… is from page 45 of David Friedman’s 1996 book Hidden Order:
If the best things in life are free, meaning that you can consume as much as you want of them without giving up anything else (true of air, not true of love), then their marginal value is zero!
George Selgin sends me by e-mail the following:
From the Preface to Voltaire’s On the Lisbon Earthquake: “’All is well, the heirs of the dead will increase their fortunes, masons will make money rebuilding the buildings, beasts feed off the bodies buried in the debris: this is the necessary effect of the necessary causes; your particular misfortune is nothing, you will contribute to the general welfare’: such talk would have been as cruel as the earthquake was dreadful.”
Voltaire here ‘got it.’ People’s natural Keynesian bias toward worrying about demand isn’t new, and, alas, it isn’t going away. That’s one reason it’s such a shame that Keynesianism elevates that bias into a seemingly respectable economic theory.
The kernel of truth in Keynesianism – that people, in seeking to increase their cash balances, can cause overall economic activity to fall below the level necessary to supply people with what they all would demand if nominal prices were sufficiently flexible – is bloated into the go-to ‘explanation’ for all real and perceived macroeconomic ills.
Keynesianism strikes me in much the same way that modern neocon thinking strikes me: conveniently simplistic for people who feel that decisive government intervention is required.
In the case of the neocons, they perceive a genuine problem – a foreign country ruled by a dictator of the sort that we Americans wouldn’t tolerate. The neocons ignore the incredibly complex array of social institutions and cultural mores that allow, perhaps even encourage, the likes of a Qaddaffi or a Hussein to gain and remain in power. That is, the all-important ‘micro’ issues are ignored, enabling the neocons to conclude that if the good guys take out the bad guys, nations once suffering the inexplicable misfortune of being ruled by bad guys will surely turn to their own internal good guys as their leaders. What stands between the people of such tyrannized nations and civil society is simply the bad guys and their henchmen. (Why bother looking more deeply than the brilliantly obvious fact that bad guys are in charge? Can’t you see that that’s the problem??) And those who warn against U.S. military intervention to rid unfortunate nations of their bad guys are blind dreamers; people out of touch with reality. “What do you propose we do?” ask the neocons contemptuously. “Nothing? Ha!”
Similarly with Keynesianism. Keynesians perceive a genuine problem – unemployment. Unemployment is obviously caused by inadequate demand by employers for workers. This inadequate demand for workers, in turn, seems so obviously to be caused by inadequate demand for the goods and services that these employers produce. (Gosh, even fifteen-year-olds can see this fact!) All that stands between workers and full-employment is inadequate aggregate demand. (Why bother looking more deeply than the fact that employers are demanding too few workers and that, if demand for employers’ outputs were higher, employers’ demand for workers will be higher. Can’t you see that that’sthe problem??) So the solution is simple: remove the inadequate demand. Government spending is an oh-so-obvious means of increasing aggregate demand. Increase “G.”
No need, really, to worry about any ‘microeconomic’ issues that might be in play. In a developed economy, those microeconomic issues can be safely assumed to be pretty much alright, or at least to be issues that will aright themselves if only the big bad guy – inadequate aggregate demand – is slain. And anyone who objects to such an obvious course of corrective action is some sort of ideologue or stupid person, too dense to see the obvious. “What do you propose we do?” ask the Keynesians contemptuously. “Nothing? Ha!”
(Of course, one difference between these two situations is that microeconomic mal-adjustments in market economies are far more likely to aright themselves, if left alone, than are the cultural issues give rise to tyrannies.)
Andrew Bolt – Thursday, August 25, 11 (11:44 am)
Actually, the damage being done by clinging on to Thomson outweights the dangers of cutting him loose:
Graham Richardson says the Craig Thomson affair is damaging the Labor brand and has an “awful smell to it”.
Mr Richardson said Labor had to hang on to Mr Thomson to stay in government, but “Craig Thomson is getting desperately hard to cling on to”.
He said the next election would be “as bad or worse as NSW” if a circuit breaker wasn’t found.
“It’s just unsavoury to cling on to him, that’s the problem,” he said on his “Richo” program on Sky TV last night.
“This has got an awful smell to it that won’t go away.
Andrew Bolt – Thursday, August 25, 11 (11:20 am)
I do not know how reliable this polling technology is, but the results don’t surprise me:
SUPPORT for Independent Lyne MP Rob Oakeshott has hit rock bottom.
An exclusive poll, conducted for The Port Paper by Australian market research company ReachTEL, shows Mr Oakeshott’s primary vote falling from 47 per cent in August 2010 to a meager 14.8 per cent.
