Ethics Free Cleverness Is A Very Bad Combination As This Saga Reveals!

The conclusion of a rancid story of greed and evil human exploitation emerged recently.

‘Powerful message to consulting’: McKinsey to pay $1b for opioid crisis

David Ovalle

Dec 15, 2024 – 7.57am

Washington | Business consulting giant McKinsey will pay $US650 million ($1 billion) to end a criminal probe by the Justice Department into the company’s role in bolstering sales of addictive pain pills, prosecutors announced on the weekend.

In what officials described as a landmark case, US attorneys in Massachusetts and Virginia filed charges of conspiracy to misbrand a drug and obstruction.

The investigation stems from the company’s work advising Purdue Pharma on how to “turbocharge” sales of the blockbuster opioid OxyContin, officials said. State and federal officials allege Purdue helped kick-start the nation’s opioid crisis in the late 1990s and 2000s by aggressively marketing the drug to doctors while downplaying its addiction risk.

It marks the first time a management consulting company has faced criminal charges related to work with the opioid industry, said Christopher R. Kavanaugh, US attorney for the Western District of Virginia.

“It sends a powerful message to the consulting industry,” Mr Kavanaugh said at a news conference in Boston on Friday (Saturday AEDT).

McKinsey’s agreement also resolves a Justice Department civil investigation into allegations the company’s work with Purdue led to false claims to federal health insurance programs.

The agreement adds to more than $US989 million that McKinsey agreed earlier to pay to settle lawsuits from states, local governments, school districts, health insurers and benefit plans. It is another black eye for the consulting giant. This month, a McKinsey subsidiary agreed to pay more than $US122 million to resolve a federal probe into allegations it sought to bribe government officials in South Africa.

McKinsey said in a statement that it should never have worked with Purdue. “This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret for our firm,” the company said.

Martin Elling, a former McKinsey senior partner, has also agreed to plead guilty to allegations he destroyed records related to the company’s consulting with Purdue, federal court records show. His attorney did not immediately respond to a request for comment.

McKinsey began working with Purdue in 2004, continuing even after an affiliate of the Connecticut drugmaker and several executives pleaded guilty to misbranding OxyContin in 2007.

According to a court filing on Friday, the company helped try to fend off proposed Food and Drug Administration restrictions designed to minimise the risk of the opioid. Amid slumping sales, McKinsey advised Purdue on how to target doctors who then wrote medically unnecessary prescriptions, prosecutors said.

McKinsey consultants even rode along with Purdue sales representatives to visit doctors, officials said.

“They were no better than street level dealers reaping a profit from addiction and misery of others,” said Boston FBI Special Agent in Charge Jodi Cohen.

McKinsey has stopped working with opioid industry companies. If the company successfully completes five years of federal oversight, prosecutors will drop the charges, according to the agreement.

Purdue, facing a tsunami of lawsuits, filed for bankruptcy in 2019. In June, the Supreme Court scuttled a bankruptcy plan that would have settled lawsuits with governments and victims. The company estimated the settlement could be worth up to $US10 billion.

Purdue, the family that owns the company and creditors are engaged in court-ordered mediation scheduled to conclude on December 23; Purdue is asking for an extension through late January. In a statement on Friday, the company said it was working toward a settlement that would compensate victims and curb the opioid crisis.

The McKinsey agreement marks another moment of reckoning for companies involved in the opioid crisis, which started with prescription pills that often ended up on the illicit market, fuelling addiction.

As prescriptions for opioids declined in recent years, the epidemic of addiction shifted to illicit fentanyl, which has proved even deadlier. Drug overdoses killed more than 100,000 people in the United States in each of the past three years, although officials have noted a sharp decrease in 2024.

Local and state governments have filed thousands of lawsuits against companies involved with prescription opioids, arguing that the flood of potent pain pills wreaked havoc on communities.

The legal strategy of using state public nuisance laws has resulted in more than $US50 billion in settlements with drug makers, distributors, pharmacy chains and others. In cases that have gone to trial, some cities and counties have won large judgments.

But others have lost. The latest example happened on Tuesday, when the Oklahoma Supreme Court sided with retail chains that had been ordered to pay $US650 million to help communities suffering from the crisis.

Washington Post

Here is the link:

https://www.afr.com/world/north-america/no-better-than-street-dealers-mckinsey-to-pay-1b-for-opioid-crisis-20241215-p5kyfo

There are some really excellent documentaries on all this. Here is a link to a good one:

https://www.netflix.com/title/81095069

The combination of greed, exploitation and raw evil in pushing Oxycontin was really something to behold!

