A modern libertarian discusses the problems of immigration

This is from Gary North in the Journal of Libertarian Studies: The Sanctuary Society and its Enemies

In the United States today, the waiting period for citizenship is as short as five years. The waiting period is similar in other democratic nations. This, not the threat of economic competition, is the problem of immigration for the free society. Because the citizen authoritatively declares the law and seeks to impose it on others, he can become a threat to the free society. The problem is the moral content of his confession of faith and his possession of civil sanctions, not his productivity and his possession of economic sanctions. Mises was short-sighted here: a nineteenth-century, anti-clerical, would-be value-free analyst, i.e., a liberal. It is not the welfare state as such that creates the problem of immigration; rather, it is the confession of faith of the would-be immigrants. If their confession inherently threatens the moral and judicial foundations of the free society, then immigration is a problem, with or without the presence today of a welfare state. Freedom is based on more than private contracts. It is based on a moral vision, which includes a vision of the moral boundaries of the state.

This is the single most important issue of our time. Read it all.

Posted in Cultural Issues | 35 Comments

David Bidstrup on the summer power rip-off

The other day I submitted an article analysing 2018 YTD costs for wholesale electricity in the 5 states that make up the national electricity market. It did not fly but my interest was aroused again today when an article in the state of darkness daily rag talked about the “big battery” helping to “drive down costs”.

Using the data from the YTD analysis and adding December 2017 I have looked at the summer costs, (December 2017 + January 2018 + February 2018) for QLD, NSW, VIC, TAS and SA to see what the differences are. These are wholesale prices before the transmission people and the retailing parasites add their margins and presumably before the RET subsidies are distributed. Remember also, it is supposed to be a “national market”.

For each state I found the percentage of time that price/MWh was above $150, the actual cost of the electricity consumed in these periods and the percentage of the total summer cost that it represented. The editor cannot reproduce the table or the chart and it may have to await the return of Sinc to see the results most clearly. They can be summarised as follows.

Victoria and South Australia were outstanding in the amount of time when the price was more than $150 per MWh and the amount of the total bill for the summer period that was racked up on those high cost days. The amount of time in the high cost zone ranged from 0.4% for NSW, 0.7% for Qld, 2.1% for Tasmania, 2.4% for Victoria and 4.9% for SA. The highest cost for the period showed a huge range from $280/MWh in NSW through 2,500 in Qld, 4,200 in Tasmania, to 12,900 in Victoria and the gold medal at 14,16676.50 in SA.

Another way to report the difference between the states is to count the % of the total summertime costs that were incurred during those short periods when the price was above 150.MWh.

The folk in NSW have it easy. They had 4.97% of the time with prices above $150/MWh and the total percentage of the “summer bill” was just 1.47.

SA and VIC, the “renewables states” were not so fortunate. For the 2.43% of time in VIC the percentage of the “summer bill” was 32.96. In SA, “the state of darkness and rank stupidity” it was 45.39% of the total “summer bill” for 4.9% of the time.

A chart that cannot be reproduced here shows the gigantic spikes in SA and Victoria on Jan 18 and 19 when consumers were flogged with when prices up $14,000+ per MWh as the system was about to fall over. TAS managed to get free power when SA and VIC were paying through the nose.

As I said, this is supposed to be a “national market”. Clearly it is a very distorted one where consumers are treated differently in different states. When electricity was generated in large thermal power stations the cost did not vary from minute to minute, it was a constant. The only time when there was a price difference was overnight when reduced load encouraged generators to offer discounts to avoid wasting steam. In SA it was called the J Tariff and I expect other states had something similar. Traditional pumped hydro schemes also provided a market for off-peak power.

What we have today is simply madness. No matter how much the gormless pollies and the gullible “planet savers” want renewables to work they will not. As more useless stuff gets added and the reliable stuff gets thrown out the issues outlined above will get worse for us and better for the greedy. It is interesting that the 2 “renewable states” are the ones that get shafted the most.

