Saturday Salon 10/3

1. Getting better all the time

On the whole, that’s how it is on just about everything, according the Gregg Easterbrook in his book It’s Better than It Looks: Reasons for Optimism in an Age of Fear.

Readers here will be happy to know that there is more burnable oil and gas available now than ever before, gun homicide has been declining in the US, the masses in American have been getting richer in terms of purchasing power by a steady 3 per cent each year, plus life expectancy is increasing everywhere. Our good fortune began with the industrial revolution and there is no good reason why it should end.

Sure there are challenges with inequality and climate change, but he devoted a whole chapter on each, telling how they can be fixed.

So he told NPR, who pretty much let him rip unchallenged, as did the ABC in the Big Ideas program.

Thank goodness for Angus Deaton at the New York Times who says that he too is an optimist, on balance, but, he says:

    I found myself frustrated with “It’s Better Than It Looks” because Easterbrook is such an unreliable witness. Much of what he says is right, but much is not, or is wishful thinking, or sounds wildly optimistic, but does not seem to be documented and so is uncheckable.

So you can’t really believe any of it, because you don’t know which bits are wrong.

He says Easterbrook tends to brush aside catastrophes along the way. For example, he says life expectancy did not “decline much during wars or health alarms such as the AIDS spread.”

It’s just that HIV/AIDS:

    has been responsible so far for the deaths of around 35 million people, and it brought life expectancy down in around 20 African countries, including South Africa (10 years), Botswana and Swaziland (14 years each).

Deason says we may live well, but still may be dangerously close to a cliff.

Deason was especially cranky about Easterbrook’s rosy account of contemporary middle-class prosperity.

    One surprising assertion is that “recent Census Bureau statistics show if lower taxes, higher benefits and consumer prices are taken into account, since 2000, middle-class buying power was rising at about the postwar average of about 3 percent per year.”

Deason says the census document says no such thing. He says, fair enough 750 million people have been removed from destitution in China in 30 years, one of the greatest human achievements ever, albeit with rising inequality, but unlike the Chinese poor ordinary people in the US are not doing better.

2. Laura Tingle is coming to the ABC

It’s true:

    Laura Tingle has been made chief political correspondent of the ABC’s 7.30 program.

She’s handed in her notice, but has to serve out her time. All we know is that it will be “soon”.

Back in 2010 just after the election and before the Gillard minority government had been formed, Laura Tingle wrote:

There are two possible explanations for how an opposition presenting itself as an alternative government could end up with an $11 billion hole in the cost of its election commitments.

One is that they are liars, the other is that they are clunkheads. Actually there is a third explanation: they are liars and clunkheads.

But whatever the combination, they are not fit to govern. (Emphasis added)

Rob Oakeshott said Tingle’s assessment influenced him to consider throwing his lot in with Julia Gillard.

Let’s hope she continues to say what she means and is not infected with ABC requirements for ‘balance’.

3. Trump to talk to Rocket Man

Asia editor for The Times Richard Lloyd Parry in Rush to meet Kim Jong‑un shows Donald Trump is gambling on art of the deal says that for nearly two decades US governments held to a consistent slogan on dealing with North Korea: no rewards for bad behaviour. However,

    in a blaze of confusion and improvisation, [Trump] gave the promise of one of the biggest diplomatic concessions of all: a meeting with the North Korean leader, Kim Jong-un.

So:

    Mr Trump’s decision to meet Mr Kim “by May”, without either the time or personnel to prepare the ground, is a huge gamble, however, that could end up wasting America’s diplomatic capital without any realistic prospect of reward.

    “We need to talk to North Korea,” the nuclear deterrence expert Jeffrey Lewis wrote today. “But Kim is not inviting Trump so that he can surrender North Korea’s weapons. Kim is inviting Trump to demonstrate that his investment in nuclear and missile capabilities has forced the United States to treat him as an equal.”

Apparently Trump has yet to appoint an envoy to South Korea.

I suspect the sanctions have bitten hard enough for Kim Jong‑un to want to talk. You can probably thank China for that. However, he’s now doing it from a position of strength. We’ll have to hope Trump is up to the task.

Meanwhile, best to remember that at present they are only talking about talking. Doesn’t mean they will.

4. Tingle on Trump

Laura Tingle says that according to Washington Post columnist Aaron Blake:

    Trump’s decision to launch a potential trade war “was born out of anger at other simmering issues and the result of a broken internal process that has failed to deliver him consensus views that represent the best advice of his team”.

    On Wednesday evening, the President became “unglued”, leading Blake to ask “if Trump would launch a trade war because he’s angry, what about a real war?”

Kim Beazley says that Trump has the need to periodically biff someone in the school yard. So maybe we got lucky that he just sublimated that urge on a trade war.