That 100,000 people died of overdoses is just too horrific to contemplate – but shows just how evil people driven by financial greed can be!

Great to see the piper is being paid and the crooks are being bankrupted! Sends a message to those over-smart consultants!

There is a lesson here I believe…

David.

It Is Hard To Know Just Why A Debate On The Adoption Of Nuclear Power For Electricity Generation Has Started Up Again!

This appeared last week:

Any hope of a rational debate about nuclear power is gone

Households and businesses would be better served by a rational debate on the merits of including nuclear power in the future energy mix. They aren’t getting that.

Angela Macdonald-Smith Senior resources writer

Dec 13, 2024 – 7.06pm

Australia’s fractious debate about how to achieve its energy transition ambitions in its electricity sector has become even more muddled by the release of the costings of the Coalition’s nuclear plan. And that’s no help to households and businesses.

Any hope of a rational debate about the merits of including nuclear power in the country’s future energy mix to support decarbonisation goals – something broadly supported by industry struggling to source reliable, affordable, low-carbon power – had already disappeared before Friday.

But arguments over economic modelling using different assumptions to reach near-meaningless cost estimates stretching out 25 years, and then relating those to household and business power bills right now, have escalated the situation to another level.

Certainly, any pledges of lower prices for consumers – as signalled by Opposition Leader Peter Dutton and shadow energy spokesman Ted O’Brien repeatedly at their media conference in Brisbane – can have little meaning.

To be noted is that all the estimates by Frontier Economics of the Coalition’s and Labor’s transition plans – ranging from $331 billion to $594 billion – exclude Western Australia and the Northern Territory.

They also do not include the investment required in electricity distribution, and households’ investments in rooftop solar, batteries, electric vehicles and electrified appliances. That means the total costs to consumers of the transition would be much higher in any case than either estimate would suggest.

Baked into the contrasting positions on nuclear taken by major parties is a marked divergence on whether baseload power – now dubbed “always-on” power by the Coalition – is what is even needed in today’s power grid.

For the Coalition, replacing baseload coal with another round-the-clock but emissions-free technology is the way to go. As Dutton said: “We just can’t pretend any more than part-time power is going to run a full-time economy.”

But that stands in stark opposition to the advice from the Australian Energy Market Operator, which underscores the need for flexible power to maximise the use of low-cost renewables. In effect, “always-on” power is an outdated concept. Renewables can in theory at times already meet 100 per cent of electricity demand, were that technically possible on the grid.

Under AEMO’s calculations, using the “progressive” scenario favoured by the Coalition, only 21.5 terawatt-hours of generation is expected to come from coal by 2035, just 9.3 per cent of the total. That compares with 38 per cent in the Coalition’s model.

The worry is that having to run a high-cost power supply source around the clock to meet more than one-third of annual demand will mean switching off rooftop solar systems to make the system balance, and significant wastage of low-cost renewables.

That would be a blow not just to households but to the confidence of private investors lining up to develop wind, solar and storage plants that are needed now to help ease the country’s creaking electricity grid.

Here is a link:

https://www.afr.com/policy/energy-and-climate/any-hope-of-a-rational-debate-about-nuclear-power-is-gone-20241213-p5ky5t

I am confused as to why this debate has suddenly started up again when it seems to be pretty clear that we are slowly phasing out coal derived power ( as we need to and should be )  replacing it with solar, wind and hydro etc. Right now it is not clear to me just how much nuclear power is actually needed and by when.

We now have enough experience globally to know that nuclear power is feasible and reliable but is also pretty expensive compared with pretty much any other sources. If serious alternatives exist – and they do - we should explore them fully and only move to nuclear when it is price competitive in sunny and hydro-rich Australia!

Essentially, the bottom line is that there are transitions to be made to maximum renewables and necessary nuclear over the next decade or two. How much of what and when is well above my pay-grade!

My one plea is that the transition be technically driven and not politically driven! We need to keep the politics out and the scientific decision making in! What is the chance of that happening do you reckon?

Not high I suspect!

David.

AusHealthIT Poll Number 777 – Results – 15 December 2024.

Here are the results of the poll.

Are You Concerned About The Rise Of Antisemitism We Seem To Be Observing At Present?

Yes                                                                      14 (50%)

No                                                                         3 (11%)

It Is Not Changing                                              11 (39)

I Have No Idea                                                      0 (0%)

Total No. Of Votes: 28

An interesting outcome with a small majority quite concerned…

Any insights on the poll are welcome, as a comment, as usual!

Fair voting turnout. 

0 of 28 who answered the poll admitted to not being sure about the answer to the question!

Again, many, many special thanks to all those who voted! 

