Monday Message Board

Back again with 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


http://eepurl.com/dAv6sX You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

23 thoughts on “Monday Message Board

  1. The demand for cigarettes in Australia is price inelastic. The most recent tax hike of 12.5% has increased revenue from those paying the tax-augmented prices more than the loss in revenues that occurs because numbers quitting are still increasing.

    This is so quite apart from the new method of collecting excises (which also, independently, provides revenue gains) and occurs even though smokers seem to be drawing more and more on illegal markets which you would think means a tax revenue leakage.

    My guess is that the elasticity of demand must be close to -1 (the boundary between inelastic and elastic demands). That’s an uninformed opinion based on talking to the few of my friends smoke and who groan incessantly about the high cost of smokes on the golf course. Some are paying around $350 per week for cigarettes. Some are retired and not earning a lot of income so it really hurts.

    https://www.theage.com.au/politics/federal/thank-you-taxpayers-for-smoking-20200217-p541fe.html?ref=rss&utm_medium=rss&utm_source=rss_feed

  2. Good grief, apparently I get auto-censored each time I attempt to post a little about the disease outbreak which has started in China. I will say a minimal amount in this post and see if it gets through. All I am trying to say is be alert and be prepared as you would be for any approaching possible or probable natural and economics disaster for Australia. Note, I said “possible or probable” not “certain”.

  3. First they came for them…

    JQ, Porter must be happy to be amending laws to catch YOU…
    “and to prevent secondary boycotts by groups such as Market Forces”

    “Coalition may use government contracts to crack down on environment protests

    “Attorney general seeks views on whether the federal building code could be used to stifle environmental secondary boycotts

    “Porter explained that a crackdown could include moves to limit access to litigation funding and environmental litigation .

    “He accused the group of attempting to “impose their political will on companies across the country through widespread, coordinated harassment and threats of boycotts”.
    https://www.theguardian.com/australia-news/2020/feb/18/coalition-may-use-government-contracts-to-crack-down-on-environment-protests

    “Get involved with Market Forces
    Support our work

    “Market Forces relies on the donations of our generous supporters to continue our fight to get money out of dirty fossil fuel projects.”…
    https://www.marketforces.org.au/get-involved/

  4. https://www.theaustralian.com.au/business/mining-energy/neighbours-take-bald-hills-wind-farm-to-court-over-health-complaints/news-story/90133f79fccbe1fdda61c4ee4f754a61

    Australia’s first group legal action for noise and health impacts from a wind farm has been lodged in the Victoria Supreme Court against the 106 megawatt Bald Hills project in Gippsland.

    A judge and jury in the coalmining centre of Morwell will be asked to hear the complaint about health and financial impacts and a failure by the wind farm’s owner to take action to stop it.

  5. Doubts grow over Indonesia’s claim it is coronavirus free – 6 hrs ago
    msn.com/en-au/news/world/doubts-grow-over-indonesias-claim-it-is-coronavirus-free/ar-BB103ZGn?ocid=ientp

    Singapore Airlines, SilkAir trim flights worldwide – February 18 2020
    https://www.executivetraveller.com/news/singapore-airlines-silkair-trim-flights-worldwide

    Chief Medical Officer on Radio National Breakfast about novel coronavirus – 12 February 2020, Transcript
    health.gov.au/news/chief-medical-officer-on-radio-national-breakfast-about-novel-coronavirus

    FRAN KELLY:

    Okay. At what point would you recommend or the Government decide to lift the travel ban? What is the bar for that? How do you measure when it’s safe?

    PROFESSOR BRENDAN MURPHY:

    Well it’s- there are probably two scenarios. One is when we’re pretty confident that the outbreak is controlled in the provinces of China other than Wuhan or Hubei province, and we know that the Hubei province is locked down at the moment. But if the growth in other provinces stopped and the disease seemed to be able- to be under control in those provinces, that would be a good basis for something.

    And clearly the other less attractive option would be if there were spread of the virus to many countries, and we had widespread transmission in the form of a global pandemic, and then travel bans probably don’t add any value in those circumstances.

    But at the moment, we’re very focused on containment and we have had pretty good containment so far in Australia.

