The Albanese Government Begins its Doom Spiral. By David Pearl in The Australian.

Chalmers has changed his tune. Until recently he was saying that achieving net zero was the biggest economic prize on offer. In March last year he called it his “obsession” and “reason for being”.

But with the public’s faith in this particular utopia now crumbling after two decades of rising power prices, the government needs another one. And AI fits the bill ideally, since this revolution has barely begun. It is a kind of Rorschach test, allowing us to project our hopes and fears as our inclination strikes us. …

Sadly, the government’s grand ambitions suffer from a rather serious flaw. It is committed to policies that are hostile to any positive technological revolution, whether linked to AI or otherwise. Indeed, if you asked a properly trained AI bot how best to kill off AI in this country, it would refer you to the government’s energy, industrial relations and tax policy settings.

The government’s commitment to high-cost and intermittent energy sources that cannot meet the growing demands of AI data centres is made worse by Canberra’s bizarre insistence (until recently) on the kind of energy that is unsuited to data centres.

The government’s likely demand is that AI not replace a single union member’s job in this country or undercut their conditions. And its 2026 budget assault on savings and investment, as we know, will penalise high-risk and high-return investments across the economy, with the government and its bureaucrats to police a narrow carve-out for some start-ups.

Where does new technology come from? For people like Jim Chalmers, it just happens. In reality, it doesn’t happen without the right backing and motivation structure:

But technological change is a by-product of innovation and risk-taking by entrepreneurs in search of profits, with investors and consumers — acting through free markets — the ultimate judge of their success or failure.

A government that is hostile to entrepreneurs and believes bureaucrats rather than markets should allocate resources will only stifle, rather than foster, this process. Yet Chalmers believes “we” — meaning our politicians and bureaucrats — can somehow micromanage the AI revolution to maximise its productivity benefits and eliminate its costs and risks altogether.

This is rubbish. I don’t pretend to know whether the AI revolution will prove to be a big bang or a whimper. But if it proves to be the former, it will – like every previous positive structural shock we have experienced – cause considerable economic pain.

Labor people — with precious few exceptions — are not knowledgeable about economics. Worse, they are not even interested. So, Labor Governments inevitably end up hurting the economy. Not out of malice, but because they simply do not know how to care for it.

The once exception was when Hawke was PM and Keating was Treasurer. Keating, bless him, promptly leaned economics from the Treasury officials in his Department, and he implemented what they suggested! Australia blossomed! (Btw, apart from what he learned from Treasury, Keating shows the usual leftist confusions — justifiably earning him his “Captain Wacko” nickname.)

Now that the economy has demonstrably turned downhill, Albanese’s Government is doomed politically. The economy will just get worse until it is gone because it will reliably make mostly bad economic decisions.