Back to full employment?

I’ve been arguing for some time that the government should use the current period of strong demand to make a really strong push to reduce unemployment, particularly long-term unemployment. This piece in the Australian looks promising, though on reading closely it’s hard to see whether there is actually a serious commitment of funds and effort or just another rearrangement of the existing programs. If the government was willing to put the kind of money it’s repeatedly splashed around in tax cuts into a program aimed at driving the unemployment rate down to 2 or 3 per cent (by putting people into jobs, not by pushing them out of the labour force), they would win my support.

125 thoughts on “Back to full employment?

  1. Indisputably the ALP er… “misled” us people about the severity of the case.

    Particularly notable is that nowhere was it mentioned that it was the idea of the employee herself to scrap the award conditions when it suited her. Thus spotlight was not so far out of order to suggest formalising a few changes.

    It can’t be all one way.

  2. James,
    It is just as well that every single change to Australia’s workplace relations made by the ALP has improved the lot of every single working (and non-working) person or your case would be looking a little thin (sarcasm off now).
    Any change is going to introduce some anomalies, just as the promise made by Beazley to withdraw AWAs if he wins government will hurt many of those currently on AWAs. Any focus on individual cases is just as silly a debating point if the government pointed out one of the negotiations (or impositions or whatever other terminology you want to use) where the workers ended up notably better.
    On the previous note about resources. I think you contend that very little of our current society is truly sustainable, therefore almost any job you take would be exploitative of our environment and not, therefore, for you. I think this is a silly hurdle, but this is a seperate argument. Perhaps if you resolved your internal “deep green” (to use PrQ’s term) squeemishness you would find a job a little easier to find off a commune somewhere.
    One other question – are you in New Zealand? Perth is somewhat less than 6000km from anywhere in Australia.

  3. Andrew reynolds wrote :

    It is just as well that every single change to Australia’s workplace relations made by the ALP has improved the lot of every single working (and non-working) person or your case would be looking a little thin (sarcasm off now).


    I don’t believe that I could fairly be accused of being an uncritical supporter of the Labor Party.

    Nevetheless, I believe in giving credit where credit is due. If Kim Beazley is going to fight Howard of the issue of the Industrial relations legislation, instead of supporting him, then good on him.

    If Howard is so confident that his IR legislation is so much in the best interests of the public, then why won’t he simply show the public were Kim Beazley is wrong by accepting his challenge for a public debate?

    Andrew Reynolds wrote:

    Perhaps if you resolved your internal “deep green� (to use PrQ’s term) squeemishness you would find a job a little easier to find off a commune somewhere.

    I am not that squeamish that I would not accept one of the $100KPA jobs you say are on offer in these environmentally harmful industries, assuming that I could look forward to, at the very least, one year of secure employment, with prospects for career advancment, that I could continue with other interests in life, through, for example, the availability of the Internet and a reasonable amount of leisure time and that there are no hidden catches.

    However, I wouldn’t pretend to myself, or to anyone else, for a minute, that my occupation was not contributing to an industry that was greatly harming the prospects of our children and grandchildren for a decent life, and (I hope) I would still strive to change the direction of our society so that we would not find it necessary to earn a living in this way.

  4. It would seem James that the ALP/ACTU is fighting their challenge alone. Voters don’t seem impressed by the prospect of their groovy new AWA’s being taken away.

    Could it just be because AWA’s are actually BETTER than what went before?

  5. Any serious effort to reduce unemployment must include:

    Scrapping of payroll tax.

    Scrapping the practice of paying people to NOT participate in the workforce. (A competitive price wage and benefits paid to people for not working is always going to attract a segment of the population who find honest work to be too strenuous.)

  6. steve at the pub,

    Actually the two party preferred vote is:

    Labor 51%
    Coalition 49%

    … and public opposition to the Industrial Relations laws, in spite of the propoganda from our ‘news’ media and the fraudulent and extravagent taxpayer-funded $55 million ‘Work Choices’ advertising blitz of last year, is even higher according to the AC Nielsen Poll.

