Archive for the ‘economics’ Category

Britain’s Trillion Pound Horror Story

November 22, 2010

Martin Durkin does it again

We all remember Martin Durkin and his wonderful documentary, The Great Global Warming Swindle, that so thoroughly upset and embarrassed the ABC a couple of years ago. The ABC Collective was so outraged that, from memory, it was the first time they had issued a formal disclaimer that the documentary in no way reflected the views of the ABC …  ahem … as if the ABC has a particular view in the first place.

Anyway, Durkin has produced a new and timely documentary on Britain’s financial woes, Britain’s Trillion Pound Horror Story. According to James Delingpole in the Spectator, it is the most important programme to have appeared on British television this year. It has not, to my knowledge, been reviewed or discussed anywhere in Australia.

From what I have gleaned from the British press reviews and seen from the promos, it is quite a confronting piece, just as his Swindle was for believers in global warming. Whilst most of us know about debt and the shake up from the GFC, there is still much disquiet. In our hearts, most of us don’t really believe that it is all over, or that our leaders have much of a clue. Delingpole recons that unless David Cameron actually does something to reduce government spending, rather than just cutting the rate of increase of government spending, Britain will end up like Honecker’s East Germany.

Last year our government spent more in benefits than it raised in income tax. One third of households in Britain now receive more than half their income in state benefits. Yet our national debt now stands at £4.8 trillion — a figure so large it’s hard even to imagine. If you stacked that figure up in £50 notes, you’d have a pile reaching 6,500 miles into space. If you sold every single house and flat in Britain to try to pay off the debt, you’d still be £1 trillion short …

‘Ah,’ goes up the bien-pensant cry. ‘But if we cut government spending too drastically front-line services will suffer.’ Oh, really? Of the £700 billion-plus of our money currently being squandered every year by the government, only around £200 billion goes on doctors, teachers, police and other ‘key workers’. Most of it simply goes on administration, on diversity-outreach consultants, on climate-change advisers, on entirely pointless government ‘initiatives’ such as the various ones devised to cope with our failing education system: the Numeracy Task Force, the National Skills Academy, Early Learning Partnerships, Excellence Hubs, Learning Outside the Classroom, Parenting Early Intervention Pathfinders, The Framework for Personal and Learning Skills.

I wonder if our ABC intends to show this doco, even forgetting their bad experience with Durkin. The problem for them is that whilst Australia is at the moment in a more fortunate place than Britain, it will remind viewers very much of the Rudd/Gillard profligacy that Mr Swann, the Independents and almost all the commentariat are helping to justify, especially with their obstinacy over the NBN.

What Durkin, and many other international commentators like Niall Furguson are reminding us, is that our politicians, including Obama and the Fed in the US, just don’t seem to know what they are doing.

A lesson in economics and optimism

November 10, 2010

On what principle is it, that when we see nothing but improvement  behind us, we are to expect nothing but deterioration before us?

Thomas Macaulay

I have just reviewed an outstanding book that I consider the perfect foil for the pessimism of the Left, and an ideal primer for the economically illiterate. It would be an inspiring Christmas present for anyone floundering with notions of economic progress, who doubts man’s ability to respond to environmental problems, or for those worried by peak oil or climate change. It is the perfect response to silly books like Affluenza by Clive Hamilton,  or irresponsible alarmism Australian of the Year Tim Flannery, who so confidently predicted water shortages for Australian cities. But don’t expect this book being discussed in a literary festival or a “dangerous ideas’ talkfest. It is far too dangerous…

Sensible questions on Labor’s incompetence

October 27, 2010

Labor in Purgatory

LABOR is in purgatory. Purgatory, the place between heaven and hell; the place where souls remain until they have expiated their sins and can go to heaven. Julia Gillard knows Labor’s sins. Appalling profligacy, phony revolutions, phony targets, phony committees and phony commitments. Mounting electricity and water prices extend the suffering. Can she expiate them?

Gary Johns, in his inimitable and stylish way, sums up the dilemma’s for the Australian Labor Party. A minister in the Keating government, he understands the Labor illness better than most. With real tax reform in mind, Johns wonders whether Gillard will actually get around to governing in the broad national interest.

National hysteria on carbon warms up

September 16, 2010

BHP lemmings over the cliff, or self interest?

There seems to be an urgent rush towards the cliff of righteousness with everyone and his drover’s dog wanting to pay carbon taxes. Or is it clever strategic deals being made in the name of stupidity. Alan Moran looks closely at BHP Billiton’s Marius Kloppers’ intentions and crunches some numbers.

In seeking a price on carbon for Australia, Kloppers presumably is not advocating that BHP start to pay it immediately on the 103 million tonnes of coal a year it sells. If so, even with a tax set as low as $25 a tonne of CO2, he is advocating a payment from his shareholders of $5 billion a year.

NBN more than entire defense budget

August 12, 2010

Another extravagant waste of money

Having commented on Kerry O’Brien’s disgraceful gotcha moment with Tony Abbott on the NBN, it is nevertheless disappointing that the Opposition can’t go on the attack as succinctly as some of the economists and opinion writers in our newspapers about just how wasteful, dangerous and fraudulent the Labor proposition is.

Henry Ergas has done it again, this time on the ABC
as reported by Australian Conservative.

I think the real issue is whether the $43 billion was ever justified. Here you had $43 billion which is a staggering amount – $43 billion being invested, committed without a business case, without a cost-benefit appraisal, shifting enormous risk onto taxpayers in a program that costs five to 10 times more than what is being done anywhere else in the world.

7.30 Report a disgrace to the ABC

August 10, 2010

Kerry, what is the speed of light?

