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Monday message board

November 28th, 2005

It’s time, once again for the Monday Message Board. As usual, civilised discussion and no coarse language, please.

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  1. Terje
    November 28th, 2005 at 09:59 | #1

    Tax cuts are getting a run in the press again. The ALP says we need them. However Costello is not too sure. Costello wants to instead continue the massive increases in public health expenditure.

    Access Economics says that times are good and that this is the time during which the government should save for the future rather than cut taxes.

    http://www.theadvertiser.news.com.au/common/story_page/0,5936,17384081%255E913,00.html

    In Germany they are saying times are bad so its not a good time for tax cuts.

    http://www.businessday.co.za/articles/world.aspx?ID=BD4A118597

    I think that some elements of society are pathologically opposed to tax cuts regardless of economic conditions.

    Costello says that tax cuts might increase interest rates. Doh!

    Does anybody know where we can find a political party that believes in small government?

  2. November 28th, 2005 at 11:29 | #2

    Despite the media fawning over Ariel Sharon’s new “peace move” in Israel, the reality on the ground in Israel and the occupied territories is somewhat different. What will it take for the mainstream media to actually get past the official sound-bites?

    http://antonyloewenstein.blogspot.com/2005/11/caution-noted.html

  3. November 28th, 2005 at 13:59 | #3

    Terje, you know perfectly well that the system captures people who try to work the system, the way that the Democrats stopped trying to keep the bastards honest and became just another lot of the same. It’s why it doesn’t matter who you vote for, a politician will always get in. Those who aren’t ground up by the system become part of it.

  4. conrad
    November 28th, 2005 at 14:36 | #4

    I’m not pathologically against tax cuts (who is ?), but having the goverment save in boom times and spend more in recessions doesn’t seem unreasonable to me, but then I guess that would go counter-vote-buying behavior in boom times, which Australians seem only too suscpetible to rewarding.

  5. Razor
    November 28th, 2005 at 16:04 | #5

    The best way that a government can save is to give tax cuts. Saving and investing are the same thing – deferring current consumption. The best way a government can invest is to leave the money in the taxpayers’ pockets and allow the most efficient investment decisions to be made. This will lead to a growing economy, increasing the tax take and allowing even more flexibility when times are tough.

    We should be cutting spending and taxes now (or at least transferring spending to the Defense Budget).

  6. Terje
    November 28th, 2005 at 16:08 | #6

    PML,

    Then the system needs changing.

    Regards,
    Terje.

  7. Ian Gould
    November 28th, 2005 at 16:27 | #7

    >I think that some elements of society are pathologically opposed to tax cuts regardless of economic conditions.

    I remind you of George Bush’s claim during the 2000 campaign that high economic growth and buoyant ogvernment revenue justified a tax cut.

    Then after the Tech Wreck he argued that the slowing economy meant a tax cut was needed to stimulate the economy.

    As for Australia – health costs are going to rise, even if wages in the sector, pharmaceuticals and other costs are contained, due to the ageing of the population.

    Short of a cull of OAPs, that’s pretty much unavoidable.

    whether that unavoidable cost justifies running significant surpluses currently I don’t know.

    There is however another justificatiosn for the surpluses, government spending rises during recession and government revenue declines due to lower economic activity, even in the absence of Keynesian expansionary measures. If the government isn’t to run a deifcit over the whole economic cycle then you need to run a surplus during the expansions.

    Of course, we all know Costello’s saving up to build a warchest for his own campaign for The Lodge if he ever pries the leadership out of john Howard’s cold dead hands.

  8. November 28th, 2005 at 16:28 | #8

    Terje,
    here’s a little amusing insight on the reality of all the tax-cuts talk:
    (I love the bit about Malcom!)

    Home and Hosed
    Courtesy of Tim @ http://www.roadtosurfdom.com

    In the latest episode of our long-running soap opera, Home and Hosed, our heroes, Mr Smirky and John-John are standing on the balcony of John-John’s harbour-front house sipping drinks looking out at the view.

    MR SMIRKY: Aw, geez, John-John, how much longer do I have to keep bullshitting the media? I know they’re not exactly bloggers when it comes to hard questions, but even they’re starting to laugh at me. I’m beginning to look as stupid as big Tone on Father’s Day.

    JOHN-JOHN: Er, what? (Adjusts hearing aid). Sorry, Smirk, didn’t catch that. Was just thinking that this sure beats the view from the balcony in fucking Canberra.

    (Both laugh. Then Smirky’s brow furrows.)

    MR SMIRKY: I wanna know when we can stop bullshitting the press about the handover.

