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Weekend reflections

February 7th, 2009

It’s time once again for weekend reflections, which makes space for longer than usual comments on any topic. As always, civilised discussion and no coarse language.

Categories: Economics - General Tags:
  1. Kevin Cox
    February 7th, 2009 at 06:48 | #1

    We can fix the money market, stop recessions and at the same time get investment into renewable energy and ways of saving greenhouse gases

    The money market is “broken”. It does not operate the way a money market is meant to work. That is when we increase demand the supply increases and when we decrease demand the supply decreases and when we increase the price of money the demand drops and when the price decreases the demand increases.

    The market we have in place for money is not working this way and regulation has proved not to work. We need to look for the causes of instability and remove those causes from the market place.

    The obvious one is that when we create new money we immediately charge interest on it. That is when we increase supply we increase demand because we need money to pay the interest. A market with this positive feedback effect in the absence of any controls must run out of control once money starts to increase. We thought we had the control of the banks only lending money for worthwhile productive purposes but that has proved to be wrong.

    Remove this underlying positive feedback mechanism and see what happens. It is unlikely to do any harm and it would be easy to do. If banks or government do not have the money on hand to lend then the new money they create must be lent at zero interest until it can “pay its way” through representing productive assets.

    How to do this? Well new money should be treated differently to existing money. It does not collect interest until it has been used to produce a productive asset. So let us set up a market place where we can use both new money and old money but where the money MUST be used to construct productive assets. Let us set up an infrastructure market place for ways to reduce green house gas emissions. We are not doing too well in getting old money into that market place but we know that if we spend money on say insulation or renewable energy plants then we will create a productive asset. In fact we know that if we remove the finance costs from renewable energy they immediately become extremely profitable.

    If we do this then at least we will not compound the problem. The current approach of governments going into deficit by allowing the banks to create money, lend it to the government and the government paying interest on it will make the finance problem worse. If instead the government issued zero interest loans that had to be spent in the ghg reduction infrastructure market place then the interest on the increase in money supply would be able to paid for.

  2. Oceanic
    February 7th, 2009 at 06:51 | #2

    I submitted the following in you Weekend Reflections last weekend but left it too late to generate a response from your readers, so here we go again. Despite other recent events pushing the Global Warming issue aside its ramifications are too important to ignore.
    I found under Brown Coal in your Environment section ,while surfing your blog, the following gem and can’t understand why it didn’t occassion any discussion, considering the importance of the topic. If the contentions made are valid then this available technology would solve our emission problems, not least the Yallorn Valley smog.

    Danny Stewart Says:
    November 24th, 2008 at 6:28 pm
    John Quiggin,

    I am a retiree with an interest in the energy debate. Your blog was mentioned on the radio so I had a look. Here is my reaction to the brown coal debate it you are interested.

    The history of coal is that it has been burnt for centuries. In the latter part of the 19th century it powered steam ships and the railways, drove industry, heated homes and provided gas for heating and light. When the automobile industry started, petrol was made from coal. Coal made pharmaceuticals, fertilisers, dyes, tars and industrial chemicals. Coal has many, many applications but when it came to burning coal the process has been the cheapest and easiest. This lead Professor Striner to say………

    “Coal, as it is and has been consumed, is a waste of a natural resource. Coal should not be burned in its raw form but should be so processed that it is utilised in the most efficient and economic manner possible”

    These words were first penned in 1951 by Professor Herbert E. Striner and appear in his 1979 book An Analysis of the Bituminous Coal Industry in Terms of Total Energy Supply and a Synthetic Oil Program. Arno Press at page 184.

    Coal was used efficiently in England in response to a tragedy.
    London had more than 4000 deaths due to smog in 1950 and responded in 1956 with the Clean Air Act.

    In compliance with the Act a smokeless fuel based on Thomas Parker’s Low Temperature Carbonisation Process developed in 1906 was produced. It was called Coalite and I believe is still available. There were different brands of smokeless fuel. I do not think pre-cleaning coal was practised elsewhere although British smokeless fuel was exported to many countries.

    Other similar processes have been devised. The cleanest and most efficient method from available information is the Karrick Process from the United States. The various technologies are available but not used.

