catallaxy files

catallaxy in technical exile

Kevin Rudd and commodification

with 138 comments

While Rudd appears to be doing some good work promoting talent like Craig Emerson to the frontbench, those on the libertarian side shouldn’t set their hopes too high. As Mike Steketee notes today:

Three weeks ago, Rudd marched into the Centre for Independent Studies, one of the strongest supporters of what Rudd calls free-market fundamentalism, to preach his gospel. He spoke about the effect of industrial relations reform on the “relational health of young people”. He referred to “the rapid commodification of care for children, the aged and the infirm and how they were weakening family and other social relationships. The driver of these changes is time: longer working hours, less predictable working hours (thereby reducing the capacity to plan family and community activities), more anti-social hours worked, less flexibility from work for emergency family care and, overall, an environment where bargaining rights in the workplace for family-friendly work time are reduced for many workers.” He referred to research showing parents’ unsocial working hours harmed children. He linked the rapid rise in childhood obesity to “the impact of fast food in a time-poor environment for stressed working families”.

This commodification schtick seems to be a big deal in Rudd’s view of the world and was the reason he voted against the embryo cloning bill.

Advertisements

Written by Admin

December 7, 2006 at 10:25 am

Posted in Uncategorized

138 Responses

Subscribe to comments with RSS.

  1. ‘Commodity fetishism’ is probably a hangover from his Marxist student days, Jason. Although I don’t agree with it, it is to my mind the only aspect of modern leftism that has real explanatory power.

    Unfortunately, it puts lefties in the same boat as conservatives like Archbishop Jensen, who has also criticised WorkChoices on the grounds that it may harm care patterns within the nuclear family.

    As I pointed out on another thread, Rudd seems to want the whole of Australia to resemble regional Australia, with its strong sense of community solidarity and community ties. He forgets that regional cities like Mackay and Rockhampton are beneficiaries of the resources boom, which means not only is there a huge amount of money sloshing around, but that employees are in a very strong bargaining position vis a vis employers – with or without unions.

    skepticlawyer

    December 7, 2006 at 10:34 am

  2. Na, he voted against the stem cell bill because he’s in thrall to religious superstition. It’s what drives his social conservatism – I’ve always believed this communitarian stuff is code for “I want people to know their place”.

    derrida derider

    December 7, 2006 at 10:59 am

  3. I don’t buy all that comodification stuff!

    Rafe Champion

    December 7, 2006 at 10:59 am

  4. DD, I think it’s the same thing that drives his economics and his view on stem cells. He’s the first genuine specimen of the Christian left to lead the ALP.

    Jason Soon

    December 7, 2006 at 11:01 am

  5. This sort of shows his one-step approach to things. The inability to deal with any subject past a first superficial glance at things.

    What is making people work such long hours?

    Is it commodification?

    Are we all sinners working so hard because of the vice of commodification?

    This is a condescending and uppity view for a thief to take from the people he intends to steal off.

    Could these long hours have anything to do with high taxes at the low end. And debt. And the necessity to buy a house for a half million of a quarter million before you can even be middle class.

    When in fact we could have it that you could buy a bigger apartment at less cost each year under free enterprise conditions.

    He’s blaming the victim. Its theft and particularly inflation-theft that is the problem.

    He’s blaming the victim and instead of identifying the theft and compulsion he’s saying the victim is guilty of commodification.

    Makes Kevvy sound sophisticated but he aint.

    GMB

    December 7, 2006 at 11:05 am

  6. Does this mean he opposes subsidies to child care? They surely promote the ‘commodification of care for children’

    Grumpy Old Economist

    December 7, 2006 at 11:18 am

  7. Whats he going to do, ban childcare ?

    Or nationalise it ? Yeah, try selling that to the public. Tell us all our kids have to be placed in government controlled incubators.

    How humane and compassionate, a true socialist.

    Jono

    December 7, 2006 at 11:38 am

  8. I think what Rudd is responding to is the hyper competitive consumer culture of today. The materialism that says you should work long hours and have a flash house and a nice car because that will make you and your kids happy.

