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 By definition they don't waste anyone's time - if they did they'd have been repealed long ago.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.

Fascism

"The Archdruid" whoever that might be, as written several posts on the history of fascism. I'm not sure how accurate they are but they're interesting reading:
Fascism and the Future, Part One: Up From Newspeak
Fascism and the Future, Part Two: The Totalitarian Center

Part one also had a link to the post Fascism, Feudalism, and the Future.

Climate change and the threat of bushfires

Nicholas Symons has some interesting graphs on climate change and bushfires: Be Prepared: Climate Change and the Australian Bushfire Threat

An argument for the abolition of private schools

Elizabeth Farrelly argues in Why private schools add little to education mix that all schools should be made public:

Private schools, on the other hand, add little. They build enclaves of privilege for those who need it least. They suck public funding, with three-quarters of non-government schools getting most of their funding from government sources. This is bizarre and unprecedented. And, as theologian Marion Maddox notes in her book Taking God to School, they guise all this as neo-liberal "choice".

More compelling still, as corporate lawyer and father of six David Gillespie argues in his new book Free Schools, private schools offer no guarantee of a better educational outcome. You can fork out $150,000 for a child's schooling and essentially get nothing for it.

Private schools may perform decently in league tables but only because they use the fee-hurdle to select for socio-economic status, by far the best predictor of academic success. They further skew their results by giving scholarships to select gifted children who will up their average.

In other words, says Gillespie, once you correct for socio-economic advantage, our education system adds no value to what children bring from home. Losing such schools therefore has no net negative. In fact, by flooding middle class energy into the public system, it would bring massive gains.

Gillespie points out that the best measure of how much value an education system adds overall is "resilience", that is, the chance a socially disadvantaged child has of performing to his or her full capacity as a human.

The world's best education systems - Japan, Finland, Korea - all have a resilience measure over 50 per cent. In Australia it's 30 per cent, and falling.

This is bad for us all. Your private school may sit near the top of our league table, but as Gillespie notes, "we are riding a sinking tide, and a sinking tide lowers all boats".

Rising health costs are sustainable if we're willing to pay for them

Recently Joe Hockey has argued that Australia's spending on health is unsustainable and the Government will no longer be able to afford it in the future. In Spending on health is sustainable precisely for the reason that we want to sustain it Peter Martin disputes Hockey's claims. As Martin right points out, we can find the money if we want to.

There's little doubt that we want to pay more tax for health. The latest increase in the Medicare levy (due in July) was approved with scarcely a murmur. It'll help fund the National Disability Insurance Scheme.

Pascoe on the low hurdles Hockey is setting himself

In Joe Hockey sets himself the lowest of hurdles to save the world Michael Pascoe observes that "Joe Hockey frames the rules for the local politico-economic game to suit himself with hurdles so low that they're part of the grass".

Hockey has set a goal of an economic growth rate of 3%, something that we were likely to achieve anyway:

That's the benefit of setting the rules: announce a target that you're on track to achieve, achieve it and then announce yourself to be the winner and an economic hero.

Pascoe goes on to write:

Australia does face various challenges, as all economies do. There are improvements that need making, unnecessary spending that can be trimmed, entitlements that should be reduced (mainly at the upper end) and a more efficient and equitable taxation system to be pursued, starting with ending the blatant rorting. In various speeches, sound treasury secretaries and RBA officials have made the case for reform being necessary to protect and enhance our standard of living.

Unfortunately though, attempts by either side of politics to launch rational reforms are immediately reduced to political games. On the available evidence, it increasingly looks like May's budget preparation, with all its huffing and puffing, is more about politics than economics. Dressing it up further in a supposed cloak of G20 global commitments borders on moving it into farce.

A couple of articles on class in Australia

The Conversation is running a series on class in Australia.

In Bogans and hipsters: we’re talking the living language of class Christopher Scanlon argues that the user of labels like bogan and hipster proves that Australia is not a classless society. I especially liked the ending:

Once again, I kicked off the tutorial by asking if they thought class existed in modern Australia. They looked at me as if the answer were obvious: of course it did.

I asked one student why he was so certain. He replied simply:

    I live in Frankston and work at Woolworths.

In Denial to celebration: political responses to class in Australia Geoffrey Robinson looks at the reasons why conservatives supported economic egalitarianism in the middle part of the 20th century and now oppose it.

Yet more evidence wind farms are not harmful

Lenore Taylor in No reliable evidence wind farms harm health, peak research body says writes that a recent National Health and Medical Research Council draft report has found there was "no reliable or consistent evidence that windfarms directly cause adverse health effects in humans".

Hardly a surprise. However, the Government intends to hold more inquires. No doubt they'll eventually be able to create one that gives the answer the want. They just need an inquiry head who's ideologically sound and fact adverse.

Bluntshovels calls austerity for what it is

In Austerity is bullshit El Gibbs writes that austerity isn't about reducing debt, it's "about a bunch of rich, mostly blokes, cutting the heart out of the social safety net".

Increase in heat wave days in Australia

Alexander White has tweeted that:

The number of heatwave days averaged across Australia has gone from 2.6 in 1951-60 to 5.8 in 2001-10.

His tweet included the graph below:

I think I can see a trend.

There is no crisis in the sustainability of the Disability Support Pension

Matt Cowgill writes in DSP reform: a solution in search of a problem that, contrary to the impression given by the minister and elements of the press, we've seen a decline in the proportion of people on the Disability Support Pension.

There is no crisis of sustainability in our disability support system.