It will be 200 pages devoted to the urgent need for the Australian governments to:Sinclair Davidson posts today the book cover, with this:
a. deregulate everything, as fast as possible;
b. start using blockchain technologies, they're terrific;
c. urgently reduce all government spending on things other than the temporary workforce support, with public broadcasting getting special mention;
d. reduce taxes.
Done and dusted.
My point a is their point 1.
Their point 2 and 4 is part of my point 1.
I would bet that blockchain turns up in their points 3 and 4.
My point d is bound to be part of their 3.
The only thing I missed is perhaps the point 5 - but it's an old small government trope that decentralising power our of federal government hands always works best. Just like Kansas showed with their failed experiment with Laffernomics, hey?
I think I was close enough to claim vindication. And I did save everyone the time.
PS: I am also reminded of that bit in Hitchhiker's Guide to the Galaxy wherein Zapod proposes replacing Arthur's brain with a microchip that just says "What?" "I don't understand" and "Where's the tea?" and no one would know the difference. The three catchphrases for Sinclair would be "Lower Taxes!" "Blockchain!" "Deregulate!" (and an occasional "Free Speech!")
they want to increase the structural deficit.
ReplyDeleteI just knew more labour market de-regulation would be there. It must be because strikes were up, we had a wage break out and thus unemployment was higher than it should be.
Wait. they all went the opposite way.
Just like old 1950s commos. forget about evidence just drone on about failed ideology
This is the counsel of sissies. They may as well re-title it "Don't Rock The Boat."
ReplyDeleteYea looks like you pretty much had it right During an avalanche of debt and unemployment, when given a mandate to at least talk about tapping into an embarrassment of waste and riches, they wimped out, and just did the same old same old. Same old brain damage, lack of courage or creativity. Gutless.
ReplyDeleteReading the back cover do you see people getting worked up with new daydreams of starting a business and employing people? No I don't think so. Worst of all no mention of monetary reform. No clue that they may chart a path to debt reduction. Really nothing to see here.
Does anyone see a manufacturing renaissance coming out of this turd-polishing exercise? Do you see surplus trade balances and budgets, as far as the eye can see? All I'm getting from this is a new wave of fat bonuses, ongoing debt peonage, and continuous loss of strategic assets. Insofar as policy development is concerned, this is an exercise in lowest common denominator thinking.
ReplyDeleteWhat is the difference between an Australian economist and a catfish? One is a scum-sucking belly-crawler and the other is a fish. The group probably ruled out anything different Potts might have had to say, and then found they had nothing. The last word in the final editorial meeting was "Fuckit."
But I suppose they'll be pretty happy about the front cover. Nice ice cube. Now we know when a group has too many ideological taboos to produce new content, they spend half the time doodling and the other half getting the cover right. Anyone in the group who had an actual clue about reinstating employment, and low-debt wealth creation, would have spent a lot of the time with his forehead on the desk.
The same old mantra. Such sparkling creativity from these RMIT economists. Graeme might be able to answer this: why are economists so often bereft of creative thinking? It seems they are locked into ideological positions that make them incapable of generating an original idea. For example, not one mention of how to fix the financial system which is a huge mess that only serves to enrich the financial entities perpetuate an economic structure that is long overdue for reform. Could it be that economists are so often employed in financial institutions they are loathe to even question the very structures which sustain these parasitic entities?
ReplyDelete" why are economists so often bereft of creative thinking? "
ReplyDeleteWe are controlled by way of nailing in strategic taboos. So for 100 years in physics if you talked about the aether you'd be ridiculed, sacked, you'd be unable to publish, your colleagues would break out in a cold sweat and their would be frenzied subject changing, you'd just have said goodbye to any chance of promotion and maybe you'd better contemplate sweeping the floors in a fast food outfit.
Soon allowed for all kinds of argy bargy when he ran Catallaxy. So for the first time in human history we would up having all kinds of threads of doom to do with fractional reserve. These threads were hobbled by libertarian piety. Like there was one regulation (the reserve asset ratio) that these people couldn't abide as if it would offend Ayn Rands ghost or soemthing. They were happy about any other regulation. But by god these righteous men of libertarianism would not abide a return (after only a few short years) to the reserve asset ratio. Not on their watch by golly. They'd fight to the death for bankers inalienable right to ponzi up make-believe money.