David.

I Am In Awe OF The Work Done To Get Notre Dame De Paris Back To Its Old Self After The Disastrous Fire!

This appeared last week – and the cathedral is now open again!

Architecture

Notre Dame review – glorious resurrection is as close to time travel as it gets

Five years since it was gutted by fire, the soul of Paris is about to reopen its doors. Our critic is wowed by the buttery stonework, gleaming lead and gawp-inducing gilding

Oliver Wainwright

Sat 7 Dec 2024 00.05 AEDT

With France plunged into political turmoil, and president Emmanuel Macron’s approval ratings at an all time low, the country might be thankful to have a distraction of epic proportions this weekend. All eyes will be on Notre Dame tomorrow, as Paris prepares to unveil the interior of its hallowed cathedral, “the soul of France” finally resurrected following a meticulous five-year, €700m (£582m) restoration.

The herculean project has seen 2,000 oak trees gathered from forests across France, hewn into beams with axes and pegged into great trusses by hand using medieval tools. It has witnessed over a thousand cubic metres of limestone being hauled into place, chiselled into leaping arches and gurning gargoyles, as well as 4,000 square metres of lead, rolled, crimped and moulded into ornamental roofing. It has also been the stage for a celebrity wallet-waving spectacle, seeing French luxury goods billionaires racing to outdo each other in the size of their donations – reaching almost €900m (£749m) just two days after the fire, endowing the cathedral with a substantial maintenance kitty for years to come.

The astonishing and lavishly funded endeavour has been a lifeline for endangered craftsmanship, single-handedly reviving a host of specialist building industries across France and beyond. The project mobilised a 2,000-strong army of master masons, carpenters, roofers, glassworkers, organ restorers and painting conservators, many using centuries-old techniques. This elaborate medieval cosplay has returned the majestic pile to just the way it was before the 2019 fire – only cleaner, brighter and more colourful than ever.

“Even more beautiful than before,” is how Macron describes it, “in the renewed radiance of the blond stones and the colour of the chapels.” It’s a surreal sight. The seamless surfaces of creamy stonework have been bleached of their centuries of sooty patina, now looking as if they have been carved from a single slab of butter. The painted side chapels glow with the blazing Technicolor and gilding of a Las Vegas casino. The result might feel too Disneyish for those who prefer their cathedrals aged and timeworn, but the effect is as close to time-travel as it comes, as if the medieval guilds had just left the building.

As crowds gather outside to gawp up at the freshly carved tracery and gleaming leadwork, however, they might not be aware that the most radical part of the entire project is actually right beneath their feet. The biggest impact on Paris will not be found in the rebuilt forêt of oak hidden away in the attic, or the ornamental rooftop cresting, but in how the fire has provided a catalyst to rethink the surrounding area as a model for climate-friendly public space on an increasingly scorching planet.

“The project of the cathedral was to rebuild it identically,” says Patrick Bloche, first deputy mayor of Paris, as he stands outside Notre Dame’s freshly scrubbed facade, puffing on his pipe. “On the other hand, outside the building, we wanted to take advantage of the opportunity to completely reimagine what the surroundings could be.”

In the days following the fire, there was much enthusiasm among a certain cast of architects about what form a new-look Notre Dame might take. Norman Foster imagined crowning the charred nave with a vaulted glass roof and a spire topped with an observation deck – “a work of art about light,” he declared, which would “capture the confident spirit of the time”. Others proposed glitzy roofs made of Baccarat crystal, or a memorial spire in the shape of a gigantic golden flame. Thankfully, such hubris was ditched for a faithful reconstruction, but the fragmented and congested surroundings offered scope for a bolder approach.

“The area around Notre Dame has changed so much throughout history,” says Bas Smets, the Belgian landscape architect who won an open competition to redesign the area around the cathedral in 2022. “It’s like a privileged witness of a city looking for its form. The question now is what kind of spaces we need for the city of tomorrow.”

On Friday 29 November, Smets was first in line to explain his vision to Macron, on the president’s first visit to inspect the reborn Notre Dame, before its official inauguration tomorrow. They stood on the first completed piece of the “petit parvis”, the forecourt in front of the cathedral, which Smets plans to expand to mirror the full length and width of the building, with grooved limestone flags reflecting the chequerboard marble floor inside.

His plan – to be completed by 2027 at a cost of €50m, funded by the city – will create a much more open setting for the cathedral, encouraging visitors to explore more of the Île de la Cité at a slower pace, beyond just queueing up for a peek inside Notre Dame before hot-footing it to the Eiffel Tower. The new spaces will prioritise people over vehicles, seeing roads closed and pedestrianised, and reconnect the cathedral to the Seine for the first time in generations, with a new 400 metre-long riverside promenade. Plenty of shade will be provided by 160 new drought-tolerant trees, which will also help to shield queueing visitors from winter winds, while the hottest days will be relieved by an ingenious air-cooling water feature – with a splash of fun.

