Ongoing research for Catallaxy

The sacrifices that I make to serve the readership of the Cat!

Friday 25, we docked at Wrenbury after a week on the water and unloaded our gear from the narrowboat into the car for the trip back to base, via Cheltenham to deposit one of our party who joined the hard core of three for that leg of our journey. He is a retired political scientist and liberal so we spent some happy hours droning on about nerdish things, interrupted from time to time to exchange banter and childish jokes with the other travelers.

Saturday, a night at the opera, Handel’s Rinaldo at the local Longborough Festival Opera.

Longborough Festival Opera is an opera festival which presents a season of high quality opera each June and July in the English Cotswolds village of Longborough in north Gloucestershire. It began in 1991 as Banks Fee Opera by presenting concerts, and moved forward with operas presented by a travelling company. This was followed by converting a barn into an opera house. Audiences grew rapidly in the 1990s and, during the last decade, a focus on Wagner’s operas led to three complete Ring Cycles being performed in 2013.

During a long intermission we dined in the open air looking down over the surrounding countryside. The venue is supposed to be a converted barn but I think there is not much of the barn left!

The story ended very well, the Christians won the war, and the villains converted to Christianity and got to marry their true loves, just like the hero and heoette.

Monday, a day with David Miller on a walking tour of the city of Oxford, checking out the “dreaming spires” half a dozen of the most interesting of the 45 colleges and a tour of Magdalen (pronounced maudlin). Magdalen is very old and the steeple over the (amazing) chapel is still the highest building in the town.

Oscar Wilde lived there and we saw the Oscar Wilde Staircase. They also have a lot of land attached where they harvest hay and run a herd of deer. I took photos of some ‘bambis” and wondered how often they have venison for dinner.

David had a long association with Karl Popper and is still involved in conferences and publications so we had a good time droning over a long lunch at the Pierre Victoire. Not very British, perhaps we should have had pork pies or beef and ale at a pub.

Tuesday, a long drive up into Wales and back home. The weather was perfect (as usual) although there were clouds over Mount Snowdon as we approached but they cleared by the time we arrived. Not much of a mountain really!

We passed through many different kinds of landscape on the way, and the rolling green hills of Wales were quite different from our surroundings in the Cotswolds.

We stopped at seaside town of Porthmadog. A striking feature of the streetscape was the number of dogs. Pure coincidence I suppose. We visited a small museum that celebrated the harbor and the slate industry which exported three millions of tons of slate (over a century), especially to contribute to rebuilding the German city of Hamburg which was ravaged by a fire in 1842.

After a glimpse of Mt Snowdon we drove back through Llangollen – the far point of the canal tour – and dined overlooking the canal and one of the most scary aqueducts that we had to negotiate on the voyage. It was amusing to note that it took about half an hour to cross the territory in the car where we spent three days each way on the water.

Now a couple of easy days to recover and prepare for the next leg, to St Petersburgh and the Baltic States.

Posted in Rafe | 2 Comments

UNESCO speaks with forked tongue

Compare and contrast these statements.

First from an official UNESCO document dated June 2012 and authored by Fanny Douvere and Tim Badman (page 51 – 52 emphasis added).

The mission also noted presentations from some coal export proponents regarding opportunities to develop less impacting techniques for transhipment of coal using barges and avoiding dredging activities (specifically the proposals at Wongai and Fitzroy involving Mitchell Ports). Despite the innovative nature of these proposals, the overriding concern with both the proposals is their location in pristine, or near-pristine areas of importance to the OUV of the property, and the increase in the overall footprint of ports that would result. The mission was not able to assess the viability of such techniques but considers that, where new bulk cargo facilities are being considered within existing port areas, recommends that such alternatives that could reduce or eliminate dredging requirements should be evaluated within the relevant Environmental Impact Assessment process as a potential means to reduce the impacts of port development.

Okay – looks like UNESCO is recommending that barges be considered as a means to reduce the impact of coal exports and harbour dredging on the Great Barrier Reef.

Second, yesterday on the ABC:

In an interview with 7:30 from Paris, UNESCO’s world heritage marine co-ordinator raised questions about the transshipping proposed off Hay Point.