Sinclair's sole contribution was to show up one time and say .... close paraphrase .... "Look why can't you talk about a tax cut or something." Like all he could offer was crude Lafferism. Incredible. Of course now that the era of Libertarian piety is over its revealed as a simple matter of clawing back the seignorage off the bankers and give it back to the treasury where it belongs. For the purpose of paying off debts, funding infrastructure and so forth. But this is a heresy. A strategic taboo. Though Trampis and Steve are supposed to be leftists they would break out into a cold sweat before suggesting that the bankers be so persecuted as to not have the money creation benefit. Now if its a taboo on the left, thats spilled out of the economics profession, and poisoned society more generally, you can imagine what an incredible cancer-strength level of tapu it is within the profession of economics. So we've all got to pay the overhead of the winnings of people like feelthebern and Cambria ... .we've got to fit the bill to all his massive overhead, for people who lead lives that are simply delicious, because this taboo has been locked into the economics profession. The amount of fat thats out there is just unbelievable.
Next thing they cannot talk about is getting a copy of Graebar's book, identifying every bullshit job we don't need in the public sector, analyse which departments can be closed down without hurting anyone and give ourselves a massive embarrassment of riches to work with, when we swap this public sector welfarism for welarism of a cheaper sort.
ReplyDeleteNext thing that is absolutely Tapu is ensuring trade surpluses by exercising monopsony control on the interest rates for incoming loans. Loans coming from the European banks. Nor would they contemplate forcing our banks to default on loans from criminals and subsidised goons like Rothschild, Goldman Sachs and so forth. Proven failures and losers like JP Morgan, Merril Lynch. We should Lynch Merrill. Fucking why should we pay one dollar back to thieves and welfare queens like this?
Nothings on the table with these guys because everything is a taboo. If they got that far the anti-semite tag would come up, and they'd have all that to deal with. Well you know. Berg and the others would rather lose a lung than contemplate that we might duck any interest or principal when it comes to paying these leeches back.
How about how little established manufacturers actually spend on retooling. All this cash going to large bonuses, buying real estate and new companies and the like. All this loan money coming from the banks and going to any kind of bullshit other than productive power. They won't talk about that. They won't talk about forcing the big boys to retool instead of all this other nonsense spending they undertake. I'd make the tax rate 50% but allow accelerated depreciation. So they'd basically have to stop spending money on all kinds of things and retool instead. Something like this would never come up in their meetings. Not even in the idea generation stage.
Think of how much funds were available at low interest for the buying and selling of existing houses? No way could they contemplate re-routing this, by way of monetary reform, to productive endeavour. Retrospective interest rate caps are off the table. To soften the blow of monetary reform .... Nope. Can't do it. Totally out of the question. Industry plans are off the table. For almost as long as taxis have existed an industry plan to reform the industry has been needed to expand the number of licenses. Nope thats off the table as soon as someone like Sinclair or Berg walks into the room. Can't do it. Stalin had a 5 year plan so we cannot have anything that sound like that on purely grammatical grounds. What are the consequences of this "Can't get a job because I aint got a car. Can't get a car cause I aint got a job. So I'm looking for a girl with a car and a job"..... Failure to get on top of this has lead to the destruction of the financial position of almost everyone in Australia because they feel they need to borrow to buy a car. Which is a wealth destroying thing to do.
ReplyDeleteNope no plan to reform. So instead of a massive drop in the effective cost of transport, taking away the usury overhead, we get the invasion of UBER. So the money that should be riding on the Australian families hip goes to the bankers and to a foreign company. You won't find taxi industry reform in their book unless they read this and stop the presses right now. Because they don't believe in industry plans. Probably the only good thing that the current leader of the opposition every did was come up with a fantastic industry plan for our shipping industry. Nope. Cannot do it. Goes against something Friedman said in Free To Choose. All too hard. The dog stole their homework. Their brain is hurting.
You will find it hard to run out of things that are not off the table. Think of this as a visual image. Supposing they got Darcy, Chris, Sinclair, Aaron and Jason Potts in the room for the initial meeting. They then pin their arms to the desk, bring out a hammer and break their typing/writing forearm in three places and snap a few fingers. Thats the kind of restriction you are imposing on the profession when you force everything off the table.
ReplyDeleteLand tax, off the table. Boosting royalties, not allowed. Corporate reform, hush your mouth. End bank subsidies, did someone make a bad smell? Transitional plans ... I'll make the coffee.
