McCloskey on Piketty

Posted in Economics and economy | 12 Comments

Shorten’s Greek solution to our economic problems

Bill Shorten is an economic illiterate. And he is counting on the economic illiteracy of others, of which there is no shortage. From Nick Cater in The Oz today quoting Shorten looking to turn Australia into Greece:

“We’ve got to go for growth, and the way you go for growth is you spend money.”

You think we have economic problems now, try that out as a theory of recovery.

We have a government supposedly in crisis, and to the extent it’s true, it is due to the blatant and inexhaustible fund of personal ambition. Here we have this kind of clear policy position made by the leader of the alternative government, yet no one is making statements about how dangerous Labor would be if we were mad enough to let them back in.

Posted in Budget, Economics and economy | 76 Comments

Leonard Nimoy 1931 – 2015


Posted in Cultural Issues | 55 Comments

Open Forum: February 28, 2015

Posted in Open Forum | 785 Comments

I would never (again) vote for a Coalition led by Tony Abbott

Okay – so to shake things up a bit.

18C – Abbott broke a profound and fundamental promise to repeal this provision of the RDA.

Increased taxes – I’m paying more tax now than I did when Labor was in power.

Xenophobia – this business about foreigners having to pay more for houses is just a big new tax. It is a disgraceful outbreak of racism. No doubt there will be a dob-in-a-foreigner hotline and people will be harassed at auctions across the country. I’m also disliking all this talk of ‘dual citizens’ being a problem.

He is a Keynesian – the budget and the failure to contain spending and the repeal of the debt ceiling.

Useless as a Prime Minister – rash promises, broken promises, tin ear, this confected outrage over the AHRC, race-based privilege in the Constitution …

He Cannot be Trusted – Abbott once told us that we shouldn’t accept anything he says that isn’t written down. Well we now know we should not accept anything he says full stop.

I will not be voting for the Coalition at the next election if Tony Abbott is still Prime Minister.

Posted in Federal Politics | 338 Comments

I would never vote for a Coalition led by Malcolm Turnbull

Andrew Bolt says that Malcolm Turnbull is about to have his final go at taking over the leadership of the Liberal Party by Tuesday, so that it is now or never to make our views known (see here, here and here).

When I used to work in Canberra, our offices backed onto the Liberal Party headquarters, and I was asked one time, even before Malcolm entered Parliament, what I thought about him. My answer was that if I was in the constituency that would decide the fate of the next election, and my vote was the one that would put him in or out, that I would hesitate about which way to go. That was then. Today I would have no doubt. The reasons.

Peter Wright For me, national security is the ultimate issue in any election. There are always international issues that matter, and they weigh heavy with me. All but forgotten today, The Spycatcher Trial was one of those moments I do not forget. Wright was an MI5 agent who set out to write a tell-all/reveal-all of the English intelligence service. Margaret Thatcher sought to prevent the publication of his book, and the final determination was in a court in Tasmania, in which Malcolm Turnbull sought to defend Wright and ultimately was successful in allowing the book to be published worldwide because it could be published in Australia. I was told then that everyone deserves the best defence and etc etc, but if Malcolm has ever said that he defended Wright even though he was treasonous scum, I haven’t heard it. I would never trust Turnbull on any national security issue, and there is nothing more important at the present time.

He’s a Warmist Anyone soft-headed enough to take in the Global Warming scam without at least some doubts is not a possessor of the shrewd, sensible, incisive mind I am looking for in a leader. He lost the leadership on this one issue at the time because there are people like me who would never line up behind anyone who believes this stuff needs trillion dollar government solutions to what is looking every day less of a problem.

He’s a Keynesian I once had a conversation with Malcolm over economic issues and mentioned something that I think of instinctively as an issue, the kind of thing Peter Costello put at the centre of his own management of the economy. His response was to walk off. Having watched and listened to him over the years, he has no sense of how an economy works. Given that when he led the Libs he was all set to follow Labor’s lead on the stimulus, and declared that the Coalition would have done much the same, in many ways he owns the problems we have right now.

Useless as a Minister He may be popular with the ABC and others like it, but this is only because he has never done anything of any use that would upset them. If he doesn’t upset the ABC, what could he possibly stand for? What issue has he carried forward as part of the government that has done an ounce of good? If the NBN is his crowning achievement, he has done nothing other than implement Kevin Rudd’s back-of-the-envelope idiocy that will cost us billions and return millions.

