a story.

No surpise really that such class warfare would enjoy most support in a place like the UK. A place where the "tradesman entrence" has always remained, if not now in the physical sphere.

And those same grunts may now not wish to do the legwork in the fight for professional middle survival - and their very own personal armageddon - real and very tangible this time. Well, boo fucking hoo.

Anthony Nolan: "That the working class is equally capable of a bloody nasty turn to fascism if it is held out simple answers to complex problems."

The comment sums up nicely the never ending middle-class fear of the grunts. Which way will they jump? And here I was thinking Obama had changed the equation forever onward....

Class works in a circle rather than a progressive line. The capitalist class (American definition here) will always share more in common with the underclass. Take away money and both sub-cultures are identical in cultural workings. Fear of police (underclass), tax collectors (capitalist class) etc. Across any measurement, the similarities are uncanny.

The middle class, or more precisely the professional middle class (officer ranks), of course decides the politics of our era. Hence the need for, and indeed the fear of, grunt reaction. A never ending deflection battle thus ensues.

The danger of the middle can be seen through any number of "ultimatum game" simulations. Any breakdown of class and occupation clearly shows the main face of irrationality. In a quest for "their perceived" holy grail of fair division, these people are willing to lose to win. Or at least perceive, in their minds, a loss as a win. It's burn the village to save the village at its most dangerous. And indeed its rawest.

Anthony Nolan's plaint re trains running on time, aka " the fat controller".

Like Sydney, am reading Melbourne is having the experience of being on the cutting edge of advanced civilisation (trains meltdown, etc).

We don't have these problems in places like Adelaide, where the blessings of "civilization" and "progress" are a bit later in coming. Backward yokels that we are in our "pissant" country town. Same with Perth, one hears.

Were we more advanced, we would agree that the only purpose of government is the transferring of our assets, with a receipt in the form of accumulating public debt thru corporate bailouts and welfare, and resultant run down thru lack of readies for real, as opposed to white elephant infrastructure, to the hedge funds, merchant banks and "equity" that bribed and electorally bullshitted government that then legislated itself out of its original purpose. With the help of "pragmatic" (fascist? opportunist?) elements in the union movement and ALP (ok, so some of these were only trying to make a realistic accommodation with globalisation).

Silly us!

Whoops....

Better mention ETSA, gas contracts, etc before Richard jumps on me. So progress is a little slower, not a great deal slower, than previously suspected.

Richard Tonkin: "At the moment, we are probably closer in context of the Midwich Cuckoos".

At the moment all-pervasive and the developing Foucaultian norm, I concur. For a charming authentication of this proposition, refer to tonight's Dateline report on "development" in Cambodia. If the more myopic can see past the external differences, they may find Richard's comment well-demonstrated.

Anthony Nolan, the mess in NSW is a classic example of the coopting of government by big capital (similar to Cambodia, et al). NSW is an example of extinguished government, as in "Dead Parrot" . It now only exists as a shopfront/component of a new feudalism specifically in the form of an ongoingly recycled resource (painful being eaten alive).

F- knows who really controls NSW , but it is being dismembered and the Bonds version is only one example (readers, get beyond artificial government/ private distinction and get back to what "government " really is!) of it and why and within the background, including what the end game is. Once again, refer current Dateline's "Cambodia", if you can access it.

I digress. The point I wanted to make is, that one could see Hansonist rednecks as both symptoms and victims of the system, rather than just as executive actioners.

Don't forget they already tried to.

"..impose a vicious twerp on Sydney ( to make the trains run on time)"

And people ran off Michael Costa, a fellow also interestingly of Italian antecedents, who now lurks sulking at Murdoch castle. Costa is like Morphett - just there to dismantle the system if It can't be made to work whilst accommodating its own ransacking at the same time. But every so often it gets so egregious that even Australians wake up.

