Thursday, 19 February 2009

No crisis - meat raffle tonight

Adelaide, South Australia: I suppose that sign seen in an Adelaide street tonight is one way of responding to the recession. Actually it hasn't fully hit home here yet, although some primary industries have taken a hit. But interest rates are still at 2.25% and the Reserve Bank has said it may not lower them any further.

Opposition politicians seem to be engaging in a bout of infighting among themselves, but it's probably no more undignified than a spat between Peter Mandelson and Starbucks.

The r-word is much in evidence. That's fine if it means avoiding the kind of catastrophic market failure represented by a collapse of the financial system. What is different is the call by one trade union leader for controls on foreign ownership and the restoration of export licenses.

Similar protectionist calls have been heard in Britain and other parts of the world, some with a xenophobic tinge. But remember that the old 'mixed up' economy was a notionally market economy that was unable to function as such and hence deliver the benefits of competition.

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