    #IWillEatWithYou
    getup.org.au/campaigns/racial-justice/iwilleatwithyou/iwilleatwithyou

    Right now, much loved family businesses and restaurants across the country are going under.
    As misinformation about Coronavirus spreads across social media, local Chinese restaurants and stores are paying the price – with some losing up to 50% of their revenue.1 That’s not because of doctor’s orders OR common sense, it’s because of fear.2

    Updated COVID-19 statistics – February 16, 2020
    https://nucleuswealth.com/articles/updated-coronavirus-statistics-cases-deaths-mortality-rate/

    COVID-19 is the number 1 issue facing investors at the moment. Given issues with data from China, we have put together these charts (updating throughout the day) to highlight the data from outside of China.

    COVID-19 cases caught outside of China

    Whilst at first most cases of COVID-19 outside China were people who had flown from China to another country, we now seeing transmission of the virus outside of China beginning to elevate: …

    WHO underestimates the spread of the Coronavirus – February 14, 2020
    sciencedaily.com/releases/2020/02/200214111519.htm

    The coronavirus probably has a stronger ability to spread than the World Health Organization has estimated so far. This according to a review of previous studies of the coronavirus’ transmissibility performed not least by researchers at Umeå University in Sweden.

  6. Coronavirus Known Cases Globally to date:

    Total Cases: 73,335
    Deaths: 1,874
    Recovered: 12,799

    Active Cases: 58,662
    In Mild Condition: 46,867
    Serious or Critical: 11,795

    Closed Cases: 14,673
    Recovered / Discharged: 12,799
    Deaths 1,874 (13% of closed cases).

    These data beg the question. What is the death rate of COVID-19 (official name)? Or SARS CoV2 to give it its correct taxonomic name. At this stage one could give an estimated death rate of anything from 2% to 13%.

    The official Ro (R-nought) or estimated transmission rate is 2 to 3 (2 to 3 infected from each 1 case). There are various papers about which give a high end Ro of 3 to 6.

    This is serious folks. COVID-19 is highly infectious and dangerous. You need to be prepared. There are both health dangers and economic/financial dangers. The need to self-quarantine for some weeks must be prepared for in terms of having adequate food and medicines (if you need the latter). A global depression is also not out of the question. China has basically shut down economically. Those in the know are probably shorting the market right now.

  7. Svante says: at 3:23 pm

    “KT2, if it is targeting Market Forces then COALbo’s ALP will wave it through.”

    Svante I unfortunately agree that the ” flag in the wind ” AlboLibLite laborites will wave it through – which takes the wind from my sails.

  8. A beef with beef…

    Yes. The bar extending to far right at top is a beefy problem. I would also like to see effect of beefs pattys  [cow poo ] washing into waterways producing algal blooms, hence a feedback not included. Although “Farm-stage emissions include processes such as the application of fertilizers – both organic (“manure management”) and synthetic;” this study does not seem ti extend to runoff.

    “”You want to reduce the carbon footprint of your food? Focus on what you eat, not whether your food is local 

    “…food production is responsible for one-quarter of the world’s greenhouse gas emissions.

    “There is rightly a growing awareness that our diet and food choices have a significant impact on our carbon ‘footprint’. What can you do to really reduce the carbon footprint of your breakfast, lunches, and dinner?”

    https://ourworldindata.org/food-choice-vs-eating-local

  9. Economotionomics.
    – the economy of the invisible.
    And an RDEU update?

    “The more sophisticated technologies we develop to compute and predict the future, the more serious uncomputables we create”.^1

    The market [govt ] will control your future by marshalling “emotions”.

    Dont agree? – OUR dept of Prime Minsiter and Cabinet… “these feelings of incompleteness motivate people to persist until the pseudo-set has been fulfilled.”^2

    Emotions have forever been enmeshed with decision making, and now it is argued (^1) emotions are the  “new oil” source for winning digital propaganda, manipulation opportunity cost, and financialisation. 

    I assume Eva Cox would want, as do I, a precise metric and current value of social capital. Fbook, Amazon, googl, netflix have our data [incl emotions… see “^1 ] and therefire have a better ability to rapidly gauge intangibles re social capital. This is a disruption to an emergent [popn / social] value I didn’t realise is being disrupted. 