    When it comes to identifying the source of hyper competitive behaviour I put it down to other factors, viewing the things that Rudd is quoted as saying as being symptoms not causes. I think that a big primary factor is taxation. You can’t drop out of mainstream commercial society (except by being a street person with no assets at all) without the tax man turning up and demanding that you have generated some revenue to share. And when you do go and earn some revenue they take another slice again. The more the tax burden increases the more people will become hyper competitive and the more they will seek to corrupt the system. The more they will also try to escape this rat race by being even more hyper competitive.

    Given a tax cut I take the view that many and possibly most people will use it to fund an increase in leisure time. However I also believe that when they do work the allocation of time and skills will be such as to lead to higher productivity. Essentially tax cuts create the necessary incentives for households to outsource the things they are not good at. So tax cuts give us more leisure time and more goods and services to stuff in our houses.

    The other factor is that excessive statism errodes civil society and once it is gone it takes a very long time to rebuild. Without robust civil society the nature of communities changes. We then find less meaning in the local lamington drive (because it is gone) and seek meaning in places like work.

    I think that Rafe on his website alludes to some of these issues of how we are driven to find meaning in our world:-

    http://www.the-rathouse.com/

    Those on the right of politics are not without blame in this process either. The fact that privatisation has been pushed as a priority over and above reducing the tax burden is in my view a case of flawed priorities. What the government continues to own is of far less concern to me than the things that the government continues to steal. This is not a criticism of privatisation but a criticism of prioritisation. Corporatising the world will not rebuild community. Reducing the wedge between households would be a better starting point.

    The fact that we are in many ways more materially effected and preoccupied by government in Canberra than the goodwill of our neighbours and our local community is a sad situation.

    terjepetersen

    December 7, 2006 at 12:15 pm

  9. I’m not so sure about your reasoning, Terje. If it were true wouldn’t the Scandinavian countries be the most hypercompetitive?

    Jason Soon

    December 7, 2006 at 12:23 pm

  10. Economists who are in favour of tax cuts tend to argue that tax cuts *increase* incentives to work, not make people lazier. You (and implicitly GMB) seem to be saying the exact opposite.

    Personally I don’t care for either justification. I think tax cuts are good for political economy reasons i.e. it is more efficient for people to decide what to do with their own money than for it to be funneled to collective decision making.

    Jason Soon

    December 7, 2006 at 12:29 pm

  11. Working harder and being more productive are not the same thing. If I find a subsistence farmer working in the field then cutting off his left arm will make him work harder. That does not mean he will be better off.

    terjepetersen

    December 7, 2006 at 12:33 pm

  12. Terje
    You’re missing the point. What I’m saying is I don’t think the essential normative issue is whether or not tax cuts make people work harder. The essential normative issue is that tax cuts allow A to use his money to meet A’s preferences rather than let A to Z decide the use of A’s money.

    What I’m saying is that your reasoning doesn’t hold up, If it did, then the most highly taxed economies would be the most hypercompetitive.

    Jason Soon

    December 7, 2006 at 12:37 pm

  13. The following article goes into this issue in some detail:-

    http://www.wanniski.com/PrintPage.asp?TextID=5117

    The chief reason politicians and economists throughout history have failed to grasp the idea behind the “Laffer curve” is their confusion of work and productivity. Through both introspection and observation, the politician understands that when tax rates are raised, there is a tendency to work harder and longer to maintain after tax income. What is not so apparent, because it requires analysis at the margin, is this: As taxes are raised, individuals in the system may indeed work harder, but their productivity declines. Hume himself had some trouble with this point:

    There is a prevailing maxim, among some reasoners, that every new tax creates a new ability in the subject to bear it, and that each increase of public burdens increases proportionably the industry of the people. This maxim is of such a nature as is most likely to be abused; and is so much the more dangerous as its truth cannot be altogether denied: But it must be owned, when kept within certain bounds, to have some foundation in reason and experience.