    JOHN-JOHN: Um, yeah, I wanted to talk to you about that…It’s just that…

    MR SMIRKY: Oh, no! Not again! You can’t back out again. You promised. (Stamps his feet)

    JOHN-JOHN: Well, I promise a lot of things…

    (Both laugh)

    JOHN-JOHN: …but you can’t honestly expect me to piss off when we’re a bloody shoo-in for the next election…

    MR SMIRKY: That’s what you always say…

    JOHN-JOHN: Yeah, I know. (Laughs) But geez, with Fat Boy Dim running the other mob, what’s a bloke to do? It’s like being Makybee Diva in the Melbourne Cup and all the other horses have been scratched. Home and fucking hosed and all you need to do is a token trot around the paddock.

    MR SMIRKY: But that’s why I want a go. We can’t fucking lose! Fucking Browyn could win the next one!

    (Both laugh. A lot.)

    JOHN-JOHN: Yeah, well, but…

    MR SMIRKY: (Clenching fists) I’ll fucking challenge you. I fucking will…

    JOHN-JOHN: Yeah, right. I thought you were meant to be good with figures. Can’t you fucking add up numbers?

    MR SMIRKY: Yeah, like the Budget surplus. (Both laugh) They fall for that one every year! (Puts hand on heart, speaks in silly voice) Oh no, there’s only twenty cents in the surplus. Put up taxes, scrap services and big surprise! A surplus! I must be a fucking financial genius. But anyway, don’t you worry about the numbers, I can get ‘em. This bloody IR thing is going to do you like a dinner. The fellas are going to be begging me to take over.

    JOHN-JOHN: Yeah, right. Listen, Smirky. Do you think all the people who are gonna lose their jobs or have their wages cut are going to vote for Fat Boy when we run the interest-rate scare thing again? Trust me, they’re the very ones who won’t risk it. It’s fucking foolproof.

    MR SMIRKY: Well, then, I’m going to tell everyone you wear adult incontinence pants.

    JOHN-JOHN: You wouldn’t dare. Besides, it was only that once, when J-Ho and I stayed at the ranch in Crawford. And you would’ve needed them too if you’d been invited.

    MR SMIRKY: Aw, come on, John-John, you can’t keep the bloody job forever. It’s not fair. Just cause you happened to get the benefits of Mean Paul’s reforms and then fell on your feet with the bloody war on terror…

    JOHN-JOHN: Oh, look! Over there! A terrorist! (Slaps knees) Ha-ha! I never get sick of that one! Hey, ring up Mickey K and get him to go on telly and say we’ve heard some chatter from Indonesia. (To himself) What fucking genius came up with the concept of “chatter”?

    MR SMIRKY: …just because you got 9/11 and Bali…

    JOHN-JOHN: Look, Smirky . (Concilliatory) There’ll be other 9/11s. There’ll be other Bali’s. Iraq took care of that. You’ll get your chance. Just be patient.

    MR SMIRKY: Aw, c’mon, John-John. Pleeease…..?

    (John-John puts his hand on Mr Smirky’s back and guides him over to the view.)

    JOHN-JOHN: One day, all this will be yours….I pwomise

    MR SMIRKY: Oh, fuck. And they call me Smirky. (Skulls the rest of his drink)

    (Enter J-Ho from inside the house)

    J-HO: John? Malcolm’s on the phone.

    JOHN-JOHN: Which Malcolm?

    J-HO: The rich one.

    JOHN-JOHN: Which Malcolm? (both laugh)

    J-HO: (Smiling, turning to Mr Smirky) Oh, hello Smirky. Didn’t realise you were still here.

    MR SMIRKY: (Under his breath) Like hell you didn’t, you fucking bitch.

    J-HO: (Still smiling) We don’t all wear hearing aids, you know, Smirky.

    MR SMIRKY: (Under his breath) You were meant to hear, bog breath. (Out loud) Is that bloody Bullturd ringing up and trying to crawl up John-John’s arse again?

    J-HO: (To John-John) It is Malcolm Bullturd. Something about some ideas he’s got for tax cuts or some such. (Smiles at Mr Smirky)

    MR SMIRKY: (Under his breath, walking up to J-Ho) I don’t know what I ever saw in you.

