Please, Joe, stop looking for consumer demand to lead the recovery

Joe was Great! There was not a moment in the whole of Q&A tonight that I thought he was behind, and this is enemy territory. But most importantly, this was even when the one-eyed Tony Jones tried to sandbag the Treasurer with a NATSEM study that had not been released EXCEPT TO THE ABC!!! And without showing the level of disgust he no doubt felt at such obvious ALP-ABC gotcha attempts to undermine the Treasurer, he simply turned it aside. He embarrassed the ABC for its obvious duplicity.

But I would have left this alone, except that there is one thing I think the Treasurer needs to tighten up on. He is trying to get there, in fact he is almost there, but his Keynesian minders or whoever it is that surrounds him, don’t quite let him see through to the point he is obviously trying to make. But if he gets there, he will be impregnable.

He was asked something like this, which I almost thought of as a friendly question, from Gai I think it was:

Why is household debt good but public debt bad?

Why are you encouraging people to borrow and spend at low interest rates when they may end up in serious trouble when interest rates go up?

Spending is not what you want. Joe, listen to me. Spending is not what you want to encourage. Growth and employment are not the result of spending. Growth and employment are the result of VALUE ADDING production. That is, the result of production where the value of what is produced will, within a reasonably short period of time, create an income flow even greater in value than the value of the resources used up. That is the meaning of value adding.

Private households do not create value ever. A household uses up value, but it is not from households that economic growth occurs (except for the occasional plumber that gets called in). Growth comes from business. If you confuse personal spending with business spending you will never get these things clear in your head. There is personal consumption, which is the point of economic activity. And there is business activity which is continually trying to add value to the resources they use up. Please, Joe, stop looking for consumer demand to lead the recovery. It cannot be done.

One more reminder in the video below about the difference between those bad Keynesians, who used to be in government, and who thought growth came from spending, versus you supply-siders, bless your hearts, who have replaced them, who are concentrating on value adding production, which is the true source of growth and employment.

Posted in Budget, Classical Economics, Economics and economy | 1 Comment

Q&A Forum: May 25, 2015

Posted in Open Forum | 281 Comments

Pull the other one

It now turns out that former Army chief Lieutenant General David Morrison’s office knew about a sex scandal in the military long before it went public and just in time to reinforce the then Labor government’s misogyny attack on the former opposition.

However, the retired Army chief told the ABC a senior staffer in his office received a phone call from New South Wales Police about the investigation in July 2012, almost a year before the Army boss went public with the scandal.

He said his staffer was told by police that “an individual, a reservist, was being considered for prosecution by the New South Wales police, for inappropriate use of an internet provider”, but that the staffer did not think it was serious enough to pass on to his superior.

“In the hurly burly of all the things that happen in the office of the Chief of Army, that wasn’t something that he thought was important enough to bring to my attention,” Lt Gen Morrison said.

So members of the ADF are being investigated by the police and a senior staffer doesn’t tell the Army chief?

Posted in Federal Politics, National Security | 56 Comments

Monday Forum: May 25, 2015

Posted in Open Forum | 546 Comments

Welfare recipients take cruises

Here is a some interesting news:

Australia’s booming cruise industry seems to have happened too fast for Federal Government agencies, unable to keep up with passenger arrivals.
The Department of Immigration and Border Protection has revealed it’s undertaking analysis to find the cause of incorrect data, which is leaving hundreds of passengers listed as overseas, weeks after their return from a cruise.
NSW woman Lyn Anderson last week shone a light on the problem that resulted in her carer’s allowance being suspended by Centrelink after a cruise to Bali on the Diamond Princess.
Passengers from several other cruises have since come forward with similar stories of having government allowances cut off weeks after returning home.
Tasmania’s Ian Ritchie experienced the issue not once but twice, after cruising to Shanghai in 2013, and then to New Zealand in March.
“Both times it was on the Queen Mary 2. Some time after I was back my pension was cut and when I rang up to find out why they said “you’re not back in Australia yet”,” said Mr Ritchie.

In the meantime ISIS fighters continue to receive welfare and the budget remains firmly in deficit.

Posted in Budget | 68 Comments

Super changes? Let’s take a hard look at the facts

In The Australian today

“The taxation concession on superannuation earnings in retirement is unsustainable,” Chris Bowen said last week. And “someone has to show the courage to say it and to deal with it”.

Posted in Uncategorized | 18 Comments

Conference on the history of conscription in Australia

Should have put this up earlier, next Saturday I will be in Melbourne to deliver a paper at The Great Debate: Conscription and National Service 1912-1972.

This conference examines the history, politics, controversy and experience around the periods in Australian history when compulsory military service was introduced. It will look at particular at Universal Military Training, introduced in 1912, conscripted cadets to 1929, the great Conscription debates in Australia and at the Front during 1916 and 1917, the introduction of National Service 1951-1959, and the most controversial period of conscription, during the Vietnam War 1965- 1972.

The program.