    As I have written earlier, if John Howard is so confident of his case, why won’t he accept Kim Beazley’s repeatedly made challenge to debate the IR legislation, and why does John Howard go to such elaborate lengths to avoid questioning by Journalists who are prepared to properly scrutinise his case?

    He can easily sway a good many of the public, by preaching from his bully pulpit in Parliament or in stage managed media conferences and ‘interviews’, the kind of nonsense peddled by yourself on this forum, but it would be an entirely a different matter, if he were to be forced forced to have his case properly tested before the viewing public in a fair debate.

    If that were ever to occur, the Coalition would be struggling to attain a popularity of even 20% in the opinion polls.

  7. steve at the pub,

    Thanx for your answers. I am curious about how much difference higher wages make to getting good staff.

  8. Higher wages has not produced better quality staff.

    There have been two outcomes from offering higher wages:
    Significant increase in the number of applicants,
    People applying from much further afield. (eg, uni students in Canada & USA applying for my bar jobs)

    Most of this new demographic of applicants are completely & totally unsuitable (eg, 16 year old girls still in high school in Melbourne) Possibly half of responses are looking at only the wages offered, without the applicant considering whether they are qualified or competent, or where the job is located or what tasks they may be required to perform.

    In summary: The competence of applicants has not been improved by offering higher wages. The average standard of applicants is dropping regardless. All in all, I am paying more for a lower standard of employee.

  9. Whoops! I misspelt ‘propaganda’ as ‘propoganda’.

    My apologies.

    ‘steve at the pub’, your post is bizarre! You get a wider pool of applicants by offering higher wages, but, you say the quality is no better, and you end up with a lower standard of employee? Therefore the implied ‘solution’ is to go on paying low wages?

    Just how ‘high’ are the wages on offer, anyway? … and how ‘high’ are they in comparison to normal wages offered in the industry? I hear that wages in most pubs are pretty abysmal, these days, especially considering the high costs of living in the larger cities. For that kind of hard demeaning work, I would expect to be paid exceptionally well.

    However, in regards to company CEO’s, especially the current imported CEO of Telstra, I can agree with you that higher wages certainly don’t seem to improve the quality of the employee.

  10. Er… I only posted the reality of my experience, to answer still-working-it-out’s question. I was speaking only of my bar job vacancies.

    Yes, I did say that offering higher wages has NOT improved the standard of applicants. This has been my experience.

    There is nothing bizarre in this. Offering higher money for anything (including bar jobs) = lots of people will, purely for the money, hold up their hand & shout “me, me, pick me!”

    Those with an aptitude & proven (to themself) ability to work in a pub will always apply to a pub if they are needing a job. The numbers of these suitable people are static. In good times (like now) lots of these people have no need to rely on their barkeeping skills.

    The volume of applicants for my bar jobs has been in decline over the past few years. It was once several highly suitable ladies each week dropping of a resume, and going onto the “waiting list” for a job; to me now taking people sight unseen from as far away as New Zealand or South Australia via a phone interview.

    Despite extensive (& expensive) local advertising by myself and my competitors there has not been a local applicant for a bar job for over 12 months. It has been 3 years since there has been sufficient local applicants to fill all local bar vacancies.

    Offering high wages means I get SOME applicants. But do no look at this in isolation, for simultaneously I am advertising far afield. By offering higher wages I am attempting to lure people from afar into coming to my place to work.

    I am getting people, but they are not any better than I used to get.

    I am not implying any “solution”, nor am I implying that paying higher wages is an extravagance. There is a floor price for labour in this country, so at no time have I ever paid “low” wages. However I can promise you that if I did not have to pay high(er) wages I would not.

    There is NOTHING demeaning about bar work. It is honest labour, performing a function which is in demand by the employers and is meeting a need of the shopping public. ANYONE who feels their job here is “demeaning” has no place in the operation, and I will relieve them of their burden of employment before their attitude infests the place and harms anyone.

    Speaking of which, you better adjust your attitude, fast, because as rapid as I am to sack someone who believes their job is demeaning, I move more quickly to evict (ie, to BAR) a punter who indicates a belief that bar staff are performing demeaning work.