Tingle says that Trump’s tax cuts were built on budget deficits of 5 per cent GDP stretching out forever into the future. In terms of US debt they were simply unsustainable.

Unsustainable.

As well as being a stimulus to an economy already growing by 3 per cent pa.

Now with the tariffs, George Dubya Bush imposed tariffs of 8 to 30 per cent on steel in 2002. They were estimated to have cost 200,000 US jobs by 18 months later when Bush lifted them.

Tingle says China and the EU should heed RBA governor Phil Lowe’s advice and admirably “sit still” to avoid a trade war, unless they want to damage themselves as well as the US.

One commentator said today it was like they were all in a boat. One shoots a hole in the bottom. They others don’t like it, so they also shoot holes in the bottom. Or maybe it’s a case of when elephants fight, it is the grass that suffers.

Tingle says it’s a threat to the system of US led multilateralism we’ve live under since 1945. You might think it sucks, but we’ve done well out of it.

However, if Trump renders it broken, special deals with the US won’t save us, and once broken it won’t simply snap back into place this time if Trump changes his mind.

It might be time to put in a call to Lisa Simpson:

67 thoughts on “Saturday Salon 10/3”

  1. Does anybody else see parallels in the Greg Easterbrook v Angus Deaton debate to the Global Warming debate ?

    GE is pointing to an overall global trend of warming and AD is countering with examples of devastating cold snaps.

  2. Apologies for reprising the Trump trade thing. There is now a big sigh of relief that Trump is making an exception for Australia. What Tingle was saying, however, is that the course Trump is going down could break the whole system, which will have consequences we can’t avoid.

    I think the real problem is that Trump is using security reasons for his action, not economic reasons as such. This taken together with his is bedrock ‘America first’ policy means he is likely to give the finger to the WTO, which would effectively break the international trading system as we know it.

    Warwick McKibbin also sees the possible destruction of the WTO as an outcome if the big players retaliate with tariffs. However, he has another idea. The big players could sell all their US Treasury bonds:

    There is an alternative response for countries and it makes a lot more sense. A much smarter response which might even have unintended positive consequences for the world outside the US economy, is to consider again, the source of the US current account deficit. For decades trillions of dollars of global savings has been pouring into buying US treasury bills and other government securities. This effectively subsidizes the borrowing costs of the US government relative to what it would pay if it only had access to US domestic savings. It also drives down the cost of US corporations borrowing in domestic markets. This subsidy by foreigners to the US government has been made at the expense of investment that could have been made in any number of advanced and developing countries. This could have gone into infrastructure projects with much higher rates of return than offered by the US Treasury.

    If the major creditor countries left their tariff rates unchanged and instead decided to sell their holdings of US government securities and invest in other countries, the US would quickly discover the fundamental error in the economic logic underpinning the Trump Administration. The US dollar would drop sharply, US long bonds would rise by several hundred basis points until US savings rose and US investment fell so as to move the trade position closer to balance. US exports would rise and imports would fall. US firms, consumers and the government would be far worse off due to higher borrowing costs but they would sell more for cheaper prices to foreigners!. The US would have to learn to live within its means if it no longer wanted to have the benefits of access to an open global trading system. The lesson would be that a country that leverages by borrowing for decades in order to sustain consumption and investment levels that are far removed from fundamentals, eventually has to pay. Is it not surprising that many of the billionaires in the Trump administration don’t understand this logic because the US economy has mirrored their own financial strategies of borrowing heavily, subsidized by foreigners and leveraging those loans to generate enormous wealth.

    Of course, this would be a dramatic step, but it would not violate the principals of the WTO. It would enable market forces to lead to an adjustment in the US that has been needed for decades. It would also avoid the inevitable train wreck coming from future trillion dollar US fiscal deficits that will cause massive future increases in the US trade deficit. The US does not save on net, so therefore fiscal deficits have to be financed by foreigners implying rising trade deficits. On the plus side it might even provide emerging countries with needed financing depending on how the funding was allocated. This would be a much better outcome for these countries than a global trade war. It might even teach mercantilists of the world that their model of trade is actually wrong.

    I doubt that any of this has escaped the leaders of the major countries who have advisers who have completed economics 101. I am just stating the obvious with a hope of avoiding a potential conflict.

    In short, the US has been making a mozza and dining out by leveraging the special place it has had in the international system. If countries ignored them and bought each other’s bonds, the US would suffer a significant depreciation of its relative worth in the world. They would be poorer, and less significant, which is probably what needs to happen in the long run.

    It’s just that the outcome would be pretty much the obverse of what Trump had in mind when spruiking “America first”.

  3. BilB
    To clarify, I’m talking parallels of debate.
    If consistent analytics of argument is upheld, AD is a prosperity denier.

