Political and corporate defeatism
The Spectator, 26 May 2023
C harles Mackay’s 1841, titled Extraordinary Popular Delusions and the Madness of Crowds has enduringly served to refute claims of collective wisdom. He described events like Dutch tulip mania and the 1711-22 South Sea Bubble as frenzies of collective investment hysteria.
In the modern era, every decade or so we have seen more such investment delirium, including the build-up to the 1929 Wall Street crash with lesser events like the 1970s Poseidon mining boom/bust and the 2007 collapse of US leveraged housing funds.
In all cases, investment frenzies ramped up share prices to stratospheric levels. Lessons have not been learned. The next debacle will centre on
Upshots from politicians delivering more free stuff and regulations
The Spectator, 24 May 2023
T he forerunner of democracy – a post-medieval one-man-one-vote – was propelled by radicals seeking greater freedom of trade, speech, and religion in the face of vested interests and intolerance.
Building upon gains in these areas, radicals promoted greater equality – first of incomes (by compulsory takings from the better-off) and subsequently augmenting this with regulatory measures on economic activities. At a later stage, some special privileges were extended to previously disfavoured racial groups. In this latter respect, people, at least in Western nations, are probably more accepting of non-mainstream race, religious, and sexual preferences than in any previous era.
.... Read online ..... pdf
Recessions are bad news for super funds
The Spectator, 11 May 2023
T he Commonwealth budget surplus stems from the nation’s resource assets, and to a lesser degree its agricultural strengths. But, rather than fostering these advantages, Australian governments are focused on negating them.
For agriculture, this is seen in ever-mounting land-use restrictions and in the Commonwealth’s intent on stopping the live sheep and beef trade.
The resources industry faces even greater environmental-based curbs on new proposals.
The Commonwealth Environment Minister, Tanya .... Read online ..... pdf
Energy: drowning in subsidies
The Spectator, 6 May 2023
P aul Broad, the former head of Snowy Hydro, resigned amid, according to the Australian Financial Review, an escalation of tensions with Energy Minister Chris Bowen. Broad did not comment on his reasons for resigning. In a recent interview with 2GB, he said ‘it will take 80 years not 8’ to transition to renewables. He seems to claim we need this transition, but I do not believe we do. Most political leaders are deaf to such views, which swim against a tide of activist enmity and businesses searching for subsidies.
You can’t. And the truth is, we need this transition. If it ever occurs, it will take 80 years, not eight. So there’s massive changes need to occur. And I’m deeply concerned about the rush. The notion that somehow .... Read online ..... pdf
Australian productivity growth lowest in 60 years
The Spectator, 25 April 2023
L ast month the Productivity Commission (PC) revealed that Australian productivity growth on the decade to 2020 was the lowest in 60 years. Mining and agriculture were the most efficient sectors, though productivity gains in some services – like medicine and digital services – may be hidden because of improved quality.
To avoid antagonising the dominant political ideology, with masterly understatement, the PC opines, ‘…abatement efforts could, in many instances, increase the cost of production and could put downward pressure on measured productivity, at least in the short term.’ The PC makes stacks of recommendations for improvement, including some that could raise productivity by freeing up investment .... Read online ..... pdf
Two cheers for democracy!?
The Spectator, 19 April 2023
T wo cheers for democracy! So wrote E.M. Forster speaking for the Bloomsbury set, the affluent intellectuals who were the leading ‘Wokes’ of the 1930s. ‘Two cheers’ was a half-hearted acclamation of a political outcome that, at least in the England in which they lived, had neither delivered government shorn of Victorian traditionalism nor advanced sufficiently along a socialistic path.
The Bloomsbury set would be more pleased with ‘diversity equity inclusiveness’ slogans that have been adopted by today’s professional elites and become omnipresent in all but a handful of democracies and in nations where Islamic politics dominates. .... Read online ..... pdf
Australia’s ‘green energy’ chimera
The Spectator, 12 April 2023
T he government has asked the Joint Committee on Trade and Investment Growth to inquire into ‘Australia’s transition to a green energy superpower’. It wants ideas on how to accelerate growth in sectors covering renewable energy, batteries, electric vehicles, and so on.