“We were inspired by seeing how they clean the streets of Paris,” says Smets, whose team includes the French urban planning agency GRAU and heritage specialists Neufville-Gayet. The city is unusual in having a dual water network, one for drinking water and another for untreated non-potable water, for irrigation, cleaning and firefighting – a 19th-century legacy of Baron Haussmann’s urban improvements. On hot summer days, the street-cleaning vans often leave this water running to cool down the roads and pavements. Learning from the locals, Smets has designed an 80 metre-long stretch of the plaza to be flooded with a thin 5mm-deep sheet of water on the hottest days, forming a reflecting pool that also provides evaporative cooling, lowering the air temperature by several degrees. Like the fountains of Kings Cross in London, it promises to be a popular place for a cooling splash – with enough space before the cathedral entrance, church wardens will be relieved to hear, for damp feet to dry off.

Given the expected 15 million visitors a year, one of the designers’ chief tasks was to improve crowd control, which Smets has partly addressed with a new entrance – dramatically punching new openings in the quay retaining wall facing the Seine. Enabling people to arrive by boat, this entrance will connect to a new visitor centre housed in a former 1960s underground car park, and provide a theatrical route up to the plaza, giving a worm’s-eye view of Notre Dame’s famous western facade for the first time.

Not all Parisians have welcomed these bold changes. An angry petition launched in April 2023, titled “Save Notre Dame gardens!”, gained more than 55,000 signatures, with concerns focused on the removal of fences around areas of lawn, as well as the removal of benches and flowerbeds, “completely distorting the spirit of the place”. Others opined that the scheme was “too British” in its plan to surround the cathedral with open gardens. Smets insists that some of the criticism was down to a misinterpretation of the plans – the historic benches, for example, will all remain – but the design has been altered to retain more of the fencing, only removing a section to open up the riverside path. “It became a political thing,” he says. “In the competition, we were asked to take out the fences, so we did. But keeping the fence, for me, is totally fine. We’re actually returning the situation to how it was in 1848, with a fence around the gardens, but not blocking access to the Seine.”

With an eye on Paris’s wider urban greening efforts, which have been a chief hallmark of socialist mayor Anne Hidalgo’s tenure, the project will also act as a laboratory for future landscaping work elsewhere in the city. While the main plaza will see an existing avenue of horse chestnut trees extended along the street, encouraging people to take a full circuit around the cathedral, a former car parking area to the east will become an experimental arboretum of different species.

“We imagine it as a living climatic laboratory,” says Smets, “to see how well different trees perform over time.” After the city’s plane trees suffered from beetle infestations, and others have been stricken by drought, the pressure is on to determine which varieties will thrive in the rapidly changing climate. “This is such an important, symbolic site,” he adds. “But it is also an opportunity to reimagine public space as a way to create a better outdoor microclimate – looking to the past to inform the city of the future.”

Here is the link:

https://www.theguardian.com/artanddesign/2024/dec/06/notre-dame

This looks just glorious in all the pictures I have seen. Raises the spirits to see tasks like this undertaken and brought to fruition!

David.

Another Salutary Tale Repeating One Of The Same Old Stories!

This appeared last week!

Marge’s computer wouldn’t turn on. Then IT support offered ‘help’

By Nicole Pedersen-McKinnon

December 7, 2024 — 12.30am

On the morning of September 4, Marge was faced with a completely blank computer screen.

A few attempts to turn it on – and a few panicked minutes – later, a message from “IT support” popped up. It offered to help.

Marge had to ring a certain number to connect with a technician. Then: “I was told by someone to do nothing and to wait for someone to call me, which happened after about 30 seconds.

“This, I have found out, was the beginning of many unauthorised transfers of moneys from my two accounts.”

Devastatingly, the fraudsters first stole $49,500 from Marge, followed by $50,000, $10,000, $9000, and other amounts of smaller denominations.

“This was all over a period of three days and only stopped when a friend of mine visited and suggested to me that the so-called technicians could be my hackers, which turned out to be the case,” she recounted to me.

She was told not to turn off her computer or phone as they wanted to keep in contact; she was also urged not to answer any other calls “as they might actually be from the hackers”.

This scam is the remote access or Trojan type – with the fraudsters probably gaining access to Marge’s computer via a Facebook link she had used to purchase a new iPad (that never arrived).

