I was chatting yesterday in Sydney to Billy Tucker, an internet entrepreneur and consultant, and asked him why there is a new internet boom going on that feels bigger, and much more substantial, than what happened in the ’90s.
His answer surprised and excited me: it’s because in the past one to two years, women aged 55-plus have suddenly gone online, en masse. They control the nation’s purse strings. When they are buying online, everything changes, and every night they are sitting in front of the TV using a laptop or a tablet … and shopping.
At about the same that conversation was taking place in Glebe, the secretary of the Treasury, Martin Parkinson, was delivering his annual post-budget address to the Australian Business Economists at the Westin Hotel in the city.
His address focused on the three shocks that Australia has faced in the past few years: “the most significant — some may say the largest — shocks seen since World War II …” They are: Mining Boom Mark 1, the GFC (the collapse of Lehman brothers), and the “renewed mining boom with GFC after-effects”.
To those three can be added two more shocks: the new digital revolution and the collapse of Greece. More importantly, these two events, plus the last of Parkinson’s three shocks, are occurring now, all at once.
To deal with Greece first: yesterday Zbigniew Jagiello, the chief executive of Poland’s largest bank, PKO Bank Polski, compared the latest version of the eurozone crisis with the collapse of Lehman Brothers in 2008.
Obviously it is still early days and another colossal, messy bankruptcy that closes the global banking system again may still be avoided, but it is beginning to be hard to see how. Certainly the choices facing Europe’s leaders are now quite stark in the aftermath of the inconclusive Greek elections.
The open talk that Greece may leave the eurozone, possibly followed by others, will have killed off investment already because of the potential for unhedgable devaluation losses; if it happens, contagion affecting at least Portugal and Spain would be inevitable.
Moreover it’s becoming increasingly evident that several countries, including Italy and probably France, cannot restart economic activity without a devaluation. The only alternative to a break-up of the euro now is deeper federalism in Europe — that is, mutualisation of sovereign debt, and centralised bank guarantees — which would be horrendously complicated and unlikely.
In discussing the “third shock” yesterday, Parkinson lumped together “Mining Boom Mark II” and the GFC after-effects, including the new crisis in Europe, but these are two quite distinct events.
Parkinson used this as a launch pad for a discussion about whether monetary policy and fiscal policy are working at cross-purposes in Australia at the moment (unsurprisingly, he says they’re not). He made two points: with close to full employment the new effect of monetary and fiscal policy is smaller than when there are underutilised resources, and second, that both policies are merely returning to normal.
The mining (or rather LNG) construction boom is more or less locked in and holding unemployment down. Meanwhile the dollar has been forced below parity again because of the new eurozone crisis.
At the same time we have the “fifth shock”: Tucker’s insight into the new digital revolution, in which the true engine room of consumer spending — 55-plus females — are moving online.
The fact that these three things — the mining/LNG boom, the new eurozone crisis and the new, permanent, digital revolution — are happening at once is massively disruptive, and completely beyond the ability of government to influence.
Retailing is being especially disrupted by online sales, as is manufacturing by the high currency –although with any luck we might get just enough eurozone crisis to keep the dollar below parity without a global banking meltdown.
Goldilocks anyone?
*This article was first published at Business Spectator
“…in the past one to two years, women aged 55-plus have suddenly gone online, en masse. …. every night they are sitting in front of the TV using a laptop or a tablet … and shopping.”
What a sweeping generalization! Some of us went online in our thirties…and are still here. We don’t watch TV (sordid, brainless, trite, giggling, reality shows and advertisements marsquerading as current affairs or news) and we hate shopping, online or otherwise.
The bit about sitting in front of our laptop or tablet is, however, correct. We are either working, writing, blogging, tweeting or searching the medical literature on how to cope with the myriad of aches and pains we’ve developed from sitting here so long.
Where’s the evidence for Billy Tucker’s assertion?? Somehow or other Alan’s ‘chat’ with Billy (who?) has been transformed into holy writ. I know many women over 55 and none (to my knowledge) are doiug what Billy asserts.
Well well – that’s me! 55 and just about to shop online this very evening. Checking Crikey first to catch up with news, then Flipboard on my iPad, watch the daily show and colbert report on FoxtelIQ – download books from interviewed authors to my kindle. Of course this will all come to a crashing end when the changes to super come in. After struggling as a single mother for more than 20 years, in lower paid jobs, not enough super – at last I’m earning enough to start squirrelling away for retirement – and what do they do? Slam the demographic that has been most disadvantaged in building super by removing the tax breaks for extra contributions at the time we need it the most. And, ironically, if this report is true – will seriously slow down something that could have had great economic benefit – before it even gets of the ground. OK – I know – it doesn’t look as though I’m that hard up – but the point is, this is the first time in more than 20 years that I have had discretionary income. I thought I couldn’t get more disillusioned with Labor.
Mobsmith has nailed it.
Hey Alan. Didn’t you read Guy Rundles piece toady- Perhaps you should.