    Twenty years later, in The Wealth of Nations, Adam Smith had no such problem: In his hypothetical pin factory, what is important to a nation is not the effort of individuals but the productivity of individuals working together. When the tax rates are raised, the workers themselves may work harder in an effort to maintain their income level. But if the pin-making entrepreneur is a marginal manufacturer, the increased tax rate will cause him to shift into the leisure sphere or into a lower level of economic activity, and the system will lose all the production of the pin factory. The politician who stands in the midst of this situation may correctly conclude that the increase in tax rates causes people to work harder. But it is not so easy for him to realize that they are now less efficient in their work and are producing less.

    terjepetersen

    December 7, 2006 at 12:39 pm

  14. Taxes have deadweight losses of 20% which means reductions in allocative and productive efficiency. I don’t have a problem with that point, Terje. mainstream economics tells you that and it even gives you a nice estimate,

    What I’m not convinced by is the claim that this makes people ‘hyper competitive’.

    Jason Soon

    December 7, 2006 at 12:41 pm

  15. commodification ie treating human beings like any other factor of production.

    Ties in with being a christian as we are all born in God’s image.

    ties in with business school who realise that the only thing that provides a sustainable competitive advantage are the workers and their inter-action.

    Jase take a read of Tawney and Bill Temple and then update it and you have a lot of what Krudd is.

    He is particular on about a family being together.

    will the father be able to watch his sons play football on Saturday morning.can they have a family dinner.

    etc etc etc

    Bring Back CL's Blog

    December 7, 2006 at 12:49 pm

  16. The word hyper competitive is probably not ideal. The point is that people “work” harder than they would otherwise but at lower “productivity”. High taxes make people more busy but not richer.

    You have said:-

    The essential normative issue is that tax cuts allow A to use his money to meet A’s preferences rather than let A to Z decide the use of A’s money.

    This is essentially the monetarists view that government spending misallocates resources away from individual preferences. I agree with this issue but I think it is fundamentally far less important than the issue of inter-household trade incentives. It is the impact on producer incentives brought about by the wedge on inter-household trade that shrinks the pie most significantly.

    You are right in once sence though. I probably do disagree at a fundamental level with the bulk of those people that advocate tax cuts. However most people who advocate tax cuts (myself included) generally focus on the empirical evidence and find agreement there.

    terjepetersen

    December 7, 2006 at 12:51 pm

  17. Rudd is talking rubbish when he says that analysing labour like any other good is ‘commodification’ which is indeed the premise behind his thinking. Humans aren’t being bought and sold in the labour market – labour services are.

    Jason Soon

    December 7, 2006 at 12:51 pm

  18. Humans aren’t being bought and sold in the labour market – labour services are.

    You are right. The problem is that the word labour is actually a polyseme. Depending on the context it can mean “labour services” or
    it can mean “workers”. Commoditising the first is quite different to commoditising the latter.

    The word “demand” is also a polyseme. It can mean “command” or it can mean “supply a good in order to acquire something through trade”.

    Polysemes cause lots of problems in the formulation and communication of ideas. It seems to happen quite a lot in economics.

    terjepetersen

    December 7, 2006 at 1:04 pm

  19. “Economists who are in favour of tax cuts tend to argue that tax cuts *increase* incentives to work, not make people lazier. You (and implicitly GMB) seem to be saying the exact opposite.”

    I’m not saying the opposite.

    I think marginal tax cuts ought to get people working longer hourse as well.

    But that doesn’t contradict anything I said.

    But this idea that the MASSIVE benefits coming from tax cuts occur just because people work harder.

    Well thats just silly.

    “Economists who are in favour of tax cuts tend to argue that tax cuts *increase* incentives to work, not make people lazier.”

    Yes they do. And thats true. But this is a very small reason why productivity expands and not a big reason. And the economists emphasising these incentive effects probably aren’t particularly good economists.

    I myself think in terms of resource allocation.

    One reason the land tax and the GST are superior taxes is that they barely affect resource allocation.

    One hurts dispproportionately the poor. The other the rich. But at low levels at least they don’t distort resource allocation decisions very much.

