Economy and Abbott

As an update on yesterday's post The Australian today reported "Economy rides Abbott Victory." The evidence offered was an increase in share price and in consumer confidence.

It is a bit of a worry that this paper equates the economy to the share market.  It is about as bad as the way the retailers equate the economy with the sales in their stores.

The reality is the economy is much more than all these. 

But the value of shares on the stock market is a measure of expectation, not reality.  It is how much people expect the shares to be worth either because of what the companies will earn or (in a bubble) what they will sell for in the future.

If, as noted yesterday, the public has an assumption that the party of the bosses is better at managing the economy, then one would also expect the election of the party of the bosses to create a shift in the stock market.  The news that would justify a page one splash would be if this hadn't occurred.

Meanwhile, in commentary on Monday the chair of the BCA was arguing that a double dissolution should be avoided because it would be bad for business and consumer confidence.  This follows the business community's comments about the 'minority' government.

One really gets the feeling that the business community and its cheer squad at the Oz just regard democracy as a nasty little impediment to the capitalist state!