The Hansonist phenomena had its origins in rightful popular resentment ill-directed and then manipulated by the criminal classes after the early nineties recession. This time, we need to keep popular anger out of the hands of the criminals. Richard and Anthony show us a way, thru the heart and mind of cultural resistance and building of community spirit. (Chavez has based his rise on this.) But it is a tenuous way given the capacity of civilisation's real enemies to control and exploit media, ideas and sentiment.

BTW, re " the private school educated"; who was it that legal-ated (my invention), financed , publicised and exploited the Hansonists and their primitive and easily dismantled emotivenesses and nonsenses (thought I'd covered that in an earlier post)?

That the working class is equally capabale of a bloody nasty turn to fascism if it is held out simple answers to complex problems. 

Chavez anyone?

At this point even I'm annoyed enough to want to impose some a vicious twerp on Sydney to just get some public transport happening.

Remember Hanson? Who do you think voted for her? It wasn't the private school educated entrepeneurs was it now? It was the unemployed of Ipswich. Who are probably not too dissimilar to the unemplyed anywhere else in Australia?

I get the gist of what Anthony Nolan and Richard Tonkin are suggesting.

The Tasmanian situation of the last two decades is both different and similar, with its alternative proposals of sustainable science based development, including tourism, against the pillage of a nasty little constellation of odd bedfellows vested interests. Last time I looked, the bases ( if you can call a forest/tree a "structure" and what about die-back, anyway) on which alternatives were constructed had been, well on the way to being blown away. Specifically to ensure that said alternative would not remain viable. The triumph a "situational goods" economy based on destruction and rationing rather than construction.

Anthony's and Richard's comments relate to components rather than the overarching immanent system which, as the cost for its own survival, tolerates such transgressions and subversions, until it shows its real face in places like Gaza, Tasmania or with PacBrands, unactionable event like global recession. I hope they don't join Paul Morrella in confusing the model for the actuality.

But they seem Wyndhamesque, as the efforts of a few healthy survivors, after the comet hit and the Triffids took over.

Richard, can live entertainment survive cataclysmic climate change, depression and incipient fascism at the point of a bayonet? Anthony, what good the Lucas workers' paradise under the same circumstances, let alone under competition from those less scrupulous, intent on cornering a market. Wall St is post, not pre, Lucas.

But I agree that, under the current circumstances, all we may be able to do is a sort of Fahrenheit 451 warehousing of values, for a time long past our own imminent foreclosurings.

The lights are going out...

"Not in our time

or our children's time, or theirs...".

What am I seeing proposed in this thread? The triumph of unreason over reason employing the selective use (perversion?) of reason?

Is it a coincidence that the Age of Reason is vectored with the times of reactionary modernism? If the logic here is true and not merely operative within its own denial laden self referentialism arbitrarily dislocated from contingency and context, then the whole affair cannot eventually avoid collapsing under the weight of its own illogicality and contradictions, as I see it.

And the Gadarene Swine, accompanied by numerous pet Lemmings, hurtled stubbornly toward the abyss, in the face of all and any logic proposed from those foreseeing the inevitable result.

Apropos Manuel, again this writer asks "Que?"

In support of the argument that the Australian working class has little political spine and scant political leadership do please take the effort to compare and contrast what the now sacked employees of Pacific are doing (lining up for the dole) with the efforts of Lucas Aerospace some years ago now.

Some of the emotion reflected in this thread is honourable but from a business point of view not convincing.

We have chosen to live in a competitive world, and a brutal one at that. We can always chose otherwise if we wish via our democracy, for it has been our democracy along with the unions that has made capitalism more palatable and financially rewarding for the worker.

To an extent globalisation is reversing some of the hard won benefits of the working class in our western democracies. It is easy to understand that the workers don't like this very much and talk about the social responsibility of corporations etc.

This is like Richard Dawkins talking logic and reason to those who truly believe in their God - a personal belief that has nothing whatsoever to do with logic and reason. Running businesses (especially large ones) on the other hand is all about logic and reason and has very little to do with emotion, except that of the investors.