The three-question survey, carried out across the Lyne electorate on Tuesday night, also shows an overwhelming 70.4 per cent of Lyne residents do not want a carbon tax, with 24.9 per cent in favour and 4.8 per cent undecided.
Putting the Gillard Government into power doesn’t turn out to have been a smart career move.
Andrew Bolt – Thursday, August 25, 11 (10:51 am)
Malcolm Farr nails a real villain in the Craig Thomson affair, with a column devoted almost entirely to his sins:
Opposition Leader Tony Abbott now is leading the Opposition’s outrage, despite not showing it back in 2009 ...
Age columnist Shaun Carney says the Thomson scandal is actually a wonderful opportunity for the previously hang-dog Gillard Government:
I would very much like to believe that Barrie Cassidy is wrong - that Labor MPs do indeed care when union leaders allegedly pinch $100,000 from their own members:
But we should not lose sight of the fact that Thomson - guilty or innocent - is being especially and uniquely persecuted because the Government hangs by a thread. Had that not been the case, would this ever have become a matter for the police?
It would in fact be abnormal not to care.
(Thanks to readers Mark and Cameron.)
Andrew Bolt – Thursday, August 25, 11 (10:03 am)
He’s changed his mind, and won’t get much thanks from the Government for doing so:
Just hours after the multinational announced Australia’s highest ever corporate financial net profit of $US23.6 billion ($22.46 billion) for the 12 months to June 30, the CEO delivered a bleak assessment of the Gillard government’s plans to put a price on carbon.
“This, if you boil it down to its barest essentials, is a tax on coal exports from Australia,” Mr Kloppers told reporters in London.
“And that is a tax which competing countries like Indonesia, South Africa, and so on, do not have.... it’s an economic dead weight cost because it’s basically just an export tax, and those costs get discounted into investment decisions.
“I wouldn’t be so presumptuous as to speak for the industry as a whole, but on average if you increase the cost you will get less investment than you had before...”
Last year, Julia Gillard and Bob Brown welcomed Kloppers’ foolish support for a carbon dioxide tax:
“I welcome the statements today from Mr Kloppers,” Ms Gillard told reporters in Canberra…
Senator Brown said the businessman’s remarks legitimised the federal government’s promised climate change committee of MPs and experts that will work towards pricing carbon.
“Mr Kloppers’s very timely statement yesterday - which is based on pure commonsense - will give strength to this committee, as it deliberates on the best way forward to a carbon price for Australia,” he told ABC Radio today.
I expect Gillard and Brown will not now be praising Kloppers’ commonsense.
Andrew Bolt – Thursday, August 25, 11 (09:59 am)
This sounds to me a phone call that should not have been made:
THE NSW Police Minister, Mike Gallacher, is being accused of improperly interfering in the Craig Thomson affair after he phoned the Police Commissioner, Andrew Scipione, to discuss calls for an investigation into the Labor MP soon after being contacted by the opposition Senator George Brandis.
The Herald has learnt that Mr Brandis phoned Mr Gallacher last Friday to alert him of his intention to write to Mr Scipione asking him to investigate allegations that Mr Thomson used a union credit card to pay for escort services.
Mr Gallacher has confirmed he returned Mr Brandis’s call and then telephoned Mr Scipione that evening to discuss what he had been told by Mr Brandis. The NSW opposition police spokesman, Nathan Rees, said the telephone calls by Mr Brandis and Mr Gallacher created the perception of political interference.
There was no need to tell the Police Minister what would turn up in his in-tray anyway:
In a statement, Mr Gallacher’s spokesman said the minister called Mr Scipione to tell him ‘’that the federal shadow attorney-general, George Brandis, had advised he intended to write directly to the NSW Commissioner of Police’’.
A spokeswoman for Mr Scipione confirmed the conversation and said: ‘’There was no other discussion on the matter.’’
Andrew Bolt – Thursday, August 25, 11 (07:06 am)
The Craig Thomson affair adds a whiff of scandal to an accident-prone government. Tony Abbott will be contemplating an early by-election or vote of no confidence in the government, citing reprehensible circumstances as Malcolm Fraser did in 1975.
The Rudd-Gillard imposition of big measures without adequate forethought, such as the mining and carbon taxes, is redolent of Gough Whitlam’s crash through or crash approach.
(Thanks to reader Michelle.)