    GMB

    December 7, 2006 at 1:17 pm

  20. All I know is that I am middle class with a household income a number of times the national average. I pay too much tax and receive other benefits and services back from government that I could elect to receive more efficiently by contracting directly with the provider. And as a sometime public servant I know all about the deadweight loss Jason mentions. The times in my life when the state could have helped – eg a severe health crisis – it would not and so I just paid up in full (self insurance). I can look after myself and my brood – I don’t need the state deciding how to spend a greater portion of my income for me than is strictly neccessary.

    jimmythespiv

    December 7, 2006 at 1:20 pm

  21. But this is a very small reason why productivity expands and not a big reason. And the economists emphasising these incentive effects probably aren’t particularly good economists.

    I myself think in terms of resource allocation.

    GMB, that comment is pretty much spot on in my view.

    terjepetersen

    December 7, 2006 at 1:35 pm

  22. As co-incidence would have it, Mankiw has posted a nice analysis of whether higher tax reduce work effort at http://gregmankiw.blogspot.com/2006/12/card-on-income-and-substitution.html

    So we are left in the ironic position that if you think the government just wastes tax revenue, then higher taxes probably increase work effort. If you think the government uses tax revenue to provide stuff valuable to taxpayers, then higher taxes probably reduce work effort.

    Fortunately, the case for cutting taxes is strong in either case.

    Of course, about 1/3 of government spending goes on welfare payments, which reduces the work effort of the recipients.

    Another 1/3 goes on health and education – which we would provide for ourselves if the government did not. They seem intermediate – they are valuable, but a lot of government spending on them gets wasted.

    Grumpy Old Economist

    December 7, 2006 at 2:17 pm

  23. What about the distortionary effect high marginal rates have on hours worked. I currently work about 10 hours per day – would I not work 6 if marginal rates were lower and I was broadly satisfied with my acquisitive power – or would I work 10 hours and by the Maserati Quattroporte I am lusting after. To paraphrase Herb Simon, I would probably satisfice – work 8 hours and settle on an entry level Porsche 911. My guess is the general population would do likewise – so clearly income taxes are distorionary. A practical example are the semi-retired folk who work 4 hours 4 times a week, play golf etc etc, but who rely for income mainly on accumulated investments. They are choosing the income level to fit their desired needs.

    jimmythespiv

    December 7, 2006 at 2:24 pm

  24. You are assuming that you or the retired couple get nothing of value from the government so that the tax cut increases your real income, and you use the higher income to buy more leisure. But if we shrink government (cut taxes and spending), then the tax cuts raise your income, but the spending cuts reduce it to the extent you valued the government spending. For example if the old couple’s pension were cut or you now had to pay for your children’s education and health insurance, then you would still work just as much.

    Grumpy Old Economist

    December 7, 2006 at 2:32 pm

  25. I meant to say you could work as much.

    Grumpy Old Economist

    December 7, 2006 at 2:33 pm

  26. The issue of hours worked assumes a lot about the productivity of one hours work.

    If I am a plumber I can fix taps. However I can probably also build a varanda. So if I want a new varanda I can do it myself or else fix other peoples taps and then use the money earned to pay a carpenter to build my varanda. If the tax wedge is too large I will work hard at building my own varanda with low efficiency (I’m not a specialist) rather than fix taps for other people with high efficieny.

    Speciallisation, the division of labour and capital is why we today live in a rich society. It is not because we work harder than our ancestors.

    terjepetersen

    December 7, 2006 at 2:47 pm

  27. This is all very strange. I remember seeing a study of Europe which found that the reasons Europeans work less than Americans was because of the higher tax rate.

    Jason Soon

    December 7, 2006 at 2:47 pm

  28. Yes, that is the Prescott study – which is being discussed in the Mankiw post.

    Grumpy Old Economist

    December 7, 2006 at 2:56 pm

  29. Jason,

    Your first argument was best; the case for tax cuts is a moral one not an economic one. Who gives a rat’s patooty if the populace works harder, longer or sexier as a result of cutting tax rates? The important thing is that we are no longer having as much of our money stolen by politicians.

