China- can't stop its influence

In the past week China has dominated the news for many reasons. First they arrest an Australian man working for Rio Tinto on the basis of him possessing state secrets. See this is when things get interesting, if a company - Chinalco is run by the government ( their chairman is on the Central Committee of the Communist party) then possessing information about this company becomes a state issue. The resolution of this issue could severly hamper our future trade and economic direction.
Then we get information that China's growth and thus demand for our exports is kicking along nicely. So economists have been saying the Australian economy is strongly linked to China, however China is maintaining a strong grip on change happening too fast at the moment.

In the same article there is some concerning news regarding unemployment - Long term unemployment has reached 107,000 people (out of work for more than 1 year) which means structural unemployment will also increase.

As a last thought the guru article yesterday was worth a read. Asia Pacific- which includes China still has an extraordinarily large amount of people in this region live in extreme poverty. (900 million live on less than $1.25US a day) So despite the large amount of growth and newsprint about the future of China as an economic power a large amount of people have not really benefited yet from the changes to the economy as a more open, globalised entity.

Yr 12 ECO information and Review

"I would rather be vaguely right, than precisely wrong." - John Maynard Keynes

An interesting philopsophy indeed.
This is more information for you upcoming trials and a source of information rather than an alternate source of reading.

Here is the as promised, you can either download it or watch through the blog. External Stability powerpoint

Australia's External Stability

Uploaded on authorSTREAM by Camsutt | Upload your own presentation

I have discovered a good quality web site that may assist you with your understandings and concepts of economics. It is based on the Victorian equivalent of the HSC, however the course is similar and has the same economic concepts.

Here is the link to the site named Mr Wood.

Are we out of the recession?

Well for a political junkie like myself a week when the great smirker Peter Costello retires after all the time he has spent coveting the leadership of the Australian Liberal Party, is a week to comment upon.
Costello despite the efforts by Howard to downplay his efforts deserves credit for the position that the Australian economy now finds itself. As Peter Hartcher stated in his article this week,

"Keating imposed the structural reforms that woke Australia from its economic coma and created the beginnings of a modern, competitive economy. And Costello imposed the discipline to prevent the political system from bogging the country down in a mire of government debt"

There is no doubt that without Costello the Howard government would have blown a considerably higher proportion of the commodities boom. The result is that Australia has been able to cope with the recession better than any other developed country due to the subsequent budget surpluses and negative public debt. The following graphs from the Federal Treasury show Australia's Economic growth to be higher than all of the top 20 economies and to have lower net public debt than all of the top 5 economies.








However the question that needs to be answered is - Is Australia out of the recession?? (give the poll a go). After reading Gittins from the 13/06/09 a number of points are raised. Our recent trade performance has been exceptional- why? Well the Australian dollar feel sharply which meant that exports received an advantage and imports were higher. Combined with lower demand for imports by Australians in a downturn has meant that our trade performance has been very good. In addition during a recession manufactured good demand falls- now we our economies structure is weighted towards services and commodities. The demand for these has been steady.

However with the dollar heading back to 80c/US, business confidence picking up and thus higher imports combined with the prices gained for our exports sliding the future for Australia is not rosy yet.

New World Order!!!

There are a considerable amount of conspiracies floating around out there that perpetuate the idea that the USA has attempted to change the balance of power so that they are in total control.
The evolving nature of world order means that there has been constant change since the end of the Cold War and the demise of communism. If this peaks your interest then you could try a number of avenues for further research.

Here a number of links that will make you think. I am not trying to sway you either way, merely encouraging you to challenge the accepted beliefs and always question.

New World Order- details.
The basic idea of the concept is that very powerful forces would cause conflict and situations which require solutions (e.g East Timor independence) which will require outside forces i.e the UN to enter sovereign land and then retain control post the conflict. The end goal is a totalitarian world government.
If you are interested further try the videos on this google search.

If you want some relevant information to the World Order syllabus then start here.
For example you will find information about the UNMIT (United Nations Integrated Misson in Timor Leste) which maintains a policing and training role in East Timor to encourage democratic processess to be constructed in this new nation state. They have supervised volunteer collection of arms, swearing in of judges and administered a serious crimes unit which is investigating human rights breaches dating back to 1999.

Budget Leaks and Wrecking Balls

As May comes around the chatter amongst economists and interested people regarding the Budget begins to build steam and this year it appears to have started to have happened quite early. With the background being the global financial crisis (or GFC as some have named it- sounds better) this means that many items on the ALP wish list will be placed on the chopping block.
Here are some of the items that have been considered;

• paid maternity leave (min 6 weeks)
• upgrade to the aged pension and unemployment benefits
• increased funding for universities
• continuation of 'Education Revolution'
• whether the incentives for first home buyers should be continued
• environment incentives e.g insulation
• tax cuts (which were introduced as part of election campaign in 2007)
  

However with unemployment heading towards 7% (which obviously increases transfer payments), company and income tax revenues down it is obvious that a number of these items will be merely wishes. At the least Australia is heading for a Budget deficit of $30-50 billion.

Compare these issues to this article from the SMH (by Jonathon Pearlman) regarding defence spending. What are your thoughts on defence expenditure and where the funds could/should go???

Illustration by Rob Homer , SMH.

Is Rudd the Australian ambassador of China???

Good luck, sleep well and remember the basics. (fact, explanation, example) and make sure your answer is balanced without becoming an emotional diatribe.
Hope I have some interesting marking ahead.

Eco- Is Foreign Aid good for Africa?

On the 17th of March, Foreign Correspondent (yes on the ABC) had an interview with Dambisa Moyo a Zambian-born economist. This is some of the information from the ABC web site.

"In her new book, Dead Aid, she argues that official aid is easy money that fosters corruption and distorts economies, creating a culture of dependency and economic laziness.
Moyo is particularly dismissive of the ‘celebrity aid’ model popularised by international stars such as Bob Geldof and Bono and says many aid organisations and NGOs are more interested in perpetuating poverty in order to justify their own existence."

Interesting thoughts indeed. Moyo is a believer in trade and the power of the market as opposed to the aid model in which she claims the only growth occurring is in the Swiss banks accounts of the political elite.
Lastly she claims that 10 percent of Africans were living in poverty in the 1970s compared to 70 percent now.
What do you think? It would be good to hear some comments for a change.... (PS this is not a new concept it is new for an African economist to be suggesting it though)