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. 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. Trees for climate fix? Maybe not.

    ‘Just sitting there dead’: study finds mass tree losses in NSW after severe drought

    “Even species ‘superbly adapted’ for Australia’s harsh conditions suffered, with up to 60% of trees dying in some areas
    . ..
    “Still, many trees aged 40 years or older also perished, underscoring the severity of conditions for plants that were “superbly adapted” for Australian conditions.”…

    hix, any comment? An item on my bucket list was satisfied by a visit to Schwarzwald – the Black Forest – but my naiveté fooled me into thinking it was still wild. I hope it is ok for the future. I’d say they need to reassess mortality; … “and the mortality probability was 0.4% yr-1.”…

    …”The couple’s piles of logs were worth less than what it had cost to cut and stack them. Now, they don’t expect to earn a profit from logging spruces for 20 years. “We have a big forest now with big problems,” Jörg von Beyme says.

    “The von Beymes are far from alone. Since 2018, more than 300,000 hectares of Germany’s trees—more than 2.5% of the country’s total forest area—have died because of beetles and drought fueled by a warming climate. The massive dieback has shocked the public. And it has raised hard questions about how a country renowned for inventing “scientific” forestry more than 3 centuries ago should manage forests so they can continue to produce wood and protect ecosystems in the face of destablizing climate shifts.”…


    “Every year Africa loses an approximate $17 billion to illegal logging activities with the demand for timber now at an all-time high, exacerbated by an international smuggling racket with China at the heart of this trade.”

  2. JQ, Harry, Ernestine, do you?

    I have never understood “people’s tax consciousness,”, nor;

    “Why People Vote Against Redistributive Policies That Would Benefit Them

    “New explanations from economics research.

    “Views on fairness, equity, and justice are much more complex and context-specific than we have grasped until now.”

    “As Norbert Lloyd Enrickwrote in 1963, “Every man is ‘aware’ of taxes, especially in this year of 1963. The extent of this awareness has rarely been examined, despite the ever-increasing importance of the public sector. Given our ignorance about tax awareness or tax consciousness, it is surprising that some economists are so willing to predict the effects of changes in the tax structure on individual behavior. If we do not know people’s tax consciousness, how can we know the extent to which changes in their tax burden will affect their behavior?” 

    “This article is excerpted from the book “Combating Inequality: Rethinking Government’s Role.”

  3. People’s “tax consciousness” is greatly affected by the propaganda in the system about “deservingness” (whether people deserve the income and economic results, or lack thereof, that they get) and tax. People don’t have any inherent, inherited views about deservingness and tax. These are learned views. They may have some inherited predilections towards being generous or selfish but these effects are probably minor compared to enculturation. Most people after all mostly sit on or near the average for most inherited characteristics. Basically, people “Vote Against Redistributive Policies That Would Benefit Them” because they have been propagandized into believing such policies would not help them and would also damage the overall economy. Capitalism has a very effective propaganda system which suits the interests of oligarchs and corporations. The world view promoted to everyone is the worldview of oligarchs and corporations.

  4. By backing Berejiklian for a federal seat now held by an independent Morrison is effectively sanctioning corrupt behaviour in a national government.

    This could/should blow up as anti corruption forces throughout the country mobilise.

    There are those in Lib ranks who are dismayed by Morrison.

  5. To the Schwarzwald, hum. Non human made landscape essentially does not exist here, not even the natural reserves. The Bavarian Forest natural reserve is probably a bit closer to a non human influence status. Been quite a while since i was at the Schwarzwald. Enjoyed the gorges. Lot´s of other interesting stuff in the bigger region arround too. For me mainly Europapark, Europe´s biggest theme park that is not an US transplant. The Rheinfall is not too far either. It is an interesting broader region. One could do 50 km travel intervallls and be either in a bigger city, a historic city or at some natural highlight for a long time round there. The bigger less touristy cities tend to have at least some nice palace or cathedral left when the historical center is gone. To start with a less touristy place that has a nice castle as well as a constitutional court: Karlsruhe—> Baden Baden—>Straßburg—> Rhine valley–> Europapark—> Schwarzwald –> Schaffhausen ->Rheinfall Bodensee —> ……. all the famous alps stuff,

  6. Labor has been forced to ruled out alteration of its 2030 emissions target if it ends up needing Greens support to win government .This wont stop Morrisons scare campaign and it wont mean that the Liberal party will be forced to stop making love with, and refuse support from ,the far and extreme right. James Campbell who is politics editor at the Herald Sun was unusually frank when he said that worldwide ” right wing populist conservatives can win elections without the backing of business groups in 2021 ” , saying that they just need to find “simple messages” with enough “cut through” .

