Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.
I’m now using Substack as a blogging platform, and for my monthly email newsletter. For the moment, I’ll post both at this blog and on Substack. You can also follow me on Mastodon here.
John Quiggin 
Microsoft AIM (Analog Iterative Machine) to the rescue.
JQ, any use? Microsoft’s new Analog Iterative Machine may be of interest to run for example: “The State-Contingent Properties of Stochastic Production Functions”
Robert G. Chambers
John Quiggin
https://www.researchgate.net/publication/4987612_The_State-Contingent_Properties_of_Stochastic_Production_Functions
“Picture a world where computing is not limited by the binary confines of zeros and ones, but instead, is free to explore the vast possibilities of continuous value data.” …. “We currently have capacity for a limited number of users. Please let us know if you are interested to participate”
From:
“Unlocking the future of computing: The Analog Iterative Machine’s lightning-fast approach to optimization
June 27, 2023
…
“Though presently operating on a limited scale, the initial results are promising, and the team has started scaling up its efforts. This includes a research collaboration with the UK-based multinational bank Barclays to solve an optimization problem critical to the financial markets on the AIM computer. Separate engagements are aimed at gaining more experience in solving industry-specific optimization problems. In June 2023, the team launched an online service that provides an AIM simulator to allow partners to explore the opportunities created by this new kind of computer.
…
https://www.microsoft.com/en-us/research/blog/unlocking-the-future-of-computing-the-analog-iterative-machines-lightning-fast-approach-to-optimization/
“AIM (Analog Iterative Machine)
…
“We currently have capacity for a limited number of users. Please let us know if you are interested to participate by writing to us at project-aim-contact@microsoft.com
https://www.microsoft.com/en-us/research/project/aim/
Great article on Twitter’s impending decline and collapse.
https://www.thenational.scot/comment/23628167.twitter-dead-well-wealth-cant-buy-elon-musk-talent/
THE pendulum Theory has been hijacked by some financial economists lately. These economists claim that an Inflation-Deflation pendulum exists. But that is not what the Pendulum Theory suggests. Here is a small section of that theory:
Pendulum Theory
As a result of the above-mentioned factors the supply of money tends to alternate in every age between too little and too much, with the pendulum swinging from excessive concern with the quality of money to the opposite extreme of an inflationary, excessive quantity of money.
This is the basis of the author’s pendulum meta-theory of money, i.e. a “general theory comprising sets of more limited, partial theories, which spring out of the special circumstances of their time. The enveloping pendulum or metatheory also explains why the usual theories of money, despite being so confidently held at one time, tend to change so drastically and diametrically (and therefore so puzzlingly to the uninitiated) to an equally accepted but opposite theory within the time span appropriate to historical investigation.” (pages 31-32).
In every age the supply of money tends to be either too generous or too restrictive, whether by objective standards or by those of creditors or debtors who have conflicting interests. According to the pendulum metatheory, monetary theories do not deal with eternal verities but are prescriptions for courses of action that may be appropriate at particular times and places. Even when successful, by altering circumstances they ensure their own failure in the long term.
For the whole picture you can go to:
“Inflation
The Pendulum Meta-theory
Quality versus Quantity of Money”
An essay based on a theme from the book by Glyn Davies:
Davies, Glyn. A history of money from ancient times to the present day, 3rd ed. Cardiff: University of Wales Press, 2002. 720 pages. Paperback: ISBN 0 7083 1717 0. Hardback: ISBN 0 7083 1773 1.
A short precise is given at:
https://projects.exeter.ac.uk/RDavies/arian/metatheory.html
With central banks firmly applying the blunt instrument of monetary policy, i.e., raising official interest rates; the financial sector struggles to adjust to the end of “cheap money” (sometimes called quantitative easing). It is in the interests of economists employed by financial firms to suggest that a period of deflation or disinflation is imminent. At the very least, they want to influence central bankers to get them to pause any future rises to official interest rates ceilings. But deflation only occurs in highly unusual circumstances.
Deflation occurs when asset and consumer prices fall over time. While this may seem like a great thing for shoppers, the actual cause of widespread deflation is a long-term drop in demand. Deflation often signals an impending recession. With a recession comes declining wages, job losses, and big hits to most investment portfolios.
Disinflation is more common, but this also needs special conditions to maintain a falling rate of price increases. The causes of disinflation are debatable. But some economist suggest that they are linked to either, a decrease in the growth rate of the money supply, or, a business cycle contraction (recession). If the central bank of a country enacts tighter monetary policy, that is to say, the government starts selling its securities, the supply of money inside an economy may be reduced.
Before any predictions of a looming global recession, or claims of an impending deflation, can be treated seriously they must be substantiated by facts. I have not seen facts that support the suggestion that there is an Inflation-Deflation Pendulum operating in the medium term.
Latest on Twitter, from NPR and other sources:
“Going forward it [Twitter] will automatically reply to journalists’ inquiries with a single poop emoji, Musk announced — via tweet, of course — on Sunday ”
Normal companies, even crooked ones, do not act like this. Nor do normal adults. “Infantile” is precisely right.
Musk is simply being accurate about the state of Twitter. 😉
While the prospect of a wage-price spiral has been debunked on this site – often on the fallacious grounds that wages have not driven inflation in the recent past – it seems to me that one is developing right now. Almost every wage bargaining issue in the economy seems dominated by the chatter than wage increases are not keeping pace with inflation – a generally true claim. Of course that is how a wage-price spiral develops when wages attempt to play catch-up with price increases but these wage increases themselves drive further inflation. If a spiral develops that will mean that the RBA has few options to limit interest rate rises and induced unemployment will be that much higher.
Wage increases in the March quarter were a record in terms of the recent past but were still swamped by price increases. Trouble ahead if a wage price spiral develops that creates the worst of all worlds, namely – high inflation and rising unemployment.
HC: “Trouble ahead if a wage price spiral develops that creates the worst of all worlds, namely – high inflation and rising unemployment.”
The word “wage” appears 6x in your comment Harry.
Are there any other words or economic concepts you know of, which may contribute to inflation please.
Some references from the past year may assist us in avoiding “Trouble ahead if a wage price spiral develops that creates the worst of all worlds, namely – high inflation and rising unemployment.”
Thanks in anticipation.
“the estimated effect of inflation on growth is biased by a factor of three.” … “The break is estimated to occur when the inflation rate is 8 percent. Below that rate, inflation does not have any effect on growth, or it may even have a slightly positive effect.”.
JQ wrote in “The 6-4-2 solution” on APRIL 27, 2022:
“If wages rose at 6 per cent a year, and workers shared fairly in productivity gains, inflation would be around 4 per cent. Assuming a neutral real interest rate of -2 per cent, that would be consistent with a 2 per cent target cash rate. Hence, the 6-4-2 solution.”
1st Quotes From:
“Nonlinear Effects of Inflation on Economic Growth
IMF Working Paper No. 95/56
26 Pages
Posted: 15 Feb 2006
Michael Sarel
Independent
Date Written: May 1995
Abstract
“This paper examines the possibility of nonlinear effects of inflation on economic growth. It finds evidence of a significant structural break in the function that relates economic growth to inflation. The break is estimated to occur when the inflation rate is 8 percent. Below that rate, inflation does not have any effect on growth, or it may even have a slightly positive effect. When the inflation rate is above 8 percent, however, the estimated effect of inflation on growth rates is significant, robust and extremely powerful. The paper also demonstrates that when the existence of the structural break is ignored, the estimated effect of inflation on growth is biased by a factor of three.”
JEL Classification: E31, O40
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=883204
Any comments?
KT2,
“The law of the instrument, law of the hammer … is a cognitive bias that involves an over-reliance on a familiar tool. Abraham Maslow wrote in 1966, “If the only tool you have is a hammer, it is tempting to treat everything as if it were a nail.