FANNY DOUVERE, DR, UNESCO: It’s common sense when there is more ships passing through a particular area there is also more potential for damages to the reef, there is also more potential for a collision.

MARK WILLACY: While particularly concerned about port dredging, UNESCO also wants more information about this transshipping plan.

FANNY DOUVERE: So whenever any activity will impact or could impact potentially on those exceptional values for which it is inscribed in the world heritage list then it needs to be raised, those issues need to be addressed and we… it is our role as UNESCO to be a standard setting organisation as well to raise those issues with the Government.

Maybe UNSECO has two employees with the name Fanny Douvere? Maybe Fanny can’t recall what she wrote in 2012?

(HT: AH)

Posted in Global warming and climate change policy, Hypocrisy of progressives, Mining | 23 Comments

How’s that mining tax going?

Not well.

The Treasurer this morning revealed net revenue from the Mineral Resource Rent Tax was only $600,000 in the June quarter, compared with the already-downgraded $150 million forecast last year.

Is that net of the promise to refund state government royalties? Either way another terrible Rudd-Gillard policy bites the dust.

Hockey, however, also said this:

The PUP was elected on the basis they were going to repeal the mining tax package. We were elected on the basis we were going to repeal the mining tax package. We ask the parliament to respect the mandate we have.

Hmmmmmm – turns out that the Parliament did respect the “mandate”. Both the House and the Senate passed legislation repealing the mining tax. The government, however, got greedy – it wanted to repeal the tax and the associated “expenditure” in one fell swoop. The Senate passed the tax repeal but not the associated expenditure – the only reason the mining tax is still on the books is because the Abbott government did not accept the Senate amendments.

Okay – so what is the associated “expenditure” that is causing so much trouble?

  • Loss carry back
  • Small business asset write-off and motor vehicle deduction
  • Foregone tax revenue from the increased superannuation
  • school kid bonus
  • low income superannuation contribution

The financial consequences are set out here:

MRRT - repeal

In that table we see about $7.28 billion of “expenditure” – when you separate out actual expenditure from tax cuts we see that the Abbott government was looking to repeal about $4 billion of tax cuts.

The Abbott government has no mandate to increase taxes – in fact, quite the contrary.

Posted in Mining Tax, Taxation | 29 Comments

Wednesday Forum: July 30, 2014

Posted in Open Forum | 573 Comments

You must not encourage governments to believe they can pick winners

The front page story in the AFR today is Sims asks BCA to please explain picking winners and the first line of the story, before it goes behind the paywall is, “ACCC chairman Rod Sims has asked to meet with Business Council of Australia president ­Catherine Livingstone to explain governments that ‘pick winners’ from industry usually fail.” I mean, seriously, would any self-respecting economy really want their political leaders to shift massive amounts of taxpayer funds in particular directions because politicians think that’s where economic activity will now be heading. I don’t say governments never get it right, but their return on funds invested is massively negative, ten cents in the dollar.

Governments are clueless about where the next major advance in economic output is going to come from. In fact, so too is the business community in general. No one has any idea of the sectors in which Australian economic growth in 2016 and beyond will be based on. Anyone in the private sector, who thinks they do know, is welcome to put their own money up since the return on such certain knowledge would be very high. Governments never should since their track records are so poor. They will only lower our standard of living, not raise it by blowing our productivity on useless projects that pay less than they cost.

And even when introducing an industry policy, governments should never do anything business- or industry-specific. What governments should do is ensure to the greatest extent they can that an economy can adjust as rapidly as possible to take advantage of new opportunities. They should, for example, do what they can to ensure that the education and training structures of the economy are responsive to such adjustments and that industrial relations mechanisms allow new projects to get off the ground quickly and efficiently. But nothing governments ever do should be designed with any specific firm or industry in mind.

If there is money to be made in running a business in Australia, governments are the last people to know in advance where those opportunities are. No individual firm or industry should be directly assisted by governments. And more importantly governments should never be encouraged to think that they can make these decisions. They will only misdirect our resources and lower our potential growth rate.

