The Roaring 20’s….
In the 1920’s the world economy went through an unprecedented economic boom. Driven by the activity generated from WW1 and the subsequent rebuilding processes and most importantly a new mindset where people were confident to invest again, following years of rationing and penny pinching.
Will the 2020’s follow a similar pattern after the last 10 years and the impacts of the GFC….?
One of the key differences between the 1920’s and the 2020’s is technology and the “connectedness” of the world. What happens on one side of the globe affects the attitudes of people on the other side of the world in almost an instant. The instability in the Middle East, Donald Trump, China and Russia, all affect investment thinking, everywhere. What this does is erode confidence and I’m not talking about the confidence of a large investor to invest in a job creating project, I’m talking about the average Joe Blow who isn’t confident to spend $100 on a Friday night at a restaurant because he’s not sure if he will have a job in 12 months’ time. These average Joe Blow’s are the basis of economic cash flow.
Of course it takes large investment to create jobs and this creates the certainty of employment, but again we live in a World Economy in the 2020’s. In 1920 the Macro economy was what happened in your country. The Macro economy now is what happens in the whole world.
Buts let’s look closer to home. I am confident in continued growth in the South East Corner of Queensland, Greater Sydney, and Greater Melbourne. I have less confidence in the regions. Now I know there are some great nation building projects in the pipeline such as water infrastructure, and other larger investments such as battery plants etc, but these are all long term projects and require significant political will to ensure approvals and development in a timely manner… our system unfortunately does not support development and that comes from either side of the political aisle.
Firstly our country is very big and it costs a lot of money to build and maintain infrastructure over long distances. It is much cheaper for governments if everyone lived in one location.
Secondly the rise of the climate change debate has halted development. Regardless of where you stand on the issues, the fact is water, security and power supply have become political no go zones.
So what does that all mean for the next decade…
We need confidence at the absolute core of our economy. The average person needs to be confident to spend and be confident in their employment. This comes from…
Large investors having confidence in the stability of the world economy which requires…
Leadership. Definitive political will and the ability to negotiate the middle ground especially when it comes to nation building projects.
Maybe it’s just a dream…
