The Greedy Little Nation That Sold Its Soul For House Prices

Via MacroBusiness.com.au,

There was a time when Australia’s housing bubble was not much more than a curiosity. Contained mostly to Sydney it seemed it would pass with a little pop and be forgotten.

Then there was a time when the bubble went national. And suddenly the little pop was going to be a big pop so monetary and fiscal policy began to distort in support of it.

Next there was a time when moral hazard became so great that the bubble grew to engulf all policy and media, marginalising an entire generation from home ownership. Politicians routinely lied to cover the collapse in evidence based policy-making.

Finally, we come to today. When notions of managing the macro-economic levers of an economy now boil down to just one thing:

  • low interest rates to prevent the housing bubble bursting;

  • fiscal repair to prevent the bubble bursting, and

  • mass immigration to prevent the bubble bursting even though it is crushing living standards and gutting wages.

This classic slippery slope upon which one bad policy choice cannoned directly into the next is not over.

Three ridiculous further steps are being mulled that will ensure the complete selling of the nation’s soul in a vain attempt to save house prices.

The first is captured by Anthony Bubalo of the Lowy Institute:

Not long ago I listened to four Australians of Chinese heritage speak at the Lowy Institute about the impact on their communities of the foreign interference question. Some of the issues they raised were similar to those articulated by Muslim Australians when they talked about the effect of terrorism on their relationship with broader society.

…The government is certainly seized of this challenge. New legislation has been passed and a new position, the National Counter Foreign Interference Coordinator, has been created in the Department of Home Affairs, similar to the longer-standing position of Commonwealth Counter-Terrorism Coordinator.

But alongside these measures the government will also need to protect the bonds in our society that allow people and communities to cooperate and trust each other despite cultural, ethnic, religious, or ideological differences.

…Some lessons are obvious, such as the importance of precise language. In the same way that it is vital to distinguish between the ideas of Islamist extremists and those of the Islamic mainstream, we must avoid using the the word “Chinese” in relation to foreign interference to ensure we are not conflating the CCP with Chinese Australians.

Feel good drivel aside, the only response that will work to prevent the spread of influence within said community from corrupting the wider democracy is to cap its numbers. There is no need at all for discrimination. That is anathema in a modern multicultural nation. We should simply slash the permanent migrant intake in total. Problem solved.

Literally, the only thing standing in the way? House prices.

The second slippery slope we find ourselves on is the responses being mulled to collapsed wages. This time from Peter Hartcher:

There is a case to update and improve the current enterprise bargaining system, but it needs to done intelligently. Inflexible new industry standards could be disastrous.

The McManus ACTU also demands the scrapping of the current practice of secret worker ballots before a union can call a legal strike, and banning outright any enterprise agreements that are agreed without a union.

So Aldi supermarkets, for example, a generous employer that offers pay and conditions above and beyond the rest of the industry, resists any union involvement in its workplace negotiations. On the McManus agenda, Aldi would be obliged to deal with the Shop, Distributive and Allied Employees Union. This union commonly negotiates lower pay for workers so long as the employer eases the way for its workers to join the union.

How can the ACTU endorse these policies while at the same time being in favour of the very mass immigration program that has destroyed industrial relations standards? Easy, house prices. The CFMMMEU now runs the ACTU and it wants more building for its members. In classic building site style, everyone else can fuck off.

Finally, we have the Coalition musing on a new immigration management brain fartmigrant tag and release in the bush:

A new population policy that could produce sweeping changes to keep new migrants in regional Australia and improve the co-­ordination of infrastructure development to take account of growth trends is being developed by the Turnbull government.

The policy, slated to be released later this year, comes amid increasing backbench pressure for a firmer and more clearly articulated immigration policy, with MPs citing concerns in key Sydney and Melbourne electorates about the impact of population growth on quality of life.

Totally unmanageable without migrant proof fences and satellite tracking bracelets. But house prices need support so let’s abolish freedom too.

It’s all so bizarre. All we need to do is cut immigration and let house prices fall. There’ll be a period of adjustment while wages and the currency correct but it won’t be too bad. We’ll still be on the doorstep of Asia. The students and tourists will still come, in greater numbers than ever as we get cheaper, but they’ll also go home not pressuring living standards. Broader tradables (40% of the economy) will boom. Commodity income will surge, lifting the Budget. Our maginalised youth will have much greater opportunities to advance their global opportunities as Dutch Disease ends. Incomes will ultimately be much more sustainable.

Then we can all move on with a much healthier economy, polity, society and strategic outlook.

The alternative is to sell our freedom to China, our standards of living to a few rich developers, our politics to carpet baggers and our society to fractious class wars. Just for higher house prices.

If a more ignominious fate awaited any nation in history then I’m not aware of it.