Alan,
The best economic theory work is now done at the University of Missouri, Kansas City, (UMKC) and by others following a similar line of reasoning.

In a paper delivered to the Field Institute the Chair of UMKC described the fiscal space in which a successful sovereign government can operate and provided a diagram in slide 49 of her presentation. If the current account balance and the government balance is plotted for any period the result shows whether the private sector is operating in a long term sustainable area of the fiscal space chart.
See;http://www.fields.utoronto.ca/video-archive/2013/11/221-2524

I have plotted Australia's position each year for the last 60 years.
In every year of the Howard/Costello era Australia operated in the unsustainable area and therefore the economy was set to crash when the property bubble burst.

It was really the gang of four, Rudd, Gillard, Swan and Tanner who rescued Australia by supporting demand through prompt deficit spending.

One rule is that a Sovereign Government (SG) can never go broke buying things for sale in exchange for the sovereign currency whether what is for sale is labour or building or domestic produced consumer goods. The SG can contribute to inflation if it doesn't ease up on its purchases if full employment inflation looms.

But, there are two different types of inflation and Australia mainly suffers from the second, namely, asset value inflation. The cause of that inflation is too much money in the hands of those who have too much and who are therefore looking for somewhere profitable to invest their excessive incomes and thus bidding up asset values. Negative gearing and franking credits aggravate this situation.

Meanwhile, in our super-duper rootin-tootin economy which comes out on top of the post-GFC list, we have massive problems with basic resource provision, most significantly water, and with infrastructure and services, we have massive economic activity which is simply chasing the tail of extraordinarily rapid and downright STUPID population growth without leading to significant improvements for the pre-existing population. We are NOT seeing overall improvements in our basic services and infrastructure. We are not seeing the eradication of poverty. We are not seeing a healthier environment, either natural or human. We are not weaning ourselves off of our addiction to fossil fuels. And we are not moving towards a more sustainable society.

In other words, our fantastic economy is NOT giving us a better quality of life… or a more secure future!

So….. exactly what IS it doing then ??

You’ve got to wonder how economic analyses of the sort you have presented here Alan can completely miss all of this sort of stuff.

If you considered the things that the economy is supposed to provide and be intimately connected to, in the real world, at all levels from personal to national, then I think your analysis would show a very different result regarding the state of Australia’s economy and how it might compare internationally.

Alan,
Your methodology is weird. The use of tweaked raw data for incommensurate variables introduces large arbitrary weighting bias towards some measures and against others that can’t be justified by any measure of relative importance. It also can't capture the inevitability of different levels of variation of different measures (debt to GDP ratios vary much more than inflation rates).

At the very least, I’d suggest you use a commensurate measure such as rank or percentile on each of the criteria and, if you insist on weighting, do so explicitly and with justifications.

A couple of other observations:

Are you targeting economic wellbeing, or economic management? You seem to be having a bet each way. If management, I’d suggest that growth rates not levels are a better measure of financial variables (wealth and income). A country that starts poor will still have low income and wealth even after many years of excellent economic management; while most rich countries are still rich even after years of relative mismanagement.

“Wealth” is massively influenced by asset prices. In particular, the growth of Australia’s wealth in recent years is mainly due to the resources boom and rising house prices, further buoyed by the high exchange rate. I’m not sure these belong in a measure of economic management. Growth in the real capital stock might be a better measure of underlying wealth.

Employment ratios are heavily influenced by culture and demographics – the proportion of the population of working age. Again, I’d suggest direction of change is a better measure of performance here than levels.

Don't be such a doom-monger, Ludwig.

>>...we have massive problems with basic resource provision, most significantly water...<<

A shortage of water may be a problem up where you live (but given the rainfall up there, it would be a tad surprising) but we Sydneysiders have at least planned ahead on that front. We have full dams at present...

http://www.sca.nsw.gov.au/water/dam-levels

...and a desalination plant in mothballs, ready for the next down-cycle.

The investment deficit in other infrastructure - rail services spring to mind - is slowly being addressed, but is principally a failure of political will, rather than the result of any economic issues.

>>...we have massive economic activity which is simply chasing the tail of extraordinarily rapid and downright STUPID population growth...<<

Whoa there! Massive economic activity? Where?

>>We are NOT seeing overall improvements in our basic services and infrastructure.<<

Who's "we" Kemo Sabe?

Once again, even though it progresses at snails pace, improvements are taking place all the time down here in Sydneyland. Our parks are well maintained, our streets are clean, our domestic services (garbage collection etc.) has over the years become the best I have seen anywhere in Australia.

>>We are not seeing the eradication of poverty.<<

Along with many other countries, bro. It isn't just a matter of waving a magic wand, you know. And I hesitate to point it out, but your own ideas about closing the borders and becoming "self-sufficient" are certainly not designed to address that particular problem either.

>>We are not seeing a healthier environment, either natural or human.<<

Honestly, I give up. If you cannot see that we are the healthiest we have ever been, with an extended lifespan and one of the best healthcare systems in the world, then I simply don't know what to say.

See, you have finally silenced me!

I don't see anything in Coalition ideology, that supports economic growth, rather contraction. Nor is the reduction of mining venture investment helping.
Nor is the continuing reduction in tax receipts, employment, or employment growth.
The coalition is clearly reaping an economic whirlwind of its own making, by talking down the economy.
There is a formula for growth, which includes quite massive tax and other reform and simplification!
Much of which will be resisted by the rich and powerful, and other vested interest, with skin in the current complexity.
After quite massive tax reform and vast simplification, the second part to economic growth is energy.
Cheaper than coal thorium energy appears the way to go; particularly, given we own enough of this currently wasted resource to power the world for 70 years, by which time, the world will have solved the fusion energy conundrums surely!
Majority shares would confer a level of control, in who is appointed to a board, and who is the senior executives; meaning, no government, even one that seems as hopeless as this one, never ever needs to concern itself with the day to day management of any corporation.
We seem to be losing our vehicle building industries, the home of much of our corporate R+D, due to visionless troglodytes, and a patent aversion of employee owned co-ops, which as a much leaner and the least costly/most cost effective form of private enterprise, would have allowed us to continue building cars?
Ideally, right hand drive electric vehicles, for which we would have found ready markets in India, Malaysia, Singapore, Hong Kong, Malta and other parts, where Britannia had former colonies?
Yes we are finding new energy resources, and isn't that timely with what's happening in the Crimea and the Middle East?
The government needs to reinstate the government owned oil and gas corporation. So we are no longer at the mercy of foreign nationals!
Rhrosty.

Rhian,
I suggest that you need to look at some of the slides which accompanied the article presented by Dr Stephanie Kelton to which I drew attention in my first comment.

In the fiscal space diagram Australia has been regularly losing ground in domestically owned capital goods. If our SG budget balance and our CA balance are plotted you will find that in most years the plot is to the left of the sloping S - I = 0 line (sloping 45 degree line). John Howard deliberately favoured citizens (particularly those with young families) going into debt with the banks rather allowing citizens to accumulate savings through a deficit budget and maximum employment.

If you do not understand this point please read Modern Money Theory available as chapters at; www.neweconomicperspectives.org

Ludwig
Our electoral cycle precludes sensible economic planning. Somehow we need to break our Westminster System into the USA's three arms (Presidency, Parliament, Supreme or High Court) without incurring the problems of the presidential system. Parliament's only responsibility should be to pass laws. Having cabinet ministers run the economy is little short of crazy.

After WW2 Australia planned the introduction of the consumer goods industry which led to the expansion of other industries. Soon we will not be able to afford all the imports we will need once we have almost no productive industries of our own. Ore and coal are capital assets and we are selling those to maintain our living standard. That is a blinkered policy.

Requiring every negatively geared activity to operate as an individual entity and to be able to pass on losses for a very limited time, say two years, might improve housing affordability

Hi Alan,

<< There appears to be strong vindication for former treasurer Wayne Swan from a formula just published in Australia's alternative media.>>

This seems like an opening line from the Melbourne Comedy Festival. I take it that this is to whom you are referring when you say “alternative media”?

I think you might be a little out of touch with Australian voter sentiment, perhaps the message takes a long time to reach Southern France?

But in the great tradition of progressive hypocrisy, everything is resolved with the little “narrative theory”.

Anyway, back to the Melbourne Comedy Festival. Your comments were hilarious. Could you please put some stuff together for Dave Hughes, he is desperate for some new material, particularly stuff that eulogizes anyone associated with the greatest political defeat in Australian history, that of the ALP at the last election.

Since you are in France, can you contact the two students that had Wayne Swan down as the “worlds greatest treasurer”. If you can’t track them down perhaps you could ask that Alan Austin guy, he seems to have a pretty good spanner on these things, well he seems to think he has.

I like the way GY keeps accepting your articles just to give you the opportunity to self destruct. Great strategy!

Good morning,

Thanks for these comments. Intriguing, as always.

@Foyle, thank you for the UMKC link.

Yes, agree about asset inflation. This is another argument for redistribution of wealth and income towards the poor and lower middle, rather than the reverse which Australia is now pursuing again.

@Ludwig, to which period are you referring with: “We are NOT seeing overall improvements in our basic services and infrastructure”?

Before or since September 2013?

Which countries have a better record than Australia for infrastructure development during the period 2009 to 2013?

Who was International Infrastructure Minister of the Year in 2012?

Agree completely the IAREM score doesn’t measure social or environmental outcomes. Or education, or health, or life expectancy, or happiness. It is openly a measure of economic performance.

There are other tables which measure and rank social outcomes.

@Rhian, yes, agree it’s a weird formula. But what econometric formula isn’t?

Re: “tweaked raw data for incommensurate variables introduces large arbitrary weighting bias towards some measures and against others that can’t be justified by any measure of relative importance.”

Why not? Pretty sure it can, Rhian.

Re: “It also can't capture the inevitability of different levels of variation of different measures.”

Yes, it can. Satisfactorily, if not perfectly.

Re: “Are you targeting economic wellbeing, or economic management?”

Both. Measuring the former as evidence of the latter.

Re: “I’d suggest that growth rates not levels are a better measure of financial variables.”

Agree. The variable for growth – gr – is a measure of growth rate. Refer here:

http://www.independentaustralia.net/politics/politics-display/australia-tops-the-iarem-worlds-best-economy,6279

Re: “A country that starts poor will still have low income and wealth even after many years of excellent economic management.”

Correct. Hence the weightings adopted. The charts show Chile, for example, has advanced from 49th in 2007 to 17th in 2013. This is because income, growth, employment and inflation have all improved – despite wealth declining.

Agree also that other measures for wealth and jobs could have been used. The challenge, of course, is to find numbers comparable across time and nations released annually.

Happy to discuss further.

Cheers, AA

Pretty good metrics, there isn't anything I can take issue with here, though I am somewhat curious as to why the Gini coefficient isn't among them.
True, it is probably a more relevant indicator in terms of societal outcomes than the power of the economy, but I would also argue that the sustainability of the economy is fairly closely related to income distribution.

<< Honestly, I give up. >>

Haaaa hahahaaa Pericles!

<< …you have finally silenced me! >>

Really?? Truly?? Promise??

I don’t believe you!!

Well there’s no need for me to go to the trouble of responding in detail to your post then.

All I will say is that you are so sooo wrong!!

C’mawwn. Denounce your silence. Let’s get stuck into yet another one of our long and wonderful discussions!

Tell me you are willing to respond. Then I’ll address each of your incorrect statements one by one. I could write a book in response to your post! ( :>)

<< Our electoral cycle precludes sensible economic planning >>

Indeed it does, Foyle.

And the enormous bias exerted on our political process by profit-motive-driven vested-interest big-donations big-bribing big-business is another huge factor.

I wonder if the 10 billion a year we are paying in interest on the debts the last 2 ratbag prime ministers ran up could be having a bit of a depressive effect on the public well being.

That debt doesn't include the ridiculous NBN debt, that was kept off the budget by a typical Labor sleight of hand, or the ridiculous Disability insurance scheme, or the Gonski school spending. A couple of little booby trap the delightful Julia set for her replacement, when she knew she was about to get what she deserved, a good kicking.

<< @Ludwig, to which period are you referring with: “We are NOT seeing overall improvements in our basic services and infrastructure”?

Before or since September 2013? >>

Both!

Alan, all the apparent improvements are simply struggling to keep up with the constant and very rapidly increasing demand for the duplication of services and infrastructure and upgrades to existing ones as they become overburdened. This situation has existed for a long time.

Supply is struggling to keep up with demand.

If you only look at the supply side, then yes you will see lots of apparent improvements.

But if you consider the demand side as well, then… no… … there are no real improvements at all!

<< Which countries have a better record than Australia for infrastructure development during the period 2009 to 2013? >>

Not many I would imagine … if you only look at the supply side.

<< Who was International Infrastructure Minister of the Year in 2012? >>

Some drongo.

Who was responsible for judging who was infrastructure minister of the year? Did they consider the demand side at all…. or only look at the supply side. The latter, for sure!

<< Agree completely the IAREM score doesn’t measure social or environmental outcomes. Or education, or health, or life expectancy, or happiness. >>

Wonderful!

<< It is openly a measure of economic performance. >>

Yes yes YES! Your IAREM determination of economic wellbeing is COMPLETELY detached from reality!! … from all the things that the economy NEEDS to be intimately connected to! This is simply bizarre when you stop to think about it!

<< There are other tables which measure and rank social outcomes. >>

Yes. But they are obscure! How much credence do they have compared to the broad measures of economic performance? Stuff all!

The problem is not so much that your economic performance indicators are so demand-blind and quality-of-life-blind, but it is that in the eyes of ‘economists’ and politicians, they are what counts!

OK, Ludwig, I'll bite.

>>Tell me you are willing to respond. Then I’ll address each of your incorrect statements one by one.<<

Off you go. Fill yer boots.

I'll help you along. Here are the points again.

1. A shortage of water may be a problem up where you live (but given the rainfall up there, it would be a tad surprising) but we Sydneysiders have at least planned ahead on that front. We have full dams at present, and a desalination plant in mothballs, ready for the next down-cycle.

2. Improvements are taking place all the time down here in Sydneyland. Our parks are well maintained, our streets are clean, our domestic services (garbage collection etc.) has over the years become the best I have seen anywhere in Australia.

3. Your own ideas about closing the borders and becoming "self-sufficient" are certainly not designed to address [the eradication of poverty] either.

4. We are the healthiest we have ever been, with an extended lifespan and one of the best healthcare systems in the world.

I look forward to hearing your response to each one of these points, one by one, as you have promised.

Did I miss one? Ah yes, here it is.

5. Massive economic activity? Where?

Thanks, by the way. You have single-handedly rekindled my enthusiasm.

Oh, and do us both a favour by sticking to the point, there's a good chap.

Alan
Great idea and I believe it highlights accurately the unsustainability of the Howard error.

Nevertheless, I believe the criteria you are applying is far too narrow. Much of the criteria used is meaningful to economists and business but not necessarily to its citizens

I would like to see a scorecard which includes: unemployment, homelessness, health, mental health, education, mean incomes, adequacy of retirement incomes, adequacy of social welfare, home ownership/rent, prison numbers, media concentration, corruption

Hello again,

@TurnRightTurnLeft, agree completely re income distribution.

The Gini coefficient was included in an earlier draft of the IAREM formula. It was abandoned simply because the numbers are not released annually for all countries and current numbers are inaccessible. We got around it, however, by using Credit Suisse’s median wealth rather than the mean or weighted mean. This effectively takes the Gini factor into account. Also reduces the complexity of the formula and the work required by those using it.

@Hasbeen, re: “10 billion a year we are paying in interest on the debts …”

You really do not need to worry too much about this. Australia’s debt has been far too low for far too long.

Fortunately, the first moves made by new Treasurer Joe Hockey last September were to increase the debt substantially, as the previous government should have done.

There is still a long way to go under current global economic conditions before Australia’s increasing debt becomes anywhere near a problem.

@Ludwig, yes and no.

Re: “Your IAREM determination of economic wellbeing is completely detached from reality”.

No, not at all. The eight variables are precisely those that most concern employees, bosses, investors, taxpayers, voters, bureaucrats and politicians. The figures are those relied on and awaited eagerly by business, treasury, academia, the media and the citizenry to know what is going on.

@YEBIGA, agree mostly.

The IAREM ranking does consider unemployment, but also takes job participation into account. The income measure used is probably a fairer one than mean incomes, as the notes to the chart at the World Bank explain.

Corruption is a small component of the economic freedom variable in the formula, but is dealt with more directly by Transparency International’s corruption index.

Most of the other indicators you list are measured somewhere, such as the most liveable city tables, the happiness index, the World Justice Project’s rule of law index, the UN’s human development index and others.

I agree these are vital indicators, Yebiga. But the IAREM looks strictly at economic outcomes.

Cheers, AA

Talk about gilding the lily by Alan Austin. Aust total debt is about $4.7 trillion. Abbott tells us that Govt debt is not the $300 billion that Labor told us but $667 billion so add another $120,000 debt to every household in Aust.

We are not the magic economy because we have no manufacturing or high tech industries that actually produce something.

So every household in this country owes an average of $427,000 and most of this is over inflated domestic properties.

The next big collapse is coming because they continue to print money.(quantitative easing)The share market is way over inflated. In the West unemployment is up ,manufacturing is down but our share market defies gravity and climbs? Where did that QE go ?

Our banks are not safe and want to pass laws that enables them to convert your deposits into their shares. It is called "bail in".

http://www.cecaust.com.au/

Hi Alan,
No doubt some of those other measures, unemployment, homelessness, health do appear in various other rankings. These other rankings are not taken seriously and work as little more than filler for newspapers and radio shows. The economic ranking are taken much more seriously in business circles but for the general populace there is no agreed or general ranking.

It would be a significant improvement if we had a more balanced ranking system which was understood and referred to as readily as GDP or Inflation. In other words a kind of scorecard on our government and one which is harder to manipulate with rhetoric.

Nevertheless, I find your contribution here informative and important.

Pericles, told ya I didn’t believe ya, old chap.

But I do thank you for coming back for a bucketing!

<< Off you go. Fill yer boots. >>

Don’t worry, they are full, after sloshing around in the mud puddle of your previous post!

<< A shortage of water… >>

It may be a tad surprising to you to learn that lots of places in this country have major water issues. Perth, Adelaide, Southeast Queensland, lots of smaller towns, whole agricultural and pastoral regions.

There was a major expression of concern about water in SEQ a little while ago, before the big rains (and floods). Remember the mooted Traveston Dam?

And yet, despite this critical concern our amazing governments, Federal and Qld state, continue to pack em in to the southeast corner! They are making NO attempt to slow this population growth down, other than to meekly suggest that perhaps people should go to other places, like Townsville or Cairns or Longreach or Urandangie instead.

But they are imposing permanent water restrictions on us and trying to make us feel guilty if we use any more water than the minimum that we could possibly get away with.

What they are actually doing is trying to reduce the per-capita water consumption so that they can pack ever-more people in, into areas with obvious and quite critical problems with the supply capability of one of our most fundamental resources.

And yet conventional economic analyses don’t indicate any problem at all!

What they do (falsely and gravely) suggest is that the economy in water-stressed cities and regions is just fine thankyou very much, for as long as there is high population growth and hence high economic activity!!

Pericles, I find it staggering that you would support any type of economic analysis that does this, or question something as obvious and important as the problems we have around the country with water-provision!

There you go; a whole post, and I’ve only addressed one of your terribly wrong points!

[the word limit and 4-posts-in-24-hour limit is really going to hang me up on this thread!]

Alan

I was going to read your article, but thought why bother. It will only be the usual labor spin. Hate Abbott, Love Labor. We are good and the Liberals bad.

How's inadequate Bill travelling?

How about an article criticising the gerrymander in SA.

Labor wins with 47% two party preferred and support from another former liberal now obviously just another labor stooge.

What he should have done is said I'll support the Labor caretaker government until the other independent returns to the house or there is a by election in his seat. Then I'll decide who I'll support to form a new government. Instead he fell over himself to accept a cabinet position and make an illigitmate government. Watch the debacle over the next couple of months/years.