  4. Brian
    The more I look into the Trump/tariff thing the more I see it as a vote seeking, Trudeau bitch slap exercise.
    And maybe to get the media to eviserate themselves on Bernie Sandernomics, maybe…..

  5. Mr A,
    We shall see, it changes every day. Trump and Sanders both hate NAFTA with a passion. Their on a unity ticket there.

    He’s got most of the known Worlds leaders and media to beg for exemption and poo poo tariffs, that’s a positive.
    It won’t bother China or Russia that are far more protectionist than US.

  6. Jumpy GE is agreeing with your “thank goodness for the rich people let there be more of them” thinking. Overall wealth has increased and there are fewer people dying of starvation is the GE line, where AD is pointing out that most of that wealth is in fewer hands and more people are suffering relatively.

    That is not a parallel to the denialist’s attack on science over global warming argument, particularly as your use of cold snaps (presumably US and Europe), which AD does not mention at all, are infact an extreme effect of global warming which, as you are no doubt unaware, were occuring at the same time as the Arctic was experiencing a heat wave with above zero temperatures in the dead of winter and Arctic ice volume and extent is diminishing rapidly.

  7. BilB, no need to flail, overall extreme poverty and overall life expectancy is trending north.
    That is, either because of or despite wealth inequality, a good thing.
    Optimism is warranted.

  8. Mr Jumpy

    Would you care to engage with BilB’s second paragraph at 4.21pm? You know, the one about the Arctic experiencing “north of zero” temperatures.

    north = above
    Temperatures in Celsius
    Arctic = very far north

    Cheerio
    (an Australian greeting)

  9. Mr A
    After listening to the links provided by Brian im following the optimism/pessimism route and parallels within the Global warming debate.

    I’m resisting being sucked in to trollers rabbit holes.

    Cheerio
    ( an Australian little red sausage or American cereal)

  10. Happy days are here again.

    How great it is to learn that the era of brutality that started with the destruction of Biafra, the reign of the Khmer Rouge,and the multi-faceted conflict in the Lebanon, is finally over! The appalling atrocities being committed each day in Syria, Iraq and Yemen must be figments of our imagination.

    Let’s hope Easterbrook has an opportunity to visit planet Earth sometime soon.

  11. Happy days are here again.

    How great it is to learn that the era of brutality that started with the destruction of Biafra, the reign of the Khmer Rouge,and the multi-faceted conflict in the Lebanon, is finally over! The appalling atrocities being committed each day in Syria, Iraq and Yemen must be figments of our imagination.

    Let’s hope Easterbrook has an opportunity to visit planet Earth sometime soon.

    Optimism and hope are great – delusion and fantasy are not.

  12. I posted about Easterbook mainly to let people know, if the heard him having been promoted by the ABC, they’d know that he is completely unreliable.

    Completely.

    I’ve recently heard from another source that life expectancy is falling in the US, so put me in the ‘don’t know’ category.

  13. Last year the US trade deficit with China increased by 8% to reach $375 billion pa. In addition:

    Last year, an independent commission on US intellectual property estimated that the annual cost to the economy in counterfeit goods, pirated software, and theft of trade secrets from all sources exceeds $US225 billion and could be as high as $US600 billion.

    Apparently Trump wants China’s trade surplus to reduce by $100 billion pa. Easier said than done. China is also investing considerable amounts within the US, creating jobs there, but extracting a profit.

    Geoff Winestock has had a look at the implications of the tariffs. This is how countries could be affected:

    Canada has an exemption for now, but only because NAFTA is being re-negotiated.

    Trump has chosen for his opening round in a trade war with China a sector that will hurt his allies more than China.

    It may well have to do with the Pennsylvania by-election, where a Republican won a seat including vast swathes of coal country that were ancestrally Democratic. The elected Republican congressman Tim Murphy was forced to step down after it was revealed that he urged a woman with whom he was conducting an extramarital affair to have an abortion.

  14. Tonight’s Four Corners is on Big Australia: Are we ready?

    The numbers tell the story. Australia’s population is growing fast. Across the country, we’ve added almost 400,000 people in the last year alone. The populations of Melbourne, Sydney, Brisbane and Perth have expanded by nearly three million extra people in the last 10 years. And we’re feeling the strain.

    It has huge implications for infrastructure and services – Mass trasit, aged care facilities, schools etc. Victoria is building a high rise school with playing facilities on the second and fourth floors.

  15. China theft of IP gas been going on for decades. Australian textbooks disapperaed into the PRC and mo royalties ever emerged.

    And that’s just a tiny segment of the problem.

    Isn’t the WTO meant to sort this out? ?

  16. Brian (Re: MARCH 12, 2018 AT 10:05 AM):

    Tonight’s Four Corners is on Big Australia: Are we ready?

