Yesterday a variety on commenters on the site pulled out dog whistles, hinted darkly of racism, alleged bias and lorded it over me for criticising the Greens and their immigration policy. One even suggested I was obsessed with it despite never having written on the subject before.
Well…you know what? I am obsessed with immigration. Do you know why? Because the economy is. And that’s what MB does.
Immigration is now the central driver of the Australian economy. It drives the housing bubble. It drives private debt. It drives wages. It drives investment patterns. It drives public spending. It drives the current account.
We are in the midst of an immigration boom the likes of which we have never seen before. Not because we have not seen larger inflows but because we have never seen such huge flows into such a weak economy. It is now a key driver of everything.
This is easy to prove:
- house prices are mad in the immigration centres of Sydney and Melbourne driving big wealth effects;
- real consumption per capita has not risen since 2008 so all household consumption is being driven by headcount increases;
- domestic demand is heavily supported by dwelling construction directly resulting from immigration;
- public investment is a desperate rear guard action to build-out crush-loaded infrastructure.
That’s three quarters of the economy right there. There is nothing else left to drive domestic demand growth. That’s it: immigration and its multipliers.
Should be good, right? Sure, if it were planned right.
But it isn’t. Indeed it is deliberately planned wrong.
Mass immigration today is not about supporting the living standards of existing residents. It is the opposite. It’s a deliberate policy to deflate their living standards so that a few chosen rent seekers – banks, retailers, consumer services, builders – can avoid any fallout in the post-mining boom adjustment. That is the process of repairing Australian competitiveness as the mining boom inflation falls away.
This immigration deflation takes three obvious forms: lower wages, higher house prices and poorer standards in public services and infrastructure.
Mass immigration is no longer a marginal policy supporting other ways to grow the economy. It has become the tail wagging the dog and is now a rabid class war aimed at workers and youth so that capital in these sectors can enjoy the out-sized returns of yesteryear’s bubble.
Now, the irony of this is that those that generally care more about the the prospects for the working classes, youth and generally more vulnerable – loosely couched as the Left – are also traditionally the strongest supporters of immigration. However, as I’m sure you see, in the immigration driven deflating economy, this same Left has morphed unwittingly into the front line shock troops for an oligarchic putsch that is herding the working classes and youth into the economic mincer.
It’s no laughing matter having your wages deflated and houses taken away. I know that millennials pretend not to care, enjoying “experiences” over “stuff”. And that working class folks take on monster mortgages to crawl into far flung postage stamp McMansions while wealthy immigrants and greedy landed locals pluck prime property in the centre.
But take a look at Maslow’s hierarchy of needs, a pop psychology take the needs of the human being:
Look at the base of the pyramid: security, safety, food, water, warmth rest. Do you know what each of those variables adds up to? Two things: wages and a house.
The unholy alliance between immigration and the chardonnay Left is playing a key role in ripping those two base levels of the human pyramid away from the the most vulnerable Australians. The Left has joined and is the prime defender of an outrageous class war.
Some will counter by using my own analysis against me. They will argue that if immigration is all that is holding the economy together then the vulnerable will suffer more if it is cut. True enough in the short term. But beyond your nose that is wrong. What will happen is asset prices will deflate and the Australian dollar tumble as interest rates fall to zero. Wages will still taper but more widely and the post-mining boom deflation will be more shared across the nation. The class war will be replaced by a program of mutual sacrifice between wages and capital. The recovery will come from tradable sectors.
Others will counter that there are more pressing matters for the Greens and traditional Left to focus on, such as addressing climate change. True enough as well. Likely, the Greens’ mass immigration policy is predicated on the notion that we need to foster global integration to deal with a global problem. Global government may be necessary.
Quite right too. Nobody is going to accuse me of not supporting the cause. I spent ten years pushing the international climate change agenda from 2000 at The Diplomat. I nearly killed myself ghost writing the second Garnaut Climate Change Review (literally ended up in hospital for two weeks), and have ceaselessly campaigned for accelerated carbon mitigation policy at MB.
But if this spirit is not leavened by the pragmatism of understanding and supporting the needs of a local population then the battle will be lost to anger, confusion and demagoguery. To put it bluntly, why should anyone give a shit about climate change if it rips the roof from his or her head?
The miracle in all of this is that youth does still care. What a marvelous generation the Millennials are. Through the miracle of education they shine with a global ethic and post-cultural identity that is as close to the perfect humanist construct in history as we’re ever likely to get. They are equipped with the values to change the world for the better.
But for the rest of us to misuse that, to spit on it and cut it loose in the world without an anchor, to shit on it from our castles as we stuff ourselves with myriad international cuisines personally delivered by some bicycling sub-altern desperate for a visa, that is fucking obscene.