    Humans survey for this data in hundreds or thousands, whereas tech giants, continuously, amass millions of actual decisions, using our “playbour” – data and usage patterns. And they know “emotions are the new primary energy source” – just ask trumo or the editors of newscorpse / fox etc. Or scotty from marketing – behavioural economics is in pm&c for a reason.

    Yet social capital now seems to be easily maniplulated due to our ‘ Playbour ‘, and emotion harvesting – “our enthusiasm, joy, fear, anger, aggression, et cetera, are being mined with algorithms”. ^1

    Which brings us to;
    ^1
    “The more sophisticated technologies we develop to compute and predict the future, the more serious uncomputables we create

    “SB It’s become something of a cliché, especially since 2016, to claim that “data is the new oil”. We therefore now inhabit data or computational or informational capitalism. But you go further than this and say actually, emotions are the new primary energy source. Can you explain this fascinating concept?

    “AK Today, social energies have, to some extent, become part of the energy market: just as coal, oil and gas are extracted from the natural world, our enthusiasm, joy, fear, anger, aggression, et cetera, are being mined with algorithms by Google, Amazon and Facebook, who sell our data to other companies for advertising or propaganda purposes. Since each human constitutes thousands of data points, the value of social capital or the “people power” can be precisely calculated. Even the online activities of protest movements are monetised. We all perform so-called “playbour”, where value is harvested unbeknownst to us through labour masked as play. The contemporary global economy is based on flows and conversions of emotions and social energies into information, into capital.”
    https://tankmagazine.com/issue-82/talks/agnieszka-kurant/

    ^1bio. Agnieszka Kurant at MIT …
    “Conceptual interdisciplinary artist Agnieszka Kurant explores how complex social, economic and cultural systems can operate in ways that confuse distinctions between fiction and reality or nature and culture. She investigates “the economy of the invisible,” in which immaterial and imaginary entities, fictions, phantoms and emergent processes influence political and economic systems. “…
    https://arts.mit.edu/artists/agnieszka-kurant/#about-the-residency
    ***

    Adam Smith spoke about emotions;
    “The Theory of Moral Sentiments by Adam Smith
    “Part I, Section I, Chapter III: Of the manner in which we judge of the propriety or impropriety of the affections of other men by their concord or dissonance with our own
    “Smith presents the argument that approval or disapproval of the feelings of others is completely determined by whether we sympathize or fail to sympathize with their emotions. Specifically, if we sympathize with the feelings of another we judge that their feelings are just, and if we do not sympathize we judge that their feelings are unjust.” Wikipedia 

    And for more…
    The Emotional Mind: The affective roots of culture and cognition
    “Affective science can demonstrate the surprising relevance of feelings to perception, movement, decision-making, and social behavior. The mind is saturated with feelings. Almost every perception and thought is valenced, or emotionally weighted with some attraction or repulsion quality.[3]”
    http://philosophyofbrains.com/2020/02/16/the-emotional-mind-the-affective-roots-of-culture-and-cognition.aspx

    We [ I ] need to talk about social capital and how…
    – “the value of social capital or the “people power” can be precisely calculated”
    –  it is now able to be marshalled by algorithms, including emotional responses as they relate to decsion making, and 
    – how it has jumped the shark to digital decisions by government and private algorithms;

    “Fukuyama states that, “one person’s civic engagement is another’s rent-seeking.” Therefore, while social capital can facilitate economic development by reducing transaction cost and increasing productivity, social capital can also distort democracy if civic association enables special interest to gain special favors.” *** wiki again…

    ^2. And scary “opportunity cost manipulation” Department …
    The behavioural economics unit within PM&C uses pseudo-set framing…
    “Applying behavioural insights to a cash transfer program”
    … “these feelings of incompleteness motivate people to persist until the pseudo-set has been fulfilled.”…
    https://behaviouraleconomics.pmc.gov.au/projects/applying-behavioural-insights-cash-transfer-program