    Burning coal directly to produce electricity is about 30% efficient. There are many ways to increase the efficiency, and it is quite possible to double, if not treble, the efficiency. This does not reduce the CO2 output per ton of coal, but halves the CO2 output per unit of power, and allows other toxic emissions and particulate matter to be captured.

    Strangely there seems to be no interest in the efficient use of coal as an interim method of reducing CO2. There seems to be no realisation that we could half our fuel bill, increase the value of our exports, and provide China with not clean but smokeless coal which would make their cities smog-free. We could do all this and incredibly obtain oil as a by-product. Oil that can be refined into a cheap reliable supply of petrol, aviation fuel and diesel.

    Coal, even brown coal, is the eighth wonder of the world. We have not yet learnt the value of its efficient use. Instead we invest in schemes that burn coal in pure oxygen and try to sequester CO2, both horrendously expensive and neither sustainable.

    Coal is not the problem, we are. If we used simple proven methods of burning coal efficiently we could meet the 2050 targets in 2020.

  3. Hermit
    February 7th, 2009 at 08:24 | #3

    Oceanic I think the topic of better ways of using coal is a huge one with many tradeoffs between efficiency and emissions. Competing approaches without CO2 capture to the Karrick process include supercritical coal, the Bergius process, coal seam methane, in situ gasification and brown coal drying. A related issue is direct water use and indirect water contamination. I believe by about the year 2020 we will have to make jet fuel out of coal meaning that it should be phased out of electricity generation by then. The problem with using coal for anything is that we want emissions reductions of 80% by 2050. The processes mentioned don’t go far enough.

  4. Chris Warren
    February 7th, 2009 at 08:44 | #4

    Kevin Cox made an interesting suggestion.

    But how do you (in his words)ensure that:

    the money MUST be used to

    do anything, X, Y, Z.

    I know people like to blame the money supply, or credit, or greed or whatever, but the real problems and drivers of economic crisis, are not these.

    In Kevin’s case he wants to ensure that new money is used to create productive assets which I think he wants to specify generally.

    But how do you implement such a scheme? Money is the blood of the capitalist system and I think capitalists will oppose any suggestion that money MUST be used in particular way. Arguably their position can be supported by economic theory.

    Might it be easier to regulate credit? This seems to me to be closer to the real problem and would be easier to develop in a public policy sense.

  5. Chris Warren
    February 7th, 2009 at 08:50 | #5

    Kevin Cox made an interesting suggestion.

    But how do you (in his words)ensure that:

    the money MUST be used to

    do anything, X, Y, Z.

    I know people like to blame the money supply, or credit, or greed or whatever, but the real problems and drivers of economic crisis, are not these.

    In Kevin’s case he wants to ensure that new money is used to create productive assets which I think he wants to specify generally.

    But how do you implement such a scheme? Money is the blood of the capitalist system and I think capitalists will oppose any suggestion that money MUST be used in particular way. Arguably their position can be supported by economic theory.

    Might it be easier to regulate credit? This seems to me to be closer to the real problem and would be easier to develop in a public policy sense.

  6. Danny Stewart
    February 7th, 2009 at 09:14 | #6

    In reply to Hermit and the efficient use of coal I would make the following point. Coal is currently burnt with an efficiency of 30%. Doubling the efficiency will halve the CO2 output without need for capture. The Karrick process has that potential making it an excellent interim method. It both pays for itself and reduces emission by half. The other methods mentioned cannot match this performance. Bergius in particular is dirty, dangerous, inefficient and deserves no recommendation. The other methods appear to be less economic/efficient that Karrick which seems to be the most promising. It has been tried and tested,

  7. Hermit
    February 7th, 2009 at 09:39 | #7

    Here’s an idea that’s been around for perhaps 20 years. Why not cap the level of CO2 emissions and let the market decide on the technology mix? Oh wait I thought Australia was going to do that then they cancelled it for some reason.

    I recall when Rudd was in opposition he was forever telling people to ‘take a cold shower’. Now he is the one who over reacts.

  8. Danny Stewart
    February 7th, 2009 at 11:01 | #8

    In 1956 England passed the Clean Air Act which among other things, demanded the use of low emission fuels in London. This followed the 4000 deaths from smog in London in 1952 The benefit was rapid and dramatic, and it was fairly cheap to implement. Hermit is quite right. An appropriate piece of legislation (carbon tax is too complicated and made for scam merchants) could be very effective.

