Gotcha!

Like most people, I don’t like being suckered. But I was well and truly suckered by Aaron Patrick of the Australian Financial Review today. Patrick wrote to me saying he was doing a feature article on penalty rates and I gave him a long interview setting out my position. In particular, I made the point that, if (say) a 10 per cent reduction in wages produced only a 1 per cent increase in hours of work demanded by employers, the average worker would end up doing more work for less money. This is a standard point in the analysis of minimum wages.

As it turned out, I was wasting my breath. All Patrick wanted was the concession that lower wages might produce some increase in employment, thereby justifying the Gotcha! headline ‘Even union economists accept cutting penalty rates creates jobs’.

Given my history with the Fin, I shouldn’t have been surprised, I guess. But my general experience, even since Michael Stutchbury became editor, has been that most AFR journalists are straightforward professionals.

Also, most journalists these days understand that the game has changed with the rise of blogs and social media. Twenty years ago, the only response to a shoddy smear like Patrick’s would be a letter to the editor, which might or might not get published long after the event. Now, I can respond here and on Twitter, Facebook and so on. My readership might not be as big as the measured circulation of the AFR, but, after you deduct all the people who only look at the business pages, it’s not that different.

In any case, Patrick and the Fin are on a hiding to nothing with this one. Most people work for a living, and most have worked out by now that when the bosses talk about flexibility and productivity, they mean “work more for less”.

“White, heterosexual Christian” isn’t an identity?

At the Oz, Paul Kelly has a piece headlined’ http://www.theaustralian.com.au/opinion/columnists/paul-kelly/donald-trumps-election-a-rejection-of-identity-politics/news-story/147b11c08b64702d3f9be1821416cb72. This is bizarre, given that Trump’s appeal was obviously directed at white, heterosexual Christians upset that the US is no longer being run entirely by and for people like them.

In a sense, it now is. Trump’s Cabinet, like the Republican party as a whole, is overwhelmingly reflective of the identity politics of a former majority unwilling to adjust to the reality that it is now a minority. The vagaries and the biases of the electoral system have given this minority a lot of power, but it is fragile and tenuous. It’s precisely this fragility that is giving Trump’s brand of identity politics its ferocity.

Of course, Kelly’s unstated premise is that “white, heterosexual Christian” isn’t an identity, it’s just the norm against which deviant identities are defined. This is on a level with the kind of low-grade bigot who uses the term “ethnics” to describe people of all ethnicities other than Anglo-Celtic.

Campbell Newman: the gift that keeps on taking

A little while ago, it was revealed that the Queensland taxpayers were picking up the bill for Campbell Newman’s indefensible defence in a defamation action brought against him and Jarrod Bleijie (aka Boy Wonder) for accusing two Gold Coast lawyers of being bikie criminals, apparently on the sole basis that they were fulfilling the professional obligation of providing some bikies with a defence. The bill amounted to $0.5 million, and was greatly increased because Newman and Bleijie refused to mitigate the damages by apologising.

Now, thanks to the Oz, we learn how we are paying for the new State Executive Building, which Newman and then-Treasurer Tim Nicholls assured us we would get for nothing as part of a complex land deal. In reality, it turns out Newman left us on the hook for a 15-year lease at above market prices. Of course, the Oz being the Oz, this is presented as the fault of the current Labor government, which denounced the deal at the time and has continued to do so.

Identity crisis (repost from 2014)

When I posted the following piece two years ago, I didn’t suppose it would be enough to kill the absurd idea that “most Australians pay no net tax”. But, given its obvious kinship with Mitt Romney’s disastrous “47 per cent” catchphrase, I felt sure that hardheads on the political right would kill it off before it lined them up on the losing side of a class war.[1] Not for the first time, I was wrong. So, here’s a reprint.

In the latest issue of Gerard Henderson’s Sydney Institute Quarterly, Adam Creighton, economics correspondent at the Oz, “explains why most Australians pay no net tax”. That’s a striking conclusion, so I checked it out. Creighton has discovered that most Australians get about as much back in transfer payments and public services as they pay in taxation. The poor get a bit more, and the rich a bit less.

To save Creighton some work in future, can I suggest he consider the budget identity constraint “Expenditure = Income”. Since the government spends on services and transfer payments roughly the same amount as it raises in tax revenue[2], it’s obvious that, for the average Australian the same identity must hold, with income renamed as “tax paid” and expenditure as “transfer payments and public services”.

Next up: Why there is no net travel into the CBD

fn1. Romney wasn’t silly enough to push this line in public. He got caught using it at a donors meeting, when someone secretly filmed him.

fn2. Taking account of the seignorage from inflation, returns on assets, intertemporal transfers through debt etc, this rough equality becomes an identity. Please, no arguments about deficits, and especially about MMT. The point of this post is a really simple, and doesn’t need this kind of complication.

The Oz makes the case for higher taxes

A couple of days ago, I was one of fifty signatories to a letter opposing the proposed cut in company tax rate and rejecting the general idea that Australia needs lower taxes. We got excellent coverage from the ABC, Fairfax papers and so on. But by far the most extensive was from The Australian. I counted at least four stories all with a prominent run on the website

* A straight new story, though of course replete with phrases like “the left wing establishment”
* The IPA attacking the signatories as the “fatuous fifty”
* Shorten also attacking the company tax cut as a recipe for “mayhem”
* A front page piece saying a tax increase is a lazy way of solving our problems

Not so long ago, the Oz would have ignored a statement like this (or stuck it in a short story on the inside pages) with the plausible justification that it’s just a bunch of lefties saying what lefties usually say. The fact that they felt the need to reply over and over is revealing, in two ways.

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