In view of the accelerating advances in technologies, I’m encouraged by articles in this weekend’s Financial Review. It starts with an interview with Australia’s Chief Scientist, Professor Ian Chubb, in which he “hammers home” the importance of STEM (Science, Technology, Engineering, and Maths). In addition to developing Australia’s Science Policy, Chubb also advocates a focus on improving education with more support for teachers at all levels to attain continuing professional development.
I’m also encouraged by the government’s identification of business sectors in which Australia has competitive strengths:
- Food and Agribusiness,
- Mining Equipment,
- Technology and Services,
- Medical Technologies and Pharmaceuticals,
- Oil, Gas, and Energy Resources, and
- Advanced Manufacturing.
Add this to the new Prime Minister’s embrace of volatility and disruption, and we have a potentially game-changing opportunity.
Another article highlights the optimism of youthful politician Wyatt Roy, “a passionate believer in the power of entrepreneurs to transform the economy, particularly in information technology and telecommunications.” Based on his several visits to Israel’s powerful Office of the Chief Scientist of the Ministry of Industry and Trade, he wrote a white paper for policy reform in terms of centralising all government spending on commercialisation and distribution of seed funding.
The same article includes research by Mark Cully in the Department of Industry and Science that “includes many upbeat and positive conclusions about the country’s entrepreneurial culture”. It also identifies young, small businesses as more innovative and as the source of a disproportionate percentage of job creation. Let’s hope that the change at the top will result in more government support for start-ups, along the lines of the SBIR and STTR programs in the U.S.
According to James Canton in his book Future Smart, “Economic theories that involve the redistribution of wealth through taxation may be politically popular in Europe but have little to do with driving new investment, producing jobs, stimulation authentic productivity, attracting capital, and – the largest factor inventing the future – transforming economics by investing in building technology-rich economies and Innovation Ecosystems that create value that generates wealth, jobs, and new business formation. Somebody just has to tell the truth here.
Sorry to tell my European friends who have been preaching the dystopian end of capitalism for ten years, but if there were a better way to grow an economy, lift up the fortunes of citizens, increase jobs and productivity, I don’t see it yet. And, in all fairness, the US model of capitalism needs a refresh as well if it is to shape a prosperous New Future of Economics.”
… informing the public about the true cost of the Public Health System. In Terry Barnes’ recent article in the SMH, it was all about the proposed GP co-payment policy. Terry does call for broad “conversation” about reform, but he doesn’t draw any attention to the true cost of the public healthcare system, which is about 10% of GDP. Many Australians that think their Medicare surcharge (1.5%) covers the cost of healthcare. The public system is a good safety net for those that can’t afford private health insurance, but it’s underfunded and grossly inefficient compared to the private sector.
… the Economics Editor of the Sydney Morning Herald, Ross Gittins, has written about the cost of climate change denial. It’s good reading – here’s the link: http://www.smh.com.au/comment/the-heavy-price-of-an-unhealthy-planet-20141111-11k6oj.html
The best of Peirpont’s Dubious Distinction Awards in last weekend’s Financial Review is most worthy of a reprint. It’s entitled “Entrepreneurs of the Year”.
To some of the Asian migrants in Athens, who appeared on the streets in June at the height of the mayhem between protestors and police. The Athenians were throwing bottles and bricks at the rozzers in protest against proposed economic austerity measures and the police were throwing tear gas back. The Asians were pushing carts piled high with goggles and liquid Maalox, which they sold to the protestors as protection against the tear gas. If the Athenians had as much entrepreneurial resilience as the Asians, Greece would never have been in trouble in the first place.
Bloomberg’s lengthy report this week that the U.S. Federal Reserve secretly gave the big U.S. banks trillions of dollars, not the billions that were reported publicly at the height of the GFC, was shocking. Even worse, the congressional oversight committees didn’t know about it. So, this band of unelected know-it-alls and their Wall Street cronies, the very ones who got us into the mess, dramatically increased the exposure of U.S. taxpayers without reference to the elected officials responsible for their supervision.
Today, the news is that the Fed is pumping more money (billions) into Europe. If that’s the public line, we must now question the magnitude of the real amount(s). The press isn’t helping; CNNMoney offered this ‘reassurance’,
“It’s important to note — the Fed’s funding does not come from U.S. taxpayers, and is independent from the federal budget.”
So, where does it come from? Oh wait, I know, they’re just doing a lot of creative accounting, which cannot be the answer to the unprecedented mountains of unpayable debt around the globe. Something’s got to give, and I’m afraid that it may be ugly in the extreme.
‘Doomsday’ is a term used with alarming frequency in recent articles. The reasons are many, but I only just learned that the global economy is under threat in yet another way: big U.S. banks have something like 15% of their total commercial banking assets at risk in Europe. I don’t see how another financial crisis can be avoided, and my worst fear is that it will be a lot worse than the last one. I hope I’m wrong, but it seems prudent to get out of any connections with the following banks and their exposure to PIGS.
Bank of America – $14.6 billion, Citibank – $20.6 billion, and JP Morgan Chase – $15 billion.
This isn’t relevant to Medical Equipment Finance, but it certainly is to business and the economy. I couldn’t agree more with Ross Gittins in his column in the Weekend Sydney Morning Herald when he says, “The most obvious disappointment about this campaign is both sides are pledging to do nothing serious in the coming three years about the greatest and most pressing threat to the economy: climate change.”