Asbestos. Why should the government walk scott-free?

OK here is the deal. Why do asbestos campaigners and labour unions only target private businesses for compensation? It is said that these businesses knew about the dangers but continued to profit the deadly products. But where was the government? Why didn’t the government step in and ban these products earlier? As a minimum we should investigate what the government knew about the dangers of asbestos at the time and why they didn’t outlaw its use.

Trust me, I am not one for government regulation. But the governments are only to eager to regulate our lives for our own “safety”. It is only fair that the victims should be entitled to know what the government knew about the dangers at the time and why they didn’t ban asbestos. Compensation may also need to be considered.

Call me a conspiracy theorist but the cosy relationship between the unions and the ALP may have something to do with the fact nobody asked these question of our government before.

Turnbull’s Failure

Why is Malcolm Turnbull prepared to negotiate on ETS ahead of Copenhagen when even Rudd is trying to position himself for the talks failure?

KEVIN Rudd has talked down prospects of international agreement at a crucial climate change summit in Copenhagen in December, amid fresh predictions the conference is doomed to failure.

ETS is the only policy where the Coalition can have a win over ALP. CO2 is a product of industrial activity and ETS is a punishment for what Rudd calls “making things”. Turnbull should be out there explaining that anyone who is involved in manufacturing, mining, agriculture, transport etc. will be very badly impacted. Many will lose their jobs because the same goods from their competitors in China and India will be ETS free. Nobody will escape the impact of the ETS as prices of electricity, transport and pretty much everything go up.

Will ETS reduce emissions? No. The polluters can simply buy the carbon offsets and pass on the costs. Heavy industrial polluters can relocate to ETS-free jurisdictions.

ETS is a great chance for Turnbull to paint Liberals as the party of the business and the party of the workers in one hit. He should be selling the message that he is trying to protect OUR JOBS, while Rudd is trying to kill them. He – Turnbull will stand up for the workers. Rudd will only stand up for SMH and The Age readers. Turnbull will save current jobs that exist right now, Rudd will give you “green jobs” that may never exist.

Here is something Turnbull can try. He can show two widgets: A (made in Australia) and B (made in China). Under the ETS widget A becomes a lot more expensive to produce. Widget B stays the same – Chinese goods are not penalised under the ETS. The likely outcome: The Aussie company that makes widget A goes under. We now have 2 widgets B made in China. Australian economy shrinks and our foreign debt grows. CO2 emissions are actually higher, as the widget has to be produced abroad and shipped to Australia. It is bad news all round.

The only reason Turnbull wants to support the ETS is because he wants to be the Mr. Popular so badly he is prepared to support a bad policy for a short-term political gain. This is what we want from our politicians, right? More short-term populism. Turnbull is showing a very poor judgement. People are not stupid and once the implications of the ETS become clear they will turn on the ALP, no matter what Laurie Oaks and Paul Kelly think. Libs are going to loose the next election whether it is double dissolution or not. If Turnbull supports the ETS he gives Labor a powerful argument to claim that ETS had the support of both parties and Libs were going to introduce it anyway.

Turnbull should oppose the ETS because it is a very bad policy that is against the national interest. It will probably hurt him in the short run but in the long run he will build a powerful platform for the Liberal resurgence. Unfortunately I fear that Malcolm is the SMH reader himself…

The real fat cats

Since the beginning of the Global Financial Crisis it has become customary for the government officials to rally against the corporate fat cats driven by sheer GREED. The benevolent government agencies were meanwhile painted as our saviours.

But while the corporate world was tightening its belts, the big government has been lavishing its commissars with big pay rises. It has been revealed that senior Reserve Bank managers received a massive 28.8 per cent increase in their total remuneration over the past year, at the same time as the Rudd government was lashing out at corporate “fat cats”.

Is this simply another case of “all animals are equal but some are more equal than others” or “two legs bad, four legs good”?

Che’s Meltdown

Thomas E. Woods, the author of Meltdown, takes on a leftist blogger known only as Che. Personally I don’t know why somebody of Woods’ intelligence would bother to respond to something that looks like it was produced by a raving leftist cliché generator, but the results are amusing nevertheless:

Che: I love it when right wing economists talk about “market forces” and “letting the free market run our economy.” They make it sound like the free market is some altruistic being that always knows exactly what to do and when to do it.

Woods: I do not know of anyone who subscribes to this junior-camper caricature. For one thing, no free-market economist is dumb enough to use a phrase like “letting the free market run our economy.” The free market is merely the matrix of free exchanges entered into by individuals. How can a matrix of free exchanges “run” anything?

…

Che: If free market principles were allowed to rule, like Schiff wants, what that means is everything is based on maximizing profit.

Woods: At this point we are all supposed to gasp at what a terrible prospect this would be. After all, the track coach and Michael Moore have told us about the wickedness of “profits,” so what more is there to say, really?

But as we’ve seen above, profit is simply society’s way of ratifying a firm’s past production decisions. It indicates what consumers want, and (by the process of imputation) the best process for producing it. Profits attract further investment in a given line of production, until the increased supply of goods in that industry brings the rate of return there back down to the level that exists elsewhere in the economy. This is how we ensure that our limited resources are not wasted, and that the most urgently desired goods are produced.

In the absence of profit as a driving force, how exactly would Che like to see resources allocated? We can either allow consumer preferences to guide production, or let the personal preferences of a monopolist (i.e., government) dictate what should be produced and how. When the question is posed this way, the choice is pretty clear, which is why the question is never posed this way.

