Year: 2012

As the eurozone crisis has now seemingly calmed down and my friend’s updates become more ecstatic by the week, I am afraid that we are edging ever closer towards his dream scenario. To most Europeans, bankers excepted, it may actually seem more like a nightmare.

After the turmoil of the Global Financial Crisis, economics needs to escape from the dead ends of neoclassicism. Unfortunately, Basu’s self-proclaimed ‘groundwork for a new economics’ fails to achieve this.

Australia is trying to return the budget to surplus, so a saving of $10 billion would be handy. But blinded by activism and without a sense of economic logic, Australia is bound to waste both money and energy.

The federal government’s plans to establish a Clean Energy Finance Corporation (CEFC) should be scrapped. As a commercially oriented company, it competes with private investors. As a company with a public mandate, it nevertheless aims to serve a public policy goal. These dual purposes are hard to reconcile.

As Groucho Marx once put it, you have to learn from the mistakes of others because you can never live long enough to make them all yourself. If Australian policymakers heeded his warning they could save the $10 billion they are prepared to commit to the Clean Energy Finance Corporation.

Traditional rankings of the least trustworthy professions always deliver the same result. Politicians, taxi drivers and journalists come out on top. However, in the wake of the financial crisis economists can no longer be far behind. At least jokes about hapless economists are not in short supply these days – which to economists is a clear indication that there must be a demand for such ridicule.

The wheels of justice grind slowly, but perhaps even more so in Australia. Comparing the speed of Fair Work Australia’s investigation into Labor backbencher Craig Thomson to a snail’s pace is unfair to common molluscs.

Europeans may one day wake up in an environment of revived national rivalries, new political extremism and a continent without the open borders they once took for granted. This could be a tragedy even worse than the economic turmoil the continent is experiencing at the moment.