25 thoughts on “Sandpit

  1. No doubt Prof Quiggin will be putting up his own post soon enough regarding his adventure with tonight’s “Drum” episode.

    Catch it if you can and see what it says not just about the issue of power generation, distribution, costing and the Enviro disaster but as a paradigm for the death of Media in Australia.

    I should say I am specifically NOT using this space as an excuse to bash the Drum, quite the opposite.
    It is a lone oasis in in a TV desert and its capacity to argue objectively on big issues has been compromised by rightist interference over more than two decades, to ensure that underlying issues like political patronage are excluded from discussion.

    What is left on a show like the Drum are several elephants in that particular room that panellists seem to shrink from drawing attention to usually because of narrow interests they represent in the skewed excuse for free markets that now exists which is more a disguised species of mercantilism.

    For example, on how costs should be apportioned in the light of long term political vandalism concerning the issue and several related ones. is avoided, for obvious reasons and criticisms of those responsible is veiled and muted when not excluded as panellists rush to ensure socialisation of debt and private interests, wealth.

    I lack the wit to add much more but like General MacArthur, will return after a bit more thought, by which time a debate may have commenced that benefits we who feel concerned, once again stressing that I posted this NOT to bash Fanning or her panel including the prof himself, who faced an uphill task to present given the circumstances and the nature of the rest of the panel.

  2. Paul Walter, I rarely watch either the drum, nor q&a now, without stressing about “by which time a debate may have commenced that benefits we who feel concerned,”, even with JQ on the panel.

    Here is an antidote for “several elephants [one being tax] in that particular room that panellists seem to shrink from drawing attention”… “But history shows that serious attempts to collect more taxes usually succeed.”

    I hope we see The Professor discussing a “tax only” panel – soon and often. And stressing “not much different ” as JQ said in response to Gans & Switzer on abc rn between the lines 2 mths ago.

    “”For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data.

    “”In their book, Saez and Zucman sketch out a modern progressive tax code. The overall tax rate on the richest 1 percent would roughly double, to about 60 percent. The tax increases would bring in about $750 billion a year, or 4 percent of G.D.P., enough to pay for universal pre-K, an infrastructure program, medical research, clean energy and more. Those are the kinds of policies that do lift economic growth.

    “”One crucial part of the agenda is aminimum global corporate tax of at least 25 percent. A company would have to pay the tax on its profits in the United States even if it set up headquarters in Ireland or Bermuda. Saez and Zucman also favor a wealth tax; Elizabeth Warren’s version is based on their work. And they call for the creation of a Public Protection Bureau, to help the I.R.S. crack down on tax dodging.

    “I already know what some critics will say about these arguments — that the rich will always figure out a way to avoid taxes. That’s simply not the case. True, they will always manage to avoid some taxes. But history shows that serious attempts to collect more taxes usually succeed.”

  3. Every so often someone at Catallaxy posts a graph purporting to show that its the rich who pay almost all the taxes. But these graphs are totally flawed because they define rich as those who have the highest TAXABLE income. Whereas the problem starts with the fact that if you are really rich you have heaps of income, but most of it is non-taxable. I heard a tax consultant saying that no-one in Australia need pay more than 70 000 in income taxes if they don’t want to. This was a few years back so the figure may have changed. But the rich can set up all these companies and trusts and things. Which is an argument against the ubiquitous use of artificial persons. 70 000 is what a rich person makes when he takes a nap.

  4. And, usually, such purported ‘the rich pay’ proofs limit the taxes considered to income tax; and, usually, such purported ‘the rich pay’ proofs do not work out an overall rate of tax on income. Admittedly that’s not as simple as it might be – should tax on capital gains be treated as tax on assets, or on net assets, to work out an asset rate, rather than as tax on income? – but neither is it difficult.
    In much of history, taxes are the impositions of the powerful on the weak and go to strengthen the powerful. We seem to be returning to that model.

  5. Over at Catallaxy they are getting excited about nuclear weapons. Do you trust our guys never to use these weapons on civilians? They are talking about nuclear bombers and things.