Posted in Global warming and climate change policy, Rafe | 15 Comments

No such thing as “the level of demand” at an aggregate level

Through the whole of the Costello years as Treasurer, I would say that everyone would live through these exceptionally good economic times, but no one would learn a thing. And it’s not just that we had balanced budgets, but had ZERO DEBT. Only country ever to do this and we floated on air. So then we elected Labor and then we had the GFC, and then we had the advice from Treasury to go early and go hard, and so here we are today, in a crumbling economy with living standards heading south. Which is a preamble to this: Peter Costello and later treasurers right to stress benefit of surpluses. Not so sure about those later treasurers, but Peter was the legitimate article, Australia’s greatest Treasurer.

In his book on Australian treasurers, Bowen describes Costello as the country’s first post-Keynesian treasurer, rejecting the idea that taxes and spending should be used to manage the level of demand in the economy, with that task left to the Reserve Bank. The pursuit of a budget surplus was seen as evidence of good economic management and became an end in itself. Costello was able to distil his political message into a simple message: “Surpluses are good and Liberals deliver surpluses,” Bowen writes.

Half way there. There is no such thing as “the level of demand” at an aggregate level. You cannot manage it. You cannot cause it to go up and down. Aggregate demand has no separate existence apart from aggregate supply. It is Keynesian junk theory whether it is spending or adjusting rates. It will not work and never has, ever. Modern macro is false from end to end. As John Stuart Mill put it, and found in my Free Market Economics where it is explained at great length: “demand for commodities is not demand for labour”. That was written 170 years ago. The idea that there is progress in economic theory is just plain wrong.

PLUS THIS: From Max in the comments:

“Austrian theorist Henry Hazlitt argued that aggregate demand is ‘a meaningless concept’ in economic analysis. Friedrich Hayek , another Austrian, wrote that Keynes’ study of the aggregate relations in an economy is ‘fallacious’, arguing that recessions are caused by micro-economic factors.”

“The Keynesian is a collectivist methodologically. He looks at aggregates. He recommends government programs that affect aggregates.”

“Keynes argued, and his disciples still argue, that the cause of unemployment is insufficient aggregate demand. This is another way of saying that the cause of unemployment is excessive aggregate supply. The fact that Keynesians never put it this way does not affect the analytical truth of the argument.”

Absolutely dead on. But what’s the source?

Posted in Economics and economy | 18 Comments

Hybrid cars, hybrid power systems and free fish in the sea

Someone remind us of the difference in price between standard and hybrid cars. We are putting in place a hybrid power system. Someone explain how that can reduce the cost of hot meals and fresh goods from the coolroom.

I was told at lunch that sun and wind are free. So are the fish in the sea. So how come they charge for them in the shop? On the bright side, when the power fails they will be cheap because the fishmonger will have to give them away or throw them out.

Posted in Global warming and climate change policy, Rafe | 29 Comments

“The people of this country don’t want …”

Full story: PELOSI, SCHUMER PLEAD TO TRUMP: ‘LET’S DEBATE’ BORDER FUNDS ‘IN PRIVATE’. Instead, very public with the best bits in the video above. Might also mention this as well: Pew Survey: Out Of 27 Nations Polled, Zero Want More Immigrants to Move to Their Country and that includes Australia. As for Trump and the Dems, here’s the transcript of the relevant bits on border protection:

TRUMP: “We need border security. People are pouring into our country including terrorists. We have terrorists — we caught 10 terrorists over the last very short period of time. Ten. These are very serious people. Our border agents, all of our law enforcement has been incredible, what they have done, but we caught 10 terrorists. These are people that were looking to do harm. We need the wall. We need — more important than anything, we need border security of which the wall is just a piece. It’s important. Chuck, did you want to say something?”

SCHUMER: “Yes. Here’s what I want to say. We have a lot of disagreements here. ‘The Washington Post’ today gave you a whole lot of Pinnocchios because they say you constantly misstate how much of the wall is built and how much is there, but that’s not the point. We have a disagreement about the wall, whether it’s effective or not —“

TRUMP: “’The Washington Post’ —“

SCHUMER: “— not on border security, but on the wall. We do not want to shut down the government. You were called 20 times to shut down the government. You said, ‘I want to shut down the government.’ We don’t. We want to come to an agreement. If we can’t come to an agreement, we have solutions that will pass the House and Senate right now and will not shut down the government. That’s what we are urging you to do. Not threaten to shut down the government.”