My paper, “The Long Ripples of Vietnam Conscription”, describes the seismic shift in the political allegiance of people in the educated middle class as a result of the conscription issue, so with a lag of some years the ALP became the natural party of government in Australia. The poisonous climate of intellectual and political debate is a result of the advances that the left made during that time, on the back of the moral and intellectual debacle of conscription which was introduced by PM Menzies and implemented during the Vietnam War.

Posted in Uncategorized | 28 Comments

Anti-fossil fuels agitprop may harm Australia

As part of the agitprop for Paris in December, the web is awash with green activist material claiming massive subsidies to fossil fuel.  The IMF got into the act with a recent research report claiming $5.3 Trillion a year is spent globally on subsidies to fossil fuels.

This led to breathless articles supporting carbon taxes like this, this and of course from Lord Stern (who reckons the IMF have underestimated the costs).

But as pointed out by less gullible and self-interested commentators, the “subsidy” is not what it seems – 40 per cent is due to road accidents and the like, which oil is said to cause; 25 per cent is due to fossil fuels causing global warming; another swag is due to the authors’ view that taxes are too low anyway!

This is small comfort to firms considering themselves besieged by green activists attacking their customer base and their share price.  Terrified about the “divestment” campaign, spearheaded by The Guardian’s constant sniping and attempts to draw the Gates Foundation into a leadership role, BP, maintaining its long-standing quisling approach has called for a global carbon tax and Shell was prompted  to declare that fossil fuels have no future unless their burning is accompanied by carbon-capture-and-storage.

The green lobby in Australia has had a ball trumping up the international numbers and applying them to this country. One lobby group has claimed that the nation spends $47 billion of fossil fuel subsidies over four years. But this turns out to be input tax relief in the Fuel Tax Credit scheme ($27.9 billion), concessional rate of excise on aviation fuel ($5.5 billion, to avoid forcing airlines into buying fuel overseas), accelerated depreciation rules ($1.5 billion applying to industry generally) and the removal of the carbon price ($12.5 billion).

In the most recent  OECD economic survey of Australia, of the $108 billion in tax expenditures listed only $2 billion was identified as energy related and this referred to the non-inclusion of agriculture within the carbon pricing.  Even Australia’s relatively low petrol taxes were not considered inadequate compensation for “carbon pollution” as the OECD (itself frightened of scaring off people by stating the true size of the tax necessary to abate CO2) maintains excise generally is “way above even high end estimates of its appropriate value” (p.65).

In general the Australian energy industry is relatively silent on the issue.  Many firms hope to gain from subsidies that might be targeted at the dragon, others are staffed by True Believers and all of them share the trepidation of the international businesses about having their customer base and share price undermined by green activists.

With President Obama placing a higher priority on climate change than ISIS villainy, and economic repair, and only a marginally less priority than improving his golf handicap, the green lobby has recovered confidence from its 2009 Copenhagen upset.  It is hoping for a new lease of life in Paris at the end of the year.  The agitprop will therefore be ratcheted up further.

It will not succeed in curbing aggregate global emissions, as the Chinese and Indians will refuse to abate (China is now the world’s largest greenhouse gas emitter and was said to be the source of fully 40 per cent of the IMF’s $5.3 Trillion subsidy).  Both are urging action by the rich countries  while India, now the third largest emitter, is talking about taking its own abatement path  including by “traditional methods such as switching off street lights on full-moon nights to save on energy and cut emission”!

The real danger for Australia is that the government will be stampeded into taking energy curbing and taxing policies that will harm an economy far more reliant on fossil fuel usages (and exports) than any other in the world.

Posted in Uncategorized | 23 Comments

Guest post, review by Michael James.

Rod Liddle, Selfish Whining Monkeys: How we Ended Up Greedy, Narcissistic and Unhappy (Fourth Estate, 2014).

Many readers of Catallaxy will be familiar with Rod Liddle from his column in The Spectator, where he regularly and entertainingly debunks the hypocrisy and denialism of the politically correct doctrines propagated and defended by the West’s left-liberal intelligentsia. His new book contains much of the same; it is a critique of what he calls the ‘faux left’, ‘faux’ because whereas it claims to be motivated by concern for the poor and disadvantaged, it is in reality devoted to securing its own careers, incomes and lifestyles, frequently at the public expense. But the book contains a good deal more, some of it quite surprising.

Liddle had two highly personal reasons for writing this book. The first is to confess to his own selfishness and hypocrisy in leaving his first wife and their children, and remarrying (though he is still in touch with his two sons from his first marriage). The second is to pay homage to his parents, who were of the generation that grew up during World War II and inherited the stoicism, frugality and neighbourliness that enabled their own parents to endure the war’s sacrifices and privations. Liddle is not overly romantic about them; he believes that we all do what we can ‘get away with’, but as his parents couldn’t get away with much they behaved markedly better than his own generation, which has contrived to get away with a lot. Economically, we have stopped saving up for things; we demand to have what we want now, and the capitalist system readily supplies the necessary credit. Morally, we have abandoned personal responsibility and, whether we know it or not, we live by fashionable social doctrines that propagate moral relativism and maintain that our conduct is determined by forces beyond our control: we are all victims now.