By the time Marge realised she was the victim of such a sophisticated scam, only $229.80 could be recovered – though banks are working together to try to reverse fraudulent transactions, the rest of the transferred funds had been immediately cleared out of the recipient account. She wryly says: “Felt like having a huge party!”

This year, for the Money section, I’ve taken a deep dive into the scams perpetrated on our readers, in a bid to recover some of their lost money. And sometimes it has worked.

As scams increase, a new avenue for compensation is available for fans who fall victim to fake tickets.

With a growing legion of criminals now trying to dupe you out of money, particularly over Christmas, Scamwatch has issued a comprehensive list – until fraudsters next evolve their tactics – of the most prevalent scams:

• Online dating and romance scams
• Investment scams
• Product and service scams
• Threats and extortion scams
• Job and employment scams
• Unexpected money scams
• Impersonation scams.

It’s worth keeping these broad categories or themes front of mind. Also be on high alert if you are, or intend, transacting any property. PEXA or settlement scams – where criminals discover your purchase intention and intercede with an authentic-looking mule account – are some of the fastest growing scams.

What should you do if you are scammed? Cut off all contact and immediately contact your bank.

Note well that a further layer of scams now exists too: for which you are targeted if you Google “how to reclaim money” or “How to get back money lost to a scam”. Many of the results that pop up are secondary scam sites, requiring payment up front or worse.

What has all my advocating for scam victims this year shown me?

The key to a bank being held liable, or issuing any refund, is never to hand over passwords, or verification, token or one-time access codes. It’s in the terms and conditions and if you’ve typed or told a fraudster, you are unlikely to ever see your money again.

Instead, never trust anyone who tries to get you to part with vital information. Always hang up and get the official number from your own search of an institution that cold calls you. Find out if the contact is legitimate.

Do not click on links anywhere, from anyone, that you don’t trust (including online shopping “stores”; reputable ones, too, are sometimes duplicated in “shadow websites”).

And remember, most scams lie beneath a convincing cover story: from an authority (a government institution, bank or a telco), a deeply-in-need person (sick or downtrodden), a love prospect (romance or dating scams) or a loved one (“Mum I’ve lost my phone”).

All are designed to get behind your defences … and into your bank accounts. Please stay safe from scams this Christmas. And have a wonderful one.

Here is the link:

https://www.smh.com.au/money/banking/marge-s-computer-wouldn-t-turn-on-then-it-support-offered-help-20241206-p5kwhl.html

As the good man said “be careful out there!” The are a lot of nasty people out there wanting to exploit you and cause pain and anguish and financial loss!

David.

Do You Think This Commentator Has A Clue What He Is Talking About?

Frankly I do not!

Here is the recent article….

Trump’s revolution is coming for the health technocrats

Peter Ridd

5:00AM December 05, 2024

Of all the creatures in the US bureaucratic swamp, environmental and medical science organisations have the most to fear from the return of Donald Trump. The science behind claims of catastrophic climate change, and many environmental and medical issues, finally will be subject to scrutiny.

Trump clearly is not a believer in catastrophic climate change, otherwise his favourite phrase would not be “Drill, baby, drill”.

Like most Americans and his right-hand man, Vivek Ramaswamy, Trump can see climate change is being used as a front in the culture wars.

In a Rasmussen poll, 60 per cent of Americans agreed with Ramaswamy’s comment that climate change had become a reli­gion that “actually has nothing to do with the climate” and was really about power and control. This is a huge and understandable vote of no confidence in the cataclysmic assertions of climate science.

Even worse, a survey published by the American Medical Association found trust in physicians and hospitals collapsed from 71 per cent to 40 per cent across the course of the Covid-19 pandemic. And who can blame people for this collapse of trust, given the genuine conspiracies by government science authorities?

In his first term Trump was unsuccessful in bringing any useful scrutiny to the more extreme climate and environmental science issues. Scott Pruitt, Trump’s first head of the Environmental Protection Agency, was a fan of employing so-called red teams to challenge the science behind many environmental regulations.

However, Trump was vigorously opposed by Washington insiders and from within his own Republican Party, so his scepticism about the veracity of science institutions came to nothing.

But times have changed and he now owns the Republican Party and all levels of federal government. Any doubts that Trump means to do something about the failing science institutions should be dispelled by the nomination of Robert F. Kennedy Jr to run the US Department of Health and Human Services.

Kennedy has maintained for years that the American medical sciences are plagued by corruption, stemming from the enormous amounts of money received from the drug industry. Do they have too much influence on government regulators? Kennedy says he wants to return the agencies “to their rich tradition of gold-standard, evidence-based science”. And he has stated: “I’m not anti-vaccine. I just want good science.”