Think of reform under Lee in Singapore. For over 100 years we've known that Henry George was basically right. For the most part. We had to meet him at least part of the way. But its a difficult thing to implement since it destroys the incumbents capital value and cash flow AT THE SAME TIME. If you don't do it loanable funds will inevitably flow to real estate rather than new plant and equipment. Peoples effective housing costs will be huge and there will be mass impoverishment no matter how productive the country is.
Well Lee found a bit of a workaround. Instead of putting up a land tax he coddled these rich slobs by buying up all their land. Then he started increasing the supply of living space by building all this communist high-rise. His people wound up in very short order as having the best standard of living in the world apart from maybe Leichtenstein, Switzerland and maybe one or two others.
Communist housing? Out of the question. Even if its a way of dealing with authentic Georgist concerns. You have to feel a bit sorry for these guys. There they are in the one room with a book to write and they cannot really discuss anything.
How about how little established manufacturers actually spend on retooling. All this cash going to large bonuses, buying real estate and new companies and the like.
ReplyDeleteIn Australia investors rely on he property market for capital growth and hence increasing their wealth. It is a disaster for the country because property investment is one of the wasteful uses of capital because there is no employment, no product, no innovation arising therefrom. Labor lost the last election because it wanted to introduce policies to slow down the ever increasing cost of housing and the generous tax concessions for negative gearing and franking credits. This country is stuffed.
Exactly. I don't know of all these guys, but some of these economists sat by and watched approvingly as this misallocation of loanable funds was continued for decades. Not one of them has talked about banking reform, or anything that could address this crisis. Everyone and his Momma chasing real estate rainbows and few actually creating wealth.
ReplyDeleteThey are talking about flattening the tax system. You can't polish a turd and very little will be achieved by this. But what would create employment after awhile, would be to get rid of taxes, for the retained earnings of the sole trader. After a period of consolidation, the sole trader, realising that his business was about the only tax rort available to him, would tend to reinvest and refurbish his act, churning most of his winnings back into his business. Once a certain head of steam is reached this would inevitably lead to lots of hiring. Its the way to low-debt expansion. To rely on debt for expansion can never work over the longer run. Its a method that will always have short legs. But this sort of low-debt growth can just keep going decade in decade out without roadblocks.
In terms of the big corporates, if they are international I would actually be looking at some of Pauline Hansons ideas of taxing these guys using a percentage of total revenues. Otherwise they can weasel their way out of paying anything. But those that pay taxes here I think with the current monetary conditions it will take accelerated depreciation to pull more responsible behaviour from them. And if the small businesses are already growing nicely I'd think about making new debt, that isn't refinancing .... I'd think about making the interest non-tax deductible. There might be problems with this but its always a good thing to go around ruthlessly cutting out banker overhead.
In terms of the big corporates, if they are international I would actually be looking at some of Pauline Hansons ideas of taxing these guys using a percentage of total revenues.
ReplyDeleteAbsolutely Graeme. Mirrors what I have been arguing. Taxing them on turnover in the country. Doesn't matter where their head office is or how many tax experts they have, no escape for multinationals. For any company that employs in the country, a discount based on the number of employees they have as a ratio of turnover?(Have people forgotten that there was a time when governments proclaimed an obligation towards full employment?)
Yet again ... economists and politicians live in fear of large corporations.
"For any company that employs in the country, a discount based on the number of employees they have as a ratio of turnover?"
ReplyDeleteYeah maybe. A lot of work would have to be done to see if the numbers work. It could get too complicated. I like the idea of not being allowed to deduct for an employee over $200 000. But to double deduct for the first amount of the minimum wage 5 days per fortnight. So they are kind of forced to create a lot of part-time jobs and scoop up guys who are on the sickness benefit. Almost chasing unemployed people down the street to offer them a job with any kind of enticement "we got beer" .... Lot of nice female employees? But you know in the end that sort of thing could get a bit complicated and easy to rort. One would think it would be on the table when it comes to this "unfreezing" exercise, but perhaps it might not get past deeper analysis by tax code experts and perhaps its something that you would want sunsetted so that it phases out after ten years. I don't think you can know these things until you get a team of people looking at the details, running numbers.
A dozen years ago I had a big problem with John Humphries. But paradoxically I would put him on any team to investigate possibilities of this sort. He's quite good with taxation scenarios and running numbers and things. I had a thread on my old blog where I talked about this sort of thing. My problem is not that they haven't implemented something like this. My big problem with these guys is that its not even under consideration. There has to be a good way to scoop up all the people who want work but who are not quite up to 10 days a fortnight work. Its certainly a good idea for investigation. To suppress these excessive salaries and to scoop up all this labour that has fallen through the cracks.