So it would appear that you have no problem at all with the statement that I made about Sydney, Ludwig. You instead chose to reference places whose government haven't either the foresight or the political will to do anything about the problem.

>>It may be a tad surprising to you to learn that lots of places in this country have major water issues. Perth, Adelaide, Southeast Queensland, lots of smaller towns, whole agricultural and pastoral regions.<<

Given that you are forever heaping scorn on Sydney, and what you have previously described as its "runaway population growth", is it not completely obvious that the problem is not the population, but the politics? As I took care to point out to you,

"...we Sydneysiders have at least planned ahead on that front. We have full dams at present... and a desalination plant in mothballs, ready for the next down-cycle."

All this in the face of, according to you, population growth that is out of control.

It is patently obvious to even the most casual observer that it is not the lack of money to build infrastructure that is the issue, but the decisions of governments to spend our money elsewhere. And don't even get me started on the massive levels of corruption that clearly pervert the process.

>>There you go; a whole post, and I’ve only addressed one of your terribly wrong points!<<

And the saddest part is, that you have actually failed to address it at all!

Not even the slightest objection to the tiniest detail of what I wrote, only a diversion into irrelevancies. Which, given your claim that you were going to "write a book in response" indicates that such a tome would only ever pass muster as fiction.

None down. Still five to go.

Good morning all,

@Arjay, a couple of those points are sound, though some seem not. But all are way off topic.

The IAREM seeks to rank all the world’s economies in order to determine which governments have put in place appropriate policies for the times.

@YEGIBA, yes, agree entirely. The reason this formula was invented was precisely because hitherto there has been none available to rank overall economic performance.

@Imajulianutter, good morning to you.

Also well off topic. No, the SA election result is democracy in action. The Howard Government in 1998 was re-elected with 49.02% of the two-party-preferred vote, with the ALP gaining 50.98%.

Was that an illegitimate government, Keith?

Just on the intriguing discussion between Ludwig and Pericles, and to return to the topic, it may well be that the IAREM does shed light on the thorny population growth issue. If we look at the countries which did and didn’t expand their populations between 2007 and 2013 we can now verify whether their economic wellbeing overall rose or fell.

Cheers, AA

Hey, look!

It appears that the Center for American Progress and its co-chairmen former US treasury secretary Larry Summers and Britain's shadow chancellor Ed Balls all read On Line Opinion.

They made this announcement the day after this OLO article was published!

Coincidence? I think not …

http://www.couriermail.com.au/news/breaking-news/ex-treasurer-swan-gets-new-honour/story-fnihsfrf-1226866287948

<< Re: “Your IAREM determination of economic wellbeing is completely detached from reality”.

…not at all...…The figures are those relied on and awaited eagerly by business, treasury, academia, the media and the citizenry to know what is going on. >>

Alan, yes the figures are eagerly awaited by business, government, academia and the general community.

But they don’t reflect the relationship between supply and demand. They appear all the more positive if the demand is high and the amount of effort being put into supply is thus high, regardless of how well supply is keeping up with demand.

Thus, if population growth is high, the burden on existing infrastructure and services is constantly rapidly increasing, and the demand for the duplication of I & S is forever high, your IAREM will look very rosy indeed!

Meanwhile, real improvements in I & S, over and above the constant pressure being placed upon them, and over and above the constant duplication of it all for evermore people, are very small indeed, if not in the negative.

So….we’ve a got an indicator which shows the economy to be doing very well indeed…when it is not providing significant improvements for the general community!

And when you consider the other things that it doesn’t take into account – environmental quality and the reduction of our non-renewable resource base, then it is indeed a very gravely false indicator.

One thing that it very clearly suggests is that high population growth is good and higher is better! This terribly wrong! Your indicator not only misses some of the most vital factors, it very strongly supports rapid expansionism and antisustainability, which are enormous negative factors!

The more I think about it, the worse it appears to be.

Crikey, we just so totally need an indicator which everyone hangs out to hear about, which takes into account the things that I have mentioned, and thus gives us a realistic view of where we are economically with full regard to real improvements in quality-of-life factors and consideration for the sustainability of it all.

<< So it would appear that you have no problem at all with the statement that I made about Sydney, Ludwig >>

Pericles, Alan Austin’s article pertains to the whole country, not just Sydney. Regarding water, you conveniently didn’t mention the places that have the worst problems and chose to simply talk about Sydney. You addressed my point about water supply problems all over the country by talking only about Sydney! Hmmm.

And no they are NOT planning properly in Sydney. A huge mothballed desalination plant is an admission that water supplies are not secure. And yet this doesn’t lead to a stop or even the slightest slowing down in the rate of population growth, with the concomitant rapidly increasing demand for water!

If the government worked towards stabilising Sydney’s population, then they’d be doing some proper planning for the future.

<< It is patently obvious to even the most casual observer that it is not the lack of money to build infrastructure that is the issue, but the decisions of governments to spend our money elsewhere. >>

Whaat??

The government IS building infrastructure, at a massive rate! But the population is increasing so rapidly that this is needed just to keep up the same level of basic infrastructure for ever-more people.

I keep making this extremely important point, but you don’t respond. It either glosses over you, or you just simply can’t counter it.

<< …only a diversion into irrelevancies… >>

Deeearohdearodear! Where is your headspace at if you think my comments are a diversion? They are directly related to the subject of this thread.

Now please, let me go play in the muddy quagmire of your five-point post.

Response to number 2 coming up soon….

<< 2. Improvements are taking place all the time down here in Sydneyland. Our parks are well maintained, our streets are clean, our domestic services (garbage collection etc.) has over the years become the best I have seen anywhere in Australia. >>

And the place is congested to all buggery, despite the most phenomenal amount of money having been spent on roads!

Um… on my recent forays around the Sydney coast, I noticed that rubbish was everywhere!

In fact, it prompted me to start up a new photographic theme. Litter. A lot of which is actually quite photogenic. As a result of this endeavour, I observed that Sydney was much more rubbishiferous than anywhere else on the NSW coast.

OK, so the parks are well maintained and the streets are clean, etc. But....hasn’t it been like this for a long time? Certainly has in my part of the world.

So…. what IS actually improving in Sydney, Pericles?

<< 3. Your own ideas about closing the borders and becoming "self-sufficient" are certainly not designed to address [the eradication of poverty] either. >>

You know full well that do not want to close the borders. Net zero immigration is what we need to achieve.

If we had a stable population or a much lower growth rate and continued to have good economic growth, we would have a much better prospect of achieving real improvements in quality of life issues, including the reduction and eventual eradication of poverty.

<< 4. We are the healthiest we have ever been, with an extended lifespan and one of the best healthcare systems in the world. >>

Yes. But you’ve got to admit that our healthcare system could be a whole lot better. It is a major desire of the general community, and of government. A great deal of money is poured into it. But again, it results almost entirely in the duplication of basic health services for evermore people and the struggle to counter the overburdening of existing services due to population growth pressure, and does NOT lead to significant improvements overall.

I reckon Alan is taking a lend of you guys. His index is largely arbitrary, and house prices, the result of a credit binge, rather than careful economic husbandry, look very large in its composition. If you're in a country that still has a housing bubble, you'll look good on Alan's reckoning.

But let's assume I'm being unreasonable and the index is worthwhile, which country is the fairest of us all? Well, according to what I've read from Alan it's not Australia, but New Zealand, which rose 15 places on his index, compared to our 9 places. And from what I can tell from Alan's documentation and other research, NZ didn't splurge on government spending at all.

Alan also seems to get another fact wrong - the biggest stimulus according to the OECD http://www.oecd.org/economy/outlook/42421337.pdf was in the USA (see page 6).

What's more New Zealand says it will be back to surplus next year http://www.abc.net.au/news/2013-05-16/new-zealand-government-delivers-budget/4694850, while we won't be back in surplus for quite some time, no matter what either side says.

Weak, Ludwig. C- at best.

>>Regarding water, you conveniently didn’t mention the places that have the worst problems and chose to simply talk about Sydney.<<

Exactly.

The point being that the problem in those areas is clearly a lack of planning. If the biggest city in Australia can sort it, then it cannot be that difficult for the less populated areas, surely? Since your mantra is "low population is better", then by (your) definition it must be a far simpler problem to solve for those places, no?

But if it is not about population, and it is a problem that, as Sydney's experience proves, can be solved with proper planning, then it can only be a matter of political will, n'est-ce pas?.

And frankly, you should be ashamed of such blatant sophistry as this little gem...

>>And no they are NOT planning properly in Sydney. A huge mothballed desalination plant is an admission that water supplies are not secure.<<

So, your idea of forward planning is... what? Wait until there is a drought, then complain that the shortage of water is because there are too many people?

Oh, wait. That is what you do, isn't it.

>>The government IS building infrastructure, at a massive rate!<<

I simply repeat my earlier question - where is this "at a massive rate" happening?

>>[Sydney] is congested to all buggery, despite the most phenomenal amount of money having been spent on roads!<<

It's a city, Ludwig. That's what cities are like. They prosper as a result of their being a city. Much of the Chinese economic miracle is down to their rapid urbanization.

http://www.china.org.cn/business/2014-03/22/content_31873970.htm

http://www.economist.com/blogs/graphicdetail/2012/01/daily-chart-6

I know you prefer to live out in the sticks, Ludwig. But you are a relatively insignificant economic unit, and - quite frankly - wouldn't be quite so well off if it weren't for the prosperous urban centres of Australia. Like it or not, we are the reason you have a job at all.

Aust total debt is now $5 trillion. World debt is $ 40 trillion. We have 12.5% od the world's debt but only 0.03% of the world's pop. You are all dreaming to think Aust is the miracle economy.

Unless we end this private debt money creation system coupled with money printing, it will end us all.

Greetings.

Graham's observations are mostly correct, as usual.

Re: “house prices ... rather than careful economic husbandry, look very large in its composition.”

Correct. But it’s real wealth nonetheless.

If an Australian home-owner were to sell a highly-inflated house and swap the Aussie dollars for a ridiculous amount of, say, Euros, to buy property in, say, the South of France, the transaction would proceed.

Could happen.

So there’s nothing imaginary about Australia’s wealth.

Yes, the bubble may eventually burst. If so, future IAREM scores will decline accordingly.

Re: “according to what I've read from Alan it's not Australia, but New Zealand, which rose 15 places on his index, compared to our 9 places.”

Indeed. Australia was 9th in 2007 and 1st from about 2010.

Does that determine best economic management? Not necessarily.

Other ways the IAREM score may determine best management are (a) the economy which advanced the greatest number of places, or (b) the economy with the greatest increment in actual score.

Regarding (a), New Zealand rose 15 places from 25th to 10th – a greater rise than Australia’s.

But Oman rose 23 places from 35th to 12th and Chile rose an extraordinary 33 places from 50th to 17th!

Can we claim these reflect better management than the United Arab Emirates which started an impressive 8th and rose to 3rd? Or Australia which started a creditable 9th and rose only nine places – with nowhere further to go?

Regarding (b), only eight countries in the 2013 top twenty achieved higher absolute scores than in 2007:

Chile +7.64
Oman +4.58
Australia +4.41
Switzerland +2.70
New Zealand +2.34
UAE +2.48
Singapore +1.93
Sweden +0.89

Re: “Alan also seems to get another fact wrong - the biggest stimulus according to the OECD was in the USA.”

Not quite. Total *attempted stimulus* was greater in the USA. But, unfortunately for them, the attempt comprised both *spending* and *tax cuts*. The latter, as was discovered too late, were counterproductive.

Why Australia zoomed ahead of everyone else, leaving the USA in its wake, was *stimulus spending* which was highest in the world.

Cheers, AA

OK Alan, so Chile is your poster child? Still proves my point. On your somewhat arbitrary index a country which runs a smaller public debt than we do, and did little more than maintain expenditure just after the GFC does much better. They also have a requirement to run a balanced budget over the economic cycle and have run surpluses since the GFC, unlike Australia.

Good morning all,

@Ludwig, re: “if population growth is high, the burden on existing infrastructure and services is constantly rapidly increasing, and the demand for the duplication of I & S is forever high, your IAREM will look very rosy indeed.”

Correct. An expanding population is not a problem provided infrastructure and services keep up. Australia has achieved this particularly well in recent years.

Re: “Meanwhile, real improvements in I & S, over and above the constant pressure being placed upon them, and over and above the constant duplication of it all for evermore people, are very small indeed, if not in the negative.”

Not necessarily, Ludwig. Most countries ranked high on the IAREM are in the positive on real improvements.

Re: “we just so totally need an indicator which everyone hangs out to hear about, which takes into account the things that I have mentioned, and thus gives us a realistic view of where we are economically with full regard to real improvements in quality-of-life factors …”

Pretty sure we do have those indicators, Ludwig. Nine are listed in paragraph 7 here:

http://www.independentaustralia.net/politics/politics-display/australia-tops-the-iarem-worlds-best-economy,6279

Now we have a measure of straight economic performance as well.

@Graham Y, not really.

Chile certainly wins hands down for best increment from 2007 to 2013. But that could be because of poor management prior to 2007.

Most citizens around the world would prefer to live in nations with much higher income and wealth. If deficits and debt help achieve this, most citizens accept that.

Chile goes into deficit as required, and is in deficit again this year.

Cheers, AA

'Most citizens around the world would prefer to live in nations with much higher income and wealth. If deficits and debt help achieve this, most citizens accept that.'

Like the Greeks and Spainards, Alan?

<< 5. Massive economic activity? Where? >>

Holy snapping duck poo Pericles? Open ye eyes!!

It’s everywhere around us! All sorts – mining, agriculture, new houses by the thousands, roadworks everywhere on our highways, new hospitals and schools, yada yada….

But….. yes you know what I’m going to say….. where are the real improvements??

They are very thin on the ground! The vast majority of this activity is part of the endless struggle to keep up with the demand created by rapid population growth, without it leading to real tangible significant improvements for the pre-existing population, or leading to a better future outlook for our nation.

And yet, it all comes out very strongly on the positive side of the ledger in indicators like GDP and Alan’s IAREM score….. and hence leads our dumb pollies, pseudoeconomists, pretend-academics and vested-interest big-bizzos to feel happy and to rest in comfort that all is well. ( :>(
.

That was a really fun mud-slosh!! You’ll have to give me another quagmire of a post sometime.

Hold on…. just about every post of yours is a quagmire! ( :>)

In fact, your latest one is a doozy. More like a vast impenetrable swamp than a mere mud puddle!

Response pending….

Pericles, there so so sooo many things to counter in your latest post that my head is just spinning!

<< The point being that the problem in those areas is clearly a lack of planning >>

Well of course it is. And the rate of population growth and the ultimate size, for a town, city, state or the whole country, are surely two of the most fundamental factors in developing those plans.

A fundamental part of any local/regional/state/national plan has surely got to be the ability for the environment/resourcebase/servicebase/infrastructure to support the desired or expected pop growth, and to strive to reduce or curtail that growth if any one of those things is not up to scratch and can’t reasonably be brought up to scratch.

You seem to see population growth and planning as separate issues. Wrong wrong wrong!

The lack of planning extends to your beloved Sydney in no uncertain manner.

<< So, your idea of forward planning is... what? Wait until there is a drought, then complain that the shortage of water is because there are too many people? >>

Der… um…. my idea of forward planning could possibly maybe be to strive to greatly reduce population growth in places like Sydney where the water supply capability is not guaranteeable in dry times?

And your idea of planning is? To keep allowing massive population growth, even though the authorities have, by way of building a huge desalination plant in Sydney, effectively admitted that the water supply is not up to the task with the necessary safety margin in dry times?

You are happy for the demand for water to continue until the supply capability from all the dams and the desal plant and presumably groundwater sources is barely enough to get the population by in good times, and that two or three or ten new desal plants would then be needed to guarantee water provision in dry times??

Rapid pop growth forever and at all costs, eh Pericles.

Some plan!

continued

I wrote:

>> [Sydney] is congested to all buggery, despite the most phenomenal amount of money having been spent on roads! <<

You replied:

<< It's a city, Ludwig. That's what cities are like. >>

Ohmygoodness! I’m speechless. My poor head! Now it’s REALLY spinning!

So……. the incredibly stifling congestion in Sydney is ok by you. Fascinating. So then, what other really significant downsides to a large and rapidly growing population are ok by you?

This is a really interesting point. You are one of OLO’s prime continuous-rapid-population-growth advocates. You don’t have an issue with congestion…. which the vast majority of Sydneysiders certainly do. You don’t have a problem with water demand-supply security not being implemented, or being steadily eroded by the ever-increasing demand. So, what other enormous negative aspect of pop growth are you willing to accept? And, how does this reflect on your assessment of the positives and negatives of continuous rapid pop growth?

And no, cities are not necessarily like that. Think about Perth, Adelaide, Hobart, Darwin, Geelong, Newcastle, Townsville or Cairns.

Oh… of course, they aren’t cities to you – they’re just large country towns!

<< They prosper as a result of their being a city. >>

Who’s ‘they’? And how do you define ‘prosper’?

I was going to say that I’ll give your post a dismal F. But I won’t.

Ludwig, just standing there, waving your arms around and expostulating doesn't cut it.

>>Holy snapping duck poo Pericles? Open ye eyes!! It’s everywhere around us! Ohmygoodness! I’m speechless. My poor head! Now it’s REALLY spinning! <<

So what exactly are you complaining about? Too much investment, or not enough investment?

>>Well of course [lack of planning is the problem]. And the rate of population growth and the ultimate size, for a town, city, state or the whole country, are surely two of the most fundamental factors in developing those plans.<<

Absolutely. So we are in agreement. If a city is growing faster than its infrastructure, then there is a failure of planning. It is not the growth that is the problem, it is the lack of planning to cater for that growth. As you point out, it doesn't just happen by itself, does it?

>>...my idea of forward planning could possibly maybe be to strive to greatly reduce population growth in places like Sydney where the water supply capability is not guaranteeable in dry times?<<

That is simply perverse thinking, Ludwig. If your city is growing, you plan to keep water supply ahead of that growth. Which is why Sydney now has a desalination plant, ready for the next drought. That's called planning.

Your concept of planning - reduce population growth - is simply a curtailment of personal freedom, which you seem to be hooked on.

>>So……. the incredibly stifling congestion in Sydney is ok by you.<<

Compared with other major cities, particularly in our region, we have the barest minimum of congestion, and then only in rush hour. You may think of it as "incredibly stifling", but that is probably because you don't get out much.

>>...of course, they aren’t cities to you – they’re just large country towns!<<

Correct. Cities are major population centres, these are not. And at the risk of being disloyal, Sydney doesn't actually qualify either as a big city.

Do some research. Check out why cities are the key contributors to the wealth of a country. Start with China, you could learn something.

http://www.economist.com/news/leaders/21599360-government-right-reform-hukou-system-it-needs-be-braver-great

How good was Australia under Labor?

Well, according to the only poll that counts, the 2013 federal election, not really that good. That is that is why it was voted out with Labor falling well behind as the preferred economic manager (Newspoll).

Were the people wrong? No, and silly comparisons of international data will not prove otherwise.

There are a whole lot of reasons why the wider electorate support change, but we will see how events play out.

The answers are tough, but more of the old Labor (2007-13) would not have addressed Aust's various economic shortcomings.

It's a competitive world, and one can hope we remain one of the best countries in terms of balancing wealth creation and being compassionate, but who knows what the future will deliver.

Sure, Aust could have led the world for years to come on a whole range of criteria mentioned by some. With such a low level of public debt, options are out there to just spend, spend for a while yet.

But, as lost on some, the majority of Aust's said to hell with that. They said we need to address high business and labour costs, regardless of an awareness that social spending would be cut.

There are some huge issues ahead, and I have more hope that the Coalition will address them, but again who knows what the future will bring.

But, would the majority of Austs say that things were going great under Labor, even looking back in 3 years time? I doubt it very much.