But Kennedy is just the beginning of the insurrection in the health sciences. Trump has nominated Marty Makary to head the Food and Drug Administration; Makary crossed swords with the medical establishment over Covid lockdown policies.

And Trump’s nomination for US surgeon general, Janette Nesheiwat, has strongly criticised the American Academy of Pediatrics for using puberty blockers to treat children with gender dysphoria.

But most remarkable is the nomination of Jay Bhattacharya to lead the National Institutes of Health. He was co-author of the Great Barrington Declaration, which pointed out the damage of Covid lockdowns. The medical science establishment tried to crucify him, now he will be its boss.

Of course, most areas of science are rock solid and nobody doubts it. There is no doubt that Newton’s laws of motion work. Industrial science is audited by the red team called cold hard reality. But in many areas where success and failure are not obvious, better systems are needed to stop groupthink, ideology or self-interest influencing the scientific wisdom. Top among these systems is ensuring there is guaranteed debate, checking and auditing, which is largely what Kennedy is advocating.

In this regard, scientists are 180 years behind accountants and 300 years behind lawyers and politicians. Auditors are accountancy red teams. Defence lawyers are legal red teams, as is British Opposition Leader Kemi Badenoch. All these innovations are examples of the wonderful development of the institutions of Western civilisation, especially the British sub-branch. They happened because there was an obvious systemic deficiency that needed correction.

Compulsory auditing of public companies started, at least theoretically, in 1844 in Britain. Arguably, it took a half-century to become effective. Similarly, defence lawyers were first allowed in criminal trials in the 1730s because it could be seen that there was a major missing part of the legal system. The accused were not good at defending themselves. Australia did not formally recognise, or even pay, the federal opposition leader until 1920. It can thus be seen that formalising official red teams has been a long process in society.

It is now science’s turn. In Australia, we need red teams to scrutinise the science behind the Great Barrier Reef and how it ended up with record amounts of coral after supposedly being almost destroyed a dozen times in the past six decades. Add to that bushfire and forest management, the Australian Covid response, the closure of our fisheries, the transgender cult, and climate and energy policy. Then throw in whether our education and social science research institutions have done more harm than good to society. Is there any chance these have been affected by groupthink, ideology or pure self-interest?

Trump, Ramaswamy, Kennedy and others hopefully will begin to Make American Science Even Greater. We need to do the same in Australia.

Peter Ridd is an adjunct fellow at the Institute of Public Affairs.

Here is the link:

https://www.theaustralian.com.au/commentary/trumps-revolution-is-coming-for-the-health-technocrats/news-story/08d8e55aa8f795e9041ed6b31942b089

It is worth reading this rant just to see how far off beam one can become by talking to yourself in a conspiratorial echo chamber!

I feel very sad for him as he fumes and rants against the 99% majority who reckon he has basically lost it!

If you think of the obvious successes in medical science, computing and engineering it is hard to see how his world view reflects a recognisable reality!

So good luck Peter, I think I will stick with the mainstream. By the evidence of my eyes, the ‘scientific method’ works, as is seen in all its successes. Not sure what you are on about does!.

David.

I Am Not Sure This Is Going To Be A Wonderful Christmas….

This popped up last week:

Australia’s economic problems have been brewing for years

We are in the most prolonged downturn since the 1991 recession. It’s time for a treasurer to do something about it.

John Kehoe Economics editor

Dec 6, 2024 – 2.56pm

The stagnant private sector economy and deterioration in living standards exposed in the national accounts this week have been years in the making.

Labour productivity has failed to improve since 2016; business investment is languishing close to 1990s recession levels; there has been no serious economic reform; undisciplined government spending is in vogue after too much stimulus during the pandemic; and the Reserve Bank of Australia has been forced to push up interest rates to grind household and business activity to a halt and bring inflation under control.

As a result of all of this, economic growth slowed to just 0.8 per cent through the year to September, and in per-person terms the economy has been shrinking for almost two years after adjusting for population growth. It is the most prolonged downturn since the 1991 recession. A better measure of living standards – disposable income per person – is 10.5 per cent below its peak.

The soft-hearted want to take the easy path and blame the RBA. The hard-headed know this problem has been brewing in Canberra over multiple governments under Liberal and Labor prime ministers and treasurers.

For years, serious economists have warned Australian economic policy was on the wrong track. Now it is coming home to roost.

Economist Alex Sanchez, a former adviser to Prime Minister Anthony Albanese and self-described “Labor dry” of the Hawke-Keating reformist mould, says the platform has been burning for more than a decade.

