Monthly Archives: December 2015

And now the heavyweight division

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Republicans have been very reluctant to attack Obama for the whole of the past seven years. Whether it is the courtesies of the American system or Obama has the photos I don’t know. But now we shall see since he has moved to attack Donald Trump himself. This is from the NYT and featured at Drudge: Obama Accuses Trump of Exploiting Working-Class Fears.

President Obama said in a radio interview airing on Monday that Donald J. Trump, a leading contender for the Republican presidential nomination, is exploiting the resentment and anxieties of working-class men to boost his campaign. Mr. Obama also argued that some of the scorn directed at him personally stems from the fact that he is the first African-American to hold the White House.

That Obama reached for the race-card is disgusting and despicable but par for the course. Since nothing anyone in any leading position has said has referred to the President’s racial background – half white, half black – that he grabs for it in every controversy he is part of has degraded the American political system since it allows him to ignore the substantive parts of any criticism. But lets get to this business about resentment and anxieties, which are not just held by men, and not just held by members of the working class. Let us go on to what he had to say:

“If you are referring to specific strains in the Republican Party that suggest that somehow I’m different, I’m Muslim, I’m disloyal to the country, etc. — which unfortunately is pretty far out there, and gets some traction in certain pockets of the Republican Party, and that have been articulated by some of their elected officials — what I’d say there is that that’s probably pretty specific to me, and who I am and my background,” Mr. Obama told Steve Inskeep, an NPR correspondent. “In some ways, I may represent change that worries them.”

I just think he’s a far-left loon, and that pretty well covers the kinds of change he represents. If his standard of concern is whether something might “destroy the United States”, as he says below, I’m not sure short of a nuclear war what he would include. This is truly disturbing:

“This is a serious challenge — ISIS is a virulent, nasty organization [!!!!!] that has gained a foothold in ungoverned spaces effectively in Syria and parts of western Iraq,” Mr. Obama said, referring to attacks the group organized in Paris and apparently inspired in San Bernardino. “But it is also important for us to keep things in perspective, and this is not an organization that can destroy the United States.”

As for destroying the United States, there are other nations along the pathway to the US that might find things have deteriorated to a very considerable extent because of the American President. Think about this, a reminder of where things have gone with Iran:

The Iran deal isn’t merely sub-par diplomacy, it is a scandal. I don’t see how a president who took seriously his duty to preserve American security could have entered into it. There is another scandal, too: a journalistic one. Here, as in so many instances, reporters have covered up for the Obama administration by deliberately failing to report the facts surrounding the Iranian nuclear debacle. It would be interesting to compare the number of minutes that network news broadcasts have devoted, over the last few months, to the fulminations of Donald Trump with the minutes they have devoted to the crumbling of the Iran agreement. Likewise with column inches in our supposedly sophisticated newspapers.

But Obama has now taken on Donald Trump who will or will not react and will or will not reply directly to what has been said. This really is a moment of truth. I don’t know why it has taken so long for such a showdown to have occurred, but the time has now arrived. Is Trump up to it? We are now about to find out.

My favourite economics text of all time

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It’s that time of year again. Even as living standards continue to slowly ebb, there is still virtually no understanding why spending of itself cannot hasten growth and increase employment. I have just submitted a paper on my favourite economics text of all time, Henry Clay’s Economics: an Introduction for the General Reader as the hundredth anniversary of its first publication in 1916 is next year. It is why I adopted his title when I wrote my own text. This is part of what I wrote on Clay’s second edition that was published 26 years later and after the publication of The General Theory in 1936. He is trying to explain what’s wrong with Keynesian theory.

Clay then makes the crucial point in noting the error in trying to generate recovery through higher spending, which brings his argument back to the very core of the classical theory of recession and unemployment.

