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Monday Message Board

July 25th, 2011

It’s time again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Economics - General Tags:
  1. Ken Fabos
    July 25th, 2011 at 08:20 | #1

    Does anyone know if complaints were lodged over Alan Jones’ (parphrasing here) ‘put Gillard and Brown in a sack and drop them out at sea’ remarks? I don’t listen to Jones and heard them on Media Watch and thought they went far beyond hyperbole. They are politicians not climate scientists and no doubt get a stream of vile stuff aimed at them but it’s another unsavoury aspect of the current campaign by this dangerously deluded and irresponsible radio presenter.

  2. adamite
    July 25th, 2011 at 08:32 | #2

    As mentioned on another post, Abbot is comparing his anti-carbon tax campaign to Cadel Evans’ battle to win the tour de France – more like a ‘tour de farce’ in Abbot’s case methinks.

  3. Clinton
    July 25th, 2011 at 14:00 | #3

    Former Young Economist of the Year Paul Frijters follows up his posts on Core Economics on the folly of carbon policy with an article in The Conversation. Describes John Quiggin as ‘one of the raindancers’: bit.ly/ohIaIU

  4. Clinton
    July 25th, 2011 at 14:03 | #4

    Hyperlink?: http://bit.ly/ohIaIU

  5. Ikonoclast
    July 26th, 2011 at 09:25 | #5

    Frijters presents an unfocused and emotional rant then ends with a throwaway line ostensibly in favour of geo-engineering our atmosphere. Now, I guess we’ve all posted an unfocused and emotional rant in blog at some. However, he writes as an academic economist in something called “The Conversation (Beta)” which promises, in its strapline, qualities like expert views and academic rigour with journalistic flair. Of course, academic rigour with journalistic flair is an oxymoron so just why an academic would want to attempt it is puzzling.

    Frijters shows no academic rigour at all. The attempt at journalistic flair is there but the arguments and style are entirely derivative and imitative. The viewpoint expressed is the typical anti-science right-wing, business as usual, do nothing, make money till it all collapses argument. Perhaps Frijters is trying to be another Andrew Bolt. My advice is don’t bother. Bolt has this particular market in journalistic inanity and prejudical stupidity all sewn up.

  6. July 26th, 2011 at 09:51 | #6

    I am wondering why I attempt to hyperlink anything the comment does not show up.

    Happens at Troppo as well.

  7. July 26th, 2011 at 09:56 | #7

    let us see if this works.

    Short but sweet

    <a href= "http://www.angrybearblog.com/2011/07/why-economists-on-average-are-terrible.html&quot;.angry bear shows why economists are lousy forecasters!

  8. July 26th, 2011 at 09:56 | #8

    whoopsy

  9. July 26th, 2011 at 11:03 | #9

    Oh my god, Frijters thinks back burning increases the amount of CO2 in the atmosphere. Frijters, if you are reading this, check out the carbon cycle. If you know a high school student who pays attention in class they can probably explain to you why back burning doesn’t increase the concentration of CO2 in the atmosphere.

    Then Frijters goes on to make the old argument that because other countries are shooting more holes in the boat we’re all in than Australia, there is no point in Australia reducing the number of holes it shoots in the boat. Actually there is an advantage in Australia shooting fewer holes in the boat. The advantage is there will be fewer holes in the boat.

    With regards to the people of India, this may come as a shock to some, but the people of India are already taxed, and given that a carbon tax could replace some of their least effective taxes it’s hard to see how a carbon tax could be anything but an improvement. Taxation is a transfer, not a cost. There are dead weight losses involved with taxation, but the Indian people already have those on account of how, as I have mentioned, they are already taxed.

    Frijters’ solution appears to be to wait until one person on the boat invents magic boat repair spackle and then expect them to run around fixing everything while we continue to shoot holes in it. That’s a pretty damn lazy approach. And also… what’s that word? They taught it to me in high school… Oh yeah – irresponsible.

  10. gerard
    July 26th, 2011 at 11:19 | #10

    Glenn Beck’s recent address to the Israeli Knesset received practically zero coverage in the American press.