…
The first recorded statement of the concept was Abraham Kaplan’s, in 1964: “I call it the law of the instrument, and it may be formulated as follows: Give a small boy a hammer, and he will find that everything he encounters needs pounding.”” – Wikipedia.
Neoliberals have one fear and one instrument so it is the always the worker who needs a pounding.
KT2, As I am writing about a wage price spiral . Wages trying to catch up with inflation and inflation being worsened by increasing labour costs it is fairly natural to use the word “wage”. I could of course have repeated referred to Santa Claus skinny dipping in Lake George but my point might not have been so clear.
After reading “Financial models on climate risk ‘implausible’, say actuaries” (FT below), the large financial institutions are on the hook for for losses due to AGW, if ignored. Ignoring acruaries would I assume, leave them uninsured.
A wake up call for “… (overly “benign” models,) large financial institutions had reported that they would suffer minimal economic impacts if the world warmed by significantly more than 1.5C higher than pre-industrial levels”.
*
“Financial models on climate risk ‘implausible’, say actuaries
“Lack of understanding of full economic damage caused by ‘hothouse’ conditions, report finds
The consequences of passing climate ‘tipping points’ — self-reinforcing and irreversible negative planetary changes — were often not captured by the models, the researchers said
By Camilla Hodgson
“Financial institutions often did not understand the models they were using to predict the economic cost of climate change and were underestimating the risks of temperature rises, research led by a professional body of actuaries shows.
“Many of the results emerging from the models were “implausible,” with a serious “disconnect” between climate scientists, economists, the people building the models and the financial institutions using them, a report by the Institute and Faculty of Actuaries and the University of Exeter finds.
…
“Some models were likely to have “limited use as they do not adequately communicate the level of risk we are likely to face if we fail to decarbonise quickly enough,” the paper released on Tuesday said.
“It also found that significant factors were sometimes missing from models.
“For example, an assessment of global gross domestic product loss in a so-called “hothouse” world of 3C higher temperatures by a group of 114 central banks and financial supervisors, known as the Network for Greening the Financial System,did not include “impacts related to extreme weather, sea-level rise or wider societal impacts from migration or conflict”.
“As a result of such overly “benign” models, large financial institutions had reported that they would suffer minimal economic impacts if the world warmed by significantly more than 1.5C higher than pre-industrial levels, it said.
…
https://www.ft.com/content/a5027391-41a4-4e21-a72d-f8189d6a7b71
Harry, thanks. All I am asking of you is to mention another major variable prominent at this time. Yes, we all agree a wage priice spiral is not optimal and would have have deleterious effects .
The “P” word. Profit Harry. After reading these two articles and a study by IMF, do you anything to say about profits?
^1. Analysis by Oxfam and ActionAid of Forbes’ “Global 2000” ranking shows they made $1.09 trillion in windfall profits in 2021 and $1.1 trillion in 2022, with an 89 percent jump in total profits compared to average total profits in 2017-2020. For this analysis, windfall profits are defined as those exceeding average profits in 2017-2020 by more than ten percent.
^2. IMF says “”Rising corporate profits account for almost half the increase in Europe’s inflation over the past two years”.
*
^1.
“Big business’ windfall profits rocket to “obscene” $1 trillion a year amid cost-of-living crisis; Oxfam and ActionAid renew call for windfall taxes
Published: 6th July 2023
》”722 mega-corporations raked in $1 trillion a year in windfall profits in 2021 and 2022. A windfall tax of 90 percent on last years’ windfall profits could generate $941 billion —money that now could be used to tackle poverty and climate change.
》”While profits soared, one billion workers across 50 countries took a $746 billion real-term pay cut in 2022.
》”Oxfam and ActionAid are calling for permanent windfall taxes on windfall profits across all sectors.
“722 of the world’s biggest corporations together raked in over $1 trillion in windfall profits each year for the past two years amid soaring prices and interest rates, while billions of people are having to cut back or go hungry.
“Analysis by Oxfam and ActionAid of Forbes’ “Global 2000” ranking shows they made $1.09 trillion in windfall profits in 2021 and $1.1 trillion in 2022, with an 89 percent jump in total profits compared to average total profits in 2017-2020. For this analysis, windfall profits are defined as those exceeding average profits in 2017-2020 by more than ten percent.
“45 energy corporations made on average $237 billion a year in windfall profits in 2021 and 2022. Governments could have increased global investments in renewable energy by 31 percent had they taxed at 90 percent the massive windfall profits that oil and gas producers funneled to their rich shareholders last year. There are now 96 energy billionaires with a combined wealth of nearly $432 billion ($50 billion more than in April last year).
“Food and beverage corporations, banks, Big Pharma, and major retailers also cashed in on the cost-of-living crisis that has seen more than a quarter of a billion people in 58 countries hit by acute food insecurity in 2022.
“Extreme wealth and extreme poverty have increased simultaneously for the first time in 25 years.
》”18 food and beverage corporations made on average about $14 billion a year in windfall profits in 2021 and 2022, enough to cover the $6.4 billion funding gap needed to deliver life-saving food assistance in East Africa more than twice over. Oxfam estimates that one person is likely to die of hunger every 28 seconds across Ethiopia, Kenya, Somalia and South Sudan. Global food prices rose more than 14 percent in 2022.
》 28 drug corporations made on average $47 billion a year in windfall profits, and 42 major retailers and supermarkets made on average $28 billion a year in windfall profits.
》 Nine aerospace and defense corporations raked in on average $8 billion a year in windfall profits even as 9,000 people die every day from hunger, much of that driven by conflict and war.
“People are sick and tired of corporate greed. It’s obscene that corporations have raked in billions of dollars in extraordinary windfall profits while people everywhere are struggling to afford enough food or basics like medicine and heating,” said Oxfam International interim Executive Director Amitabh Behar.
“Big business is gaslighting us all —they’re hiking prices to make monster profits, plundering people under the cover of a polycrisis.”
“A few increasingly dominant corporations are monopolizing markets and setting prices sky-high to line the pockets of their rich shareholders. Big Pharma, energy giants and big supermarket chains shamelessly fattened their profit margins throughout both the pandemic and cost-of-living crisis. Most worryingly —in the absence of regulation, including progressive taxation— governments have invited this,” Behar said.
“There is a growing body of evidence that corporate profiteering is playing a significant role in supercharging inflation, echoing fears that corporations are exploiting the cost-of-living crisis to boost profits margins —a trend dubbed “greedflation” and “excuseflation”.
“Christine Lagarde, the President of the European Central Bank, suggested in May that corporations are engaging in “greedflation”, while the IMF last week published a study showing that corporate profits account for nearly half the increase in Europe’s inflation over the past two years.
“Huge corporate profits have coincided with the degradation of pay and conditions for workers.
“Oxfam estimates that top-paid CEOs across four countries enjoyed a real-term 9 percent pay hike in 2022, while workers’ wages fell by 3 percent. One billion workers in 50 countries took an average pay cut of $685 in 2022, a collective loss of $746 billion in real wages compared to if wages had kept up with inflation.
…
https://www.oxfam.org/en/press-releases/big-business-windfall-profits-rocket-obscene-1-trillion-year-amid-cost-living-crisis
^2.
“Europe’s Inflation Outlook Depends on How Corporate Profits Absorb Wage Gains
“Higher prices so far mostly reflect increases in profits and import costs, but labor costs are picking up
Niels-Jakob Hansen, Frederik Toscani, Jing Zhou
June 26, 2023
“Rising corporate profits account for almost half the increase in Europe’s inflation over the past two years
…
“As the Chart of the Week shows, the higher inflation so far mainly reflects higher profits and import prices, with profits accounting for 45 percent of price rises since the start of 2022. That’s according to our new paper, which breaks down inflation, as measured by the consumption deflator, into labor costs, import costs, taxes, and profits. Import costs accounted for about 40 percent of inflation, while labor costs accounted for 25 percent. Taxes had a slightly deflationary impact.
