Catallaxy Files

Ms Looney is upset by the treatment her daughter had received from MCG security – who told her family to remain seated as they ejected Julia – and police detaining her for what she said was two hours.

Ms Looney is the mother of the 13-year old that was escorted from the MCG on Friday night.

CL makes the point:

I’m sure ‘interviewing’ a child without adult representation is also illegal.

Removing a minor from the custody of her guardians? Then there is this:

“It was ridiculous that she was in there for so long. For two hours they interviewed her over her saying, ‘You’re an ape’,” Ms Looney said.

It gets worse (emphasis added).

Collingwood fan _________, 13, abused Goodes with only minutes to go in Friday night’s Indigenous Round game and was ejected from the MCG after a long grilling by Victoria Police.

I think Victoria police, MCG security, the Australian Football League, the Collingwood Football Club, and the Sydney Swans Football club have some explaining to do.

Was the 13-year old girl grilled in the presence of her parents?
How long was the 13-year old girl separated from her parents?
How many policemen were present, at all times, while the 13-year old girl was being grilled?
Were female police officers present at the grilling of the 13-year old girl?
Were the Victoria police officers undertaking the grilling of a 13-year old girl male or female officers?
Were AFL officials present at the grilling of the 13-year old girl?
Were Collingwood Club officials present at the grilling of the 13-year old girl?
Were Sydney Swan Club officials present at the grilling of the 13-year old girl?
Does Victoria Police approve of grilling 13-year old girls in the absence of her parents?
What protocols does Victoria police have for grilling 13-year old girls?
Do those protocols involve separating 13-year old girls from her her parents?
Were those protocols (if any) actually followed while grilling the 13-year old girl?
Does the AFL approve of grilling 13-year old girls?
Does the Collingwood Football Club approve of grilling 13-year old girls?
Does the Sydney Swans Club approve of grilling 13-year old girls?

Let’s be clear about this – the 13-year old was very rude and quite rightly has apologised. Yet there are some important questions to be answered. Being rude does not extinguish your rights. From what I can see a child has been abused and I want to be reassured that this is not the case.

An interesting story about market reforms in China but this particularly caught my eye:

China’s leaders, including a group of pro-market bureaucrats who seem to have gained in the leadership shuffle this year, seem to think that more government spending could worsen economic conditions and that the private sector needs to step in. . . .

The new leaders, who took office in March after a once-in-a-decade leadership transition, seem more determined to change course. In his speech this month, delivered to party officials nationwide by teleconference, Mr. Li, the prime minister, said, ‘If we place excessive reliance on government steering and policy leverage to stimulate growth, that will be difficult to sustain and could even produce new problems and risks.’

‘The market is the creator of social wealth and the wellspring of self-sustaining economic development,’ he said.

He spoke of deregulation and slimming down the role of government.

‘Li Keqiang thinks like an economist,’ said Barry J. Naughton, a professor of Chinese economy at the University of California, San Diego. ‘He wants the government to get out of the way.’

He actually doesn’t think like an economist, at least not an economist of the modern generation. But this is a tide that is rising. Watching the effects of regulation and the stimulus has been a very clarifying experience at least for some. The obstacles must be immense but at least there is recognition at the top about what now must change.

This weekend is “Indigenous round” in the AFL fixture. The highlight of the round is the game tonight between Richmond and Essendon. The weekend is intended to highlight the contribution indigenous players have made to the AFL and, of course, the contribution the AFL has made to indigenous players.

By almost any measure this is a success story. While the statistics of Indigenous disadvantage make for some terrible reading (see ABS stats here) the AFL stats show a different picture. Each team has a number of Indigenous players and all of them are fantastic. In fact I often wonder why the AFL doesn’t recruit more Indigenous players given that the players they have tend to be so good.

That brings me to what we’re all going to be talking about this weekend – not how well Indigenous players are doing in the AFL or how much work the AFL has done to promote Indigenous players and the like. Rather an incident last night when Adam Goodes pointed to a female Collingwood supporter who was subsequently removed from the stadium. She had made some comment that he had taken exception to and it was speculated that this was a racist slur.

Okay – so this morning it turns out that the female Collingwood fan was a 13 year old girl who had called him an “ape”. Adam Goodes is 33, he is a dual premiership winner, Brownlow medallist, All Australian, and superstar of the game. Now what can we agree on? First, what she did was rude, poor behaviour. No question. Sure Goodes was angry about it. He is an adult and, I suspect, like many adults he finds rude children very annoying. Also she was escorted from the stadium – no problem there either. The MCG is private property and they can exclude rude people at their pleasure.