But ultimately I put my faith in low-debt small business expansion through retained earnings. And also I'd want these sole traders to be getting the new money creation benefit. So the only bank bailout I would want is to buy up bank branches at district operation centre level so we could get the cheap credit, that had been going to real estate and big corporates out to these guys. Employment comes when these fellows how too many producer goods and cannot possibly operate them all themselves. But yeah there is a possibility with the big corps that we could basically twist their arms to create a lot more part-time work. So that people get some benefit, but work on top of that, then we scoop a lot of it back on beer excise and GST.
Here is one of my posts from June 2008 that explores your idea. Basically there is a huge section of people who have fallen through the cracks. This amounts to a gigantic resource to raid for man-hours but not full time man-hours in all cases. So if your system can work we would be showering ourselves with booty.
ReplyDeleteSo the social contract would be that if these bigshots wanted to pay themselves million dollar salaries, and if they wanted to borrow money, then retooling and creating part-time jobs for the currently destitute would always wind up on their intray. And it would never really leave the top of their intray. This leaves a social contract wherein sure, they can make more than a million dollars a year. But in order to do so they have to keep updating their kit, and keep finding new and creative ways to employ everyone. So they earn their big salaries only by way of fulfilling this social contract.
So here is a thread where I entertain this idea, and I would only point out that it may pass muster, or it may be too complicated. But either way our economists are completely remiss because its not on the table.
https://graemebird.wordpress.com/2008/06/20/raiding-the-sick-blind-lame-old-and-aboriginal-for-manhours/
There is a lot of preliminary talk. So you might want to scroll down to when I start talking about this fellow called Brian who showed up on talkback radio.
ReplyDeleteSo the social contract would be that if these bigshots wanted to pay themselves million dollar salaries
ReplyDeleteThe idea that a CEO or upper management's labour is worth so much is just a huge conceit on their part. I've worked on production lines and with boards and I know which ones are working harder.
Basically there is a huge section of people who have fallen through the cracks. This amounts to a gigantic resource to raid for man-hours but not full time man-hours in all cases. So if your system can work we would be showering ourselves with booty.
There is but the coalition typically demonises them, especially those on Newstart, many of whom should be on the DSP. There is an obvious fact about work that is typically overlooked: it is a primary means of establishing social relations and that is very important for psychological and physical health. So there are considerable pay offs getting people back to work but not work for the dole because that is transitory and does not establish social relations. So it provides zero of the benefits of real work and is insulting.
I know this isn't going to happen. The time is not yet right.
Right. And its like free money for society. If you can get 5 days a fortnight out of everyone, they are all wealthier, they wind up buying stuff, getting healthier, eating better and all the time we are raking back on the GST. Pure money for jam. So thats one source of resources. Sacking bullshit jobs in the public sector free loot. Getting rid of the seignorage banking subsidy is like this el dorado of extra riches. The Americans have their bullshit medical system to raid for extra loot.
ReplyDeleteThen you are in a position to grow sole trader business in double digits, buy back strategic assets and put in the best infrastructure. Particularly of the sort that doesn't fight gravity. Like all these little coastal wharves that are container enabled. All this really flat rail. 100 year plan to get really good at both submarine cargo transport and dirigibles cargo transport. A multi-century plan for the triumphant and ubiquitous return of the canal. Since manufacturing is really logistics in disguise this infrastructure would eventually lead to manufacturing power beyond the dreams of anything done before.
"I know this isn't going to happen. The time is not yet right."
ReplyDeleteYou've jogged my memory. This is how the economists used to talk. Instead of doing their job and telling us what we should do , they would go into soothsayer mode and then bid away the best alternatives until they had hunkered down with the second-worst alternatives. Thats not their job. Their job ought to be to project the best ideas and then let the politicians decide what is doable.
So with the global warming fraud, instead of promoting soil development through land hydration and pushing up royalties on coal, perhaps rigging our inward loanable funds in such a way as we always ran trade surpluses not matter how much coal we exported ....... Instead of that it becomes an argument between a carbon trading system and a carbon tax system .... Since they have bid away all good options and were down to the worst and the second-worst.
Actually you've kind of talked me back into it. I think we NEED to do this sort of thing right now. As we sack every bullshit job in the public service and reduce the size of the financial sector, it seems expedient that we force businesses to become obsessive job creators. Couldn't think of a better time and most of that money is going to come back straight to the treasury when the formerly unemployed people start spending extra loot.