…
https://www.imf.org/en/Publications/WP/Issues/2023/06/23/Euro-Area-Inflation-after-the-Pandemic-and-Energy-Shock-Import-Prices-Profits-and-Wages-534837?cid=bl-com-WPIEA2023131
https://www.imf.org/en/Blogs/Articles/2023/06/26/europes-inflation-outlook-depends-on-how-corporate-profits-absorb-wage-gains
I am not really sure about why the trend in profits is as is but the effects seem to be transitional. Quoting the IMF report you cite:
“The increase in nominal profits was largest in sectors benefiting from increasing international commodity prices and those exposed to recent supply-demand mismatches. While the results show that firms have passed on more than the nominal cost shock, and have fared relatively better than workers, the limited available data does not point to a widespread increase in markups”.
If firms can absorb wage increases then this reduces the inflationary impulse if workers play catch up. If they cannot then the wage-price spiral that looks like it is taking off now will be more severe.
So … being as i am somewhat of a contrarian at times, and possibly moooost of the time … I maybe, possssssibly agree with Musk about people putting his whereabouts online. Though, if it is just which city, maybe that shouldn’t be a big deal. I’m not sure though. I kind of like my own privacy, and luckily, no one’s interested in me.
I gather though, this is about “data scraping?” I’ll have to go find out what that is before I can bloviate on the subject. (I didn’t know there was anything useful on the Tweeter.)
And I agree that using a rude emoji is stoopid.
Solar anecdatum
“American researchers are proposing to use steel zip ties to attach solar modules to fences in animal farms as a low-cost racking solution for agrivoltaic applications.”
https://www.pv-magazine.com/2023/07/07/using-existing-fences-as-near-zero-cost-racking-solution-for-pv-deployment/
This is as simple as it looks:
Fixing a panel to the fence takes two workers 7 minutes. The zip ties cost 37c per module. The fence is paid for. The exact same modules (Jinko’s basic 400W Cheetah line) cost €100 retail each in Spain in a pallet of 10.
The researchers fussily remind farmers to get professional help to calculate the wind loads beforehand and wire up the panels afterwards. I expect many American and Australian farmers will just look up stuff on the Internet and give it a go DIY. Or specialised fence installers will just add solar to the price list. It’s not practicable to stop them.
BTW, the two main threads on this post – social media and inflation – are linked by monopoly power.
That was me. Why are FB and WordPress cancelling me? (aggrieved sob)
Still cancelled – James Wimberley
I imagine windage will be high on a lot of fences not built for those loads. Houses, sheds and out-buildings ought to provide enough solar panel mounting area for rural self-sufficiency? In theory, I am not in favor of sub-optimal installation. Empirical results will determine eventual outcomes, I dare say.
The long and tawdry exercise of ministerial sledgehammering the mental health of one time welfare recipients with contrived debts by means of an illegal shakedown scheme has concluded part one of the saga, with the long-awaited report into Robodebt landing with a thunk on the GG’s desk. Hopefully part two proceeds apace, and the referrals for disciplinary, civil, and/or criminal investigation are pursued.
The most destructive two elements of this scheme always struck me as being by design and not by oversight or incompetence. If the wildly inflated estimated debts were the only matter, with the onus of proof belonging to the department rather than being reversed and placed (illegally, I believe) upon the one time welfare recipient, then the harm would have been so very much less; it would have created confusion and some level of irritation and time being wasted, but could have been resolved in each case. By pursuing the recipient as if in the first instance they were the ones at fault, and in deliberately placing bureaucratic road blocks (the wall of silence) in their way to prevent a successful and fair resolution, the department(s) involved magnified the harm caused.
Aside from the harm caused *as a design feature*, the saddest aspect for me is that one minister after another knew full well something was up, whether they were originally responsible for it or not, and they chose to bury the victims rather than change the policy or legislate it, if that was what they truly believed was how the scheme should run. If the latter route, at least they would have been honest about stealing money on false pretenses. There are so many people’s heads that need to be banged together, and yet even now they can’t admit to being in the wrong.
Public service isn’t easy at times; standing up to a minister and telling them their scheme would be unlawful if implemented is the kind of thing you would think being paid the big bucks the heads of departments and the most senior managers get would be part of the deal, but no, they are presumably too scared of losing access or something. And as for ministers, you would think that every new policy would come with an independent legal report as to its legality under existing legislation, and as to what would need to be put to parliament as new legislation or amendments to existing legislation. You would think.
I’ll just finish by saying I hope Labor overhaul these departments to ensure they are refocused on providing a *public service* to people who need help, not to run interference or to sic debt collection vultures onto them for manifestly wrong debt estimates.
PM says Robodebt was a “gross betrayal and a human tragedy”. This is true. Also true is the fact that Albanese’s and Morrison’s lack of effective actions (plural) on the COVID-19 pandemic in Australia also show a gross betrayal and a human tragedy.
It’s not a contest but I hazard the guess that inaction on COVID-19 has cost far more excess deaths than even Robodebt has.
“Covid-19 became Australia’s third leading cause of death in 2022, after ischemic heart disease and dementia, according to an analysis.1
There were 20 200 more deaths in 2022 than would have been expected if the pandemic had not happened, with a total excess mortality of 12% for the year, found a review of excess deaths by Australia’s Actuaries Institute’s covid-19 mortality working group.” – BMJ 2023;381:p842
These deaths too are most concentrated among the poor and disadvantaged including those unlucky enough to have medical preconditions and vulnerabilities.
Alabanese has selective morality. He “cares” when he scents a political advantage but does not care when he fears the withdrawal of political and donation support for courses of action which could save 20,000 lives a year. Alabanese’s inaction on COVID-19 is a betrayal generating 20,000 avoidable deaths last year. Excess deaths remain well above baseline this year.
Robodebt was a failed attempt to check on welfare fraud. In other words it was a failed attempt to save the taxpayer’s dollars. It is difficult to assess cheating so the scheme examined incomes to determine if welfare recipients were cheating. This failed to be an accurate test in many cases because income alone is not a good indicator.
Ministers took departmental advice in good faith as they must do with respect to the way the welfare system operates. Some civil servants have said they declined to give ministers news they didn’t think ministers would want to hear. So much for civil servants paid more than the PM and their lack of courage.
The idea that LNP ministers persecuted the most vulnerable as a deliberate act of policy is Labor Party fantasy. It was a serious mistake not a deliberate act of bastardry.
The Commissioner wrote a polemical report attempting to attribute political blame to the previous government. Were there attempts to devise a better scheme? Is it accurate to say that any attempt to check on welfare recipients is an act of persecution?
The main effect of this poor report is to give the “I am outraged” group of partisans a chance to exercise their outrage – we need one such opportunity every few weeks to keep the “grievance” community at peace. A better report – with better terms of reference – would be to determine what went wrong and to then try to correct it. The government attempting to blame its current opposition is a political act not one that improves the operation of our welfare system one bit.
James, Ikon, Harry, N, Don – anyone, please if you can, define what is a concept or word for authorities using perceived persecution & privacy as an exxuse not to act.
Howard Mumford Jones says;
“Persecution is the first law of society because it is always easier to suppress criticism than to meet it.”
“Ours is the age which is proud of machines that think and suspicious of men who try to.”
https://en.wikipedia.org/wiki/Howard_Mumford_Jones
I am unabke to come up with a name or word for the concept of authirities using a perception of persecution (also privacy) as an excuse not to act. Ikon? Anyone?