  9. Kevin Cox
    February 7th, 2009 at 13:36 | #9

    Chris,

    You are right the controllers of market places make it difficult for the idea to be implemented – but that is no reason not to try. And yes the economic argument about restricting capital to particular areas of the economy it is argued (without any justification – just argued) is economically inefficient because it does not let capital go to where it is best used. My counter argument about restricting some capital to particular general uses is that is what governments do all the time but they do it through the budget process and that is not a good way of allocating resources (spending money) to be directed to a particular area of the economy. At the moment they are doing it through the “panic” process where they do not care where the money goes as long as it goes. I can prove that optimising each area of expenditure independently does in fact leads to a global optimisation of the use of capital and we do not need an overall capital market to achieve optimal use of capital.

    For several years we have been working on the design (and building components) of a system to create a market in a water infrastructure. We have many of the components in place and we know how to do it. We just need someone to give us a market to try. I have been trying in vain to interest the water industry to use it as a way to remove water restrictions and use price to control demand and the market to allocate resources for water infrastructure in an efficient manner. The water infrastructure market place would do away with water rights trading and we would be guaranteed to allocate our money efficiently and we would know how much we need to spend to solve a given problem – like let the Murray flow continuously all year around with a flood every five years and ensure that Sydney Water never had to impose water restrictions.

    I have switched my efforts to trying to use the same idea on ghg because that – when coupled with the need to fix the finance market – would seem to be a no brainer.

    Amazon is an example of a “market place with a purpose”. Anyone can sell books through Amazon. However buyers get to give feedback and sellers can see what buyers are doing and other sellers are doing. Buyers can also find out what other readers are saying and what other readers are buying so they are better informed. This then leads to a market that not only gives buyers the lowest cost books but helps buyers buy books that better suit their reading needs.

    We would see the ghg reduction infrastructure market place being made to work even more effectively by giving more loans to people who consume less energy. Giving the loans is a form of income distribution and as the ones who consume less energy tend to be the less well off and so the system is socially equitable. Better still it does not matter how many loans you give it will not create inflation in the real money market so you do not have to get it exactly right. You will get inflation in the loans market place but that does not matter.

    To illustrate the power of the approach I will later today outline a market with a purpose to implement Oceanic’s idea of making better use of coal than burning it for fuel – that will also achieve the purpose of encouraging brown coal power stations to shut down.

    I am not an economist although I have had to try to understand economist talk because economists are the gatekeepers to market construction. I am a builder of information systems and markets are a particularly interesting form of information system.

  10. jrbarch
    February 7th, 2009 at 15:22 | #10

    Was just browsing Buiter’s Maverecon reading the articles about Fiscal expansions, the potential for a Depression and the idea of a ‘Good Bank(s)’.

    Could anybody tell me what is likely to happen to capital flows in AUS (both domestic and external) for the private, banking and public sectors this year – and the likelihood of a ‘sudden stop’? Will external financing leave?

    Probably not asking for much!! Cheers ….

  11. Kevin Cox
    February 7th, 2009 at 15:35 | #11

    Oceanic calls for a policy to make better uses of coal than just burning the stuff.

    In the following we outline a “market with the purpose” of diverting coal from burning to create energy to other uses.

    First who are the potential losers if coal is diverted to other uses? The main losers are the companies that have built power stations that burn coal to produce energy. Their plants will be worth nothing if all coal is diverted to other uses because coal gets a higher price elsewhere. The coal producers are not losers. If we have implemented a way of funding infrastructure for renewables we will have cheaper energy than from coal and so there are no other obvious losers – but if there are as we will see we will take care of them.

    Let us create a market place by inviting any organisation or person who wishes to sell some infrastructure product that uses coal in ways other than burning to apply to put their products or services in the market place. They must specify how they will use coal, what it will produce, and how much money will be made if their infrastructure is built. So a builder of chemical plants might apply and show that their factory will turn coal into animal food and the food can be sold for X dollars and will cost Y dollars to run and it will use Z tonnes of coal per dollar invested. They will put their infrastructure product on the market. That is people can buy their factories in the market place. Note it is the factories that are sold in the market place not the output from the factories.