I suspect this is more the stuff of Labor diehards and people who live a long, long way away who really have no idea at all. That is why some rely more on international data to supposedly tell a story about how well we were going

The very best economies, face a certain boom or bust reality, that remains cyclic.
Ideologues, limit their and therefore our options by thinking within a limited circle of often very flawed or highly selective ideas.
Every western style economy rests on just two support pillars, energy and capital. And those relying on outside sources for either are in the most vulnerable and precarious economic positions.
Meaning, the more we pay for energy and everything that depends on it, (food, transport) the less there is for discretionary spending.
We have the highest median house prices in the English speaking world!
Again, the more we spend on rent or mortgages, the less there is to spend inside the real economy.
The so called wealth in our higher priced housing, is a false positive, particularly, when one needs to sell and then replace former housing, with something that caters for a larger family.
Today, we in Australia, import 91% of our oil needs, and at a cost of 26+ billion per and rising!
Those imports create four times more total carbon, from well head to harvester, than what lies beneath our feet!
Our economic success in the period referred to, was bought and paid for, by previous surpluses, created for the most part, by huge economic growth in China, rather than Howard/Costello's, so called economic management. And by debt.
Paying down that debt is made harder, by shrinking tax receipts, and a non mining economy, still going backwards.
One doesn't have to be Nostradamus, to see, we confront a period of future economic downturns and stagnation.
What might help us avoid the worst aspects, is greatly increased house building, and replacing energy imports with indigenous supplies; and quite massive tax reform and simplification, that in the first instance, shuts down all avoidance!
Just this much change would allow us, to avoid economy harming austerity!
However a rosy picture you paint Alan, no nation can borrow its way to prosperity, particularly, where those borrowings are used to service debt or recurrent spending!?
Rhrosty.

Hi Alan, it shouldn't matter how Chile was managed before the GFC, what should matter is how it has been managed since the GFC. And over that time their economy has basically doubled in size. However, the claim that it was poorly managed before that doesn't stack up as in the six years before that it grew by about two-thirds. This graph illustrates that http://www.tradingeconomics.com/chile/gdp.

Chile embarked on a free market experiment in the 80s, and it took some time to work, but it has, as you can see from this graph contrasting Chilean growth with South American growth in general. The structural adjustments were initially tough, but started to pay dividends around 1991 when the economy really took off. http://en.wikipedia.org/wiki/File:GDP_per_capita_LA-Chile.png

Chile is now presenting us with a natural experiment. A very left-wing government, advocating the sorts of policies you seem to advocate, has just taken over promising to reverse 35 or so years of economic policy. How long will it take before Chilean growth tails off, or will it survive the socialists? This will be a much better test than your index of whether merely spending money you don't have, which is what Labor did over the last 6 years, amounts to good economic management, or whether it is a little more sophisticated than that.

Chris Lewis
Those of us who find economics arcane but who nevertheless try from time to time to understand what brawling commentators are saying usually slink away defeated. In your case, how can you accept that Australia has "such a low level of public debt" when the Coalition is doing its best to persuade us that we have such a huge debt that only it can be trusted to manage it? Are you distinguishing between public and private debt and if so what are do you want us to infer about the difference? Are you saying, for example, that it is not "public" Australia — that is, Australia the nation — that has a huge debt but only private Australian businesses?

How can you so lightly dismiss all "international data", as if it's somehow non Australian and therefore irrelevant to us, when what international data does is compare the performances of all countries, including Australia. And if you are implying that the available "international data" somehow gives a false impression of our economic performance, could you please explain, with examples, how and why it does this, and, if you have some in mind, list for us other measures of the comparative economic healthiness of different countries which would show not only that Australia is not the economic envy of other countries, as widely believed, but that it is in fact doing poorly?

I don't dismiss all data, nor do I ignore the advantage Aust has from ongoing low levels of debt by relative standards when compared with other countries.

But I do suggest that most Australian know that reform must occur in the longer term, including labour market reform, addressing energy costs, improving home affordability, making our manufacturing industries competitive, improving infrastructure, and addressing growing poverty for an increasing minority.

Propaganda stuff for Labor, or stories about how well Aust is going by international comparisons, are not relevant to the majority of Aust's who rejected Labor, including myself.

these are some aspects of the economy we people hope to see improved rather than bs numbers compared to others.

Employment: though Australia has a rate at around 5% in August 2012, the ABS indicated real unemployment rate 13.1%, when one included those who worked just one hour a week, discouraged jobseekers, the underemployed and those who wanted to start work within a month, but cannot begin immediately.

Average hours worked per Australian worker continued to decline: 35 in the 1980s, 34 in the 1900s and 33 since 2000, reaching 32.9 in 2011 (ABS, 2012).

Australian manufacturing continued its decline. As a share of Australia’s GDP, manufacturing’s share declined to 7.1% in 2011-12 after being 11.2% in 2003-04.

Manufacturing employment (938,300 in the March 2013 Quarter) meant a further decline of 143,000 under Rudd-Gillard.

also higher energy prices with double-digit growth in electricity prices after 2007, including 14% in 2012-13.

I could go on, but you can hopefuly get the drift why we aussies voted Coalition.

Who knows if the coalition will deliver, but many of us had enough of Labor.

<< An expanding population is not a problem provided infrastructure and services keep up. >>

Alan, I couldn’t disagree more! There are numerous other criteria to look at, even if I&S is keeping up with pop growth, before you could assert that it is not a problem.

<< Australia has achieved this [keeping I&S up with population growth] particularly well in recent years. >>

Really??

Why then has Mr Abbott declared himself to be the infrastructure PM? He as with a very large portion of the Australian populace sees the urgent need to improve infrastructure, big time….. because it is NOT keeping up with population growth, let alone improving.

<< Most countries ranked high on the IAREM are in the positive on real improvements. >>

Really? Australia certainly isn’t!

Which countries do you think are showing real improvements? And how does this correlate with population growth?

<< Pretty sure we do have those indicators, Ludwig. >>

Yes Alan, we have a range of indicators that show how well we are doing in terms of quality-of-life factors. But how much notice do our politicians take of these? How significantly are they treated compared to GDP and the likes of your IAREM?

<< Now we have a measure of straight economic performance as well. >>

Yes. A measure that tells us in no uncertain terms that population growth is good and faster growth is better, and that forever increasing the demand for everything is a good thing, no matter how stressed certain resources or services or infrastructure might be!

<< So what exactly are you complaining about? Too much investment, or not enough investment? >>

What a classic attempt to divert the subject away from the core issue, Pericles!

You know perfectly well what I’m complaining about…. and it is the one thing that you avoid addressing like the plague.

To reiterate for the hundredth time:

I am concerned about all this economic activity simply leading to the duplication of everything, at about the same quality, for evermore people, and NOT leading to any significant improvements for the pre-existing population.

And despite this lack of improvements it adds enormously to the positive side of the ledger for GDP and IAREM….which renders them fundamentally flawed indicators. In fact; much worse; terribly WRONG and highly misleading indicators of our true economic wellbeing.

<< That is simply perverse thinking, Ludwig. If your city is growing, you plan to keep water supply ahead of that growth. >>

Ah Peri, tis you who suffers from perverse thinking when it comes to planning. You really do only see the supply side, don’t you. You seem to be simply incapable of entertaining even the slightest thought for addressing the demand side.

Everything you say about planning is premised on letting the demand side continue to increase rapidly with no end in sight… and that planning is all about supplying everything that is necessary for that growth.

Well….. that is just bizarre!

Where the supply capability is not up to scratch it is eminently sensible to strive to reduce the rate of increase in demand and indeed to plan for it to be stabilised.

And get this: addressing the demand side is vastly easier than addressing the supply side! All we would need to do is reduce the immigration rate. And perhaps implement some incentives to get people to move to places where all the supporting stuff is in good order, and not into areas where there are major problems with services/infrastructure/resources. Oh, and completely obliterate the stuuupid baby bonus!

Sorry Pericles but I think that you are just completely off the rails with this stuff.

Greetings again,

@Rhrosty, re “However a rosy picture you paint Alan, no nation can borrow its way to prosperity, particularly, where those borrowings are used to service debt or recurrent spending!”

Do you really see a rosy picture? The IAREM merely ranks the nations according to economic outcomes.

Would you agree borrowings lead to prosperity when applied to infrastructure and productive assets?

@GrahamY, yes, agree mostly.

Chile's rocky patch was between 1972 and 1984 when GDP per capita fell well below the region’s and took until 1992 to catch up. Your Wikipedia graph shows this well.

Agree completely Chile’s future will be highly instructive as well as intriguing to watch.

Same here in Europe where the United Kingdom changed recently to a Conservative government after years of Labour. France then did the opposite, changing to the Socialists after years of the right.

Both are liberal economies, similar populations, same region and both suffered badly through the GFC.

So which will emerge from recession faster?

Would you agree, Graham, that in both cases – Chile v Latin America and France v the UK – the IAREM scores will be useful indicators?

@Chris Lewis, re “But I do suggest that most Australian know that reform must occur in the longer term, including labour market reform.”

Two questions:

How do you know ‘most Australians’ know this?

How do you explain countries which maintained high wages through the GFC, like Australia, Switzerland, Norway and Luxembourg, mostly boomed, but those with lower wages, like the USA, France and Germany, suffered badly?

Is there empirical evidence that ‘labour market reform’ is needed in Australia?

@Ludwig, re: “Why has Mr Abbott declared himself to be the infrastructure PM?”

The answer is embedded in the question, Ludwig. Only Mr Abbott calls himself that. No-one else just yet.

The London-based organisation Infrastructure Investor awarded Anthony Albanese “International Infrastructure Minister of the Year” in 2012. We shall see what they say about the achievements of the Abbott government in due course.

Finally, the IAREM was applied to Mr Hockey’s proposals for privatisation here today:

http://www.independentaustralia.net/politics/politics-display/abbott-and-hockey-selling-off-the-silver-iarem-says-australians-will-suffer,6328

Comments welcome.

Cheers, AA

Alan,

I tried to find where on earth you got this strange ranking, only to find that you made it up yourself! Alan Austin, a man with no economic qualifications whatsoever, an a penchant for cherry picking statistics, has created a fantasy based ranking system, and then has the temerity to lecture the rest of us based on a bunch of lies.

Howard presided over the strongest growth over a decade in Australia's history, and better than any where else in the developed word delivering record low unemployment, and doing this while delivering almost continuous surpluses, and a AAA rating

Labor's legacy is mediocre growth, record debt year after year, threatening the AAA rating, rising unemployment, and a litany of badly managed projects, broken promises, and a labor created immigration problem. All in all the most incompetent government in living memory.

<< @Ludwig, re: “Why has Mr Abbott declared himself to be the infrastructure PM?”

The answer is embedded in the question, Ludwig. Only Mr Abbott calls himself that. No-one else just yet. >>

Alan, I haven’t heard any criticism of Abbott regarding his desire to really get serious about infrastructure. Just about everyone seems to think that is a damn good idea.

The perception across our community seems to be that infrastructure is nowhere near good enough, and needs a damn good kick-along.

It’s a pity that many of those who think this can’t see the folly in continuing with very high immigration.

They are Periclesians. They seem to only be able to see that the supply side of the equations needs a whole lot of improvement, while the demand side needs no attention! And yet the demand side is the cause of the problem, and is DEFINITELY what we should we should primarily be addressing.

Although I would suggest that there is a large portion of the populace that CAN see this connection… and would be very supportive of a government that significantly reduced immigration.

Again, your IAREM and the conventional GDP measure not only don’t indicate this, but they indicate precisely the opposite – that we’d all be better off if we INCREASED immigration and hence the demand for infrastructure.

I agree with you that there should be no further privatisation. Hockey should stop hocking off our public assets!

OK, so your IAREM suggests that privatisation is bad. Well….I’m sure that not everything it suggests is counterintuitive!

Hello again,

Just a few observations:

@Shadow Minister, re: “this strange ranking … you made it up yourself … with no economic qualifications whatsoever …”

Precisely, SM. You need (a) form three arithmetic, (b) form four clear thinking, (c) the internet for the raw data, (d) Excel or other spreadsheet software and (e) a calculator which will do square roots. No economics qualifications needed whatsoever.

That’s the beauty of it.

Re: “Howard presided over the strongest growth over a decade in Australia's history”

Perhaps. But it was below average for the developed world at the time, wasn't it, SM? The trick is to be ahead of the pack. Keating, Rudd and Gillard achieved that – even if global growth was lower than during the Howard years.

Re: “while delivering … a AAA rating”

No, SM, Australia never achieved AAA with all agencies under Howard. That came in November 2011, when Fitch gave you its first AAA. There was never any risk to Australia’s credit ratings under Labor.

@Ludwig, re: “Alan, I haven’t heard any criticism of Abbott regarding his desire to really get serious about infrastructure.”

Of course not. He should be serious. But until he actually builds something, he is having a premature congratulation.

Re: “The perception across our community seems to be that infrastructure is nowhere near good enough …”

Correct. That is because perceptions are shaped by your media. (Here’s a secret, Ludwig. Don’t tell anyone: They lie!)

Those who actually understand what is happening in Australia and beyond know Australia was first or second in the world in infrastructure development from 2009 to 2013. Admittedly from a low base.

Re: “Again, your IAREM indicates … that we’d all be better off if we INCREASED immigration and hence the demand for infrastructure.”

Correct, Ludwig.

Re: “I agree with you that there should be no further privatisation. Hockey should stop hocking off our public assets!”

Correct again.

Re: “OK, so your IAREM suggests that privatisation is bad. Well….I’m sure not everything it suggests is counterintuitive!”

I will take that as a compliment. Thank you, Ludwig.

Bonne nuit, AA

Alan, where to start.

Australia lost its AAA rating under Labor in 1986 and regained it under Howard in 2003.

"The restoration of Australia's AAA rating came after six surplus budgets were delivered. "When we recovered this rating we recovered respect in the eyes of investors and rejoined the first rank of countries as measured by economic performance," Mr Costello said.

In 2003, S&P said Australia "has one of the strongest fiscal positions" and its reinstatement of the AAA rating paved the way for Australian companies to borrow funds at a cheaper price."

That Fitch (the last and least of the rating agencies) took another few years to rate Australia meant nothing.

Secondly: With regards to the "Statistics" you disgust me!

There is a saying: Lies, damn lies, and statistics, because any idiot can with a few manipulations make statistics say whatever they want, which is exactly what you did. That is why statistics from anywhere other than a recognised body that carefully crafts indicators is viewed with suspicion.

Finally, I have been looking for OECD countries that had a higher growth rate from '96 to 2007 higher than Australia's average of nearly 4% and I can't find one that comes close.

Hi again SM,

Another good thing about the IAREM is we can check things quite simply and quickly.

If we go to the World Bank database we can easily see how many countries had higher GDP percentage growth from 1996 to 2007 than Australia’s puny cumulative 44.347.

Here is the link:
http://databank.worldbank.org/data/views/variableselection/selectvariables.aspx?source=world-development-indicators#s_g

So how many countries?

The answer is: 102!

Australia was sort of in the middle for GDP growth through that period. Not as bad as some, but given its potential, quite disappointing overall.

Countries in the developed world with higher GDP growth from 1996 to 2007 include Algeria, Bahrain, Bermuda, Chile, Croatia, Cyprus, Finland, Georgia, Greece, Grenada, Hong Kong, Isle of Man, Israel, Jordan, South Korea, Kosovo, Kuwait, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao, Malaysia, Oman, Poland, Russia, Saudi Arabia, Serbia, Singapore, Slovak republic, Slovenia, Spain, Tunisia, Turkey and United Arab Emirates.

Countries with about double Australia’s rate include Belarus, Bhutan, Cambodia, Chad, Georgia, India, Latvia, Mozambique, Burma, Nigeria, Rwanda,

Countries with around three times Australia’s growth, or more, for that period include Angola, Azerbaijan, Bosnia & Herzegovina, Equatorial Guinea and Liberia.

Even Bangladesh, Ghana and Namibia had higher growth than Australia during that period!

Just check the data at the World Bank, SM. You don’t need any sort of qualifications whatsoever.

Cheers, AA

Ducking and weaving again Ludwig.

>>You know perfectly well what I’m complaining about…<<

That's one way to avoid the question, I guess.

Your answer to everything is that our population should remain at the same level, or somehow reduce itself, without actually saying a) how this can be made to happen, and b) how this will actually improve our situation.

You call this "managing demand". Which sounds great in theory, but you don't have even the vaguest conception how this would pan out for the economy.

Tellingly, though, the common thread in your defence of the absurd notion that we can somehow stand still and everything will magically get better, is to attack the nearest straw man...

>>Everything you say about planning is premised on letting the demand side continue to increase rapidly with no end in sight<<

Not at all. I have never advocated growth for its own sake, nor infinite growth, nor even "rapid growth". I am however a great fan of equilibrium, where population grows in line with the nation's capability to absorb it, on the basis that we become a more substantial, and therefore less vulnerable, economy as a result of that growth.

This is where we ideologically part company:

>>Where the supply capability is not up to scratch it is eminently sensible to strive to reduce the rate of increase in demand<<

Implicit in this statement is your assumption that we are actually unable to meet the demand. As I pointed out - using the most obvious example of water supply to a large metropolitan region - this is not the case. All that is required is the political will.

I fully expect that you will go to see the movie "Noah", when it reaches your neck of the woods. And I just know that you will be in the Noah cheer squad, urging him on as he and his best mate God set about reducing the world's population to a manageable level. I know this, because there is no significant difference between their attitude towards humanity, and yours

Alan,

Your totem pole is a complete fraud Another disingenuous comparison. I asked you how many OECD countries had better growth. None of the major economies had a higher growth rate, and of the OECD the countries that just squeaked over were Finland, Greece, and Spain, who on the other economic indicators did far worse.

It is this type of cherry picking the data that makes your analysis so fraudulent and incompetent.

<< @Ludwig, re: “Alan, I haven’t heard any criticism of Abbott regarding his desire to really get serious about infrastructure.”

Of course not. He should be serious. But until he actually builds something, he is having a premature congratulation. >>

YES Alan, he SHOULD be serious. Because infrastructure is seriously not keeping up with our manic rate of population growth!

I don’t expect Abbott to build anything of any significance….. because we are basically putting about as much effort as we can into infrastructure now, and have been for a long time. What he is likely to say in ~two years time is that he has built this many new sections of highway and freeway, that many new hospitals, a host of new schools, a huge shirtload of new houses, ra ra… and big-note himself greatly for all of that!

But of course all of this is spurred by population growth… and is needed to support that population growth.... with no net gain!

Wanna bet that this is what will happen?

The general community and all commentators that I have heard applaud Abbott for at least verbally committing to boosting our efforts at building infrastructure…. because they know we badly need it!

<< Re: “The perception across our community seems to be that infrastructure is nowhere near good enough …”

Correct. That is because perceptions are shaped by your media. >>

No, no. You can’t entirely blame the media. People do actually experience infrastructure (and service) shortfalls first-hand – on our roads, with permanent water restrictions, long queues for medical attention, etcetratarata…

<< Those who actually understand what is happening in Australia and beyond know Australia was first or second in the world in infrastructure development from 2009 to 2013. >>

What do you mean by infrastructure development? The amount of infrastructure per capita? Or the improvement in infrastructure over and above the negative effects on it from population growth?

Clearly the former. Because the latter would be about zero, if not negative.

continued

<< Re: “Again, your IAREM indicates … that we’d all be better off if we INCREASED immigration and hence the demand for infrastructure.”

Correct, Ludwig. >>

YES Alan! Your IAREM indicator indicates that even though we are struggling to keep infrastructure up to population growth, let alone significantly improve it over and above the pressures imposed on it by that population growth, the best thing to do is BOOST population growth, simply because it would lead to the building of more infrastructure... and completely without regard to the quality of that infrastructure, or the relationship between supply and demand!

That’s just crackers! It couldn’t be more counterintuitive!

Popnperish succinctly outlines the main issues with continuous rapid population growth on another thread: http://forum.onlineopinion.com.au/thread.asp?article=16156#281098

She writes:

< With 407,000 people added to the population in the year to the end of June last year, that means $80 billion is required to cater for their needs. >

Alan, we desperately need an economic indicator which shows this phenomenally huge expense on the negative side of the ledger rather on the positive.