    I know that it may be naughty, but I am starting to think that many liberatrians are the real neo-cons in that so many of them seem to be hung up on that drug of the marxist, macreconomics.

    Rococo Liberal

    December 7, 2006 at 3:19 pm

  30. RL
    Great point about the morality of taxes/work. Who gives a frogs shit if it means less or more work.

    JC.

    December 7, 2006 at 3:22 pm

  31. Taxes need to be cut (and the revenue base shifted). It is immoral that we make people worse off and force them to work harder and longer, or for less hours by making them less well off. The disincentives work both ways.

    Taxes force some to work for longer, and some to stop altogether. We are financially less well off and either have less time or cannot buy time intensive commodities. Forcing this decrease in living standards without a net benefit resulting from the impost is immoral in that it limits our choice, reduces our welfare and is paternalistic.

    It all wraps up into a neat little package, see. Both micro and macro effects considered as well, RL.

    Mark Hill

    December 7, 2006 at 3:28 pm

  32. Beautiful, ABL. You should be running the country, I reckon…

    skepticlawyer

    December 7, 2006 at 3:30 pm

  33. Before I get your seal of approval, perhaps you should know my more radical ideas, like full scale constitional reform and support of the PEPC.

    Look in the recent comments:

    http://www.southsearepublic.org/

    Mark Hill

    December 7, 2006 at 3:43 pm

  34. Is Rudd talking about tax cuts? yes/no – I dont think so, he may have to have a talk with Emerson.

    How is he going to pay for more growth less hours less work – at some point the maths will have to done.

    rog

    December 7, 2006 at 3:44 pm

  35. PEPC??

    Sinclair Davidson

    December 7, 2006 at 3:54 pm

  36. A little perturbed at kevvies grasp of history (the US and the formation of the UN), has he been confabulating?

    No real life experiences, a bit of a worry.

    http://www.southsearepublic.org/story/2004/9/13/191230/641

    rog

    December 7, 2006 at 3:56 pm

  37. Yea ABL,
    You should put yourself up to run the country, I ean that. I haven’t been kidding round when i say that.

    Forget it about Emmerson, guys. If he does support labor reform he should leave the ALP. If he doesn’t support he ain’t worth a crock as he is either a liar or an idiot. Either way he ain’t worth it.

    JC.

    December 7, 2006 at 3:56 pm

  38. I’ll try to explain why we give a ‘frogs shit’ about the effects of taxes on work effort.

    Taxes have collection, administrative, enforcement and compliance costs. They also encourage rent-seeking: resources put into political battles over who bears the taxes.

    They also impose economic costs because they distort decisions and change behaviour. They affect the willingness to work, to start new enterprises and to take risks with capital. The result is what economists call a ‘deadweight loss’ or ‘excess burden’. Taxes induce individuals to consume a mix of goods that is less desirable from the standpoint of their own subjective preferences. That is, taxes change what you do to a less preferred option. The excess burden from a tax is the difference between how much it makes individuals worse off and the amount collected. The more the tax changes behaviour, the greater the excess burden.

    The effect of higher income taxes on household income and behaviour is much broader than reducing hours worked. Taxes on labour income also affect work effort, choice of occupation, conditions of work, forms of compensation, patterns of consumption, and tax avoidance and evasion.

    An income tax of t per cent means you are willing to give up a dollar of taxable income to undertake an untaxed activity (more leisure, less effort, consumption of tax preferred items, tax avoidance and evasion) that increases well-being by $(1 – t). These activities will be pushed to that point so that when an activity is increased so as to reduce taxable income by a dollar, deadweight loss increases by the foregone tax revenue, t cents. A rise in the tax rate increases the incentive to engage in these activities, increasing deadweight loss by t per cent of the reduction in taxable income.

    These effects substantially raise the efficiency costs of income taxation. To the extent they reduce taxable income, all of them contribute to the overall deadweight loss. To get the full distorting effect of the tax we add all the reductions in taxable income from all the distortions. The loss in income from a reduction in hours worked is only one component of this.