    J-HO: That was a long time ago, Smirky. (She flicks his jacket lapel). Maybe if you had some actual, you know, power I still might be interested. (She grabs his crotch) And that surplus isn’t all it’s cracked up to be either…(She laughs, begins to walk away)

    MR SMIRKY: You’re just bloody cruel…you bloody are…(bottom lip trembles)….
    [continues... http://www.roadtosurfdom.com/archives/2005/11/home_and_hosed.html#comments ]

  9. Terje
    November 28th, 2005 at 16:40 | #9

    QUOTE: If the government isn’t to run a deifcit over the whole economic cycle then you need to run a surplus during the expansions.

    RESPONSE: Yes but now we have paid of the debt from the pump priming undertaken during the last cycle so its time for a tax cut. If we go into recession again then they can always trying spending their way out again. Not that I think it ever makes any sence for governments to waste money.

  10. Harry Clarke
    November 28th, 2005 at 16:46 | #10

    Goggle’s market capitalisation is back in the news this week. Its share market capitalisation is now $120 US billion and its share price at $400 US, or nearly five times its float level, is about 70 times current earnings.

    Goggle’s managers don’t seem to be the standard sort of Wall St spivs. Moreover, as Business Week points out this week (December 10) at

    http://www.businessweek.com

    the wealth that is created by this explosion in value has real consequences. Goggle could undertake a huge takeover of some real (here = definitely non-ephemeral) assets to firm up its underlying value. Moreover while advertising on the Web in total last year was only worth $120 billion out of a total of from $300-$400 billion, web advertsing grew at 34% over the latest quarter compared to 3% for newspapers over the past year.

    Is Goggle overvalued? Its been asked before on this blog and my guess is the editors of Business Week think it is. But it looks like it will remain a firm of immense value that will impact on mainstream media markets in a big way.

  11. Razor
    November 28th, 2005 at 17:16 | #11

    Harry, Google is only over-valued to those who wouldn’t pay for the current stock price. The “is it over valued?” question requires a valuation method to be measured against. I wouldn’t buy it, but that is because I wouldn’t buy it until it had a price/earnings ratio under 10. Others differ, and the only way I could be buying it at my valuation is because somebody else thinks that it is over-valued and is willing to sell. (There are other reason for selling, but in general that is a reasonable assumption.)

  12. Peter Evans
    November 28th, 2005 at 17:40 | #12

    Google is interesting. Cringley has an interesting take, to put it mildly…

    http://www.pbs.org/cringely/pulpit/pulpit20051117.html

  13. Ugly Dave
    November 28th, 2005 at 18:57 | #13

    On the weekend Alan Ramsey speculated on whether John Howard’s father, Lyall Falconer Howard, was ever a member of the New Guard ( http://www.smh.com.au/text/articles/2005/11/25/1132703373209.html ).

    Inspection of an unpublished manuscript now in the State Library of NSW shows that a number of men with motor car experience were brought into the New Goard to ferry their Storm Troopers around in their attempts to play Hitlerian games against working class speakers.

    A Lyall Howard is named in the manuscript as being one of the men in a cavalcade of cars that “invaded” Bankstown and attempted to break up meetings in arly 1932. Many cars were damaged.

    This was the time that the NG was planning to arrest Premier Jack Lang and all other members of the NSW government, incarcerate them in Berrima Goal, and take over the state.

    It was for a while a serious plan. The Storm Troopers actions were there
    to incite the workers to revolt to provide the excuse for action.

    Ironically there were plans to charge the NG leadership with sedition. These foundered once Lang was dismissed by the state governor, Sir Philip Game, and replaced by Bertie Stevens im May 1932.

  14. phil
    November 28th, 2005 at 19:14 | #14

    Terje
    I believe it floats around the Caribbean on a large boat, savings taxes in all jurosdictions it doesn’t visit.
    Razor
    With my tax cuts I’ll buy a big road from Brsibane to Sydney, and a hospital in my region. Oh, doesn’t it work like that?

  15. Jim Birch
    November 28th, 2005 at 19:39 | #15

    “Does anybody know where we can find a political party that believes in small government?”

    Not in power, that’s for sure. Whatever the rhetoric of the day. People love whinging about tax but they vote much more consistently for spending programs. The tax take has been trending up since the year dot and I can’t see any material reason for this pattern to change. Get over it. If you want taxation organised on a different basis then your best hope would be to take it out of the hands of politicians. And even if you managed this, I doubt that much would change, Taxation Central would still consider education, roads, social security, defence, etc, to be desirable. Maybe you could stack the committee…

  16. Andrew Reynolds
    November 28th, 2005 at 21:26 | #16

    Phil,
    I think that Terje’s point is that most tax is not spent on socially useful projects and, in any case, most of these could and should be funded in other ways.
    Many good hospitals were built without taxpayer funding and roads from Sydney to Brisbane could be funded out of tolls, payable by those who actually use the road, for example.