…

Che: Holding the government accountable for its actions is called Democracy. Holding a CEO accountable for his or her actions is called impossible.

Woods: Could these be the most laughable lines of the whole piece? Che has swallowed the propaganda he got in school without a peep of independent thought.

I could write a whole book on this, so let’s stick to a couple obvious points. Our government launched a war in 2003 on ludicrous and transparent pretenses that led to as many as a million people dead and four million displaced. Prior to that, in the 1990s, we had a bipartisan sanctions regime that killed half a million Iraqi children. (Note that our leaders do not deny that statistic; they merely say the price was “worth it.”)

Who, my dear Che, was held “accountable” for that? Anyone? What alleged sins of any US corporation even approach that?

The Federal Reserve System, which enjoys a government monopoly on the creation of legal-tender money, created the conditions that led to the present economic crisis. (I give some of the contours of the argument here and in Meltdown, my latest book.) Was anyone held “accountable” for that?

Are you telling us that the government bailouts were an example of public-spiritedness, rather than a transparent payoff to friends and allies of the regime? The bailouts, in fact, were an example of government intervention to prevent the free market from holding CEOs accountable.

You want to keep a CEO accountable? Stop buying his product. How do I stop buying the government’s “product”? Oh, I forgot, I don’t buy it — the money to fund it is seized from me.

Farmers are the new bankers

Investor extrodinaire Jim Rogers shares his thoughts on the current economic crisis and the future of the economy.

Highlights include:

So what should they be doing?

What would I like to see happen? I’d like to see them let these people go bankrupt, let the bankrupt go bankrupt, stop bailing them out. There are plenty of banks in America that saw this coming, that kept their powder dry and have been waiting for the opportunity to go in and take over the assets of the incompetent. Likewise, many, many homeowners didn’t go out and buy five homes with no income. Many homeowners have been waiting for this, and now all of a sudden the government is saying: “Well, too bad for you. We don’t care if you did it right or not, we’re going to bail out the 100,000 or 200,000 who did it wrong.” I mean, this is outrageous economics, and it’s terrible morality.

…

I really think agriculture is going to be the best place to be. Agriculture’s been a horrible business for 30 years. For decades the money shufflers, the paper shufflers, have been the captains of the universe. That is now changing. The people who produce real things [will be on top]. You’re going to see stockbrokers driving taxis. The smart ones will learn to drive tractors, because they’ll be working for the farmers. It’s going to be the 29-year-old farmers who have the Lamborghinis.

…

Are you worried the economic crisis will lead to political turmoil in China and elsewhere?

I absolutely am. We’re going to have social unrest in much of the world. America won’t be immune.

Three Lessons of Freedom

Via Julie Novak’s blog three lessons of freedom by Lawrence (Larry) Reed, president of the US-based Foundation for Economic Education:

• Government can provide you with absolutely nothing except that which it has taken from somebody else.
• A government big enough to give you what you want, is big enough to take everything you have.
• A free people are not economically equal, and an economically equal people are not free.

Official Lies

Excellent commentary by Jarret Wollstein on how the governments in US and elsewhere lie about the real rate of inflation.

Rudd is out to destroy what’s left of our economy

Let’s face it, most of our deluded commentariat has no bloody clue when it comes to economics. They didn’t see the Global Financial Crisis coming and they have absolutely no idea what actually caused it. Most of their “solutions” are also dead set wrong. They couldn’t predict then, and they can’t predict now. I wouldn’t waste my time listening to their so-called expert opinions.

The GFC was caused by the US consumer debt binge fuelled by Fed’s decision to keep the interest rates too low for too long which resulted in a husing bubble and overall lack of savings. As a result USA is drowning in debt. It produces less than it consumes and it has a gigantic government debt. Moreover, US economy is 70% consumption driven mainly by debt. The debt USA has no chance of ever repaying. Once the rest if the World fully understands this all bets are off.

Let’s be honest Americans need to stop consuming so much and learn to live within their means. Unfortunately team Obama tells them to do the opposite – borrow even more and spend even more. As a result we will see a more impoverished US where the GFC is only the beginning of a long and painful depresion.

So what does it have to do with Rudd? Well, Australian ecomomy is not so very different to the US. We consume more than we produce, whe have very high personal debts and we also have a head of state more obsessed with doing what is popular than doing what is right.

Before the GFC Australia was one of the very few Western nations free of government debt. Not any more. In the headlong rush to “do something” the government brought in a massive stimulus package that has a potential to commit the nation to more that $300 billion of debt. Rudd says he will return the budget into surplus, but I doubt it. He made no tough decisions to date and is not likely to do so in the future.

But stimulus is not even the main danger right now. Given that Australia has the same structural problem that the US, it would make sense to steer our economy away from excessive consumption towards greater production. After all, it was Rudd himself who said that he didn’t want to be a Prime Minister of the country that no longer makes things. Fine rhetoric, but how is introducing a new tax on production helps this? It doesn’t.

The new tax is of course the Emissions Trading Scheme or ETS. Whether you believe in Global Warming or not, CO2 is a by-product of industrial production – of making things. For example, making cars and beer produces a lot of CO2, while shuffling papers in a bank produces a lot less. Placing a tax on CO2 emissions will raise the cost of producing everyday goods in Australia and makes it more likely that producers will shift overseas to countries like China taking their CO2 emissions and jobs with them.

Unless Kevin Rudd plans to become the first non-Chinese head of China, he better get used to the idea that he is will become the PM who may just succeed in ensuring that Australia is a country that no longer produces things…