Don't send your children to the mines

From Michael Pettis' finance blog, a dose of cold water on the vaporous conceits of our bloated miners…in two years time this will be old news and we will have adjusted to the new realities, but for now it is amusing although rather chilling to see our treasurer, Wayne Swan and Glenn Stevens from the Reserve Bank strutting around as though they are personally in control of our current good fortune. It will be interesting to see how they behave when the rug is whipped out from underneath them.

The problem is of course the shortness of human memory and our brief life span. I'm old enough to have lived through three recessions, but if you're under the age of forty-five you will have never experienced one as a responsible adult, and if you spent your young adulthood in tertiary study, raise that age to fifty.

Even when the evidence of past disaster is around you, it can be hard to notice it for what it is. When I was at university at the beginning of the nineteen-seventies I lived in Carlton, which was a suburb built in the eighteen-hundreds. The whole area had narrowly survived complete demolition as an intractable slum in the nineteen-sixties. Carlton was on the up and up when I lived there: Fitzroy, the suburb to the east was still grim, poverty-stricken and Dickensian. Yet both suburbs had been prosperous when built. They were clobbered by the depression which started in 1873 and which ran through until 1896 — the first Great Depression. Seventy-five years later they were just beginning to emerge from that disaster! Of course prosperity had returned and disappeared several times since the initial disaster but it had happened somewhere else: other suburbs were built from the fruits of prosperity while Carlton and Fitzroy were largely forgotten. Now, they are both very much up-market, one-hundred and twenty years later!

So be aware of the transitory nature of human affairs and trust not in the utterances of the mighty! The real story is written in other places. Don't worry about Gina Rinehart's crazy public bloviations: they will soon be amusing footnotes to history.

Be warned: don't send your children the mines!