    Money to spend in this market place will be supplied by the government as zero interest loans to be paid back from the tax on the profits of the investments made with the loans. Although it does not matter who gets the loans from the point of view of the market we can use the loans for other social purposes such as compensation to the people who are going to be hurt by the market or to people who have little in society or to members of the political party that won the last election or … Let us say we are going to give the loans 50% in total to the organisations that have power plants that burn coal – but only if they shut the plants down and 50% to the homeless in society but only if they put the earnings towards putting a roof over their head.

    We might even make the value of the money in the loans depend upon the amount of coal used per dollar of investment. Thus if a plant A uses twice as much coal for the same amount of investment dollars to plant B that uses half the amount of coal per investment dollar then we might make loans to company A convert to real money at twice the rate of company B. That may not be a good idea but we could experiment with the rules in that sort of way to better achieve our purpose.

    We now distribute the loans and see what happens. If the market does not achieve the objectives we want we change the market place rules so that our objectives are achieved. We can adjust the market place using feedback from its operation. If for example the market becomes unstable then we change the rules to restore stability. If we see monopoly cartels emerge we change the rules to prevent that happening.

    If we see products being sold through the market place that do not use coal or that uses coal and releases greenhouse gases from coal into the atmosphere then we ban the seller from the market place and the directors of the companies and the buyers who perpetuated the fraud all from this market and perhaps any other market places we might decide to construct.

    This approach does not cost the government or the country anything as the zero interest loans are paid back through taxes. It compensates those organisations that are hurt by the market operation. It benefits the homeless simply because they are homeless and removes that burden from our conscience and from support by public social service payments.

    The cost of building and operating the market will be covered by a small fee paid by merchants in the market place who will be only too willing to pay for access to the people with loans to invest. That is, implementation and operation is by private companies and paid for by merchants in the market. The government and their advisors set the rules but the government does not have to pay a cent and could even charge for their time.

  12. Oceanic
    February 7th, 2009 at 16:21 | #12

    Kevin response #11 – thanks you for your input, but to put matters right I haven’t proposed “…better uses of coal than just burning the stuff.” What I have done is to bring Danny Stewart’s article to the table for discussion.
    I read Danny to be saying that coal should not be burnt in its raw state, as it presently is, but if a pre-combustion process is performed other valuable constituent parts are separated leaving a smokeless fuel which would provide a more efficient burn.
    Ironically, Brown Coal [lignite] generally seen as the villain would when processed, provide more free oil as one of the by-products, than any other form of coal. Making it very valuable indeed.

  13. Kevin Cox
    February 7th, 2009 at 16:26 | #13

    Chris,

    You say why not regulate credit. That is what we have been trying to do with the Central Banks setting interest rates. It does not work (and will not work) because there is another powerful internal positive feedback mechanism at work with the way we create money.

    We create money by issuing credit. We give people credit if they have money to back the money we create and loan to them. Now someone has more money that means we can increase the loans we have outstanding that in turn increases the amount of money.

    Increase the amount of money and we increase the amount of credit which now allows us to increase the amount of money. The opposite happens on the way down. That is the system starts to move in a particular direction and its internal dynamics keep that movement going until something stops it – like a prime loans crises one way – or a war or massive injection of money the other.

    Linking new money to credit is ungovernable in a systems sense. It is not a matter of greed or of regulation. It just can’t be done. That is the other main reason why creating money independent of debt is a good idea as it eliminates this positive feedback mechanism. Eliminate the positive feedback and you do not need to regulate it.

  14. Kevin Cox
    February 7th, 2009 at 16:34 | #14

    Oceanic I am happy to change the market to include factories that make more efficient use of coal. That is a policy decision of government.

    The mechanism I have proposed will achieve Danny Stewarts objectives by including the factories or processes he lists as infrastructure products. This will direct investment to those areas and hence coal consumption to those areas and away from simple burning of coal.

    Leaving it to “market forces” will not direct investment because the finance costs of building Danny’s processes will mean they are uneconomic and no investor will touch them.