The central achievement of the ‘permissive society’ is easy, no-fault divorce, and its central self-deception is that children are not unduly harmed by family break-up. In fact, says Liddle, separated adults and the offspring of broken homes make up a highly disproportionate share of the unemployed, the underachievers and the mentally ill. Meanwhile, throwing off material and moral constraints has left us no happier than our parents’ generation was, but prone to mysterious new malaises for which no clear physical cause can be found. The only genuine moral advance that Liddle’s generation has made is to very largely cast off the racial prejudice of his parents’ generation. But on economic and cultural grounds Liddle shares the popular opposition in the UK to mass immigration and multiculturalism.

Liddle is clearly a conservative, but he is also, as he declared in The Spectator soon before the British general election of May 2015, a supporter of the Labour Party. Indeed, he holds Thatcherism as responsible as permissiveness for modern dysfunctional hyper-individualism. In his critique of high finance and globalisation he even seems to be still something of the Marxist revolutionary he was in the 1980s. In fact he is a throwback to the early days of Labour a century ago, when it was part of the movement to emancipate the working class by instilling in it a thoroughly Victorian devotion to sobriety, education and self-improvement. But his stubborn attachment to Labour’s traditional gas-and-water socialism is a case of pure sentimentality. He calls for the renationalisation of Britain’s public utilities and the shunning of consumer choice in services like education and health care in favour of leaving decisions to the ‘experts’. But this wilfully ignores both the extent of government failure in Britain that preceded the Thatcher revolution and the continuing betrayal of white working class children in failing state schools. It also leaves him without a practical means of combating the faux left which is his main target. In one of his best chapters he shows that an internet search can quite quickly establish that the ’quangocracy’ that polices public standards and the terms of public debate is both remarkably small and remarkably unqualified for the multifarious tasks for which its members co-opt one another. But he isn’t prepared to disestablish it by cutting off its money; and merely exposing it (which he thinks is all we can do) won’t do much good when it can simply deflect criticism of itself by denouncing it as politically incorrect.

Still, Liddle poses questions that classical liberals won’t necessarily find easy to answer. How readily can freedom and responsibility be combined? Hayek wanted maximum individual freedom to be contained within a rigorous, traditional moral and legal framework that enforced the rule of law. But once people are used to wide consumer choice, why wouldn’t they eventually choose subversive but congenial moral codes and doctrines as well? Was J. S. Mill right to see public opinion as potentially the greatest source of oppression? Or, as Liddle suggests, are strong social sanctions and norms needed to help individuals behave responsibly? Much has been written about the relation between conservatism and liberalism, but I’m not sure it has come to any firm conclusions.

Posted in Uncategorized | 14 Comments

It is a form of mental illness

The continued fixation on Archbishop Pell by a certain class of media fools would be unacceptable in even the most benign environment. Picked up at Andrew Bolt, here is the quote from Miranda Devine he uses to fully explain there is no there there, but at least it allows these people to indulge in their anti-Christian obsessions:

David Ridsdale told the royal commission last week that he phoned Pell in early 1993 to inform him about the sexual abuse he had suffered at the hands of his uncle, and that Pell said: “I want to know what it will take to keep you quiet.”

Ridsdale says he remembers those exact words and his response: “F… you, George, and everything you stand for.”

This has been reported as fact and underpinned the venom against Pell last week. But the allegation does not even make sense.

At the time of the alleged phone conversation, Gerald Ridsdale had already been charged and had pleaded guilty to 46 charges involving 21 children. There was no reason to keep anything quiet.

Is this truly a story from 1993, from possibly even before Gillard set up the slush fund? But if there is a story that is not discussed day after day, it is the murder of Christians in the Middle East at the hands of Islamic State fanatics. Like this:

The video starts with what it called a history of Christian-Muslim relations, followed by scenes of militants destroying churches, graves and icons. A masked fighter brandishing a pistol delivers a long statement, saying Christians must convert to Islam or pay a special tax prescribed by the Koran.

It shows one group of captives, identified as Ethiopian Christians, purportedly held by an Islamic State affiliate in eastern Libya known as Barqa Province. It also shows another purportedly held by an affiliate in the southern Libyan calling itself the Fazzan Province. The video then switches between footage of the captives in the south being shot dead and the captives in the east being beheaded on a beach. [Bolding added.]

They have the video, but here the oh-so-cautious media says “purportedly” since it is only an allegation and even if they have said themselves that this is what they did, you do not want to go too far in blackening their name. This is a story for which there are probably no end of possible news items each week, of which there are now hardly any shown or even discussed at all.

Our perceptions are in the hands of the media, and therefore as a society we are now fixing on the trivial and ignoring what may yet bring our entire civilisation down.

Posted in Cultural Issues, Ethics and morality, Media | 54 Comments