End of year reflections + Time to say goodbye

THANK YOU AND FAREWELL

Another year has almost whizzed by, and Christmas is just around the corner. So, Yule all should start getting ready for Santa’s visit. As we hurtle towards the festive season, I want to acknowledge the readers of Elephant in the Room for their continuing support.

The end of the year lends itself to reflection. As we glance over our shoulders and review the past twelve months, it’s clear that 2022 has been an eventful year. Around the world, political upheavals, military actions, natural disasters, and human tragedies captured the headlines and grabbed our attention.

Russia invaded Ukraine, Australia battled floods, Europe fought wildfires, America banned abortions, Britain changed leaders, China behaved imperiously, and the world struggled with a resurgent COVID-19 pandemic caused by Omicron subvariants which drove new waves of infections.

Against this tumultuous backdrop, nations were brought together by sport. Among the uplifting events in 2022 were the Winter Olympics in Beijing, the Commonwealth Games in Birmingham, and the Rugby League World Cup across England. In each case, people were united across boundaries, cultures, and religions.

Economically, the world experienced skyrocketing inflation, rising interest rates, and a sharp slowdown in global growth. “The war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth,” said World Bank President, David Malpass.

It was also a year in which we mourned the loss of many famous figures, including legendary cricketer Shane Warne and former Soviet leader Mikhail Gorbachev. And over a 10-day period beginning on 30 July, three icons of the Australian music industry – indigenous singer and songwriter Archie Roach, lead singer of The Seekers Judith Durham, and entertainment superstar Olivia Newton-John – left us.

But the biggest news event of 2022 was the death of Queen Elizabeth II on 8 September. There was an immediate outpouring of grief – and widespread sorrow around the world – as billions mourned her passing. She was seen by many as a bastion of stability throughout her seven-decades as the Commonwealth’s longest-serving monarch. Her Majesty’s reign spanned the tenures of 16 Australian prime ministers, 15 British prime ministers, and 14 US presidents.

On a far less important scale, what struck me as I looked back on 2022 was the breadth of subjects covered in this blog. Among other things, I explained:

• • why GDP is a flawed yardstick of human welfare;
  • how big corporations make billions from side businesses;
  • why blind obedience to authority is perilous; and
  • why we need slow journalism in a fast world.

While each of these posts tackled important topics, the post which arguably contained the most important message was the one titled, Why politicians are not qualified to run a country. To be clear, that post was not designed to take a pot shot at our elected leaders. Rather, it was a genuine attempt to highlight, inter alia, a deficiency in the economic literacy of parliamentarians around the world.

In that post, I stated that economic ineptitude was on display during the Global Financial Crisis (GFC). In response to the GFC, politicians in many nations, including the UK, erroneously adopted fiscal austerity measures (tapping the brake on spending) in lieu of embracing fiscal stimulus measures (hitting the accelerator on spending).

This past September, the UK government again chose the wrong policy response in its efforts to cushion Brits from the skyrocketing cost of living. The newly elected PM, Liz Truss, introduced a sweeping package of £45bn in unfunded tax cuts in an effort to reignite growth. That announcement was greeted with alarm by economists, investors, top US officials, and even the International Monetary Fund.

A fundamental problem with Truss’ fiscal policy initiative was that it put her government in direct conflict with the Bank of England’s (BOE) monetary policy stance. The government was trying to stimulate demand and spur the economy to fuel growth while the BOE was trying to dampen demand and cool the economy to bring near double-digit inflation under control.

Markets quickly found themselves in the middle of a tug-of-war between the British government and its central bank which were working at cross-purposes. This caused an extreme reaction, with the pound hitting a record low and government borrowing costs surging. The fallout was not driven by concern over deficit spending per se, but the wrong kind of spending. As noted by one commentator:

Deficit spending should build economic capacity – things like childcare, education, infrastructure, investment in renewables, healthcare, government benefits. You know, things that improve society, make it easier to get into work, and increases the productivity of that work. High-end tax cuts don’t do that.

To wit: The government was seen to be destroying its tax base for no good reason. High end tax cuts during a recession with inflation rising fast are not a sound economic idea. Even so, Truss believed they were and cited a debunked economic theory called trickle-down economics which erroneously alleges that tax cuts for the rich increase economic growth.

Ten days after her government’s policy announcement, Truss was forced to reverse her plans to abolish the top income tax rate of 45 per cent. The humiliating policy U-turn made the government look incompetent and ultimately resulted in Truss resigning as PM after just six weeks. Hopefully, the “Trussonomics” saga will make politicians the world over think twice before breaking with Treasury orthodoxy.

■      ■      ■

It’s said that all good things must come to an end, and so it is with this blog. I started Elephant in the Room in February, 2020 and have enjoyed publishing a new post each fortnight. Nonetheless, after some serious soul searching, it’s time to say goodbye to blogging. This has not been an easy decision and – even as I write these words – I feel a sense of panic that I might be doing the wrong thing.

Of course, if it transpires that I have made a mistake in closing down my blog, I can always restart it. But for now, I wish to embark on a new adventure – writing my fifth book. The profound impact of organised religion on human history has long fascinated me as a field of inquiry, and that will be the focus of my research over the next couple of years – in lieu of researching and writing blog posts.

Religion is a belief system that has shaped every culture and continues to play a central role in the affairs of humankind. It is one of the most powerful forces on Earth and brings out the best and worst in people. The focus of my text will be on the latter, for this has been my personal struggle: To reconcile how individual believers and religious institutions can commit evil in the name of an unseen deity.

As I prepare to move on to this new adventure in my life, I am indebted to the many readers who have followed me on social media. You have been a loyal, online audience to whom I have tried to provide relevant and interesting content. Thanks for clicking on to my virtual soapbox each fortnight – I am grateful for the time you have invested in reading what I have written over the past three years.

I am also grateful to my unseen support team for their help. To an outsider, blogging can seem an effortless endeavour whereas, in reality, a lot goes on behind the scenes. In my case, my wife Beverley has acted as blog proofreader and family friend Kieran Weston has undertaken the vital role of blog webmaster. Their assistance, on a voluntary basis, has been invaluable and I am indebted to both of them.

Needless to say, starting a new chapter in life is always exciting – and a bit scary. It has been a labour of love maintaining the Elephant in the Room blog, and it is with a heavy heart that I say goodbye – but not until next fortnight. On Sunday week (18 December) I will publish my final post for 2022, and it will take the form of a Christmas parody.

The parody will be set to the rhyme scheme of Clement Moore’s classic poem, The Night Before Christmas. It will broadly imitate the style and form of Moore’s original lyric while addressing a different subject matter – a look back at the biggest news stories of the year.

[NOTE: You may continue to contact me at [email protected] until 31 December, 2022. Should you wish to contact me after that date, please email me at [email protected] and I will reply promptly.]

I now raise my glass to all of you as I bid you farewell. Life is a series of hellos and goodbyes, but parting is much harder. To paraphrase Dr Seuss: I won’t cry because it’s over, I’ll smile because it happened. I wish each of you the best on life’s journey and hope that tomorrow is kind to you.

Cheers to health, happiness, and prosperity in 2023 and beyond!

Regards

Paul J. Thomas
Chief Executive Officer
Ductus Consulting