The first rule of the game, as far as business is concerned, is to make a profit. The second rule of the game is not to lose the cash you have already earned. Making money is usually easier than keeping it.

Sadly the Corporations Act doesn't deal with the psychology of legal business decisions (and their effects) and assistance (to business) by governments of the day, for whatever their reasons.

Businesses are in business to make money. That is what their shareholders expect. If a business can buy a widget cheaper from overseas then it is logical and reasonable for that business to do so. The same goes for manufacturing. The Chinese work for a lot less than we do and under far worse conditions in many cases. There is no way we can compete with that.

If we want to change the way businesses do business then we will have to change the Corporations Act. And if we make it too hard for businesses to make money then they will go elsewhere anyway. Already Australia is a particularly difficult place to run a business taking into account all the compliance shit that any business small or large has to put up with these days.

For a very short period in our history some could "enjoy" the (financial) security of a job for life, but we have now chosen to live in the global economy. If we don't like it all we have to do is change, and that won't happen until democracy makes it so.

In the meantime it will be business as usual.

Just been out to watch the soccer final with some mates and mercifully Adelaide tho beaten at least didn't capitulate in the feeble way of the last matches.

Several new posts. Thanks again Anthony Nolan, more succinct than I could have put it.

To tell the truth, the post I sent off last night was the early therapeutic draft, not the less heated post that I wanted to ultimately send.

Paul Morrella has the difficulty of arguing an unpopular case given all the circumstances involved, but he's argued a true point. At base, I'd object to other people telling me what to do with what's genuinely mine, also. He hasn't said he applauds the behaviours, more tried to explicate on the reasons and people behind it. One thing, if any one ever the thought the class split was over, I'd say think again. Clearly there is no comprehension of what's involved for the other party and a real clash of cultures and outlooks. Perhaps Marx and others are right in suggesting that conflict is as intrinsic as it is inevitable.

Paul has said they have to be hard, they have to do right by the people who have entrusted them with their money. One supposes so.

But I think the thing has raised some questions about the game that Ernest has touched upon. There is too much fishy, too much being obscured or kept quiet, concerning it. As Victoria more or less commented, it becomes a little Orwellian after while. I think it’s the beginning of a phase, not the end, as Gillard said the other day. There are going to be some titanic battles during this upcoming phase, with danger for all involved.

The government must uphold the law but runs the risk of being uncovered as too passive to big business on one hand, or driving off business on the other hand. Meanwhile the opposition must attempt constructive criticism without being opportunistic or biased, or will face irrelevance, in the current climate, if seen as not being an honest broker.

The unions must surely resist, but without hot tempered rashness The corporates and banks lurking in the background, if trying pass on costs for their foul ups on to others, must be very careful the continuing incidence of these events doesn't really turn a rightly increasingly sceptical public right back on them, including for bystander productive businesses who deal squarely with others. Too shifty and obnoxious by half a certain ilk have been in their dealings with other people, including many less fortunate than themselves, for the shabbiest of motives, it seems to me.

The reason others' posts hearten me is the sense of a recognition of something very contrived and devious behind what appears just an unfortunate situation.

But Morrella is right to point out the other side. I also must remember that bad temper is no substitute for passion, it is the enemy of rationality and constructive engagement.

Paul Walter: "In a narrow sense you are right, but it seems a very limited way of looking at what a given incident could signify."

My personal feelings don't matter in this instance. I'm pointing out how a particular system operates. Such a system can of course be changed, and I'll then point out the consequences of the changes made.

Personally, I think Australia and indeed the world, is attacking these situations in the wrong way. I also think that when desperation finally hits (we are still in the hope phase), the correct advice will be sought, and the correct course of action will be taken.

I've never had a doubt.

