Manufacturing and productivity improving in Australia

Michael Pascoe, in Manufacturing not dead, just dieting, looks at the latest RBA statistics and notes that there has been a small rise in productivity and in manufacturing jobs:

Here's a surprise: amid all the headlines about the demise of Australian manufacturing at the hands of our strong currency, militant unions, interfering governments, poor productivity and the solar eclipse, employment in the manufacturing sector actually grew in the year to the end of August.

What's more, productivity also has been improving and is now running at a bit above the average of recent years – admittedly faint praise. It still adds up to the standard liturgy chanted by the high priests of business being as dangerously outdated as the Catholic Church's celibacy and men-only rules.

Taxing the wealthy may create jobs, not destroy them

Mark Summer, in Conservative Exceptionalism, looks at some of the faulty economics of some conservatives, especially around the arguments against increasing taxes on the wealth.

But the biggest problem with O'Reilly's threat–and the threat of every conservative who ever longed to go Galt–is that they forgot one thing. A kind of surprising thing. They forgot how capitalism works. 

Markets are moved by a little thing called supply and demand. If the market supports yet another talk show, then someone will probably air the show. And that show will hire construction workers and cameramen, caterers and chauffeurs. If the demand isn't there, the show won't be there. Neither will the jobs.

...

The same market rules apply whenever someone hints that, because of increasing personal taxes, he might not choose to create a new job. That's fine. He doesn't have to. Because if the demand is there, someone will. A company that refuses to expand in the face of rising demand will be supplanted by one that will. In the real world, jobs are not created or destroyed out of spite. They are created because they fill a need to create something, whether it's objects or information, that the market demands.

He concludes with:

Instead of reducing jobs, higher taxes can actually stimulate the creation of jobs. They don't prevent the accumulation of great wealth, they just expand the base that's needed to support the narrow top of the pyramid. Without any direct "redistribution" in the form of the government taking dollars from one person and giving them to another, higher taxes still act to reduce the gap between rich and poor by providing incentive for real growth rather than simple concentration of wealth.

So as the clouds of Taxmageddon gather on the horizon, don't worry. Increasing taxes are sure to reduce the deficit and slow the widening gap in incomes. They won't reduce jobs. If they do end up cutting into Bill O's salary, or even convincing him to put down his microphone, just take that as a bonus.

There's one aspect that the author has missed I believe. One of the problems in the USA is that Governments have not been spending enough money maintaining critical infrastructure (think roads, bridges, etc.). This is largely because they have not had the revenue. That is the price paid for decades worth of tax cuts. If taxes were higher, especially on the wealthy, Governments would have the funds to spend on infrastructure. Of course it takes people to maintain that infrastructure, which means more jobs (note this does not necessarily mean "Big Government" as the work can be contracted out).

On privisation and public policy

In Trains of thought on power and politics Laura Tingle has excerpts from a Quarterly Essay by former Queensland Transport Minister Rachel Nolan. It's well worth a read.

Edit 2/12:  John Quiggin's response: Rachel Nolan on the case for privatisation.

Conservatism and patriarchy

In All About the Patriarchy Paul Krugman has an interesting take on conservatism:

There’s a strand of thought — I identify it especially with Corey Robin, although he’s not alone — that says that conservatism isn’t really about the things it claims to be about. It isn’t really about free markets and moral values; it’s about authority — the authority of bosses over workers, of men over women, of whites over Those People.

The rise of the expert blogger

In Nate Silver and the Ascendance of Expertise Bora Zivkovic writes about the rise of the expert blogger.

A few more companies who don't seem to need to pay tax

Mike Seccombe in Google: Don’t Be Evil, Don’t Pay Tax describes how Google uses a Double Irish Dutch Sandwich so it doesn't need to pay tax in Australia (and many other countries).

A couple of weeks ago, Google Australia's spokesman went straight to script when media reports began appearing about Google's latest filing with the Australian Securities and Investments Commission, which showed the company had paid just $74,176 in tax in Australia on last year's estimated revenue of more than $900 million.

In Tax fury: Google, Amazon, Starbucks admit: 'we hardly pay anything' AP report that Starbucks in the UK has come in for some questioning by a UK Parliamentary committee:

In sometimes bitter exchanges, MPs said they could not accept that Starbucks had reported losses for all but one of the 15 years it has operated in the UK, suspecting the firm was attempting to minimise the taxes it pays in Britain.

