The latest GDP figures and the responses from our 'leaders' reminds me of Thomas Dolby's 1982 song, "She Blinded Me With Science," referring of course to the colloquial British concept of deliberately confusing someone (in this case, multiple people) by giving the impression of highly complex knowledge. Mr. Rudd dropped this today in response to a 0.4% growth in the GDP figure:

"Today's figures demonstrate that the Government's economic stimulus is working and it is positioning Australia as the best performing economy in the world," he said.

"Had we pursued the strategy recommended by [Opposition Leader] Mr Turnbull - not to invest and not to provide cash payments to pensioners, carers and others - Australia would be in recession today."

Even if the stimulus is the reason GDP recorded a small gain (it's quite probable), that's not necessarily a good thing. GDP is one of those figures that measures all spending, regardless of how destructive it is. In other words, the government could just as well build hundreds of battleships, have a fight to the end in the middle of the ocean until one remained, and GDP figures would record impressive gains thanks to all of that spending. The question we need to ask is this: are we wealthier for it? Are we wealthier for the billions of dollars that were squandered on plasma TVs and the like instead of being saved and invested productively? When I say productively, I mean expenditure for the purpose of increasing future consumption, an expansion in the capital base. Government expenditure -- and 'stimulus' payments, are usually (if not completely), squandered on unproductive expenditure, or destruction of the capital base. While both of these will show up in the GDP figures, only one actually improves the wealth of the nation.

So while the politicians can slap each other on the back and take "credit" for further destruction of real wealth, try to look beyond the statistics, most of which have a built in bias towards disguising the true cost of government and over-counting benefits.

Earn or Learn: that's the message the government is now sending to the Australian Youth,

"Any Australian under 25 will need to be either working, studying or training under a new plan agreed to by the Federal Government and state and territory leaders."

The government, together with the unions[1], have progressively increased the cost of youth labour to the extent that the government feels obliged to pass yet another law to fix "youth unemployment". This is nothing more than a bandaid policy aimed at fixing a problem caused by government intervention. Rather than forcing youth to do what a group of bureaucrats think is "right", how about first they allow them to choose whether or not they want to work or study. As it stands right now, with the minimum wage at a staggering $14.31 per hour (set to increase further in 2009), it's no wonder fresh high school graduates can't find work. They're products of an education system that leaves them barely qualified to operate a dishwasher yet alone function in the workforce; they're being systematically dumbed down by compulsory state-run education and this move will do nothing but add yet another taxpayer-funded burden to our economy.

Businesses are already being subsidised by 'free' government education. They don't see the need to invest in their staff because they're (being forced into) paying for training already. As the direct beneficiaries of training and education, if the government gradually removed their involvement in the education industry and allowed the market to function, business should and would bear the costs, voluntarily. It would probably be a lot cheaper, practical and relevant to boot! Who can honestly say that what they learnt in high school is useful to them in the workforce; I had to 'unlearn' most of what I was taught as soon as I left!

If our leaders are serious about 'helping' "...young people avoid slipping into long-term unemployment", then they should repeal the minimum wage laws. They should let people work at the level where the cost of labour is equal to labour productivity. Every young man and woman willing and ready to work should be allowed the opportunity to do so. A free labour market would welcome young people, which would not only exhort and restore the spirit of work but also improve labour skill and know how. The labour productivity of Australian youth would likely rise and exceed the ominous minimum levels that presently condemn millions to idleness.

On a more cynical note (seem to be doing this a lot these days...), what's the bet that the next Australian Bureau of Statistics (ABS) unemployment data will show a remarkable decline in unemployment, considering that the government has literally made it illegal for under 25's to be unemployed. Kevin Rudd will be grinning with glee at the success of his latest scheme...but it's just a superficial, statistical, (at best) short-term 'gain', just like every other government initiative designed to "help us". The cost to production, to wealth, whether in lost labour or the cost to the taxpayer who has to foot the bill, will be untold.

[1] Just a quick note: I have no problem with voluntary unionism so long as they're not backed by the government, don't receive government handouts, 'favours' and so on and don't make any contributions to government or party officals. In other words, unionism is fine as long as the union doesn't engage in coercive or violent activity (sadly, that's the definition of the modern union!).