    I don’t like it. But we do really need a good submarine fleet with nuclear torpedoes. Any other area can and should be covered with other more targeted and humane means. But we cannot do without nukes to stop a massed naval landing. If there is another way, we should talk about it. But so far I cannot see a substitute. If there is a massed naval landing combined with a grid takedown we are finished. We are so much more vulnerable than most people think. For example a grid takedown means a money supply takedown under current banking conditions. That means everyone wants to act but no-one can act no matter how patriotic they be, because there is no medium of exchange. Thank you fractional reserve banking ……….. (not.)

    We cannot be tolerant of fractional reserve banking. Its not acceptable. It ruins free enterprise and puts us in danger at all times.

  6. To G Bird – “parasites,” “looters” and “moochers”…

    GB. I also now have ren & stimpy in mind for you. If you were not so rude and derisive I would never have made such a connection. Ren & Stimpy rely and tearing out your heart strings. Something you seem good at. Please tone down the abuse.

    And linking this…
    “and four kids were killed because of this stupidity” to subsidies is vile.

    The deaths were bad practice and bad policy. Irrelevant to tax, subsidies, welfare OR INDEED ECONOMICS. To argue this way is just you lowering yourself to ren n stimpy. A kids cartoon – in your own words “THAT THE FIRST THING THAT POPS INTO A CHILD OR A FOOLS HEAD IS ALWAYS THE RIGHT ANSWER. You got it now?” You got it now?

    GB said “Indeed they are the first solutions that comes to mind.” only if you are using a prior commenter as a child. Which of course shows us how too debate you – not at all. An adult would first say stop it. But an adult understanding that “the market rules” will at some point try to tip the scales. Tax. Subsidies. Renationalisation. Call it anything you want as all you are doing is calling out the deadweight “loss” [market term not common wealth term] instead of suggesting why and what the deadweight is – externalities and cultural and paradigm zeitgeist. And suggesting zero interest rate loans. Off to scomo with you. Then you agree “Now taxing negative externalities can make sense. ”

    You’ve mentioned you are poor because of you being subsidised by all of us. Tax transfer from cash positive to cash negative – the dole. Should I call scomo and mention you don’t want this subsidy now? Oh. You want ‘your’ tax back.

    GB You sound like Ayn Rand …”Her books provided wide-ranging parables of “parasites,” “looters” and “moochers” using the levers of government to steal the fruits of her heroes’ labor. In the real world, however, Rand herself received Social Security payments and Medicare benefits under the name of Ann O’Connor (her husband was Frank O’Connor).”
    https://www.snopes.com/fact-check/ayn-rand-social-security/

    You are a free rider “The free rider problem of potential donors could be solved either by a tax financed National Health Service”. Universal health care – is it a subsidy, one keeping you healthy…

    “Altruism and free riding
    Altruistic rich members of society may be willing to subsidize the provision of healthcare to the poor if they are more interested in the health than in thesubjective well-being of the poor – a case of interdependent preferences. Private charity is not suitable to achieve an efficient allocation as donations to the poor, whether in cash or in kind, have a public-good characteristic because they increase the utility not only of the donor but also of other altruistic members of society. The free rider problem of potential donors could be solved either by a tax-financed National Health Service…” 
    https://www.sciencedirect.com/topics/economics-econometrics-and-finance/welfare-economics

    Call subsidies anything you like. Fixing an entrenched system – from 70’s thru to 2019 is in need of a push and pull to return deadweight loss to the common wealth profit.

    My thumb’s  muscle memory for you comments is again reinforced. My apologies to all that this is soooo ad hom. My only excuse – I am not red adair – or a prof of economics – so all I have is fire. Your tone sucks the oxygen GB. If you bother to reply do it in the sandpit. Where this [doesn’t really] belong.

  7. The subsidies caused the deaths . Thats all there is too it. Because you take away normal reinvestment and you replace it with a gold rush.