The inquiry attracted 125 submissions. A few submissions, like that of the Australian Environment Foundation (AEF), pointed out that the proposal rests on the case for reducing human-induced emissions of carbon dioxide but that there is no scientific proof that this would have any significant effect on our climate. And, the non-Western world is not going down that same path, with the consequence that the de-carbonising economic suicide into which the West is sleepwalking, can .... Read online ..... pdf
The unsafe Safeguard Mechanism
The Spectator, 28 March 2023
A nd so, the Greens have joined the ALP in imposing additional carbon taxes on the top 215 greenhouse gas emitting firms. In passing the so-called Safeguard Mechanism, the voluntary program that the Coalition originally introduced is converted into a requirement on the nation’s top mining and industrial firms to reduce their emissions by 30 per cent by 2030. Those emissions are said to be 137 million tonnes a year. Their curtailment builds up to constitute 40 million tonnes a year. This is in addition to abatement measures already in place, which confer a subsidy on wind and solar, that has enabled those energy sources to displace a quarter of the supply formerly provided by coal.
One way to meet the new reductions is by ..... Read online ..... pdf
Slow rolling crisis or banking wildfire?
The Spectator, 23 March 2023
The world’s leading funds manager, BlackRock, has argued the collapse of the Silicon Valley Bank (SVB) may start a ‘slow rolling crisis’. This may be so but, at this point, bank share prices have stabilised (Chinese banks have even seen their share prices increase).
SVB was only sixteenth in terms of size within the United States. Yet it, and the smaller Signature Bank, were bailed out by the Biden Administration, ostensibly on the basis that their failure would cause contagion across the system. Perhaps, as many have conjectured, other factors, including SVB’s important role as a lender and bag-holder to the speculative tech industry, may have helped its path to salvation. ..... Read online ..... pdf
Silicon Valley Bank: doomed to fail?
The Spectator, 15 March 2023
The basic question to ask about the collapse of the $200 billion Silicon Valley Bank (SVB) is, why did it take so long for such a collapse to occur?
The root cause of the bankruptcy is the vast increase in US government spending, which, like that of other governments, was not accompanied by matching increases in taxation. Inevitably, the outcome of that is an increasing money supply monetary policy. And the corollary of that will always be an increase in inflation.
When the US Federal Reserve started to combat the excessive supply of money it did so by the only way available – buying up debt – ..... Read online ..... pdf
Australia: suffocated by regulation and raided by greedy politicians The Spectator, 8 March 2023
Gary Banks in The Australian notes how government regulatory measures are destroying our vital comparative advantage in energy supply and promoting inefficient labour relations practices, while spending splurges have brought no improvement in outcomes, especially in health and education.
Years of over-regulation and excessive spending have been pushed even higher by Labor. The Commonwealth Government has to maintain the momentum of carbon abatement by massive new regulatory impositions on the major carbon dioxide emitting firms and forcing consumers to fund new spending in the transmission lines for wind and solar.
..... Read online ..... pdf
Climate change: short on proof, drowning in nonsense
The Spectator, 27 February 2023
The environmentalist creed in context
Environmentalism, more particularly its prevalent global warming strain, dominates politics. It is the fourth such banner raised by the disgruntled that has conditioned politics since Medieval times.
Earlier eras saw politics underpinned by a struggle against government taxation which in the anglosphere can be marked by Magna Carta (1215), the English Civil War, and the American War of Independence. France experienced the ‘Fronde’ in 1648, which placed restraints on the king’s ability to levy new taxes, eventuating in the French Revolution a hundred and forty years later when the king was forced to convene a Parliament to seek ..... Read online ..... pdf
Is coal making a comeback? Australian mining’s uphill battle The Spectator, 19 February 2023
Coal supplies a quarter of the world’s energy, oil and gas account for a half, and renewables – in spite of vast subsidies everywhere they are built – comprise just 7 per cent.
While Germany is being ridiculed for re-opening coal mines, even tearing down a wind farm to do so, it is claiming this is only a temporary departure from its decarbonisation transition.
Such assurances are not being given by the fastest-growing developing nations.
Indeed, Bloomberg reports, regretfully, that coal is making a comeback
Climate ruminations: the markets reject Chalmers
The Spectator, 13 February 2023
Combatting the perceived incidence of global warming is driving government policies. In Australia this has been obvious for many years, but for the ALP it was clarified by the publication in the Monthly of the Treasurer’s philosophy on the need to remake capitalism. Jim Chalmers claims this is necessary because energy policy cannot be left to genuine market forces when we need to combat the effects on the Earth’s atmosphere by the combustion of fossil fuels.