Howard Mumford Jones says;
“Persecution is the first law of society because it is always easier to suppress criticism than to meet it.”
“Ours is the age which is proud of machines that think and suspicious of men who try to.”
https://en.wikipedia.org/wiki/Howard_Mumford_Jones
Berkley Earth’s May 2023 Temperature Update by Robert Rohde, dated 19 Jun
2023 stated:
https://berkeleyearth.org/may-2023-temperature-update/
Meanwhile, the Daily 2-meter Air Temperature (World, 90°S-90°N, 0-360°E) has
exceeded the 17 °C threshold for the first time in the instrumental records (so far)
for:
• Mon, Jul 3, 2023: Observed Temperature 17.01 °C (anomaly +0.81 °C);
• Tue, Jul 4, 2023: Observed Temperature 17.18 °C (anomaly +0.98 °C);
• Wed, Jul 5, 2023: Observed Temperature 17.18 °C (anomaly +0.97 °C);
• Thu, Jul 6, 2023: Observed Temperature 17.23 °C (anomaly +1.02 °C);
• Fri, Jul 7, 2023: Observed Temperature 17.20 °C (anomaly +0.98 °C); …
https://climatereanalyzer.org/clim/t2_daily/
And SSTs (World, 60°S-60°N) have been at record seasonal highs for almost
4 months so far, significantly above the equivalent seasonal temperatures for the 1998
& 2016 El Niño years.
https://climatereanalyzer.org/clim/sst_daily/
Per the GISS analysis, the top-10 hottest years so far (relative to the 1880-1920 baseline) on the instrumental record include:
#01: 2020: +1.29 °C
#02: 2016: +1.28 °C
#03: 2019: +1.24 °C
#04: 2017: +1.19 °C
#05: 2015 & 2022: +1.16 °C
#07: 2021 & 2018: +1.12 °C
#09: 2014: +1.01 °C
#10: 2010: +0.99 °C
Barring a major volcanic eruption, nuclear war, and/or major meteor strike, I would
not be at all surprised to see a +1.3 °C global mean surface temperature
threshold exceedance (relative to the GISS analysis 1880-1920 baseline) yearly average
for 2023, and +1.4 °C for 2024.
Can anyone please explain why Labor continues to approve more fossil fuel projects? Do they wish to end civilisation?
Do Labor wish to make Australia increasingly uninhabitable in the coming decades?
“Can anyone please explain why Labor continues to approve more fossil fuel projects? Do they wish to end civilisation?” – Geoff Miell.
Labor and their patrons (big business) don’t get it. They don’t understand how critical the situation is. It’s the same with the SARS2 pandemic. They don’t understand how critical that situation is either. We are governed by career politicians and lawyers. They and most big business people are essentially science illiterates. They don’t understand the dangers involved in seriously perturbing complex natural systems and the potentials for runaway emergent and evolutionary behaviors. It’s all that plus plain old short-term self-interest.
Another go:
There are two schools of ethics:
Utilitarianism – looks at outcomes. Very roughly when you carry out an action which has had good consequences it is deemed ethical.
Deontology – looks at intentions. Again very roughly, if your intentions are good and moral then an action is not unethical even if things go astray.
I taught ethics (and my former students will be aghast at this brief precis) but in class I didn’t choose sides between these schools. Ethics to me gives a guide to the things you need to bear in mind if you seek to behave morally.
On the Robo-debt issue the former government is being judged immoral because the scheme had some bad consequences. More than that those politicians are being judged as immoral because their intentions were bad – they sought to “wage war against the most vulnerable in society”.
I agree that bad consequences occurred but I don’t believe there is evidence the intentions were bad.
Welfare recipients do cheat the taxpayer on occasions (the current explosion of expenditures within the NDIS seems to confirm this) and it is difficult to assess whether they are – inspecting individual cases one-by-one is likely to be about as costly as the funds retrieved from avoiding illegal claims. If social support is contingent on income lying below a certain level then one way of assessing compliance is to check the benefits received against the averaged income.
While it might seem plausible it also seems that this scheme failed on some occasions with serious consequences. Before debt notices were sent out those suspected on earning excessively high incomes should have been given the opportunity of explaining themselves.
My instinct is to offer reparations to those adversely affected (where possible) and to try to come up with a better way of assessing compliance with income tests. But I take the “intentions” viewpoint seriously so it is foolish to engage in a political witch hunt engineered by a single woman and a political party in power that seeks to demolish its opponents with a witch hunt.
Both from a utilitarian and a deontological viewpoint the actions of the current Government are unethical. It is preferable to focus on the real issue of trying to concentrate the social welfare payments where they are needed in society without wasting money on those making dishonest claims. This meets the most important needs of those experiencing difficulties at minimum cost to the taxpayer.
Tudge admitted on telly that the fraud detection rate as measured by convictions was about 0.1%. By the end of Robodebt, how many extra fraud cases were successfully convicted, over and above the the benchmark set by the pre-existing policy? That is, did it actually achieve some new policy objective, did it meet or exceed expectations in terms of extra fraud cases convicted, during the reign of the Robodebt policy?
I have to disagree with Harry’s characterisation with respect to ethical behaviour. What actually matters is what is manifest in the Australian Public Service Act and ancillary acts. Code of Conduct specifies that an APS employee is to follow reasonable and lawful direction, but it gives no free kick to following unlawful direction.
The use of income matching and income averaging was part of previous policy, but my understanding is that income averaging was used as a means of searching for potential cases of overpayment. Income averaging was presumably known to err towards giving an inflated estimate of any overpayment, if any overpayment had actually occurred. Therefore the task was to take that list of potentials, and through the historical means of actually contacting people and interviewing them, of reviewing their previous data on file, and so on, working out if the potential debt a) existed; and b) what that actual size of the debt was. The key part is that the income averaging was a selection method for identifying potential cases of overpayment; it had no skill in determining the actual debt owed, but erred on the side of netting more people rather than fewer as a first pass over the data.
Then came Robodebt: income averaging became the tool for skillful determination of the actuality *and* actual value of the debt owed, something this tool was never designed to do and very obviously to employees who used it in its predecessor policy was clearly unable to establish with accuracy the value of a debt owed. In my understanding, this is where the unlawful aspect of the scheme began, i.e. using a tool to give an improper measure of debt owed, or even of the existence of a debt owed, and then issuing a debt notice based on this quantity; indeed, not only issuing a notice, but adding a 10% charge as the cost of contracting out to the private debt collectors to pursue that debt, often *in the first instance*, meaning before any reasonable attempt to engage with the person against whom the debt was raised.
The second issue was that the onus of proof, the burden of proof, was placed upon the ex-social security client, and in many cases they were required to produce payslips from well over five years previously, and well outside the maximum period of retention that the ATO requires of Australian taxpayers. This was in many cases an impossible threshold of proof for the ex-social services client to meet.
The third issue was that social services staff were clearly being sent to Siberia if they acted in accordance with the APS and their code of conduct, i.e. raising issues of potential (and actual) unlawful direction by the agency, etc.
The fourth issue is that the original architect, the minister of the day, went on the right-wing friendly media (as the LNP identified Alan Jones and his ilk) to frame the *alleged* overpayments as being a crackdown on cases of fraud.
I come full circle: where is the evidence that Robodebt actually met one of its apparently central objectives of cracking down on fraud; did the metric of convicted fraud cases in excess of the previous policy’s convicted fraud rate of 0.1% go substantially positive, or did it hover around the same rate? Remember, Robodebt raised by tenfold the rate of issued debt notices, since found to have been unlawful.