  11. Freelander
    July 26th, 2011 at 17:22 | #11

    @gerard

    That crazy must now be passed his American trailer-trash popularity use-by date. Why he is being honored with a platform in the Knesset???? And some believe evolution is onward and upward, rather than more like a random walk.

  12. Donald Oats
    July 26th, 2011 at 20:28 | #12

    Funny how geo-engineering is so popular among conservatives (who in the same breath will claim the “law of unintended consequences” as why humans shouldn’t meddle in things), when there is already one geo-engineering process in train, and it works at cutting out the root cause of the AGW problem, ie reduce our contribution of GHG load in the atmosphere by reducing GHG emissions to as close to zero as possible.

  13. Freelander
    July 26th, 2011 at 22:31 | #13

    The law of unintended consequences only applies to others, apparently; not to really smart people like what they are. Geo-engineering could do it, but given how speculative any significant geo-engineering project would probably be and how ugly some unintended consequences might be that is the sort of gamble I wouldn’t be keen on unless business as usual had resulted in a dire runaway outcome.

  14. July 26th, 2011 at 23:37 | #14

    The trouble with geoengineering is that I have yet to see a proposal that would:
    (a) Work
    (b) Be cheaper than reducing CO2 emissions or directly removing CO2 from the atmosphere using plants.

    Since activities such as reforestation could be considered geoengineering, we might need a new term to cover proposals that are simply used as an excuse for being lazy and irresponsible and avoiding doing the things we know will work. Perhaps geoslackerneering? As some ideas are extremely hazardous to the environment perhaps they could be called geoinjureneering? Or maybe we should call it World Adjustment for New Climate or WANCgineering?

  15. Jim Birch
    July 28th, 2011 at 09:26 | #15

    According to a Foreign Policy/WaPo article, the US intelligence community believe that al Qaeda – as an international force against the US – is close to collapse, the result of knocking off OBL and six years of drone strikes against AQ leaders in Pakistan. Yemen remains an active area. The break down of AQ is not seen as an end of terrorism but a loss of the international focus required to effectively strike against the US:

    More broadly, U.S. officials warn that al-Qaeda’s influence is likely to outlast its status as a functioning network. “Terrorist organizations, even more than enemy armies, are capable of reconstituting,” the senior U.S. counterterrorism official said. “The thing we absolutely don’t want to do is hang out another ‘Mission Accomplished’ sign.”

    http://www.washingtonpost.com/world/national-security/al-qaeda-could-collapse-us-officials-say/2011/07/21/gIQAFu2pbI_story.html

  16. Evan
    July 28th, 2011 at 15:03 | #16

    I noticed that the extremely determined climate denier troll at The Conversation, Douglas Cotton, replied to one of Prof. Quiggin’s comments and stated that “I’m prepared to put my money where my mouth is” and asked Prof. Q to contact him.

    Have you/are you going to contact him Prof. Q?
    And I wonder where this money is coming from? Mr Cotton is pretty much trolling The Conversation full time, so I wonder if he is personally wealthy or is being financed by somewhere?

  17. Fran Barlow
    July 28th, 2011 at 16:31 | #17

    @Donald Oats

    I have become more interested in geoengineering as the prospect of effective and timely abatement have declined. while I very much accept that there is a risk of moral hazard here, subject to suitably robust modelling showing feasibility, I’d be willing to entertain it.

    I’d prefer we focused on mitigation as the primary strategy of course, and use geoengineering to buy us the time we are probably going to need, even if in ten years we are doing far better than we are entitled to hope now.

    It’s worth noting that there are distinctions to be had between active and passive geoengineering. Biosequestration of CO2 — essentially drawing CO2 out of the air, stabilising it and sequestering it — is a form of passive geoengineering. Providing we can do this at suitable scale, cost and without other undesirable ecological footprint effects, it seems worth pursuing. I”m hearing that there is the possibility of using an analog or ruthenium to do this with fairly cheap materials at good RTE.

    Use of a dimming agent in the upper atmosphere such as SO2 would be more problematic, because we can’t be absolutely sure at this stage of unintended consequences, and there is of course the potential to subvert the primary mitigation strategy — effectively kicking the problem down the road. Sooner or later, without mitigation, dimming won’t work.