"You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn't ring true," said Margaret Hodge, head of Parliament's Public Accounts Committee on Monday.

Troy Alstead, Starbucks global chief financial officer, acknowledged to the panel that its taxable profits in the UK are calculated after royalties paid to its European headquarters in the Netherlands have been deducted. Alstead acknowledged that it has a special tax arrangement with the Dutch government covering its headquarters.

Companies operating in Europe can base themselves in any of the 27 EU nations, allowing them to take advantage of a particular country's low tax rates.

Alstead insisted that Starbucks was not seeking to mislead investors or tax authorities about its performance in Britain.

"We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically," he told the committee

I wonder if Mr Alstead had a straight face when he expressed his company's displeasure with their financial performance.

More on the Parliamentary inquiry, including video of an Amazon executive being questioned. At least Google admits that it is trying to reduce its taxes - Starbucks, Google and Amazon grilled over tax avoidance:

He further freely accepted that until recently, the Ireland company was paying a fee to a separate Dutch company within Google, purely for the purpose of reducing its taxes.

Australia doesn't have an economy wide carbon price

Andrew Leigh writes in Climate Change Mythbusters: An Economy-Wide Carbon Price that claims that Australia has the world's only economy wide carbon price are wrong:

In fact, Australia’s carbon price excludes agriculture, smaller emitters and household transport (although some businesses will face an effective carbon price via changes to the present fuel tax regime). Overall, it captures about 60 per cent of total carbon emissions.

Interesting article on living longer

Dan Buettner has a great article, The Island Where People Forget to Die, that looks at the Greek island of Ikaria where the local residents seem to live much longer than other Greeks, or indeed other people. A couple of things stand out for me: diet, lifestyle and the social conditions that cause them. The article is fairly long but it's well worth a read.

Ebook formats and DRM

Apprentice Alf has written Ebook Formats, DRM and You — A Guide for the Perplexed.

The link between unemployment and crime

"Possum Comitatus" has posted a great chart on Twitter showing Reported Robbery Offences as a function of unemployment for Queensland between 1997 and 2012.

Tax and Government spending is give and take

Ross Gittins in Be a happy taxpayer - the system benefits you has written a great article explaining how as we go through different stages of life we either subsidise others, or we are subsidised in turn.

See what all this proves? As well as redistributing income from rich to poor, the budget acts as a giant, multi-faceted mutual support scheme. At some points in your life you're a net contributor, at others a net recipient.

The system requires those without dependents to subsidise those with, particularly when the little blighters need educating. It requires the well to subsidise the sick. It requires those who work to subsidise those too old to work.

I think it's a good system, a sign we live in a reasonably caring, civilised society, where those in need get supported by the rest of us.

It's a reason we should pay our taxes with a lot less grumbling. The pity is, the system's so complex and convoluted it's not until you see a special study such as this that you realise how it works - it's inbuilt fairness and solidarity.

Something to think about next time you're tempted to justify a demand on government because you've ''paid taxes all my life''. You've also been benefiting all your life.

Decline in Amecian wages

Michael Greenstone and Adam Looney have looked at the decline in wages of many American workers in The Uncomfortable Truth About American Wages. They argue that the decline is actually worse than that reported because it is masked by changing role of women in the workforce and by the decrease in the male participation rate (the statistic only records people with jobs).

When we consider all working-age men, including those who are not working, the real earnings of the median male have actually declined by 19 percent since 1970. This means that the median man in 2010 earned as much as the median man did in 1964 — nearly a half century ago. Men with less education face an even bleaker picture; earnings for the median man with a high school diploma and no further schooling fell by 41 percent from 1970 to 2010.

They also report that women are also starting to see a decline in earnings:

Since 1970, the earnings of the median female worker have increased by 71 percent, and the share of women 25 to 64 who are employed has risen to 71 percent, from 54 percent. But after making significant wage gains over several decades, that progress has slowed and even reversed recently. Since 2000, the earnings of the median woman have fallen by 6 percent.