In finishing, the promotion and the defense of the Robodebt monster would have been more convincing if the minister and government of the day had legislated the new policy so that it was lawful. It would have been an absolute stinker of a policy, it would have been in my book unethical behaviour to use an unskilful method of computing debt owed, but at least it would have been lawful. The rhetorical question is: I wonder why the government didn’t do that.
Don, I agree that those identified with having a debt should have been contacted first. I said this explicitly in my comment above.
I also agree that the scheme did not work well. It cost more than it raised and caused, in addition, unnecessary suffering. That’s enough for a summary rejection of the scheme.
The 1 in 1000 conviction rate under the old scheme does not indicate high levels of compliance. It suggests the old scheme was not working well.
I’d prefer to base my moral judgements on Kant and Hume rather than a public service regulation based on weasel words like “reasonable”. It is interesting that you evoke the public service regulation though. Indeed the main force of your argument indeed tends to drive home the fact that it is civil servants here who are at fault not pollies. As you state : ” an APS employee is to follow reasonable and lawful direction, but it gives no free kick to following unlawful direction.
Much of the rest I agree with – the income averaging methods seems to have potential for identifying fraud but, yes, as stated above, it is a first step not a conclusion. People concerned should be consulted. This again seems a civil service issue. Consulting each party would have high high transaction costs and so I guess the public servants didn’t want this. But it is important.
the burden of proof must necessarily be placed on the welfare recipient. How could it not be? They earn the income. One way around this might be to inform those receiving benefits that from the time they receive the benefit they must keep income and other records. It is probably difficult to require this ex post.
I don’t know whether senior civil servants were threatened with being sent to Siberia or whether this is Public Service gossip. The senior civil servants involved are paid salaries that exceed those of the Prime Minister so you might expect that such people would show a bit of courage and intellectual stamina. They obviously didn’t. I read that one senior administrator responsible for these matters (now shifted to AUKUS) is now earning nearly $900,000 annually.
Politicians do need to rely on advice from civil servants. If they are too cowardly to give accurate advice that is a problem of culture.
My general point is that instead of engaging in a political witch hunt by the current government of its predecessor it might make sense to think about ways of improving the compliance system. Forget about the 1 in 1000 nonsense. How do we insure that benefits go to those most in need at minimum cost to the taxpayer. Robodebt attempted to do this and failed. The difficulty seems to be to accurately monitor incomes and social benefits without being involved in excessive transaction costs both for civil servants and for those receiving benefits.
I worked in Centrelink once upon a time. I have some idea of:
(a) how difficult data matching is;
(b) how imperfect, incomplete and inaccurate stored data on clients can be;
(c) how difficult it would be to automate debt calculations with inadequate data;
(d) the difficulties staff work under doing complex work with inadequate resources; and
(e) the problems welfare recipients have with an over-complex welfare system.
When Robodebt started up, retired Ikonoclast said to Mrs. Ikonoclast, “It won’t work. It will end in disaster.” Of course, you will have to take my word on that.
Some seem to want to give a free pass to malgovernance and maladministration. That is the order in which they arise when they are systemic. I am sure each one of us would not give a free pass to malpractice by professions we might to deal with for personal services, for example doctors, lawyers, solicitors, accountants etc. whether or not the malpractice was systemic or individual. Malpractice must be stamped out and the offenders punished appropriately depending on the seriousness of the offense(s).
Claims of “playing politics” by Dutton et. al. are clearly claims that themselves play politics. This is all politics in the full, non-pejorative sense of the word which means people deciding on policies which affect people. The question is whether we are going to have discriminatory or non-discriminatory politics. We cannot accept the standard motivated reasoning apologia and defenses offered by some when power oppresses the poor and vulnerable and where admitting to such might require one to question one’s “tribal” political allegiances.
It always seems to be the case that when the powerful mess up they plead with displays of wounded innocence and want the injured to turn the other cheek. Yet, when the powerless mess up they must always face the full brunt of punishment from the powerful. It’s about time that playing field was leveled out a bit. The actions of the potentially culpable in the genesis, governance and administration of the Robodebt mess must be fully tested at law wherever there is a prosecutable offense.
Harry, can you please provide us an ethics lesson around your question:
“Is it accurate to say that any attempt to check on welfare recipients is an act of persecution?”
“Spanish Minister Proposes $21,000 ‘Universal Inheritance’ From Age of 18
“from the how-to-win-young-voters dept.
“Yolanda Diaz, Spain’s Labor Minister and candidate for Prime Minister with the progressive platform Sumar, has proposed a scheme to tackle social inequality by giving every young person in the country 20,000 euros (roughly $21,776) to spend on school, training or starting a business once they reach the age of 18.
…
https://m.slashdot.org/story/416438
Yolanda Díaz
https://en.wikipedia.org/wiki/Yolanda_D%C3%ADaz
Somehow Yolanda Diaz et al, have managed ro stitch together >16 other parties as a bloc. A feat in and of itself.
“Sumar (electoral platform)
https://en.wikipedia.org/wiki/Sumar_(electoral_platform)
Thanks Harry for your follow-up comment. We definitely agree that dealing with fraud is essential for any social security scheme, I reckon. The commission has made it clear that lower level employees suffered for following their code conduct by escalating their view and their evidence that the robodebt scheme was unlawful. These were career employees who in evidence to the commission demonstrated their clear understanding as to why the scheme was likely unlawful. Their evidence when initially raised within the public service should have kicked off a formal independent legal advice and report on the legal issues. One can argue as to why no such legal advice reached the level of a formal report to the heads of departments, and to the ministers responsible for the portfolio and the policies. I shall wait to see what the eventual result of the referrals has.
With respect to the level of successful fraud convictions prior to the robodebt, the process after income matching and or income averaging flagged a set of potential overpayments was to investigate the biggest discrepancies, moving down the list. Extremely small overpayment cases wouldn’t justify the cost of chasing down. Amounts of $39, for instance, as a one-off overpayment, would be more expensive to recover than the cost of not recovering it. There’s nothing stopping a debt notice for such a small overpayment, and indeed even under the previous policy that would happen. An overpayment is not to be conflated with it being evidence of fraud, neither the intentionality or the actual practice of fraud. The previous policy was effective in uncovering fraud; the onus was on the ministers and the government of the day to explain just how this automated robodebt was going to exhibit superior skill in detection of criminal activity that was (claimed, without corroborating evidence) apparently missed by the previous policy execution.
Don, you say “One can argue as to why no such legal advice reached the level of a formal report to the heads of departments,”.
Robodebt, when ceased as “illegal” in 2019 by Stuart Robert, is a non argument morally or ethically or factually. Yet it is ‘best practice’ Humphrey Appleby minister protection public service. So there isn’t it seems, evidentiary advice or formal report. Which those in the sealed section will rely on to escape punishment in the future.
In any comments on Robodebt, 2017 is where the bullcrap starts and 2018 is when we know they were lying. Apoligists are eliding the truth…
“It wasn’t a sophisticated legal issue, it was clear cut and as we now know lots of people within relevant bureaucracies did actually from early on appreciate it was illegal unless legislation was passed to authorise it,” he told Guardian Australia.” ~ Carney – AAT member^2
*
In a Guardian article “Crude and cruel’ scheme: robodebt royal commission report recommends civil and criminal prosecutions” by Paul_Karp Fri 7 Jul 2023
“Holmes said the “unfairness, probable illegality and cruelty” of robodebt was apparent from the beginning of 2017, but the fomer government chose to “double down” on it, instead attacking those who complained in the media.
“Robodebt was a crude and cruel mechanism, neither fair nor legal,”
*
^2.
And yesterday in “Early robodebt critics outraged by how long Coalition persisted with unlawful scheme” … “Shocking to learn politicians and public servants ‘were basically just lying to us’, Andrew Wilkie says”
….