    If you believe your profession has more gentility than mine, or give a word or sign to indicate that you are better, then you’ll be promptly losing a fair bit of your dignity and self-esteeem when you land bum-first on the footpath!

    I pay exeptionally well only for work which is done exceptionally well. Those who don’t perform are paid what they are worth, or would be except for the intervention of the Australian floor price for labour.

    Bar staff have been paid up to $60,000 per year by me, although this is an exception; $50,000 would be more representative. This is for a fully kept position. I believe it compares quite well. That wage, apart from taxation and cost of work clothes, is available for discretionary spending.

    How do your co-workers stack up for available discretionary funds?

    How about you now stop shedding your credibility & dignity by ceasing to use inverted commas on the word “high” when referring to the high wages I pay?

  11. SASP – have you ever come across the proverb: “The fish starts smelling at the head first”?

  12. Thanx again. You are being extremely informative. If you don’t mind me continuing to ask questions I’d like to pose a couple more.

    Do you know what has happened to the locals? Are they finding all sorts of different types of employment? Or is there a specific alternative well suited to people with bar experience that they are moving to? There are alot more cafe’s and restaurants these days. Maybe these are providing the competing demand? Or have higher property prices changed the local demographics so that the bar staff have moved somewhere else?

    And are you in a wealthier area like the northern beaches in Sydney? I have noticed that in good economic times the local unemployment rates in areas like these gets to almost literally zero. And commuting to places like these from higher unemployment areas can be quite difficult.

    It sounds like losing local applicants is the worst part. I imagine local workers would have a bit of synergy. I guess they would get on with the customers better, which would be good for you and make their job more enjoyable. The shorter commutes would make it easier to get them on shift at short notice. If you are unable to get locals then I guess you would have to offer substantially higher wages to make up for the extra commute time while still having all the downsides of workers coming from further away.

  13. ‘steve at the pub’,

    Clearly, I can’t take issue with most of your attitudes as an employer (although I do take issue with your rationale for opposing minimum set standards of wages and working conditions), so I apologise if I have caused you to draw any implication that you are exploitative or unfair to your own workers.

    And you are correct, there is nothing inherently demeaning about bar work, so my apologies again.

    Nevertheless, I think ‘demeaning’ would be a fair word to use to describe situations where employees are not accorded due respect by their employers, or by the members of the public, or not remunerated fairly for their hard work, and this situation, even before the introduction of the new Industrial legislation, was far more widespread, including within the hospitality industry, than many here are prepared to acknowledge, as shown in Elisabeth Wynhausen’s “Dirt Cheap”, and from my own personal experience.

  14. James: My “rationale for opposing minimum set standards for wages and working conditions”? Not sure what you mean. I have stated that a floor price applies to the price of labour. Like anything which is subsidised or has a high floor price, producer inefficiency becomes entrenched, especially amongst those whose product is in such condition that it would be unmarketable without the artificial legal protection.

  15. SATP, I learned about this proverb from a person who comes from a business family that was successful for several generations in the past and continues to be successful. It came up in conversations about running a business. While it may not be too difficult to interpret it in the context of an owner-managed enterprise, it is a bit tricky when there is a separation of ownership from control. But, since you never heard of this proverb, it may be best to treat it as a dead end.

  16. SATP,
    The variant of Ernestine’s proverb that I heard was (I think) “The fish rots from the head”. I took this to mean, in the context, that she might be suggesting that rather than “blame the workers” you might indulge in a bit of introspection.

    I do not mean this to be offensive, and I am sure Ernestine would not wish to be gratuitously offensive either. In fact while I find much I don’t agree with in your posts, I do find them often interesting and well worth reading.

    Are there things you could do differently/better that would attract and retain the staff you want? Do your advertisements convey accurately what you want from your staff? What do you offer in return, apart from the pay?

    If what you have tried isn’t working then maybe you need to try something else.

  17. Still Working It Out:

    What has happened to locals? Some are still working for me. However transients and itinerants are kept away by the price of housing, which has skyrocketed to the point where a person holding down a $30,000 p.a. job is unable to afford to rent.

