Saturday, May 21, 2011

Hey! That sounds good for Cairns!

"Looking ahead, a growing Asian middle class will boost demand for our commodities, and for our services exports - education, tourism and professional services - and for niche, high-end manufactures."

- Ross Gittins, veteran economics columnist at The Sydney Morning Herald.

A useful Saturday morning antidote to yet another moronic polemic rant at The Journal of Ignorance. KS economic themes align with Gittins in his messsage of structural adjustment and change which needs to be embraced rather than resisted.

"Why is there so much discomfort in the community about this transformation? Because it involves change and change is often difficult. Because the short-term costs of adjustment are concentrated in particular sectors. But also because what's happening - the longer-term structural nature of the change - is not well understood.

People need to be reminded, for instance, that a higher exchange rate helps spread the benefits of the resources boom through the community by reducing the price of imported goods and services.

They need to be reminded the economy is always changing - far more than we realise. Each year, about 300,000 businesses are born and a similar number die. About 2 million workers start new jobs and a similar number leave their jobs. And about 500,000 workers a year change industries.

The gravity point of world trade is shifting closer to us, giving us the opportunity to become a lot richer."

That last point was previously graphically demonstrated with our post The World is Getting Closer.

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