Ernest William: "This means of course that the ordinary mums and dads are outvoted (putrid democracy at work). Bill Shorten was very critical of the government for not taking action to prevent this sort of thing happening - indeed, President Obama is now working on it in the US."

Firstly, company voting is "generally" proportional to stakeholding. It isn't one man, one vote. It's a capitalist solution to a capitalist venture.

Secondly, the guy babbling about changing this is an obvious idiot.

Thirdly, Obama isn't working on changing any such thing. Obama is stating that when a government makes a loan it should be with conditions. I haven't a problem with that. I also don't have a problem with a government having a vote proportional to its stakeholding. And neither does the law.

Apparently there were no questions asked for loans according to the media, although the responsible Minister Kim Carr was livid when Ms Morphett announced the decision.

Plainly not a responsible use of taxpayer money.

.Similar help provided by the Obama administration is reported to be in the form of shares in those companies, and the Republicans have cried foul because they considered that socialism.

That's part of it. However, more than Republicans (probably playing politics) are deeply concerned. Taking any holding also means taking on any liablities. In the case of Citigroup, such liabilities could go well into the trillions. Frankly this is very dangerous to the American taxpayer.

If the Rudd Government is giving these companies taxpayers' money to keep them afloat, and they are on the market, then the amount given should be covered by each company's shares at current value.

Sure.

They're the people making the loans, it's up to them to make the conditions. Seemingly they've been a soft touch up until now.

Something that concerns me is the ease with which people resort to calling someone or other a t if they take action that is disagreed with. A search for ' t' on this website results in 364 hits. By comparison, a search for climate change draws 938 hits. So are we to conclude that m in Australia is an issue at least a third as important as climate change in the public debate?

Dictionary.com defines m as a governmental system led by a dictator having complete power, forcibly suppressing opposition and criticism, regimenting all industry, commerce, etc., and emphasizing an aggressive nationalism and often .

I hardly think the CEO of Pacific Brands fits that description. Please, don't fall into this trap of throwing around terms like ' t'. It just cheapens your argument.

Not since the Great Depression has American business been so vilified for financial scandal, environmental recklessness and general disregard for the public interest. The very names of the disgraced companies — from Enron to Worldcom and ImClone — conjure up images of shame. It is enough to make executives question whether it is even worth trying to please stakeholders not to mention earn a profit.

Most companies are totally focused on profit. With many businesses putting their hands out for government assistance, maybe whenever the government uses our money to invest in private enterprise we should demand that the company moves to Triple Bottom Line accounting.

We could also give tax breaks to companies that moved to triple bottom line accounting. That is, companies that took into account the effects their activities have on the environment and the social support.

The exchange below between Paul Walter and Paul Morrella is illuminating. 

Paul W's prose hits the screen and sticks like a gob of phlegm to a footpath. 

Paul M claims that the mistake of the CEO was to appear in public instead of keeping the whole thing in the club where it would be merely business as usual. 

Managers are now paid so much by way of bonuses and share packages that they effectively operate as a ruling class.  The ruling class, as ever, knows its own interest and nothing else.  Whole new generations are about to be educated in old fashioned class consciousness and at a time when the ALP is less capable of acting defensively in class interests than any time in its prior history. 

Appeals by citizens for a modicum of decency in a putative national interest will continue to fall on deaf ears.  However, attempts by the likes of Morrella to suggest that the class nastiness of management is merely the objective workings of market rationality will always be exposed by the heat and clarity of someone like Walter.

The capitalist media is surprisingly quiet on this.  I wonder why? What happened to all the brave communications degree'd students? Oh, that is right, they bumped into the reality of corporate ownership and lickspittle line bosses and are now silent.

Plus ca change.

Paul Walter: "Just watching SBS describe how Pac bond executives generously bestowed upon themselves massive pay increase before the sackings."