  7. $278 billion for altzairu berdea*

    That´s what Bloomberg think it will take to make global steel net zero by 2050
    Bloomberg-NEF estimates that new clean capacity and retrofits for lower emissions will cost the steel industry an additional $278 billion compared to business-as-usual capacity growth. This is a relatively modest figure, compared to the $172 trillion estimated by BNEF to decarbonize the global energy sector. Most of the costs to make green steel come from operations, rather than capital costs.

    This is no longer a pipe dream, but who will pay? Recharge;
    ArcelorMittal, the planet’s [second-] largest steel producer, announced last week that, after signing a memorandum of understanding with the Spanish government, it will oversee a €1bn investment to build a green-hydrogen-powered direct reduced iron plant at its existing facility in Sestao on the outskirts of Bilbao, as well as a new electric arc furnace. […] The world’s first full-scale zero-carbon steel plant will require a whopping €500m ($588m) of public money to go ahead...

    The Spanish government and the EU are now faced with a genuinely hard subsidy problem in steel decarbonization. Similar ones will arise in cement, fertilizer (see and shipping. A few thoughts.

    1. The case for early deployment subsidies for green steel etc is in general strong. First, these are commodities (shipping a service commodity): the product is standardized, with negligible scope for product differentiation or price-gouging; they are intermediate goods, so reputational costs and benefits are minor; there is little prospect that the transition will generate large net savings, as it has done in electrical generation; there is thankfully little scope for rent-seeking through IP. There is therefore no large first-mover advantage, and a rational steelmaker will hang back and wait for others to sort out the problems and bring costs down. IIRC economies of scale were an argument for public subsidy recognized by Alfred Marshall. It is reasonable for Arcelor-Mittal and other steelmakers to ask for an early-deployment subsidy.

    2. That said, negotiating subsidies as bespoke handouts for single projects is a terrible way to spend public money. The scheme should be fair as between companies, transparent, legally certain and based on technical facts and known trends.

    Bloomberg says that the cost of green steel is dominated by that for green hydrogen. This is certain to come down, but nobody can be sure of the timescale or end point. World DRI production using fossil gas was 104 mt in 2020, about 10% of the total. From this we can infer that the process is currently a little more expensive in most places than blast furnaces, but not by much. (DRI apparently requires high-grade ore, which means added pre-processing of low-quality ore.) I would suggest that steelmakers should bear the DRI investment risks – it is after all their trade – while public support concentrates on the part they don’t know about, hydrogen supply. The ideal policy is of course a stiff carbon tax – the current ETS price does not seem high enough to get the job done. Second best would be a self-contained sectoral levy-and-rebate scheme: levies on fossil steel etc, rebates on green. If that’s out, consider a price guarantee for hydrogen, a “contract-for-difference” on the model of British support for offshore wind.

    3. The steelmakers and cement guys have been surprisingly ready to commit to the transition,, on financially acceptable terms. The shipowners are coming round more slowly, prodded by EU threats of unilateral action, but prospects are good. I don’t know much about fertilizer, but I suspect the sector follows the same pattern. The cultural difference with fossil fuel producers is that the transition is just a big change in their way of doing business, not an existential threat.

    I doubt if steelmakers have any sentimental attachment to coke, or the blast furnaces that burn it. Metallurgical coal is dirty, polluting, supplied over long and easily disrupted supply chains, and volatile in price. A hydrogen DRI steelworks would be sited, like Arcelor-Mittal’s Basque project, near to the electrolyser plants that will feed it though pipelines and to the wind or solar farms or hydro dams that will feed them electricity. The hydrogen will be bought on 15- or 20-year contracts, as is common for renewables. Altogether, fewer headaches. For green steel, and I think green cement, fertilizer and shipping too, the argument is not about status, self-image and power but simply money.

    *Altzairu berdea: that’s how Google translates “green steel” into Basque. It’s a very old pre-Indo-European language, that some enthusiasts claim is descended from Cro-Magnon. But both terms here are clearly imports from Spanish or imperial Latin, SP “acero verde”. Cavemen had no need of a word for steel, but you would think that as painters they would have been interested in colours. The language is not a joke – Basque nationalism spun off an effective terrorist wing in living memory, and any Spanish government has to worry about a resurgence.

