Arete, have a look at The Gruen Transfer, specifically "the pitch" and you'll see the gag. If the bouncers let you in of course, for a small country they have lots of giants, eh bro!
Gravelclimber, evidence of government intervention stifling recovery is still opinion based but as more people analyse policy of the era its becoming more widespread. This is from today's Australian but there's plenty around if your interested, its not a new theory. You'll see this article was written by the same sort of academics who praise FDR, but they do raise valid points and they are not alone. Its the same here where an ill concieved knee jerk bank deposit guarantee made bank deposits more secure than Commercial paper, which increases the difficulty companies have in raising capital, thereby stifling growth.
http://www.theaustralian.news.com.au/story/0,25197,25008973-7583,00.html
Essentially you can view this from any perspective and put a positive tilt on it, me from the right, you from the left. But at the end of the day saying the free market failed depends on what you think it is that the free market does. Markets boom and bust, they always have and they will continue to do so. Governments can try to control it but they always end up stifling growth, Communism is a great example.
There's a book by Phillip Ball called "Critical Mass" which is the world from the physicists perspective, these guys beaver away until the can model something with mathematical certainty and its amazing as to the applications of some of their findings. You'd be suprised to learn of the initial intentions of Karl Marx' research, and how much spin Lenin put into it. Its a dry read and it does show the enormous potential of what is possible, but apart from Russell Nash, few real advancements have been made in the modelling of economics. This is why the opinions of economists need to be carefully weighted and reasoned against each other. There is still a lot of instinct in what they do, hence the reason why I think Turnbull's misgivings deserve some level of pandering.
The US system fell over because they stopped sellin collateral and starting trading debt. And I'm sure you realise the issues of trading "nothing" when someone decides they want there money back. Mortgages in the US were NINJA loans, no income, no job, no assets, and over the top prices were paid for houses on the hope that capital gains would allow owners to refinance at new levels they could afford. However the US system is different, if you simply return your house keys to the bank thats it, the debt is finished for you. Even if you paid $400k for a $300k house, and the bank can only sell it for $300k, they cannot pursue you for the extra $100k. So who wears the loss, insurance companies and the merchant banks who bundled this debt and sold it. The US banking industry has failed, ours has not, so has the market failed or do areas of the market need to be regulated better. Bernie Madoff is a prime example of the need for regulation and oversight.
We don't have this arrangement, we don't have issues with inabilities to raise capital, as all the recent capital raisings done by Comm Bank, Bank of Qld, etc. And yes companies are expanding. BHP Billiton are still forging ahead with a $6billion Iron ore expansion, yes they have closed 1/3 of their Nickel capacity but its on care and maintenance and will restart when prices improve. Fortescue are increasing production and they see China recovering, the organisation I work for are aiming for records this year, and some of the contract partners I deal with are expanding to meet these needs. Good companies with responsible and costed plans are raising capital and growing.
As for the skills shortage, I'm in the middle of it. I know all about it and the myths that journalistic hysteria has spread. We have actually never had an issue recruiting tradesman, some have, but thats the nature of low unemployment, supply and demand. When I did my apprenticeship Keating wanted everyone to go to Uni, Howard started increasing technical colleges. The situation is more social and less economic and not relevant. Building things for the sake of it and giving money to everybody was Gough's Army, and that didn't end well. We need people/jobs to support future infrastructure, but what we don't need is infrastructure just to support jobs. Incurring massive amounts of government debt now is just going to stifle infrastructure in the future. The money must be repaid, and spending cuts will have to be made. Your plan relies on the free market to be there to take over while the government recovers, so the sooner the free market does that the better. Thats why you let the weak parts fail and the strong take over, from the ashes the phoenix will rise. Profit drives development, excessive regulation stifles it.
As for Tax cuts for the rich, if you earned money in the higher brackets you'll know what bollocks that statement is. The greater percentage cuts are always for the low income earners, and so are all the payments. A famiy with 2 kids on $60k doesn't actually pay tax once all the allownaces are paid out. So who does pay tax? Or is it unfair to give the same amount of money to someone contributing more? I paid $43k in tax last year, and yes that means I pocketed lots too, but why is it that if I get any stimulus it won't go into the economy. 31% of my income goes straight to the government. If you want to get rid of the moochers in society then high income earners isn't where you'd start. What's more a one off payment gives a one off boost to the retail sector. A tax cut and an interest rate reduction gives a weekly boost to the retail sector. A chunk of that will go to Aristocrat, another to Phillip Morris, CUB, etc, but that is the nature of the beast.
Interestingly you basically finished with what I've been saying all along, the solution is arbitrary, so lets arbitrate. And I think we should get the best brains in the country to do the arbitrating, not two career public servants with the economic foresight of a layman. Give them the opportunity to pour over the IMF and Treasury data and see what they think. If they come up with nothing they you can get call Benedict XVI and get Rudd cannonised at your earliest, but lets be sure before we empty our wallet.
Thats all from me on this, everybody feel free to comment if you feel the need, I'll stop clogging thread.
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