  15. Ikonoclast
    February 7th, 2009 at 19:04 | #15

    The Karrick process is merely a coal liquifaction process to create synthtic gas and gasoline from coal. Coal liquification is notoriously the worst CO2 polluter in modern energy production. All thermal Coal should be left in the ground.

    We must switch to renewable energy sources in one generation i.e. over about 30 years. The simplest way would be to;

    (a) remove all fossil fuel subsidies,
    (b) implement a carbon tax,
    (c) directly ban the commissioning of any new thermal coal plants;
    (d) set up a Department of Renewable Energy with a brief to build a proof of concept giant solar convection tower, a hot rocks geothermal project,
    a major tidal power project and a major wind power project; all these to pave the way for commercialisation of industrial scale renewable energy.

    The democratic nation state must lead the way with dirigism. It will all happen far too late if we wait for capitalism to pull its finger out of its assets.

  16. Danny Stewart
    February 7th, 2009 at 21:08 | #16

    Ikonoclast. My interpretation of the Karrick process is that it differs from other coal-to-oil processes in that it is not a single product process but that it produces 5 commodities, heat, oil, smokeless fuel, gas and nitrogen and sulphur and other products. For its total output it almost certainly is not the worst offender. No body knows because the CO2 output of the Karrick process has never been measured.
    Open-fire burning of coal and wood has not only a higher CO2 emission per unit of usable energy output, but a high particulate matter emission as well and is toxic due to the sulphurous and nitrogenous output (which causes acid rain and such environmental problems).
    Karrick has only the CO2 output. Because it is a more efficient system the CO2 per unit of energy is reduced.
    My argument is that if we have to use coal until the geothermal comes on line, then use it efficiently.
    I agree that we need a Department to give coherent direction. Ex-president Clinton made that point very strongly in his alternative energy speech.
    All the alternate sources you mention, and many more, have been tried and tested,and I believe all are in commercial operation. No further testing is required. I would be very suspicious of any alternative energy business looking for finance for testing.
    Unfortunately Australia is well behind and a bit directionless.
    The Parker process got into trouble for producing excess dioxin. The problem was sorted but it indicates that any of these process need regulation and regular assessment

  17. Danny Stewart
    February 7th, 2009 at 21:14 | #17

    Ikonoclast. Is “DIRIGISM’ a typo? I have not heard the word before. If not, can I ask you what it means?

  18. Ian Gould
    February 7th, 2009 at 22:55 | #18

    “Dirgiism” – a political philosophy typically associated with France which assumes that capitalism works more effectively when subject to a degree of government direction.

  19. February 8th, 2009 at 01:06 | #19

    I anticipate as some point in the GFC, there will be compelling pressure on the US to reduce their deficit, which is for all I know is reaching perilous proportions spreading fear that cannot be acknowledged.

    I suspect the premises for economic growth are shaky since that they are built on the materialist delusion and ignore the parlous environmental condition for economic activity as usual.

    Raising taxation will go against conventional wisdom, and cutting expenditure will not be a case of “rounding up the usual suspects”. The change will be that the pain will be real, since it will not devolve this time in the first instant on the lesser people.

    Such is a script to trigger deep change? As least the spin doctors might gag.

  20. Kevin Cox
    February 8th, 2009 at 01:41 | #20

    Ikonoclast,

    You are right. Undirected capitalism on its own will not do the job. All the things you suggest are worthy but will not do the job because they will not direct enough resources quickly enough.

    We know that properly functioning markets are the most efficient way to allocate resources and we know that once markets get going they feed on themselves.

    What I am proposing directs capital to the purpose of reducing ghg emissions and uses a market to allocate the capital.

    A carbon tax is a start in directing funds but it is what happens to the tax after it is collected that is important. Distribute through a market to build infrastructure to reduce ghg emissions and you double (triple) its effect.

    Until the financial crisis I thought we had to get money from taxes or a surcharge on existing energy but then it hit me that we could solve two problems with the one mechanism.

    Instead of (or as well as) a carbon tax create new money separate from debt (debt is money that earns interest and has to be paid back) to fund buyers in the market for ghg emission reduction infrastructure.

    We need massive amounts of new money every year to keep the economy moving. If we replace debt as the way to create new money we will have the quantity of funds available in the time frame needed to make it happen quickly enough.