But is it racist? Many individuals are having a go at me on twitter for questioning whether calling an Indigenous man an “ape” is actually racist and not just rude. For many people it seems self-evident that is is racist. But nobody can say how or why. The “best” story I’ve heard is that Social Darwinism ranks “people of colour” below animals.

To my mind there are two problems here. First by defining down what constitutes racist behaviour we trivialise actual racism. All around the world there are people who face significant disadvantage and obstacles to life on the basis of their ethnicity. Getting hung up on Adam Goodes – a man at the very pinnacle of success in his chosen career – being called an “ape” as being racist as opposed to being rude does nothing to combat actual racism. The second problem is that it detracts from the good work the AFL do in this area.

What is to be done? Well rather than demonise a 13-year old girl (and those people who don’t think this was a racist attack on Goodes) we should be telling our kids that being rude is not appropriate behaviour. That the ‘great Australian’ tradition of sledging needs to be scaled back a bit (if not a lot).

Media reports indicate that the 13-year old girl has phoned Adam Goodes and apologised for last night.

Update: NineMSN has the story here.

Julia, whose last name has not been released, has now explained the incident to Nine News saying she yelled out “way to kick ya ape” on the spur of the moment.
“I was really upset that we were losing and I just said something really rude and I shouldn’t have,” Julia said.
The 13-year-old said she wanted to apologise to Goodes, saying: “I don’t know why it came out, I just kind of meant it as a joke and then he heard it and he thought it was racist.”
“I’m sorry for what I said, I didn’t mean it in a racist way,” Julia said.
The teen’s mother Joanne told Nine News she was astounded by what her daughter said but proud that she wanted to speak out to apologise.
“I don’t think Julia even realised what she’d actually said,” Joanne said.
“She’s only a 13-year-old young girl that lives in a country town and doesn’t get out that much.”
Julia said she felt “ashamed” and “upset” when Goodes pointed at her and she was led away by security.
She said she ended up being questioned by police who warned her about the possible consequences of her actions before telling her Goodes was not going to press charges.

I was quite surprised that no one picked up these quite amazing pars in Martin Parkinson’s speech delivered earlier in the week

Another factor that will affect future revenue collections is the revision to the carbon price projections. The 2013-14 Budget projects a carbon price of $12.10 in 2015-16.

This change, along with updated emissions, means that compared with the 2012-13 MYEFO, receipts from the sale of carbon permits will be $3.7 billion lower over the four years to 2015-16. Partly offsetting this, expenditure on several programs in the Clean Energy Future plan will also fall because of decisions announced by the Government in last week’s Budget.

The previous projections were based on the Strong growth, low pollution report published in 2011, which is a comprehensive modelling exercise underpinned by longer-term fundamentals such as the long-term global environmental goals. These fundamentals haven’t changed. As such, the modelled prices continue to show the price levels required over time to meet these long-term goals as well as the international commitments to reduce emissions by 2020.

However, in the near term, the profound economic weakness in Europe has weighed heavily on the European carbon market. As the Australian carbon pricing mechanism will be linking to the European ETS from 2015-16, downward revisions to price projections largely reflect this weakness. This fall in the carbon price will mean that it will be cheaper for the Australian economy to achieve its emissions reduction target.

There are two conclusions we can draw from this discussion.  The carbon price projections in the budget forward estimates are complete bollocks.  So much for the idea that we will be returning to a budget balance in 2016-17.  And, seriously, does anyone believe that there will be a global climate change agreement in place from 2016?

Secondly, Parkinson is still clearly infected by the green disease and nothing will happen to change this.

It is pretty amusing that we now have competing fact-checking outfits – our hard-earned taxes being willfully misdirected to the ABC and US-import, Politifact Australia.

The latter is a joke, the former is likely to be even worse given the appointed person to head it up.

I particularly like the FACT (hee, hee) that Swanny was given the benefit of the doubt when he said millions rather than billions – just a slip of the tongue, it would seem.

But when Jamie Briggs talked about government departments buying gold-plated coffee machines, this was regarded as a pants-on-fire lie because the machines are not literally gold plated.  I ask you.

But I guess that means that Julia Gillard was lying when she talked out gold-plated poles and wires when trying to explain sky-high (is that a lie?) electricity prices.