    Footnote 1: The cultural gap may be widest in Sweden, where the first pilot plan for hydrogen DRI steel has been set up. Hybrit is a joint project of private steelmaker SSAB and public ore company, LKAB. The non-executive Chairman of the LKAB board is Göran Persson, Prime Minister of Sweden for 10 years and former leader of the Social Democrat party. He is as establishment as it gets in Sweden, but not your typical capitalist. It looks as if he isn´t treating the job as a comfortable retirement sinecure.

    Footnote 2: SFIK Chinese sabre-rattling against Australian coal imports is not paralleled by anything similar for its massive iron ore imports from Western Australia. China is far more dependent on these than on the comparatively small volumes of Australian coal. The country has domestic reserves, but of low-grade magnetite (25% Fe ) against Pilbara’s 67%-Fe haematite. China could at a pinch do without Australian ore, but at considerable expense, either by pre-processing the magnetite or importing the good stuff a great distance from Brazil. Vale’s 400,000-tonne supercarriers won’t go through the Panama Canal, so it would be the long way round.

  8. The “tax consciousness” hypothesis of Norbert Lloyd Enrich has its greatest supporter in the Nobel laureate Robert Lucas, His rational expectations school basically adopted Milton Friedman’s concept of price expectations but used it to explain tax perceptions. Lucas argued that people had a kneejerk reaction to changes in tax rates. His idea was that the futility of redistribution policies lies in the expectation that they lead to higher taxes. In response to this expectation, taxpayers begin to increase their savings to protect themselves from this perceived inevitability of tax increases. The age of uncertainty was over, according to this hypothesis, and a new age of rational expectations had dawned. The great empirical work done by Thomas Piketty demonstrated the failure of social-democratic reflection on tax issues, in particular their neglect of fiscal doctrine and just taxation was a mistake in hindsight. This allowed liberal and neo-liberal academics to push the line that all tax increases were harmful to economic growth. There was also an initial failure to understand the importance of timing in implementing a tax rate change. Even the liberal theorists got this wrong. If you legislate for a tax change, it may take months to get such legislation passed and approved as a tax law. But the boat may have already sailed as it were. People are more sensitive or “conscious” of tax changes in times of austerity. So if, for example, a tax change is launched during a period when people are highly “tax conscious” then personal savings may rise. If however a tax change occurs during a long boom or even a quarter of heightened economic activity then the tax change may have a minimal impact on “tax consciousness”. People may actually reduce savings.
    If you want a more in-depth analysis of “tax consciousness” I suggest you read the 2008 paper by
    Jin-Sep Kim “Analysis of the Tax Consciousness of a taxpayer and Tax Agent.” (0ctober, 2008). This looks at many areas of this debate. It also raises the point that it is the advice from tax agents that may be crucial in the decision making process of the taxpayer. As we know the tax system has become very complicated both here and globally. So complex that many taxpayers now rely on professional tax advice.
    If you want primary data look at the work done by Diah Nur Pertiwi that was published in 2013.
    The only comparable Australian research I could find comes out of the UNSW, my old university. Look at the eJournal of July 2007 (Volume 5 Number 1). There is hardly any long term and wide ranging research on ‘Tax consciousness” in Australia; as far as I have been able to ascertain.
    As with all things related to tax policy changes, the complexity of this issue is made worse by the political bias of the researcher.

  9. Jaes, excellent roundup and info as per usual. Thanks.

    Glad you added;
    “2. That said, negotiating subsidies as bespoke handouts for single projects is a terrible way to spend public money. The scheme should be fair as between companies, transparent, legally certain and based on technical facts and known trends.”

    … but cant we just bleed Twiggy for a while to get some of his commons cash pile back? Any funding suppirt contingent on shares to Government?

    What does Spain do about private vs public ownership of compared with “Hybrit is a joint project of private steelmaker SSAB and public ore company, LKAB.”?

    I hope your Basque language promotion “Spanish government has to worry about a resurgence.” isn’t being noted by your hosts.

  10. hix, thanks.

    When I arrived by train into Karlsruhe station I glaces out the window through huge brick arches framing my view of – a gaggle of flamingos! The zoo was next door. A severe memorable juxtaposition.

    And yes, forest as a farm. When I searched UK for native / untouched / old growth forests to visit wuth my English Rose, many hits. But nearly all were just old graveyards.

