Clag: a glue-like putty that can be used to either block up conduits, bog up divots or choke up cogs. Clag is Australia’s secret economic weapon; gum thrown, stuffed, squished and mashed into every open crack and crevice in vulnerable markets to hold them together.
The latest goo to be poured into an open wound is the energy sector. Currently, we’re furious deciding whether or not to keep open a doomed coal power plant or build a new one. Covered in gunk, we’ve lost sight completely of the real problem for energy which is the price of gas. All we need to to is tell the gas cartel to leave 10% of annual exports here and all power problems – prices, reliability and decarbonisation – are instantly resolved. Instead we’re ladling concrete into the crevice with outcomes so inefficient that they would not be out place in a dying Soviet Union.
When it comes to fixing energy let’s just bog it up!
A second yawning chasm in the economy is the Banking Royal Commission which has exposed Australia’s banking sector as a gang of white collar mobsters. It remains to be seen what the RC will do with this knowledge but already the legislature is furiously shoveling mud over the findings to bury them as quickly as possible. Regulators want to unwind some of the tightening that has exposed the corruption and the media is depositing a conveyor belt of trivial slurry over the catastrophic levels of banking perversion in the hope that it will once again be forgotten.
When it comes to fixing the banking system just bog it up!
A third mighty fissure is threatening to swallow households hole. On the wrong end of the great banking swindle, they are now so indebted that consumption is their last not first thought. Retail is dead man walking and growth sinking into a permanent swamp. Related is falling wages which cop a load hand-wringing mush with no real answers anywhere in sight. Fiscal and monetary managers are heaping futureboom fantasy onto markets which only serves to keep the currency up while planning an avalanche of tax cut goo to pour all over an asphyxiated Budget right at the wrong point in the cycle.
When it comes to fixing Australian growth just bog it up!
A fourth economic crevasse is a housing bubble rolling awkwardly towards the cliff edge. Prices are falling and face a titanic interest-only price reset. But you’d never know it. Confidence is up and Domainfax is furiously massaging the landlord army plus FHB patsies with a blinding rain of positive oils.
When it comes to fixing the housing bubble just bog it up!
A fifth political economy vortex is gathering around immigration. It is at once the last growth driver standing and the ultimate economic bog itself; back-filling poor demand, over-building, the housing bubble and tax revenues. But it, too, is now muck in the cogs of an efficient economy as it crush-loads infrastructure and every essential service. The only answer to this sticky goo is more of it.
When it comes to fixing demographics just bog it up!
The final crack at our feet is a slowing China and falling bulk commodity prices. This is going widen all of the chasms above yet it’s simply ignored with outlandish forecasts of forever high prices, nor any attempt remedy a chronically low tax take. The only attempt to replace the drowning export income with non-mining tradables is to sell-out universities to Asia’s dumbest.
When it comes to repairing national income just bog it up!
These are only the outstanding five facets of the clagberg. Also gummed-up is tax reform, competition, NBN, federation, productivity, infrastructure, the currency, simple meritocracy, so on and so forth. Indeed, if it’s big enough to matter to macro economic efficiency then we’re almost certain to have chocked it full of bog.
The drivers of clagflation are simple: Dutch disease, rampant interests, collapse of the political centre, a corrupt media and professional class of political carpet baggers. Above all is Strayan exceptionalism: the collective certainty that we’re the best no matter how high the clagberg rises.
All of this economic clag comes at a price. On a per capital basis we get poorer as the economy grinds into a profitless sludge. But it comes with an upside too, nobody can be blamed for it, as it is buried under a slag-heap of better headline numbers. The leadership class can pretend it knows what it’s doing even as it rips its own piece off the gummed-up carcass.
The question now is can it still be hidden? Can such a misshapen artifice of economic mucilage still convince others to invest in it? Can we pull off the “great clagflation”, bogging up every crack in sight with rehypothecated dung as we aim for a slow stall into relative poverty? Or will the world take the opportunity to whip the submerging carcass for its own pound of flesh, clearing the clogged arteries of the economy in one mighty flush?