And what about another porky that Gillard is pushing – that the Coalition policies on school education will result in a loss of $16.2 billion in funding.  Politifact concludes that this is just “mostly false’, when it is a complete howler.

My suggestion is that the Cat crowd get on to fact checking the fact-checkers.  There should be some interesting reversal of findings!

The Australian has a debate on privatising the ABC with Peter van Onselen providing the ‘yes‘ argument and Rebecca Weisser providing the ‘no‘ argument.

Both arguments are unsatisfying.

PvO’s point boils down to ‘here is an asset that the government can sell and use the money to pay down debt’ type argument.* He also points to the annual running costs of the ABC as a budget saving. He is unconcerned about the left-wing bias at the ABC. I don’t actuallt disagree with the notion that the government should privatise the ABC, or that public debt is a problem, or that the $1 billion or so the government pumps into the ABC could be better used as tax cuts, for example.

The problem with this sort of argument is that there is no mechanism is place to restrain future government debt. So selling the ABC to pay for Swan’s irresponsible spending spree may get us out of a debt and deficit hole now, but without a fiscal constitution that restrains future debt and deficit the underlying problem remains. Using privatisation proceeds to validate past consumption is a case of eating our capital. So selling the ABC having already spent the money on school halls and pink-batts (the public equivalent of wine, woman and song) doesn’t address the spending problem.

Rebecca has a far more interesting argument and, while I don’t agree with it, I suspect it will carry the day. Her point boils down to a ‘the ABC is a civilising institution of society’ type argument.* She is concerned about left-wing bias at the ABC. So while the ABC is a civilising institution it isn’t performing as it should. Rebecca’s argument is profoundly conservative (in a Burkean sense) and it will appeal to many on that basis.

So her solution to the problem of the ABC is a good hard solid dose of reform.

To my mind the problem is that this has already been tried and failed. John Howard gave this a red-hot go. He did not succeed. In my opinion he failed because the problem had been misdiagnosed. This isn’t just a problem of poor governance – although that does contribute. This is a problem of incentive structures and organisation.

Both Hayek and Schumpeter have developed theories as to why intellectuals are likely to have left-wing views. Schumpeter’s is a theory of incentives; intellectuals are forever questioning and attacking social institutions. Hayek provides a psychological argument—intellectuals are rationalist and require detailed explanations of all phenomena. It is not enough that something should work in practice; it also needs to work in theory. Hayek makes the prediction that the more intelligent an educated person is the more likely they are to hold left-wing views.

So an organisation like the ABC (like universities and the public service) is always likely to have a left-wing bias. But hang on you say – what about other media organisations or other service industries dominated by intellectuals, they aren’t all dominated by left-wing views. No they aren’t. They are dominated by consumer choice and the need to make a profit. The ABC can get away with its left-wing views because there are no market forces at work, at all, within the ABC. When there is no market consequence to people giving full expression to their own preferences why would we ever expect they would change their behaviour?

The ABC cannot be reformed from within – if you are concerned about left-wing bias then commercialisation is the answer to that problem.

* Neither of them use that terminology. That is what I understandd their arguments to be.

Today in The Australian:

“Ford’s workers are angry. And rightly so. Only weeks ago, both the Prime Minister and the Leader of the Opposition reaffirmed their passionate commitment to Australia’s car industry. Now, with Ford announcing it will shut down carmaking in Australia in October 2016, their jobs will disappear.”

One more story in a growing list. They may not put you in a gulag but then they don’t need to. This is from Peggy Noonan at the WSJ. I have emphasised the four different federal agencies involved. Where do you suppose the co-ordination was coming from?

The most important IRS story came not from the hearings but from Mike Huckabee’s program on Fox News Channel. He interviewed and told the story of Catherine Engelbrecht—a nice woman, a citizen, an American. She and her husband live in Richmond, Texas. They have a small manufacturing business. In the past few years she became interested in public policy and founded two groups, King Street Patriots, and True the Vote.

In July 2010 she sent applications to the IRS for tax-exempt status. What followed was not the harassment, intrusiveness and delay we’re now used to hearing of. The US government came down on her with full force.