  11. Infrastructure layout by slime moulds. Cheaper than AI & humans.

    And your daily dose of Awe.

    “On the Road: Among the non-Humans

     “When researchers arranged oat flakes in the geographical pattern of cities around Tokyo, slime mold constructed nutrient channeling tubes that closely mimicked Tokyo’s metro rail. •

    “The shaggy ink cap mushroom iscapable of erupting through asphalt and lifting heavy paving stones overnight, although they are not themselves a tough material. No one knows how they do it. •Some fungi speciesare able to harness radioactivity as a source of energy, similar to how plants use sunlight to grow. ”

  12. Ikon, I agree ” People don’t have any inherent, inherited views about deservingness and tax. These are learned views.”,
    … yet I think inherited views are cultural memes. My father’s advice “NERVER get involved with the Government!”, but 50% of his contracts were Government tenders, which “15% retention” and Bank of NSW “we are calling in all monies in 2 weeks” in late ’70’s forced a partial sale of business. My brother then vowed to ever place private property as security. Perpetuating bau.

    And see above: “Why People Vote Against Redistributive Policies That Would Benefit Them”

    Thanks Gregory McKenzie:.. “As with all things related to tax policy changes, the complexity of this issue is made worse by the political bias of the researcher.”

    May we have a bias index please.

    It seems Australia is ranked 41st for tax complexity.

    I need someone to interpret or pick highlights as this is very detailed and I cannot decide which category better or worse. Tax & transfer and franking but many categories.

  13. It doesn’t matter what’s true. It doesn’t matter what the intelligent think. The foolish manipulated by the ruthless determine the system. B****t baffles brains.

  14. K2T, Some people prefer a lottery where they have a chance of being really rich but a much greater likelihood of not being rich to a guaranteed income that is above the average that they might expect without te redistribution. I recall this was an argument against the fairly silly (although well-intentioned) ethics of John Rawls.

    But it is a good question. Why do working class Trump supporters reject a national health scheme?

  15. KT2: History casts la ong shadow. ETA ceased operations by 2010 and announced its dissolution in April 2018. But according to Wikipedia, in February 2020 there were still 238 etarrras serving time in Spanish and French prisons. There is an ongoing nationalist campaign to have them amnestied as “political prisoners”, though I assume all those previously jailed for simple membership or abetting have long been released. Spanish conservative politicians regularly use the issue as a stick with which to attack left-wing governments. Basque nationalist deputies in turn regularly annoy conservatives by making speeches in the Cortès in incomprehensible Basque, as is their right. It’s understandable that green pork may look cheap. The “Basque Y” high-speed rail line is nearly finished, at vast expense as half of it runs in tunnels.

  16. KT2, Hix: I believe you can hunt down tiny patches of the Caledonian ur-forest in Scotland and similar stands in the Swiss Alps. But basically, the one significant old-growth forest left in Europe is in Eastern Poland,,where the current migrant crisis is. There are more forests that have been managed sustainably for a long time, for instance round old Norman abbeys. I came across a fine stand of 400-year-old oaks near the Loir (no e) that had been planted by Colbert to replace ones he had cut down to make warships for Louis XIV. Around 1880, the book said they were ready to cut, but an early green protest movement saved them for a leisurely old age.

    The Black Forest suffered more in WW2 that its twin over the Rhine, the Vosges. Don’t ssk me why. Nazi policy over exploitation of German conquests and vassals was an incoherent mess, as well as sadistically cruel.

  17. Oops, arithmetic fail: the statist French oaks I saw were 300 years old, not 400. Contrary to popular belief, oaks are not particularly long-lived as trees go. The few surviving mediaeval specimens in Sherwood Forest are picturesque wrecks. 400 years is a good lifespan. Olives can live – and fruit! – for 2,000, sequoias 3,200, bristlecone pines 4,500 years.

  18. Whiter shades of pale, significant if non white. Glad a …

    “New Simons Collaboration Aims to Provide a Mathematical Language for Fairness

    “A joint effort by a group of researchers finds a rigorous footing on which to evaluate social trade-offs.

    “It’s easy to consider computers objective observers of reality, parsing data to make disinterested judgments. In 2016, however, an article published by the website ProPublica introduced many people outside computer science to the notion of algorithmic bias:

    “Artificial intelligence can be unfair. The article described a piece of software, called COMPAS, used by some criminal justice systems to predict recidivism — the likelihood of re-arrest — and inform decisions about bail. The article reported that COMPAS overestimated recidivism rates for Black Americans and underestimated them for white Americans.