I'm not a specialist on this particular company, I don't know much about it to be honest, though I have had a small look at the situation. From my understanding all the shareholder agreed benchmarks have been met by these particular people. In company terms, that's all that matters. The government (general public) doesn't have a say. Of course the situation could be changed by either government or private citizens taking a direct stake in said company. Putting their money, where their mouth is, so to speak.

The government apparently gave this organisation a number of no questions asked loans. There's no such thing as a poor borrower, only a poor lender. If governments can't get their own contracts (agreed conditions) right, that's nobody else's fault. Perhaps they're the questions that should be asked.

If arsonists are jailed for psychopathic attacks on society and the Japanese taken on in battle and defeated for their alien assaults, as the history books relate, how long before Australians wake up and come down on white collar criminals who also so relish destroying out democracy.

Government has weaned people so much, they now believe it's everywhere. A company isn't a government. It doesn't have any of the same responsibilities. It merely follows the law as laid down, and that's it.

My impression last night of CEO Sue Morphett, was of a pig. As the true story continues to come out in dribbles and drabs, the impression is exponentially reinforced.

These people aren't politicians. They just can't get a shiny new tie and a head full of bullshit. They're in a position of needing to do real tangible work. The mathematics never lie. Such people should only ever appear on business channels. This particular lady has made an error of judgement doing otherwise.

Just watching SBS describe how Pac bond executives generously bestowed upon themselves massive pay increase before the sackings.

Can people believe this?

If arsonists are jailed for psychopathic attacks on society and the Japanese taken on in battle and defeated for their alien assaults, as the history books relate, how long before Australians wake up and come down on white collar criminals who also so relish destroying out democracy.

My impression last night of CEO Sue Morphett, was of a pig. As the true story continues to come out in dribbles and drabs, the impression is exponentially reinforced.

Business decisions are made on future opportunity assessments. That's the thing that should be of most worry to Australian workers. The verdict is in, and it's two thumbs down. Nobody can beat mathematics. That includes nice sounding politicans.

The irony of course is that the government will ultimately end as the greatest down-sizer of them all. They (or most involved) just don't realize it yet. Personally, I'd advise them to hold back on the moral outrage - it'll come back to haunt. All that money wasted, all that money borrowed - the reckoning will always come.

There's what politicians promise, and there's what the market will bear. The market, like it or not, will always win.

No doubt a politician fronted one of these factories at election time - politicians find them like leeches find blood. I'd be interested to know what was promised. The Emperor of course has no clothes.

Pac Bonds is about the "redesigning" of a relatively well developed manufacturer debt saddled, by previous Gordon Gekkos equity types, into an entity now fit for resale to multinationals, for operation as a component in a tax dodging, paper shuffling black hole for same, I'd suggest.

The sacking-as- "Gaza-ing" of workers, what’s more, is not accidental any more than it is necessary, except a deliberate statement by the CEO to international capital, announcing the extent to which Pac Bonds is prepared to subvert human rights, play off shareholders against stakeholders and sell out community interests, including knifing taxpayers who helped subsidise the firms, in the advancement of a deliciously anticipated, morally criminal and humanly destructive, agenda by lords of the universe of the same sort as that in play on another level, with the Wall St Heist, or politically with examples like Iraq and Palestine.

As Gaza was not really about Palestinian terrorism so much as the massaging of a dumbed down, captive Israeli electorate, for the electability of unscrupulous politicians in Israel, Or Tampa so much as heroic protection from "queue jumpers" as the manipulation of Hansonism by Ruddock for electoral purposes in view of now apparent obscured agenda on behalf of capital. People need to develop a like wise more sophisticated approach to what Pac Bonds is really about.

The bean counters and lawyers employed by Morphett this last year could give us a real appreciation of the mechanics and abstracts, which have nothing to do with productivity but these are the very things not being elaborated upon in the media at the moment, but evident in all the liability shuffling that we see also with Wall St.

It's clear that people like Morphett view people as cattle tho, in the abstract, in a very fascist way.

"four legs good; two legs bad".