“The error lies in ignoring the patent fact that neither money nor income as such provides employment but only spending.” (Clay 1942: 265)

This is the fundamental difference between classical theory and modern macro confined to a single sentence with no elaboration. It is merely Clay’s restatement of John Stuart Mill’s “demand for commodities is not demand for labour” (see Kates 2015). Clay knows this – it is a “patent fact”. So obvious may it have seemed to him he may not have felt any need to explain further. For whatever reason, this single sentence is his only attempt to bring the classical denial of the possibility of demand deficiency into his critique of the Keynesian Revolution that surrounds him.

The downwards spiral we are now part of is to see our economies floundering, thinking that public spending will improve our economic prospects, therefore increasing public spending and then finding things only getting worse. A hundred years ago they may not have been as wealthy and their technology may not have been as good, but they did at least understand what was needed to hasten recovery after an economic downturn.

Soros and the progressive internationalist cause

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This is a theme I have dwelt on before, progressive internationalism. Every era comes to an end for some reason. This is the reason for the end of ours. Here we have more of the same urged on by George Soros. The author here seems to see some kind of benevolence in Soros’ actions, but the actual drive is hatred for the open societies by the left.

George Soros, “a prominent international supporter of democratic ideals and causes” is no exception to the rule.

Under the false pretext of “democracy promotion” the notorious magnate created a network of foundations and instigated a series blatant regime changes in Eastern Europe and the former Soviet republics after the collapse of the USSR.

“Now his foundations are up to their eyeballs in promoting propaganda serving the US-UK war agenda for destroying stability in Syria as they did in Libya three years ago, creating the current EU refugee crisis,” Engdahl stresses.

It seems that Soros is making every effort to exacerbate the ongoing refugee crisis in the EU: the infamous philanthropist is urging European leaders to accept about one million of refugees annually and at the same time he is encouraging the desperate asylum seekers to flee to Europe.

And it will just go on because Soros is far from the only one with such attitudes and beliefs in positions of power.

Hillary Clinton plays Princess Leia

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princess leia hillary clinton

hillary as princess leia

hillary as princess leia 3

princess leia hillary clinton

Hillary Clinton above and Princess Leia to the right. I don’t know if it was intentional, but it hit me around three quarters of the way through the film that it’s the same person. I might add that it is very difficult to get publicity stills of Princess Leia off the net. If I can find a better one at some stage, I will post those as well. [And now, in updating two months later at the beginning of March 2016, there is not a single other photo available anywhere. Quite, quite remarkable and you do have to wonder. But more than ever the resemblance is striking.]

And it’s not the only reason to avoid the film. You may go as I did because you went to the first one and have been going ever since. But as a film and a night’s entertainment, it may have been the worst film I have seen all year. See Mark Steyn for a more extended take. Nevertheless, in keeping with the last remaining social convention of modern America, I will say nothing about the story itself.

Let me also add this from Instapdundit: The ‘secret weapon’ behind Star Wars who was Marcia Lucas, George Lucas’s first wife, now departed from the scene and almost erased from history, who was the one with the judgement that made Star Wars work.

The TnT show

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Who does this sound like?

Donald Trump is a standard-issue liberal-leaning businessman who, having decided that his best chance for glory lies with the GOP, found a few hot button issues that appeal to conservatives. If you move beyond these issues and get him off-message, he reverts to the liberal notions and cliches that predominate among the rich and famous.

The only difference between how Trump is described and our Malcolm is that he hasn’t even found a single one of those issues, hot button or not, that appeal to conservatives. Whatever he does that is reminiscent of the the conservative side of the ledger is only being done because he has been forced to by the 43 who would be in open rebellion if he tried to dodge the original agreement. But if you want to have some idea of what the PM is like, let me take you to Geoffrey Luck’s review of Malcolm Turnbull’s biography found at Quadrant Online. If you are looking for evidence that Malcolm has always been a man on a mission, go to the link. Here is a bit from the start on how he ended up leading a party of the right without having any principles to match.