    And after on Q&A will be Panellists:
    Bob Carr, Former Foreign Minister;
    Tim Flannery, Chief Councillor of the Climate Council;
    Jane Fitzgerald, Property Council of Australia, NSW;
    John Daley, CEO Grattan Institute; and
    Jiyoung Song, Asia Institute of the University of Melbourne.

  17. Ah! “Free Trade” and a floating currency.
    A system designed by big multinationals s for multi nationals.
    A world where dumping can be very attractive for businesses where marginal cost of production is well below the average cost – and it takes yonks for anti-dumping cases to be heard. Yonks that are long enough for the dumped on business to go out of business.
    A world where Germany can run endless trade surpluses because the value of the Euro is held down because of what is happening to the Greek economy.
    A world where the $Aus has ranged against the $US from a value below 50 cents US to above $US1.00.
    A world where it would make more sense for countries to have the power to control imports directly provided that the result of this control isn’t long term trade surpluses?

  18. I have heard Easterbrook on RN and remember a few times thinking ‘I must check those figures/findings’ and ‘that can’t be right’. He does not back up his claims on progress and most are not easily verifiable. Granted he is a flash writer and thinker, though many skeptical thinkers find him unconvincing, including myself and I am a deliberate fencesitter on that topic

    Apart of his lack in crucial supportive facts and incongruent argument, Easterbrook also is also trapped in a logical fallacy, as in There is no contradiction between having the best possible life and living on the edge of a precipice.. It is often in the nature of things to look brighter before they go out, from physical flames to over reach of thriving populations. From a risk management point of view that logical fallacy is a potential grave error in assumptions.

    So to me it is never down to optimism or pessimism, particularly in relation to the risks from consequences of escalating CO2 emissions to a increasingly prosperous human society, if that is your preferred measuring scale. Or put it this way, I would be uncomfortable flying with a happy-go -lucky jet pilot as much as with an overly anxious and distressed one while the plane is heading into rough weather. No room for emotions when only critical faculties will do. Though optimisms and pessimism are important emotional tools we carry in our mental tool kit, because now and then in the right circumstances they have proven to be evolutionary beneficial. However, once such feelings get entrenched and are not amendable to reasonable facts and rationally made arguments, they tend to be counterproductive and potentially fatal.

    In that context, I highly recommend Steve Fuller on post-truth (and a reasonable argument why pessimism has its value in certain circumstances) on the Philosopher’s Zone on RN. For many of us, ‘post-truth’ represents everything that’s wrong with the world today: fake news, social media hysteria, and a political culture where appeals to prejudice and emotion trump rational policy discussion. But for Steve Fuller, post-truth is neither new nor particularly bad. It’s just a by-product of the institutionalisation of knowledge—including scientific knowledge.

  19. Ootz: Modern transport means that local crop failures do not lead to local hunger deaths for most of the world. Three consequences:
    We store less food per capita and assume transport will solve the problem.
    Local crop failures no longer help control world population.
    We get to believe we are bullet proof and don’t need to worry about the health of agriculture.
    When a big crisis does come it can lead to a massive crisis, particularly if it corresponds to a transport crisis. (Think truck drivers decimated by a killer flu.)
    The other really scary thing is that some of the countries who could have a massive food crisis are nuclear powers. Hard to think of those countries meekly accepting their fate.

  20. “Isn’t the value of a floating currency set by the market?”
    In your dreams. 🙂
    That’s what is supposed to happen – but this is Australia; we do things differently here.

    Jumpy:
    So Rhodes Scholar Hawke and long-time boss-cocky of the ACTU had no idea what would happen if he floated the AUD? Yeah. Right. Of course he was as innocent as a new-born babe.

    The old saying, “If it ain’t broke, don’t fix it” applied well-and-truly to the floating of the Australian dollar. Leaving aside all the propaganda and the cult-beliefs, what would have happened if the Australian dollar had NOT been floated?

  21. It’s manipulated in many ways.
    Reserve Banks mainly but without going into issuances of Treasury Bond and the like, I’d rather Brian explain that part of the market manipulation to you.
    If he would,but it’s all available by googleing.
    To be honest I’m not as educated as I should be on it either

  22. So instead of the Reserve Bank setting the exchange rate of our currency (as happened before the currency was floated) the Reserve Bank now manipulates the exchange rate of the currency?

  23. GB
    Governments are the only entities that can float or set currency rates, take it up with them.

    In answer to what would have happened, I don’t know.
    Do you ?
    Maybe find a comparable Country that didn’t and see.

  24. I don’t know enough to get into the issue of floating currencies. Of importance in terms of the post, the Chinese pegged their currency to the US dollar from 1995 to 2005, and then it floated within a band. The currency is still largely pegged as explained here. Hope it’s up to date.