  8. Its very hard to get people to believe that energy economics is different and that the speed of substitution away from existing major energy sources is inherently very slow. If you are thinking of getting substantial change by the 2030’s, thats the thinking of people outside of energy economics. It seems common-sense but its not the way it works. We really aren’t going to get all that much done before the later part of the century. We will be in energy stress all that time. I mean globally. This was inherent in the paper I studied in 1985. But Vaclav Smil understands all of this coming from a different background of engineering. Subsidies slow the transition down. They don’t speed it up because subsidies ensure the ineffectiveness of the new energy source.

    He comes out after seven minutes and the first thing he says is:

    1. We are a fossil fuels civilisation.
    2. We shall remain so for a long time to come.
    3. Energy transitions take a great deal of time.
    4.Scale matters.
    5. So does power density.
    6. Its always better to use energy rationally then to come up with new ways to use it.

    So then he starts talking about why the above conclusions are true and essentially inescapable. But he can talk as much as he likes, because if someone has got in their heads the magic-pudding of subsidies, he’s talking and they are not listening. My experience is that you can try to tell people about agricultural reform so that farms produce rather than consume energy, if they have that secret sauce of subsidies going on in their head, you are talking, they are not listening. If you start talking about how important city layout is to energy consumption …. if they have those subsidies magic beans floating around in their imagination, they are getting some sort of insulin shock fatigue trying to listen to you, because they believe in error that subsidies can do the job. So nothing else is important. Why should you listen to me? You’ve got the subsides right? And the 16 year olds think we have no time right? But subsidies slow things down, they don’t speed things up. Even if they seem to speed things up for a few years.

  9. GB says ” the subsidies caused the deaths”. A winged parcel of gold rush causing deaths. And no thanks to any reply on this.

    Graeme Bird says:
    OCTOBER 13, 2019 AT 7:28 AM

    “Like Caesar said: Make haste SLOWLY.”

    Yes minister then… 2 steps back…

    Graeme Bird says:
    OCTOBER 13, 2019 AT 5:36 PM

    “Subsidies slow the transition down.”

    “But subsidies slow things down, they don’t speed things up.”

    And thanks for leaving out the derision.

  10. No not two steps back. I’m not against action. I’m not against communist pilot projects, zero interest loans, and long-term tax exemptions for retained earnings for stand-alone companies. I’m not against extra gasoline tax and higher royalties on coal. I don’t mind incentives.

    But not bounties. Not subsidies. These are economics snake oil. They will never work since they misunderstand or ignore the slow process of reinvestment through-out the entire network of production.

    I can see the desperate need for a communist pilot program involving goats, mobile electric fences and unemployed people. To continuously reduce fuel levels in fire prone areas. I think we need a lot of small communist projects everywhere, many of them to inter carbon in the soil. For one thing to have much better soil.

    But these subsidies have to go. We have to start again, not without incentives, but without subsidies, since this is the only way to aspire to many diverse forms of energy and a whole string of problems solved that need solving.

  11. After 30 years of fooling around and another 30 years of expansion, its at least theoretically possible that thorium will bring back the age of cheap fuel worldwide. We Australians could engineer ourselves cheap energy locally. But as a global family I see nothing but energy stress until late century. Or even next century.

    But if Thorium is the only answer its not a great answer. Not on its own. Its certainly not a quick answer. As the Professor says its basically vapourware. No disagreement there. But even given the many decades delay, if thats the only answer its no good answer because cheap energy brought us urban sprawl, ghastly industrial corporate farming (with its high output and low nutritional value) an arms race in the size of cars on the road. And another thing. Combined with funny money excessive lengthening of the structure of production so that goods are carted hither and yon, in scant regard for common-sense understandings of economy.

    Boehm Bawerk showed that gains in manufacturing were made not just by improving producer goods, or increasing the number of producer goods. Something else also happened. The lengthening of the structure of production. But funny money lengthens the structure of production as malinvestment. As market failure. It lengthens excessively so. When a trend is one way many economists have a hard time believing it can go too far. So for example once we see that less people were primary producers every decade, it can become hard for economists to think the trend can ever go too far. Once we see that the structure of production needs lengthening (for increases in manufacturing productivity) to cry out that funny money is making that process excessive, they think you are crying wolf.

    Also cheap energy has allowed this explosion of debt, which is slavery-lite, and kept the debt accumulation going, when without cheap energy, we would crash and have to reduce debt before we could get going again.