Posted in Economics and economy | 18 Comments

Balanced budgets should be Canberra’s priority

A story on how balanced budgets have been the keystone of the Canadian recovery, an upturn in sharp contrast to the circumstances in the US to the south. The article is by Brian Lee Crowley, the head of the McDonald-Laurier Institute, and published in the Globe and Mail. From which this:

We have a lot of cases available to us to test the proposition that we will increasingly be hearing that balancing the books is over-rated. If the all-stimulus-all-the-time Keynesians are correct, for example, France should be the strong man of Europe, for its Socialist president came to power rejecting “austerity” and preaching the virtues of stimulus. Britain, which pursued a course of fiscal discipline under the coalition government of David Cameron, should be in steep decline.

Instead the head of the International Monetary Fund, Christine Lagarde, recently had to apologise to Britain’s Chancellor of the Exchequer for having wrongly warned that his austerity policies would provoke disaster, as Britain turns in one of the strongest economic performances in the EU. Overtaxed and tapped out France, by contrast, continues to be the sick man of Europe. Interviewed on British television Ms Lagarde acknowledged that Britain’s growth seems “pretty sustainable” because it depends on private sector investment and consumer spending.

Economic theory of the Y=C+I+G variety has a lot to answer for. The evidence keeps mounting that balanced budgets accompanied by limited growth in public spending are the key to prosperity even while the opposite evidence, that budget deficits and large increases in public spending drag an economy down is everywhere to be found (see the US for exhibit A on the harm debt and deficits cause). Canada and the UK have become prime examples of how private sector growth, fostered by what others choose to call “austerity”, actually does create the foundations for economic growth.

Posted in Budget, Classical Economics, Economics and economy | 50 Comments

Here is a proud man


That’s Daniel Andrews – the Victorian ALP leader.

I’ve only seen him in action twice. The first time as a talking head on election night in 2010 when the Brumby government unexpectedly lost the state election and then recently when it looked like the Napthine government might fall on the floor of the Parliament.

On both occasions he was very impressive. The last couple of days, however, he has been underwhelming. He must know it too – look at the body language and the shamed face.

The Baillieu and Napthine governments have been particularly underwhelming and, until the weekend, it looked like Andrews was going to be the next Premier. But now even The Age are editorialising about his competence:

Labor leader Daniel Andrews and some of his party officials must believe Victorians are dupes, because the explanation they have offered about what happened to a journalist’s tape recorder after it came into the custody of Labor operatives is manifestly implausible and patently disingenuous.

Labor’s response has been fundamentally dishonest. Why didn’t Mr Samaras return the recorder when he saw the Fairfax Media sticker on the back? Why didn’t Mr Carroll or Mr McLindon direct their colleague to return it? Why did they even discuss distributing it? How many other memory sticks were there with copies? Who passed a copy of the Baillieu conversation to Liberal operatives? When exactly was the recorder destroyed? We could go on.

Andrew Bolt does go on:

How strange. How convenient.

His chief of staff did not tell Daniel Andrews about the tape.

His press secretary did not tell Daniel Andrews about the tape.

His party’s secretary did not tell Daniel Andrews about the tape.

His party’s assistant secretary did not tell Daniel Andrews about the tape.

His party’s lawyers did not tell Daniel Andrews about the tape.

Is Daniel Andrews telling the truth, or does he really not have a clue what his team does when he’s not in the room?

Over on Twitter the luvvies are trying to hang this on the journalist. Well that’s not going to work and will only serve to further annoy The Age and make the ALP look bad.

Posted in State Politics | 79 Comments

The nine stages of the Picketty bubble

The nine stages, by Robert Shrimsley. h/t Michael James.

Everybody has been talking about this important book because they feel they have to

Concern is growing that much of the western world is heading into a “Piketty bubble” – a social and economic phenomenon that arises when everyone who considers themselves to be anybody feels the need to talk about a new book by French economist Thomas Piketty.

Capital in the Twenty-First Century, which argues that modern capitalism is entrenching inequality, was written a year ago in an obscure European dialect. But it is now being hailed as a masterpiece after it was discovered by a US publisher and translated into American.

