Wednesday, January 16, 2008

The ALP will wreck this country

Labor treasurer Wayne Swan is trying once again to put a positive spin on failed ideas like social engineering and central planning.

He is boldly proclaiming:

"The turbulence in the international financial markets is certainly having an impact on the sharemarket, there's no doubt about that, but the most important thing we can do here is to modernise our economy,'' he told Macquarie Radio.
Hows that for doublespeak ? I'm sure the treasurer knows very well that by "modernise", he really means destroy and control.

A market economy is the natural evolution of individual people making decisions and exchanges which they believe is in their best interest. History gives an absolutely overwhelming record of success and dynamism when economies are free. Entire industries (I.T, medicine) spring up and employ tens of millions of people within years (!!) as human knowledge and entrepreneurship move forward, whilst existing industries such as farming and agriculture can continue forward producing one hundred times as much output with one tenth the labor compared to only 50 years ago.

So although the idea of leaving the market to itself isn't very glamorous and may not earn votes, it is actually the most sensible thing to do. Less taxes, less regulations is a start.

But government should not have "industry policy" at all. It should not protect local car manufacturers by imposing tariffs on imports, nor should it do the same with textiles clothing and footwear.

Australia does not *NECESSARILY* have to operate a domestic car industry any more than it needed to operate a massive electronics industry or a massive tourism industry. These may seem like good outcomes in themselves, but they don't take any economic calculations into account, and government involvement always costs more than it delivers in terms of benefits.

Its best to let a free economy pursue activities where it can compete and develop a competitive advantage. But then, we wouldn't need a treasurer, would we ? :)