    I know I must sound like Pollyanna. Or Leibnitz. Or Voltaires Dr Pangloss, when I suggest maybe we need this decades long energy-stress that has been foisted on us, by our funny money, greed and hardcore lack of foresight. Maybe we need what seems to be a human tragedy, because its going to make us get everything right.

    What should a farm look like? What should the average farm size be? What should the average height of residential buildings be in satellite country towns?

    For example I think the main street of a country town ought to look like six floor luxury apartments, with retail on the bottom floor. You should feel like you are in Paris. But you walk 100m tangentially you know you are in the country. And there should be really tall buildings that look fantastically beautiful at either end of town, and again at the train station. That are actually car parks. And most people have to walk some distance to get into their car so that the town centre is never clogged up. Well thats a thought anyway. Thats a direction of where I think our imagination ought to go.

    If there is no one best answer, I would say permaculture comes closest to it. Because permaculture is really the lowest maintenance nano-technology we have, and are ever going to have. Check out Matt here. He’s always ecstatically happy because he eats the best food. He’s got some ideas about how to make his permaculture produce energy. There are bound to be teething problems in his latest idea. You think he’s flaky but he’s actually one of permacultures leading lights.

    I post this video just to give you an idea of what is possible when you get all that nano-technology that evolution or natures God has bequeathed to us, and get it working for you with good design. The rain falls on the roof and the roof will need repainting. But the same fain falls on the food forest and it can only get better. As an Atheist I don’t want to get all Saint Augustine on everyone. But when you look at it like that, man’s creations are kind of sub-standard. And the things that evolution or natures God brings to us, are of a higher quality.

  12. “ I can see the desperate need for a communist pilot program involving goats, mobile electric fences and unemployed people.”

  13. Yeah definitely. Higher CO2 levels mean greater buildup of fuel after a wet winter. That fuel needs to be turned into protein and fertiliser. And people need to be employed. Of course with these commie undertakings when they start they will be loss-making. But if they start slow and build slow they can become very efficient. So we need people doing these things on public land. Need to keep those fuels levels down. There was no mystery with the fires in the spring. This reflected the winter rains in an age of high CO2.

  14. ‘m not seeing much vetting for quality over at the Conversation. They are vetting for letters at the end of ones name. And for ideological viewpoint. But not for quality. One post I was particularly disturbed by is the following:

    https://theconversation.com/we-cant-drought-proof-australia-and-trying-is-a-fools-errand-124504

    This is ridiculous. We have a duty to drought-proof the countryside. Its hard to figure out even what this girl is talking about.
    What do other people think? Drought-proofing means water retention landscapes. It means swales every 3 metres of altitude and trees on the lower sides of the swales. Mostly nitrogen fixing trees. Where they find a good clay bottom thats where you can put a pond, without a plastic bottom. A pond that leaks slowly. The idea is to get water flowing slower than toothpaste but underneath the ground. Rather than water flowing over the top.

    People who have spent the last ten years doing a pHd aren’t going to be much aware of what is going on around them in policy debates that require a little bit of understanding over many disciplines. Once you have water under the surface the soil life follows it. That inters carbon. I know people are angry at right-wingers like I used to be angry at the left. But surely when we find something we can all agree on we should jump at that. I want the carbon in the soil to moderate droughts and floods and to green the deserts. But others may want it for the pure goal of interring carbon. I want programs which encourage the big land-holders to offload chunks of land in return for interest free loans to improve the land they have. I think we should meet leftist calls for a guaranteed living wage … I think we ought to meet this request halfway. And provide jobs, like building water retention landscapes, maybe just 5 day a fortnight jobs.

    We are on the driest continent. We have more capacity than most to improve soil and inter carbon. We have more capacity than ANYONE to do this because we have more resources than people living in the Sahara. Its not a fools errand. Its a simple responsibility we have after seizing land from the indigenous people.