TRUMP: “If you don’t want to shut down the government —“

SCHUMER: “Let me just finish. Because you can’t get your way — let me say something, Mr. President. You just say, ‘My way or we shut down the government.’ We have a proposal that Democrats and Republicans will support to do a C.R. that will not shut down the government. We urge you to take it.”

TRUMP: “If it’s not good border security, I will not take it.”

SCHUMER: “It’s very good border security.”

TRUMP: “If it’s not good border security, I will not take it.”

SCHUMER: “ It’s what —“

TRUMP: “Because when you look at these numbers of the effectiveness of our border security and when you look at the job we are doing —”

SCHUMER: “You just said it is effective.”

TRUMP: “Can I tell you something?”

SCHUMER: “You just said it is effective.”

TRUMP: “These are only areas where you have the walls. Where you have walls, Chuck, it’s effective. Where you don’t have walls, it’s not effective.”

PELOSI: “Let’s call a halt to this. We have come in here with the first branch of government. Article One. The legislative branch. We are coming in in good faith to negotiate with you about how we can keep the government open.”

SCHUMER: “Open.”

TRUMP: “We are going to keep it open if we have border security. If we don’t have border security, Chuck, we are not going to keep it open.”

PELOSI: “We will have border security.”

SCHUMER: “You are bragging about what has been done. We want to do the same thing we did last year this year. That’s our proposal. If it’s good then, it’s good now and it won’t shut down the government.”

TRUMP: “We can build a much bigger section with more money.”

SCHUMER: “Let’s debate in private.”

TRUMP: “We need border security. I think we all agree that we need border security.”

SCHUMER: “Yes, we do.”

TRUMP: “See? We get along. Thank you, everybody.”

REPORTER: “You say border security and the wall. Can you have border security without the wall?”’

TRUMP: “You need the wall. The wall is a part of border security.”

REPORTER: “Can you explain what it means to have border security?”

TRUMP: “Yeah. We need border security. The wall is a part of border security and you can’t have very good border security without the wall.”

PELOSI: “That’s not true. That’s a political promise. Border security is a way to effectively honor our responsibility.”

SCHUMER: “The experts say you can do border security without a wall, which is wasteful and doesn’t solve the problem.

TRUMP: “It totally solves the problem and it’s very important.”

PELOSI: “This spiraled downward from when we came at a place to say how do we meet the needs of American people, who have needs. The economy, people are losing jobs and the market is in a mood. Our members are already —“

TRUMP: “We have the lowest unemployment that we’ve had in 50 years.”

PELOSI: “People in the Republican Party are losing their offices now because of the transition. People are not —“

TRUMP: “And we gained in the Senate. Nancy, we gained in the Senate. Excuse me. Did we win the Senate? We won the Senate.”

SCHUMER: “When the President brags that he won North Dakota and Indiana, he is in real trouble.”

TRUMP: “I did. We did win North Dakota and Indiana.”

PELOSI: “We came in here in good faith and we’re entering into this kind of a discussion in the public view.”

TRUMP: “But it’s not bad, Nancy. It’s called transparency.”

PELOSI: “I know. It’s not transparency when we are not stipulating to a set of facts and we want to have a debate about you, confront some of these facts.”

TRUMP: “You know what? We need border security. That’s what we will be talking about. Border security. If we don’t have border security, we will shut down the government. This country needs border security. The wall is a part of border security. Let’s have a talk. We will get the wall built and we have done a lot of wall already. It’s a big part of it.”

Posted in American politics, Politics of the Left | 39 Comments

Wednesday Forum: December 12, 2018

Posted in Open Forum | 1,875 Comments

David Leyonhjelm on a lower tax bill

Limit government to what we need it for, and we will all save thousands of dollars in tax.