The authors attribute the downturn to a number of factors including "technological change, international trade and the decline of unions". However, what they are really concerned about seems to be the decline in skills and education:

Many of these forces have been around since the 19th century, but today, for what may be the first time in American history, we are failing to invest enough in our skills and productivity to stay ahead of these trends, and the impacts of this failure are reflected in the declining wages of many American workers.

Greenstone and Looney recommends improvements to the education system including college completion rates.

In the USA rich Democrat states subsidise Republican states

Matthew Yglesias in How The US Currency Union Works—Endless Subsidies To Low-Productivity Area:

Because rich people are Republicans but rich states vote Democratic, Democratic policies transfer wealth from Democratic places to Republican ones.

More evidence for global warming - ten charts

Joe Romm has put together Ten Charts That Make Clear The Planet Just Keeps Warming.

Why American politics is stuffed

A great article by Nick Bryant: Can Americans Agree ... On Anything?

Why I no longer buy The Australian

For most of my adult life I was an avid reader of The Australian and The Weekend Australian. I have to say that its been several years since I purchased either paper. With one exception I now no longer trust anything in The Australian or it's Saturday stablemate. The exception is the writing of George Megalogenis (but even then you sometimes need to ignore the headline).

Why don't I trust The Australian? I feel that it's no longer a newspaper of record. Instead it seems to have become an agenda driven publication. There is no way for me to tell if an article is accurate or biased.  To me the Australian is no longer impartial.

I also find the paper incredibly arrogant and thin skinned, even bullying and vindictive. Woe betide anyone who criticises The Australian.

All this is a shame as The Australian can be a very good newspaper at times. It has carried out and reported on investigations that any editor would be proud of. But for me that's now all for nought, because as I said, I no longer trust it. Nor do I need it any more, the Internet now brings me other sources of news.

It is widely reported that The Australian runs at a loss and that Rupert Murdoch keeps it going for the influence it brings. But, one day Rupert will be gone. When that day comes many expect his replacement to close the loss making venture. I will be saddened when The Australian dies. Not for the loss of what The Australian now is, but for the loss of what it might have been.

Articles on the Australian
John Quiggin: The Oz is not a newspaper
Robert Manne: Margaret Simons and the Australian
Robert Manne: Payback: The Bullying Tactics of the Murdoch Press
David Marr: The Politics of News: David McKnight’s 'Rupert Murdoch: An Investigation of Power'
Tim Dunlop: Manne up: taking on The Australian
Sally Neighbour: The United States of Chris Mitchell: The Power of Rupert Murdoch and the Australian’s Editor-in-Chief

Sex offender registers don't work apparantley

Monica Attard in Sex Offender Sites. The Facts and Greg Barnes in Isolating sex offenders doesn't make us safer both write that sex offender registers, far from making your children safer, may actually increase the risk to them.

Will the rich destroy America?

Chrystia Freeland, in The Self-Destruction of the 1 Percent argues that growing economic inequality in the USA will likely result in a long term decline in that country's economic well being. She compares the situation in the USA to the decline in Venice.

The story of Venice’s rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness.

The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.

Link for the Australian Real-Time Macroeconomic Database

Australian Real-Time Macroeconomic Database:

[P]rovides a macroeconomic database for Australia which includes measures of GDP, its components, prices, and key monetary and labour market statistics over the last fifty years as published and revised in real time. The vintages of data are collated from various sources and accommodate multiple definitional changes, providing a comprehensive description of the macroeconomic environment as experienced by Australian policy- and decision-makers.

Sexual inequality in the workplace

Jessica Irvine in Canberra's sex wars are underpinned by real sexual inequality in Aussie workplaces exposes some dreadful statistics highlighting discrimination in the work place:

5 : The number of female chief executives of Australia's top 200 companies listed on the stock exchange, or 2.5 per cent.

14.6 : Percentage of women on ASX 200 boards.

55 : Number of ASX 200 companies without a single woman on their board.

29 : Percentage of women in Parliament.

37 : Female members of the House of Representatives, out of 150 members.

29 : Female members of the Senate, out of 76 members.

$19.50 : Entry-level zookeeper hourly pay.

$15.90 : Entry-level personal carer or support worker hourly pay for providing care to our elderly on award wage.

17.5 : The percentage gender pay gap today between male and female full-time earnings, up from 15.9 per cent in 1994.