    And what is pseudo set framing?
    “Pseudo-set framing—arbitrarily grouping items or tasks together as part of an apparent “set”—motivates people to reach perceived completion points. Pseudo-set framing changes gambling choices (Study 1), effort (Studies 2 and 3), giving behavior (Field Data and Study 4), and purchase decisions (Study 5). These effects persist in the absence of any reward, when a cost must be incurred, and after participants are explicitly informed of the arbitrariness of the set. Drawing on Gestalt psychology, we develop a conceptual account that predicts what will—and will not—act as a pseudo-set, and defines the psychological process through which these pseudo-sets affect behavior: over and above typical reference points, pseudo-set framing alters perceptions of (in)completeness, making intermediate progress seem less complete. In turn, these feelings of incompleteness motivate people to persist until the pseudo-set has been fulfilled.”
    Keywords: framing effects, Gestalt psychology, judgment, decision making, perception 

    “Little is known, however, about two questions of central importance: What precisely constitutes a reference point? And via what psychological processes do reference points affect behavior? The answers to these questions may be as vast and varied as reference points themselves; indeed, perhaps this is why scant theoretical progress has been made in answering them (Abeler et al., 2011). Although some research has identified conditions under which reference points exert stronger versus weaker influence (Simmons, Leboeuf, & Nelson, 2010; Strack & Mussweiler, 1997; Wilson et al., 1996), it has tended to focus on identifying interesting and important effects of reference points on behavior (e.g., Heath et al., 1999; Pope & Simonsohn, 2011), with the reference points typically being either stipulated (Kahneman, Knetsch, & Thaler, 1991; Kahneman & Tversky, 1979) or assumed (Becker & Murphy, 1988; Campbell & Cochrane, 1999; Ryder & Heal, 1973). Using Gestalt psychology, we develop theory generating testable predictions of (a) what will—and will not—act as a pseudo-set and (b) the psychological process through which pseudo-sets affect behavior. Moreover, we differentiate between reference points and pseudo-sets: not only do we show that pseudo-sets can exert a greater influence on behavior than other types of reference points, but we also show that their effectiveness is more likely to be driven by a distinct psychological process—perceived incompleteness. First, what constitutes a pseudo-set? Early Gestalt research…”

    The discussion and last sentence from above reads “Still, our results show pseudo-set framing is effective across a wide variety of tasks, increasing effort—even at mind-numbing tasks—and promoting both prosocial behavior and gambling.”

    So a psychosocial tool using a persons perceptions, and a two edge sword depending on how we us it. In PM&C department.

    Pseudo-Set Framing
    Journal of Experimental Psychology: General 2017, Vol. 146, No. 10, 1460–1477
    http://dx.doi.org/10.1037/xge0000337

    JQ, my question to you is;
    Q: does the power of data encompassing emotions, as harvested now via internet, allow for an even greater “extension based on less restrictive assumptions” in RDEU ^3 and does this new “harvested emotions” power, combined with AI, make for better decision making, policy and or  manipulation. Or even an urge update/ new model? Or stated differently – reference something telling me you have incorporatwd our tech giants new ability to “harvest emotions”, covered.

    ^3. “… but since RDEU admits behavior inconsistent with EU, the field of potential applications is widened. As such, the RDEU model is not as much a competitor to EU as an extension based on less restrictive assumptions.”
    ^3. Generalized Expected Utility TheoryThe Rank-Dependent Model
    Authors: Quiggin, John
    https://www.springer.com/gp/book/9780792393023
    [No, I have not read above. My emotional response to the price stopped me – I wept!]

    JQ also mentions emotion here;
    “”For the record, this is what we say about economic rationalism (p 42)
    “The term ‘economic rationalism’ first entered the Australian lexicon in the period of the Whitlam government and was used primarily in a positive sense. The connotation was that of policy formulation on the basis of rational analysis, as opposed to tradition, ** emotion ** and prejudice. With the exception of support for free trade, there was no presumption in favour of particular policy positions. Views were generally in the economic mainstream of the period.”
    WORK FOR ALL
    – REPLY
    John Quiggin & John Langmore
    http://www.uq.edu.au/economics/johnquiggin/JournalArticles95/WFA95.html

    From the Department of Opportunity Cost Manipulation: Making more unknown unknowns – you don’t know -but we know how to use via … “the economy of the invisible”.