Please, set your IAREM aside completely and devise one for us!

Good morning all.

@Shadow Minister: No, not at all. Not at all.

Re: “I asked you how many OECD countries had better growth.”

No, not really. You made an observation that “I have been looking for OECD countries that had a higher growth rate from '96 to 2007 higher than Australia's average of nearly 4% and I can't find one that comes close.”

Perhaps there is an implied question there. But there is also an admission that you were having difficulty locating the information.

So I gave you the full picture, with the link to the original data. As a bonus, the data supplied was for the whole world, not just for the OECD. So there is absolutely no possibility of any accusation of cherry picking.

Re: “of the OECD the countries that just squeaked over were Finland, Greece, and Spain”

No, not correct. Other OECD countries with higher growth were Chile, South Korea, Israel, Luxembourg, Poland, Slovak Republic, Slovenia and Turkey.

So you got three out of the eleven. Not bad.

But only Spain, Israel, Greece and Finland were “close” to Australia on the upside.

The others were waaaay ahead. Australia was a long way behind even the Slovak Republic and Turkey.

We have to accept, SM, that 1996 to 2007 was a period of dismally disappointing economic management in Australia relative to the rest of the world.

Could that be because the then Treasurer had no economic qualifications, do you think, SM?

Just a thought.

@Ludwig, thank you for your passion and your persistence. But we just don’t share your pessimism and pissed-offed-ness.

Re: “But of course all of this is … needed to support that population growth.... with no net gain!”

Of course there is net gain. It’s just that humanity has a tendency not to notice. All humanity.

You bring to mind, Ludwig, an intriguing passage in an ancient Judeo-Christian text called Ecclesiastes: “Say not thou, What is the cause that the former days were better than these? for thou dost not enquire wisely concerning this.”

Cheers,

AA

AA,

Have a look at the list of OECD countries, the additional ones you list are not there, neither is a single advanced economy. No matter how you wiggle, your lists are complete garbage.

The ever increasing performance of the economy during the Howard era contrasts with the dismal performance under Labor who brought the economy close to losing the AAA rating gained by Howard.

Is this due to Labor's Swan's feeble economic qualifications compared to Costello? or was it due to pure labor incompetence.

<< Of course there is net gain >>

How can you say that? That’s an extraordinary statement Alan, coming from one who is so into indicators and careful assessments of economic factors.

<< …we just don’t share your pessimism and pissed-offed-ness. >>

You don’t share my realistic concerns.

Alan, there are indicators of all sorts which strongly suggest that there is not only no net gain, but a steady net loss happening in conjunction with rapid pop growth.

Well I guess we can’t progress this debate any further.

Thankyou again for your friendly demeanour and willingness to keep responding.

Cheers til next time.

I wrote:

>> Where the supply capability is not up to scratch it is eminently sensible to strive to reduce the rate of increase in demand <<

Pericles, you replied:

<< This is where we ideologically part company >>

We sure do. It is just the most amazing and terrible basic premise that you have – that the demand side of the equation is untouchable! No matter how out of whack with the supply side it is or how much of a struggle we might be having in getting supply to meet demand, or how ominous it might look that supply won’t be able to meet the needs of the current demand let alone one that is rapidly increasing, it is entirely a matter of improving supply. Leave the demand alone!

Your whole argument is fundamentally based on this incredibly FLAWED notion.

The most basic tenet of good planning must surely be to match supply and demand, with the supply side being of high quality and able to remain so, ongoingly.

Heaven help us!

There you go again. It's called verballing, Ludwig, a technique that originated with "the putting of damaging remarks into the mouths of suspects during police interrogation."

http://en.wiktionary.org/wiki/verballing

>>It is just the most amazing and terrible basic premise that you have – that the demand side of the equation is untouchable! No matter how out of whack with the supply side it is or how much of a struggle we might be having in getting supply to meet demand, or how ominous it might look that supply won’t be able to meet the needs of the current demand let alone one that is rapidly increasing, it is entirely a matter of improving supply. Leave the demand alone! Your whole argument is fundamentally based on this incredibly FLAWED notion.<<

Once again - for the umpteenth time, it would seem - I am not in favour of i) unending growth, which is mathematically unfeasible, ii) unfettered growth, which is politically unacceptable, or even iii) "rapid growth", a concept you snuck in during a previous post.

What I do understand is that this country has nowhere near reached its optimum level of population, or economic well-being. Until such time as it actually starts showing the strain that your imagination has created within your fortress-Australia mindset, I remain a supporter of the sensible level of growth, and concomitant population increase, that is our present policy.

After all, it has done no damage at all to our per capita GDP, has it.

(Cue furious attack on GDP; which, unfortunately, from a previous exchange of views, it is crystal clear that you do not comprehend.)

I'm also a great fan of city living, as are a few million of my neighbours down here.

(Cue furious attack on city living, which you are entitled to dislike for personal reasons, but not entitled to assume that everyone shares your phobias. For one, I wouldn't live in your neck of the woods to save my life)

I note this “simple formula” excludes the vital factor (perhaps most important of all) of “human rights/freedoms”

This exclusion allows “Kuwait” and “United Arab Emirates” in top 10. More telling is how even with this exclusion the super economies like China and India still get nowhere near the top places.

Obviously the extreme lack of ‘individual freedoms’ and ‘rights’ in those nations is the reason.

This should alarm us all, especially when it is asked who will be next century’s economic flavour - "Asian” or “European”.

The mere relaxed manner in asking this question, the nonchalant demeanour, to me indicates an acceptance that Asia may rule. Worse it tells of a carefree stance to the absent human rights in Asia which in the west are the most vital factors.

. . . obviously with these attitudes the overwhelming winner will be Asia with European philosophies possibly descending into museums.

This tells us much about how well-off westerners have come to completely ignore when analysing Asian economic cultures – that is, that of human exploitation and human rights abuses. They simply care not.

Most privileged westerners act as though these atrocities do not exist each time we praise Chinese economic growth and speak of the Asian “Tiger economy” in awe, or how easily our children travel to Asia and India for their “gap year” and to somehow feel they had a wonderful experience even though they were amidst vulgar atrocities of enormous number and child labour on top of general slavery. They only remember the different foods, spices, smells, and architecture, maybe even a strange encounter or two with a local.

This is tantamount to the privileged kids in UK or USA in the early 1940s taking their “gap year” in Nazi Germany for a wonderful experience.

If that image feels eerie, imagine our global future within the current climate.

I picture some sci-fi movie of a futuristic society where most are dirt poor in squalor, the rest few live in utter luxury.

It is not hard to predict this really, since the west seems to have already given up.

Good morning all,

@Shadow Minister, are you saying Chile, South Korea, Israel, Luxembourg, Poland, Slovak Republic, Slovenia and Turkey are not OECD members? Or are you saying their GDP growth from 1996 to 2007 was not greater than Australia’s?

These are easily verified, SM.

Please spend some time with the GDP growth charts, SM. They really are quite instructive.

You will find even Angola, Azerbaijan, Bosnia & Herzegovina, Equatorial Guinea and Liberia grew at around three times Australia’s rate during the period 1996 to 2007.

That is no great party trick.

The challenge was to survive the devastating downturn from 2008 to 2012 without going into recession. Not many did that, did they?

@Matthew S,

Welcome to the chat.

Re: “this ‘simple formula’ excludes the vital factor (perhaps most important of all) of ‘human rights/freedoms’.”

Partly correct. The eighth variable - economic freedom - does include a component of human rights/freedoms. So this is not excluded completely.

You will find other rankings elsewhere which measure and contrast human rights directly. These include Transparency International’s corruption index, the World Justice Project’s rule of law index and the UN’s human development index.

So no need to duplicate all those here.

The IAREM measures purely economic outcomes. It does not measure human rights, education, the environment, health, life expectancy, crime rates, child slavery, women’s emancipation or other social outcomes – important though all these values are.

Cheers, AA

Pericles, from your post of Sunday, 30 March 2014 4:47:43 PM:

<< Your answer to everything is that our population should remain at the same level, or somehow reduce itself, without actually saying a) how this can be made to happen, and b) how this will actually improve our situation.

You call this "managing demand". Which sounds great in theory, but you don't have even the vaguest conception how this would pan out for the economy.

Tellingly, though, the common thread in your defence of the absurd notion that we can somehow stand still and everything will magically get better, is to attack the nearest straw man... >>

So.... who’s verballing whom??

You make crazy assertions about my views which you KNOW are not true.

You’re a classic verballer!

I said:

>> It is just the most amazing and terrible basic premise that you have – that the demand side of the equation is untouchable! No matter how out of whack with the supply side it is or how much of a struggle we might be having in getting supply to meet demand, or how ominous it might look that supply won’t be able to meet the needs of the current demand let alone one that is rapidly increasing, it is entirely a matter of improving supply. Leave the demand alone! Your whole argument is fundamentally based on this incredibly FLAWED notion <<

You called this verballing!

It isn’t in the slightest. It is exactly the way I see your views. You’ve made it crystal clear that the demand side of the economic equation, ie: population growth, is untouchable….. haven’t you??

<< Once again - for the umpteenth time, it would seem - I am not in favour of i) unending growth… >>

Yes I know that.

So um…. how does that sit with your notion that the demand side of the equation can’t be adjusted and that all planning has to be on the supply side?

continued

AA,

I am sorry that you lack the simple ability to comprehend english, I clearly said: "Have a look at the list of OECD countries, the additional ones you list are not there". Please stop trying to be such a smartass. Your list is dishonest manipulation to reach a predetermined result.

An indication of how the real world views Labor is:

"THE $16.2 billion Building the Education Revolution scheme, one of the signature policies of the Rudd and Gillard years, has been condemned as an international case study of legislative and ­bureaucratic failure."

I would suggest that you spend some time reading up about the following subjects about which you have little to no knowledge and scant regard:

1 Economics,
2 Logical reasoning,
3 Journalistic ethics.

<< After all, it has done no damage at all to our per capita GDP, has it. >>

What? GDP! That most fundamentally flawed of economic indicators! Even worse than Alan’s IAREM! No, population growth has done no damage to it at all! Woop de doo ( :>/

<< Cue furious attack on GDP… >>

Haaahahaha!!

Yep. And thoroughly deserved it is too!

<< I'm also a great fan of city living >> << I wouldn't live in your neck of the woods to save my life >>

Aaah haaaahahahaaaa!

You’d live in Sydney, but you wouldn’t live in the most wonderful part of the whole country – Townsville, Cairns and the Wet Tropics??

Well…. that is your loss entirely.

I’ll have the tropical north… or the botanically fantastic southwest WA, or just about anywhere else in the country ahead of stodgy old Sydney! Although, if I secured the right job at the Royal Botanic Gardens or somewhere similar, I could live there. I’d probably go completely bonkers in the first 12 months. But I’d be willing to give it a go!

<< Cue furious attack on city living … >>

Nope! I’ve got no issue with all those poor sad misguided half-mad millions of Australians who choose to live in cities!

Alright Pericles, so if my summation of your position, which you called verballing, is incorrect, then I’m at a bit of a loss.

Could you please clarify your position re: addressing supply but not addressing demand, even when demand is rapidly increasing and seriously stressing the supply capability of one or more basic resources, services or basic forms of infrastructure. Thanks.

That's not difficult Ludwig.

>>Could you please clarify your position re: addressing supply but not addressing demand, even when demand is rapidly increasing and seriously stressing the supply capability of one or more basic resources, services or basic forms of infrastructure. Thanks.<<

You are using the "when did you stop beating your wife" technique here, I notice. So my answer is to reframe you question.

a) demand is not "rapidly increasing". It is slow, steady, and entirely manageable. And predictable, of course, which provides a solid base from which to plan future supply.
b) demand is not "seriously stressing the supply capability". Supply is keeping pace with the gently increasing demand. Indeed, in the case of water supply - which you led with earlier, if you recall, as an example of impending doom - sensible planning will prevent the issue from getting out of hand.

Hope this helps.

Now, in return, could you explain how you would set about "managing demand"? If indeed that is what you have in mind - your protestation that I had verballed you on the subject is confusing.

And on the same lines, could you suggest how maintaining a static population level - which I seem to recall is one of your mantra - will increase our economic wellbeing.

Thirdly, could you suggest a more useful measure than GDP per head, since the concept seems to give you such a headache?

Incidentally, Ludwig...

>> I’ve got no issue with all those poor sad misguided half-mad millions of Australians who choose to live in cities!<<

That's 90% of the population.

Who is out of step, do you think?

What?

I said I’ve got no issue with it! They can live in that sort of environment if they choose.

[Although I do recall us discussing this ages ago, where I questioned just how much of a choice it really is for a lot of people, and where they would choose to live if they really did have a free choice. Many if not most would choose a sea-change or tree-change, as is evident from the very considerable transmigration movement in recent decades from southern cities to leafier less-crowded surroundings]

Them city-dwellers; they’re all half mad like you Peri!!

If they lived in a wonderful place like I do, with a good balance of trees and birds and non-intensively humanised environs, then they'd all be perfectly sane like me!! ( :>)

More later. Have a great day!

Sounds awful, Ludwig.

>>If they lived in a wonderful place like I do, with a good balance of trees and birds and non-intensively humanised environs<<

I prefer people, myself.

Which could, when you think about it, go a long way to explaining why you and I differ so much on the topic of population.

<< I prefer people, myself. Which could… go a long way to explaining why you and I differ so much on the topic of population. >>

Pericles, I prefer people, plants, birds and urban, rural and natural environments in a harmonious mosaic, with the natural environment predominating…. which could indeed go a long way to explaining why you and I differ so much on the topic of population.

<< So my answer is to reframe you question. >>

Sorry but I still don’t know what I said, that you accused me of verballing you over, which is not true. The main point that I made is that you would ONLY address the supply side of the equation and leave the demand side completely alone. You haven’t addressed it.

<< …demand is not "rapidly increasing" >>

We have profound disagreement here.

<< …demand is not "seriously stressing the supply capability" >>

More profound disagreement.

<< Supply is keeping pace with…. demand >>

At best, the supply of infrastructure and services is just about keeping up. But it is most definitely not getting ahead in terms of improvements in quality.

<< …in the case of water supply… sensible planning will prevent the issue from getting out of hand. >>

Only if that planning takes into account the demand side of the equation as well as the supply side. Look at SEQ. They basically need a new major dam. The Traveston site was the best choice. But what an almighty stir it caused. And as a result, it got knocked on the head.

It would be very difficult indeed to increase water provision in SEQ to the level where it both catered for the rapidly increasing demand and provided a big safety margin for dry times.

And you know what I’m going to say next….. The MOST fundamental thing that needs to be done in SEQ, as it concerns water and all manner of other quality-of-life issues, is to significantly reduce the influx of people. Premier Beatty realised this. Bligh likewise. Newman, apparently not at all!

I will address your requests soon.

<< …could you explain how you would set about "managing demand"? >>

If I’ve said it once I’ve said it a thousand times on OLO, not least in our numerous long exchanges, Pericles.

Greatly reduce immigration! Head towards net zero immigration. And get rid of the despicable baby bribe!

Then we could possibly implement incentives to get people to move to places where water supplies, services and infrastructure are more up to the task of supporting them than in SEQ or Sydney, for example.

<< …your protestation that I had verballed you on the subject is confusing. >>

Really?

You wrote:

<< Your answer to everything is that our population should remain at the same level, or somehow reduce itself… >>

Well… you know that this is not true. It is pretty damn close to verballing me to assert that this is my position.

Firstly, we need to greatly reduce the rate of population growth. But even with net zero immigration, our population would continue to grow for a long time, and would slowly reach a point of no growth some 4 decades down the track, given the age distribution of the population and if the current birthrate remains about the same. That is; the real birthrate, not the increased birthrate due to that bloodyawfulbabybonus!

I have never said anything about reducing the population of Australia.

<< …could you suggest how maintaining a static population level… will increase our economic wellbeing. >>

Achieving a considerably lower rate of pop growth and then reaching a stable population will be a whole lot better economically and quality-of-life wise than allowing the population to burgeon to the point where basic resource provision can’t keep up, we can’t afford to keep infrastructure and services up to scratch and the environment becomes severely degraded…. which is a point that is lurking somewhere in the near future.

Surely that’s obvious.

continued

Remember, regarding basic resources; it’s not just water, it’s food, and it’s minerals and everything else that we export in order to make a profit so that we can afford to build services and infrastructure at a rate that the increasing population demands.

As the population increases, we need more of all of this to meet both the domestic demand and ever-higher profits from exports…. in order to just stand still….to just make the same per-capita returns.

That’s a big ask. In fact; a damn near impossible ask. Our mineral exports have been in boom phase for a long time. They are not likely to increase. Our agricultural produce isn’t going to increase very much at all. And our value-adding industries? The prospects of increasing output and profits that can keep up with the increasing demand of our rapid population growth are looking dismal to say the least.

<< …could you suggest a more useful measure than GDP per head... >>

GDP per head? But it is gross GDP that our politicians, pretend-economists and vested-interest big bizzos take notice of. They look at the gross increase each year. If they looked at the per-capita increase, they would get a very different and much more realistic impression of it. It would be pretty close to zero most years I would think. Sometimes positive, sometimes negative. And this is with all the things that contribute to it which just completely shouldn’t, such as increased economic turnover from illness, road accidents, etc….as well as massive economic growth spurred by rapid population growth which is much closer to neutral than to the big plus that GDP makes it out to be.

What we need is a GPI: http://en.wikipedia.org/wiki/Genuine_progress_indicator

< …the relationship between GDP and GPI is analogous to the relationship between the gross profit of a company and the net profit; the Net Profit is the Gross Profit minus the costs incurred; the GPI is the GDP (value of all goods and services produced) minus the environmental and social costs. >

Ok, I give in, Ludwig. If nothing I have said makes any sense to you, there is little point in repeating myself, since it would be a waste of breath.

The clincher that persuaded me to give up banging my head against the brick wall of your intransigence, was your response to my asking what you believed might be a more useful measure than GDP per head.

>>What we need is a GPI<<

A more ridiculous notion would be very difficult to find.

The benefit of GDP is that it only measures actual stuff. None of the areas that are included in the GPI definition you referred me to could possibly be objectively measured:

"...the 'costs' [sic] of economic activity include the following potential harmful effects:

Cost of resource depletion
Cost of crime
Cost of ozone depletion
Cost of family breakdown
Cost of air, water, and noise pollution
Loss of farmland
Loss of wetlands"

Not one single element has a real, identifiable, independently assessable value attached to it. Every single one is an individual, personal, gut-feel, emotion-driven judgment, which means that no two people could ever agree on an actual figure for it. How such a random number could ever be considered useful, let alone more useful than GDP, is a mystery only you have the magical ability to solve.

So, go on. Wave your magic wand (no, not that one) and tell us exactly how you would measure GPI, and how it could be put to practical use.

Pericles, you should have given in long ago. I get the feeling that you know that some of your arguments are really dodgy but you are loathe to back down on them. So you keep on fighting, and digging yourself into a deeper and deeper hole!

You’ve pulled some woolly arguments out of the hat, but this one takes the cake:

<< A more ridiculous notion [than GPI] would be very difficult to find. >>

Because…

<< The benefit of GDP is that it only measures actual stuff. None of the areas that are included in the GPI definition you referred me to could possibly be objectively measured >>

( :>0

I’m amazed!

So you reckon that because we can easily measure the economic activity related to illnesses from smoking, car accidents, floods, continuous population growth and all manner of other things that should appear in the negative but which are added to GDP and totally made out to be positive, that makes GDP a whole lot better than a GPI?!?!

You’d rather have an indicator that tells us NOTHING about real progress and which is TERRIBLY misleading, compared to an indicator which would give us a pretty damn good idea about genuine progress!

Wow!

Yes, the components of a GPI are less tangible and more subjective. So what?

That’s got to be a WHOLE lot better than adding obvious negatives to the positive side of the ledger!!

Even if some of the components received weightings that I strongly disagreed with, I would still consider a GPI to be a thousand times better than GDP.

The fact that a GPI takes into account the sorts of vitally important quality-of-life and quality-of-environment things, some of which you have listed, while GDP just completely doesn’t, doesn’t mean anything to you eh?