Andrew Bolt – Thursday, August 25, 11 (06:54 am)
Here is the real stolen generation, for whom there will be no apologies:
The fifth Overcoming Indigenous Disadvantage report released today ...found Aboriginal children are now seven times as likely to be abused as non-indigenous Australians.
That was worse than a 2009 report, which showed they were six times more likely to be abused.
The 2011 report also said substantiated abuse had increased in the past decade from 15 to 37 per 1000 indigenous children, compared to non-indigenous children at four to five per 1000.
This partly reflects increased reporting of child abuse, the report said.
In 2010, for example, 48.3 per 1000 indigenous children aged 0-17 were under care and protection orders compared to five per 1000 non-indigenous children.
Note that last statistic. If we have so many Aboriginal children now under care and protection orders for good reason, was it really “genocidal” and “shameful” to have them put in care in the past? For what were we actually apologising?
The “stolen generations” myth was a toxic lie which has stopped us from saving yet more children.
The truth is that Aboriginal culture is broken and all the mythologising of it only betrays a new generation of Aboriginal children.
(Thanks to reader CA.)
Andrew Bolt – Thursday, August 25, 11 (06:35 am)
Contrast and compare…
Bolt: Does it not amaze you that a union who represents the lowest paid workers in hospitals does not call in the police when it is beyond question on any reading of how it actually occurred that members’ money was illegally used to purchase the services of prostitutes?
Emerson: Well, see, there you go again. You’ve just said that members’ money was illegally used. This is the subject of a Fair Work Australia investigation. You want me to preempt that by saying, yes, I agree that money was illegally used. I do not know that.
Bolt: But Craig Thomson agrees with that.
Emerson: I do not know that money was illegally used. I do not know that, Andrew.
Bolt: So do you think it was possible that (the union credit card) was legally used to purchase the services of prostitutes?
Emerson: I don’t not know that it was illegally used and I am not going to entertain you by saying, yes, Andrew, you make a very good point, money was illegally used. I will not do that...
TONY JONES: OK. Is there any way at all that the use of a union credit card to pay for prostitutes could be legitimate?
KATHY JACKSON: Of course not. Of course not....
TONY JONES: OK. If the identity of the person who used the credit card for that purpose, for the purpose of paying for prostitutes, is discovered, would that person, in your opinion, in the opinion of your investigators, have committed a crime?
KATHY JACKSON: Um, well, they would have committed a crime, I would say - like, I’m not a legal expert, but in my view, as the national secretary of the union, as a member of this union, anyone in our organisation who misuses union money, be it for, you know, prostitution services or other unauthorised services, has committed a crime, and in particular they’ve defrauded the membership.
The Gillard Government’s cover up is shameful, and a betrayal of working Australians - especially of Australian unionists.
Andrew Bolt – Thursday, August 25, 11 (06:22 am)
ANTHONY ALBANESE (Infrastructure Minister): Well, we are seeing the longest dummy spit in Australian political history. Tony Abbott has a view that if he can’t control it, he’ll try to wreck it. It doesn’t matter whether it’s about the economy or jobs. You never see them happier than when there’s an announcement about job losses.
CHRIS UHLMANN: Why should the Coalition help, though; they’re in Opposition? Why shouldn’t they try to get government, particularly if they believe that you’re an incompetent government?
ANTHONY ALBANESE: What they should try to do is actually hold the Government to account.
CHRIS UHLMANN: Aren’t they doing that?
ANTHONY ALBANESE: They don’t even bother to do that. Today we saw them not even worry about Question Time.
CHRIS UHLMANN: But you shut it down.
ANTHONY ALBANESE: We’ve seen that - no, they shut it down with their suspension of Question Time at five minutes past two. Once again, as they have done throughout this year, Tony Abbott determined to engage in destructive behaviour. This guy is a wrecker, he’s not a builder.
CHRIS UHLMANN: But it was open to you to continue Question Time; you shut it down. Didn’t it look like a government on the run?
This Government is now dysfunctional. It must go. At the very, very least, it needs to get itself a new leader who can offer not just a fresh start, but steady, competent leadership.
Andrew Bolt – Thursday, August 25, 11 (12:03 am)
It seems that only the Gilllard Government now wants Craig Thomson to keep his mouth shut:
Mr Thomson has denied allegations he used union credit cards to pay for the services of prostitutes when he was head of the HSU between 2002 and 2007.
The HSU’s national executive agreed today to refer all relevant documents to NSW police, following a two-hour meeting in Sydney.
Mr Thomson has also rebuffed federal opposition calls to make a statement to parliament about the matter.
But his HSU successor Kathy Jackson, who is also a Labor Party member, said Mr Thomson needed to explain himself.