  10. Emotions in Oz, KT2?

    See:

    Australia briefly became an independent state during the Whitlam years, 1972-75. An American commentator wrote that no country had “reversed its posture in international affairs so totally without going through a domestic revolution”. Whitlam ended his nation’s colonial servility. He abolished Royal patronage, moved Australia towards the Non-Aligned Movement, supported “zones of peace” and opposed nuclear weapons testing.

    Although not regarded as on the left of the Labor Party, Whitlam was a maverick social democrat of principle, pride and propriety. He believed that a foreign power should not control his country’s resources and dictate its economic and foreign policies. He proposed to “buy back the farm”…

    On 10 November, 1975, Whitlam was shown a top secret telex message sourced to Theodore Shackley, the notorious head of the CIA’s East Asia Division, who had helped run the coup against Salvador Allende in Chile two years earlier.

    Shackley’s message was read to Whitlam. It said that the prime minister of Australia was a security risk in his own country. The day before, Kerr had visited the headquarters of the Defence Signals Directorate, Australia’s NSA where he was briefed on the “security crisis”.

    On 11 November – the day Whitlam was to inform Parliament about the secret CIA presence in Australia – he was summoned by Kerr. Invoking archaic vice-regal “reserve powers”, Kerr sacked the democratically elected prime minister. The “Whitlam problem” was solved, and Australian politics never recovered, nor the nation its true independence.

    ht tp :// johnpilger.com/articles/the-forgotten-coup-how-america-and-britain-crushed-the-government-of-their-ally-australia

    ht tps :// ourworldindata.org/optimism-pessimism

  11. Scummy’s Robotheft,

    Lack of ‘duty of care’ proves voters are right to not trust government
    Bernard Keane, Crikey, 6 hrs ago c/- MSN
    “Discontent with Australian democracy is near record lows. The majority of voters are convinced that people in government look after themselves and can’t be trusted, and that government is run for the benefit of a few big interests. But, through all this, the Morrison government has found a new way to alienate voters … What is the duty of a citizen to a government like that? Is there any civic duty at all when a government declares it has no legal responsibility toward its citizens, when citizens already believe that government is primarily there to look after a few big interests?”

  12. Snippets from the latest CoalWire (https://endcoal.org/2020/02/coalwire-310-february-20-2019/):
    – New report ups the estimate of annual deaths worldwide from fossil fuel burning to 4.5m (mean years lost 19), annual cost $2.9 trn.
    – Support for new coal mines in Australia down to 37% (57% among conservative voters).
    – Greenpeace activist applies for CEO job at embattled Polish utility.

    From BNEF, electric two- and three-wheelers now have 30% market share (20m a year).
    https://cleantechnica.com/2020/02/19/5-trends-are-ushering-in-the-age-of-electric-vehicles-bloombergnef/

  13. PS:
    – Indian cosl generating capacity was ui 3.9% in 2019. But coal generation fell 2.5%. Yes, fell. Lenders to the coal bubble promoters and coal importers like Adani must be getting very nervous.

  14. Compare and contrast…

    Fresh calls for more government spending as unemployment drifts higher – Updated: 7:21am, Feb 21
    thenewdaily.com.au/finance/finance-news/2020/02/20/government-spending-unemployment-rise/

    Ministers accuse federal government of prioritising budget surplus over NDIS – 7 hrs ago
    msn.com/en-au/news/australia/ministers-accuse-federal-government-of-prioritising-budget-surplus-over-ndis/ar-BB10cm1k

    NT RAAF base set for $1.1 billion upgrade – 7 hrs ago
    msn.com/en-au/news/australia/nt-raaf-base-set-for-dollar11-billion-upgrade/ar-BB10d9gj

  15. Chinese coal update
    ***********************
    Reuters report an Indian coal analyst as predicting a drop in Chinese coal production of 200mt in 2020 (-10%) from the coronavirus epidemic, of consumption 180 mt. Global coal trade will stay flat, as the increase to China will be balanced by further falls to Europe.
    https://www.reuters.com/article/us-china-health-coal/china-thermal-coal-market-faces-two-three-month-short-squeeze-due-to-coronavirus-noble-idUSKBN20C0AO

    This estimate is largely guesswork as the epidemic is still raging. But the order of magnitude is striking, and suggests China will suffer an actual GDP drop. A global recession must be possible. The silver lining is that carbon emissions should fall, quite significantly: a cyclical blip, but welcome all the same.