Pericles, I am truly flabbergasted over your line of argument.

Flabbergasted you may be, Ludwig. But you're still relying upon emotion and fairy-dust, rather than actual facts we can agree on.

>>So you reckon that because we can easily measure the economic activity related to illnesses from smoking, car accidents, floods, continuous population growth and all manner of other things that should appear in the negative but which are added to GDP and totally made out to be positive, that makes GDP a whole lot better than a GPI?!?!<<

That is so ridiculous, it defies rational examination.

The problem is that you absolutely cannot "easily measure the economic activity related to illnesses from smoking, car accidents, floods, continuous population growth and all manner of other things"

Would you like to rephrase it? Preferably, explaining exactly how such nebulous, abstract concepts can be nailed down to a dollar value. You can't, can you.

>>Yes, the components of a GPI are less tangible and more subjective. So what?<<

Precisely because they are intangible (i.e. not measurable) and subjective (i.e allowing you to attribute any value at all that you can conjure up), you end up with a value that is completely meaningless. It staggers me that you cannot grasp this unbelievably simple concept.

So, back in the real world. If you have an "index" that is entirely subjective, and that applies an inconsistent measurement to entirely nebulous concepts, to what possible use can you put it? What action do you take when it goes a) up, or b) down?

Lunacy, writ large.

Any chance you two potential "love birds" can give us a break and continue elsewhere!!

Kipp, as painful as the latest instalment of the Luddy vs Perry saga is for you, and evidently is for him in his attempts to defend the indefensible, I am having a great time { :>)

It is right on topic. So this is precisely the right place to have this sort of discussion. And we are reasonably gentle with each other. The quality of the discussion is reasonably high compared to many that you see on OLO. So please feel free to join in!

<< Precisely because they are intangible (i.e. not measurable) and subjective (i.e allowing you to attribute any value at all that you can conjure up), you end up with a value that is completely meaningless. It staggers me that you cannot grasp this unbelievably simple concept. >>

Good heavens, NO, Pericles!

Relative intangibility does NOT equate to meaninglessness!

In the real world there are all manner of fundamentally important things that are rather intangible.

The challenge surely is for our academics, economists and politicians to get a handle on these… and to absolutely NOT do what you seem to want – to only be concerned with things that are easily and consistently measurable!

We get our experts to come up with dollar values for these ‘intangibles’. We then have them debated amongst all interested parties, call for public submissions, and ultimately come up with values that the majority can agree on. Or some similar process.

Only taking into account easily measurable things would be absolute folly.

Even if the primary economic indicator, GDP, did put all the measurable negative things on the negative side of the ledger, it would still be a highly flawed and misleading indicator.

Surely it is just so obvious that we need something vastly better than GDP to base our economic prosperity on!

Worshipping GDP, which indicates that rapid population growth is good and faster growth is better, and that the faster we move AWAY from a sustainable future, the better we are doing economically, is absolute lunacy, writ large!

Hi Alan, agree that spending on selective infrastructure is well worth borrowing for. i.e., dams that over time, earn much more than their original capital outlay!
A very rapid rail system, that replaced most of the air traffic between Brisbane and Melbourne, one of the busiest in the world, would surely pay for itself over time, and could be funded with self terminating, Government guaranteed, thirty year bonds?
Something we don't do here.
Enabling it to stay, given a tax free status on the returns, would allow most of this money to be reinvested here.
I mean, 50% of something, is always going to outperform, the 100% of nothing we are reaping right now, from our own super funds.
I just don't see pink batts or schools halls reaping a commercial benefit, for any but a select few; and then, only during the roll out phase!
We could increase our education spend, by as much as 26 billions, if we but ended, welfare for the rich!
We could reboot our car industry, by making right hand drive electric vehicles for parts of Asia. These vehicles, could be gas powered and rely on ceramic cells rather than batteries.
The exhaust product of the NG powered ceramic cell, is mostly water vapor! Recharging is just a matter of minutes, the time taken to pump compressed gas in!
Moreover, the power to weight ratio is vastly improved, due to the fact, we don't need to push half a ton of batteries around.
The range is dramatically improved by the ceramic cell's energy coefficient, around 80%, the highest in the world.
We could and should make these vehicles here, and an employee owned co-op, would enable us, to produce them at the lowest possible cost!
You may believe we are doing well, Alan?
I however, believe we can do so much better, and indeed, demand we should, rather than praise our current mediocrity/cultural cringe and paucity of ideas/thinking leaders.
Rhrosty.

Good morning,

@Rhrosty, yes, agree with all of that pretty much.

It seems an intriguing aspect of human nature that we don’t see past immediate financial needs and wants and cash shortages to understand the big picture of our overall improved state of comfort and standard of living.

The latest world’s most liveable city ranking placed Melbourne first. The IAREM places Australia at the top. But that doesn’t stop people struggling to pay the bills, especially those on low and fixed incomes, feeling the economy is not working well for them.

Hence my attempts to be a bit nuanced regarding how “rosy” life in Australia really is. Because even though in 2013 your economy was well ahead of Norway, the UAE, Singapore and Switzerland, there are certainly areas where it could do much better.

Regarding pink batts, it has been estimated that house owners with insulation will save 45% of what they would have paid for heating/cooling. That is over the life of the buildings, which will be more than 100 years for many. Another estimate is that the emissions savings is equivalent to taking a million cars off the road. So that would seem a pretty sound investment, with benefits well beyond the roll-out phase.

The school buildings in most communities have made educating your kids just that much easier. That will pay off in generations to come.

Agree, Australia offers far too much welfare to the upper middle and the very rich. Tax concession for the big corporations is another aspect of this.

Can’t see that changing in the short term, however, Rhrosty. In fact, voters have just opted for a government which is committed to increasing it, both directly with payouts like the parental leave scheme, and indirectly by abolishing targeted taxes.

Yes, agree regarding alternative cars. Will be interesting to see how Tomcar in Melbourne progresses.

Cheers,

Alan A

Nice try Alan,

No matter how hard you try to white wash the pink batts debacle and the incompetence of the BER, the real world has cottoned on to the disasters that they were. The coroner handed down a finding that clearly indicated gross negligence on the behalf of Rudd and Garret, and the BER is now a world wide test case for how not to run a project.

Hi again Shadow Minister,

No, once again, the opposite of what you have just written is true.

You can find the Coroner's actual words here:

http://www.courts.qld.gov.au/__data/assets/pdf_file/0019/203374/cif-fuller-mj-barnes-rk-sweeney-ms-20130704.pdf

Contrary to the false assertions in the mainstream media, the Queensland Coroner did not blame the federal Government at all – apart from noting the obvious fact that the fatalities would not have occurred if the rapid-rate scheme had not been implemented.

Culpability, according to the Coroner, was shared three ways.

1. The state authorities: “Under our constitutional arrangements, workplace health and safety is primarily within the domain of State Governments.”

2. The companies: “That the employers of the three people whose deaths were investigated by this inquest failed to adequately discharge their responsibilities is evidenced by their conviction of offences under electrical and work-place safety legislation.”

3. And, in one case, the victim: “Despite being directed not to use metal staples Mitchell chose to do so and died as a direct result.”

Don't believe what you read in The Australian, SM, or on papers written by shonky academics who get their raw data from The Australian.

That is not the way to wisdom or truth, is it?

Cheers,

AA

Alan,

From the coroner's report:

"The regulation of work place safety is primarily a State Government
responsibility. However, it is reasonable to expect that when the Commonwealth Government injects $2.7 billion into the economy via a program designed to create employment for unskilled and/or unemployed workers, it will have regard to the possible safety implications. ...
Undoubtedly, a major contributor to the failure to put in place adequate safeguards was the speed with which the program was conceived, designed and implemented. It was announced on 3 February 2009 and its commencement on 1 July meant the detailed analysis and planning that would usually be involved in such a venture was curtailed. One witness with experience in such matters estimated that such a project would usually take two years to role out. Because a major focus of this program was the stimulation of the economy to counter the effects of the global financial crisis it needed to proceed far more quickly than that, but not at the cost of human life."

"the evidence indicates it was primarily failings in the planning and
implementation of the HIP by Commonwealth agencies that led to an increased risk of harm"

That pretty much nails Rudd and Garret.

As for the BER, The statistics were from the commonwealth not the Australian, and the academics' reputations are based on their peer reviewed papers and are far more reliable than those cobbled together by an unqualified shonky would be journalist

Not at all, SM.

If the Queensland Coroner nails any federal government, he nails the Howard Government.

As he found:

“Prior to the HIP, the home insulation sector had no mandated training or skill requirements, training levels and barriers to new entrants. At the inception of the HIP, South Australia was the only State with licensing requirements for insulation installers.”

“The Commonwealth had no regulatory powers to enforce compliance with any laws. However, it could deregister an installer from the HIP if they breached guidelines.”

That is just appalling, SM!

Why was an established industry which had a history of fires, injuries and deaths in many countries, including Australia, so poorly regulated when the GFC hit in 2008?

Why was the training regime in place so inadequate?

Why was the frenzy of extra regulation, new procedures and training guidelines – which the Rudd Government implemented – necessary at all? Why were they not already securely in place?

The Rudd Government did nothing to make roof cavities more dangerous or render Australian workers less amenable to training. All it did was increase the volume of installations.

Regulations which ensure safety in ten house ceilings should not need to be different from regulations for work in 100 ceilings or 1,000 or a million.

The Government in place when the GFC hit acted swiftly and effectively under enormous time pressures to ameliorate the safety risks as they became known through 2009.

The Government from 1996 to 2007 when the industry was expanding significantly, in contrast, appears to have failed to monitor and deal with these risks. It did not even provide a record of injuries and deaths which occurred in the insulation industry during that period.

Read the report in its entirety, SM. You will be ashamed you ever voted for the Coalition.

Cheers,

AA

That would look great on a T-shirt, Ludwig.

>>Relative intangibility does NOT equate to meaninglessness!<<

But let's be honest. It doesn't actually make sense, does it.

Even if you were to find some kind of compromise position through your process of discovery. Which I strongly doubt.

>>We get our experts to come up with dollar values for these ‘intangibles’. We then have them debated amongst all interested parties, call for public submissions, and ultimately come up with values that the majority can agree on. Or some similar process.<<

As a businessman, I can see more than a few holes in this process. Who gets a guernsey as an "expert", first of all. Would you disqualify experts in economic theory, for example, but allow free rein to the Sustainable Population Party? That might seem an extreme example, but it does give you some idea how impossible it will be to get agreement. And if you don't have agreement (there is widespread agreement on the components of GDP, after all), what credibility will your GPI have?

>>Only taking into account easily measurable things would be absolute folly.<<

But if that is a folly, it is one that you indulge in every day of your life. Would you drive a car manufactured by a company that has devised its own set of measurements with which to design its brake system? Would you take a flight in an aeroplane whose manufacturer had built it to the specifications of a committee containing only Greenpeace activists?

Measurability is critical, Ludwig. Everything else is pure fantasy.

Speaking of tools...

"Covering 96% of the world’s population and 99% of global GDP, the Index provides a more complete picture of global prosperity than any other tool of its kind."

http://www.li.com/programmes/prosperity-index

Easy to read and full of great graphics:

"The Legatum Institute has topped a poll by the Harvard Business Review for charts and graphics that have changed the way people think in 2013."

Australia still holding 10th place over the past five years.

Alan,

I did read the report, and you are grasping at straws. Labor's negligence was clearly identified as a major contributor to the deaths.

As for the BER, the three greatest failings were:

1 The government built schools were seldom what each school needed most,
2 The buildings the government managed cost on average twice what similar buildings managed by independent schools,
3 The majority of the expenditure occurred well after the initial GFC when it was needed and had no effect on saving jobs.

Alan, You are right, the energy saving from pink batts, could be saving energy for years, however, those savings are needed, with energy bills that have doubled again and again, and so far ahead of inflation, to be almost breath taking!
Incidentally, I have pink batts and would have personally preferred the roll out of solar hot water units.
One of which completely offsets the energy consumed by air conditioning the average home.
And yes, investing in education has long term benefits as well and something that eventually contributed to the emergence of the Celtic tiger; only cruelled by foreign speculators, and their huge debt burdens.
However, the economy boost needed during the GFC, was a here and now imperative, and we would have been better served, I believe, by the building of many low cost homes, which would have still employed all those trades etc.
The only difference, the ongoing rent roll that improves with time, could have been reinvested in more of the same, thereby ending the huge and growing levels of homelessness, and shameful in one of the richest nations on earth.
And if you like energy savings Alan, then you would love Aussie smell free innovation, that turns average biological waste, into enough alternative endlessly sustainable energy, to completely power the average home or high rise, indefinitely!
Once the infrastructure costs are recovered, virtually for free, along with endless free hot water!
The addition of food scraps/waste, creates a salable surplus!
The by products are thoroughly sanitized, carbon rich, soil improving fertilizer, high in both nitrates and phosphates, and reusable water, eminently suitable for oil rich algae production!
Rhrosty.

I wrote:

>> Relative intangibility does NOT equate to meaninglessness! <<

Pericles, you retorted:

<< That would look great on a T-shirt, Ludwig. >>

Heeey… I think you might be onto something there!

So you are still asserting that if something can’t be easily measured… and different people are likely to come up with different measurements based on their differing views of how important things are… and these measurements are likely to change through time as opinions change on the relative importance of different factors… then it must be meaningless!

That’s an incredible position to uphold! (This certainly seems to be your position, or am I inadvertently verballing you?)

Look at the Wellbeing Manifesto: http://wellbeingmanifesto.net/ (see in particular No. 9)

It is full of things that are not easily measurable, at least not without a large degree of subjectivity. But these factors, I hope you can agree, are of vital importance.

<< Measurability is critical, Ludwig. Everything else is pure fantasy. >>

Deaaar oh deary me! That is just so so sooooo wrong Pericles! ( :>(

AA said

'Don't believe what you read in The Australian, SM, or on papers written by shonky academics who get their raw data from The Australian.

That is not the way to wisdom or truth, is it?'.

Just as I predicted you would say. It is almost defamatory, pity you don't live here.

<< …spending on selective infrastructure is well worth borrowing for. i.e., dams that over time, earn much more than their original capital outlay! >>

Rhrosty, let’s be careful about that. Firstly, they are not worth borrowing for if we have already borrowed a lot, are paying a big interest bill, have very poor prospects for paying back our debt… and continue to have rapid population growth which demands more and more produce from water provided by new dams just to struggle to maintain the same standard of living for evermore people.

If we continue to have rapid pop growth and thus an ever bigger demand to spend money on essential services and infrastructure, then we're not likely to be able to service our debt, let alone pay it off, if we continue borrowing.

There might be some merit in borrowing for big infrastructure projects, IF it is part of a no-pop growth or at least much lower growth sustainability-oriented paradigm. But if it is part of the current facilitation of never-ending rapid expansionism, then NO, it would not be a good idea at all.

You have got lots of great ideas about technological advances and improvements in efficiency. We should definitely be implementing many of them.

But, even if we had a very high level of success, we would still be battling to secure enough improvements to counter the constant huge negative factors of rapid population growth.

continued

Look at the amazing mining boom. The most extraordinary wealth was generated over at least the last couple of decades, and basically continues, just a little back from the peak production/income.

But that didn’t cut in terms of significant improvements. We have a massive need for more infrastructure and services… and we are going rapidly further into debt. What the mining boom did do was facilitate absurdly high immigration.

I couldn’t imagine that even our most successful technological / value-adding / efficiency-improving advances could reap us as much return as the mining boom…. or even keep up the same level of overall returns as profits from mining decline….. unless we address the demand for everything as well.

We critically need to reduce the rate of growth in demand.

What we absolutely fundamentally and critically need, in conjunction with all your good ideas, is a very big reduction in immigration and a plan to head quickly towards net zero immigration and a no-growth population.

Alan, I know you never take a step backwards, so how about repeating what you said in response to my piece on the BER, and please refer to my name to make it official.

You said

'Don't believe what you read in The Australian, SM, or on papers written by shonky academics who get their raw data from The Australian. That is not the way to wisdom or truth, is it?'.

Go on Alan, please. Let us see you put your words to the test, now you have said this on a public forum. Go on, big man

Alan, living in France makes it easy to say what you like.

But, I can promise you this, if you were here, and you said what you said assuming you had the courage to mention my name, I would easily win a case in a civil court for talking through your ass and making completely false assumptions.

You really a dropkick, and I can't believe anyone takes you serious.

As SM said, it was a peer reviewed paper, as was the HIP, and anyone (well most) would conclude that I (and others) conducted myself in a reasonably objective way in response to the evidence.

Now don't take this the wrong way. I am not that upset. It is just with you i would enjoy ripping your arguments to pieces anywhere I could get the chance. And what a better way than legal action to embarasss you.

Chris,
that's speaking straight from the shoulder!
On second thoughts, all those who speak straight from the shoulder, should try doing it from a little higher up.
Back on topic, the worst and best economies, we are in for a very rude awakening!
China, which we depend on for 25% of our own economy, is facing a huge economic crisis!
That could send the world back to even greater dizzying lows.
The debt burden in China is double their economy!
15% of their housing is empty, and there is a housing bubble far bigger than that that occurred in America, which was the financial straw that broke the camel's back. Moreover, China has, created more derivatives, than that which caused the first GFC.
The days of credit rescues are numbered, and or simply printing more money, to pay for this or those excesses?
One can see the whole thing tumbling into an almost unrecoverable ruin, as the world finally gets wise and stops relying on the USD as the reserve capital!
Nor will a similarly problematic yuan replace it, with the only Gold remaining the only safe haven worth having, given, nobody, however clever, or economically astute, can print any more of that!
We for our part, are rather reminiscent of the warm and comfortable frog, in financial water that is very gradually being brought to the boil, and only aware of the lethal threat to our financial well-being, when our financial goose is well and truly cooked.
We built a huge trade reliance with China, and all but ignored an equally populous and younger India! Which is even closer, and still a democracy!
We encourage foreign capital, that is invariably coupled to problematic foreigners, who fund their purchases with tax avoiding debt instruments, we are supposed to service/repay!
And we continue with the mad hatters madness, of trying to fix the structural deficit, by selling revenue earning infrastructure and or assets, which then simply compounds the structural deficit problems!
Rhrosty.

maybe, but when someone refers to you as 'dodgy' you get a bit pissed off

I note that your "manifesto" regurgitates that old furphy, Ludwig...

"Bushfires, car accidents and crime waves all increase GDP".

They do not. I have asked you to justify this statement on a number of occasions, but you never do.

Here is an explanation of GDP that describes the components that are measured.

http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/gross-domestic-product.asp

So - either in your own words, or words that you cut'n'paste from the internet - describe how bushfires, car accidents and crime waves impact GDP. Explain, for example, if the entire country was covered by bushfires, how GDP would increase. Alternatively, if there were no bushfires at all for, say, five years, explain how GDP would decrease.

You see, whichever way you look at it, the theory cannot possibly be correct.

Given that illustrates the intellectual basis of your "manifesto", I wouldn't pay too much attention to it if I were you. Also, a quick glance through its signatories is illustrative of the nature of its adherents. Very few actually have a stake in the productive economy; most rely on the taxpayer to provide for them in one fashion or another.

Bonjour all,

Just rushing out, so can't stop to chat.

Regarding academic integrity, refer here:

http://www.independentaustralia.net/politics/politics-display/ministerial-responsibility-in-australia-accuracy-please,4333

And for an update on the economy, refer here:

http://www.independentaustralia.net/politics/politics-display/joe-hockey-is-no-paul-keating,6352

Back later ...

Cheers,

AA

Pericles, where in that brief explanation of how GDP is calculated does it say or allude to your assertion that economic activity generated by…

<< bushfires, car accidents and crime waves >>

…does not get added to GDP?

It really is very simple: Bushfires etc increase economic activity, all else being equal. And what does GDP measure?

Yes, that’s right; it measures economic activity, regardless of the whys or wherefores of that activity, or whether it is good, bad or indifferent.