“The sad thing as a country is that we’ve known about it, but done nothing to arrest it,” he says. “It just seems to have gotten all too hard, which is not characteristic of our country’s nature.”

“And I hold myself to account as well,” he adds, having stepped down from the government in July.

But in Canberra, it has been all buck-passing and blame-shifting. Labor is trying to deal with the symptoms of inflation and declining living standards. But cost-of-living handouts do not treat the underlying cause of the problem.

The political class increasingly sees every problem as a distributional issue rather than the poor fundamentals.

Making matters worse, profligate spending by federal and state governments is now in direct conflict with the RBA’s efforts to tame inflation. Governments have their foot on the accelerator as the RBA keeps its foot firmly on the brake.

Approaching an election, an increasingly desperate Albanese government is on a collision course with the RBA as Labor prepares to roll out more cost-of-living relief and a big-spending childcare package. The prime minister’s election slogan to Australians is “we have your back”.

Treasurer Jim Chalmers has dropped the pretence that fiscal and monetary policy are working in the same direction. He now says the record government spending is propping up the economy to save it from technical recession.

While the government wants to avoid the economy going backwards, the extra dollars it is spending will inevitably prolong the inflation pain and elevated interest rates.

Labor did not cause the outbreak of the biggest inflation shock since the 1980s. Extraordinary pandemic stimulus from the Morrison Coalition government (backed by Labor) and the RBA; government-mandated lockdowns; closed borders; global supply chain disruptions; and a war in Ukraine that temporarily lifted global energy prices were the chief culprits.

Yet, the criticism from some economists is that after 2½ years in government, Labor should have done better managing the inflation outbreak and the economy more broadly.

The good news is the unemployment rate is a low 4.1 per cent. A jobs surge in government-dominated care sectors and the bureaucracy has held up the labour market. Chalmers has also delivered two budget surpluses due to a revenue boom from income tax and soaring commodity export prices.

The lucky treasurer

Economist Chris Richardson says Chalmers has been the luckiest treasurer in history, but there has been no real restraint on spending. Chalmers’ budgets have added $60 billion extra in net discretionary spending. The budgets have contained $104 billion in new spending decisions, but raised only $44 billion in extra revenue to pay for it.

That’s a generous calculation because it includes billions in theoretical revenue from a new superannuation tax on retirement savings balances above $3 million that is unlikely to pass parliament.

Total federal and state government spending in the September quarter was at a record 29 per cent of nominal GDP. Extraordinarily, it is the same level it reached during the peak of the pandemic lockdowns in mid-2020 when massive stimulus payments including JobKeeper were flowing.

Higher spending on the $49 billion National Disability Insurance Scheme, aged care, defence, state government public servants and infrastructure projects has pushed the nation’s finances into a long-term structural deficit.

The Organisation for Economic Co-operation and Development warned again this week that expansionary budgets will need to be reined in over the coming years to address fiscal pressures.

“Robust government spending growth has kept GDP growth positive as tight monetary conditions restrained private consumption and investment,” the OECD noted.

Westpac economist and former Treasury official Pat Bustamante says the “once-in-a-lifetime” expansion in the public sector is propping up the labour market, but skewing productivity.

“The longer this dynamic continues, the larger the risk we remain stuck in the slow lane when the public-sector sugar hit runs out,” he says.

The fundamental problem was laid out in a McKinsey report presented to company chairmen and chief executives this week. For much of this century, Australia has coasted on the easy gains from the mining boom and high immigration. Labour productivity growth has been virtually zero since 2016 and has slumped to 30th out of 35 rich countries. McKinsey’s “national emergency” warning is no exaggeration.

Productivity – how efficiently labour produces goods and services – is the key determinant of living standards and contributed more than 80 per cent of income growth for the three decades before the pandemic, the Productivity Commission estimates.

Governments are pumping in more money to the non-market economy (such as the NDIS, aged care and public service), which is expanding at almost triple the pace of the private sector. While higher demand for social services seems inevitable as the country becomes richer and older, bigger government is indisputably weighing down productivity.

Productivity is falling in the non-market economy and has had zero growth for 20 years. This is Chalmers’ “care economy”.

Productivity Commission chairwoman Danielle Wood said in July it “always has been and always will be difficult” to improve productivity in labour-intensive industries. “So what that means is as those sectors expand as a share of the economy, as they inevitably will, that will drive down productivity overall, and you have got to work harder elsewhere,” she said.

In other words, governments and business need to drive larger-than-usual productivity gains in the private sector to offset the expanding non-market economy. But it’s not happening. While private sector productivity is now growing at just below pre-pandemic averages, overall productivity is shrinking.

