The "lets pretend we don't pick winners" proletariat were dead against commercialising or making anything. Unless it was from 90% aluminium where the energy subsidy was king.

Even in services they were all for tourism and financials but dead against transport services (remember "we are a nation of shippers but not a shipping nation") & any software that required its own distribution.

We can also thank the proletariat for stealing the financial inheritance from our grandfathers in the mutuals, carving up a good chunk among their mates, and then pissing the residual up against the wall going to take over the world buying dud banking and insurance assets without any prudential controls in places the UK and India.

And finally, under "MacFarlane the cad" (he who lectured on the imperative for savings and the unsustainable asset inflation of residential real estate when he was the reserve's aspiring deputy governor), they hit on this "real estate miracle economy" thing where the current account deficit didn't matter. Well now the same bunch of commies in treasury are swapping treasuries for that same current account deficit RMBS. They are even to write bonds while we are running a budget surplus just so they can swap them for bloated "hot money" funded corporate debt that the foreign bank local branches won't refinance at term.

The inability of Australian manufacturing and processing to add value and their alarming rate of decline is an issue which extends far beyond mere cheap labour. I just don't see why investors jump for joy at the news of secured price increases by the mining and energy sector when our lack of manufacutring potency and practically non-existent middle tier value-creation when clearly those nominal gains are subject to being eroded in the form of higher priced imports.

A diminishing manufacutring presence is an erosion of bargaining power at the international trade level because (1) we are inept towards producing many of the things we consume in the quantity required and (2) the lack of a feasible alternative makes for a 'take it or leave it' situation with producers in the same manner we dealt with them at the starting leg of the supply chain. After all, a growing number of emerging economies offer significantly lower wages than say China, but just how many can produce in the same volume, at the same frantic pace, to the same standard and on the same scale as her?

I know for a fact that a number of foreign entities having relocated from China into SE Asia to access lower wage scales end up moving back because those smaller fringe nations lacked the synergy and qualitative reliability to provide a stable and consistent delivery of contractual agreements. Capital infrastructure fragmentation juxtaposed with incomplete access to inputs, which had to be imported, posed logistical constraints which made the strategy impractical and difficult to manage in the long term.

The absence of a viable production base is a fundamental value-generating deficiency which will continue to hurt as other economies intensity their investment towards developing comprehensive capital infrastructure and self-sustainability - now that's a real threat. Being content with a purported 'resources boom' whilst performing perfunctory lip service to the need for comprehensive supply chain integration is shallow consolation as it limits our economic growth to two divergent vulnerabilities:

One is our extractive industry serving as little more than an employee of offshore manufacturers who pay our wages, albeit one that's quite lucrative for the moment.

The other is driven by consumption which goes as far as the value reflected by our fixed assets and income - both of which are subject to deterioration as recent times have proven.

Our upside is capped by how big a crater we're willing to dig in our own backyard to maintain the status quo. The downside is an abysmal degradation in living standards as the US have come to realize in their eleventh hour. In time, it'll come back to bite us in the R$.