From your link:

< Government (G) - This category includes government spending on items that are "consumed" in the current period, such as office supplies and gasoline; and also capital goods, such as highways, missiles, and dams. >

So increased government spending on items that are consumed, as a result of the recovery effort after a flood, cyclone, bushfire, etc get added to GDP…

…. and ongoing government expenditure due to health issues, road accidents, etc does indeed contribute to GDP.

Perhaps you can specifically point out to me where in this summary there is anything that supports your assertion that things like this don’t result in a ‘positive’ contribution to GDP.

Alan,

The independent Australian is where integrity goes to die. It consists of pompous and factually dubious polemics written by failed journalists with no integrity and zero subject knowledge, and read by a handful of left whinge retards.

Just sad really

Greetings,

Intriguing comments. Thank you.

@WmTrevor, thanks for the Legatum link.

Curious about their ‘economy’ rankings. Not explained, unfortunately.

@Shadow Minister, no, none of those BER observations is true.

The key questions are: What was the scheme’s purpose? To what extent was that achieved?

Answers here: http://www.independentaustralia.net/politics/politics-display/we-really-must-talk-about-what-actually-did-save-australia,5644

@Rhrosty, thanks. Mostly agree. Just a couple of queries.

Re, “we would have been better served by the building of many low cost homes …”

Perhaps. But where? On what government land?

Do you accept, Rhrosty, that construction had to start in the 2009 third quarter to have the desired effect? Could land have been acquired in that timeframe? Compulsory acquisition?

Could house construction realistically be accomplished in every population centre across the nation?

@Chris Lewis, calm down! You have no legitimate complaint whatsoever.

When you first published those ministerial sackings figures – which were not just dodgy, but blatantly false – I wrote privately to lead author Keith Dowding alerting him to the errors and providing the accurate data.

So you should have said ‘thank you’, withdrawn the fraudulent paper, and rewritten it. When you didn’t, it was entirely reasonable that it be refuted here:

http://www.independentaustralia.net/politics/politics-display/ministerial-responsibility-in-australia-accuracy-please,4333

In fact, if you studied responsibility of knowledge in ethics at school, you would understand it was my responsibility to refute it.

But do I get any thanks?!

You’ve made the same basic mistakes in the BER paper, Chris. Starting with believing what you read in Murdoch publications.

Please research these Press Council adjudications, Chris. They will show you – from independent semi-judicial inquiry – that Murdoch employees are paid to distort, fabricate and lie.

Adjudication numbers 1441, 1447, 1476, 1480, 1483, 1484, 1486, 1492, 1496, 1498, 1503, 1506, 1509, 1511, 1513, 1515, 1517, 1519, 1523, 1525, 1527, 1529, 1530, 1531, 1536, 1537, 1539, 1540, 1547, 1549, 1550, 1554, 1555, 1556, 1558, 1561, 1562, 1568, 1572, 1573, 1583, 1587, 1588, 1590, 1591, 1592 and 1594.

Your BER paper makes four fatal errors. Happy to discuss, if you wish. But quoting The Australian should be enough for most readers to see it is, well, dodgy.

Cheers, AA

Let's look more closely at this, Ludwig.

>>It really is very simple: Bushfires etc increase economic activity, all else being equal.<<

Economic activity does not increase as the result of bushfires, it simply moves from one place to another. Here's how it actually works.

In a previous small business, I employed a volunteer fireman. Whenever he was called upon to fight a fire, he took off to do his bit, with my blessing. My company was therefore deprived of his services for that period of time, so instead of paying him to do his job, I was paying the same amount of money to fight the fire. Many other businesses were in exactly the same boat. Net result, no increase in GDP.

The permanent firies are paid whether the countryside is burning or not, so no change there either.

Let's say the fire destroyed some houses, which were rebuilt, creating jobs for builders. The payment for these houses came from either the insurance company, or from individual savings. The insurance money came from premiums that had been measured previously under "consumption of services", so caused no change in GDP when they were spent. Similarly, personal savings would need to be withdrawn from their hiding place - effectively taken out of the pool of money available for business investment - so again, the net effect on GDP will be "no change".

This might help understand that last bit:

http://www.ssag.sk/SSAG%20study/EKO/RELATIONSHIP%20BETWEEN%20GDP.pdf

(You will find reams of more complex economy-talk on the subject of the role of savings in GDP measurement on the internet. All of it absolutely fascinating.)

So far, no impact on GDP - certainly, not the positive impact that you are suggesting.

Now consider the impact if the fires continued for a long time. My business output would decrease. Insurance premiums would increase, reducing the household's net disposable income. And savings would eventually be exhausted, reducing the investment capacity of the economy. All of which would serve to depress GDP calculations, not boost them.

Hope this helps. Feel free to question the logic if it still doesn't make sense to you.

Thanks Pericles for your detailed response.

But I’ve got to say that your argument just completely leaves me bewildered.

I mean, it is just so obvious that various things get added to GDP that just simply shouldn’t. They should be subtracted from GDP instead! That’s the bottom line.

Let’s start right at the top of your linked document:

< GROSS DOMESTIC PRODUCT (GDP) – is the total value of final goods and services produced within a country over a period of time. >

So, right there in the definition we can see that there is no differentiation between goods and services that are genuinely progressing the economy and our quality of life and those that aren’t.

It is all just lumped in together, regardless of whys or wherefores.

You wrote:

<< Economic activity does not increase as the result of bushfires, it simply moves from one place to another. >>

You can’t assume that. It is reasonable to assume that the recovery effort from bushfires, floods, cyclones, etc, does indeed result in considerably increased government expenditure and private-enterprise economic activity. It DOES lead to increased value of final goods and service.

<< Net result, no increase in GDP. >>

But your example is not universally applicable. Just because you experienced the situation which you describe does not mean that there is no net increase in GDP as the result of a fire across the whole fire-affected area, or the state or country.

Sure, a fire can result in some reduction of GDP if people can’t work as a result of injuries, or damage to their workplaces or the need to attend to their domestic issues with urgency. So this may detract from the increased economic activity that the fire leads to. But it unlikely to completely cancel it out.

continued

<< …so again, the net effect on GDP will be "no change". >>

Again, no. You can’t assume that. Money that is sitting there, either in insurance company coffers or peoples’ private accounts was not necessarily going to be used for business investment or other economic activity in Australia. So you cannot say that it would have contributed to GDP anyway.

And even if these funds were to be used 100% for economic activity at some point down the track, you still have the issue of them being spent now rather than later as result of the fire, which means that they are spent as a direct consequence of a negative factor, and it is therefore surely quite absurd that they should contribute to GDP.

GDP measures that economic activity now. It doesn’t take into account what might happen down the track if that money hadn’t been spent now.

Quite apart from any factor that you think might balance out this sort of expenditure, it is still absurd that this sort of thing should appear as a positive in our primary economic indicator.

I asked you last time:

Could you…

>> specifically point out to me where in this summary there is anything that supports your assertion that things like this don’t result in a ‘positive’ contribution to GDP. <<

You didn’t do this, which seems to me to be directly because there is indeed nothing there to support your assertion.

So can I ask you the same in relation to your latest linked document.

Yes Alan, agree with most of what you say.
Clearly, Govts own considerable parcels of Government land, and have the power to resume as much as they can justify.
Mrs Bligh found considerable acres to start a building boom near Brisbane?
However, there is absolutely nothing that prevents a government from building brand new cities on previously rural land, which for starters, would have kept down resumption costs. One thing we have plenty of, is land!
These same cities or towns, could be constructed as self contained, replete with their own CBD and industrial parks.
In fact, building a power station right beside said parks would limit energy costs, half of which can be lost in transmission lines, which we still nonetheless have to pay for, along with the price gouging practices of foreign investors. I'm in favor of cheaper than coal thorium power stations, for industrial purposes!
I have no problem borrowing for most of this, or financing it with self terminating thirty year bonds.
In comparative terms, any borrowing for these and any other projects that return a tidy profit, is worth borrowing for, given the returns cover all capital raising and servicing.
If anyone proposed a Snowy mountains scheme today, they would be howled down by all and sundry, or by people incapable of seeing the big picture or eventual goal.
We should crack on and build rapid rail, simply because the price to us for this or any other infrastructure doubles every decade.
The fact we may have to borrow to build these and other infrastructure project, is just small change, compared with what we will eventually pay for essential, but endlessly deferred projects.
Rhrosty.

If we were to crack on with rapid rail, we could pay for most of it, with the later sale of resumed and rezoned land, to new home buyers.
People who currently live in the boondocks and face a four-six hour daily commute, and an endlessly rising fuel bill, would gladly pay a premium for a service, that transported them to their places of work in half an hour or less!
Even then, it would likely be significantly less costly, than the fuel bill and parking fees!
Moreover, if those links were whisper quiet magnetrons, the time used for travel, could easily become productive time, using a laptop to study of perform work related tasks.
Because one wouldn't be held up on a regular basis by ever present and growing gridlock, one would arrive at work or school/college, far less stressed, and a good deal more productive, with a lot less time consumed in simply winding down.
There will also be considerable economic productive upside benefits!
And emergency response times would come way down, thanks to the quite dramatic winding back of gridlock.
These things, if built right from the get go, with the most advanced available options, will serve our needs, well into the next century and beyond.
[I mean, Melbourne trams still perform stirling and very cost effective service!]
And the quality of family life would greatly improve, given we could devote much more time to it, and our familial relationships?
Rhrosty.

"Curious about their [Legatum] ‘economy’ rankings. Not explained, unfortunately."

The Technical and Methodolody Appendix might offer a bit more by way of explanation, Alan...

http://media.prosperity.com/2013/pdf/publications/Methodology_2013_FinalWEB.pdf

Whatever isn't provides an excuse for a visit to their offices: 11 Charles Street, Mayfair, London, W1J 5DW, +44 (0) 207 148 5400. info@li.com

Thanks, WmTrevor.

Still can’t understand Legatum’s economy calculations.

Just compare Australia and Canada:

From tradingeconomics.com:

Australia leads Canada on GDP growth 2.8% to 2.6%.
Canada has a higher jobless rate, 6.9% to 6.0%.
Australia interest rate is a near-perfect 2.5%; Canada only has 1.0% which offers no reward for savers.
Australia kills them on debt to GDP, with only 20.7% to Canada’s 84.6%.
Australia leads Canada on current account deficit, -2.90% to -3.20%.

Then, from the CIA world factbook:
Australia has a tax rate of only 33.2% compared with Canada’s 37.7%.
Australia has higher national savings, 24.4% of GDP to 21.5%.
Australia thrashes Canada on industrial production growth, 3.2% to 1.4%.

Then Heritage Foundation gives Australia a higher score on economic freedom, 8.20 to 8.02.

So on what measures did Legatum determine that Canada’s economy ranked 4th and Australia merely 10th?

Bizarre. Looks like I’m off to Mayfair, WmTrevor …

Cheers, AA

That doesn't mean that it is wrong, Ludwig.

>>But I’ve got to say that your argument just completely leaves me bewildered.<<

There might be other reasons. The most obvious being that you haven't quite grasped it yet.

It would help if you stopped making assumptions, and concentrated on facts.

>> It is reasonable to assume that the recovery effort from bushfires, floods, cyclones, etc, does indeed result in considerably increased government expenditure and private-enterprise economic activity. It DOES lead to increased value of final goods and service.<<

Government expenditure does not lead directly to economic growth. If it did, the US economy would have gone through the roof, with $85 billion by way of QE injection, every month. Here is an interesting discussion thread on that very topic.

http://www.reddit.com/r/investing/comments/1qtpuq/what_growth_of_our_gdp_is_the_85b_monthly_qe_a/

When the money is directed - not to productive enterprise, but to repair and remediation work, it cannot possibly cause an uplift in GDP.

>>Money that is sitting there, either in insurance company coffers or peoples’ private accounts was not necessarily going to be used for business investment or other economic activity in Australia.<<

Oh? Then where do you imagine that it goes, Ludwig? You seem to think that this money is sitting in a vault somewhere gathering dust - I can assure you that it does no such thing. Any bank that did not invest your savings in order to earn a return would close in a week. Think about it.

>>...you still have the issue of them being spent now rather than later as result of the fire<<

Absolutely. So the money spent on the firies, builders etc. is of course measured as part of the current GDP. But - and this is the bit you are having difficulty with - it has been displaced from other potential spending, which makes it net zero, at best.

>>...it is still absurd that this sort of thing should appear as a positive in our primary economic indicator.<<

That is your opinion,which is fine. But GDP does at least have the benefit of being factual, rather than subjectively assessed, and also measurable

AA,

No one is querying the relative strength of Australia's economy today, the problem we have is with your completely phoney ranking of Australia'a economy under Howard, that compared to all major developed countries had the highest growth, the lowest unemployment and the lowest debt.

The Labor years increased unemployment produced record debt year after year, and was characterised by a litany of broken promises, financial incompetence, an unbroken record of disastrous projects and policies, and an unearthing of corruption by many senior MPs and leaders of the Labor party enriching themselves at the expense of the lowest paid, and the taxpayers.

SM is spot on.

As events turned out, the vast majority of Australian, in an election contest, which is the only thing that counts in a real world of democracies, also agreed and voted Labor out.

Alan you are such a poor scholar, but you would be good in an authoritarian country like china where propaganda may be a virtue for success in the media.

Here at least, bs artists like Rudd got found out.

As for my own work, well I am getting published here, as well as in academia in Aust and abroad, and read by people that count.

And stay tuned, in the coming months I will be exposing real bias in academia.

The same way as all people do on these forums, Alan... by looking at the topic by concentrating on different things and ignoring others.

(Other things that is. Okay, people too sometimes. But only when it is for their own good.)

"So on what measures did Legatum determine that Canada’s economy ranked 4th and Australia merely 10th?"

That would be pp. 45-46 of the Technical and Methodolody Appendix and in the later Index Variables, Gallup Data and the Regression sections. Their Factor Analysis and Variable Weightings are shown on p.57.

Notes on the Income Regressions, estimations techniques their coefficients and interpretations and the construction of the incomes scores (all well beyond my mathematics) are found earlier on pp. 36-37.

Doesn't mean you have to agree with them.

Nor does it rule out a visit to Mayfair... with a bit of shopping on the side you could help the United Kingdom improve from 28th place on the economy sub-index for next year's results.

When it isn't nasally occupied I use the same finger to type dees and gees so, 'Methodolody' should read 'Methogology'... if you average those two attempts you get the correct word.

Pericles, you are putting in a concerted effort to try and convince me that negative things don’t get added to GDP. I appreciate that. But it seems to me that it is having the opposite effect. I am finding my view, which is the view expressed by many, to have consolidated as a result our discussion.

The main reasons for this are that after asking you to point out just where there is any indication that negative things don’t add to GDP in the links that you have provided, there has been no response.

Secondly, the very nature of GDP is that it measures all economic activity regardless of whys or wherefores, end of story. This is now the third time I’ve mentioned this. You have offered no direct response.

Thirdly, what does it matter if money not spent on economic activity now, gets spent on equivalent economic activity later on or not? It’s what gets spent now, in the current GDP time period that gets added to the current (or forthcoming) GDP total. So, money spent on remediation after a disaster gets added to GDP now. Economic activity generated as a result of big and obvious negative things gets added to GDP. It’s as simple as that. Any analysis of what might have happened to that money if it hadn’t been spent now or how it might have displaced other economic activity is really quite irrelevant.

Fourthly, that money if it is not spent now could later be spent on 'good' or 'bad' economic activity, which should or shouldn’t be added to GDP respectively. So it is not a direct trade-off. And we should also be mindful of a portion of that money getting spent overseas if it hadn’t been spent on remediation activity now and thus not adding to our GDP at all.

continued

Pericles, you wrote:

<<When the money is directed - not to productive enterprise, but to repair and remediation work, it cannot possibly cause an uplift in GDP. >>

But then…

<< > ...you still have the issue of them being spent now rather than later as result of the fire <

Absolutely. So the money spent on the firies, builders etc. is of course measured as part of the current GDP. >>

These statements seem to be contradictory.

<< But - and this is the bit you are having difficulty with - it has been displaced from other potential spending, which makes it net zero, at best. >>

Certainly not in the current GDP period. Possibly in the long term. See ‘Fourthly’ above.

<< GDP does at least have the benefit of being factual, rather than subjectively assessed, and also measurable >>

Not if it is measuring the wrong things and adding blatant negatives to the positive side of the ledger.

Well, I guess we’ve reached a total impasse on this particular point.

This is just one of the problems with GDP. There is a bigger one – its connection with rapid population growth. It indicates that rapid growth is good and faster growth is better. And that is just enormously counterintuitive.

Incidentally, just in are unexpected reduced unemployment numbers?
Could this be people dropping out, or employers, believing that the repeal of the mining tax and the carbon tax, will improve things or lower capital cost outcomes?
I think the real outcome, will be debt laden energy providers, pocketing extra profits?
For mine, I would have kept a carbon tax, but amended it to a million dollars a ton.
To offset any actual cost, I would have included a carbon cap, set at current emission; meaning, no sanely run business would actually pay this sword of Damocles tax.
The tax could be doubled every decade, and the cap lowered by around 1% biannually?
This would surely be enough time and forward planning opportunities, to allow all those with a still functioning brain, to stay far enough of the carbon curve, never ever to have to pay this tax, but particularly, when there is a serious business case, for accepting inevitable change!
Those ahead of the carbon reduction curve, best placed to maximize future profits; and or, future economic growth!
I don't like an ETS, given the number of reported rorts and or corruption.
What's next? Carbon derivatives, traded in lieu of real carbon? Given a truly international carbon trading scheme, will surely result in carbon becoming the most traded and valuable, tradable commodity, not worth less than a 140 billion per?
One can't bake bread from wheat derivatives, or run the car with oil derivatives.
One can however, quite massively distort the market, with plucked from the air derivatives.
Someday, a true leader with the courage of conviction, will outlaw these economy harming or crippling instruments, along with other problematic practices, such as cornering the oil market; or, short selling and very high frequency trading, for similar reasons, or just to reinsert, simple inherent fairness!
And where a truly visionary leader leads, others will surely follow, or pay a huge economic penalty, for following the lunatics, (ideologues?) who currently, seem to be running the asylum?
Rhrosty.

Not exactly, Ludwig.

>>Well, I guess we’ve reached a total impasse on this particular point.<<

You are beginning to understand, which is very encouraging. If only you would stop using the words "add" and "added", I think the penny might finally drop.

>>the very nature of GDP is that it measures all economic activity regardless of whys or wherefores<<

Yes indeed. Absolutely correct. Now, hold that thought.

>>It’s what gets spent now, in the current GDP time period that gets added to the current (or forthcoming) GDP total. So, money spent on remediation after a disaster gets added to GDP now. Economic activity generated as a result of big and obvious negative things gets added to GDP. It’s as simple as that.<<

Instead of "added to", substitute "included in". That brings it into line with, and entirely consistent with, the previous statement.

Now, let's go back the the point at issue.

It is not that "money spent on the firies, builders etc. is of course measured as part of the current GDP". We have already agreed, that is entirely true.

But this little gem is the problem:

>>It really is very simple: Bushfires etc increase economic activity, all else being equal.<<

They are accounted for, absolutely. But they are included in GDP. Not added to GDP. As I pointed out, the money spent on them is taken away from other areas, so there is no increase in overall economic activity.

Clearer now?

Ahh Pericles, you appear to be heeding what I am saying and now starting to agree to quite a considerable extent. Excellent!

A quick summary:

I wrote:

>> the very nature of GDP is that it measures all economic activity regardless of whys or wherefores <<

You replied:

<< Yes indeed. Absolutely correct >>

Very good.

I wrote:

>> It’s what gets spent now, in the current GDP time period that gets added to the current (or forthcoming) GDP total. So, money spent on remediation after a disaster gets added to GDP now. Economic activity generated as a result of big and obvious negative things gets added to GDP. It’s as simple as that. <<

You seem to have no disagreement with this.

Excellent.

I wrote:

>> It really is very simple: Bushfires etc increase economic activity, all else being equal. <<

You replied:

<< They are accounted for, absolutely. >>

Wonderful.