I really cannot see what all of the whingeing is about in this instance. What do people expect from an owning class hell bent on maximising return for investment? Why should they keep on earning what must be clearly inadequate returns on their share holdings when these can be potentially maximised by sending the manufacturing to China?

Hell, let us face it, that place has considerable market advantages when other matters are discounted. If we get over our sentimental attachment to the idea that we ought to trade with democracies as a priority we see that China's advantages are as follows:

• pitiable wage rates;
• no on costs for occupational health and safety regulations;
• no unions to force wage and occupational health and safety issues;
• virtually no environmental regulations;
• no enforcement mechanisms to speak of for either occupational health and safety or environmental protection;
• an historical record of the state suppressing dissent with admirable haste and force.

To hell with human rights, industrial citizenship and so on. I want my undies cheap, dammit.

The whining going on in the press is sentimental bunkum - front page photos of honest and loyal workers (ie, dupes) bemoaning their lost years and foregone income. Oh, pleeese. It is global capitalism so just bend over and take it like a decent pleb, will ya? Silently!

Food, minerals/ores and primary produce aside, there is nothing we make in Australia that cannot be made cheaper in China. Hell, even their milk powder is enhanced.

I think that the Australian managerial classes are slackers and clearly lacking ingenuity and drive in failing to export as much of what is left of Australian manufacturing offshore asap.

Moreover, as India becomes more telephonically telecommunicative I think we ought to be exporting as much of our accounting and banking and other business service sector work there asap as well.

Pissweak. Pacific should have done this years ago.

The unemployed and underemployed can be put to use servicing the needs of self funded retirees at rock bottom work test wages. I want a gardener. I want a gin and tonic. I want a semi-literate rural unemployed oaf on whom to look down as she reforests my rural holdings. I want someone to sneer at while she hand washes my management sized euro-underwear with the extra big cup for us hard men.

I haven't worn one since about 1960 so who wears the wretched things anyway?

"While we could wear these brands we knew our country could always be self-sufficient in putting shirts on our backs. With the brands about to be accompanied with a "Made in China" tag, any such faith and trust is most likely about to be eroded."

Why would anyone imagine Australian manufacturers could have a comparative advantage in producing cheap underwear?

Anyone could do make a singlet. It amazes me that even China has a comparative advantage in such a thing compared with, say, Vietnam, Eritrea or Honduras.

If Australia, with its high labour, transport and other costs wants to manufacture clothing, it needs to add value to them way beyond what it takes to make up a singlet or pair of undies.

You could probably train a house cat to make a singlet.

Illiterate, blind kids working in water-powered mills were able to make cotton singlets in Charles Dickens's time - and it's got a lot easier since then.

Australia manufacturing needs to niche market quality, value added products if it wants to survive in a global market place.

Look at the French and Italian garment industries. To survive, they go up-market with exclusive branding and distinctive, almost unique products.

The don't make bloody singlets any more than they would try to export cheap cars to India.

So, what will Kevin do? Let me guess...

He'll deliver an sanctimonious, useless sermon about the "immorality" of Pacific Brands's executive salaries, tell us how "un-Australian" Bonds are, how the Pacific Brands pull-out from Australia is an "attack on the working families of this nation", he'll make no mention of the unconditional Government subsidies Pacific Brands got from Canberra, and he'll write an essay blaming it on the Howard government and 'Liberalism'.

Richard, you said there were a few holes in your logic - I'm going to be a spoiler and point out one of them. The push to buy Australian is fatally flawed. Australia is an export nation - ie, we make our money primarily out of exports rather than servicing the domestic market. If you argue that we should buy Australian products, then you must also be in favour of other nations buying locally produced products (that would be only fair). That would put a bit of a dampener on our export market. Because we are a nation with a relatively small population, it would be economically unviable to produce some products if they were for domestic use only. So we would have to get used to having a lot less choice in the products and services available to us, and also higher prices because to balance our loss of exports we would have to lower our imports (so no more cheap clothes, electrical goods etc.)