    The staff procurement predicament I am in is shared by EVERY business in town. Not just the other hospitality businesses, but the dress shops, law firms, motor dealers, accountancy firms, the banks, the police, building trades, electricians, the medical professions, & so on.

    Yes, there are cafes & restaurants here, however they are not able to offer the job security which hotels do. Nor can they offer the hourly rate, or the sheer volume of full time work which pubs do. They have no hope of attracting pub staff.

    Perhaps I should revisit one of my comments from my previous but one post. Jobs here are fully kept. For you yokels from the big smoke, that means the staff are housed & fed. There is no commuting, unless you count walking down the stairs to be commuting.

    I am in a remote/regional area of Queensland. There is no commuting. Any office worker in this town who gets out of bed at five to nine will not be late for work, there isn’t any traffic or distance to travel.

    But yes, the district is quite wealthy. There are kids here who are the 2nd generation to never have performed household or houseyard chores. This lack of instilled work ethic/instilled experience of drudgery makes the younger generation of little princes/princessess almost impossible to employ.

    Do locals get on with the customers better? Yes, sometimes.

    The benefits/disadvantages of employing locals are perhaps better dealt with in another thread, but you probably can guess most of them already.

    I prefer to employ locals for many reasons. Among these reasons are availability and stability. Though experience has taught me there is no guarantee of either of these.

  18. steve at the pub,

    Having a “floor price” establishes some uniformity across the whole industry, which, in theory at least, gives all workers a decent minimum standard of living. It may seem to you as if it has caused inefficiency to become entrenched. However, at least, if the laws are respected and enforced, you are paying roughly the same costs as other employers.

    Without these minimum standards, particularly with our globalised economy, a ‘race to the bottom’ would be a practical certainty and many more Australians would become working poor. They would be literally living to work. There is also a tendency where wages are low, for some employers not to manage their workers well.

    I once lived in an Australia, in which practically everybody, who was prepared to put in a decent day’s work – that is without having to work non-stop from the minute he/she walked in the door, and being allowed to have his/her mind wander from the job from time to time and be able to stop and have the occasional chat with fellow workers – could expect at least an adequate standard of living including. If one was prepared to work hard and become very proficient at one’s job, one could have expected to have done very well.

    Today, that has clearly changed, in spite of economists being able produce figures that purportedly show that our standard of living has more that doubled since the 1960’s. For many workers, being prepared to work very hard for long hours and being very good at their work has become the very minimum requirement for simply being able to keep one’s head above water.

    What may appear to some employers to be high costs of labour are really only what is necessary for a barely dignified life. This is because many costs of living increases have not been properly factored in to the cost of living indexes, the most glaring of these being housing costs.

    These increases in the costs of living, borne principally by workers, are a symptom of the underlyling inefficiencies, which, I argue, have been brought about by decades of neo-liberal economic so-called ‘reform’ coupled with population growth. If the new Industrial relations laws ever become properly entrenched, workers will end up paying even more for the inefficiencies of neo-liberalism.

  19. James,
    Is there a reason you seem to regard the future with dread? Does your regard of the past as being better than the present represent a strongly conservative bent?
    I look at the world we are in today, compare it to the past, and see progress. Less pollution (granted, except for carbon dioxide, which has only recently been regarded as pollution), more freedom in the labour and other laws (again, too much regulation still, but we are not as restricted as the past) and, despite your contention, more wealth. I would also dispute that we are working more hours. We may be spending more time at work, but when we are home, we have more time than our parents did to spend with our children. I certainly spend more time with my kids than my Dad did, simply because I do not need to do as much around the house. I am also earning more and with better job security – becasue I know that if I loose my job finding another would be simple.
    I would encourage you to read this paper and establish a critisism of it, if you can. Extract:

    We document that a dramatic increase in leisure time lies behind the relatively stable number of market hours worked (per working age adult) between 1965 and 2003. Specifically, we document that leisure for men increased by 6-8 hours per week (driven by a decline in market work hours) and for women by 4-8 hours per week (driven by a decline in home production work hours). This increase in leisure corresponds to roughly an additional 5 to 10 weeks of vacation per year, assuming a 40 hour work week. We also find that leisure increased during the last 40 years for a number of sub-samples of the population, with less-educated adults experiencing the largest increases.

