The Corbyn Plan

The election plan of the ALP is to follow the policy lead of Jeremy Corbyn.  The same Jeremy Corbyn who said about Hugo Chavez and Venezuela in 2009:

Venezuela is seriously conquering poverty by emphatically rejecting the Neo Liberal policies of the world’s financial institutions.

The same Jeremy Corbyn who said in 2011:

I’ve been involved in opposing anti-terror legislation ever since I first went into Parliament in 1983.

The same Jeremy Corbyn who:

claimed that 9/11 was “manipulated” to make it look like Osama Bin Laden was responsible to allow the West to go to war in Afghanistan.

And still the same Jeremy Corbyn who:

blamed Britain for the beheading of Alan Henning by the ISIS killer “Jihadi John”.

And the very same Jeremy Corbyn whose economic manifesto includes rail nationalisation, free tertiary education and freezing the pension retirement age.

What is worse.  The ALP policy direction or the ineptitude of the Coalition government such that the ALP are on track to win the next election?

Follow I Am Spartacus on Twitter at @Ey_am_Spartacus

Posted in Uncategorized | 15 Comments

These are not unrelated stories

First this: President Trump Launching Section 301 Trade Infringement Investigation: “This is only the beginning”….

During an afternoon announcement with Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer, President Trump announced the launch of section 301 trade investigations into China’s business practices for theft of U.S. technology and violations of U.S. intellectual property rights.

Perhaps the most overlooked portion of the remarks from President Trump happened as he sat down to sign the Presidential Memorandum authorizing the official investigation:

…This is only the beginning folks. This is only the beginning…

For approximately 30 years China has been engaged in a unidirectional trade war against the United States of America; facilitated and enabled by both Democrats and Republicans who have been purchased by multinational and corporate lobbyists to block any effort to defend our U.S. interests. The biggest victims have been U.S. middle-class workers.

And then this: NORTH KOREA’S KIM JONG UN SAYS WILL WATCH US BIT LONGER BEFORE ACTING

North Korea’s leader Kim Jong Un received a report from his army on its plans to strike the area around Guam and said he will watch the actions of the United States for a while longer before making a decision, the North’s official news agency said on Tuesday.

“The United States, which was the first to bring numerous strategic nuclear equipment near us, should first make the right decision and show through actions if they wish to ease tensions on the Korean peninsula and prevent a dangerous military clash,” Kim was cited as saying in the report by KCNA.

The North’s leader ordered the army should always be fire-ready should he make a decision for action, the report said.

And it ain’t over yet, except perhaps for Kim.

Posted in International | 14 Comments

Cross-Post: Parnell McGuinness: Same Sex Marriage ‘yes’ campaign could lose if mismanaged

Australians who have not yet made up their minds on same-sex marriage are now embarking on a “journey” which many politicians only recently completed. It looks like most will arrive at the same destination, but without the whiff of political expediency.

Still, despite the polls, if the journey is mismanaged the “yes” campaign could lose. To take one example, this could happen if people begin to feel that by extending marriage rights, their own right to hold private religious views will be diminished.

Or if ordinary Australians are made to feel they can’t voice their concerns without being howled down and silenced as bigots, they might deliver a Brexit-style silent revolt.

Likewise if same-sex marriage campaigners allow themselves to believe that the case for extending marriage equality is obvious and doesn’t need to be argued. It may feel obvious in the wealthy, liberal and largely white inner-city suburbs, where sexual taboos were done away with long ago.

But remember until as recently as the 1970s pretty much all sex was taboo. Even heterosexual relationships were only socially acceptable within marriage.

Unwed mothers were pressured to give up their children to married couples. No-fault divorce wasn’t available in Australia until 1975.

Before that, people would sometimes pretend they’d been adulterous to get out — ironically, the first major sexual taboos were smashed by heterosexuals who were desperate not to be married.

In 1975 the first Australian state decriminalised homosexuality. Homosexual practice wasn’t decriminalised in Tasmania until 1997.

This is shockingly recent, but it’s a good reminder that we did hold these attitudes and taboos — and that they have adjusted and changed within our lifetime.

Australia has always lagged in the Western world, possibly because of our large immigrant population, who often bring with them and maintain socially conservative attitudes about sex and the role of women, among other things.

In many non-Western countries these taboos still exist and they remain strong in many new immigrant communities.

But it’s worth remembering that we are all immigrants from a not-too-distant past.