He Cannot be Trusted To draw a distinction between himself and the Prime Minister over the Human Rights Commission Report on children in detention not only shows the worst imaginable political judgement, but has him line up with the Government’s enemies. I am a million miles from Canberra right now, but since all and sundry report Turnbull’s treachery, who am I to doubt it. This is a government that needs to survive and win that next election. Abbott is learning how to be a PM on the job, and is actually getting the hang of it. Shame about the wasted first year, but that is now the past.

There is clearly a succession plan in place at the top of the Liberal Party. What may have begun as the second eleven is now starting to function as a very good government. And the PM does not like to lose, and I don’t think he will.

Posted in Federal Politics | 157 Comments

Mostly about Scott Walker but also Art Laffer

This is mostly about Scott Walker but also a bit about Art Laffer and the economy.

First, to say that Obama doesn’t love America is as weak a truth as ever I have heard in politics. To leave as an open question whether he is a Christian is an absolute pussycat of a position. Because whatever is in his heart of hearts, the actions he takes help Islamists and harm both Israel and the United States. That is what matters. The rest is dross.

For Scott Walker, the nomination is now his to lose. Early early days, but he is a Republican from a Democrat state, his policies are being shaped along Tea Party lines and he is, so far, fearless in the face of the media.

He also has friends in the right places. This is an article by Lawrence Kudrow which notes the following which comes under the title, What Scott Walker Actually Said:

Yes, believe it or not, Wisconsin governor Scott Walker actually spoke at some length at the dinner this past week where Rudy Giuliani charged that President Obama doesn’t love America. All the hullabaloo went to Giuliani, but in terms of the Republican presidential race, a number of Scott Walker’s pointed comments about policy and politicians are not to be missed.

First a word about the dinner itself, which was generously backed by John Catsimatidis. It was the second event sponsored by the Committee to Unleash American Prosperity, a new group founded by Arthur Laffer, Steve Moore, Steve Forbes and myself.

And this is what they are seeking:

To maximize growth, jobs, opportunity and upward mobility, the U.S. must recapture the first principles of economic growth that were so successful in the 1960s, ‘80s and ’90s. Namely, pro-growth policies should seek a low-rate, broad-based flat tax, limited government spending, the lightest possible economic regulations, sound money and free trade.

The Reagan Revolution was not just about lower taxes. To restrict Reagan’s message to tax alone is to miss most of what was important. It is the entire matrix that is crucial. To focus on any one aspect is to miss the point. And I will emphasise that when Art Laffer led the supply-side revolution in the 1980s, he did it under the banner of Say’s Law, properly understood. Say’s Law is not about tax although it does help to explain why diverting spending away from governments is the key to growth.

As for Walker, he is first to rise above the crowd so will be taking most of the shots in these early days before the election in November 2016! These next two years will be an endurance test. But here is the final question.

Can Walker win? Arthur Laffer has known him for years and says he has matured enormously from his days as Milwaukee county executive. Others say he is the only Republican candidate with a record of winning many different elections, from local office, to state assemblyman, to three gubernatorial races in four years.

Walker is a superb retail politician, a trait that will serve him well in the early primaries. He has an uncanny knack of maintaining direct eye contact. At the dinner, rather than rushing out for an early-morning TV call, he insisted on talking to every person in the large crowd surrounding him.

The question now is whether he can develop from a tough state-union buster to a national politician who can modernize Reagan’s policies while maintaining the Gipper’s upbeat message of optimism and growth.

The Republicans need a strong message and a messenger to clarify the issues. This final bit is naturally what I find myself attracted to most of all:

Walker was also highly critical of President Obama’s conduct in the war against radical Islamism, and said the U.S. must wage a stronger battle in the air and on the ground against ISIS.

Meantime, one must simply endure and hope things can be held together until then.

Posted in Economics and economy, International | 21 Comments

Killing the housing industry by throttling demand

Among the more affluent who are seeking to upgrade their housing to a preferred location, there is considerable discussion about the Chinese squeeze on purchases.  This is not just something that is imagined by disgruntled under-bidders, the top end of the real estate industry has recognised the buying power of Chinese speakers, the majority of whom are probably residents and all major firms have been hiring Chinese speaking sales staff.

Data is poor.  The RBA estimated that in the most recent year 12 per cent of new dwelling turnover and 3 per cent of sales of existing properties was accounted for by foreign buyers.  And these estimates were considered to be on the high side due to some FIRB approvals not being followed up by actual purchases.

Many in the industry doubt the role of foreign buyers (e.g. the Real Estate Industry of Australia) but Domain  estimated that one third of new home sales in Victoria in the last quarter of 2004 were to foreigners.

The Commonwealth Government reacted to this with populism. It proposes that any foreign investor who wants to buy a residential property valued under $1 million will face a $5,000 application fee, plus an extra $10,000 for every additional million.