    Granted, this is for the US, but I believe the trends would be similar here. If it is wrong, please point to an article in a peer-reviewed journal.

  20. Andrew, I wouldn’t get too excited about “peer reviewed” being a marker of quality. It doesn’t really mean that much. Also, the paper you cite is just a working paper, which means it hasn’t been through peer review anyway.

    From a quick read, the benefit he seems to be endorsing – increased leisure – is enjoyed more by the less educated. Thus I suspect he’s misinterpreting the effects of reduced employment. If so, the paper inadvertently supports James’ position.

  21. Tony – from the Economist’s review of the paper – “And that is not just because unemployed high-school drop-outs have more free time on their hands. Less educated Americans with jobs—the overstretched middle class of political lore—do very well”.
    The reason I asked for peer reviewed is that James has a habit of referring to books, rather than academic papers. Some of the books on the subject (on both sides of the argument and I am not saying that either way in regards to any of James’ references) should be in the fiction category. At least published papers have to comply somewhat with the requirements of the publisher. In this case the Fed is fairly reputable.

  22. steve at the pub,

    Thanx again. Very interesting.

    Forgive me for missing the part about kept positions from earlier post. As a yokel from the big smoke the idea of a kept position is something completely new to me.

  23. Andrew Reynolds wrote:

    “Is there a reason you seem to regard the future with dread?”

    (I could write volumes on this one.) Briefly, because our destiny is largely in the hands of people who seem to be complete fools. They are, almost literally speaking, increasing the speed of the Titanic upon which we are all passengers with the ocean ahead strewn with icebergs to suit the ship’s owners who wish to set a new record for crossing the Atlantic.

    Queensland’s destiny is largely guided by Labor Premier Peter Beattie and Brisbane’s Liberal Lord Mayor Campbell Newman, who, in spite of our dams threatening to run dry, threatened power blackouts, health crises and traffic congestion, want to further increase South East Queensland’s population, whihc has already increased by 1,000,000 in the last 15 years by a further 1.1 million by 2026.

    Only last Sunday, when during an interview about Brisbane’s water crisis, Peter Mares on ABC Radio National’s “National Interest” put to Campbell Newman, whether in view of the threat of Queensland’s water running dry, we should begin to discourage interstate migration into Queensland, he responded :

    I don’t think so …

    Last December 8 the Queensland Government placed the following advertisment in the Courier Mail :

    Four million Queenslanders

    Today: 3,999,865

    Tomorrow: 4,000,000

    (Row of photos including baby’s face, farmer, blue collar worker workers, attractive female scientist with eyes focussed on test tube, etc)

    Queensland’s population will reach four million people tomorrow, Friday 9 December.

    If you are visting or thinking about a move to Queensland, you will already know we are the nation’s engine room, Our population growth is only rivalled by our economic and employment growth. We now account for 19.5% of Australia’s population.

    Tomorrow’s mile stone and our economic success reflect that Queensland is the place to invest, work, live, work and play.

    To all Queenslanders, I urge you to warmly welcome our new arrivals.

    Peter Beattie MP
    Premier and Treasurer

    Now he tells the residents of the Mary Valley and Rathdowney, that if their farms aren’t flooded, their won’t be enough water for the population of South East Queensland!

    How could I possibly not worry about our future with people like Campbell Newman, Peter Beattie and John Howard in control of our country’s destiny?

  24. Andrew wrote:

    I would also dispute that we are working more hours. We may be spending more time at work, but when we are home, we have more time than our parents did to spend with our children. …

    I suggest you listen to “Life Matters”, on ABC Radio National today, in which the length of working hours in Australia is discussed. As you are in Western Australia, you may still be able to hear the first broadcast at 9AM. It is repeated after the midnight news in the Eastern states.

    All that I have written above has been utterly confirmed by both the program guests and callers : that Australians are working longer and more intensely than almost any other OECD country.

    Does the availability of labour saving devices offset the additonal hours? In your case, possibly, but in the case of most, I very much doubt it, and this is certainly not my experience. Most of the devices that save me from domestic labour, with the possible exception of the micro-wave oven were already around before the neo-liberal economic ‘revolution’. Most other gizmos these days are more trouble and expense than they are worth.