That rests on the theoretic construct that a doubling of CO2 in the atmosphere, which is likely to take place in the next 50 years, is causing about a 1 to 1.5°C warming and Australia, with 1 per cent of emissions, can be instrumental in stopping this. Most experts ..... Read online ..... pdf
"Chalming" no-one: Labor rommances communism
The Spectator, 29 January 2023
Jim Chalmers is proving to be the most iconoclastic Treasurer since the Whitlam government’s Jim Cairns, a man who only joined the Labor Party after his application to join the Communist Party was rejected. Cairns spearheaded a previous assault on conventional capitalist economic theory and, like Chalmers, sought to borrow, spend, and regulate the nation into prosperity with fairness. Both Chalmers and Cairns came into politics with doctorates in economic history – that of Chalmers was a hagiography of Paul Keating, whose policies he now wants to reverse.
Like Cairns, Chalmers faced a budget crisis but was unable or unwilling to make the expenditure reductions necessary to rectify this.
Energy chaos: the shape of things to come
The Spectator, 25 January 2023
Australian governments have made energy policies focused on achieving higher shares of renewable energy that they claim is the cheapest source of power. The Commonwealth government is planning for renewables to reach 82 per cent of supply by 2030, while the Liberal Party’s plan is for 85 per cent by 2050 and 61 per cent by 2030. State governments have additional plans. In pursuit of these goals, governments around Australia are being sucked into a vortex requiring ever-increasing controls, while seeing mounting cost increases.
Subsidies that amount to $6.9 billion per year have propelled wind and solar, which had virtually no market presence 20 years ago, to their current market share of 27 per cent. The CSIRO and other ..... Read online ..... pdf
Inquiry into Australia's transition to a green energy superpower
Submitted 22 November 2022
The inquiry seeks advice on how Australia can “transition to a green energy superpower”.
The Inquiry mentions a number of areas in respect to the “transition”, including:
• where trade and investment activities are already having a positive impact; and
• emerging and possible future trends.
It further seeks advice on how government agencies can assist in identifying opportunities and in assisting and subsidising new investment. It has particular interest in how activities can be assisted in areas the government has determined to be prospective. These, it says, include renewable energy, battery storage, energy supply and infrastructure, electric vehicle industry, infrastructure; advanced manufacturing, and services and technology.
The Australian Environment Foundation notes multiple failures where industries designated by governments as being highly prospective have received favourable treatment from tariffs or support through financial assistance. None have succeeded. Some of these have been in the areas now, with little supporting evidence, once again being re-affirmed as worthy of support. ..... Read the submission here
The Old Man’s Tale
by Viv Forbes
The council man was adamant:
“The Law must have its way,
The shed you built is not approved
It must come down today.”
“No doubt the shed is safe and strong
And no one has complained,
But plans and rules must bind us all
Or anarchy will reign.”
The old man clenched his horny hands,
He gripped the planner’s arm,
Then changed his mind and led him out
To look around the farm.
“You see that shed” the old man said,“With shingle roof and wattle wall,With no advice from coots like youMy Grandpa built it all.”
“He came out here from Birmingham
With no help from the Crown,
Without a passport or a card
He sailed to Sydney town.”
“He got himself a riding horse
Bought cows and found a dray,
But sought no travel permits
As he left for Moreton Bay.”
“There were no maps to guide him
Once he left the city blocks,
And flooding of the Richmond
Cost him half his mob of stock.”
“But when he got to Moreton Bay
A sickness swept the place,
So Grandpa saddled up again
To see a safer base.”
“For weeks he struggled northwards
Thru the bush and hostile blacks,
Until he reached a mighty stream
Which stopped him in his tracks.”
“The soil was deep and fertile
And the flats were green and lush,
So Grandad thought he’d squat a while
He had no need to rush.”
“He cleared the scrub and dug a well
And found himself a wife,
He brought her to that wattle shed
To start their married life.”
“Then rangers tried to take his land
(For squatters rights were spurned.)
My folks were forced to sell their stock
To buy the land they’d earned.”
“My Pa was born in that old shed
He worked to earn his land
‘Twas he who built the homestead
And no planner lent a hand.”
“The sweat of generations
Feeds parasites like you,
And now you tell us builders:
‘This shed will never do.’
