Will it really be as bad as the 60's?

[MissMuffitt]

What does everyone think of this article? Is it more scare tactics, or is he right ?

http://www.businessspectator.com.au/bs.nsf/Article/Five-punch-combination-CES3Y?OpenDocument

 

[sailor]

I was a teenager in the 60's, and recall the oldies talking about a credit squeeze and how tough things were. Everyone seemed to have a budget and worked 2 jobs...at least in our family circle. I don't think tis that bad at present, but the big problem is how much disposable income the non-employed seem to have and how freely they spend it on doodads. That is of great concern.

 

[Beef_Hooked]

...but the big problem is how much disposable income the non-employed seem to have and how freely they spend it on doodads. That is of great concern.

So you're saying that the economic problems brewing today are due to the 2.7% of working age people who are unemployed having too much money, and spending it on luxuries?

Not unrestricted credit, not Wall St alchemists, not govt. spending etc etc... but dole bludgers with fat wallets down at Harvey Norman.

That's a huge influence they have, now I understand the high levels of bitter resentment towards them.

Cheers,
Beef

 

[sailor]

So you're saying that the economic problems brewing today are due to the 2.7% of working age people who are unemployed having too much money, and spending it on luxuries?

Not unrestricted credit, not Wall St alchemists, not govt. spending etc etc... but dole bludgers with fat wallets down at Harvey Norman.

That's a huge influence they have, now I understand the high levels of bitter resentment towards them.

Cheers,
Beef

No I'm not saying tis attributable to that alone.
And it also depends on which figures one looks at:

UNEMPLOYMENT RATE

• decreased by 0.1 percentage point to 4.1%. The male unemployment rate decreased by 0.4% to 3.7%, and the female unemployment rate increased by 0.2 percentage points to 4.6%.

Ref: http://www.abs.gov.au/Ausstats/[email protected]!OpenDocument

 

[alexlee]

The low unemployment rate has other effects. e.g. existing employees are more likely to get payrises because it's hard to find good staff, and people who think their jobs are secure are more likely to spend and not save.
Alex

 

[FHB]

Gottliebsen seems very concerned about the monoline insurers, without them credit will dry up quickly. Asset and economic growth is dependent on availability of credit, so it really depends if the monoline insurers are allowed to fail (I doubt it) and how they will restrict their bond insurance activities in the future (?).

Employment/unemployment will be an effect of this issue, not a cause.

 

[Beef_Hooked]

Sorry Sailor I stand corrected. 4.1%m / 4.6%f. but you missed my point.

Yes Alex I understand that low unemployment has a direct effect on inflation and a certain level of unemployment is necessary in order to contain inflation.

What I can't understand is that the unemployed (as opposed to working people) are responsible for inflation, that unemployed people have enough spare cash to influence inflation by their spending.

If life on welfare is as easy as many on this forum believe, then why is it only 4.5% of people are unemployed. Why don't we all sell up and forget about the trials of investing in property and sit back and collect huge cheques every fortnight?

For the record, I have been unfortunate enough to have been on welfare once due to circumstances beyond my control. After 10+ years of full comfortable well paid employment it came as a shock and fortunately it was only for a short period of a few months. I didn't choose to be unemployed and I can give first hand evidence that:

1. It was not easy, I was working part time and the amount of hoop jumping required to top up my meager part time income took almost as much time and effort as my employed time.

2. I was subjected to humiliation and social disapproval by both employers and my peers.

3. I wasn't "Living in Nirvanna" nor was I influencing the economy down at Harvey Norman spending huge wads of spare cash on doodads.

4. I did everything I could to get off welfare as soon as possible for the above and many other reasons including a dramatically reduced standard of living.

By all means, someone prove me wrong, quit your job, sell your property, dissolve your trusts, "walk a mile in another man's shoes". Then come and tell us all how easy it was with first hand evidence rather than heartless blind predjudice.

Anyone volunteering?

Cheers,
Beef

 

[alexlee]

The problem with the monoline insurers is that they issued insurance over CDOs as well. Currently the banks are putting off writedowns on the CDOs because they say that the insurance they have over it gives it protection. If the monolines have their credit ratings downgraded, then that protection isn't as valuable. As a result, the ibanks will have further writedowns.

The problem with writedowns is that it decreases bank capital. That means it cannot loan out as much money to borrowers.
Alex

 

[Mr. Fabulous]

Hi Beef,

You know, we can always abolish or heavily reduce welfare payments to people, much like in the US. Then we can watch crime soar through the roof as people become more desperate to simply be able to put food on the table, just like in the US. Then we can watch the people who wanted to cut welfare completely in the first place whinge about the high levels of crime.