“Carney, who as an AAT member frequently wiped robodebts due to the unlawful process of income averaging, said he was “appalled and outraged that it did take so long to confront the bleedingly obvious”.
“It wasn’t a sophisticated legal issue, it was clear cut and as we now know lots of people within relevant bureaucracies did actually from early on appreciate it was illegal unless legislation was passed to authorise it,” he told Guardian Australia.
“Carney said the royal commissioner, Catherine Holmes, was “spot on” in identifying the culture of demonising welfare recipients as a cause of the failure of administration. He said Australians were “the world’s greatest demonisers of dole bludgers”.
“Wilkie said: “We all knew it was a flawed data matching system, spitting out incorrect notices, and damaging people terribly.”
“But the member for Clark said it was still shocking to learn that “public servants and politicians knew it was illegal and every time they responded to … inquiries, they were basically just lying to us”.
“It was such a complete failure of governance, and potentially criminal behaviour. That has shocked me.”
…
https://www.theguardian.com/australia-news/2023/jul/09/early-robodebt-critics-outraged-by-how-long-coalition-persisted-with-unlawful-scheme
Harry Clarke says July 9, 2023 at 9:29 pm “The 1 in 1000 conviction rate under the old scheme does not indicate high levels of compliance.”
“welfare fraud -conviction rate 98%”
Facts below.
Robodebt, old information (read: bias) and apologists are distracting from tax /white collar crime and bad policy, at a ratio of 194:753.
● $1 spent on welfare fraud -conviction rate 98%! and 94c on 1$
● $1 spent on tax fraud would return $6.53 on 1$
● 30% more checks for welfare compared to white collar / tax.
Some facts…
“• According to budget papers, $7.53 of increased revenue would be returned for every dollar spent by the ATO taskforce chasing tax avoiders, while only $1.94 would be returned through the Department of Human Services compliance activity around social security fraud.”
From:
“Responding to welfare fraud: The Australian experience”
Tim Prenzler
AIC Reports Research and Public Policy Series
119 Australian Institute of Criminology 2012
…
“This is despite the probable potential for much higher levels of tax fraud (Karvelas 2008; Sivapragasam 1997). For example, Marston (2007: 7) compared Centrelink and Australian Taxation Office (ATO) reviews and prosecutions: • In 2004–05, Centrelink undertook 3.8 million reviews of social security eligibility and pay rates, whereas the ATO undertook fewer than 2 million reviews, despite a much larger client population.
• In the same year, the reviews in Centrelink resulted in debts (with an average debt of $996) of $390.6m. By comparison, the reviews by the taxation office led to $800m in debts raised.
• According to budget papers, $7.53 of increased revenue would be returned for every dollar spent by the ATO taskforce chasing tax avoiders, while only $1.94 would be returned through the Department of Human Services compliance activity around social security fraud.” pg13
…
” This same issue generated some controversy in 2006. A newspaper report entitled Law Hunts Dole Fraud as Rich Cheats Go Free questioned national differences in the preceding financial year between 4,102 welfare fraud defendants on the one hand and ‘only 249 alleged tax cheats, 74 alleged corporate crooks and just one defendant referred from the Australian Competition and Consumer Commission’ (Garnaut 2006: 1). A number of anonymous critics from law enforcement agencies accused the public prosecutor of being overly cautious in its prosecution policy, choosing the relatively easy welfare cases to meet its high conviction target in over 90 percent of cases. The conviction rate for welfare cases was 98 percent, based to a significant extent on a large number of guilty pleas. White collar crime expert Professor John Braithwaite was quoted as saying ‘The DPP is serving Australia very poorly with respect to serious white collar crime…It is very tough on the fraud of the poor and very soft on the fraud of the rich’ (Braithwaite cited in Garnaut 2006: 1).” pg14
…
Click to access rpp119.pdf
*
We are terrible at detecting fraud and recovering monies.
“Fraud against the Commonwealth 2021–22”
Australian Institute of Criminology.
Merran McAlister and Samantha Bricknell Statistical Bulletin 41
…
“External fraud • ‘Other’ means (78%, n=1,879) eg the taking of natural resources, influencing officials and misusing or claiming health or welfare benefits without authorisation
“Total internal fraud losses reported in 2021–22 were approximately $2,795,284 and total external fraud losses amounted to approximately $198,409,958.”
KT2, when I said that “one can argue”, I meant that a legal defence might be possible, even if the behaviour was immoral. I feel the commission pretty clearly laid out the case for their having been essentially collusion to block all legal counsel contracts that would have resulted in an official report that the scheme was unlawful. If not collusion, then at least the kind of mutual understanding between the minister and the heads of departments, or those immediately below them, as to what the minister wanted from their departments in their portfolio. It’s a known fact that in Canberra senior public servants or their representatives have informal, off the record, dinners at the best restaurants, in which one or more ministers and/or their representatives discuss what they want of the department and by extension the top tier of the public servants, in exchange for rewards for the said top tier. As you noted KT2, “Yes, Minister” so perfectly captured that.
I would much prefer to see a serious lift in the base rate for the dole, and for more public funding to help those who can work to get some semblance of stable employment. Spending so much time and money on fighting genuine victims through the court system, when the scheme was manifestly unlawful just amplified the pain, stress, and psychological trauma those (very many) victims endured. Even if you last the distance and win, you still have potentially substantial costs at risk, unless the justice awards full costs. Even then, there are other unreclaimable costs to fighting an entire government apparatus, especially one that received an injection of more than 100 million bucks, not to improve their client facing processes, but to fund the *anticipated* jump in legal challenges to the manifestly unlawful scheme. It truly sucks, being falsely accused of being a criminal, and having to personally risk everything you have on a court case.
“Political witch hunt” is one of those oft repeated phrases regularly trotted out by the likes of Trump, Boris and even Putin, when he was commenting on the Mueller report.
The phrase is a red flag; those that use it are most likely hiding their culpability.
If the case of Robodebt does involve criminality, then the law should be allowed to prevail.
All the ups downs ins and outs of welfare, as demonstrated by Robodebt, would be ameliorated by a universal basic income, would it not?
Rog, Obviously not. People would have the same incentives to hide their earned income and there would be many more of them. That’s what Robodebt was trying to assess: The eligibility for extra socially-provided income given earned incomes.
It would be easy to provide a tax free UBI to everyone and adjust existing income taxes and other taxes on taxpayers to make up the shortfall in the overall national budget, to the nearest x million. Clearly, well off people would get the UBI and pay more in extra taxes than their new UBI. No need for grants (other than initial grant at 18th birthday), cancellations or over-payments in the welfare system. No need for student allowances as the UBI is that too. Frankly, if you can’t surf *and* pass a uni undergrad course (given a grade that gets you admission) then you just aren’t trying.
Harry said “That’s what Robodebt was trying to assess: The eligibility for extra socially-provided income given earned incomes.”
“socially-provided” seems to me an inelegant and sub nation framing. “Given earned income” seems to leave out the State.
By using “socially-provided” imo, you deny persons a natural inclusion in the state of Australia. Thereby providing a door to just those socially averse to sharing, tribal, to be the determining factor of worth of welfare. How would “socially-provided” under Bolsonaro or Trump go? As opposed to relying on independent state institutions to decide.
*
In the Law Report below, they state that the rate at which debts were referred…
Guess.
5 in 10,000
Compared to tax fraund above. Miniscule. Minute. What is this called in economic terms?
As Don said upthread “Amounts of $39, for instance, as a one-off overpayment, would be more expensive to recover than the cost of not recovering it.”
500,000 dole bludgers @ $39 per = $19,500,000. We lose more money in iron ore (>2%) and coal transport (>20%) as dust. Have you suggested to mining companies they need to be prosecuted for wasting resources? Gas flaring? How about a Tobin tax. Independent institutions for me please. Not “socially-provided”.