  15. How do Kangaroos fit in to a water retention plan? Does Kangaroo meat taste good? How much methane and C02 does a Kangaroo produce? Is that more than say a German Shepard? What about a Golden Retriever? How much vegitation does a Kangaroo need to eat to produce a kilo of meat? Would Hemp and Bamboo have a special place in a water retention program? What about Sugar Beets?
    Why would big land holders need loans to improve their land? I would think that a big land owner became big because there was lots of cash in the bank account. Anyways think about this, you want the big land owner to have access to no interest loans instead of loans that would be 4 or 5 percent intrest, and even less in real dollar terms and in return the land owner is supposed to give up large capital investments (land in this case) to get a slightly better deal on a loan. I have never been very good at making money that is probably why that deal does not make sense to me.
    But yes government policies that stress water retention seem to be an obvious decision. Feel free to write all you want it and the related subject of permaculture because with out permaculture there is no culture.

  16. Big landowners might not need cheap loans to improve their land. But neither can we really ask them to offload land without an incentive to do so, or go into usurious debt to make improvements for the communities benefit. In the end that won’t end up for the communities benefit. It will end up for the bankers benefit.

    My main rule for reform is that you don’t hurt peoples capital value and their cash flow AT THE SAME TIME. So I’d be undermining their total wealth, but at the same time helping them improve their cash flow. Their total wealth would be undermined by a greater supply of farm land coming onto the market.

    We see with virtually all valid reform, that it has a tendency to undermine capital value. So for example taxis. We’ve had decades of taxi industry dysfunction because we don’t want to bring down the capital value of the taxi license holder. This dysfunction went on so long that Uber became a thing and now the value that should be riding on the wallets of Australians is going to a big international company. The idea was to bring taxi licenses down in value to about 10,000 or 20,000 dollars. Just enough for quality control. But in doing so I wouldn’t say …… “Why do taxi license holders need this or need that” I would just have a five year plan that fixed the industry, even if it meant trying to boost taxi drivers cash flow for 20 years.

    We need to move to a nuanced Georgism. But to do so quickly means collapsing just about everyones retirement value which tends to be invested in their house? People are never going to stand for it. So again imagine people with 5 investment properties. A reform goal winds up hurting their total wealth, at the same time as improving their cash flow. If such people can be convinced to offload some of their investment properties and cede their negative gearing rights then we might throw refinancing two of their remaining properties at low interest and making rental income non-taxable for twenty years.

    Well you could have objections to the specifics mentioned. I just want to get across the idea that reform usually means capital value destruction. So to sugar that pill it ought to come with debt or interest relief, and with medium term improvements in cash flow.

  17. “How do Kangaroos fit in to a water retention plan?”

    Swales on public lands will lead to more kangaroos and camels and if we cannot bunch them with fences or carnivores we need more culling. Kangaroo meat could be made non-taxable or a stand-alone business culling kangaroos for food could be given a tax exemption on retained earnings for 20 years.

    “Does Kangaroo meat taste good? ”

    Yes it does. A bit low fat for my liking and it can be a bit gamey. But it would be possible to engineer cheap Kangaroo meat onto the market. Cheap meat is good for poor people.

    “How much methane and C02 does a Kangaroo produce? Is that more than say a German Shepard? ”

    Indeed they do. Herbivores don’t have that HCL digestion. They have more fermenting going on. Healthy natural grasslands have bacteria that gobble up methane. Methane may mix well but the reality is that once methane is at a substantial altitude its not going to be able to deposit extra joules in the ocean. Sure if you had a band of methane in the stratosphere that band would probably get unnaturally warm. But thats not the same as the oceans getting unnaturally warm. In fact it may create the opposite effect. For all the funding of climate science we have stumbled on a subject that is not adequately resolved.

    Let your heart not be troubled about Kangaroo methane. Done right water retention landscapes mean more herbivore dung. More herbivore dung means more carbon internment. And if we are ever under war-time conditions we will all be grateful for the restoration of public lands if we have to go foraging for kangaroo and camel, while our military boys are busy sorting the problem out.