    You can bet that what has been done suits the Chinese.

    This is important:

    A large part of China’s reserves are denominated in U.S. dollars and are invested in U.S. treasury bonds, which are deemed to be a safe haven for capital among major central banks around the globe. It is estimated that China is the largest single nation holder of U.S. bonds, with approximately US$1.25 trillion of these securities.

    Obviously the Chinese have a big enough stake to jerk the $US around, but would probably suffer damage in the process.

    The US$ has effectively been the world’s reserve currency since the gold standard was made redundant by Richard Nixon in 1971. So a lot of trade is done by nominating value in US$.

    You can bet that by 2050 traders will be able to use the Chinese Yuan instead. It’s how we get there and what gets jerked around on the way.

    I think the main way our Reserve Bank influences the the value of the dollar is (a) through interest rates (b) through jawboning, (c) they actually trade the $A to influence the market.

    The problem with the last is that they don’t have enough to make a lot of difference, and also the Government expects a trading profit from them, which is a line in the budget.

    Don’t rely 100% on any of the above.

  25. I watched the Four Corners program plus Q&A. Not sure it was a good expenditure of time. John Daley was worth listening to, Bob Carr not so much, except he made a sensible statement at the end. It was more than a little Sydney-centric.

    Emma Griffiths ran an excellent program in Brisbane and SEQ in her Focus segment today. She had better talent than Q&A, using people who were actually working in the area including the Infrastructure Australia CEO.

    The strong message that came from Daley was that Australia’s big cities can fit a lot more people in by densification. Also that boosting regional areas to solve big city problems basically doesn’t work.

    Brisbane has the advantage of having a large city council, though the concept of “Greater Brisbane” involves contiguous councils. Seems Greater Brisbane is heading for 4 million and SEQ for 6 million.

    I get the impression that Brisbane and SEQ are in better shape than Sydney, because of our larger BCC concept together with SEQ regional planning under the auspices of the state government. Room for improvement of course, but Sydney seems largely fragmented and politicised, apart from a recent Western Sydney initiative which includes eight councils plus state and Commonwealth governments.

  26. About 20 years ago, when I was telling a university student that I had thought exchange rates adjusted according to the value of traded goods and services, she said, “Well, that was how it used to be, but my lecturer says that these days, investment and speculative capital flows across the globe are so huge and capricious, that they outweigh the trade effects.”

    Is that what your reference to Mr Soros was about, Jumpy?

  27. Brian: (Re: MARCH 12, 2018 AT 11:57 PM):

    The strong message that came from Daley was that Australia’s big cities can fit a lot more people in by densification. Also that boosting regional areas to solve big city problems basically doesn’t work.

    Yesterday, around midday, I submitted 8 web questions to the Q&A website. For some reason the latest approved question published so far this morning is at 07 Mar 2018 10:35:42am.

    One of my questions, lodged yesterday at 12:01pm was:

    South Africa’s Cape Town water supply may be exhausted/depleted mid-April, due to drought; driest since 1933.

    Australia’s Sydney region experienced a severe drought between 1934 and 1942, prompting the building of Warragamba Dam, which began in 1948, and was completed in 1960.

    Per ABS: Sydney’s population in 1961 was at 2,183,231; and by June 2016, had reached 5,005,400 people.

    Is Sydney reaching limits to growth? Can Sydney’s water supply sustain further population growth? Is Cape Town where Sydney could be in future?

    The fundamentals to sustain human life are access to:

    1. Clean, breathable air;
    2. Adequate shelter and clothing;
    3. Clean/potable water;
    4. Adequate nutritious food;
    5. Adequate sanitation/healthcare.

    In Sydney and Melbourne adequate shelter is becoming unaffordable for many. Where’s the extra water and food coming from to sustain the added multitudes?

    More energy is required to enable these processes. Are we really planning for all this? Or is it all going to miraculously happen? Add climate change into the mix to mess with the apparent assumptions about sustaining more water and food supplies for the increasing population.

    I really don’t think our leaders/”experts” have a handle on this – mostly wishful thinking! Blind faith in “technology will fix our problems” seems to be the answer from some. I’m not so sure technology will fix it; but prove me wrong.

  28. Ambi, I think Jumpy is referring to the time George Soros took the Bank of England to the cleaners through currency trading. Nothing illegal, and I think you’ll find that Soros believes he shouldn’t have been able to do it.

    I think your university friend is referring to the fact that around 98% of currency trading is just currency trading, very much a casino on a zero sum basis with no economic utility at all, but defended because companies need a market on which they can hedge for various reasons to minimize risk.

    There was a Tobin tax transaction proposal, but I’ve fallen off the pace with that stuff and haven’t kept up.