From yesterday in “‘Tsunami of suffering’: Robodebt royal commission findings explained” Terry Carney, when a member of the Administrative Appeals Tribunal, found in 3 appeals THREE TIMES in 2017 that Robodebt debts where illegal.
2017. Threes times. He ruled that Robodebts were illegal.
“‘Tsunami of suffering’: Robodebt royal commission findings explained”
Guests:
Terry Carney – Professor Emeritus, The University of Sydney Law School; former member, Administrative Appeals Tribunal
Prof. William Van Caenegem –intellectual property law expert, Bond University
https://www.abc.net.au/radionational/programs/lawreport/robodebt-royal-commission/102508594
*
“Explainer: what is the ‘tort of misfeasance’ and how might it apply in the case of robodebt
…
“The final report found that:
[commissioner Catherine Holmes]
“The beginning of 2017 was the point at which Robodebt’s unfairness, probable illegality and cruelty became apparent. It should then have been abandoned or revised drastically, and an enormous amount of hardship and misery […] would have been averted. Instead the path taken was to double down, to go on the attack in the media against those who complained and to maintain the falsehood that in fact the system had not changed at all.
…
https://theconversation.com/explainer-what-is-the-tort-of-misfeasance-and-how-might-it-apply-in-the-case-of-robodebt-209507
KT2,
Waste of time arguing with some people. Their minds are impervious to logic and their hearts impervious to empathy.
Harry,
The premise of your argument, that Robodebt exposed Xn of people that were hiding their earned income, wasn’t sustained by the evidence.
A lot of this ‘dole bludging’ chat is just conjecture, usually based on anecdote.
At the end of the day, Robodebt was illegal and the govt of the day knew it.
Misfeacence is looking good.
Note the dates – 2017.
“Centrelink bogus debts: How far can the vulnerable be pushed before they break?
By Eleanor Green | 6 February 2017,
I AM ONE of the lucky people who have received a false debt notice from Centrelink.
“The letter states:
“‘We have completed our review of your employment income details and made a decision to change the amount you were entitled to receive.’
“You might notice it does not say I received more than I was entitled to. Rather, the Government has changed their mind about how much to pay me after the fact.
…
https://independentaustralia.net/politics/politics-display/centrelink-bogus-debts-how-far-can-the-vulnerable-be-pushed-before-they-break,9995
*
‘Centrelink staff told not to fix mistakes in debt notices – whistleblower
This article is more than 6 years old
“New whistleblower says staff ‘are struggling daily with our consciences’ after being told not to correct errors they see unless the customer points them out
Christopher Knaus
Thu 19 Jan 2017
https://www.theguardian.com/australia-news/2017/jan/19/centrelink-staff-told-not-to-fix-mistakes-in-debt-notices-whistleblower
Rog The claim you attribute to me:
“The premise of your argument, that Robodebt exposed Xn of people that were hiding their earned income, wasn’t sustained by the evidence.”
is your fantasy. I never made it. To the contrary I stated Robodebt failed. It did not achieve its objective. My suggestion was to try to do things better and I made some suggestions.
This type of blatant misrepresentation is foolish and irresponsible.
On Mon, Jul 10, the daily average North Atlantic SST was at 24.1 °C. Will it continue breaking records and exceed the 25 °C threshold later this month? We’ll see soon!
The 8 hottest days (per 2 m World air temperature average) on Earth likely in the last 100,000+ years so far have all apparently happened in recent days:
Mon, 3 Jul 2023: +17.01 °C; anomaly +0.81 °C;
Tue, 4 Jul 2023: +17.18 °C; anomaly +0.98 °C;
Wed, 5 Jul 2023: +17.18 °C; anomaly +0.97 °C;
Thu, 6 Jul 2023: +17.23 °C; anomaly +1.02 °C;
Fri, 7 Jul 2023: +17.20 °C; anomaly +0.98 °C;
Sat, 8 Jul 2023: +17.17 °C; anomaly +0.94 °C;
Sun, 9 Jul 2023: +17.11 °C; anomaly +0.87 °C;
Mon, 10 Jul 2023: +17.12 °C; anomaly +0.88 °C.
https://climatereanalyzer.org/clim/t2_daily/
There’s still time later this month to get even hotter! And then there’s next year…
https://www.theguardian.com/environment/2023/jul/11/uncharted-territory-un-declares-first-week-of-july-worlds-hottest-ever-recorded
The Australian Bureau of Meteorology (BoM) issued its latest revised Long-range sea surface temperature forecasts, dated 1 Jul 2023, including forecast means for the NINO 3.4 region:
Jul 2023: _ +1.5 °C
Aug 2023: +2.0 °C
Sep 2023: +2.3 °C
Oct 2023: +2.4 °C
Nov 2023: +2.5 °C
Dec 2023: +2.7 °C
NOAA’s report titled ENSO: Recent Evolution, Current Status and Predictions published 10 Jul 2023, included their IRI Pacific Niño 3.4 SST Model Outlook showing from Jun 2023, nearly all model outlooks indicate a strong (ONI values at or greater than +1.5 ºC) El Niño will persist into the Northern Hemisphere winter 2023-24. The BoM’s model outlook appears to be at the highest end of the selection of dynamical model outlooks.
For the record re wages & profits in Australia… (feel free to remind me Harry)
“Corporate profits not main driver of inflation as profits share has not blown out: Lowe
“Lowe has been asked if he thinks inflation is being driven by large corporations. In short, he says it has contributed but is not the primary source:
“The aggregate data show that the profits share – excluding the resources sector, which is appropriate to treat them differently – the share has not risen in Australia.
“What we have seen is firms be able to increase their prices in line with the higher input costs. Being able to pass on input costs fully and preserve the proper margins, but the profit margins have not blown out.
“There are some specific firms where you could say the profits have increased, but by and large, they are confined to specific areas of the economy.”
https://www.theguardian.com/australia-news/live/2023/jul/12/australia-news-live-cost-of-living-surplus-interest-rates-eu-trade-talks-robodebt-indigenous-voice-closing-the-gap-net-zero-big-four-banks?page=with:block-64ae1fc18f08ce64897ea994#block-64ae1fc18f08ce64897ea994
KT2, A nice model of inflation – developed by the late John Pitchford – has unions and firms each competing for more than 100% of the value of output. Workers seek and get high wage increases and firms respond by upping their markups. That can be consistent with maintaining equal shares of output going to wages and profits with a wage-price spiral being ground out of this bargaining process. That looks like what might be going on at present in Lowe’s world.
Thanks everyone, for having some words to say on Robodebt. Harry, I fundamentally (but politely) disagree with the notion that Robodebt was activated to increase detection of fraud. Fact: it used a method that had *no skill* in identifying actual fraud. That method had never previously been used to identify actual fraud. At best, it was a filter to rule out cases for which no overpayment existed, or for which the degree of overpayment was insubstantial, and highly unlikely to have been due to fraud. If the social services, if the ministers of the day(s), if they had wanted to identify fraudulence that had (allegedly only) been missed by the teams that worked on chasing it down, then they should have funded a program to use evidence, rather than concocted fever dreams of dollars owed, to establish likelihood of fraud, and the value in pursuing it, as opposed to concentrating on other cases. None of that was in the Robodebt infrastructure. That is why Commissioner Catherine Holmes’ is not “a polemic.” It is an insightful examination of a policy that had been created to backfill a political result. Now, if you think that calling out a political motive for something is in itself political, you have made a category error. If you are willing to forgive the blushes of the actual politicians, then to go after the commissioner as being “political” is irony so rich, it must have been seamed from Russian turf.