Well explained is how despite the temptation of many ALP friends and mentors, Turnbull made the objective decision that in Labor, his wealth would ultimately frustrate his obsessive ambition to become prime minister.

I have no idea what Trump will be like as President but there he will almost surely be, in the same way that I still have no idea what Malcolm will be like as PM although that is what he now already is. But both from the business class, both from the left and both overflowing with confidence in their abilities.

An imagined Donald Trump on Hillary Clinton

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https://youtu.be/qUGT30gGtiI

More parody. This was picked up at Powerline which is described as this rendering of Donald Trump as re-imagined by Masterpiece Theater. I assume that the words are Trumps even if not the sound. Whether this is the actual transcript being followed, the points made are also extraordinarily accurate, and nothing I have ever heard from an actual Republican in quite such a devastating way.

Movie rebellion

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This is a great parody that unfortunately you can only see at the link: How Ken Burns would tell the story of ‘Star Wars’. Tonight we will see the latest instalment. Since the first (Episode IV), it has been more of a duty to complete the set but off we will go, if for no other reason than to make sense of parodies like this one. And I did laugh at the idea of Senator Jar Jar Binks.

On filmic matters of a similar kind – dealing with Hollywood’s love of violent rebellion against established authority – we went to see Suffragette . What I had never appreciated was how violent these protests were. The film also did lead me to this documentary about the single most famous moment in suffragette history.

https://youtu.be/-G4fJ9I_wQg

For me, the documentary was more interesting than the film but these are the more systematised views: Rotten Tomatoes: critics 74%/audiences 72%; IMDb: 6.9.

“I’m with Tony Abbott” writes Mark Steyn

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And if you want to know why, you need to read When the Arab Spring Blooms in Paris and San Bernardino… wherein we find:

My view of the Arab “Spring” remains what it was five years ago. As I said to Megyn Kelly on live TV an hour after Mubarak resigned, this is the dawn of the post-western Middle East – and more broadly the post-American world. The “Facebook Revolution” went, predictably enough, the same way as the Iranian revolution: All the western-educated intellectuals come home and assure the world’s media that there’s nothing to worry about, the theocrats are pussycats. So in Egypt we were told that moderates like Mohamed el Baradei would get together and there was no chance of the Muslim Brotherhood coming to power, just as we were told in 1979 that Mehdi Bazargan et al would be calling the shots and Khomeini and the ayatollah had no real interest in governing. And then the moderates get shoved aside – as they were in Iran by the mullahs, and as they were in Libya by the tribal militias, in Egypt by the Muslim Brotherhood, in Syria by ISIS, in Yemen by the Houthi… And, even in Tunisia, where the “Spring” began, the tourist hotels are empty since the jihad boys gunned down Europeans sunbathing on the beach.

Tony doesn’t make it till the last para but it’s worth the wait. And I might add that the most notable aspect of this reference to Tony Abbott is that Mark Steyn, writing for a worldwide audience, can use Abbott’s name as a metaphor for a particular set of political beliefs and the actions that go with them. There really is no one else.

The aim is not to scare you, however . . .

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budget summary

This is from The Public Knowledge Blog which has the above chart among many other insights that are not normally found in public discussion. It really does make a difference to see these things in front of you this way. Here’s another that tells a more historical story, but just as depressing as the first chart, if not more so. The sheer damage done by public spending and deficit finance is hardly understood anywhere, and certainly seldom by those on the receiving end of the cash and payments.

debt and deficits

If you own a stock of assets already, like a house and a car, your livings standards will only be slowly eroded but downwards they will come. But if you are paying as you go, you will feel your living standards slipping away and unless you have some way to protect your income, things will only get worse. The attack on super is just one form in which our falling productivity will manifest itself in lower personal incomes. Economic management is frightening when you can see what’s going on. The Turnbull-Morrison slowly-slowly approach only works for a while, and only on the political side. The economy will continue to wear away unless things are turned around and private sector activity without any form of government subsidy becomes the order of the day. The innovation statement is more colossal waste and evidence they do not have a clue about what needs to be done.

