Author: David James

  • ECONOMICS

    Trump's pro-globalisation critics miss the key questions

    • David James
    • 07 February 2017
    10 Comments

    Many defenders of globalisation express frustration at the rise of Trump and what they see as an ignorant and self-defeating backlash against its virtues. But they have no answer to the most pressing question: Is the global system there to serve people, or are people there to serve the global system? They also never address a central contradiction of globalisation: that capital is free to move, but for the most part people are not, unless they belong to the elite ranks.

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  • ECONOMICS

    Wage inequality is a bigger threat to workers than robots

    • David James
    • 21 November 2016
    9 Comments

    The idea that machines will replace humans, transforming the work force, is far from new. As technology develops at an accelerating pace, there is growing concern that new social divisions are emerging. While there are signs of deepening social divisions between the rich and the rest of the working population, previous predictions of a collapse in employment have proven to be wrong. This is largely because a confusion arises from conflating production and transactions. They are not the same thing.

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  • INTERNATIONAL

    Understanding Trump the businessman President

    • David James
    • 10 November 2016
    17 Comments

    The first step for a business person is to make the sale, usually by over-promising and tapping into the emotional triggers of the customer. That is what Trump did. Over and over, he assured everyone that electing him would be 'fantastic'; he would deliver; customer-value is in the bag. The next step, once the sale is made, is for a hard financial logic to be applied. Trump's hype will be, at the very least, toned down. Once the customer has coughed up, business people typically become extremely pragmatic.

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  • ECONOMICS

    It will take more than a royal commission to tame the banks

    • David James
    • 10 October 2016
    2 Comments

    The strategy of the Big Four banks' appearance in parliament was clear enough. Blame the whole thing on a need to improve impersonal 'processes', imply that there have been a few bad apples but overall things are fine, and promise to do better in the future. The greatest challenge was probably to hide the smirks. A royal commission is being held up as an alternative, and no doubt it would be more effective. But a royal commission would not address the main issue.

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  • ECONOMICS

    The bad business of privatisation

    • David James
    • 13 September 2016
    18 Comments

    The argument that putting government operations into private hands ensures that things will run better and society will benefit is not merely a stretch; it is in many respects patently false. The argument is based on the claim that the market always produces superior price signals. Yet one area where private enterprise definitely fails is long term stability. If there is an expectation that a privatised service should last in the long term, and usually there is, then selling it to business is a bad choice.

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  • INTERNATIONAL

    The merits of Trump's economic agenda

    • David James
    • 09 August 2016
    15 Comments

    The main legislative catalyst for the GFC was the repeal, in 1999 by Bill Clinton, of the Glass Steagall Act, which had prohibited commercial banks from engaging in the investment business. This allowed the investment banks to indulge in the debauch of financial invention that almost destroyed the world's monetary system. Trump has made the reinstatement of Glass Steagall official policy. Should that happen, it could be the most beneficial development in the global financial system for decades.

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  • ECONOMICS

    Beyond Brexit doomsday myths

    • David James
    • 28 June 2016
    15 Comments

    Had Greece decided to exit the EU last year the consequences would have been far greater than Brexit, because Greece uses the euro, whereas Britain has the pound. British interest rates are not set in Brussels, they are set by the Bank of England. And it has an independent fiscal and budgetary system, to the extent that it is possible. The British government has been imposing 'austerity' measures because it subscribes to neoliberal orthodoxy, not because it is being told to do so by Brussels or Germany.

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  • ECONOMICS

    How financial markets are stymying climate action

    • David James
    • 15 June 2016
    7 Comments

    There is little doubt that the means to dramatically reduce the amount of pollution produced by developed economies is already theoretically available. It is perfectly possible to redesign industrial systems so that they do not pollute and do not consume finite resources at a rate that is unsustainable. But it requires a radical shift - and the biggest barrier to that shift occurring, the financial markets, is barely even mentioned in discussions of the challenge.

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  • ECONOMICS

    Serfs sucked dry in the kingdom of banks

    • David James
    • 18 April 2016
    11 Comments

    Three finance-related events are currently gaining great attention in the media. One is the so-called Panama Papers. Another is the proposal to have a royal commission into the banks. And a third is the furore over the unaffordability of homes and the debate over negative gearing. On the surface they would seem to be quite separate issues. But all three issues demonstrate yet again that banks are, if not the most malign organisations on the planet, then certainly among the most dangerous.

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  • MEDIA

    CommInsure exposé proves spin doesn't always win

    • David James
    • 16 March 2016
    7 Comments

    Most spin doctors are either former journalists, who have personal experience in how the industry works. If a story appears in the media, it is more often than not because some spin merchants want it to be there. Happily, there are exceptions. Gold Walkley winner Adele Ferguson did a brilliant exposé of the insurance industry that was definitely not on any spin doctor's agenda. Indeed it was a demonstration that spin has its limitations if the journalist is skilled enough to get beyond the wall.

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  • ECONOMICS

    Labor's negative gearing heroics alone won't save us

    • David James
    • 26 February 2016
    8 Comments

    It is not often that federal political parties exhibit courage. Labor's decision to change the rules on negative gearing is a rare instance. It targets what is most dangerous and unfair in our financial system. Expect howls of protests from powerful lobby groups if it ever looks like becoming policy. But these changes alone won't be enough to deal with the ills of the financial system. While they are designed to target the bias away from productive investment, they won't remove the attraction towards property.

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  • ECONOMICS

    Consequences loom for global debt binge

    • David James
    • 19 January 2016
    11 Comments

    Low interest rates tend to change the understanding of risk; having high debt seems to be less of a problem because the cost of servicing it is lower. This cavalier attitude has been especially evident in Australian households, which have racked up more debt relative to the size of the economy than any other country in the world. The massive appetite for debt has been replicated across the globe. The world may have survived the era of casino money - just - but it is now facing another crisis.

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