Taboos hold us at an emotional level. Changing legislation is not enough to change people’s hearts and minds. Even when it is plainly the right thing to do, there is still a job of persuasion to be done.

It should help the “yes” campaign that it can build itself around a deeply conservative proposition to restore family values.

Campaigners must realise that just yelling louder in their existing echo chambers will have no impact.

And lashing out at people who disagree — precisely those whose minds need to be changed by the “yes” campaign — will be counter-productive.

For their part, conservatives should embrace the opportunity to broaden their base. It has been a very, very long time since part of society last clamoured for access to a conservative institution rather than freedom from one.

The conservative mindset prefers the stability of a regularised, public commitment over the less clear de facto model.

Stable domestic situations promote the wellbeing of the children in a household, as well as reducing the potential for welfare fraud.

Both of these arguments carry conservative weight, but children are a priority.

Children are increasingly born into irregular situations created by parents of all sexual orientations. Offering parents who want it a way to create more stability for children can only be a positive and is an inherently conservative thing to do. To put it another way, far from undermining it, extending marriage equality to same-sex relationships will likely make society more conservative, not less.

That said, it will be a tough time for same-sex couples between now and November 7.

It will also be tough for people who have doubts about extending traditional marriage to same-sex couples. The trolls from all sides will be out in force, trying to polarise the debate.

But there’s a silver lining.

For a couple of months, Australians will turn their minds to the topic of why extending equal franchise to people whose opinion — or in this case orientation — you don’t necessarily share is the right thing to do.

And make no mistake about it, tolerance is a two-way street.

We can’t forbid someone from being religious any more than we can forbid them fancying the same sex. A popular saying about gay marriage has been that if you don’t support them, you shouldn’t get one.

Well, the same thing applies in the other direction: if you don’t agree with the pastor, don’t go to the church. How people behave to one ­another when they interact is more important than what they think or even say in private. ­Actions trump words.

If the “yes” campaign accepts this, and engages respectfully and on a personal level to dispel doubts, we will come out of this knowing why we are a nation that extends the symbolic institution of marriage to all consenting couples.

Political correctness will have nothing to do with it.

Political correctness is the preserve of mealy mouthed pleaders doing obedience to an establishment view.

People — and politicians — who take up attitudes based on political correctness are capable of shedding them again when fashions change, or the posture is no longer useful. But an unforced and considered opinion sticks.

We all have something to gain by conducting this debate with respect and in good faith. If the goal is a freer and more stable society, for once there can be winners all around.

This op-ed first appeared in The Daily Telegraph.

Posted in Cross Post | 129 Comments

The Gipper one more time

Update: Brendan O’Neill on the various hate groups.

Posted in History, International | 36 Comments

David Leyonhjelm on the Murray Darling basin plan

The Millennium Drought, the longest and most severe drought for a hundred years, prompted some people to panic about climate change and conclude that drought was the new normal, that water would always be scarce, and that the environment was facing catastrophe.

More sensible people knew, and others found out, that droughts always end. That occurred in 2010/11 with widespread flooding. Wetlands recovered, birds bred enthusiastically, frogs and fish proliferated and the cycle of life resumed as it has for thousands of years. Dorothea Mackellar’s description of Australia as a land of droughts and flooding rains was never better demonstrated.

However, during the drought, a plan was devised, first by the Howard Liberal government and then by the Gillard Labor government, to remove water from agriculture in order to ‘save’ the environment. Whether this would have occurred in the absence of the drought is uncertain; although water management was imperfect, with over allocation in some areas, the arguments at the time were all about equitably sharing between the states.

In 2007 the Howard government introduced the Water Act, which required the development of a plan to manage water in the Murray Darling Basin. The details of that plan were negotiated with the states by the Gillard government. Against the background of drought and state rivalry, it was 1% science and 99% politics.

The plan calls for the “return” of 2,750 GL of water to the environment, via both water rights purchased from farmers and water efficiency measures. A further 450 GL is to be returned subject to certain conditions.

Implementation commenced in 2012, with water rights purchased from farmers in southern Queensland, NSW and Victoria, plus a small quantity from SA.

In 2015 and 2016 I chaired a Senate inquiry into the effects of its implementation, with hearings in nine locations including each of the participating states. We also flew from the mouth of the Murray to Renmark in South Australia to allow us to have a good look at the lower lakes.