Unlike the five phases in Hyman Minsky’s classic bubble theory, a Piketty bubble boasts nine stages.

The page is gated, so this is an abbreviated account.

Stage one – buy-in. Anyone who believes they are part of the “big conversation” has to talk about Prof Piketty’s views.

Stage two – escape velocity. A critical mass of enthusiasm sees stock in Piketty rise faster than Bitcoin… Bluffers’ guides spring up on the internet, including information on how to pronounce his name.

Stage three – backlash. It is revealed that he is François Hollande’s favourite economist.

Stage four – counter-offensive. Prof Piketty’s supporters fight back pointing out that most of his critics have not read his book.

Stage five – rearguard. Citics reply that most supporters haven’t read it either

Stage six – boredom.

Stage seven – disassociation. Even supporters begin to be embarrassed to refer to him.

Stage eight – denial. Members of the thinking classes now feel it is chic to admit that they never read the book and Picketty’s is picked up by Russell Brand, a pop star who likes to make fatuous comments on public affairs.

Stage nine – relocation. People move Prof Piketty’s book from the living room to the lavatory, where it sits on a shelf between Stephen Hawking’s A Brief History of Time and Francis Fukuyama’s The End of History.

Prof Piketty, meanwhile, faces complaints that as wealth accrues disproportionately to star writers, his triumph is increasing inequality among economic authors. This view is boosted by the success of his next book, a jaunty work of behavioural economics called “peut-etre”.

There is a possible much later stage 10 – rediscovery. A new crisis promotes a revival in which people return to the book and note that Prof Piketty “had some interesting things to say on this subject”.

Posted in Economics and economy | 19 Comments

Q&A Forum: July 28, 2014

Posted in Open Forum | 199 Comments

George Brandis is a hypocrite

George Brandis wants to strengthen Australia’s Intellectual Property laws:

It involves three main proposals, but the big one is overturning the important iiNet decision that highlighted that ISPs are protected from liability for users infringing, because they’re not the proactive party. In other words, under that ruling, ISPs can’t be forced to be copyright cops. Brandis’ plan would wipe that out, requiring ISPs to spy on user activity and try to block any “bad stuff” from happening, or they would face liability …

The second part of the proposal is basically Australia’s version of SOPA. It would allow for website blocking of “infringing overseas sites.” And it would be like the original SOPA, with a “private right of action,” allowing entire websites to be blocked on the say so of the copyright holder. …

The final piece of the plan appears to be an attempt to buy off internet companies that are likely to oppose this plan, in that it extends safe harbor protections to more of them. Basically, this is a cynical ploy to try to split the obvious opposition of this plan.

(HT: Old Misery Guts)

Did you hear what Brandis said?

There is a very strong public interest in the protection of private property and that includes intellectual property …

Not that I disagree – but what evidence exists to support that Brandis actually believes that notion? What evidence exists to support the idea that the protection of private property is supported by Australian law? Let’s look no further than the plain packaging laws:

But the six judges who ruled against the challenge said while the government had imposed rules and regulations on the tobacco companies, it was not using their property for its own benefit and so was not violating the constitution.

”Although the (Tobacco Plain Packaging) act regulated the plaintiffs’ intellectual property rights and imposed controls on the packaging and presentation of tobacco products it did not confer a proprietary benefit or interest on the Commonwealth,” a summary of the judgement said.

So property rights confer certain rights:

  • the right to use the property,
  • the right to earn income from the property,
  • the right to dispose of the property.

Yet the previous government – with the full support of the then opposition – legislated to deprive tobacco firms of, at least, two of those three rights.

Now online piracy, arguably, does not deprive intellectual property owners of any of their rights – it does reduce their profits but they are still in possession of all of their rights.

So Brandis needs to explain why and how Australian pirates are any different from him. Why does he think that online piracy is theft when private individuals engage in that activity, but government expropriation of intellectual property is acceptable?

Looking forward to his guest post on the issue.

Posted in Economics and economy, Hypocrisy of progressives, Politics, Take Nanny down | 49 Comments