So there we have it. We have agreement that negative things such as bushfires do indeed get added to or get included in or contribute to GDP.

Things that should appear on the negative side of the ledger appear on the positive side.

Ahh but hold on…. There is not quite total agreement:

<< As I pointed out, the money spent on them is taken away from other areas, so there is no increase in overall economic activity. >>

1. As I have said; it is irrelevant as to what that money might have been spent on later on if it had not been spent now. In spending it now in response to a bushfire or whatever, it is being added to / included in / contributing to GDP. But it shouldn’t be, because negative events and their resultant economic activity shouldn’t appear as positives in our primary economic indicator.

2. Yes, some of that money, probably most but you can’t assume all, would be spent on Australian economic activity later on if it hadn’t been spent now. Some of it might get spent overseas. Some of it might simply be saved and not spent for decades.

continued

3. And most significantly, when it does get spent, it gets spent on things that should contribute positively to GDP and things that shouldn’t – and the ratio of these two is unknowable until it is actually spent.

So you can’t say that there is no increase in overall economic activity in the long term by spending the money now, and you can’t say that this money would have contributed more legitimately to the positive side of the ledger or not.

The only thing you can say is that the money was spent now in relation to the hypothetical fire, and the resultant economic activity was added / contributed / included in GDP... when it damn well shouldn’t have been.

And as I say: this here-and-now expenditure is what GDP shows. It doesn’t take into, at all, what might or might not happen in the future.

OK, so perhaps we are getting close to agreement here.

So then, what about the bigger and nastier aspect of GDP? The one where rapid population growth creates enormous economic activity and adds / gets included in / contributes to GDP enormously, thus making rapid pop growth look really good for our economy, and faster growth look even better?

THIS is the really SINISTER thing about GDP.

You have said that growth can’t go on forever. But GDP would have us, and our wondrous pollies pseudeconomists and big bizzos saying pushing for rapid expansion for ever more…. completely regardless of all the enormous negative factors that accompany it.

We’ve been over this ground before to a fair extent. But in light of our current well-focussed and amicable discussion, it is I think the right time to revisit it.

Oh please, Ludwig.

>>We have agreement that negative things such as bushfires do indeed get added to or get included in or contribute to GDP.<<

No, we most certainly do not.

We can agree on the "included" and the "contribute to", but we disagree fundamentally on the "added to", in the sense that this indicates an overall increase. The economic activity associated with bushfires does not increase GDP, it is included in GDP.

>>Things that should appear on the negative side of the ledger appear on the positive side.<<

That is simply nonsensical. There is no "negative" and "positive" side of the ledger. It is a single column that gives a total.

>>...negative events and their resultant economic activity shouldn’t appear as positives in our primary economic indicator.<<

See above. Economic events are economic events. Full stop.

>>...when it does get spent, it gets spent on things that should contribute positively to GDP and things that shouldn’t<<

What it gets spent on is totally irrelevant. You seem to be confusing the simple, one-dimensional measurement of GDP with the concept of unit productivity (look it up). It is only the fact that it gets spent that requires it to be measured, not whether it is spent wisely. Which is why bushfires will eventually reduce GDP, not increase it. And why borrowing from the Bank to invest in new plant and machinery has the capability of increasing it. Eventually.

>>...in light of our current well-focussed and amicable discussion, it is I think the right time to revisit it.<<

Perhaps.

But it would be pointless, if you cannot understand why you are so completely off-target when you say that "Bushfires etc increase economic activity, all else being equal." And at the same time rid yourself of the notion that there is somehow "good" GDP and "bad" GDP.

<< We can agree on the "included" and the "contribute to"…>>

Excellent! Pericles, I think that is big step forward.

<< There is no "negative" and "positive" side of the ledger >>

YES!! Correct. All economic activity regardless of the whys or wherefores goes on the GDP tally, which appears as a positive indicator of economic wellbeing. Things that should count against GDP or which are neutral are added to it. There is no negative side of the ledger. All economic activity resulting from negative things appears as a positive contribution to our economic wellbeing.

<< Economic events are economic events. Full stop. >>

YES!! According to those who worship GDP! They can’t even conceptualise negative economic activity!!

, << What it gets spent on is totally irrelevant >>

YES!! As it concerns the GDP calculation, what the money that gets spent on bushfires would have otherwise been spent on is irrelevant.

<< It is only the fact that it gets spent that requires it to be measured, not whether it is spent wisely. >>

YES!!

<< Which is why bushfires will eventually reduce GDP, not increase it. >>

YES!! Of course disastrous events like this reduce economic wellbeing. But GDP for the term following a fire, during the recovery phase, when economic activity generated by that fire contributes to it, would suggest otherwise.

So, what is it that we actually don’t agree on?

It seems to only be this new distinction of yours between ‘included in’ and ‘added to’.

You only introduced this yesterday.

I think it is a complete furphy. They amount to just the same thing!!

Now, regarding the population / GDP connection, I wrote:

>> You have said that growth can’t go on forever. But GDP would have us and our wondrous pollies, pseudoeconomists and big bizzos pushing for rapid expansion for ever more…. completely regardless of all the enormous negative factors that accompany it. <<

Do you agree that no matter how huge the negative factors related to population growth became, GDP would still indicate that high pop growth is a good thing?

to Alan Austin and others,

Idiots all talking of GDP and population size etc.

Besides, if it was ONLY about population size and growth rates then what is the story with Indian and China?

Going a step further than that, why hasn’t even Japan and South Korea YET blossomed as much as any original western culture?

I mean considering that Japan and S. Korea have been wealthy for some time now and they at least (unlike their more recent Asian economic bloomers) have managed to overcome poverty.

However in areas like legal ethics and equality rights etc., racial prejudice and other kinds of group oppression, Japan and S. K. are not yet even at the start line compared with say Australia.

Take Japan -

we can increase the number of people in the nation as much as we want but unless we have a parallel developing advancing legal and ethical culture with the population increase, we will NOT end up with a copy of some European descended culture now a “western nation” (e.g. Australia, UK, Germany, France, Sweden, etc.) as should be abundantly clear from the examples of India and China who are refusing to allow the economic benefits from their massive worker base to fairly trickle down to the poorest (especially in India).

And if anyone needed more convincing look to Japan and S. Korea where they may have overcome poverty but they are yet to even give a hint of thought to legal/ethical matters to deal with racism, prejudice and basic consideration for the “other”.

e.g. Japan had S. Koreans imprisoned in WWII some who had kids in Japan and some still live in Japan, yet Japan does not allow these people to be citizens.

Also neither of those nations has any concern with global humanitarian issues and do not take in refugees and immigrants even though they have extreme wealth etc., whereas smaller and poorer nations like Finland and Sweden take on so many immigrants and refugees that their demography (like ours in Aus) has altered over 50%.

That's the question, Ludwig.

>>So, what is it that we actually don’t agree on?<<

It is blindingly clear - to me at least - that this is what we disagree on, right here.

You first referred to:

"Bushfires, car accidents and crime waves all increase GDP".

Which came from your "Wellbeing Manifesto".

Then you repeated it, just to make sure.

>>It really is very simple: Bushfires etc increase economic activity<<

And even now, you clearly still don't get it.

>>But GDP for the term following a fire, during the recovery phase, when economic activity generated by that fire contributes to it, would suggest otherwise.<<

Until you can see how wrong that is, you won't be able to understand anything to do with the economy whatsoever.

>>It seems to only be this new distinction of yours between ‘included in’ and ‘added to’. You only introduced this yesterday<<

Exactly. It was when I tried to point out that you kept using "added to" when you meant "included in".

Your position was that we first have one number for GDP, then when we have bushfires, another number is added to it. Which, I hope you now understand, is nonsense.

Which really sets the tone for the entire "Manifesto".

OK Pericles, it is pointless continuing with this particular line of discussion.

I thought we might be getting near agreement, but alas, it ain’t gunna happen.

It seems to that a lot of things you say are at odds with your bottom line.

I found a whole bunch of things that we seem to agree on, as per my last post, and yet we still have a fundamental disagreement.

It is simply incredible that you can completely bag things like the wellbeing manifesto and genuine progress indicator, uphold GDP as a sensible construct and don’t see any problem with our very high immigration intake and resultant rapid population growth at least for a long time to come.

I tried to move the debate forward to how GDP relates to population growth. I asked you a direct question, but you have avoided it completely.

Why?

Throughout our long history of discussions on this forum, I’ve had to really press you to respond to basic questions numerous times.

This is a critically important point: GDP increases as the population increases, all else being equal or of small variation. This misleads us into thinking that the economic growth generated by population growth is entirely a good thing, with completely no regard to the very considerable negative factors caused by that population growth.

Then as population becomes so large that it overwhelms our basic resources and skittles our quality of life, the economy will really suffer and annual increases in GDP will presumably be smaller, or it will stagnate or perhaps even fall, even if we continue to have population growth.

What we need is a realistic indicator that will demonstrate the approaching problems with the supply of resources, goods, services and infrastructure compared to the ever-increasing demand…. and not mislead us into a false sense of security and then tell us far too late that something is wrong.

So, back to my question:

Do you agree that no matter how huge the negative factors related to population growth become, GDP would still indicate that high pop growth is a good thing?

True enough, Ludwig.

>>I thought we might be getting near agreement, but alas, it ain’t gunna happen.<<

From the moment you asserted that "bushfires etc increase economic activity" we were bound to disagree.

Note, that I am not considering whether or not GDP is good or ill, merely observing its nature. You insist on confusing what GDP is, with your views on what it is used for.

>>It is simply incredible that you can completely bag things like the wellbeing manifesto and genuine progress indicator, uphold GDP as a sensible construct...<<

The Wellbeing Manifesto has nothing whatsoever to do with the calculation of GDP, nor has the fact that I "bag" it.

The Genuine Progress Indicator is, as I pointed out, an entirely subjective view of the world. Again, totally irrelevant in the context of GDP, which at least measures a reality, whether you like that reality or not.

>>This is a critically important point: GDP increases as the population increases, all else being equal or of small variation.<<

Quite often, it does, but not necessarily. The key is whether GDP per capita increases also. If it does (and it does) then at least people are better off in one dimension - that is, financially.

>>Then as population becomes so large that it overwhelms our basic resources and skittles our quality of life, the economy will really suffer and annual increases in GDP will presumably be smaller<<

That is indeed one scenario. There are, however, others that are equally likely outcomes. You are simply taking the most pessimistic view, and extrapolating from that.

>>Do you agree that no matter how huge the negative factors related to population growth become, GDP would still indicate that high pop growth is a good thing?<<

Raw GDP is not the measure I would use, since it sees only one dimension. What I would use is per capita GDP, where a decrease could indicate problems looming.

However, if we are able to keep increasing GDP per capita, at the very least we know that there are the economic resources available to tackle any peripheral issues.

Good morning again,

Fascinating discussion. Some responses, briefly:

@Ludwig and Pericles, are you perhaps confusing income and wealth?

Do you agree GDP growth is an income measure – what the nation earns annually – and other variables, such as in Credit Suisse’s global wealth report, measure wealth – what we own?

Would you agree that disasters like bushfires increase earnings, but decrease the value of what we own?

Hence the IAREM formula – to come back to the article – must measure both. Which it does. It has two earnings measures – income and growth – and two ownership measures – wealth and inflation.

@Shadow Minister, re “No one is querying the relative strength of Australia's economy today …”

Excellent! We are progressing.

Re: “under Howard, compared to all major developed countries had the highest growth, the lowest unemployment and the lowest debt.”

That is just incorrect, SM. The IAREM shows transparently its data sources – World Bank, the IMF, Credit Suisse, others. Just follow the links. Not hard.

@Chris Lewis: You are doing it again. Argumentum ad populum is a fallacious argument.

Re: “I will be exposing real bias in academia.”

So why is your fraudulent ministerial sackings paper still online? Doesn’t it concern you that a small number of readers can access your “research” – if they have authorisation or pay – but anyone can read the article which exposes it as false?

@WmTrevor, thanks for that reference.

Still can’t see how they derive a higher score for Canada and Switzerland than for Australia. Perhaps they have a ouija board.

@Rhrosty: No, I think those reports of increased employment relate to the USA. Australia’s job numbers for March are released tomorrow.

It will be surprise if there is an increase, but a welcome one.

Mostly agree re carbon tax changes. No doubt that’s one of several policy areas Labor will be working on in Opposition.

@Matthew S: Welcome to the chat.

Yes, the IAREM only measures economic outcomes, not social or governance issues. Other organisations have rankings for those.

Cheers, AA

<< The Wellbeing Manifesto has nothing whatsoever to do with the calculation of GDP, nor has the fact that I "bag" it. >>

Hahaha. Of course it doesn’t Pericles. And GDP has nothing to do with wellbeing!

<< The Genuine Progress Indicator is… totally irrelevant in the context of GDP >>

YES. And GDP is irrelevant to genuine progress!!

<< The key is whether GDP per capita increases also. >>

Ahh, now this is interesting. It is something new in our discussion.

YES indeed; per-capita GDP is much more significant than gross GDP, especially while we have rapid population growth.

<< That is indeed one scenario… You are.. taking the most pessimistic view. >>

No it is not the most pessimistic possible view. But yes there is a lot of merit in looking at the more pessimistic possible outcomes and planning for their eventuality, or more to the point; to stop them from eventuating.

<< Raw GDP is not the measure I would use, since it sees only one dimension. >>

YES YES YES!! Wuuunderful!! GDP does indeed ‘see only one dimension’. And that makes it a TERRIBLE piece of work!

So… what other sorts of GDP are there? How about cooked GDP?

GDP is absolutely cooked! It is cooking the books in no uncertain manner, by adding negative stuff to the positive side of the ledger!

<< What I would use is per capita GDP, where a decrease could indicate problems looming. >>

Good! That’s certainly MUCH better than raw or cooked GDP!

Now, if we could just get the economic activity that results from bushfires, floods, car accidents, smoking-related disease, etc, etc, to NOT contribute to GDP, then we’d have a pretty good per-capita economic indicator.

<< However, if we are able to keep increasing GDP per capita, at the very least we know that there are the economic resources available to tackle any peripheral issues. >>

Sorry, you’ve lost me there.

<< @Ludwig and Pericles, are you perhaps confusing income and wealth? >>

I don’t think so, Alan.

GDP is very much a measure of economic activity, certainly not wealth. Certainly closer to income.

<< Do you agree GDP growth is an income measure >>

Well, that’s what it should be. But it is very flawed when economic activity resulting from obvious negative things gets added to it, and it includes economic activity generated by population growth which just results in more services and infrastructure for evermore people without improving anything or increasing per-capita GDP.

<< Would you agree that disasters like bushfires increase earnings, but decrease the value of what we own? >>

YES! Disasters obviously reduce our economic wherewithal, quality of life and general wellbeing. But economic activity spurred by them gets added to GDP, which then totally suggests the opposite!

<< …the IAREM formula… has two earnings measures – income and growth – and two ownership measures – wealth and inflation.

Yes. But it still doesn’t take into account the negative effects of rapid population growth. It still suggests that rapid growth is good and rapider growth is gooder, regardless of the bad and worsening issues with water or the massive effort needed to build new infrastructure and duplicate services just to keep up with population growth without creating real improvements, to name just a couple of the negative things associated with pop growth.

I sense that you are still a little confused, Ludwig.

>>GDP has nothing to do with wellbeing!<<

There is most certainly a connection, Ludwig. Surely you must agree that life in Australia, with a per capita GDP around the $40,000 mark, is substantially more attractive than in Eritrea, where the same measure is around $700. So you couldn't in all conscience claim that it has "nothing to do with wellbeing", could you.

>>GDP is irrelevant to genuine progress!!<<

Oh, I think it is. If you track the rise in GDP of South Korea against that of North Korea, it is not difficult to spot its correlation with progress. I can assure you that South Koreans do.

>>per-capita GDP is much more significant than gross GDP, especially while we have rapid population growth.<<

On this, we can agree. And we are doing fairly well on that front too, don't you think.

>>GDP does indeed ‘see only one dimension’. And that makes it a TERRIBLE piece of work!<<

Not necessarily. It is just a measurement. It has no other qualitative properties, true, but that doesn't mean it is not in itself a useful number.

>>GDP is absolutely cooked! It is cooking the books in no uncertain manner, by adding negative stuff to the positive side of the ledger!<<

Once again, for the umpteenth time, there is no "good" GDP or "bad" GDP. There is only GDP. I thought we had agreed that.

>>if we could just get the economic activity that results from bushfires, floods, car accidents, smoking-related disease, etc, etc, to NOT contribute to GDP, then we’d have a pretty good per-capita economic indicator.<<

How would you achieve that, specifically? What would be Ludwig's version of GDP, if you couldn't include the groceries that were purchased by the wives of firefighters, ambulance drivers or cancer-ward nurses?

Bizarre.

>>Sorry, you’ve lost me there.<<

Clearly.

<< So you couldn't in all conscience claim that it has "nothing to do with wellbeing", could you. >>

No Pericles. I was speaking with tongue in half planted in cheek there. But only half, as the correlation between GDP and wellbeing is not good. Likewise with genuine progress.

I wrote:

>> per-capita GDP is much more significant than gross GDP, especially while we have rapid population growth. <<

You replied:

<< On this, we can agree >>

Yahoo!

<< And we are doing fairly well on that front too, don't you think. >>

No. If GDP didn’t put economic activity that resulted from negative events on the positive side of the ledger, and didn’t include economic activity generated by population growth, which is neutral at best, then per-capita GDP would look a whole lot different.

<< It [GDP] is just a measurement. It has no other qualitative properties, true, but that doesn't mean it is not in itself a useful number.

Yes: just a measurement, yes: no qualitative properties, but no: not of much real use. It is of a very highly misleading nature.

<< There is only GDP. I thought we had agreed that. >>

We did! But it is made up of stuff which should contribute to it and stuff which absolutely shouldn’t!

I wrote:

>> if we could just get the economic activity that results from bushfires… to NOT contribute to GDP… >>

You replied:

<< How would you achieve that, specifically? >>

Well perhaps we could look at all the economic activity in an area before it suffers a disaster, and compare it to the activity in the cleanup and re-establishment phase after the disaster, and everything that is new or increased compared to what it was like beforehand would not be added to GDP! Yes? How about that? Not too difficult.

continued

<< Bizarre >>

What is bizarre Pericles is that you somehow can’t appreciate that economic activity generated by a bushfire, flood, or any manner of other negative things can be added to GDP, and how WRONG that is!

This whole discussion is bizarre. I could never have imagined having it, because I could never have imagined anyone holding the views that you do in this regard!

I wrote:

>> Sorry, you’ve lost me there. <<

You replied:

<< Clearly. >>

Well gee thanks. That really helps. I thought you would be only too happy to clarify what you were trying to say in the relevant statement. I found it uninterpretable:

<< However, if we are able to keep increasing GDP per capita, at the very least we know that there are the economic resources available to tackle any peripheral issues. >>

Could you please reword it in understandable format. Thanks.

You seem determined to avoid seeing what is plainly obvious, Ludwig.

>>the correlation between GDP and wellbeing is not good. Likewise with genuine progress.<<

So you have ignored the Australia/Eritrea GDP comparison, and the South/North Korea example of progress via GDP.

Is there any particular reason you have chosen to do this?

>> If GDP didn’t put economic activity that resulted from negative events on the positive side of the ledger, and didn’t include economic activity generated by population growth, which is neutral at best, then per-capita GDP would look a whole lot different.<<

You still choose to pretend there is "good" and "bad" GDP, and that there are two sides to the GDP "ledger".

There aren't.

There is just GDP. It is just adding-up.

Which, regrettably, leads you to make up utterly fanciful stuff like this:

>>perhaps we could look at all the economic activity in an area before it suffers a disaster, and compare it to the activity in the cleanup and re-establishment phase after the disaster, and everything that is new or increased compared to what it was like beforehand would not be added to GDP!<<

Sadly, such a risibly impossible proposition only underlines how little you understand about the subject.

