Monday Message Board

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

34 thoughts on “Monday Message Board

  1. There is a site called “hotcopper” which is a forum for stock investors to talk about the various stocks they’re investing in. If you ever want to know how dumb and stupid some people can get, go there and visit one of the more speculative stock discussions. Seriously, it’s like going to a football game – any contribution that is deemed as not positive to the stock, no matter how objective it is or how much analysis went into the info, is seen as “down ramping” the price and is jumped upon. There’s an emotional attachment which is completely irrational.
    The problem, of course, is that some contributors provide excellent analysis, which keeps you tuned in… well, up until a point before it gets too intolerable (which isn’t long)

  2. Gdp to tax% ‘naive framing less culture war’ comment. 

    Ernestine said: “There is a glaring unequal treatment of income earned from wages and income earned as profit that goes beyond negative gearing and other subsidies to ‘investors’.”

    “the culture war is just a useful distraction to ensure that those they are exploiting never combine against them. The big issue for them is taxation,”

    Nothing new I assume, so how about we change the cultute war tax debate from unequal treatment / invest / cgt / gst / super etc, to;
    23% tax to gdp ratio rising to 28% provides for all. 

    And set tax to gdp on a rolling basis – independently of politics. Or NNI with different parameters?

    …”In a recent book, Fair Share: Competing Claims and Australia’s Economic Future, Mr Keating and co-author Stephen Bell argue the ratio of tax to gross domestic product, or GDP, should be lifted by 1 percentage point per decade over the next 30 years to avoid a budget blowout linked to the ageing population.”. This suggests we will be forced to remove the artificial cap of 23.9%.

    But … “the Coalition, in the 2014 budget, announced it would cap the tax to GDP ratio at 23.9 per cent of GDP, promising to cut taxes to prevent any breaches of this ceiling.”

    If we were able to debate  “24% gets this type of society” vs say ” 26- 28% relieves many of societies ills “, then the debate would have a frame of 2-4% difference will produce superior society without effecting employment / production / investment / non rentier profits. And collapses all debating points to a simple metric. And shows us ” the degree to which the government controls the economy’s resources” (*1). We like control in our hands. And a potential political wedger’s wedge. And makes the top 1% seem unfair as “we are only talking about 1% over ten years”. (And a tobin tax to achieve this?)

    “From its pre-crisis level in 2007-08, the tax-to-GDP ratio fell 3.7 percentage points (around 16 per cent) to 20.0 per cent in 2010-11, the biggest decline in the ratio since the mid-1950s.”

    See all oecd tax to gdp rates via the editable oecd tax to gdp tool. Able to isolate years / country / avg etc. A great interactive visual graphing tool.

    *1. “It can be regarded as one measure of the degree to which the government controls the economy’s resources.”

    I note in presented oecd graph above at top right quadrant a peak outlier – Iceland raised its tax to gdp ratio from  36% to 51% and back to 32% 2015 – 2017. ???

    Framing affordability of an equitable society around 2- 4% difference or 1% over ten, of tax to gdp, would seem to me a sensible framing.

    And I discovered JQ’s suggestion: “something a little different in blog terms. This post will be updated whenever I get a chance, both with new material and in terms of publication date so that each new version will appear at the top of the homepage, hopefully with the comments being carried with it.”

    Updated blog in tax sounds like a great idea to me. And supporters to prompt JQ? JQ?

  3. Who knew?! Awaiting study now of News Corp vs populist effect here and UK & Fox vs populist voting trends.

    “The Political Legacy of Entertainment TV

    …”we find that individuals exposed to entertainment TV as children were less cognitively sophisticated and civic-minded as adults, and ultimately more vulnerable to Berlusconi’s populist rhetoric. ”

  4. Latest report from IEEFA’s Tim Buckley on Japan’s slow but steady move away from imported coal: ****/
    The paper also covers the other Asian markets briefly. It’s all bad news for existing Australian coal exporters, and worse for Adani. When your hopes for a miracle rescue hinge on Pakistan and Vietnam, you are in bad trouble.
    Nugget: a spokesman fot Tata says that the price uplift in the expected bailout of its Mundra coal megaplant will only cut the losses in half. It’s not politically likely that Adani has secured a much better deal. Modi is rescuing his cronies from bankruptcy, but not making them whole.

  5. ALP is becoming more and more to the Right after the election. At this rate, by the next election voter will think ALP stands for the Australian Liberal Party. Its not easy to know if this shift is due to ALP lost the election on progressive policies, or if Anthony Albanese’s political stance is similar to that of moderate Liberal as Professor Quiggin pointed out in the past. I think its a mix of both. Either way, progressive policies are dead for the coming decades because of the last election.

  6. Tom,

    I agree. The Labor Party has completely caved in and acquiesced to the right wing victory. This capitulation is not limited to Albanese and his faction in the Federal wing. Annastacia Palaszczuk, here in Qld, also completely caved in and back flipped after the federal election. She almost fell over herself in her haste to approve the Adani Carmicheal coal mine. People see these sort of things, understand them and realize that the ALP stands for nothing except winning and caving in to big money. This makes all of the ALP’s protestations about caring for the environment and the climate (and the reef, the mangroves, the mulga, the bilby, the black-throated finch etc. etc.) appear completely hollow as indeed they are.

    Progressive politics is dead in this country for at least a decade (and the whole world since the election of Trump). By that time (2030) it will be too late to save anything ecologically or civilizationally. Eventually people will realize what they have done and become enlightened and… I jest. Eventually people will realize what they have done and what they face. Then they will descend into war, cruelty and barbarism as they fight over the last remaining scraps of the environment and economic production.

    What? Me bitter? Disillusioned? Nah, just realistic about homo insipiens, avarus, rapax, cupidus, vorax.

  7. That article mainly points out that some big coal players have, are, or might, be selling coal mines. Bottom line is, if someone is selling coal mines then someone else is still buying them. The key break point will be when coal mines are unsaleable, when they become stranded assets.

    Meanwhile, world coal production has risen by 1.9% for the second year in a row. Admittedly this is after a decline from a peak of about 8,000 Mt in 2013. It bottomed out in 2016 and has risen back towards but not reached that previous peak.

    Overall, the phase out of fossil fuels is still far too slow to save us from dangerous global warming. A physics dot org article in 2016 suggested that fossil fuels could be phased out in ten years. That is the sort of time-frame we need to save the planet’s biosphere.

    “How long will it take? Conceptualizing the temporal dynamics of energy transitions” – Benjamin K.Sovacool

    However, as that physics dot org article notes, there is a absolute requirement for “strong government intervention coupled with shifts in consumer behaviour, often driven by incentives and pressure from stakeholders.” We have to cease being capitalistic and cease over-consuming.

    It’s clear we haven’t done nearly enough, given that it is 2019 and according to Fatih Birol “Despite major growth in renewables, global emissions are still rising, demonstrating once again that more urgent action is needed on all fronts — developing all clean energy solutions, curbing emissions, improving efficiency, and spurring investments and innovation…”

    The consistent picture of late stage capitalism is its failure to act in time. I expect this to continue and the biosphere to collapse; the world population of humans collapsing along with it. Other animal and plant populations are already collapsing as shown by the current 6th mass extinction event (including collapses of insects, birds, fish and mammals). Eventuially, the biological kingdoms of Plantae and Animalia will collapse severely and even possibly entirely. The biological kingdoms of Archaebacteria, Eubacteria, Protista and Fungi will survive. A new round of evolution will then begin, without humans of course.

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