  29. And another question lodged at Q&A 12:14pm yesterday:

    Phosphorus:
     Humanity can’t produce food without it –essential as water/carbon/oxygen/nitrogen;
     Nine billion people to feed by 2050, with growing appetites for meat and dairy, means increasing demand;
     It’s finite, with the world’s primary source from phosphate rock, having taken millions of years to form/accumulate;
     All farmers need it, yet just five countries control 88% of the world’s remaining rock reserves;
     Four-fifths is lost/wasted in the mine-to-farm-to-fork supply-chain;
     Phosphate rock prices spiked 800% in 2008.
    Is humanity approaching limits to growth? Discuss.

  30. Australia went from the post war period where the currency value only changed by government decision (and was rarely changed) to system where it was changed more often by committee decision to the floating currency system introduced by Keating.
    Fixed worked OK when protection, award wages and currency movement controls meant that the economy was advancing in a stable manner and there were no speculators powerful enough to attack the currency.
    Floating solved some of the problems of a tightly controlled currency but the speed and size of some of the changes made doing business in the world economy risky for many.
    It is worth noticing that China is doing rather well these days with a controlled currency compared with floaters like the US.

  31. Oddity Corner

    A film curiously titled “Chappaquiddick” will soon be screened at the Apia Young at Heart Film Festival at Palace Cinemas.

    Well, Ted Kennedy certainly proved himself to be very young at heart, and a strong swimmer, though not a skilful driver nor a cautious drinker.

    I heard a while back that so many souvenir hunters h ad whittled a little piece of The Bridge At Chappaquiddick, that it had become quite unsound.

    Politician? Young woman?
    An age old story, seemingly.

  32. Brian (Re: 1. Getting better all the time):

    Readers here will be happy to know that there is more burnable oil and gas available now than ever before…

    Who says? Gregg Easterbrook? Is that globally, or specifically US? What if the US Energy Information Administration (EIA) projections are wrong?

    And what about climate change and the Paris Climate Agreement? Are they just inconvenient issues to ignore?

    Angus Deaton at the New York Times:

    I found myself frustrated with “It’s Better Than It Looks” because Easterbrook is such an unreliable witness. Much of what he says is right, but much is not, or is wishful thinking, or sounds wildly optimistic, but does not seem to be documented and so is uncheckable.

    Perhaps Easterbrook’s book should be classified as fiction?

  33. Yes, Geoff M at 3.47pm

    and following on from new policies announced (particularly in Europe?) by cities, such as Oxford, and some nations.

    ***
    Thanks for your reference to the Bank of England with Mr Soros, Brian.

    A bit of googling by consenting adults revealed the background, linked to German reunification in the early 1990s and an obscure European monetary agreement. There is a BBC doco “Black Wednesday” (1997) on YouTube too.

    Crash of £
    Poor show!!

  34. Mr A

    Don’t bother Brian atm, he’s probably seeing how much Shortbowan is going to cost his self managed fund though double taxation on some of his investments.

    Can’t be easy on him as a self manager.

    Then again, if he has to pay more, he’s will gladly.

  35. Mr J

    I heard a tax bloke from a big law firm on the wireless this arvo.

    He said, changing taxation rules on negative gearing is small beer.
    He reckons changing the rules on dividend imputation (franking credits) is small beer.

    He says what we need is Great Big Tax Reform!! …. not fiddling around at the edges….

    and he reckoned most politicians are too scared to try! [not word for word, just my summary]

    Never mind bothering Brian; does the above bother you??

  36. PS Jumpy

    I’m going to look at the AFR tomorrow to try and figure out what the ALP announcement means. So far, various journos, Mr Bowen and Leigh Sales have left me befuddled.

  37. If you, on the other hand are non-fuddled, perhaps you might share your knowledge here?

    Ta.

  38. Further to my comment of March 12, 2018 at 8:42 pm the National Museum of Australia explains that before the dollar was floated its value was always pegged to that of another currency (or basket of currencies) and the actual value of the dollar was determined daily by a morning meeting of the Governor of the Reserve Bank and a bunch of bureaucrats.

    The Reserve Bank could then use its foreign currency reserves to intervene in the market and manipulate the level of the dollar.

    When the currency was floated, it

    …meant that the dollar was now valued through the supply and demand of money within world currency markets.

    Something I thought would have met with Jumpy’s enthusiastic approval, particularly since

    By floating the dollar, the Reserve Bank gave up any ability to control the amount of cash in money markets and thus influence the dollar’s exchange rate.

    The whole thing is worth a read. (You may need to click on “More on Australian dollar floated”).

  39. Mr A
    I’ve heard lots of lawyers say stupid incorrect rubbish but the Great Big Tax Reform thang is, in my view, correct. Simplify it to save money for everyone.