The key to getting private sector productivity firing is business investment, and it has been stuck around 1990s recession levels as a share of the economy for the past eight years under both Coalition and Labor governments.

Less investment in new tools and equipment and a shallowing of the capital stock makes workers less productive. Business cannot afford to sustainably pay higher real wages unless worker output is rising. Or if employers are forced to lift nominal wages without a productivity offset, the cost pressures will inevitably be passed on to consumers through higher prices, contributing to inflation.

Election cannon fodder

Today, real incomes and living standards have gone backwards due to a combination of higher inflation, elevated interest rates and income tax payments. It is election cannon fodder for Peter Dutton’s opposition.

Shadow treasurer Angus Taylor sharpened his attack this week when he said Australians were paying the price for Labor’s “big government, big Australia” policies. Taylor is economically literate to diagnose the problems. But the Coalition is yet to roll out meaningful policies to fix the challenges. Next week, it will unveil a big taxpayer gamble on nuclear energy.

Teal independent MP Allegra Spender is almost the only MP making a meaningful contribution to the tax reform debate, after publishing a green paper which she will use as a guide for demands in the event of a hung parliament after the election.

Australia’s over-dependency on growth-inhibiting taxes on personal income and non-mining corporate profits has been repeatedly called out by the International Monetary Fund, OECD and former Treasury secretary Ken Henry’s tax review.

Overhauling tax, workplace relations, fixing the energy system mess, competition and less stifling red tape should form the basis of a modern reform agenda.

It’s not beyond us for Australia to once again enter the hall of fame of being great economic reformers.

— Chris Bradley, McKinsey senior partner

Business is exasperated about the Albanese government and is giving up hope on Labor. The platitudes from the government have worn thin, particularly after a series of workplace law changes that empower unions and reduce flexibility.

The tensions were laid bare this week after Chalmers admitted that eventually – perhaps after election spending – the private sector must drive the economy.

In response, the bosses of BHP and Wesfarmers demanded a reduction in red tape and a more friendly environment for investment.

“I kind of wish he’d said this a year ago because this is exactly the message that’s been coming from ourselves, but also from broader business,” BHP Australia president Geraldine Slattery said.

The number of restrictive clauses in federal law (including “shall”, “must”, “may not”, “required” and “prohibited”) has surged by 50 per cent since 2007, according to McKinsey.

Labor’s policies involve bigger government reallocating resources around the economy.

Chalmers’ values-based capitalism is captured by subsidies for manufacturing and green energy such as solar panels, batteries and critical minerals, a $470 million taxpayer bet on PsiQuantum, the care economy and trying to shoehorn superannuation funds and the Future Fund to invest in the government’s priorities of the energy transition, housing supply and infrastructure.

It’s a very different economic approach to the Bob Hawke-Paul Keating Labor governments in the 1980s and 90s. Their focus was on expanding the market economy via productivity growth to pay for social security net programs such as Medicare and compulsory superannuation.

Liberals John Howard and Peter Costello followed up by introducing the GST and cutting other taxes, workplace relations flexibility and delivering 10 budget surpluses.

Then the mining boom arrived in the mid-2000s to deliver tax revenue windfalls, and that made Australia complacent.

The reform task has been made harder by the 24/7 media cycle, social media, powerful lobby groups, the proliferation of political advisers with no outside experience becoming MPs, a less ambitious and more politicised bureaucracy, a more divided electorate and rising budget pressures.

McKinsey senior partner Chris Bradley says governments and business should build a shared understanding of the productivity challenge and create a sense of urgency.

“The incredible economy that we built did not happen by fluke. It happened through amazing leadership from both sides of politics.

“The ingredients were a shared diagnosis of the problem, an absolute focus on urgency and a package deal of things that are collectively better.

“It’s not beyond us for Australia to once again enter the hall of fame of being great economic reformers.”

Here is the link:

https://www.afr.com/policy/economy/australia-s-economic-problems-have-been-brewing-for-years-20241205-p5kw02

All this makes a pretty depressing read, made a lot worse by the stupidity of the Opposition suggesting a quick little dose of nuclear would make the medicine go down, and solve all our problems.

With solar, wind, tidal and fossil sources available in abundance, and nothing that even vaguely resembles a nuclear industry at present it seems to me we need to go slow and carefully to develop  the nuclear skills we need and plan for serious phased adoption the decade after next. We have the luxury of time to get it right and to learn from all the mistakes of others of the last 20 years! In the meantime we have heaps of conventional energy sources!

We have time to do things properly and safely and this is what we should do I reckon!

What do you think?

David.