Irony at it's best.

Mark

 

[Ausprop]

Then we can watch crime soar through the roof as people become more desperate to simply be able to put food on the table, just like in the US.

and other green goods hey You are right tho, easiest to pay off the violent or most vocal members in society, is almost the norm for australian politics

 

[Beef_Hooked]

Exactly right Mark, and they certainly wouldn't be paying their rent either.

Cheers,
Beef

 

[Dazz]

By all means, someone prove me wrong, quit your job, sell your property, dissolve your trusts, "walk a mile in another man's shoes". Then come and tell us all how easy it was with first hand evidence rather than heartless blind prejudice.

People are allowed on this forum to have an educated, well rounded, considered opinion on subjects without having to "walk a mile".

In my industry out on the rigs, I can guarantee that 99.99% of the population have absolutely no clue what goes into delivering petrol into their car's tank, but the entire population without exception all seem to have an opinion on what the price of the product should be. Big deal. That's the good thing about being in Australia. We are lawfully allowed to express our opinions, within certain legislated parameters.

You worked for 10 years, had a brief spell on the dole and then got back on your feet. Good onya. That's exactly what the dole is supposed to be. A stop gap measure 'til you get back on your feet, dust yourself off and carry on.

I don't think anyone really thinks that the long term unemployed are wallowing in wealth....just that their choices could be better. Choices that involve both the reasons underlying why they are unemployed and their choice of what they spend their meagre doel monies on. But then, IMO, by definition, you don't want to make it comfortable.

In terms of giving everything up.....that makes no sense to me whatsoever. Everyone is trying their best on this forum to better themselves, with property purchases (and all of the sacrifices that need to be made to make that happen), study, improve their prospects of job selection and promotion once they get in, and then all of the rights and responsibilities that flow on from that.

Why on Earth would someone with drive and passion and some get up go, give everything up that they have worked so hard towards just so that can see how miserable it is on the dole, and then be in a first hand position to comment ??

 

[Beef_Hooked]

Agree with you Daz on 99%.

The problem I found was how easy it would have been to become long term. Most employers I dealt with during that period made it obvious they would prefer to employ someone who wasn't on the dole, prejudice.

While you and I are strong enough in character to dismiss this when directed at us personally, many are more deeply affected. Feeling of little value becomes very easy once you realise that life is not easy, I found it came early for me, after rejection no:3. Like you said I dusted myself off and good on me.

Not everyone is as fortunate.

To say that the unemployed are responsible for the economic woes we are beginning to feel is neither educated, well rounded, nor considered opinion.

As is often the advice on the forum, I was suggesting further education.

Cheers,
Beef.

 

[Mr. Fabulous]

and other green goods hey You are right tho, easiest to pay off the violent or most vocal members in society, is almost the norm for australian politics

Ausprop,

I had to be on the dole for a while. Are you saying I'm violent? So what's your proposition to help people out if you don't think they should get benefits from the Govt? Granted, it's not a perfect system, but it's better than the alternative (heading down the path of the US).

Mark

 

[Ausprop]

Ausprop,

I had to be on the dole for a while. Are you saying I'm violent? So what's your proposition to help people out if you don't think they should get benefits from the Govt? Granted, it's not a perfect system, but it's better than the alternative (heading down the path of the US).

Mark

dunno.. you said cutting welfare leads to crime. I think they should get benefits, I dont want people stealing my stuff to support their drug habits. I was just agreeing.. pay them off and everyone else that makes some noise = the path of least resistance.

 

[Ausprop]

I should add that I dont think anyone that is currently long term unemployed cant genuinely find a job - other than physical or empotional handicap

 

[Mr. Fabulous]

I think they should get benefits, I dont want people stealing my stuff to support their drug habits.

So now everyone on unemployment benefits is a drug addict?

Mark

 

[pricey]

You know, I didn't actually think the 60's were that bad financially (mind you I also wasn't there at the time). I think they had a recession in '62?

I thought it was the 70's when things really fell apart.

 

[Ausprop]

So now everyone on unemployment benefits is a drug addict?

Mark

I think you would find that most crime such as theft, break in, muggings are in the name of feeding a drug habit, not to put food on the table.

 

[Mr. Fabulous]

I'll ask you again - are you saying that everyone on unemployment benefits is a drug addict?

If you got off your precious middle class bum and actually went and met junkies you'd find that none of them (usually) are on the dole either. They don't have the time or the resources (such as a stable address), to be on the dole.

It's always funny to me how people with no idea always seem to know the most about any given topic.

Mark