    My calculations say we can have zero emissions within 10 years if we create $20 billion in new money each year and direct it towards renewables and other ways of reducing emissions. Last year the M3 supply of money increased by $170 billion dollars. We probably do not need $170 billion but the amount of new money needed to keep the system functioning is greater than $20 billion.

  21. smiths
    February 8th, 2009 at 12:54 | #21

    well,

    my weekend reflection is that my sense that there are high level powerful conspiracies in operation are correct…

    change you can believe in amounts to the same group of bank-linked stooges making decisions that favour the private banks at the expense of the vast majority of humanity

    the catchphrase at the moment to explain this is that obama is making missteps…

    missteps, incompetence, coincidence

    like the beautiful wheels within wheels,

    when the simplest, truest answer, is there staring everyone in the face

  22. observa
    February 8th, 2009 at 14:10 | #22

    I note we are facing a shortage of taxpayer funds at present and so in response to this news that-
    ‘TENANTS from hell have trashed 6600 public housing properties in South Australia in three years, causing more than $7 million of damage in the process.’
    the Liberal Opposition is naturally calling for bad tenants to be kicked out. Here’s single mum Michelle of Adelaide’s comments on the article-

    ‘I agree , being on a waiting list indefinately for a affordable rental as a single mother with 3 children really bites when you see these homes getting trashed and the tenants being moved to another. I do not hold any hope in getting into a housing trust ever as by the time my name comes up my kids will have grown up and have lives of their own. I dont care how poor or how uneducated a person is when you rent its all about respect and valuing someone elses property and being grateful you have a roof over your head. Anyone who takes advantage of the oppotunity given to them to have this cheaper housing should be banned for life if the home is trashed and damaged through stupidity and lack of care. Selfish selfish people who get assistance after assistance and still dont show any gratitude by simply showing respect and making the effort to improve their own lives.’

    My response to the Michelles of this world is simply-
    The solution to the problem of public housing lies in setting up a marketplace for it similar to the private market. Qualifying public tenants should be able to bid for the various levels of public housing just like open market tenants. Now clearly they have limited income to spend on that although those on low incomes who prefer to spend it on housing rather than beer, smokes, pokies, etc should be actively encouraged to do so, thereby getting the best housing stock in the most desirable suburbs. Also as noted, those who are income poor but are nevertheless caring thoughtful tenants and good neighbours, should be actively encouraged by any such restricted bidding process. The answer to that is to allow tenants to bid for the stock of public housing with their real dollars AND some ‘SAHT Reward’ dollars that are accrued over time for good tenancy. (to start off with waiting list hopefuls could have zero rewards, with various levels of positive reward points for good existing tenants and negative dollars for bad ones) In distributing any goods or services, markets are always superior to individuals playing God or dictator so long as the particular marketplace is appropriately constituted.

  23. Alanna
    February 8th, 2009 at 16:49 | #23

    Observa#22

    Public housing is for people who cant afford to pay bottom end rent let alone bid for it. Ludicrous. Public housing isnt and shouldnt ever be market driven.

    This the problem I have with applying to market ethos to everything from welfare to inter government dept relations. Its a mindless excercise in applying a profit motive to a service which should never be profit driven. We shouldnt seek to be profiting from the poor – thats what an auction of public housing is. Its an immoral idea Observa and as well as that – it would be most unkind to those most in need who couldnt afford even a bidding process for public housing. That would likely be a whole lot of single mums with children…when you actually stop and think about it. Another silly white males market proposition?

  24. Alanna
    February 8th, 2009 at 16:56 | #24

    22# Observa

    As well, if the market is so superior to individuals or governments playing god, lets leave welfare to markets …there wouldnt be any public housing so you are still relying on governments not to play God, but to play Umpire. Thats different.