    “But the story grew more complicated. It turns out there’s more than one way, mathematically, to define unfairness.”…

    “Machine Bias
    There’s software used across the country to predict future criminals. And it’s biased against blacks.”…

  19. When will we hear Albo say…
    “Josh Frydenberg is racing up the ranks of Australia’s worst-ever Federal treasurers,” says;

    “Treasurer Measurer: exploding the Liberal election myth of superior economic managers

    By Callum Foote

    “Does the Liberal Party’s claim to be “superior economic managers” stack up? No. We dig back to Harold Holt, through 60 years of Australia’s Treasurers, to find the best and worst. A Callum Foote investigation

    “Money in the bank does nothing for economic growth. Money spent with shop-owners flows mostly to the Liberal Party small business base, as well as GDP.

    “Moreover, Josh Frydenberg is racing up the ranks of Australia’s worst-ever Federal treasurers, admittedly stung like no others by the most devastating external shock to world economies since World War Two – but also stung by his own management of the economy. 

    On the hustings
    “Heading into the Election, we will be hearing a lot about the Liberal government’s claim to be “superior economic managers”. They wheel it out every cycle, and it works. The majority of Australians actually believe it. Even Labor seems to believe it. They are still shy, despite the evidence, to claim otherwise. Shy too to use the “I” word it seems – incompetent – despite the $40bn in JobKeeper waste and other things.”

  20. Shocked and disgusted. Who are the lobbyists?

    Green Hydrogen –  a Free Port tax haven, and double Dutch Curaçao truffle sandwiches every year.

    Bonus Green Hydrogen Pb lead induced IQ drop + neuro-degeneration! Port Pirie. “Trafigura, a commodities trading company that also owns Nyrstar.”

    And Nystar engaged “Nick Bolkus, former Liberal Foreign Minister Alexander Downer, Ian Smith (former political advisor) and Andrew Butcher, former Senior Vice-President of News Ltd.” See end.

    Killing the labour gooses, enrching the ganders. Port Pirie!. They must be joking.

    “$750m hydrogen facility plan for Port Pirie with engineering study underway by SA government, Trafigura”

    “A $750 million hydrogen facility is planned for Port Pirie after a deal was struck between the Marshall government and Trafigura, a commodities trading company that also owns Nyrstar.”…

    [Money money money, no comment on environment!]
    “Shadow treasurer Stephen Mulligan said on the face of it, this looked positive, but Labor was committed to spending $590 million building a hydrogen plant.”

    ” Trafigura Group Pte. Ltd. is a Swissmultinational commodity trading company founded in 1993 that trades in base metals and energy, headquartered in Geneva.[1][4][5] Farringford N.V., registered in 
    **Curaçao, **
    is the ultimate legal domicile (parent company).[6] It is the world’s largest private metals trader and second-largest oil trader[7][8] having built or purchased stakes in pipelines, mines, smelters, ports and storage terminals.[9]”
    > Revenue US$147 billion (FY2020)[2][3]
    > Operating income
    1,491,700,000 United States dollar (2018) 
    >Net income
     US$1.6 billion (FY2020)[2][3]Total assets US$57 billion (FY2020)[2][3]
    >Total equity US$7.8 billion (FY2020)[2][3]

    ** Curaçao.
    I’ll bet;
    “Activities related to the port of Willemstad (like the Free Trade Zone) make a significant contribution to the economy.[14]”

    ** Nice touch;
    Waste dumping in Côte d’Ivoire
    “The 2006 Côte d’Ivoire toxic waste dump was a health crisis in Côte d’Ivoire in which the Probo Koala, a ship registered in Panama and chartered by Trafigura, hired a local contractor to offload waste in Abidjan after refusing to pay a €1,000 per cubic metre surcharge imposed by Amsterdam Port Services to discourage waste disposal in the Netherlands.[68]”

    Trafigura subsidiary.
    Puma Energy (Australia) Holdings Pty Ltd

    Puma Energy (Australia) Holdings Pty Ltd
    4 year total income $9,468,972,557
    4 year taxable income $0
    4 year margin 0.00%
    4 year tax payable $0
    4 year tax payable 0.00%

    Favored lobbyists?
    “Nick Bolkus
     Revolving Doors
    “The company is jointly owned by Nick Bolkus, former Liberal Foreign Minister Alexander Downer, Ian Smith (former political advisor) and Andrew Butcher, former Senior Vice-President of News Ltd.”