    Outside our already extended working hours, time is also wasted by the vast increase in the complexity of our lives.

    The fact is that the promises of neo-liberalism have not been delivered. The prosperity that many supposedly now enjoy has been greatly exaggerated by the gravely inadequate GDP measures cited by economists, and the real reduction in both incomes, and quality of life for, at least, a very large minority has not been properly taken into account.

    It is time that all the claims of neo-liberalism were well and truly put under the microscope.

  25. James,

    The plural of anecdote is not evidence. Read the paper I linked to and come back with evidence – not the opinions of others.
    People everywhere believe they are working harder than their parents, just as their parents believe they worked harder than their children do now. Look at the facts, not talkback radio.

  26. Lindsay, I found your description of your experience in the telecommunicaton sector interesting.

  27. Andrew,

    The anecdotal evidence from a large number of callers to “Life Matters” today, which you dismiss, is totally consistent with my own experience and nearly everything else I have ever heard on the subject.

    Even if we accept what is written about in the document about America, I don’t see that is relevent to Australia.

    In any case, It seems as if Patrick Lion of Brisbane’s Courier Mail newspaper hasn’t read the document either.

    I will continue to try to read the document, but I am not impressed with what I have read, so far.

  28. James,
    You can choose to look at hard evidence or rely on anecdote, opinion and books written by people predisposed to pick and choose their own portions of evidence.
    I know which I will rely on.

  29. Andrew,

    Is this a response to my post on the thread “Against The Doomsayers”, whichis a response to your calim made above that there is less pollution these days than before?

    The post contains quotes from an article in the New York Times about pollution spewing out of China’s power stations and factories, wafting all the way across the Pacific into the United States?

    By all means tell me where you think the New York Times writers are wrong, so that others can judge which of us is ‘predisposed to pick and choose their own portions of evidence’.

    If you are right about there being more leisure time then ever, then the plans that the Real Estate Institute has in store for residents of South East Queensland, which assume that, in ten years time, we will be working such long hours that we won’t have time to ‘potter around in the vege patch(es)’ which will no longer exist due to the planned increased population density, may strike a few problems.

  30. Andrew,

    I fail to see how the document “Measuring Trends in Leisure – The allocation of time over decades” (pdf 566K), that you referred me to, purportedly about the situation in the US is more valid and more relevant than research done by the likes of, for example, Clive Hamilton of The Australia Institue, on top of my own personal experience and so much other anecdotal evidence I have heard from acquaintances and from talk back radio in recent years.

    As I pointed out above, the Real Estate Institute of Queensland doesn’t seem to believe, either, that our leisure hours are increasing.

    It’s plain to me, that for many, leisure time has been drastically eaten into since the sixties, because of

    1. Increased working hours
    2. Increased Intensity of work
    3. Less opportunities for on-the job training. More training done outside working hours at universities and TAFE colleges.
    4. More commuting time, more time spent finding parking spots.
    5. Much more additonal work that is necessary in order to find jobs. Writing resumes, addressing selection criteria, attending interviews, etc.
    6. Time spent seeking accommodation and moving house due to shortage of stable secure housing stock.
    7. More paperwork demanded by the Government from all of us, either to get on with our lives or to earn income.
    8. Requirements to deal with matters such as superannuation and private health insurance.
    9. Additional time (and expense) necessary to safeguard our possessions against theft.
    10. Time spent procuring and using child care services.
    11. Time spent by parents driving children to and from school and leisure activities because of a perception of greater danger to them.
    12. etc.

    If you wish me to accept that, contrary to my own perception of my own experiences, and the overwhelming amount of anecdotal evidence that I have cited, that my own quality of life has improved in recent years, then I would at least expect you to provide some documentation that is both relevant to Australia and which provides information from sources which I can more easily verify.

