Agree with the scepticism to the veracity and competency of the models.

I have some experience in building corporate models, PL/BS/CF stuff. They are pretty easy things, a few thousand variables, once you have the “sales”, capital, stock and trading days policies the rest is easy and you can get to within 5% overall accuracy which is good enough to “feel the trend”.

That is simple stuff. Government models have millions upon millions of variables.

But if we are talking about “happiness”, the drivers are subjective “emotions” rather than “quantitative” values, so “happy” has no base value to work from, unlike say a dollar income of value.

Then we get down to the nitty gritty.

Freds model suggests what? That greater government involvement in the area of wealth distribution generates greater happiness?

Government imposed wealth distribution can only be effected through taxation policy (open to any other suggestions but I know of no other fiscal lever that governments can play with.

Any assumption that higher taxes (to fund wealth distribution) generates greater happiness is false.

I recently checked.

I compared
1 happiness as measured as a life satisfaction index
against
2 most taxed, average worker.

Freds Theory and data suggest the greater the tax, to fund greater wealth redistribution, the happier (greater life satisfaction) people will be.

Now we could take direct comparisons.

Germany and France were used by Fred

Germany
Taxation 50.7
Life satisfaction 7.1

France
Taxation 48.3
Life satisfaction 6.6

Australia
Taxation 23.1
Life satisfaction 7.3

Overall, the correlation between wealth redistribution as measured by progressive tax levels and “life satisfaction” was -0.31

Now that is not much of a correlation until one considers the negative before the value.

The negative suggests that, whilst the correlation is not strong, what correlation there is, is of a negative nature. That would suggest that

The more wealth redistribution (higher taxes) which goes on the less life satisfaction is derived.

All Data sourced from

www.nationmaster.com


Happy to circulate actual detail values of all data and methodology to anyone interested

[Deleted for flaming. Poster suspended for one week.]

Interesting article, with unsurprising comments.

When is Australia going to realise: we are NEVER going to be able to compete with China and India on wages & labour costs. The only way our manufacturing and other sectors can compete is on skill, innovation and the quality of product and quality of service delivery. As Fred correctly notes, the recent WorkChoices campaign does absolutely nothing to promote skill, innovation or quality. Therefore, what direction are we going? I'm not sure, but I can say something for sure - it isn't a good time to be an average tradey or storeperson in Australia, as the erosion of pay and conditions is just about to begin.

I am not economist type so forgive my drivel.

I was reading that france has an hourly productivity rate higher than the US. They just work a lot less hours.

So why are we pushing for longer and longer hours? It seems apparent that hourly productivity drops off after a certain amount of time. There must be an optimal work performance cutoff time. maybe 36 hours?

yet we are producing a workplace culture where efficiency means nothing, it is who is there ingnoring their family who get the pay rise? It is called visibility/networking apparently. Only those who work late are rewarded rather than being performance rewarded.

Should we focus more on results rather than time?

This would engage more passion in work by those who need to get off to cook dinner, buy groceries, take kids to sports and generally have a life. There is no motivation for these workers at all, so we are ignoring probably our greatest resource, the human one.

A timely article, which confirms much of my reading on the subject though I would have appreciated references to supporting articles/studies etc.
Why haven’t the alternative parties used the success of Scandinavian societies as a model for a serious alternative to the direction Australia seems to be heading?

Truely I need to understand the shift in my lifetime in conservative thought.
Once in times of drought or almost any threat to farmers conservative goverments pork barreled and put cane farmers into public jobs all over Queensland ,to help the poor ?
Now some gain is seen in reduceing workers wages and rights?
This lurch to the right endangers Australias fair go mate way of life.
If our economy needs to creat a working poor so rich get richer we are truely in trouble.
A division has been opened and do not ever forget Howard makes battlers not defends them.