“Craig Thomson is a former national secretary so he should go on the public record and make a public statement about his position,” Ms Jackson told AAP.
“What we say is we became aware of irregularities following his departure as national secretary. If Craig Thomson is asked to make a statement, of course it would help.”
Listen to Michael Smith’s interesting interview with current union secretary Kathy Jackson. She’s emerging as the lone person involved in the case to have acted with integrity.
- is surprised the Fair Work Australia investigation has taken so very long.
- does not rule out others being implicated in the Thomson affair.
- won’t comment on Julia Gillard’s defence of Thomson.
- says union president Michael Williamson, Labor’s national vice president, did not front yesterday’s meeting, but chaired it by videolink for reasons unexplained.
The Australian reports:
THE head of a leading Melbourne escort agency has raised fresh allegations linking Labor MP Craig Thomson to the use of prostitutes in the city in 2005 and 2006.
The manager of the escort agency has told The Australian that its records show the company provided services booked in the name of “Craig Thomson” at Melbourne’s Pacific International Suites in November 2005 and at “The Grand”, most likely the Grand Hyatt, in December 2006.
When pressed for further details, the manager provided The Australian with the contact mobile number allegedly used for the bookings. The number provided was the same as that used by Mr Thomson when he was head of the Health Services Union.
Thomson did not return the paper’s calls to respond to these allegations but has previously denied calling prostitutes.
AS boss of the Health Services Union, embattled MP Craig Thomson obtained thousands of dollars in cash advances at overseas ATMs while on a three-week trip to New York, London and Paris, it can be revealed.
The withdrawals - from a trip in May and June 2004 - were made using a union-funded MasterCard, which Mr Thomson had issued to him without the knowledge of the HSU executive…
Mr Thomson’s bank account statements during his time at the HSU - obtained by The Daily Telegraph - reveal he systematically withdrew large amounts of cash from the MasterCard.
Ten pages of bank statements detail hundreds of transactions from 2002 to 2007, which would have topped up his $154,536 annual salary by $102,034.45....
Bank statements show Mr Thomson routinely used the MasterCard to withdraw amounts in blocks of $200, $300 and $500, including from Crown Casino and Qantas airport lounges.
An initial HSU audit, by Melbourne chartered accountants Dick & Smith, found “insufficient support for most credit-card transactions” over a six-month period in 2007, while Mr Thomson was running for the seat of Dobell in the 2007 federal election.
“The (union) executive should be aware that, in the unlikely event of a GST audit by the Australian Taxation Office, replacement tax invoices may be needed,” Iaan Dick, principal of Dick & Smith, wrote in a report to Ms Jackson.
Crimes have been committed that can bring down the Gillard government, and they are dumb crimes. As a former NSW chief of detectives told me: ‘’We are ultimately dealing with the crimes of a fool, whomever that fool may be, who has left a documented trail like a bleeding elephant in a snowfield.’’
This trail of evidence of fraud, lying and cover-up now roils around the federal Labor MP Craig Thomson. It has also engulfed the NSW Police Force, which implausibly refused to act until a victim had filed a complaint.
‘’Utter garbage,’’ said the former detective. ‘’Police do not need to have a complaint from a victim in order to investigate a crime.’’…
‘’It is difficult to understand why it took [the police] so long to act,’’ said the former detective. ‘’I believe a union member went into a central coast police station attempting to make a complaint but was turned away … We are not talking about a complicated case. Given resources, this brief would represent two to three weeks’ work before somebody could be charged.’’
Tick, tick, tick.
The union seems otherwise so well-behaved:
(Thanks to readers Pira and Alan RM Jones.)
Andrew Bolt – Thursday, August 25, 11 (12:02 am)
Again I wonder about our immigration and multicultural policies:
Another home has been shot up in Sydney’s west, making it the seventh shooting in six days, but the occupants have chosen not to cooperate with police…
NSW Police on Tuesday established Strike Force Restore, made up of local detectives and the Middle Eastern Organised Crime Squad (MEOCS), to determine if the drive-by shootings in the Fairfield and Merrylands areas were linked.But detectives say they have a difficult task ahead of them because some members of the community are afraid to come forward.
Andrew Bolt – Thursday, August 25, 11 (12:01 am)
There are several striking similarities between Barack Obama and Julia Gillard.
Andrew Bolt – Thursday, August 25, 11 (12:00 am)
My column for the Herald Sun iPad ap should be here today, providing the lawyers haven’t had kittens. It’s on the real danger in the Thomson scandal.