Wednesday, March 18, 2009

Inconvenient Aussies

clipped from spectator.org

Writing in the Australian journal Quadrant for March,
2009, economist Steven Kates of the Royal Melbourne Institute of
Technology has provided approximate unemployment rates for the
USA, Britain and Australia from 1929 to 1938. The figures are
quite astonishing, including respective rates of 23.6%, 22.1% and
23.0% in 1932 and 19.0%, 12.9%, and 8.9% for the three in 1938.
(For the full table, scroll down
here.)

What saved Australia was that the Scullin Labor government, which
had been slow to recognize the onset of the Depression, in 1931
adopted the so-called "Premiers' Plan" which had been put forward
by a number of the States. This had none of the sophistication of
Keynes. On the contrary, it advocated some very simple and
old-fashioned nostrums: to cut public spending by a whopping 20%,
to return to budget surpluses, and to cut wages. This wage cut
went through the public as well as the private sector.

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