So we would have to go back to a 1950s way of life.

On executive salaries though, they are obscene. Here's an idea - stop paying them bonuses. They seem to get the bonus regardless of company performance so how about just doing away with them.

Richard: On the other side of that one, Veronica, I've just been listening (on World Today) to a Woolies spokesman worrying about damage to the increase in Bonds sales they'd made over the last twelve months. Cripes, even Joe Hockey's talking about brand damage! You are, however, quite correct. I can't help wondering though, if this is a cultural "tipping point" regarding globalisation?

Could anything have thrown the injustice of Pac Bond into starker relief than the Sol Trujillo $35 mill handshake- unbelievable in itself but then capped by Trujillo's arrogant justification on the basis that he had kids etc to look after.

Que?

What happened to the days when people were paid for building or fixing things, rather than demolishing them

Richard: Let's just say, Paul, that Sol might have become an original form of self-funded rotundee - that 1000 jobs he got rid of would've made a significant contribution to his package!

There's actually very rational economic reasons why something like this would happen.

People should firstly understand the damage their politicians do to them. When these second raters promise things, for their own selfish reasons, it has consequences. The basic scrambled mind, that is the average voter, doesn't ever really get it. Promises cost, and every cost, is always collected on. From somewhere.

The majority of businesses wouldn't be against taxation lets say. It's the level of taxation, and other assorted expenses that cause the problems. Australia is an exporting nation, that's all it can be. So there isn't any choice of turning its back on its industry. Even if it wanted too. So making it work should seemingly be priority. How do you make an industry[ies] world's best? With great difficulty is the answer.

I'd suggest taxes only be placed on consumption, and all taxes removed from production. That includes income and company taxes. With less government revenue (at least in the short term), it will mean that government might actually be placed in a position of doing real work. Australia will also lift its saving rate (rather quickly), which of course is the real driver of investment, and naturally growth. Not the economic farce (consumption) Australians and indeed much of the world is currently being subjected.

Industry grants are a farce and a waste of time and money. This situation should be a warning for exactly what will happen to the Australian car industry. An industry thats already dead - even if some people don't know yet.

Alga, Marilyn and other seeming exceptions to the rule who actually feel there are implications in this nasty mess that might eventually wash over them, too, can do no better or worse than commend an article by Bernard Keane at Crikey - Blokes make cars, women make clothes... guess who wins:

Pacific Brands decision to cut 1850 jobs says a lot more about the ineptitude of the company's board and management than about Australia's textile, clothing and footwear industry, or for that matter, the Governments stimulus package

After dismissing the opposition's opportunistic response, Keane examines the government's slowness in taking on the "gougers and usurers" at the top of the banking sector and their "blame the victim" (shades of the US!) position.

He then moves to the role of tariffs and the incidental morphing of these into tailored government assistance packages such as Bracks' for the auto industry .

From there comes some insight into the response of the government to the two unions involved (auto v TCF) and what the reasons for that could be, and a hint of gender responses involved.

This at a time when observers are also observing the implications the elevation of NSW right Senator Arbib as a sort of Praetorian guard or Sejanus for a firewall building social conservative pm and his faction, who have apparently become fearful of a lefty deputy leader and her associates.

Definitely worth a read for anyone who cares.

I guess my question is, if it is not necessary to inflict this damage on a community, why is Pacific doing this?

Paul Walter, that's easy to answer, profit growth at any cost and pure elitist greed. With a rational and logical look at globalisation, there couldn't be any other outcome but disaster. For it to work, you need consensus and a level playing field, plus a regulatory system working equally for all the global economy and you need it to be run by non vested interests. Nothing will change, no matter how much governments prop up the elite, they'll continue down their merry path to complete chaos. Governments refuse to reign them in, they prefer to let the market and their vested interests run their own race under their own constantly changing and destructive edicts. Without accountability, they do as they please and get rewarded with the people’s money. How can you run a society under those conditions.