    Today I heard on the wireless The Kouk worried about the deficit again, when ALP/greens were in charge of treasury he said we should have higher debt!!

    I listen to a lot of ABC radio too, lots of rubbish on there.

  40. Fun fact,

    An Ethiopian King was once the richest man in the World, had hundreds of thousands of white slaves.

    Another fun fact is the origin of the word ” slave”.

  41. Fun fact ::

    With headphones you can listen to radio while drowning out machinery noise e.g. lawnmower, chainsaw, chipper.

    Very useful, radio.
    mille grazie, Signor Marconi

  42. If the lawyers you listened to spouted incorrect rubbish, maybe you need to choose better lawyers?

    The one I heard spends his working days studying taxes and tax law. I prefer to listen to experts.

    If the cat kills the mice, who cares what colour it is?” Mr Deng.

    Better red than expert!” Mr Mao.

  43. Jumpy, on the dividend imputation thing, I don’t have self-managed super, nor does my wife. If you do you need to submit a tax return equivalent to what companies do, and it’s not for the faint hearted.

    It does affect us as direct share investors, however, and we will be between $3 and $4,000 down the crapper. I don’t have to spend time investigating it. It’s as plain as day.

    Ambi, if you understand dividend imputation, it remains in place exactly as now. So tax paid by a company will still be added to your income, and then the same amount is taken off your tax owing at the end. So the dividend imputation thing may still reduce the tax you owe to nothing. It’s just that the balance when it reaches zero will stop there and the tax person won’t be sending you a cheque.

    I think most of the people affected are pretty rich, but some who are getting less than the average wage, part pensioners or even full pensioners will be affected. I feel sorry for those who planned their retirement on existing rules and will be materially affected. There will be a few, but Labor will have done a calculus on the electoral damage, and you can bet it will be slight.

    The true extent is not known however, because the next chapter Shorten and Bowen reveal will include tax cuts for low and medium income people. They could be in a position to outbid the LNP on this and even bring in a surplus earlier than Scomo, Matthias and Mal.

  44. Trump has fired Rex Tillerson, replaced him with CIA Director Mike Pompeo and replaced Pompeo with Gina Hapsel, the deputy director at the CIA, to become the first woman to run the spy agency, if confirmed.

  45. Thanks for your detailed and clear explanation, Brian.
    We too would be “down” somewhat.

    “I owe, I owe
    So off to work I go!”

  46. Brian:
    So, like his loony “predecessor”, our age’s Kaiser Wilhelm III has dropped his pilot too
    Unlike his emperor’s usual outbursts and thought-bubbles , Tillerson’s response speech was a model of grace and dignity.

    Should we, here in Australia, continue to depend on Trump for our survival? What a born loser. Wonder if the Yanks might be better off swapping him for Berlesconi, before it is too late?

    Jumpy:
    “Governments are the only entities that can float or set currency rates, take it up with them”.
    Ha -ha-ha-ha. Your faith is delightful.

    Australia without Hawke’s rush to float the AUD? Prosperous and respected despite repeated virulent attacks by the international finance racketeers. It would have been a bumpy ride and required political strength, of course, but at least we would now have vibrant industry and a high standard of living for all, not just for a favoured few. Australia is not Venezuela – and if Hawke had not floated our currency, Australia would never the same fate as Venezuela.

  47. Vale Stephen Hawking, who perched his wheelchair on the shoulders of giants; resilient, humane, brilliant.

  48. Oh BTW

    If the announced ALP policy on franked share dividends is intended to prevent huge benefits flowing to very wealthy Australians through the superannuation system then why not design it with a Cap or means test?? to prevent reducing the dividend income of some retirees of modest means by up to 30%?

    I thought the ALP were masters of the means test?

    John Hewson says the Howard/Costello extension of PJK franked dividend design, to allow tax refunds, was suggested as a “sweetener” when a tax on family trusts was proposed.

    Tax on trusts dropped.
    Sweetener retained.

    Nice one, John Winston!!

  49. This is a Sam Carana Arctic News 2007 post in which he lists 10 dangers of climate change. Very sobering as every item except famine and disease is well under way.