“With subtlety and cunning
You have nibbled at our rights,
You’ve taxed away our substance
So now we cannot fight.”
“But this is where I draw the line
And I won’t be alone,
So if you try to smash my shed
I’ll fight for what I own.”
“So clear off or I’ll clout you
Do not bother us again,
Take all your forms and files and fees
And shove them up the drain.”
The planner started shouting
But old Nigger bit his leg.
He cleared the fence, and yelled a threat:
“When next I come you’ll beg.”
The wreckers came next morning
But the neighbours got there first.
They stood six deep across the gate
And bid them do their worst.
Before the planners could react
Before the police could call
The old man’s son, a barrister,
Restrained them with the law.
He quoted laws and precedents,
He combed the ancient books,
He tied the council up for months
In writs and counter suits.
By then there were elections
And the old man led a team;
They sent the planners packing
And restored the builder’s dreams.
Once more a man could build a shed
Without a planner’s chit
And no one could invade his home
Unless he had a writ.
The planner got an honest job
The red tape was undone,
The Old Man got a Knighthood
His mighty fight was won.
Collapse of the $35 billion Sun Cable
The Spectator, 16 January 2023
Last week saw the collapse of Sun Cable, a pie-in-the-sky $35 billion plan by alternative energy enthusiasts, Andrew Forrest and Mike Cannon-Brookes, to generate solar energy and transport it by cable 4,200 kilometres to Singapore. The taxpayer provided $14 million for the project’s solar system, Australian-developed 5B. But major spending, which amounted to $210 million before Andrew Forrest pulled the plug, came from the two entrepreneurs.
Last week also saw Energy Minister Chris Bowen release his consultation for the disarmingly named Powering the Regions Fund. A centrepiece of this was weaponising the ‘Safeguard Mechanism’ from the emission reporting requirement that the Coalition ..... Read online ..... pdf
Dark money
The Spectator, 11 January 2023
Recent years have seen a strengthening dominance of politics over individual and commercial decision-making. This is readily evident in the growth of regulations and government spending increasing from under 20 per cent of the economy a century ago to around (and over) 50 per cent today.
Within democracies, these developments are due to electorates demanding income redistributions and tolerating increased national debt – oblivious to the adverse effects on their own future living standards. There are very few political leaders of stature like Singapore’s Lee Kuan Yew, Margaret Thatcher, or Donald Trump who seek to persuade voters of the folly of such demands. Most opt for. ..... Read online ..... pdf
Batteries not included
The Spectator, 29 December 2022
Renewable energy battery farms threaten to cripple the economy with cyclic costs
The replacement of fossil fuels (and nuclear) by wind and solar is said to be a ‘transition’ implying, like that from sail to steam and horse to motor power, that this is being inexorably pushed by consumers adopting a lower cost technology. In fact, the ‘transition’, wherever it is taking place, is due to government subsidies and regulations. Not one significant unit of wind or solar power generation anywhere in the world has been installed without such assistance
Moreover, a wind/solar-rich electricity system requires expensive features that are naturally present or available at a trivial ..... Read online ..... pdf
Chris Bowen’s rendezvous with bad ideas
The Spectator, 22 December 2022
Back in July 2022, Chris Bowen the Minister for Climate Change and Energy, launched the latest CSIRO electricity costs report which says wind and solar are the cheapest forms of electricity supply. He said, ‘This underlines the need for Australia and the world to invest heavily in renewable energy sources to put downward pressure on power prices.’
He continues to call for eliminating coal and gas in Australia, claiming this is necessary to prevent harmful climate change. Climate change was the focus of his September address to the American Australian Association. He said 80 years ago, ‘Curtin and Roosevelt had a rendezvous with destiny. Our job is to avoid a rendezvous with ..... Read online ..... pdf
Energy collapse: it all begins with a market cap
The Spectator, 14 December 2022
Thousands of years of experience – from the ancient Babylonians and Roman Emperor Diocletian, through to modern times – have demonstrated how price controls prevent the allocation of scarce goods to their most valuable uses, lower short-term production, and cause investment to seize up.
