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MAY 2012

In Oz (Australia), we have largely been insulated from world events.  The political narrative of the Labour (=pro union) party is that Wayne Swann did that by his brilliant handling of treasury.  The Liberal (small business) narrative is that more than a decade of Liberal government had made our economy strong.  And that Labour had been destroying that good work by running the Liberal budget surplus into a deficit which approached $40 billion per annum.  (That is about 10% of government income).  Wayne has responded that he will balance the budget.  However the indications are that his budget will again be in deficit before 30th June 2012.
This will happen because the Greeks appear to be about to leave the European Monetary System (aka EMS or Euro). This is causing consternation in the world monetary system.  It is anticipated that those people who hold positive balances in Euro bank accounts (except in Germany) are about to get a haircut as those nations devalue or their banks go bust.  Those wise few citizens who had the foresight to purchase US dollars and other assets may well benefit, at least in the short term.  It is this dawning realization that appears to be causing the recent and rapid appreciation of the $US.
Of course the Greeks are being told there will be dire consequences if they leave the EMS.  No doubt to encourage them to elect a Euro friendly legislature in the election that is anticipated within a few weeks.
My own anticipation is that the Greeks as a nation would benefit by leaving the EMS.  Especially if they can find a way to get all those Greek retirees currently on full, generous government pensions back to work.  Why would the Greeks benefit?  Well the Post Euro Drachma (PED) would drop drastically against the Post Euro Mark (PEM) and lots of Germans and other Europeans would then flood into the (now) ultra cheap Greek Islands for their annual holiday.  The previously "sold" advantage of having an European wide common currency will be rendered trivial, probably by somebody patenting and selling shop price tickets that show the cost of an item or service in PEMs or PEFs (updated hourly by wifi to reflect the current exchange rates.)  And through the magic of debit cards, nobody will carry cash anyhow.
So the IMF will be bust, the PEM will revalue.  And the German economy will founder as their exports become very expensive.  France will muddle through with it's new socialist President (who will cop the blame and inoculate the French against socialism for another couple of Presidents).  The World Bank will probably suffer, and the BRICs will also get a haircut.  The USA will continue to boom because it has found new (fracked shale) energy reserves and may well have a new Republican President who will not spend the nation into penury.  And because the US culture is what it is, it will continue to evolve new cultural icons (Like Hollywood, Cars, Home appliances, Apple, Google, Facebook).  And it's economy will continue to boom.
Back to the land of Oz.   
As China and India take haircuts and lose export markets to Europe they will reduce purchases of Iron and Coal and the oversupply will cause a catastrophic fall in the price of those raw materials.  They will mark time until Euro and US demand picks up.
Australia's balance of trade will collapse and the dollar will go into free fall, probably back to about $US0.80c, although it could be as bad as $US0.65c or as high as $US0.95c.   This will cause unemployment to rise above 8% and the Australian electorate will blame the Labour Party and (what will be perceived as) their union puppet masters for demanding wages too high in union jobs and for attempting to extort too high a price for our mineral exports.  And for nearly a decade we will be left with a single or possibly two Labour government in Australia.
But maybe the Eurocrats can stave off the default by use of their Keynesian model.  Maybe China will manage to salvage it's economic miracle.  I certainly hope so.  Ambrose Evans-Pritchard seems dubious.  The trouble with Keynes is trade unions & established circumstances (sinecures).  And the observation that it seems that the only way to make people who have a sinecure work and work longer & harder for less money is to remove their sinecure.
And while the workers do not do a fair day's work, Greece (and France and much ou Europe and Australia) are not going anywhere economically but down.
These are the names of the two Australian lower house politicians who are bringing the representative democratic process into disrepute.
Of course they blame the Murdoch media.  And the Fairfax media. And the ABC.  And "self important Journalists".  And Tony Abbott and the whole opposition.
The two independents, (Oakshott and Windsor) are now being tarred.  And are agonizing over the tarnish.  They have chosen a stance that is not in conflict their personal interest.  By doing anything other than agonize they risk an early election.  And almost certain loss of their seat in parliament, and (possibly) a substantial loss of their very generous parliamentary pension.
What we need is a bit more direct government, as described by this commenter on slashdot..
I call BS! I am a Swiss and we have direct democracy and it works well, THANK-YOU!
The idea that issues become too complex is another pile of BS! Issues are not complex, issues are simple. What is complex is when you tie somebody's "emotion". A representative democracy IMO is the BS because what it does is give certain people power above everybody else. Do things move faster in a direct democracy? No, it takes time, but that is good because I hate the knee jerk gotta do this now or the world will end type reactions given by politicians.
The way Swiss direct democracy works is that the government are careholders and they carry out the day to day functions. It is the people who make the choices of what goes forward. This means that even though we have to ability to decide the sanitary regulations we usually don't. Our democracy does not run amoke because unlike a representative democracy, each person in parliament will not play party politics. For they know if they act like partisan eff heads then the vote will go to the people. And once it goes to the people it is out of their control!
Case in point the 2 billion CHF fighter jets. The SVP wants it badly, and they want the extra monies. The other parties have said, "try it, and we will put it to the vote of the people." Then the SVP said, ok no extra money, but the departments will have to cut their expenses. Again the other parties said, "try it, we will put it to the vote of the people." The SVP completely backed down, and now is cutting their own expenses and saving the monies so that in 20 years they can buy the jets. In other countries like the US, what is Romney saying? Oh yeah cut everything, but don't touch the military! ssheeshhh...
What I really dislike about representative democracies is that they are run by minorities. They are run by people who demonstrate enough, who protest enough, or who scream enough. Notice how in Switzerland there are so few protests? Answer, because the people know that if they don't like something and want it changed they just need to put it to the vote of the people. As a result many of the things that people in representative democracies scream about are not voted on because they would never reach majority...
BUT the biggest and best thing I like about our democracy is that we like to keep our money. If something costs more money we don't vote it in because we know we have to pay for it with more taxes. We don't vote rich people tax breaks, but we also don't rip them apart either.
So if you counter argument is California on how not to do direct democracies, I say, wait be careful. While California has its issues, it is also a place where people want to be. So in that vein California is not that bad. The difference between California and Switzerland is that California people like to spend, we don't...
The Peter Cook and John Cleese film classic "The rise and rise of Michael Rimmer" described a scenario for a form of direct government that discouraged a generation of the possible negative side of direct government.  The Swiss model answers the negative aspects portrayed by that film.
I have discussed and defined "regulatory capture" before.  It is well defined in Wikipedia.   It is the term used to describe the purchase of favourable regulation by political contribution.
Lee Rhiannon of the Greens has been associated with the website democracy4$  That website rails against regulatory capture at all levels of government and proposes (1). Limiting the amount that can be given by any contributor and (2). Limiting the amount that can be spent on elections.
None of those proposed methods have the slightest chance of success.  In the USA they have already circumvented similar laws with "superpacs" (Super Political Action Committees).  According to Wikipedia, Superpacs can collect unlimited amounts of money from any source and may spend unlimited amounts of money on political expenditure so long as it is independent of the campaigns.   Much like the Unions did to bring down John Howard.
Our politicians can be trusted to never suggest the only workable solution.  With Direct Government we could stop such surreptitious influence, because when it came to the crunch of enacting the law or regulation, we the people could stop the quid quo pro of purchased regulations.