Portable Long Service Leave

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I have just made a submission to the Economic, Education, Jobs & Skills Committee of the Victorian Parliament on the extension of Long Service Leave. There are employees who do not have LSL. The Committee is therefore looking at whether this represents some form of inequity, how it might be rectified and what would be the costs of change. These are the points I have made.

There are employees who do not have Long Service Leave. The Committee is therefore looking at whether this represents some form of inequity, how it might be rectified and what would be the costs of change. Let me therefore make a number of initial points.

First, this is an historic form of payment that exists only in Australia and New Zealand. It was introduced in colonial times so that after twenty years in the colonies, someone could return home to visit the family. This is a vastly different world from our own. Then the calculation was one month to go back to England, one month to visit and one month to return. Its original purpose has, in our own time and with modern transport, entirely disappeared.

Second, Long Service Leave was specifically introduced as an incentive for workers to remain with an employer. This may have had some advantages in times of labour shortages. In the modern world, however, it is, if anything, an impediment to labour market flexibility. An employee will remain with an employer even if other better opportunities become available as the date of eligibility draws closer.

Third, businesses experience Long Service Leave as a cost. Provision must be made to fund a replacement over the period the employee is on leave. It is not one of the major costs of labour, but it remains a consideration that must affect employment.

Fourth, for key employees, Long Service Leave can be a problem for a business if the particular function cannot be undertaken adequately by a replacement. It is thus not just an added impost but is also a form of disruption which are more difficult to deal with.

Fifth, expanding the range of Long Service Leave will have a small cost on some businesses whose impact will wash out over the course of around three years. But even if it will wash out, it should not therefore be assumed that the impact will be negligible and it certainly will not be zero. At the end of three years, the number of employees in the industry that has newly introduced portable Long Service Leave will be lower than it might otherwise have been. In a labour market that turns over around a million employees a year, it would be hard to detect this loss of jobs. Nevertheless, raising the relative cost of employment for some industries will have a negative impact on growth and a negative impact on employment.

Sixth, the effect on the employees themselves must be considered. An employer recognises when taking on a full-time employee that there may be a cost seven years from then as the Long Service Leave pro rata period comes into effect. But with portable Long Service Leave, the effect, if the liability comes in the form of an entitlement to a period of leave, may induce some employers to reject candidates for jobs they might otherwise have engaged. If an employee is about to enter the period where Long Service Leave applies, an employer may prefer an alternative candidate where the period is not as short.

Seventh, there will also be the cost and disruption perhaps ten years into the future of any employee who is engaged if Long Service Leave is introduced where it had not previously been available. Most private sector employees do not remain with the same employer for a decade, so for most it will merely amount to a sum of money. With Long Service Leave well and truly embedded in the economy, virtually every firm will recognise the need to make provision for such absences and the costs they entail. The certainty is that with such a mature entitlement, the cost of Long Service Leave has been financed by a lower rate of wage payment over the previous period.

Conclusion: There is no particular reason to extend Long Service Leave.

There is no serious likelihood that anyone is being relatively underpaid at the present time because they do not have Long Service Leave. The labour market is a flexible market. Wage adjustments are attuned to the value of the work undertaken relative to the remuneration in full. People do tend to get paid their economic value.

Employees where Long Service Leave is not available currently receive more than they otherwise would receive if Long Service Leave were in place. Introducing Long Service Leave will lead to lower remuneration relative to what might otherwise have occurred.

It is quite possible that employees prefer to receive the relatively higher amounts of money they receive than have their incomes pared back to finance this future contingency.

The concept itself is an anachronism but an important part of our history. It should not be removed but there is no reason that it must therefore be extended.

Any change would be for populist reasons. It would raise costs in some businesses and lower employment in some industries. It would not make the labour market any more equitable than it currently is.

Unless there is some serious injustice which is invisible to me, I would leave matters as they are.