  31. James,
    The Australia Institute is hardly an unbiased paragon of exellence. Look at the list of directors and have a think about which barrows it is in their interests to push. Conflicts of interest occur at all the points of the political compass, not just what is normally termed “the Right”.
    I would maintain that the Australian experience is not too different to the US. In the case od Australia, the data is simply not available, at least as far as I know. If so, standard procedure is to use a proxy with a good data history – in this case the US study, as I maintain it would be a good proxy. If you can disprove the proxy link, let me know. I am sure we would all be fascinated.

  32. Andrew,

    Why can’t you just deal with the substance of my above posts?

    There is plenty of basis to what I have written including “Growth Fetish” by Clive Hamilton, “Dirt Cheap” by Elisabeth Wynhausen, much reading of newspapers and online material, listening to the Radio, personal experience, experiences of friends and acquaintances. (I have even read a good deal of Peter Saunders’ wretched “Australia’s Welfare Habit”, of which I am sure you would approve, and found many holes in his case.) To suggest that a study from the US (which, in any case, appears to be in contradiction with what is written in “Nickel and Dimed” by US journalist Barbara Ehrenreich) should carry more weight than all of this, is ludicrous in my opinion, and I suspect most other site vistors will agree with me.

    As I have already said, although I try my best, I don’t employ half a dozen research assistants so I am not able always to cite reliable source for every opinion I offer. Nevertheless, I honestly believe all of what I write to be true, and if it was not, I expect that you or someone else would be able, before long, to produce documentary evidence to prove what I have written is wrong.

    My point about living standards is very important in Australian politics, because that has proven year after year to have been John Howard’s trump card. It doesn’t seem to matter how much he lies, acts destructively on the international stage, neglects our environment, swindles and defrauds ever larger sectors of the Australian population, as long as he can convince a majority of the population that they are materially better off because of these policies he seems able to get over the line at election time.

    I believe that I have shown in my posts that the picture that Howard has been able to feed to the majority of the Australian population thus far is far from complete.

  33. James,
    I am trying to find the substance in your comments. You provide anecdote, opinion and books written from a particular point of view.
    I provided anecdote (my own), opinions (I take it you do not disagree that opinion has been provided), books (Lomborg, for example) and research in credible journals. I believe myself correct and am waiting for any ‘killer’ evidence. I see none.
    I look at Australia and see those rising living standards, a better environment (and more respect for it amongst the population), better jobs more time away from the office doing the things we want to do, better general health, more material wealth and longer lives. I cannot see the substance in your comments.
    I do not have a team of researchers either. Or even one.

  34. Andrew,

    You say you are waiting for any “killer evidence” to destroy your argument about the relevance of a US publication for Australia.

    I don’t think I want to provide “killer evidence” . I only want to point out the obvious fundamental flaw in your argument.

    You argue:

    a) “I would maintain that the Australian experience is not too different to the US. In the case od Australia, the data is simply not available, at least as far as I know. If so, standard procedure is to use a proxy with a good data history – in this case the US study, as I maintain it would be a good proxy.”

    b) The the US data comes from a refereed and high quality journal.

    I say:

    It is news to me that there is a ‘standard procedure’ for substituting data. In academia, the substitution of data would be called ‘academic misconduct’ (worst possible offence).

    However, I don’t wish to bother you with academia. I understand you are an accountant. So I shall try to present my argument with reference to accounting – for your convenience.

    Your argument is akin (equivalent) to the case where corporation (A) publishes financial statements (balance sheet, profit and loss account, statement of cashflows). Corporation (B) does not collect its own financial data to produce reports. Corporation (B) employs Andrewy Reynold’s methodology. That is, Corporation (B) says: KPMG, a reputable accounting company has certified the accounts of Corporation (A) and we are similar to Corporation (A). Therefore we maintain that the financial data for Corproation (A) is relevant for us, corporation (B).

    Andrew, if you tell me that you are not only an accountant but a consulting accountant or an auditor, and you don’t see that the Andrew Reynold’s methodology of substituting data, as you proposed in your exchange with JS, is fatally flawed, then I think there is a problem which is totally outside my area of expertise.