Companies like Pacific are signing their own death warrants, as they will soon find it hard to supply markets from far away as the worlds economy collapses faster and faster. The elite continue with no change to their approach or desired outcomes. The country can't survive on an out of control incompetent government, bureaucratized system and just the service industry. If we import everything, we have no workable economy, just impoverished lot fed consumerism. Bureaucrats just spent $1 million dollars to send some of them to a course on how to be happy, but they still can't tell whether they were unhappy before the course or happier after it. Just shows why we are in such a bind with no way out until we change the entire system, I think nature will be the one to force that upon us, plus the collapse of the current economic fascism.

The Pacific announcement seemed barbaric in its brutality, on first view.

My initial thought was that the company was using recession talk as a smokescreen for offshoring, or worse still, making its workers pay from may have been bad debt purchasing speculation that had gone wrong.

The newspapers make clear a number of things.

The plan has been the table for a year and is apparently the handiwork of Sue Morphet, the CEO who quite callously, in my mind, presided over the announcement. The SMH suggested that the announcement probably involved pressure from the banks for more cost cutting, for a company that has apparently had financial problems over recent times. But an Age article suggested that Pacific itself was claiming this was not so and it was comfortable in knocking back a) yet more government funding and b)close a number of factories that are apparently quite efficient and profitable in pursuit of its bloody minded objectives.

Some commentators in the dailies seemed to feel the plan might be ill-conceived and much of the blood on the floor will be unnecessary ,including damaging for Pacific itself.

And the government is of course angry, having offered yet more bailout money to the firm, which has already benefited from government largesse in recent years to finish modernising itself and was offered more recently. Could Pacific not waited a little, for the sake of the community? What if firefighters fighting the bush fires had also adopted a sort of work to rule attitude, regardless of who else was hurt, instead of being imbued with that "community spirit that people like the Meredith Hellicar clone Sue Morphet perhaps pathologically lack.?

I guess my question is, if it is not necessary to inflict this damage on a community, why is Pacific doing this?

It's certainly true that the same newspapers presented item after item, related and unrelated to the Pacific story, of a uniformly gloomy nature as to the national and global economy (Pacific is also axing 850 jobs in China, for example). And 730 Report presented an equally gloomy but unrelated segment on the grinding to a halt of the Chinese textile industry, apparently going gang-busters as late as late last year.

All of which had me in mind of a piece I read at the lefty "Information Clearing House" blog just last night, written by an American Academic, Prof. Ismail Hosein Zadeh, who believes that the current "Hoover" attempts to right the global economy at source, back in the United States, will largely come to naught, because the Obama administration is too heavily under the influence of Wall St, including in the way of heavy election funding. People like Timothy Geithner, recently given the job of creating the banks bailout there, are actually Wall St 's creatures, embarked on a "Wall St First and regardless" strategy that ensures that any restructuring does not apparently address the problems with underlying structural components of the economy (vested interests responsible in the first place), additional to injuring millions of people both in the US and global economy that is effected by it.

Sounds like the Big Heist still, doesn't it?

Certainly Small Business locally has been complaining loudly enough about banks withholding credit over recent times, for Craig Emerson to call a round table between the banks and small business in the next week.

Meanwhile ministers like Kim Carr can only fume over the anti social decision of yet another company previously given generous support at different levels from sections of the Australian community, in turning around and kicking us in the face for our pains.

Am almost inclined to smile at Richard Tonkin's hopeful talk of a belated return of "community spirit" in the wake of the bushfires, when Pacific then treats its fellow Australians as it is doing for what seem, so far, perhaps unjustifiable reasons.

It does seem that globalisation has turned vicious as well as criminal and feral.

It's pathetic really. What the dreadful woman said was "we prefer the slave labour of the Chinese to paying decent wages in Australia."