The first half was my post on Value added and public spending. Growth only occurs where the value of what is produced is greater than the value of the resources that have been used up during production. There was a time when everyone understood that, even economists. Alas no longer. But there is a second element that matters, and that is the price mechanism. Unless you have a functioning price mechanism, where market prices reflect relative scarcity, you cannot tell what anything actually costs.

Which brings me to this: I, Mechanical Pencil: Why a socialist economy can never work. There you will see why the price mechanism matters and how crucial it is that the prices in the market are actually set by people who are trying to earn a living from what they sell. This is what I say about the price mechanism:

This is so important that almost nothing is as crucial as this for ensuring our prosperity continues. Without a functioning price mechanism, in which businesses set their own prices for themselves without government involvement, an economy absolutely will not work. Unless businesses are permitted to set their own prices based on their own production costs and customer demand, you are guaranteed to live in poverty.

The buffoons who “manage” the Victorian economy are creating disaster. It is why the most important element in the Victorian budget dealt with mental health: ‘Very targeted’: Acting Premier defends mental health levy.

Business owners have warned the levy set out in Thursday’s budget is a tax on employment and will hit those in the retail, hospitality and tourism sectors hard.

“These are very targeted, appropriate, well-thought-out revenue initiatives that impact less than 5 per cent of employers,” Mr Merlino said.

“Many of those are multinational companies. It is very targeted, and in terms of the benefit to businesses, right across the state of Victoria is massive….

The acting Premier rejected the notion that Victorian businesses – which were badly hit by the state’s second wave of the coronavirus pandemic caused by government failures in hotel quarantine and contact tracing – were being penalised for the state’s mistakes.

He also said a $4 billion budget blowout over the past two years on Victoria’s Big Build project had no impact on funding mental health services as the two were in different funding streams – the former in capital spending, and the latter on service delivery.

Looneys everywhere.