    In case it is not obvious, item b) is superfluous. Its role in your argument is to obfuscate. That is, your argument involves a substitution of lack of quality in the application of the content of the publication for quality of the publication (assuming you have a point about quality; the term assume means it is not known to be true). It is the equivalent of an extreme form of ‘creative accounting’, namely to confuse ‘assets’ with ‘liabilities’ or to do what Enron did (and Enron did the equivalent of what a real estate agent would do if sales prices would be recorded as commissions; ie categorical confusion).

  35. Ernestine,
    What I am saying is akin to standard stock market theory. I am trading in shares in companies in a particular industry. Company A, a nickel mining company, announces stellar results, beating market expectations. Company B, also a nickel miner, is yet to release results, but are similar in structure to Company A. Do I go and buy Company B’s shares in the expectation that their results will be similar to Company A’s? You betcha.
    I agree that, if you substituted data without disclosure and without basis it would be misconduct – but surely use of such a proxy in formulating an hypothesis would be acceptable? My hypothesis (which, due to lack of research funding, I cannot follow up at the moment) is that the US conditions would at least partially, and possibly wholly, be replicated here. We have similar economic systems, are similar in ethnic makeup and many of the same global and technological forces have been acting on us.
    As with the companies example above, I think the US is a reasonable proxy for Australia. I certainly here enough complaints (many on this site) that we are too similar to the US. If you have evidence to the contrary, let us know.

  36. No, Andrew, creating a new problem in addition to an existing one does not constitute a solution for the existing one.

    In steps:

    1. “What I am saying is akin to standard stock market theory. I am trading in shares in companies in a particular industry. Company A, a nickel mining company, announces stellar results, beating market expectations. Company B, also a nickel miner, is yet to release results, but are similar in structure to Company A. Do I go and buy Company B’s shares in the expectation that their results will be similar to Company A’s? You betcha.”

    I don’t know where you get your ‘standard stock market theory’ from. To the best of my knowledge, there is no ‘standard stock market theory of the sort you describe. Prove me wrong.

    What you describe is your personal formation of expectations which you use to make a financial investment decision. Other people are known to form their expectations on the basis of their opinion of the members of the board (indeed, you have used your opinion regarding the members of the board of some institution which published something, referenced by JS, which you did not like in an attempt to discredit the publication). I have no objections to any of your methods of making your own decisions. I simply would not buy your advice.

    2. Your analogy is fataly flawed. The crucial difference between your private financial investment decision making example and the original one (your argument with JS, which is the subject of my analogy), is that in contrast to your private financial investment decision making example, you have no information which would allow you to be confident that you can check your private theory (hypothesis) against reality. That is, your private financial decision making rule rests crucially on the knowledge that both corporations (A) and (B) are forced by law to publish financial accounting data but there is a time lag between the publication of financial accounting data, which is not ruled out by law. (It also rests on the assumption that relative to each other, corporation (A) and corporation (B) have not changed during the reporting period. But this is not crucial to my point here). By contrast, in the original problem (that which is the subject of my analogy) you do not have the knowledge that the corresponding data for Australia will be published within ‘the accounting period’. Indeed, you acknowledge that you don’t have any comparable data from the past or the present. Hence, my analogy to ‘creative accounting’, as described, stands.

  37. Ernestine,
    1. If you do not see this in your examination of the markets, I suggest you have another look. Each of the firms within an industry show strong (but not perfect) price correlation with each other. The correlation is not perfect, as I correctly pointed out earlier and is dependent on other factors, but good results in the first firm to report (or give guidance to the market) is a strong buy signal.
    2. On this, we will have to disagree. Simply because one firm does not publish data does not mean that they have not had a good year, just as because the US has more data on increased leisure does not mean that Australia has not had that leisure increase – it only means that there is no data. Absence of evidence does not constitute evidence of absence. I have indicated why I believe that there would be a correlation between Australia and the US in this. Can you indicate whether you believe that the correlation would be low, zero or even negative and if you do, why you do?

    Accounting periods are of no importance here.

  38. Andrew Reynolds wrote:

    I am trying to find the substance in your comments. You provide anecdote, opinion and books written from a particular point of view.

    Garbage, Andrew.

    There is substance. Just respond to the points I have made. Either show where they are wrong, or if you like, how they lack ‘substance’.

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