I wouldn't dream of lecturing you on plant phyla. I humbly suggest you adopt a similarly cautious and respectful attitude to economics.

>>Could you please reword it in understandable format. Thanks.<<

If you are unable to grasp the stuff I've been explaining to you up to now, the task of making this "understandable" to you would be positively Sisyphean.

"...positively Sisyphean." The power of history to explain a myth take...

Dear Pericles,

Regarding that fifth labour of Hercules - now the little legal issue of the King of Augeas' payroll has been adjudicated - I have already decided that bit of handiwork doesn't count as one of The Labours but since payment was made I was wondering how the Augean accounts should treat the event?

There was environmental damage to two rivers but there was also an organic fertilizer redistribution.

Or should I continue to do the logical (and very Hellenic) thing and follow convention and simply count the payment made for one day's casual labour as a part of the total economic activity since it was both countable and definably economic?

I suppose the people downwind for the last 30 years or those now downstream of the Augean stables have different ideas about whether it was a positive or a negative. Young Phyleas will get himself all tied in knots trying to decide that one.

Regards, Eurystheus (off of Tyrins), Anax

cc. Palamedes and sons Accounting, Ludwig

Pericles and Ludwig,

Leith van Onselen has published a graph showing growth in total and per capita GDP. Growth in the latter has increased very little over the past 8 years

http://www.macrobusiness.com.au/2014/03/gdp-is-rubbish/

van Onselen makes some of the same sorts of criticisms as Ludwig. While Ludwig is a botanist, Leith van Onselen is an economist and has worked for the Treasury, the Victorian Treasury, and Goldman Sachs.

Pericles is also ignoring issues of distribution. While there has been respectable economic growth in the US over the past 20 years, even on a per capita basis, essentially all of the benefit has gone to the folk at the top. Most American men are earning lower real wages than in 1979. Population growth is only attractive because the costs are shared with the entire population, while the benefits go to a relatively few. Yes, a rich coastal city can build desalination plants once it has outgrown its natural water supply, but the cost per unit volume of water will be 4 to 6 times as great as for dam water. Pericles as a business owner gets a bigger market and more competition for the jobs he has to offer if there is population growth, but the higher costs for water are shared with everyone else in the community.

Thanks for that reference, Divergence.

One of the sentences that Ludwig should take to heart is this one:

"The occasional fool even suggests natural disasters are “good for the economy” because GDP…"

It's good to see that I am not alone in rubbishing this line of reasoning, one that Ludwig introduced earlier with this assertion:

>>Bushfires etc increase economic activity, all else being equal.<<

Mr van Onselen undermines his own credibility with a similar statement - suitably vaguely worded, of course, so that he doesn't have to explain it too much...

"A higher divorce rate boosts payments for childcare, lawyers and paid housekeeping, so it helps GDP, as do heatwaves and wars because of their demand on power."

What he fails to point out is that this economic activity is simply a substitute for other spending. Using "wars" is an absolute beauty of an own goal: if you make bombs, you can't use those resources to make saucepans, bicycles, whatever. So the activity of bomb-making, because it is measured as part of GDP in the same way that making bicycles would be, would deliver no "boost" at all, just record a move from one source to another.

If you kept on making bombs, of course, you'd soon run our of money. You would have lost both the ability to make the bicycles themselves, and at the same time the target market of people with money to buy them.

But that is simply common sense.

I will certainly agree that GDP is not the be-all and end-all of economic health measurements. But as I have said before, it one clear virtue is that it is a simple, added-up number. You can surround it with as many nice-to-haves and subjective desirables, but for it to have to have any value at all, you need to accept it as it is.

Deploying the argument that politicians misuse GDP figures is not a reason to distrust the numbers themselves, merely yet another reason to distrust politicians.

<< You seem determined to avoid seeing what is plainly obvious, Ludwig. >>

Sorry Pericles, it is precisely the other way around.

Of course there is a huge difference between Aust and Eritrea, which GDP reflects. Of course there is a correlation between GDP and wellbeing/genuine progress. But it is a poor one, which is corrupted by additions of economic activity which it shouldn’t include.

Why do you not want to acknowledge this?

<< Sadly, such a risibly impossible proposition only underlines how little you understand about the subject. >>

Lovely! You really did get out of the wrong side of bed this morning didn’t you!

I made an eminently sensible suggestion. The manner in which you resoundly condemn it suggests that it does indeed have merit!!
The logic is simple. I’m sure you can see it very clearly…. but of course are loathe to admit it.

You simply want GDP to remain as it is; a very highly flawed economic indicator. You’re not interested in improving it. And you are just going to condemn ANY suggestions as to how we might do that.

Yes? Or am I verballing you?

I wrote:

>> Could you please reword it in understandable format. Thanks. <<

You replied:

<< If you are unable to grasp the stuff I've been explaining to you up to now, the task of making this "understandable" to you would be positively Sisyphean. >>

That really is quite appalling. Why can’t you just clarify the relevant statement??

Hey, you’re a good writer. This is I think the first time that I have encountered a statement of yours that I just couldn’t fathom. So I did the right and sought clarification. And you are lambasting me it. That is of very poor form.

Gee Pericles, some of our correspondence is very good and friendly. Then you fall back into a quite substandard level of address. Come on, you can do better than that.

Can you please clarify your statement if you would be so kind.

And this is very tricky territory, by the way, Divergence.

>>Yes, a rich coastal city can build desalination plants once it has outgrown its natural water supply, but the cost per unit volume of water will be 4 to 6 times as great as for dam water.<<

Who are the people, I wonder, who object most strongly to the creation of a new dam? Why, the same people who believe that cities shouldn't exist in the first place, and everyone would be happier eating wichetty grubs and living in a yurt.

I exaggerate. But only for effect.

And many thanks for this, WmTrevor

>>The power of history to explain a myth take...<<

Love it.

Thanks Divergence.

I am pleased to find out about a couple more commentators – Adam Creighton and Leigh van Onselen – who can see the terrible folly of GDP as clearly as I can.

From the article:

< Thankfully, the ABS is developing new ways of measuring Australia’s progress, which includes a bunch of qualitative factors such as health, safety, equality, etc. Let’s hope that it gains greater prominence amongst commentators and policy makers. >

Let’s hope indeed.

.

Pericles, you wrote:

<< I will certainly agree that GDP is not the be-all and end-all of economic health measurements. >>

Well….. how could you not agree.

<< But as I have said before, it one clear virtue is that it is a simple, added-up number. >>

YES! That is its ONE….. and only…. clear virtue.

Simple added-up economic activity….. regardless of the merits of that activity, how it relates to health and wellbeing or to disasters… or population growth.

Some virtue!

Pericles,

While I strongly disagree with some of the Greens' policies, I find it amusing how they have become the scapegoat for everything. The truth is that our business class has the best politicians that money can buy, and it doesn't matter which wing of the Property Party is in power. What exactly can the Greens do if one of the major parties won't vote with them? Drum their heels on the Parliamentary carpet? Hold their breath until they turn blue? They are having so much success with asylum seekers, aren't they? Or with stopping fracking and other mining activities from damaging agricultural land, even with the farmers onside. The Greens would never be able to block more dams if they were a viable proposition. Unfortunately, there is only so much water in a catchment area, and dams can't be put just anywhere, as I am told by a friend who is a civil engineer.

It was reported in the newspapers that the last lot of water restrictions cost us all around a billion dollars, due to such things as cracks in walls and foundations, and elderly people injuring themselves while carrying water to gardens. The 2010/2011 Productivity Commission Annual Report puts the damage at $150 million just in Melbourne. Another example of socialisation of the costs of growth.

Ludwig,

Leith van Onselen is good value, and you can find other good articles of his at the Macrobusiness site. Not all economists have sold out or are stupid enough to believe in unlimited growth on a finite earth.

Not so sure about that, Divergence.

>>The Greens would never be able to block more dams if they were a viable proposition.<<

The last dam built in NSW was at Splitrock, 70km north of Tamworth. That was more than 25 years ago. Since then, every proposal has been blocked by greenies of one flavour or another. Like this one:

http://www.smh.com.au/environment/water-issues/nsw-opposition-dumps-plan-for-tillegra-dam-20100519-vddc.html

"The Liberals and Nationals are desperate to court the green vote in the marginal seats of Newcastle and Maitland, set to be key battlegrounds in the election."

In the end, what they succeed in doing is twofold. They raise the price of water for everyone, as the government is forced to resort to building expensive backup resources such as desalination.

Then they have the chutzpah to complain that there is a water shortage in NSW.

Much like the boy who murdered his parents, and then requested clemency at his trial, on the basis that he was an orphan.

Pericles, I’m beyond being flabbergasted by your last post!!

<< Since then, every proposal has been blocked by greenies of one flavour or another. >>

So what are you saying? – that everyone who opposes new dams is a ‘greenie’? That those people who would have lost their properties and livelihoods, and generations of family ownership if the Traveston Dam had gone ahead, are automatically greenies – even if they are the antithesis of environmentalists in every other way, and would never in a fit want to be thought of as greenies?

There are very good ‘non-greenie’ reasons for opposing new dams.

<< In the end, what they succeed in doing is twofold. They raise the price of water for everyone, as the government is forced to resort to building expensive backup resources such as desalination. >>

What an absolute shocker of a statement!

You blame those who oppose new dams for this! That is bizarre! You couldn’t be more wrong.

It is governments, vested-interest big business, the apathetic public and people like you who actually support continuous population growth who are to blame!

Meanwhile, when it suits you to put on your greenie hat and vehemently oppose something, it is somehow completely different. Re: privatisation of Sydney Royal Botanic Gardens: http://forum.onlineopinion.com.au/thread.asp?article=16202

That’s your worst post yet on OLO, Pericles.

Not at all, Ludwig.

>>So what are you saying? – that everyone who opposes new dams is a ‘greenie’?<<

But there has not been a single dam proposal for a generation that has not been opposed by a green faction of one kind or another. To me, that is strong circumstantial evidence supporting my assertion. While non-greenies might also object, they are far from being the ubiquitous presence that the tree-huggers display.

Let's take a look at Traveston, since you brought it up.

"Traveston Crossing Dam was a proposed water project that was initiated by the state government of Queensland, Australia, in 2006 as a result of a prolonged drought which saw South-East Queensland's dam catchment area receive record-low rain" (Wikipedia)

And the government response?

"Mr Garrett said he had made the decision [to reject the proposal] based on science and the "unacceptable impact" it would have on threatened species, including the Mary River turtle and Australian lungfish.

To which I can only say:

"Then they have the chutzpah to complain that there is a water shortage"

But you are spot-on with one of your statements:

>>There are very good ‘non-greenie’ reasons for opposing new dams.<<

I found this one:

"Only 17 per cent of Southeast Queensland is held in state forests and national parks, compared to 43 per cent of Greater Sydney. One obvious result is that the catchment areas for dams in SEQ are not a patch on the Sydney catchment areas."

That does put a limit on the government's ability to address the problem of water supply. But once again, the problem is exacerbated by a complete absence of political will.

Or as I said earlier.

"The investment deficit in other infrastructure... is principally a failure of political will"

>>Meanwhile, when it suits you to put on your greenie hat and vehemently oppose something, it is somehow completely different.<<

The desecration of inner-city open space is a world away from protecting the Mary River Turtle, don't you think?

Significantly, you probably don't.

Pericles,

So far as the Traveston dam is concerned, Pharyngula, one of the main biology blogs, got up a petition with 7,000 signatures to oppose the dam because of the threat to the Queensland lungfish, which is of great scientific importance. You may not have a problem with extinctions or environmental vandalism (unless they affect you personally), but many of the rest of us do.

There will always be opposition to dams, regardless of the environmentalists and the Greens, because people tend to object to having their houses, towns, or farms flooded for pretty inadequate compensation (funny thing that!). There would be nothing to stop the major parties from announcing that the dams were a bipartisan policy (just like mass migration, means testing the old age pension, the GST, etc.). They could even do a deal for two dams at a time in different electorates so that any electoral disadvantage for one party was cancelled out. The Greens would be able to do nothing to stop it. If the politicians didn't go ahead with the dams, there were doubtless other reasons for it. You (rightly) criticize Rrhosty for his pie-in-the-sky technological solutions to everything, but you are just assuming that the dams would make economic sense. In places like the Murray Darling basin, there just isn't enough water to keep the river healthy and provide all of the water that people want.

Ok, Divergence, I'll bite.

>>Pharyngula, one of the main biology blogs, got up a petition with 7,000 signatures to oppose the dam because of the threat to the Queensland lungfish, which is of great scientific importance.<<

What would be the impact on Queensland if this particular creature became extinct? It is not considered to be either a "threatened" or "endangered" species, and is of historic importance only. As far as I can tell from the documentation, there is nothing left that we can learn from it. Its status as a "living fossil" makes it interesting to scientists, but you would struggle to raise too much enthusiasm for it with the general population, I suspect.

As for the petition, I'm pretty sure I could get seven thousand property developers to sign a petition in favour of concreting over the entire Botanic Gardens, but that would hardly make a convincing case for it.

>>There will always be opposition to dams, regardless of the environmentalists and the Greens, because people tend to object to having their houses, towns, or farms flooded for pretty inadequate compensation (funny thing that!).<<

This frames the argument quite neatly as an economic one, with property owners objecting on economic grounds, and the greenies objecting on non-economic grounds. So once again, it is a case of having ones cake or eating it. If you want water in SE Queensland (or wherever) you need to choose between paying the price for it, or valuing the future of the Mary River turtle and the Queensland lungfish.

It's a straight political choice.

>> There would be nothing to stop the major parties from announcing that the dams were a bipartisan policy... If the politicians didn't go ahead with the dams, there were doubtless other reasons for it<<

Interestingly, in the case of Traveston, the Federal Minister for all things Green, Peter Garrett, unilaterally overrode the wishes of the Queensland people, as expressed in their own choice of government. Which would render your somewhat idealistic bipartisan solution equally irrelevant, don't you think.

<< Peter Garrett, unilaterally overrode the wishes of the Queensland people, as expressed in their own choice of government. >>

Hold on Pericles, that’s not right.

Just because the Queensland people installed that particular Qld government doesn’t mean they were predominantly in favour of the Traveston Dam being built, or any other dam, or of continuous rapid population growth. The government almost always gets elected because it is considered to be the slightly lesser of two highly evil choices!

<< While non-greenies might also object, they are far from being the ubiquitous presence that the tree-huggers display. >>

Sheesh, you and your silly pigeonholes!

Greenies, tree-huggers…. one gets the distinct impression that you consider them to be lower than a snake’s belly…. except of course when you’re being one of them… a la the Sydney Royal Botanic Gardens right next to your abode.

You are willing to be a greenie, and a quite radical one at that, when it comes to the mooted privatisation of Sydney RBG. That’s classic NIMBYism by the way. And yet you completely denigrate people who do the same sort of thing, either as NIMBYs or with a much broader-minded view of environmental threats.

Something doesn’t add up there Pericles!

continued

You wrote:

<< "Only 17 per cent of Southeast Queensland is held in state forests and national parks, compared to 43 per cent of Greater Sydney. One obvious result is that the catchment areas for dams in SEQ are not a patch on the Sydney catchment areas."

That does put a limit on the government's ability to address the problem of water supply. >>

YES! That DOES put a limit on the government's ability to address the problem of water supply!!

But despite this enormously important limiting factor, the same government continues to facilitate the rapid influx of new residents into southeast Qld!

THIS is THE problem! NOT ‘greenie’ opposition to mooted new dams!

<< But once again, the problem is exacerbated by a complete absence of political will. >>

YES. But the all-important absence of political will is in relation to the absolute imperative to CURTAIL population growth in SEQ! And to therefore stabilise the demand for water, instead of letting it rapidly increase with no end in sight!

<< The desecration of inner-city open space is a world away from protecting the Mary River Turtle, don't you think? >>

Yes. But is it more important? If you lived in the Mary Valley, which would you consider to be the most important?

Crikey Pericles, you’re a NIMBY greenie, otherwise non-greenie. NIMBYGONG!! Not in my back yard!! Nothing matters unless it is in your immediate vicinity!! Dear oh dear!

That's an awful lot of exclamation marks, Ludwig, just to have a "play the man, not the ball" moment.

But let's have a quick recap.

>>Just because the Queensland people installed that particular Qld government doesn’t mean they were predominantly in favour of the Traveston Dam being built<<

Your State government does its best to supply you with water, and the Federal government - in the person of a dedicated Greenie - unilaterally overrules them. Somehow, this is evidence that Queenslanders were against the dam in the first place, and would have preferred, given the choice at the ballot box, to vote to preserve non-threatened creatures over an improved supply of water?

Seriously?

But we have wandered a long way from the topic, so it is probably best to leave it there, in its usual place. You want to exert immediate control over our population, and see everything - including the simple concept of GDP - as a reason to fire up your mantra.

We get it. Let's move on.

Incidentally, Divergence...

>>So far as the Traveston dam is concerned, Pharyngula, one of the main biology blogs, got up a petition with 7,000 signatures to oppose the dam because of the threat to the Queensland lungfish<<

Just how far, in your opinion, should a US-based blogger influence government policy in Australia?

My answer would be, "to exactly the same extent as an Australian blogger is able to influence US government policy".

But I would be interested to hear your views on the topic.

Pericles,

You are assuming that foreigners should have no say at all if a particular national government is allowing a species to be driven to extinction. National boundaries are temporary, while extinction is forever. It could be argued that all of the different species are part of the common heritage of humanity. In my own opinion, if a government is behaving like a collection of environmental vandals, with effects going far beyond its own term of office, then foreign governments are justified in applying economic sanctions and the like.

Incidentally, we are far from understanding everything about the lungfish. It is widely accepted, although there is still some dispute, that the ancestors of today's American Indians directly or indirectly wiped out 32 genera of mammals, just in North America. These included horses, genetically identical to modern horses, several species of camels, several species of elephants, etc. Those early American Indians couldn't think of anything better to do with them than eat them and hunt them to extinction. The lack of suitable animals for domestication really hindered the development of their descendants. Unlike you, however, they had the excuse of not understanding what they were doing.

Your argument that Queenslanders weren't specifically asked about the dams, most likely at the price of some extinctions, would have more force if they had also been specifically asked if they wanted such high population growth in SE Queensland and nationally. Not only have our federal politicians not asked us, they have concealed their intentions to further boost the population (like Kevin Rudd before the 2007 election) or actively lied to us like Julia Gillard before she was elected, when she said that she didn't believe in "hurtling down the track to a Big Australia", before doing the exact opposite when in power.

<< That's an awful lot of exclamation marks, Ludwig… >>

Yeah, you bring them out of me, Pericles.

<< …just to have a "play the man, not the ball" moment. >>

You’re not averse to doing that. So watch the hypocrisy there. I made a very valid point – you can be a vehement greenie when it suits you, while absolutely lambasting greenies in general!

That alone is worth a whole page of exclamation marks!! !!

<< Your State government does its best to supply you with water… >>

Oh BALLS it does!! It did its best to rapidly increase the demand for water when it knew that water-supplies were critically stressed! It increased restrictions for most users, while facilitating a rapid increase in overall usage!!

Then it panicked when it got really dry and declared that SEQ needed a new dam.

What an amazing demonstration of mismanagement!!

<< …and the Federal government - in the person of a dedicated Greenie - unilaterally overrules them >>

Well how about that! Good on him. But if he’d been a REAL greenie, he would have told the Qld govt that the primary issue is population growth! Ah, but he couldn’t have done that without going totally against his own Federal government’s doctrine of massive immigration!

<< Somehow, this is evidence that Queenslanders were against the dam in the first place, and would have preferred, given the choice at the ballot box, to vote to preserve non-threatened creatures over an improved supply of water? >>

What?? This issue wasn’t spoken about before the election. No one voted one way or the other in relation to that dam proposal.

<< You want to exert immediate control over our population, and see everything - including the simple concept of GDP - as a reason to fire up your mantra. >>

I want our government to realise that high immigration is highly counterintuitive and should be progressively reduced. And that GDP is a rotten and grossly misleading economic indicator.

So are we done? Is this the end of this discussion?

Yep.

( :>)