The inevitability of such outcomes is lost on Australia’s political class. Politicians, egged on by self-interested and socialists, are once more embracing price controls that were abandoned in the 1980s when the Hawke-Keating government accepted market prices stemming from supply and demand as the most efficient means of running the economy
ESG: climate virtue bleeding super dry
The Spectator, 7 December 2022
B usiness, where the profit motive is explicitly dominant and where the hundreds of millions of direct and indirect owners want to see it remain the crowned ruler, might be expected to reject spending that syphons off profits to political causes… And yet, nearly every firm funnels funding to politically acceptable causes, in the main involving those of a social and environmental nature.
Sometimes, pressured by governmental regulatory stances, like the soon-to-be mandatory reductions on the top Australian emitters, a growing number of firms also engage in expenditure that replace fossil fuel derived energy with more expensive wind and solar. Also important is the avoidance by superannuation fund managers of ..... Read online ..... pdf
Dan enters the pantheon of ‘great’ leaders
The Spectator, 28 November 2022
N ow the hurley burley’s done, and Dan Andrews is in the pantheon of the state’s great leaders, it’s time to see what Victorians voted for.
Like other electorates in the Western world, Victorians proved themselves to have a large appetite for government spending. The Lib-Nats joined Labor (and, of course the Greens) in proposing big increases in hand-outs. For Labor, these included subsidies for electricity, travel, kindergartens, and ‘infrastructure’.
But, reflecting voter preferences for free stuff, Labor was reticent in approving tax increases to cover these increases. These election gifts therefore (as did the Liberals’ offerings) add to the ..... Read online ..... pdf
Victoria’s looming energy disaster
The Spectator, 23 November 2022
A centrepiece of Victorian Premier Dan Andrews’ campaign is to renationalise Victoria’s privately owned electricity businesses. He claims that the private owners have scammed ‘$23 billion in profits off pensioners, families, and businesses’.
The state’s electricity assets, previously managed by the State Electricity Commission of Victoria (SECV) were sold under the Kennett government in the 1990s. Kennett inherited a near-bankrupt state.
The SECV had been a drain on government finances due to its excessive levels of staffing. Over-staffing is a hallmark of ..... Read online ..... pdf
Our retreat from rational economics
The Spectator, 16 November 2022
In today’s world, government spending accounts for up to and (in the EU) over 50 per cent of GDP – Australia’s at 38 per cent may be understated due to it being a federation. In the 1920s, no significant government spent more than 20 per cent of its nation’s GDP (federal spending in America and Australia was 4 per cent 6 per cent respectively).
Sovereign debt is now well in excess of 100 per cent of GDP in most EU countries, America, and Japan – Australia’s is 57 per cent. Until 100 years ago no state went into debt except to combat an existential crisis – indeed few states had the creditworthiness to do so.
Greta and her green-communism
The Spectator, 8 November 2022
Many breathed a sigh of relief when Greta Thunberg announced she was not going to attend COP 27 Climate Change meeting which is now underway at Sharm el-Sheikh in Egypt. The COP process is a ‘greenwashing scam’, she explained.
It seemed that the girl, although not even having reached the age of 20, had already emerged from the catharsis of teenage simplistic idealism. Was she having doubts about promoting a goal of dubious worth at a cost that is unknown but without a scientific breakthrough is incalculably high? Seemingly so, and that corroborated the notion that at a coming of age (historically at 21), she reached a maturity society expects of each emerging generation to take balanced judgements ..... Read online ..... pdf
Andrews’ Leninist approach to power
The Spectator, 24 October 2022
Last week, Victorian Premier Dan Andrews paraded his inner Lenin. He attacked Victoria’s privately owned coal generation businesses, claiming that they have taken ‘$23 billion in profits off pensioners, families and businesses’ and announced that they must be effectively driven out of business by state-owned alternatives.
Those facilities were sold to the private sector during the 1990s.
Jeff Kennett and his Treasurer Alan Stockdale pushed through the privatisations, which netted $11 billion for the ..... Read online ..... pdf
Dirty dependency: superannuation and ESG
The Spectator, 21 October 2022
Condemning those who have glued themselves to roads to create chaos, the (now former) UK Home Secretary Suella Braverman hit out at ‘the Guardian-reading, tofu-eating, Wokerati anti-growth coalition’. Her indignation about the economic damage caused by climate radicals is warranted, but she said nothing about the economic harm stemming from the fund-manager/governmental institutional wing of the anti-coal climate alarmists, which uses the Environment Social and Governance (ESG) pastiche as cover for its control aspirations.
Indeed, as she was speaking the Bank of England