If the government only got involved in the provision of services that the private sector is not well suited to provide, like national defence, criminal justice and the regulation of air quality, government spending would be no more than half of current levels. I have obtained costings from the Parliamentary Budget Office confirming this, which are available on their website.

If government spending was halved, this would allow taxes to be almost halved as well, leaving a modest surplus to pay down the Government’s appalling debt.

I recently introduced a bill to show just what a near halving of the Commonwealth tax take would involve, and how it could be done.

First, we should reduce income tax to a flat rate of 20 per cent while lifting the tax-free threshold to $40,000. This would save a typical worker on around $55,000 more than $6,000 a year and reduce the tax system’s disincentive for income-earning.

Those earning $200,000 would still pay $32,000 in tax, compared to a current tax bill of more than $67,000.

We should reduce the company tax rate to 20 per cent. This would help secure ongoing foreign investment that is so important for employment and wage growth. The alignment of personal and company tax rates would also simplify the tax system, which would reduce the need for so many tax agents, lawyers and bureaucrats.

We should abolish fuel tax. This would deliver motorists dollar-a-litre fuel for the first time in decades. And we should abolish the luxury car tax, which protects a car industry that no longer exists.

We should abolish alcohol tax. This would save around 75 cents on a can or pot of beer, and around $25 on a bottle of spirits. Low levels of alcohol consumption are not harmful, while the harms that arise from higher levels of consumption primarily fall on the drinker. It is not the role of government to prevent us from harming ourselves; at most, alcohol policy should focus on public education, discouragement of under-age drinking and the rigorous enforcement of regulations that prevent and punish anti-social behaviour.
We should abolish tobacco tax too. This would save around $20 from a pack of cigarettes, boosting the budgets of some of the poorest and most disadvantaged Australians who are also being denied proven quitting options like nicotine e-cigarettes.

Many smokers already save the budget billions by dying early after a relatively short period of morbidity, while elderly non-smokers spend decades on the age pension, in subsidised aged care and in the public health system. It’s quite unfair that we ask smokers to boost the budget twice by also paying among the highest tobacco taxes in the world.

We should abolish import tariffs. Australia continues to have an ad hoc array of import tariffs, on foodstuffs such as margarine, dairy spreads, pasta, bulgur, almonds, strawberries, maple syrup, biscuits and ham, and on a flotsam of items such as umbrellas, guitars, drums, calendars, towels, granite, sandstone, steel and cars. These hidden tariffs amount to big brother fiddling with our decisions on what to buy, for no reason whatsoever.

We should also abolish the passenger movement charge, which is one of the most expensive departure taxes in the world. It has no relation to the costs of government customs operations and applies as much to business people and foreign tourists as it does to Australians holidaying in Bali or across the ditch.

Each of these tax cuts is included in the Lower Tax Bill 2018 I introduced to the Senate last week. The bill is not likely to pass in the couple of weeks of parliamentary sittings before the next election but, for each tax cut detailed in the bill, it allows us to ask the major parties: why not? Why should drinkers pay so much tax? And smokers? And tourists? And motorists? And wage earners? And shoppers? In other words, most of us.

I have arranged for the Senate Economics Committee to hold an inquiry into the Lower Tax Bill 2018 over the final months of this parliamentary term.

Perhaps the major parties will explain to us in submissions to this inquiry why Australians from all walks of life need to pay as much tax as they are paying now.

But I’m not holding my breath for such an explanation. You can’t justify the unjustifiable.

David Leyonhjelm is a Senator for the Liberal Democrats

Posted in Guest Post, Taxation | 40 Comments

In the street with the yellow jackets

On the spot report. As you would expect the radical left is there doing what they do best fouling everything they touch with violence and destruction.

It is the ordinary folk on the march!

CFACT used the weekend break at COP 24, the UN climate conference in Poland, to head to France to do some research. After interviewing many gilets jaunes (yellow vests), and observing their demonstrations, CFACT can report that the streets belong not to the government, nor to the police, but to the men, women and children in the yellow vests. Moreover, contrary to what you may have seen in the media, in their hearts, the police are with the protestors.