  18. You’ve cottoned onto two plants with multiple uses. Bamboo can even be used to improve hydrology. A poor mans plastic pipe. Hemp is the jack of all trades in the natural world. And even the drug use of hemp is superior in the following sense …. Once a sick person has to go to opiates for pain relief ongoing, they are on the way out. But thats not necessarily the case with Hemp by-products that used correctly can build appetite and resilience. Though we don’t want to be flippant about many bad effects that these things can have on many of the younger people.

    But the new urbanism. Thats the good stuff right there. City layout itself is key to getting through this period of energy stress. Thats got to be one of the most important subjects there is. Yes permaculture plus new urbanism ….. thats a lot of the battle won right there. If you could bring industrial production and dense housing into a setup like Sweden’s Bo-01 at Malmo …..

    … So you’ve got that “New Urbanism” city layout for a satellite town. And the satellite town is surrounded by permaculture farms. Then what you have is powerful energy efficiency inherent in the way we live. And a high quality of life to boot. This energy stress this is serious stuff. No stone must be left unturned. And eventually we are going to have black soil and all that carbon back in the ground no worries.

  19. Once upon a time in a world very close to this one there was a website called Feral Scholar, now defunct. It drew a group of commnetators that came up with practical solutions to pretty much all of the problems that the world is faced with today. Permaculture and new urbanism were big themes in the website of that world. But the one problem it could not solve was how to persuade or force the people in their world to implement the solutions that they had proposed.

    Their solutions had a shelf life. Based upon backwards planning the use by, or at least open by date was exceeded. 6 years later lots of people were left standing around staring at each other because everyone thought that someone else had the solutions and was only keeping them hidden until the right time to came to apply them to the planet.

    Was the solutions last in the possession of someone just like Brigadier General Thomas Tinsley? Or, were they last in the possession of someone just like Major General John Ross(i)? Maybe they were left with someone just Vice Admiral Scott “Steckdose” Stearney. The people of that world will probably never know because the solutions have never been seen by a qualified reporter.

    Just maybe the people of this world should try to apply those solutions in any case. If the people of this world can recreate them. The solutions could retard the growth of politcal retardation on this planet, leading to a slightly longer life span for all.

  20. G. Bird
    This link made me think about your reservoir proposal. (I guess that you made it some where else.)
    https://www.yahoo.com/news/dead-fish-line-banks-near-022014926.html

    My thought is that small reserrvoirs will have a larger surface area per cubic meter of water stored than large resevoirs. That means a faster evaporation rate than with large resevoirs.

    Unless the smaller reservoirs were covered. Covering them should be plausible. If we are using less fossil fuels to power our civilization that would mean less money for those countries dependent on the income from the sale of fossil fuels. But if we use those hydrocarbons to make durable plastics, which are going to stay in one place those nations that are depedent upon the income from the sale of fossil fuels will not be totally cut off, a process which would take years anyways. These nations may have to economize. But, then again that will probably be true of everyone.

    Once the Arctic is ice free humanity can not take anything for granted. Global solar management will be required to maintain a climate that can sustain human life on earth. An ice free Arctic is now locked in.
    But since the speed of change that comes with that is uncertian responsible actions now like permaculture and new urbanism could add decades to the quality of life.

    It really annoys the hell out of me that I can not personally squeeze the balls of someone who is holding back the changes that need to be made to government policies everywhere to meet these real future challenges. I am limited to suggesting such things in hopes that those who actually have access to those who need to get their balls squeezed will actully see my suggestions and feel a desire to implement them.

    30 years over due.

  21. “…Permaculture and new urbanism were big themes in the website of that world. But the one problem it could not solve was how to persuade or force the people in their world to implement the solutions that they had proposed.”

    You don’t force. You persist. These things come in waves. You don’t expect to get the same instant gratification like you would with cooking. People don’t realise how substandard the food they are eating tends to be. They think they can rely on medications for their health. In reality its great food and good surroundings that make them healthy. People will come around. In the end energy stress will force a lot of these things on us. If they get the right ideas ahead of the crisis then things are easier. If they wait for the crisis, still the changes will be forced upon them. Just with a lot more pain. I tell people that permaculture is the lowest maintenance nano-technology we ever had and ever will have. People sometimes click and give up on their Kurzweil fantasies and realise that there are certain ways of doing things that are timeless.

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