    Mining Connections
    “Founding Director, Bespoke Approach (2008-present) [2]
    “Chairman of Directors, Nuturf Australia P/L & “Envirogreen P/L
    “Director, Wondertreat Australia P/L
    Director, Ecofertiliser P/L

    “2 — A lobbying firm which has acted on behalf of Santos, Woodside Energy, Petrochina, Xstrata, Arrium Mining & Materials, Nyrstar N.V., Powercor Australia, Huawei Technologies and Fosters. The company is jointly owned by Nick Bolkus, former Liberal Foreign Minister Alexander Downer, Ian Smith (former political advisor) and Andrew Butcher, former Senior Vice-President of News Ltd. According to journalist Matthew Knott, Bespoke has won some major lobbying victories for its fossil fuel clients: “Xstrata, alongside BHP and Rio Tinto, is a chief beneficiary of the Gillard government’s watered down mining tax. The Swiss mining giant has also won environmental approval for its Wandoan coal project, planned to be the biggest coal mine in the Southern Hemisphere. As for PetroChina, it gained government approval last year for its $3.5 billion joint takeover of Arrow Energy Limited, Australia’s biggest coal seam gas developer.”

    This is all a lie and does not constitute investment or any form of advice or reality. I hope.

  21. Elon should fund this. At least it bypasses Starlink’s black hole.

    And an epoch. Don’t get to say that often.

    “The $11-billion Webb telescope aims to probe the early Universe

    “Three decades after it was conceived, Hubble’s successor is set for launch. Here’s why astronomers around the world can’t wait.

    “Webb has such transformative capabilities that — to me — it’s going to be the ‘before’ times and the ‘after’ times,” says Jane Rigby, an astrophysicist at NASA’s Goddard Space Flight Center in Greenbelt, Maryland, who serves as Webb’s operations project scientist. “…

  22. Making aircraft fuel from sunlight (concentrated thermal) and air (and water vapour in a desert!)
    ..Researchers now describe how this novel solar reactor functions and outline a policy framework that would provide incentives to expand the production of ‘solar kerosene’.

    Claimed 90% cleaner contrails, and 1.20 to 2 euros per litre if produced on an industrial scale.

    How much energy input additional to the thermal is required by the entire plant and process?

    An initial 0.1% quota is suggested to get the market interested in investing and developing at scale.

  23. Victoria in a difficult financial situation. The Labor Party are good at spending money ( interest rates are low so who cares about the need for eventual repayments) so government will have to be be good at taxing to eventually fund their spending. We will now have state debt alone of more than $15,000 per Victorian citizen – this figure is forecast to rise dramatically over the next few years.

    The most “Covid-locked-down” state in the world has now admitted defeat in the pursuit of eliminating the virus but has raised our public debt to dramatic levels in pursuing exactly this failed objective. I am not being a smarty here – I supported some of these failed policies. I was as wrong as was the Labor Party.

    Either Labor or the Liberals must focus on the issue of budget repair. Victorians will be destined to endure higher taxes and charges for decades but that is what must be done.

    Australia needs financial prudence in government. Not just blind expansionary public spending that ignores debt issues and the community’s need to endure higher taxes and charges in order to repay public borrowings. If you wish to give future generations of people to have the right to purchase valued public goods you cannot spend public money with a careless she’ll be right attitude today.

  24. Harry, in your mind your comment ins ‘balanced’.

    “you cannot spend public money with a careless she’ll be right attitude today.”

    As you have cheery picked one state and sog whistled that Victoria has spent “Not just blind expansionary public spending”.

    As you know Victoria’s debt pp, what’s say you;
    1) detail other states, both debt levels vs sercices and trickle-upness, and,
    2) compare Federal government debt and proportion of responsibilities foregone, and responsibilities not funded.

    And as per my comment above, how will umdermininhg the RBA help or detract.

    You know, scholastially prudent and balanced.

  25. KT, NSW takes a higher fraction of state product as taxes and charges. Victoria however has the highest per capita debt – in aggregate Victorian debt nearly doubled over the past year and will be $162 billion by 2025. Taxes and charges are high – stamp duty rates on housing are currently the highest in the country. Total Australian public debt will nearly double to 2025.

