The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Saturday, February 26, 2011

Idea for those that want to make name for themselves as a policy guru

Ignore all this talk about the Chindia-driven resources and terms of trade booms. Instead, start identifying the catalysts that will ultimately cause a dramatic slowdown in the "Chinalian" economies (Trademark filed by CRE Joye 26/2/11). Here's a start:

-The central authorities make a catastrophic foreign policy error in a desperate attempt to shore-up support amongst an increasingly disenchanted yet ostensibly nationalistic public;

-The corrupt Chinese kleptocracy's distortions of economic decision-making (manipulated exchange rate, centrally managed human resourcing, state picking of winners, etc) generates huge rigidities that result in decline once China loses it's comparative advantage (see next point);

-Chinese demographics (one child policy, etc) drive aging population, skills shortages, and much higher labour costs, eviscerating competitive advantage and thus ability to manufacture superior growth in the absence of state intervention;

-Excessive supply-side resources responses--everyone wants to be a Gina or Twiggy--end up crushing commodity prices and thus Australia's national income;

-Public apathy with the central authorities triggers regime change and a huge and highly inefficient devolution of decision-making that produces Indian-like democratic inertia (ie, nothing gets done).

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