What the Senate committee found is that the loss of irrigation water was having a very significant impact on rural communities. Farms which previously grew irrigated crops, such as pasture for dairy cows, cotton, or fruit and vegetables, now grew dryland crops or ran a few sheep. They required far fewer inputs, such as machinery and fertilisers, and generated far less income. Farm and supplier workers lost their jobs and moved away, leaving communities with fewer school children, volunteer fire fighters and customers in local shops.

The committee also found there was a very poor understanding of the plan. Among environmentalists, for example, there was an almost religious belief that the environment simply needed more water. Indeed, this continues today, with claims that unless the full amount of water is delivered, environmental disaster will follow. This is despite the fact that water can do more harm than good unless it is in the right place at the right time, in the right quantities.

Lack of understanding runs particularly deep in South Australia. Its outrage over allegations that water is being misappropriated from the Darling and Barwon rivers in NSW is ridiculous, given only about 5-6% of the water in these two rivers ever gets that far. If anyone is entitled to be outraged it is downstream NSW farmers who cannot access water to which they are legally entitled.

There are also regular claims that Adelaide’s water supply, SA agriculture or even the state’s survival are at risk unless the plan is fully implemented. In fact, the plan guarantees SA a minimum of 1850 GL a year, which is not at the slightest risk.

Perhaps the most disturbing aspect the committee heard was how a considerable amount of the water (around 900 GL according to witnesses) flowing down the Murray River to SA, much of it taken from productive agriculture in Victoria and NSW, is evaporating each year in Lake Alexandrina and Lake Albert, also known as the lower lakes.

The point was made that, while evaporation is unavoidable, there is no need for it to be fresh water. If Lake Alexandrina was allowed to remain open, subject to tidal influences rather than closed by man-made barrages, it could be seawater that evaporates (or at least a mixture of fresh and seawater). Preserving an artificially created environment at the expense of Australian farming and rural communities seems very poor public policy.

But the bottom line is this – the Murray Darling Basin Plan was conceived in panic, negotiated with little reference to science and data, and is seriously imperfect. Its intentions – to preserve the natural environment – are laudable, but it should not be treated as holy writ. There is enormous scope for improvement.

David Leyonhjelm is a Senator for the Liberal Democrats

Posted in Guest Post | 17 Comments

Q&A Forum: August 14, 2017

Posted in Open Forum | 201 Comments

The Economist discusses Say’s Law

From the latest Economist: Say’s law: supply creates its own demand. Even before I have begun to read what is written, let me point out that Say didn’t invent “Say’s” Law nor did he understand it properly. And to begin with Keynes’s garbled form of words, “supply creates its own demand”, does not bode well. But at least the title in the magazine itself, “Glutology”, gives me some small hope. So now onto the article.
_______

Good but not great. Getting there but not there yet. And without any doubt, the author has read my books and articles, as how could they not have been consulted since I am the only one who has been writing in defence of Say’s Law for these past 30-40 years or so. Sowell and Hutt in the 1970s and not much since. This, then, is the bit that I thought took the issue forward and out of the dreary Keynesian depths such discussions have usually been mired in.

To grasp Say’s point requires two intellectual jumps. The first is to see past money, which can obscure what is really going on in an economy. The second is to jump from micro to macro, from a worm’s eye view of individual plants and specific customers to a panoramic view of the economy as a whole.

These are both such fixed points of classical theory that without them there is a great deal that cannot be understood, with Say’s Law almost the least of it. Classical economics brings money only after the real relationships have been understood. It does absolutely bring in money, which has an enormous power to distort all economic relationships, but money comes in only at the end. Second, Say’s Law is about macroeconomics only. There is always lots of monetary purchasing power sloshing around unrelated to value adding activity so to get to the basic idea you cannot introduce money until you see what is happening beneath. It thus says that the aggregate demand for output is determined by the aggregate supply of output.

Now let me get into explaining what goes wrong after that.

First, in the very next para the author brings in money and, moreover, does so within a microeconomic setting, instantaneously breaking both rules!

Firms, like coal plants and cotton mills, sell their products for money. But in order to obtain that money, their customers must themselves have previously sold something of value. Thus, before they can become a source of demand, customers must themselves have been a source of supply.

There we are looking at money and in a micro setting. The thread has been completely lost.

Second, there is this which again completely misstates the point.

Today, many people scoff at Say’s law even before they have fully appreciated it. That is a pity. He was wrong to say that economy-wide shortfalls of demand do not happen.