The demonstrators are in fact the friends, neighbors and families of the police arrayed against them. Except in extreme cases, the police are standing aside and leaving the gilet jaunes in charge.

Posted in Global warming and climate change policy, Oppressive government, Rafe | 29 Comments

The mirage of lower renewable energy driven electricity prices

Josh Frydenberg claimed the last week in Parliament was a poor one for the opposition and the triumph for the government. He made mention of the Opposition’s inability to get Peter Dutton and its failure to deliver its preferred outcomes regarding Manus Island detainees.

He also mentioned as a success the government’s energy policy proposals.  One such proposal, the “Prohibiting Market Misconduct Bill 2018”, was clearly not a success for the government. The proposal was referred to the Senate for investigation and cannot emerge from that process until the least April of next year.

Wrapped in the normal cautious verbiage about “last resort” measures, the Bill is a desperate attempt to see electricity prices reduced before the next election. To do so it forces retailers to reduce their prices and generators to ensure they operate their businesses “fairly”.  With thirty odd retailers around the nation and dozens of differently owned generators, the electricity market is just about the least susceptible to the monopoly activities against which these measures were targeted. The provisions would allow the government to have the ACCC examine suspect behaviour which could result in fines of $10 million or divestiture.  Divestiture is clearly aimed at AGL’s Liddell Power Station.

Among the media outlets criticising the bill was the AFR. Ben Potter assailed it as ‘socialist’. The AFR had previously not opposed the carbon tax, renewable subsidies or the NEG all of which involved the expropriation of fossil fuel generator investments.  It could be that such epithets are reserved for actions against industries that do not meet the PC test!

The government’s nightmare is that its promised fall in prices will not materialise.  And such fears are justified.  Notwithstanding the chimeric bonanza of ever cheapening supplies of wind and solar, wholesale prices remain at double those that prevailed prior to the impact of subsidised renewables destroying the competitive market that had been developed.

And there was no sign of Australia’s supposed solar induced competitive advantage officials and lobbyists alike had promised (in fact Australia enjoys no such advantage except in the remote interior).

In addition to these wholesale costs, the market manager feels obliged to incur other costs for frequency control and system strength to compensate for the inadequacies of renewable energy in providing these essential components of a stable supply.  These include compensation to gas generators in South Australia which, due to the inherent deficiencies of wind and solar, are forced to stay on-line against their wishes; such “directions” operate around 40 per cent of the time.  Origin Energy maintained that the prospects of forced divestment and price controls had caused it to shelve plans for an expansion of its Quarantine gas generator in South Australia but that program would face far greater deterrence from being subject to de facto control by the market operator.

In the medium future Origin indicated a pause in its contracting for new wind as a result of the fall in the subsidy price expected from 2020.  The current subsidy of over $60 per MWh (as a point of reference the total electricity price averaged $40 per MWh three years ago) falls to under $20 on the forward market for 2021/2.  At that point the forward price for baseload power also shows a fall, from the current $90 per MWh to $65.  But wind, aside from the costs it is able to “socialise”, needs to have firming contracts, costing maybe $30 per MWh.  Such firmness would be mandatory under the reliability arm of the foundering National Energy Guarantee but would also be insisted upon by retailers in the absence of such statutory requirements.

Someone ostensibly less concerned about the effect of high prices is Sanjeev Gupta who, with the PM, the Leader of the Opposition and the SA Premier, has just announced a 10 million ton a year steel mill for Wyalla based on renewable power and financed by those ever-compliant Chinese (after, of course ,a $40 million feasibility study)! That’s twice the current Australian output. It is unclear who is supplying the power and how much it costs.  But one bonus for the existing facility is promised anti-dumping action and government purchasing preferences, thereby raising all Australian steel prices!

Desperate politicians happily provide high priced protection for the favourable media publicity on the back of a mirage of future prosperity.



Posted in Uncategorized | 40 Comments


Courtesy of Facebook notifications. Don’t forget mine is 12 July in case you are not on Facebook to be reminded.

Posted in Gratuitous Advertising | 21 Comments