    We do have to keep in mind though that while we are mitigating, global temperature is continuing to rise, and we don’t want to start passing serious tipping points. Protecting the integrity of Arctic permafrost is key. A period of hiatus, if it was part of a time when we restructured to emit something like what we were emitting in 1850 and had a long term trajectory of getting back to about 280ppmv would allow us to reduce admixture of SO2 over time.

  18. Fran Barlow
    July 29th, 2011 at 13:52 | #18

    I was listening to Marius Benson talking with an analyst from NAB on RN the other day, and the subject of the state of the Australian Dollar, interest rates, the mining boom and monetary policy so forth came up. Needless to say, the discussion stayed entirely within conventional or polite mainstream conversation on such matters. The RBA would be “forced” to raise interest rates in order to maintain inflation within the target bands, and while this would smash the parts of the conomy that were flat, that was the best they could do to create space for the demand within the economy for all that mining.

    Most of the time, such commentary just washes over me, as is the case with most folk, but on this occasion I found myself asking whether we ought not to question the rules of the game.

    For a start, what would be wrong with moving the “target band” for inflation upwards? Is 3.6% really 20% worse for the economy than, say, 3%? I’m going to guess not. Even if it is, is it really worse than the net effect of harming all the non-mining related sectors of the economy? If the RBA decided to do nothing on the OCR or even, as Westpac suggested it might, cut the OCR, wouldn’t that simply mean that a whole bunch of folks who bet on the rate going up by buying Aussie dollars would take a bath on the bet, and not be so inclined to do it again? It’s not as if most people here are thrilled with having the Aussie trading at parity + 10%*. Nor is 3.6% or even 4% “hyperinflation”. Sure it would be easy to exploit politically, but if the tradeoff is having large parts of non-mining business getting hammered by high interest rates and a high exchange rate, is this a good thing?

    The other obvious point is this. Imagine if you were in a room where there were a jackhammer and a whole bunch of people speaking loudly at the other end of the room to make themselves heard over the jackhammer. If you wanted to make the room a more pleasant place, would it make more sense to muffle the sound of the jackhammer or enforced whispering on the folks at the other end of the room? I’d say the former, providing it was technically feasible.

    Now disingenuous cris de coeur from Gina and Twiggy aside we all know that the RSPT was not designed to smash the mining industry — quite the reverse — the aim of the exercise was, pre-MRRT, aimed at relating mining revenue to the government more closely to actual profits, to capture windfall profits at a higher rate, underpinning infrastructure and investment programs and to avoid overburdening small and mid-cap miners at the start of new ventures with too much taxation. Whether it could actually do these things in practice is beyond the scope of my query. The point is though that it wasn’t intended to end or even cap the mining boom. Yet if it had, to some extent, had this effect, would this have necessarily been a bad thing? It’s not as if those unsold or unharvested minerals disappear into the ether. Coal, iron ore, bauxite, zinc, gold, silver, uranium, copper and so forth will continue to be in demand. If mining investment really did ease off, how would this be different and worse than other sectors of the economy easing off? Why would this be less acceptable? So if the regime had imposed, in effect, a regime that approached the notion of confiscatory taxation on mining, and mining had indeed eased up and the dollar weakened and the revenues had been used to helpt the sectors of the economy that had been harmed to get going and to reinvest in quality public services, exactly how would this have been a bad thing, (at least for those who count themselves “centre-left”)? I’m not seeing it. Right now we have housing that is unaffordable in pretty much every major population centre, but especially those “benefitting” from the mining boom. Not only does increasing the tax take from mining when there is a boom on make sense in equity terms, but if mining does decline, it makes sense in macroeconomic terms as well. The economy retains its diversity. We get a better capitalist policy mix.

    It’s tempting to conclude that such suggesttions cross a cultural taboo, which is why it occurs to few to raise them, but is there some other reason within mainstream politics for not at least discussing such options?

    *disclosure: hubby is happy because he buys his books on Amazon in the US and the UK, and buys collectibles on ebay. He’s happy about it but I suspect he’s in the minority.

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