Unless you start with the assumption that classical economists chose to ignore the frequent and devastating occurrence of recessions, it is absurd to think they equated the existence of recession with a deficiency of demand as we now do. That is specifically what Say’s Law was meant to deny. The best short statement on Say’s Law is from David Ricardo in a letter to Malthus in 1820: “men err in their productions, there is no deficiency of demand”. There are lots of reasons for recessions, just not this one.

The odd and dismal part of all this is that classical economists understood the operation of an economy better than our moderns, who have been blinded by Keynesian theory. If you would like a succinct and very clear statement on the correct meaning of Say’s Law, let me suggest the chapter on “Supply and Demand” in J.E. Cairnes 1874 Some Leading Principles of Political Economy Newly Expounded. Our economies are being ruined by faulty economic theories. If you would like to know why, you should read Cairnes and then perhaps my own Say’s Law and the Keynesian Revolution: How Macroeconomic Theory Lost its Way . And let me emphasise that the subtitle really is the point.

Posted in Classical Economics, Economics and economy | 14 Comments

Jeffrey A. Tucker – The Violence in Charlottesville

The vast majority of people in the United States have no interest whatsoever in street battles between the alt-right (better described today in more poignant terms) and the counter-protesters. Most people have normal problems like paying bills, dealing with kids, getting health care, keeping life together under all the usual strains, and mostly want these weird people to go away. So, of course, people are shocked at scenes of young people in the streets of this picturesque town with a university founded by Thomas Jefferson screaming, “Jews will not replace us.”

What this is about is bad ideas. They crawl into the brain and cause people to imagine things that do not exist. 

It’s hard to see, hard to hear. But they are not going away. For some people with heads full of violent ideology, what’s happened so far is not enough. They imagine that with their marches, flags, uniforms, slogans, chants, screams, and guns, they will cause history to erupt and dramatically turn to favor them over the people they hate. Indeed, what is unfolding right now, with real loss of property and life, has gone beyond politics as usual and presages something truly terrible from the past, something most of us had previously believed was unrepeatable.

What in the world causes such a thing? It’s not about bad people as such. Many of the young men and women involved in this movement were raised in good homes and, under normal conditions, would never hurt anyone. What this is about is bad ideas. They crawl into the brain and cause people to imagine things that do not exist. It can be like a disease that a person doesn’t even know that he or she has. It causes people to seethe with hatred for no apparent reason, to long for the extermination of people who have never done anything wrong, to imagine insane outcomes of social struggles that have zero chance of succeeding.

The Group

The implausibility of their ideas is disguised by group psychology. They hang around people who think these same things and egg each other on in shared resentments and dreams of new powers they can acquire if they act boldly, bravely, and with determination. They conjure up scapegoats (blacks, Jews, women, Antifa, gays, and a government that is supposedly giving them all privileges at their expense) and begin to believe that the only way forward is to destroy them all in some grand uprising, after which they will seize power and rule forever.

No idea is too insane to be off limits to a group infected with a longing to rule. 

Yes, I know it sounds insane. But one thing you learn from history is that no idea is too insane to be off limits to a group infected with a longing to rule. Any means to the end will do, with the end deeply embedded in the fevered imagination of the group member who finds mission, meaning, and significance from some struggle.

The Statue Myth

Much of the media coverage about the violence in Charlottesville, Virginia report that this all began with a dispute over the fate of a statue of the Civil War Confederate general Robert E. Lee that sits downtown. The city council voted to take it down; the protesters want it to remain as a symbol of white pride and rule (which is absurd because General Lee would have been thoroughly repulsed by the ideology these people represent). In actual fact, the dispute over this statue is a complete distraction from the real motivation here.

What this really is: an explosive expression of an idea that has been brewing in a malevolent movement that has been gaining steam for very a long time. After the Second World War, most people imagined that Nazi ideology was gone from the earth and that the only real totalitarian view that remained to threaten liberty was Communism. That might have been true for a few decades, but matters began to change in the 1990s, as new violent strains of statism begin to arise.

The Deep History

For the last two years, I’ve written about the deep history of this violent strain, which can be described variously as Nazism, fascism, alt-right, white supremacy, white nationalism, neo-reaction, or, my preferred and more technical moniker (borrowed from Ludwig von Mises), right-Hegelianism.

Ideas are strangely magical, like time-traveling spiritual DNA, moving from brain to brain like a genetic mutation. 