  25. observa
    February 8th, 2009 at 18:14 | #25

    The Michelles of Adelaide face 2 basic problems with the stock of public housing. Firstly they have to convince white males like me in leafy suburbs to vote to increase the stock of public housing, which is difficult if we believe its poorly allocated by the Alannas and/or poorly looked after by whomsoever the Alannas deem worthy of anointment. Secondly, since everyone would ultimately like subsidised housing, there will always be a need to ration that subsidy at some level, something our Michelle is only too acutely aware of, while awaiting anointment by the Alannas. Unlike Alanna I simply want to give Michelle the same opportunities I have to make certain sacrifices and tradeoffs to bid me and mine up the socioeconomic ladder of life, albeit protected from higher incomes like mine from achieving that.

    I fully understand that Michelle like many other Centrelink recipients has a limited cash budget to spend on housing(ie rental assistance)but if she wants to put in more scarce cash or ‘Reward Dollars’ to outbid another in a sheltered auction marketplace, why not? Many white males do the same in their open marketplace, albeit their reward dollars forgone in doing so, are often the flash car or overseas trip, etc. At least Michelle’s Reward Dollars would be freely available to her to bid with and by the sounds of it she knows how to earn and keep them for her family. That would no doubt make lots of NIMBYs around my leafy burb a lot more amicable to public housing around here I’d suggest. My hunch is they’re not so much averse to a lack of real dollars as averse to those who would have no or negative ‘Reward Dollars’. Anyway it’s all hypothetical and so the caring, sharing Alannas can console the Michelles with their particular soothing balm.

  26. observa
    February 8th, 2009 at 21:26 | #26

    I should add that none of this would be hypothetical if we asked the Michelles and others on the waiting list, as well as those already in public housing for their thoughts on the matter and a majority liked the idea. Naturally we could put any of Alanna’s alternative strategies to them all at the same time….?

  27. Alanna
    February 9th, 2009 at 09:09 | #27

    Observa#26
    Actually asking those on public housing lists what should be done would be a very good start Observa…I suspect the predominant view would be to reverse the decline in public housing provision.

  28. Alanna
    February 9th, 2009 at 09:14 | #28

    Observa#27
    You initially suggested not merely “reward dollars” but whatever real dollars they had in addition to “reward dollars”. I suspect Michelle’s real dollars would have been spent putting food on the kids table. I know a few single mums who slowly grow a bigger credit card debt doing just that. They dont have “real dollars” and it might help you to get out of your leafy suburb and look around a bit more. If its caring and sharing thats needed to help get people gback on their feet so that they can participate to a greater extent in the labour force and get on their feet (yes with your tax dollars) – then consider caring and sharing an investment in not only their future, but yours too Observa (their demand keeps you employed and able to live in that leafy suburb).

  29. February 9th, 2009 at 12:18 | #29

    How the growth lobby threatens Australia’s future

    My article “How the growth lobby threatens Australia’s future” of 24 January has been (in a slightly abridged form) published on Online Opinion together with a forum discussion. Comments are welcome.

  30. Michael of Summer Hill
    February 9th, 2009 at 16:35 | #30

    John, maybe its a godsend that Chinese Government-owned companies are on the prowl looking for opportunities to invest big within Australia’s mineral and mining sector. However, I have always been sceptical of the way Chinese do business and the Foreign Investment Review Board must ensure that any takeover will not affect the rights of Australian workers. And if all is above board then Australia may escape the world recession with just a little scratch thanks to the Chinese.

  31. observa
    February 9th, 2009 at 23:49 | #31

    Alanna#28
    ‘I suspect Michelle’s real dollars would have been spent putting food on the kids table.’
    Well at present she has to put that food on the table and pay private rental, while another comparable single mum may be trashing a public house and contributing to that $7mill extra cost over 3 years that could be spent on accommodating Michelle. You might well be critical of the level of pension and rent assistance they both get but it’s the same for both, with my added bonus for Michelle that she can reverse the roles at no extra cost to her and her family. That would then free up more public housing resources for more similarly situated Michelles and perhaps teach our miscreant single mum a valuable lesson in life. That holds true for whatever level of pensions and benefits and public housing we communally agree upon.

  32. Alanna
    February 12th, 2009 at 07:27 | #32

    31# Observa
    I know you dont mean it to sound this way but the implication of your last post is that some poor single mums are house trashers. It would be really nice to have some stats on who the house trashers are Observa. Im taking a wide step here (given I dont really know) but I could suggest that miscreant dads or male partners are likely to have a higher incidence of being the house trashers?

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