I imagine that creative people will come up with better methods of detecting actual fraud, or at least of identifying cases worthy of closer examination. That is a perfectly okay evolution. The issue with Robodebt policy was that it was not designed as a response to evidence, or anything of the sort; it was designed to achieve a particular political outcome, and with no consideration for the harm it inflicted upon Australian citizens.
If the scheme had been legal, or if there had been a strong enough question of law, we could argue the toss. The difficulty here is that the unlawful nature—at the very least, its most likely unlawful nature—should have provoked independent legal assessment and advice to progress to a conclusion, i.e. a report to the heads of departments, and to the ministers responsible.
I don’t know if a court of law would find guilt in the above. The issue I have is that a minister and the heads of the departments they are responsible for are there to act in the interests of all citizens, not to bash one group for a political advantage. I’ll add that I know—as anybody—that Labor have done the same. I am not against the political parties on this, I am against the use of political power to steamroller something that should have been either altered and legislated, or simply given up on.
As an aside: if you are forced to put your entire wealth on the line to fight a legal dispute against the government, and if that dispute wasn’t even one that should have occurred in the first place, it is extremely damaging to the individual concerned. Imagine having your house at threat, should you lose the case? Imagine the case taking more than two years to even get to the court date? Imagine the government settling with you, the Friday before the appearance at court? None of that is awarded in costs, no you must wear all of that, and the permanent scars that follow you; your loss of friends who thought the government might have been right, who listened to the propaganda (yes, propaganda) being sprayed left, right, and centre. There is no compensation for this. And this is why I believe, why my opinion is, that it is essential for all governments to treat public service departments as being primarily a public service, rather than as something that only begrudgingly offers any payment for something.
Of course fraud occurs. Witness the fraud in private insurance claims, where the insurance company is the fraudulent party, claiming to offer insurance it has no intention of providing. Or super funds, and their practices? The point is that cracking down on fraud has to be based on evidence of fraud, and focussed on ways of detecting potential fraud, balanced against the damage to people that comes from being falsely accused of fraud. The balance in Robodebt wasn’t even in the same Universe, it was so skewed.
As a final thought, I would have expected the government of the day could have employed a talented crew of individuals for examining the potentially missed cases of fraud (and/or of significant overpayment), and determining algorithms for accurately identifying the highest risk clients with respect to fraud and/or overpayment. Apparently this is what in spectacular fashion did not occur.
Most people try to do the right thing. They don’t set out to defraud the government. Of those who received some kind of overpayment, the vast majority wouldn’t even have known, given the extremely small nature of the overpayment. Of those who clearly did receive a significant and disputable overpayment, the obvious approach would be to contact them and to figure out how the evidence played out. Somewhere in there, there would have to be a number of actual criminal conduct cases. Starting from the presumption that there are more of those cases than are detected by the (previous) policy is fine, so long as there is some kind of evidence as to how substantial a gap there is. With no evidence presented, the rational framing of the Robodebt’s necessity collapses into the weeds. To build a platform based on a lack of evidence is both folly, and in the case of ministers, incompetence at the absolute least. If we can’t see incompetence as the primary cause, then we stray into the territory of malfeasance, or perhaps some lesser level of corruption (of purpose).
Please – someone – reveal correlation and causation nuances in Robodebt with:
“Unemployment and underemployment significant drivers of suicide: analysis” 2023
Suicides resulting in death are somewhere in the region of 5% of attempts. So this study is important. Both for the causality revealed, and the methods, imo. And Job Guarantee, welfare, support services, policy etc… 2,500 / yr + 50,000 attempts. Must be traumatic and oervasive due to vicarious and secondary trauma, and crush productivity of 200,000+ relatives and friends a year.
Adam Skinner says in “Unemployment and underemployment significant drivers of suicide: analysis” 2023
● “Using unemployment as a means of reducing inflation is unethical.
● “You can’t use that approach unless you’re prepared to accept that you’re causing people pain.”
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Aside from the importance of this study, is the method used;
● Convergent cross mapping
… which I would appreciate a view of by an economist here please.
Also mentioned is the Granger causality test and Generalized Takens Theorem, from the very poorly edited Wikipedia page. Any one who has a deep understanding of these (JQ? – ^fn1.) might consider a light edit on wikipedia /wiki/Convergent_cross_mapping
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Adam Skinner quoted from:
The Guardian Politics Live
“A study by the Brain and Mind Centre at the University of Sydney – that definitively concludes an increase in unemployment led to a rise in the number of suicides – has sparked a call for governments to offer full employment.
“It examined approximately 32,000 suicides reported in Australia between 2004 and 2016. To prove the hypothesis, researchers used convergent cross-mapping of three data points: the unemployment rate, the underemployment rate and the number of suicides.
“Lead author Adam Skinner said policymakers should be aware of the link as they pursue inflation targets that could lead to higher unemployment.
“Using unemployment as a means of reducing inflation is unethical.
“You can’t use that approach unless you’re prepared to accept that you’re causing people pain.
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“Unemployment and underemployment significant drivers of suicide: analysis”
13 July 2023
… [Distressing details re suicides]
“The study used a relatively new analytical method called convergent cross mapping to confirm causal effects of underemployment and unemployment over time on suicidal behaviour.
“The strength of convergent cross mapping is that it allows researchers to detect cause and effect in complex systems, where significant correlation between variables does not necessarily indicate causality.
“Predictive modelling was used to estimate the number of suicides caused by labour underutilisation per month.
“The study confirms that a high priority in suicide prevention should be full employment, particularly as we now face economic uncertainty in Australia,” said Brain and Mind Centre co-director,Professor Ian Hickie AM.
“Rising unemployment costs lives – particularly amongst those most vulnerable groups.”
…
https://www.sydney.edu.au/news-opinion/news/2023/07/13/unemployment-and-underemployment-significant-drivers-of-suicide-analysis.html
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Wikipedia
“Convergent cross mapping (CCM)
… is a statistical test for a cause-and-effect relationship between two variables that, like the Granger causality test, seeks to resolve the problem that correlation does not imply causation.[1] While Granger causality is best suited for purely stochastic systems where the influences of the causal variables are separable (independent of each other), CCM is based on the theory of dynamical systems and can be applied to systems where causal variables have synergistic effects. As such, CCM is specifically aimed to identify linkage between variables that can appear uncorrelated with each other.
“Applications” [of Convergent cross mapping]
– Demonstrating that the apparent correlation between sardine and anchovy in the California Current is due to shared climate forcing and not direct interaction.[1]
– Inferring the causal direction between groups of neurons in the brain.[3]
– Untangling Brain-Wide Dynamics in Consciousness.[4]
– Analyzing potential environmental drivers of malaria cases in Northwestern Argentina.[5]
– Environmental context dependency in species interactions.[6]
https://en.m.wikipedia.org/wiki/Convergent_cross_mapping
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Many datasets used by government and policy may re-analyzed using Convergent cross mapping it would seem.
Reviews / studies which reach non significance yet strong correlation may be reworked using the method in “Unemployment and underemployment significant drivers of suicide: analysis” 2023
Any here know of appropriate study with correlations which may be appropriate for this method?
Triggered?
Please call a support line.
Lifeline in Australia 13 11 14
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^fn1. JQ knows.
Clipped from search results.
– Dowrick and Quiggin (1994) argued that the commonly -used constant price … Optimal Lags and Results of Granger Test Based on FPE Criterion.
– “EGTEST: RATS procedure to compute Engle-Granger test for Cointegration,” Statistical Software … Wang, Jiayu & Quiggin, John & Wittwer, Glyn, 2019.
– the Granger test is explicitly a test of causality, it is critical that exogenous … example is rank- dependent expected utility thory (Quiggin 1982),