People have variously wondered why I’ve spent so much time and energy digging through the works of people like Johann Fichte, Friedrich List, Houston Stewart Chamberlain, Thomas Carlyle, John Ruskin, Charles Davenport, Oswald Spengler, Carl Schmitt, Julius Evola, Giovanni Gentile, and so on (many of my writings on these people are here). All of these ideas existed long before Hitler and the Nazis – and caused enormous damage in the world long before the Holocaust – and they persist after them.

It’s true that probably not even one of the protesters in Charlottesville have read these thinkers, much less the traditional liberal response to these rightist strain of anti-liberalism. How can they possibly be responsible?

Ideas are strangely magical, like time-traveling spiritual DNA, moving from brain to brain like a genetic mutation and just as unpredictably. Keynes was right to observe that most politicians are slaves to some defunct economist; in the same way these violent thugs are slaves to some defunct philosopher who loathed the emergence of universal freedom in the world during the 19th century and were determined to set it back.

Propagandists for Evil

At the same time, there must be some mode of transmission for ideas. The leaders of this movement serve the purpose well, but there is a deeper root. I’ve been very reluctant to mention what might be the most influential tract among the rise of the hard statist right in the last few decades, but given where we are with all of this, it is time. The book is The Turner Diaries, written by “Andrew McDonald” who was really William L. Pierce, a brilliant physicist whose mind was taken over by Nazi ideology, precisely because he was steeped in the literature above.

I do not recommend reading this book. You can’t unread it. It is their roadmap. I can recall the first time I read it. I was shaken to my very core, and it was the beginning of a new realization of the task before us, to combat this horror with every bit of intellectual energy. 

It’s about race struggle, religious struggle, gender identity struggle, national struggle.

It is the story of a small junta of whites who set out to reverse history with a series of killings, starting with Jews, then blacks, then communists, and then, inevitably, apologists for the merchant class and libertarians (they hate us deeply too). What you learn early on here is that this movement is absolutely socialist, just in a different way from the more-famous left-wing socialists. They are not red shirts but brown shirts, so they have a different agenda. It’s not about class struggle. It’s about race struggle, religious struggle, gender identity struggle, national struggle.

So what happens? They rally the masses to their side with a growing amount of bloodshed, gain control of the government, set up a centrally planned socialist state, get hold of the nuclear stockpile and slaughter all non-whites in the world. Sorry for the spoiler.

The Genetic Code

Why would anyone rally behind such a ghastly book? Again, the human mind is capable of imagining terrible things, and that which we imagine to be true influences actions. Ideas, as they say, have consequences. Hence, anyone who has followed the transmission of these ideas over the last decades could see where this is heading.

The progress of the last 500 years shows us precisely what the good ideas are.

What happens now? The tragedy is compounded, with a burgeoning leftist movement to counter the emerging threat from the opposite side, and a government ready to exploit the conflict between the two to crack down further on human rights and freedoms. It’s the perfect storm.

Our Task

The question is: what to do now? The answer lies in the source of the problem. The huge mess began with bad ideas. The only means available – and it is the most powerful – is to fight bad ideas with good ideas. We all need to throw ourselves into the intellectual battle most of all and as never before. What are those good ideas?

The progress of the last 500 years shows us precisely what the good ideas are: social harmony, human rights, the aspiration of universal dignity, the conviction that we can work together in mutual advantage, the market economy as a means of peace and prosperity, and, above all else, the beauty and magnificence of the idea of liberty itself.

Let us all – those who love peace, prosperity, and human flourishing for all – not despair but rather rededicate ourselves to the mission of replacing bad ideas with good ones. Our predecessors in this mission faced far worse odds and they prevailed, and they were far fewer than us. We can too, provided we think, speak, and act with courage and conviction in favor of all that is beautiful and true. This is how the left/right cycle of violence will be replaced by the highest longings of the human heart.

Jeffrey A. Tucker


Jeffrey A. Tucker

Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books. He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

This article was originally published on FEE.org. Read the original article.

Posted in Guest Post | 79 Comments

David Leyonhjelm on electricity prices

Electricity prices are skyrocketing because of decades of government mismanagement. It will take time to undo the damage, but there is something the government can and should do straight away to alleviate the pain of rising electricity prices; it should make electricity GST-free.

Making electricity GST free would immediately save a typical household around $200 each year.

Electricity is an essential service, like water. But while water is GST-free, electricity is not. Because of GST, electricity prices are 10 per cent higher than they need to be. By removing GST the government can cut electricity prices by 10 per cent immediately and prove that it truly cares about the electricity bills of everyday Australians.