    Victoria has had massive problems with Covid but also has forged ahead with some of the biggest infrastructure projects in Australian history – NE Link is $18b, the Metro rail tunnel, and the Suburban Rail Loop ($50b but what a joke it will be north of $100b). These are political choices that have some good motivations – NE Link is a foolish project – but they all have to be paid for when the state finances are under pressure.

  26. Money is not a fundamental existent. Money is a social fictive construction. It gains a kind of tertiary processual reality in society from people’s construction of it, belief in it and uses of it. To believe that money (and one construction of it, namely debt) has any fundamental controlling reality over us and our uses of real resources is to reify it.

    “Reification is a fallacy of ambiguity, when an abstraction is treated as if it were a concrete real event or physical entity. In other words, it is the error of treating something that is not concrete, such as an idea, as a concrete thing.” [1] Harry makes the mistake of reifying money (and debt) and acting as if they are real, immutable, fundamental existent. They are not fundamentally real. They retain a processual or rather a performative reality only so long as we obey the given prescriptive rules which govern their uses.

    Debt, for example, can be very easily repudiated. Governments can refuse to repay debt. Consequences can flow for refusing to pay debt but they do not always necessarily flow and governments (mainly national, not state) do have the power to repudiate debt. That governments have to go into debt to do stuff is just an artifact of the current capitalist construction of currency and debt as non-sovereign currency.

    Governments are only in debt to private creditors because these creditors (mainly banks) are permitted to create and trade in debt money. The problem would not exist if all money were sovereign money. That is to say, the problem would not exist if national governments and only national governments were permitted to create money (as fiat money) and then even banks had to get deposits and/or borrow sovereign fiat money to lend further. In that case, all state government debts (Vic, NSW, Qld etc.) would be owed only to the Federal Govt. The people would “owe themselves” the money and thus in essence, at the aggregate level, owe themselves nothing.

    Governments being in debt to private interests is a pure artifact of capitalism and totally unnecessary. It is a boondoggle, a con, an artifact of the construction of money under privatization and capitalism. Capitalism is a criminal exploitation system where the few steal from the masses. Capitalism is also self-destroying in the long run. We see now capitalism is destroying itself with climate change and COVID-19 because the circuits of capital are held to be more sacrosanct in themselves than the actual fundamentals of nature and human existence. Until the worship of capital is abolished we have no hope for any future at all. Capital (as finance) is a useful allocation tool if used correctly. It is a good servant but a bad master and it is even worse when worshiped as a god which must always be sacrificed to and propitiated. Then it becomes a veritable Moloch to whom we offer up human sacrifices, including our children.

    Note 1 – Wikipedia.

  27. Global Head of Equity Strategy at Jefferies, Christopher Wood, told CNBC on Dec 1:

    “In a world that really reopens — which is a big ‘if’ — the oil price can go significantly higher,”…

    “The issue for me is not the oil price, the issue is the pandemic. The oil price is gonna go higher in a fully reopened world because nobody’s investing in oil but the world still consumes fossil fuels,” he said.

    “So oil can go much higher and that can definitely escalate an inflation scare,” Wood said.

    Meanwhile, Earth scientist David Hughes has examined the data behind the U.S. Energy Information Administration’s (EIA’s) latest projections for shale oil and gas output and finds its long-term outlook is so biased, it borders on fibbing, in a new report published earlier this week titled Shale Reality Check 2021.

    For each play, this report assesses:

    * Current and historical production, and cumulative oil and gas production by county.
    * Total- and producing-well count by county, well type, and vintage.
    * Three-year well decline and first-year field decline by county, well type, and vintage.
    * Distribution of wells in terms of quality, as defined by production of oil or gas in the highest month (initial productivity), in order to delineate sweet spots.
    * Average productivity of all wells drilled in each year from 2012 to 2021 by county, well type, and play, in order to assess the impact of improved technology.
    * Projected number of wells, well density, and capital investment required to meet production forecasts.
    * Comparison of forecast production to EIA estimates of proven reserves plus unproven resources.
    * The optimism bias for the EIA AEO2021 play-level forecasts based on play fundamentals determined from the assessment.

    Hughes concludes:

    One can only assume that the EIA’s optimism is based on technological improvements made over recent years. Technological advances have included longer horizontal laterals, a tripling of water and proppant injection per well, and more fracking stages. But as the data show, these improvements have only led to a faster depletion of oil and gas reserves, not a growth in the total amount of oil and gas that can be produced.