  17. November 28th, 2005 at 21:44 | #17

    The two-tier graduate degree proposal initiated by the Uni of Melb, is attracting a lot of debate in academic circles, and mostly from those who want to push the anti-American line (even though the structure has been popular and common in Europe for thirty years) and by the professions like the architect dills (in the AFR Education supplement) who have come out fearing that architecture will be relegated to ‘elite’ status (heaven forbid).

  18. Homer Paxton
    November 29th, 2005 at 09:00 | #18

    People don’t vote for smaller Government.

  19. Terje
    November 29th, 2005 at 10:28 | #19

    Homer,

    I do whenever the option presents itself.

    If all parties are advocating bigger government I vote for the one that is advocating the smallest of the big government options.

    Regards,
    Terje.

  20. Terje
    November 29th, 2005 at 10:31 | #20

    Given the nature of self interest and greed we should expect the bottom 50% of people in a democracy to support more redistribution. Of course not everybody votes out of pure self interest however if they did we would expect to probably end up with a quite substantial welfare state. Which is not unlike what we have.

  21. Razor
    November 29th, 2005 at 10:37 | #21

    Terje – you are assuming a Normal Distribution of wealth in the population. I doubt that this is the case. Don’t have any evidence though.

  22. Terje
    November 29th, 2005 at 11:11 | #22

    Razor,

    Do mean normal as in a bell curve?

    I imagine that with an ageing population we should expect to see a bulge in wealth concentrated around the older people.

    If we are going to discuss this it is important to separate income from wealth. And important to remember that financial security and well being is usually some combination of the two.

    We would also have to choose whether we are going to analyse by household or by individual. Whether we include or exclude children.

    The following article explores the topic to an extent:-

    http://www.abs.gov.au/ausstats/abs@.nsf/0/e530e66700769ef4ca256dea000539ea?OpenDocument

    My point about redistribution and democracy is merely a provocation. A notion to think about. I believe (of course) that reality is far more complex. For instance people don’t vote on a purely selfish basis. People probably move between various categories and groups over a life time and vote according to an holistic experience of life rather than current circumstance. Some people have more or less empathy than others. Some people are more sentimental than others. Some people of high income or wealth may own businesses that benefit from the welfare system. Corporate welfare may effect peoples perspectives. Some see government as the wrong tool for the job even though they may agree with others on the nature of certain problems.

    Generally I think democracy is the best system in which to defend liberty. However in other ways democracy undermines liberty by a process of log rolling. Many of us support restrictions on guns, so the gun users and producers get rolled. Many of us support restrictions on certain recreational drugs, so drug users and producers get rolled. Many of us support restrictions on porn so porn stars get rolled. Ultimately liberty is imperilled even by democracy unless a basic bill of rights or some such instrument defines liberty as an essential value.

    Regards,
    Terje.

  23. November 29th, 2005 at 11:37 | #23

    Terje, you can’t change the system from within the system for the reasons cited above. You also can’t overthrow it productively while it retains legitimacy (even from cod democracy), because the replacement would be considered illegitimate and no matter how sound its basis and plans otherwise, it would end up being repressive in its own right. That would also waste resources as well as distracting from the finer objectives.

    To me, that suggests being prepared to pick up the pieces after a real screw up, and hope the mess isn’t taken advantage of by even worse types or that the break up itself didn’t cost too much.

  24. wilful
    November 29th, 2005 at 12:30 | #24

    I don’t care about small or big government, I want my government appropriately sized for the future. I think that in a huge numebr of places theres a hideous misallocation of resources, and that there’s plenty of fat for a tax cut. Meanwhile, the Federal Governmetn still has a vital role investing in infrastructure, education, and health. So-called market solutions to these issues don’t deliver what we need. But from this government with it’s current priorities – give me my money back!

  25. Terje
    November 29th, 2005 at 12:49 | #25

    Wilful,

    Most people want good government not small government. I just happen to think that small government is better (ie more good) than big government. However I accept that a big government can in theory be good. I just don’t see it as terrible sustainable or typical.

    I also want my money back.

    One of the reasons I advocate decentralisation of government power to a local level is because it allows us to more easily shop for the form of government we personally prefer.

    Regards,
    Terje.

  26. November 29th, 2005 at 22:29 | #26

    Oh no! Another blog is in town @ http://weekbyweek7.blogspot.com/

    Get it while it’s hot

  27. December 1st, 2005 at 22:14 | #27

    (belatedly)

    #$%^&*())_%#@ storms.

    that is all.

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