As we are all discovering, these electricity bills are horrendous and getting worse. Households face a 20 per cent hike in electricity bills this quarter, with a typical annual bill increasing from around $2,000 to $2,400. That’s $400 many households simply cannot afford. In fact, a lot of low-income households report they are going without heating this winter because of electricity prices. This is sure to cause deaths, a scandalous situation in any first-world country but unforgivable in a country so rich in resources.

And this spike in prices follows a horror decade in which the cost of electricity across the nation rose by an average 8 per cent each year.

Even though the revenue is passed on to the states, the GST is a federal tax. Thus the federal government could immediately make electricity GST-free without seeking support from the states. Such support would never come in any case; the states are addicted to GST revenue and rake in the dough with every electricity price rise.

Taking GST off electricity would cut state revenues by $2 billion a year. State budgets could bear this; for instance, while the NSW and Victorian Governments would each suffer reduced revenues of around $500 million, this would still leave them with a healthy budget surplus. The Western Australian Government, which receives far less GST revenue, would only suffer a hit of around $80 million. More importantly, the people of each state would face dramatically lower electricity bills.

I am pushing the federal government to immediately make electricity GST-free, and if it doesn’t budge now, it will be a key issue on which the Liberal Democrats will campaign at election time.

But making electricity GST free is just the beginning when it comes to cutting electricity prices. The mess we are in is the result of decades of governments discouraging the construction of new coal fired power stations.

The discouragement of cheap power has come in the form of the Renewable Energy Target which effectively forces coal-fired power stations and electricity consumers to provide annual subsidies of more than $2 billion to unreliable renewable generators. Ongoing threats of carbon pricing are also having a discouraging effect.

To achieve long term cuts in electricity prices, including for Australian businesses, we need to abolish or suspend the Renewable Energy Target and provide a guarantee to prospective investors in new coal fired power stations that there will be no carbon price.

At the very least this should apply while countries emitting more than us continue to increase their greenhouse gas emissions. These countries currently include China, Russia, India, Indonesia, Saudi Arabia and South Korea. It is pointless for Australia to cut its emissions while bigger emitters raise theirs. We should also withdraw from the weak and unenforceable Paris Agreement that allows this and abandon the commitment to reduce Australian emissions by 26 to 28 per cent until the rest of the world does the same.

Finally there should be no further rounds of taxpayer-funded handouts under Abbott’s Direct Action Plan, and we should remove the government’s evidence-free ban on modern nuclear power, which offers reliable, zero-emissions electricity.

A return to cheap and reliable electricity would not only be welcomed by households. Every Australian business and employer, including what remains of our manufacturing sector, would feel the relief. To coin a phrase from Trump, let’s make electricity cheap again.

David Leyonhjelm is a Senator for the Liberal Democrats

Posted in Guest Post | 43 Comments

An excess supply of economic illiteracy

Economic illiteracy is a common fault among our political classes. Two stories off the front page of The Australian this morning. First this: NBN chief Bill Morrow asks who will by the $49bn debt. As if you have to ask:

Australians face a stark choice in how to pay for the $49 billion National Broadband Network — it will either be funded by consumers who use the network or ultimately by the taxpayer via subsidies and writedowns.

NBN chief executive Bill Morrow, writing today in The Australian, raises fundamental questions about how to pay for the federal government-owned network.

He says a “land grab’’ by retailers as they try to gain market share while the NBN is rolled out has driven down internet plan prices to a level that may not reflect the costs consumers are willing to pay in a rational market. “We need to ask whether this is a faulty commercial model where cost recovery isn’t possible or is it an over-heated retail market with a price-centric marketing strategy that needs to change?’’

It’s all Labor except that our economically challenged PM also didn’t get it when he might have done something useful when he was Minister of Communications. And to go with that we now have this: Regulation needed to keep lid on power bills: Victorian report.

A damning review of Victoria’s privatised energy market has called for the reintroduction of price regulation to drive down household power bills and put a ceiling on spiralling electricity costs.

The eight-month independent review found that, after 15 years, market deregulation had failed Victorians and led to significantly higher household power bills.

Left out is the small matter of the Hazelwood power station closure. It shouldn’t be that hard to understand the supply half of supply and demand, but apparently it is.

Posted in Economics on the left, Uncategorized | 16 Comments