In December 2010 the FBI came to ask about a person who’d attended a King Street Patriots function. In January 2011 the FBI had more questions. The same month the IRS audited her business tax returns. In May 2011 the FBI called again for a general inquiry about King Street Patriots. In June 2011 Engelbrecht’s personal tax returns were audited and the FBI called again. In October 2011 a round of questions on True the Vote. In November 2011 another call from the FBI. The next month, more questions from the FBI. In February 2012 a third round of IRS questions on True the Vote. In February 2012 a first round of questions on King Street Patriots. The same month the Bureau of Alcohol, Tobacco and Firearms did an unscheduled audit of her business. (It had a license to make firearms but didn’t make them.) In July 2012 the Occupational Safety and Health Administration did an unscheduled audit. In November 2012 more IRS questions on True the Vote. In March 2013, more questions. In April 2013 a second ATF audit.

All this because she requested tax-exempt status for a local conservative group and for one that registers voters and tries to get dead people off the rolls. Her attorney, Cleta Mitchell, who provided the timeline above, told me: ‘These people, they are just regular Americans. They try to get dead people off the voter rolls, you would think that they are serial killers.’

This week Ms. Engelbrecht, who still hasn’t received her exemptions, sued the IRS.

Julie Novak, from whose all-seeing eyes nothing remains hidden, came across this article by Martin L. Mazorra with the perfect title, “Goods Buy Goods“. This is, of course, the classical definition of Say’s Law. I reproduce the entire blog post below:

One day last week, on CNBC’s Kudlow and Company, Larry gave his expert guest the last word: she justified her optimism for stocks by the fact that consumer spending appears to be trending higher and that ‘consumer spending is 72% of the economy’. Larry closed the evening’s show by telling her she had it ‘almost right’. That (words to the effect) what this economy needs is more saving, and business investment, as opposed to more consumer spending. I don’t always agree with Mr. Kudlow, but in this instance I believe he was spot on. Although I had no idea where she had it ‘almost right’. She was at least 72% wrong. Of course her assertion that ‘consumer spending is 72% of the economy’ comes straight from the GDP equation, and is an oft-quoted justifier for policies aimed at boosting demand. Once upon a time, I fell prey to the same misconception.

Here, in my (evolved) view, is a more sensible description of what grows the economy: From page 26 of Steven Kates’s Say’s Law and the Keynesian Revolution:

If one takes the annual produce of a country, writes Mill, and divides it into two parts, that which is consumed is gone. On the other hand, that portion which is used in the production process returns in the following year, with a profit. The more of the produce of a country that is devoted to productive uses, the faster that country grows.

And (from page 40) on the cause of recessions:

The basis of the law of markets is that goods buy goods, but only if the right goods are produced. If the wrong goods are produced, then they cannot be converted into the universal equivalent (i.e. money). If a proportion of goods cannot be sold, then their owners cannot buy. If one set of producers cannot buy, then a second cannot sell. The result is a general downturn in the economy and warehouses filled with unsold goods. But the cause of recession is not demand deficiency or over-production but the production of the wrong assortment of goods and services. The adjustment process thus required is the redeployment of capital from areas where there is too little demand into areas where there will be demand for the goods produced. There is no reason that the process of readjustment will be rapid, but there is no reason to believe that the downturn will be permanent.

So, under whose command should we expect the greatest likelihood of producing the right assortment of goods and services; a self-serving producer of goods and services, or a self-serving politician? Certainly the market, all on its own, can, for a time, produce the wrong assortment of goods and services. However, left to its owns devices—and to natural consequences—the market will adjust accordingly and purge its excesses. The politician, on the other hand, has a professional interest in circumventing the suffering of his supporters, and is adept at neutralizing the natural consequences for the producers of the wrong goods by spreading the loss among the entire population. And, alas, he in effect neutralizes the redeployment of capital from areas where there is too little demand into areas where there will be demand for the goods produced. Hence, a very slow recovery…

When one thinks about the last recession, housing comes to mind. Government-(explicitly)-backed mortgages (Ginnie mae), government-sponsored enterprises (Freddie and Fannie) and a variety of tax incentives are the brainchildren of politicians incentivizing the production of a particular good. Plus, the Fed had flooded the financial sector with liquidity enough to fund the manufacture of trillions of dollars worth of derivative securities designed to leverage—many times over—the housing market. In the end we had the definition of resources diverted to the production of the wrong good, and, thus, the greatest recession since The Great Depression…

This is exactly right and a perfect restatement of the classical explanation of the recession we continue to refer to as the Global Financial Crisis. The notion that consumers drive 70-plus percent of the economy is just one of the many Keynesian idiocies bequeathed to us today. When it comes right down to it 100% of the economy is devoted to raising consumption. Why else would anyone produce anything unless it eventually led to higher personal living standards. Retail is, however, less than ten percent of total economic activity if one looks at the value added data rather than at C+I+G. Most people across an economy are in the inputs industry, every one of which is directed towards satisfying consumer demand eventually, but only eventually. In the meantime they are producing iron ore and concrete, lumber and nails, factories and 747s, none of which are bought as consumer items. And this only begins the story of why the focus on consumer demand is absolutely misplaced if you want to understand how an economy actually works.

