A rising proportion of long-term unemployed is not good

In Our long-term unemployment headache Greg Jericho explains the long-term unemployed ratio and why we should be concerned about an increase in the proportion of long-term unemployed.

Repeal Day = Pseudo Reform

In Tony Abbott's pseudo reform on the spin cycle Ross Gittins writes that the Government's "repeal day" is more about spin than actual deregulation.

In the process, of course, we'll have changed the meaning of ''red tape''. It's meant to mean bureaucratic requirements that waste people's time without delivering any public benefit. In the hands of the spin doctors, however, it's being used to encompass everything from removing dead statutes to the supposed deregulation of industries.

Repealing redundant laws and regulations dating back as far as 1900 is mere window dressing. By definition they don't waste anyone's time - if they did they'd have been repealed long ago. Their primary purpose is to allow Tony Abbott to quote huge numbers: today I announce the abolition of more than 1000 acts of Parliament and the repeal of more than 9500 regulations. A trick you can pull only once.

Somewhere in there is some genuine, time-wasting red tape we're better off without, but it doesn't add up to much - hence the need for so much padding. Governments of both colours are always promising to roll back red tape, mainly because it gives people such an emotional charge.

Ross goes on to point out that what seems red tape to some may actually be important for the economy and country (e.g. "supplying information to the Bureau of Statistics").

The other problem with this "repeal day" is that it's hiding some controversial moves:

But the most objectionable feature of the whole red tape Repeal Day charade is the way it has been used as cover for rent-seeking by the Coalition's industry backers. It's an open secret the protections for investors provided by the Future of Financial Advice legislation are being watered down at the behest of the big banks, which want to be freer to incentivise unqualified sales people to sell inappropriate investment products to mug punters.

Then there's the strange case of the Charity Commission,which was set up only recently to reduce inefficient regulation and red tape. It's to be abolished despite the objections of most charities, presumably because the Catholic Church doesn't like it. It's being claimed all these dubious doings will ''drive productivity, innovation and employment opportunities'', not to mention ''creating the right environment for businesses of all sizes to thrive and prosper and to drive investment and jobs growth''.

Ross also asks show the Government came up with the supposed savings of $700 million a year:

Yeah sure. The claimed savings of $700 million a year (don't ask how that figure was arrived at) are equivalent to 0.04 per cent of GDP, and yet they'll work wonders. Must be an incredible multiplier effect.

The Murray Gell-Mann Amnesia Effect

There are plenty of sites that quote Michael Chrichton explaining the Murray Gell-Mann Amnesia effect. For example:
http://seekerblog.com/2006/01/31/the-murray-gell-mann-amnesia-effect/
http://www.firstthings.com/blogs/firstthoughts/2011/08/media-credibility-and-the-murray-gell-mann-amnesia-effect/
http://gellmannamnesia.blogspot.com.au/2013/01/whats-with-blog-title.html

Basically, imagine you're reading an article in the newspaper. You know something about the topic of the article and so you know the article is totally wrong (I think everyone with some level of specialist knowledge has experienced this). However, you continue reading the newspaper and accept everything else in it as correct. That's the Murray Gell-Mann Amnesia Effect.

Increasing inequality may be inevitable

In A Relentless Widening of Disparity in Wealth Eduardo Porter looks at the work of Thomas Piketty who argues that our economic system will see a rise in inequality and increasing concentration of wealth in the hands of a few.

Mr. Piketty’s is based on data. He just has much more: centuries’ worth, from dozens of countries. He distills from them a simple historical regularity. The rate of return to capital — understood broadly to include machinery, land, financial instruments, housing and everything else — is usually higher than economic growth.
This was particularly true before the Industrial Revolution, when economies didn’t really grow, but it prevailed even after economic growth took off in the 19th century.
This means that the income from wealth usually grows faster than wages. As returns from capital are reinvested, inherited wealth will grow faster than the economy, concentrating more and more into the hands of few. This will go on until capital owners decide to consume most of their income and stop reinvesting as much.

Is there a solution?

Is there a politically feasible antidote? Professor Piketty notes that the standard recipe — education for all — is no match against the powerful forces driving inherited wealth ever higher.
Taxes are, of course, the most feasible counterweight. Progressive wealth taxes could reduce the after-tax return to capital so that it equaled the rate of economic growth.

Spotting a liar

In So you think you can spot a liar? Stephen Dawson, a former police officer, details how most of us aren't as good at spotting liars as we think we are.

We think we can look into the eyes of someone and know when they are lying, or when they are being truthful.

Indeed, some of us can for some people. The problem is that none of us really knows with certainty who we can "read", and who we can't. And both game theory and evolution suggest that it will always be neck-and-neck between the ability to tell lies that can't be detected and the ability to detect those lies.

There are advantages to any group of people for all to be (reasonably) truthful. But there can be even greater advantages to an individual if he or she can lie and get away with it. There lies the ability to be a free rider on the efforts of others.

As some people are better at spotting liars than others, so some are better at telling lies than others. Some can be very good at it indeed.

At a TED presentation Pamela Meyer gives some tips on How to spot a liar.

Could antibiotics be making us fat?

Pagan Kennedy looks at the link between antibiotics and obesity in The Fat Drug.

Base-load electricity from renewables

In Renewable energy finally makes economic sense Mark Diesendorf argues that renewable energy can reliably supply base-load electricity. On those rare occasions when additional electricity is needed he advocates biofuelled gas turbines.

Solar to beat coal

Evan Beaver in Crushing Solar Optimism argues that the continuing improvements in the efficiency and cost of solar will put coal fired electricity generators out of business.

Voter Id in Australia

In "A fix for what’s not broken: why Australia doesn’t need voter ID" Jennifer Rayner looks at the issue of voter identification and multiple voting. She rightly points out requiring voters to provide identification won't prevent anyone from voting more than once.

Gittins on economic rent

In Who's taxing who, and who pays the rent? Ross Gittins explain the concept of economic rents.