imo, there is also a medium of exchange problem there too.

http://bilbo.economicoutlook.net/blog/?p=277

http://krugman.blogs.nytimes.com/2012/04/28/where-the-productivity-went/

http://www.epi.org/publication/ib330-productivity-vs-compensation/

SKIP the whole negative interest rate, private debt, and gov’t debt “thing”.

Try running an economy with zero private debt and zero gov’t debt.

And, figure out how to correctly get more medium of exchange into circulation.

That would suggest that if there are institutional change that overturns the status quo policy dominance, it would be quite likely that the three would each go their separate ways.

As far as the differences between Japan/US/EU choices and Australian choices, note that they are differences in degree rather than differences in kind.

Perhaps the mining companies and Big Oil are not necessarily entirely in line in terms of their policy preferences ~ or perhaps that being a source of consumers to sell Chinese goods to on credit, as in the US and the EU, and being a source of real resources required for Chinese production, as in Australia, modifies the preferences of transnational corporations with respect to the different economies.

However, a key difference between Australia and Japan, the US and the EU as a group is that the latter group is financial markets in the latter group is where transnational corporations largely originate financial capital that is deployed on a global basis in pursuit of their various objectives ~ a transnational corporation primarily looks on Australian capital markets for originating financial capital for Australian operations to hedge against the massive foreign exchange volatility of the Australian dollar.

Ok Dan we agree-about this and the failure of Monetarism to control the money supply.

Of course this attack on workers-which Volcker did successfully sustain-is what enabled Reagan to hit unions so hard like with the airline workers. He could never had done that without the Volcker induced 11.3% unemployment rate.

In the 90s Greenspan didn’t have to raise rates anymore because even with unemployment so low the labor unions had been neutered.

The period saw a two-pronged financial and political attack on working people. As a result, we had decades of low inflation, declining worker bargaining power and wage pressure, financial bubbles and financialization of the private sector, the political acceptance of unemployment as a fact of life, and growing inequality.

When we’re talking about inflation fears among a large section of the population, we have to remember one very important thing. We’re by and large not talking about a rational reaction. I’m not saying it’s irrational. What I’m saying is that people are not actively thinking about the big picture. They see prices go up, that’s bad. It doesn’t matter if it is due to rising base ingredient costs or rising labor costs or if it’s simply profit-claiming due to less competition in the marketplace, it’s all the same thing.

And boy does it piss people off. Hell, it pisses me off, and I’m one that would always choose the 5.5% unemployment rate.