  16. JP Morgan has recently warned clients that climate change poses an unacceptable risk and that BAU could lead to catastrophic outcomes; “We cannot rule out catastrophic outcomes where human life as we know it is threatened,”

  17. D’oh! JP Morgan have finally realized this have they? The scientists (environmental and systems sciences) have been telling us this for at least a couple of generations (taking a generation as twenty years). Suddenly, people think the warning has validity or credence when it is given by financial authorities. I am not directing this criticism against you akarog but at those who won’t take notice of a warning until real dangers assume a financial dimension. Operating in this manner is a sure fire way to ensure that reaction to the real dangers will be too late, as has actually occurred empirically under the current system.

    Capitalism is a delayed action system when compared to the early preventive action that can and should have been taken by a science-informed democracy acting in a social democratic manner. The free gifts of nature, meaning resources, bioservices and waste sinks, and damage thereto are not significantly costed until the 11th hour. There is no mechanism and no incentive in markets to draw in uncosted negative externalities in a discounting manner, in a timely fashion. Indeed, there is a natural bias and incentives in the system to delay such costing.

    Hyperbolic discounting causes people to choose a smaller reward today over a larger reward tomorrow. It also causes people to choose a small reward today over large cost tomorrow. Time preference theory tells us that “The higher the time preference, the higher the discount placed on returns receivable or costs payable in the future.”

    The evidence that capitalism, as a decision system, fails to properly account for costs in the future is rapidly accruing. It is now clear that we cannot wait for capitalist finances to properly value the future. The capitalist system is, as it were, congenitally incapable (by its very “DNA”) of valuing the future properly. It does this precisely because it enables emotive, qualitative, hedonistic and proximal valuing over scientific, logical, ethical and long-term valuing. Desire is promoted. Not logic. If one doubts this, one simply needs to look at advertising which is long on emotional and propagandist appeals and short on facts, especially inconvenient facts.

    “Smoking Kills” was only put there by government edict acting on societal concerns. “Coal Kills” and “CO2 emissions Destroy” will also only be put up front, in one fashion or another, by government edict acting democratically on societal concerns.

  18. On the Record: Bets

    These bets are set in stone until they reach judgement. Read the arguments written in favor of each position and discuss the bets with the bettors themselves and the rest of the Long Bets community.

    “Driverless cars will be commercially available in Las Vegas, NV by May 27 2024. Trips may be point to point outside of the city center with no requirement for any passenger to take over manual control of the vehicle.”

    BET 712
    DURATION 8 years (02016-02024)

    PREDICTOR
    Jeff McAulay

    CHALLENGER
    Stephen Zoepf

    STAKES $500

    will go to Mothers Against Drunk Driving if McAulay wins,
    or Mercy Medical Angels if Zoepf wins.

    McAulay’s Argument
    Every major car company already has autonomous driving technology under development. Licenses for driverless cars have already been issued. Google autonomous vehicles have already demonstrated hundreds of thousands of miles of driving without any major accidents.

    Zoepf’s Argument
    I agree that autonomous vehicle technology has progressed at an astounding rate. However, I feel that major technological, policy, and consumer barriers mean that commercial availability of the technology in the next 8 years is unlikely.

    “Detailed Terms
    Terms: By Memorial Day 2024, one must be able to pick someone up at a Las Vegas strip hotel and take them to a destination off-strip in downtown Las Vegas. If this is possible, Jeff wins. If it is not possible, Stephen wins.

    There are a few key clauses: …”

    http://longbets.org/712/

  19. The Nevada Democrats managed to organize their (silly) caucuses without the chaos in Iowa. Some of them have said that the difference is that people who work in casinos know how to count.

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