    “Many people wrongly believe that the only way they will be affected by global warming, will be a tiny sea level rise over many decades. But there are at least ten dangers of global warming. Events that to many may seem to be unrelated, can combine to make things progressively worse, with one danger feeding and reinforcing the next one”

    1. Flooding
    2. Shortage of water
    3. Famine and disease
    4. Migration and refugees
    5. Collapse of the financial system
    6. Economic collapse
    7. War and civil unrest
    8. Pollution, in particular as a result of nuclear war, fallout and waste
    9. Tipping points
    10. Panic

    He accurately predicts a move towards dictatorships and a revived risk of nuclear war.

    https://arctic-news.blogspot.com.au/p/ten-dangers-of-global-warming.html

  50. On the general subject of whether it’s getting better, I draw your attention to some posts at crudeoilpeak.info:

    Posted on March 14, NSW coal power maxed out in hot summer (part 1), includes:

    The Australian public has no idea how tight Australia’s power generation is in hot summers. A recent 4 corners program on population growth driven by immigration asked:

    Big Australia: Are we ready? http://www.abc.net.au/4corners/big-australia:-are-we-ready/9540586

    and a Q&A program on the same evening debated:

    Big Australia https://tv.press.abc.net.au/big-australia

    No mention was made of energy as a limiting factor for growth. Only Tim Flannery reminded the audience of water shortages in a warming world which defines Australia’s carrying capacity. Dr Jay Song said there is a lot of renewable energy. Well, Australia is coal addicted. 55% of electricity is from black coal, 19% from brown coal, 9% from gas, 7% from wind, and only 4% from solar (data from late summer 2018).

    And posted on March 16, NSW coal power maxed out in hot summer (part 2), concludes with:

    The energy illiteracy and contradictions in planning are only too obvious. The NSW government is doing exactly the opposite of what it should do, namely to invest in renewable energy and to curb current power demand. It should also ask the Federal government to reduce immigration because a growing population is on a collision course with limited energy supplies including, of course, oil and liquid fuels.

    Well said.

    Very few people seem to be able to join up the dots.

  51. Just heard the Greens leader speaking in the Senate, on a bill to ban the use of Federal funds to purchase or subsidise any coal-fired power station.

    Senator Di Natale claimed that the Liddell power station was being kept going by spit. …. Suggested that its owners were making sensible financial decisions.

    Called coal-fired power a “dying technology” akin to dial up internet, typewriters, fax machines etc.

    Emphasised issues of cost and investing for the future. Said Australia is a laggard nation.

  52. On the general subject of whether it’s getting better, I draw your attentions to Peter Hannam’s op-ed in today’s The Sydney Morning Herald paper edition. The online link is here, headlined Turnbull knows better than to deny fire weather link to climate change. This piece begins with:

    Raising the issue of the role of climate change in extreme weather events is always a delicate matter for families battling grief over lost homes and emergency service teams managing the aftermath.

    But that doesn’t mean the rest of us can’t have a discussion about the issues. If not now, when?

    And ends with:

    “Nature hurls her worst at us … always will and always has,” Turnbull said.

    The worst, though, will in some cases get more extreme, and pretending otherwise is not leadership.

    But what would the scientists know? The deniers suggest climate change is a hoax/conspiracy. But as ABC Four Corners reported recently:

    Mounting evidence suggests our changing climate is having an impact on everything – from what we grow, eat and drink, to house prices and the cost of insurance.

    When will our politicians wake-up?

  53. Here’s another interesting SMH op-ed from Ross Gittins from a few days ago, headlined Immigration the cheap and nasty way to grow the economy, link here. The final line concludes with:

    High immigration may suit our rent-seeking business people, but it’s a hell of a way to pursue the professed benefits of economic growth.

    Indeed!

  54. I thought it was disappointing, indeed egregious for Turnbull to say talking about climate change was to politicise the tragedy.

    Turnbull fancies himself as the smartest guy in the room, and would know what the real score is. So it’s him being political. In the real world:

    fire authorities across Australia know the bushfire season is getting longer. So, too, is the frequency, intensity and duration of heatwaves.

  55. GM: That was a good one on immigration. A wind back needs to be planned carefully so that it doesn’t lead to a sudden collapse of the building industry.

  56. John Davidson (Re: MARCH 22, 2018 AT 9:20 PM):

    A wind back needs to be planned carefully…

    Indeed. But there doesn’t seem to be any effective planning – it’s all about continual growth.

    In the SMH, online article headlined New migrants drive NSW population growth as birth rate slumps, link here, it includes:

    The figures revealed the number of births per woman in NSW slumped to 1.645 last financial year, the lowest in Australia, raising the prospect that soaring house prices in Sydney are taking a toll on the fertility rate.

    Perhaps the cost of living in Sydney provides a form of birth control?

    Ryan Felsman, an economist at the stockbroker CommSec, is reported to have said:

    “Our way of life is changing and governments will need to meet the challenges of a larger population through superior urban planning and world class infrastructure, especially public transport in Australia’s two most populous cities – Sydney and Melbourne,”

    There’s no discussion about the limits to growth.

  57. I think you’ll find that Mr Bob Carr has been talking about limiting population growth in NSW, for quite a while.

    But what would he know??
    🙁

  58. WA Governor, eh?
    That’ll be a nice little earner Mr Beazley. The Oz says $450,000 per annum, plus…..

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