Here comes a brand new regulatory agency and a new tax on foreigners.

There may well be overseas demand pushing up the prices of “positional goods” those that are located in the prestigious inner city areas.  But that is not a material issue for the affordability of housing in general.

The reason why house prices are high is insufficient new build and this is solely due to regulations on land and on houses themselves which is driving up prices. Australia has more surplus developable housing land than any other country in the world; we have a very efficient land development and house building industry (flats less so due to union monopolies) yet our houses are twice the price of those in Texas which faces rather more inward pressure on supply.

We could liberate the industry to provide a new growth sector, one that leverages off our perceived image as a safe, climatically desirable and stable political environment.  Instead we are focussed on throttling the demand.

RBA Bulletin

Posted in Uncategorized | 72 Comments

They’re now just making it up

This was in the middle of the story:

Federal Employment Minister Eric Abetz earlier this week appeared to rule out any changes to awards. “The government will leave the responsibility of setting modern awards, including penalty rates, and the minimum wage with the Fair Work Commission. That’s the way it remains under the Coalition,” Senator Abetz said.

And this was at the start of the story:

The wages of “hundreds of thousands” of Victorians could be cut by up to a third under a secret Abbott government plan to abolish penalty rates and the minimum wage, Premier Daniel Andrews has claimed.

Mr Andrews says the federal government is planning to revive WorkChoices, leaving Victorian workers up to 33 per cent worse off.

It’s The Age, of course, Premier Daniel Andrews accuses Tony Abbott of secret plan to cut Victorians’ wages by up to one-third. The real secret of this secret plan is how it would be done under current legislation and our institutional structure. They make it up, with the real scandal the way that Labor causes tens of thousands to remain unemployed because of the rigidities of the system we now have.

Posted in Federal Politics, Media | 28 Comments

Rafe’s Roundup Feb 26

JUST IN Alan Moran’s Climate News.

Climate madness from U.S. Representative Raúl M. Grijalva.

Pictures courtesy of Barry Williams. The end of the Great Wall of China. A geyser pre-eruption. Picturesque village. Great wall of dust. Rainbow. Tyre dump. Google data centre. Michelangelo’s grocery list. Evolution of the pug. Fat and muscle.

The failing Greek state. The death of free speech on the US campus. Home of the brave, land of the free etc?

The failing Russian state. Tony Wood in the London Review of Books 5 February 2015 reviewed a suite of books on Putin’s Russia.

Corruption has metastasised. State functionaries at all levels squeeze the populace, from the small sums demanded by traffic cops to the $1000 a month lifted from small businesses by sanitary inspectors, fire safety inspectors etc. As for high-end political corruption, in the mid 2000s $200,000 would pay for amendments to existing legislation, $500,000 would get your own law custom-made and a false budget entry cost 4% of the sum involved. The IDEM foundation, a Moscow-based think tank, calculated on the basis of surveys that the overall amount that businesses paid in bribes rose ninefold between 2001 and 2005, to $318Billion, nearly a sixth of GDP.

Economists and the world of regulation.

Stefan Zweig. New York Review of Books.

Around the town. Hendo and the media watchdog [Updated on Friday afternoon]. The Australian Institute for Progress, (AIP) “because the future does not look after itself”. IPA HEY. The Sydney Institute. Australian Taxpayers Alliance, Quadrant on line, Mannkal Foundation, Centre for Independent Studies.

Don Aitkin. Jim Rose, feral and utopian!

Sites of interest. Spiked on line (NEW) Richard Hammer, Free Nation Foundation. Aust NZ libertarian students. Powerline. The British libertarian alliance.

For nerds. Melvyn Bragg’s radio program. Stephen Hicks, always interesting for nerds. Econotalk.

Peter Boettke on Austrian economics.

Austrian economics isn’t taught yet at Harvard and MIT as part of the curriculum of scientific economics, but some of the ideas are starting to penetrate – whether it is ideas about knowledge, or radical ideas about free banking, or quirky ideas about the industrial organization of a pirate ship, or deadly serious ideas about costs of war. The future is very bright for Austrian economics.

To go back to your earlier questions that I passed on, about the stock market, I might not know stocks but I do know scientific economics and I will say this: I would go long on Austrian economics and sell short on the other contenders to the conventional wisdom.

Prices and Markets journal. The skyscraper curse.

The reason all of this is important is the “skyscraper curse.” The curse is based on the correlation between the setting of new record heights in skyscrapers and the onset of economic crisis over the last century, or longer.

Posted in Rafe, Rafe's Roundups, Uncategorized | 9 Comments