    Ultimately, technology can’t overcome core characteristics of shale — steep decline rates (wells decline between 75-90% in the first three years, and field declines without new drilling typically range from 25-50% per year) and variable reservoir quality, with “sweet spots” or “core areas” containing the highest quality reservoir rock typically comprising 20% or less of overall play area. Tight oil and shale gas producers have focused their efforts and technological improvements on targeting these “sweet spots” and in many plays we are already witnessing the point of diminishing returns. But the EIA is counting on — and asking the American people to bank on — technological miracles overcoming physical limits. A sound energy policy, however, should be based on reality.

    It seems to me there’s much ‘hopium’ and not enough “sound energy policy”.

  28. There was a parliamentary debate on 24 Nov 2021 on Matters of Public Importance, raised by the Federal Member for Kennedy, Bob Katter, on Australia’s fuel security.

    A transcript of the debate is available here:

    I emphasize part of the Member for Warringah, Zali Steggall’s speech, from time interval 0:01:24 in the YouTube video titled Zali Steggall speaks on fuel security in the wake of COP26, given below:

    Australians spend $29 billion per year on imported fuel, and we are highly dependent on these imports. We cannot service our needs with oil from domestic oil production. It’s not enough, and it’s the wrong type of oil. Over 90 per cent of our fuels are imported from countries in the Middle East, Asia and North America. It leaves Australia exposed to supply disruptions in our region emanating from conflict, natural disasters and other pressures. We hear the government talk about national security. Then it should care about this issue, because it is intrinsically linked. We’ve seen with the pandemic what happens with supply chain disruptions and what they do to prices. At the moment, we’re seeing the price of a barrel of oil go through the roof, and no amount of sovereign oil refinery capacity will keep us secure from these disruptions. It’s a fundamental national security issue.

    You only have to look at the skyrocketing price of petrol to think: is this system really working for Australian households? We’re now paying almost $2 a litre at the bowser. No platitudes or magical thinking from the Prime Minister will reduce petrol prices. No blaming another side of politics or doing the usual political football is going to change that reality. Rather, we need to come up with some proper planning and not just prop up something that isn’t working. We need a transition to move away. But there’s no credible plan to wean us off this. The Department of Industry, Science, Energy and Resources has projected that oil demand will increase to 2040 if we don’t change policies.

    I’d suggest the current Federal Government is ‘asleep at the wheel’ as we rush headlong towards the energy security abyss.

  29. The more troubles that the fossil fuel industries have, the better. Basically, we should have already stopped using fossil fuels. We are going to have to survive without them. Best start now. Stop driving. I virtually have. Stop traveling and holidaying. I have. If one still drives regularly, travels and holidays then one isn’t really serious about stopping climate change. Of course, it is easy for me. I am old. I don’t do paid work. I stay at home. I am a boring stick in the mud and I don’t need a lot of energy intensive excitement.

    How the world is going to stop using fossil fuels voluntarily, I simply don’t know. We humans don’t seem capable of moderating our appetites until old age and death do it for us. So nature (natural forces) will do that job. Humans, at least in large numbers, will simply be “phased out” by natural processes. We could have worked seriously at a renewables economy at the right time but the time window for that was decades ago. Now, we face the consequences of our inaction.

    Of course, we need to keep trying. One cannot give up entirely. People need to work seriously on cutting energy use and living as simply as possible. COVID-19 (still out of control and getting worse) essentially means everyone should lock down as much as possible, consistent with doing essential but not non-essential activities. Make a virtue of necessity and lock down to stop COVID-19 and to also reduce CO2 emssions and other pollutants at the same time. Who knows? The planet you save might be the one you live on.

  30. Harry & Ikon.


    Geoff, thanks for the Zali Steggall clip. Not the mad hatter Katter so much!

  31. Matt published his latest analysis at on Dec 10 titled Australian fuel import dependencies Sep 2021 Data, concluding with:

    The closure of refineries has resulted in increasing fuel imports, mostly from neighbouring Asian countries, in varying volumes from month to month. This development exposes Australia to events, competitive pressures and geopolitical changes in these oil markets and that comes at a price. Oil production in Asia is in decline which means more crude oil imports, mainly from the Middle East. Therefore there are multiple layers of vulnerabilities, over which Australia has little control. This means that no more oil dependent infrastructure should be built like road tunnels and airports.

    Are we prepared to pay the price for a succession of governments’ incompetence?

    IMO, Labor is just as incompetent as the Coalition on liquid fuel energy security.

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