It is clear that many would have noticed the outrageously transparent  ”gotcha” approach by Kerry O’Brien last night with Tony Abbott on the 7.30 Report. In spite of much public criticism of his bias, O’Brien continues his ruthless and shameless approach to the treatment of the Liberal opposition.

Kerry was successfully in confusing Abbott with his sophisticated mastery of the technical aspects of broadband and explaining how much better the ALP’s network would surely be. Nevertheless,  Abbott was able to get in this.

TONY ABBOTT:  And what they’re going to use, as I understand it, is to string cable on telegraph poles, which is hardly the most marvellously sophisticated technology to use in this day and age either.  Look, Kerry, err …

KERRY O’BRIEN: Its fibre … where … where signals will travel at the speed of light.

Really, Kerry. Please explain just how many megabits of light that is?

Surely, Kerry, if you don’t know the difference between the speed of networks and the speed of light, you shouldn’t be expecting a higher standard for your interviewees.

Children denied work

July 11, 2010

Julia’s Fair Work not fair

It looks like Julia’s IR legislation is still going to raise even more eyebrows going into the election. Fair Work Australia vice-president Graeme Watson has rejected the right of some Victorian school students to work one and a half hour shifts at a local Kerang co-operative.

Unless, of course, Julia clears yet more deck space against silly, damaging obstacles that discourage young people from working. Simon Crean says he is going to look at the problem in “the days ahead”.

A LEGAL challenge by two Victorian country town teenagers to keep their jobs has been rejected by the industrial umpire.

The decision was bitterly received in Terang, about 210km southwest of Melbourne.

The co-operative is the town’s largest employer, and the townspeople had rallied behind the two affected students, who have been unable to find weekday jobs elsewhere.

A petition of 1650 signatures demanded changes to the award.

“Everyone was just so cut when it happened,” a disappointed Leticia said yesterday. “I think it is pretty stupid.

“I can’t really get my head around the fact they won’t let us work.


That’s one unresolved problem on the IR front.  Another has been reported this morning on the escalating costs of coastal shipping due to Labors’ work place policy.

JULIA Gillard faces demands to wind back the Fair Work Act for businesses reeling from an explosion in shipping costs.

Solar power furphy

July 7, 2010

Lessons for Greens in Vietnam

In a visit last week to the bustling, vibrant go-ahead Saigon I came across an interesting news item in Viet Nam News, the national English language daily. Le Tuan Phong, deputy head of the ministry’s Department of Energy estimates that the average price for producing a kWh of solar electricity was about six or seven times higher than hydro-power or thermo-power.

In particular, it requires a huge, almost unaffordable initial investment. According to Mai Thanh Hai, head of the sales department of Red Sun Energy Company, the average cost for installing solar energy equipment for a household is between five to nine times the annual GDP per capita. And then, the power produced was only enough for basic necessities for six hours a day.

I wonder if the the communist government of Vietnam understands more about the economics of solar power than does the Green Gold Rush project announced by ACTU President, Sharan Burrow and Australian Conservation Foundation executive director Don Henry, mentioned in an earlier post.

ABC continues warming scare

May 19, 2010

Waste of ABC air time

Fran Kelly sounded confused, uncomprehending and disappointed in an interview this morning with scientist John Lyman from the Joint Institute of Marine and Atmospheric Research at Hawaii University. Her idea to continue with more global warming alarmism sort of back-fired. She chose what in the trade one calls “bad talent”.

The scientist illustrated just how bad ocean warming was by telling Fran that it equalled 500 one hundred watt light bulbs burning for 16 years for every human on Earth, gasp! or equal to 2 billion Hiroshima bombs tsk,tsk!

When asked about the implications, Lyman feebly replied that that was not his forte.

I seem to remember that ocean warming goes in cycles of well over a hundred years. So what this present warming has to do with anthropogenic warming is anyone’s guess. Clearly, there is nothing we can do about it today. But, for the ABC, whatever…

ACF and green fools

May 18, 2010

Green Gold Rush is fools gold

ACTU President, Sharan Burrow and Australian Conservation Foundation executive director Don Henry have been exciting the media this morning with a promise of a green jobs economic bonanza to enrich Australia. They call it a “Green Gold Rush”. They cite a study claiming that Australians would be 10 per cent, or about $153 million, better off over two decades by moving to a cleaner and greener economy.

These two zealots cite how Germany created 25,000 jobs and sustained 116,000 existing jobs by retrofitting some 200,000 apartments from 2002 to 2004. With absolutely no hint of irony — think Peter Garrett and ceiling insulation — they suggest that “Australia could do the same for our own buildings’ trades by focusing economic stimulus on energy-efficient renovations”

Has Don Henry read the Spanish study by Dr. Gabriel Calzada, an economics professor at Juan Carlos University in Madrid, showing that since 2000, Spain spent $774,000 to create each “green job”, including subsidies of more than $1.3 million per wind industry job. It found that creating those jobs resulted in the destruction of nearly 113,000 jobs elsewhere in the economy, or 2.2 jobs destroyed for every “green job” created.

Do they know that the supposed sustainable energy sources are not economically “sustainable”, because they actually consume more wealth than they produce?

In Denmark, a study by the Danish Economic Council found that the highly successful wind-power industry there was hooked on government subsidies and had a net cost effect on the economy, not a benefit. In Germany, their extensive use of green energy in their national electricity grid has come at a huge cost for households and tax payers through extravagant subsidies. .

The naïve idea that putting an arbitrary tax on the cost of carbon and depending on government subsidies like a heroin junkie can stimulate an economy is, well, naïve. What happened to all of Mr Rudd’s thriving green industries in domestic solar power, and wind, when he pulled the plug recently?

Sharan Burrow and Don Henry’s Green Gold Rush reminds me of the Soviet central planning model, where left handed, one size boot factories were very profitable.