Among Martin Parkinson’s most inglorious forecasts as Treasury Secretary was that there was a global movement towards carbon taxes and other such measures that would rapidly lower carbon emissions.  Only the EU is now following such practices and its measures are being weakened.

Parkinson maintained that the Australian measures were less onerous than those introduced and about to be introduced in Japan, Korea New Zealand.  He said, “Australia is not a first mover, but more accurately described as in the middle of the pack” and claimed that countries representing 83 per cent of world emissions had pledged to reduce them in line with the levels said to be needed.

This year saw a swallowing of Parkinson’s former agency, the notorious Department of Climate Change, within the larger industry department, and his successor at Climate Change, Blair Comley PSM taking over the Resources Energy and Tourism portfolio.  Personnel have been hidden and rearranged – thus the 481 people in Climate Change have been accommodated within a stated net increase in the industry department of only 181 people.

The headline issue has stemmed from the halving of the carbon tax from $25 per tonne to the current estimate of $12.10 a tonne in 2015.  That estimate maintains the new tradition of boldness in Treasury forecasts since the price is linked to the EU scheme now at $4 and falling!  The present punitive tax at $25 per tonne remains in place this year and revenue is estimated at $8.3 billion for 2013/4 before falling as the government moderates its pursuit of world leadership in deindustrialisation.  Lower revenues in out-years are offset by lower compensation to households and businesses.

The budget makes adjustments to the carbon confetti spread around in direct disbursements.  Some reductions have been imposed.  Thus the Global Carbon Capture and Storage Institute fantasy lavishly funded as one of Martin Ferguson’s pet projects has been cut by $20 million a year.  Reductions in funding have also been made for “low emissions coal” from the 2013/4 year and “Carbon Capture and Storage” from next year.  The Australian Renewable Energy Agency (ARENA) in the Resources Department has seen its funding growth deferred from 2014. Even so, ARENA’s funding rises from its 2012/3 level of $130 million to over $500 million in 2013/4.

But reductions are more than offset by increased “spends”.  Among these in addition to ARENA are

• a trebling this year to $167 million and further doubling of the “Clean Technology Investment Programs”;
• a fourfold increase to $91 million in “Clean Energy for Farming”;
• a doubling this year to $108 million of DRET’s “Clean Energy Future”; and
• the coming online of the Clean Energy Finance Corporation with off-budget special appropriations seemingly locked in at $2 billion a year; on top of these are administrative costs, $300 million in the coming year.

In earlier times, Kevin Rudd’s ALP was proud of its spending on climate change mitigation.  The budget papers offered consolidated data on how much was being spent across half a dozen government agencies.  In 2009/10 Climate Change expenditure was totted up at $1069 million.  Similarly, in “Securing a Clean Energy Future” the ALP/Greens/Oakshott-Windsor coalition provided detailed spending on emission abatement.

The funding is now not easy to identify as it is often lumped with other spending into a single line item.

Total expenditure identified within the Industry, Agriculture, Resources, Sustainability, Treasury and Finance portfolios over the current year and the next two are as follows.  Funding rises, including the Clean Energy Finance Corporation from under $1.5 billion to around $5 billion.

Estimated Direct Government Outlays on Carbon Abatement Measures ($m) 

These numbers include some inevitably arbitrary allocation of funding.  For example, global warming is specified as the reason for most of the spending on water conservation.  Similarly, 30 per cent of CSIRO work and 5 per cent of BoM work is allocated to climate change.  By the same token, large items of expenditure are not counted: the many grants to research agencies, the internal resources dedicated to carbon forecasting in Treasury and other departments, the spending in the infrastructure department (like all those bicycle paths) and spending in Foreign Affairs, Education and Regional Australia.

One thing is clear the carbon caper has been a boon for those interested in creating new schemes. Carbon taxes and renewable energy subsidies aside, there is almost $5 billion a year in counterproductive expenditures in the budget that a responsible government can axe.