    The efficiency costs are substantial. Even Quiggin agrees that raising an extra dollar of revenue probably imposes $1.50 of cost on taxpayers (an excess burden of 50%). That provides a good reason to limit taxes.

    Grumpy Old Economist

    December 7, 2006 at 3:59 pm

  39. Your final point says it all, grumpy.

    It is disappointing for all the talk of microeconomic reform, both Labour and the conservative coalition have not lowered our actual tax burden, removed highly inefficient taxes and have not substsantially lowered our paticularly punitive effective marginal tax rates on personal income.

    Tax should be the next frontier on microeconomic reform. The GST was just your typical tinkering at the edges.

    Mark Hill

    December 7, 2006 at 4:04 pm

  40. And don’t get me started on the effects of capital taxation. I’ll just note that if you really believe (a la Stern) that the subjective rate of time preference is almost zero, why on earth would you tax the return to capital investment? There are a lot of things you would change before you got onto worrying about climate change in 200 years time.

    Grumpy Old Economist

    December 7, 2006 at 4:05 pm

  41. IR will be the only plank of the dream team, they will never get the ALP to accept any other ‘reform’. And they are stuck with the ACTU and Combet, who looks like he has been stung by green ants (whilst sucking on a mango)

    rog

    December 7, 2006 at 4:09 pm

  42. EMTRs are my personal bugbear, Mark. I have seen the way it chases people out of the workforce, or encourages petty criminality of various kinds. It really is kicking the poor in the teeth.

    Bring on $30,000 p.a tax free threshhold – the main reason I joined the LDP.

    skepticlawyer

    December 7, 2006 at 4:22 pm

  43. And don’t get me started on the effects of capital taxation. I’ll just note that if you really believe (a la Stern) that the subjective rate of time preference is almost zero, why on earth would you tax the return to capital investment?

    Captial gains tax should be zero. Howard just passed laws to exempt foreigners who invest in Australia from paying any capital gains tax here. A very good move.

    And SL you don’t need to be poor to be kicked in the teeth by EMTRs. My EMTR last year was 75% and I don’t think I’m poor. Kicking the poor with EMTRs that high is of course quite awful.

    terjepetersen

    December 7, 2006 at 5:14 pm

  44. Is EMTR effective marginal tax rate?

    If so how could you pay 75%?

    JC.

    December 7, 2006 at 5:23 pm

  45. I must say I find that 75% puzzling too, Terje. how do you derive that?

    Jason Soon

    December 7, 2006 at 5:27 pm

  46. Easy. Two years ago my marginal tax rate was 48.5% and the phase out of family tax benefits was 30%, making my EMTR 78.5%. Then when i spend it i pay GST and excise (I consume a lot of smokes, beer and petrol). If i save it, i pay even more tax as my rate of return is taxed.

    Grumpy Old Economist

    December 7, 2006 at 5:29 pm

  47. If you are on welfare and receive public housing it is easy for your EMTR to exceed 100%.

    But I am middle class. what Howard has done with his Family Tax benefit is to automatically place most families on welfare.

    The abatement has fallen to 20 per cent, but that also extends it to more families.

    Grumpy Old Economist

    December 7, 2006 at 5:32 pm

  48. I would still like to see Terje’s calculation though.

    Perhaps he is taking account of the (now gone) super surcharge, which could easily raise EMTRs on middle class people to very high levels.

    Grumpy Old Economist

    December 7, 2006 at 5:35 pm

  49. Grumpy

    So to get EMTR you’re including all taxes paid, right? Not just tax on income.

    JC.

    December 7, 2006 at 5:36 pm

  50. The effective marginal tax rate measures the percentage of a one-dollar increase in private income that is lost to taxes and the abatement of income tested government benefits. An effective marginal tax rate of 60 per cent means that if a family earns an extra dollar, it is better off by 40 cents. When the transfer a household receives is reduced as income rises, the reduction in benefits has exactly the same effect as a marginal tax applied to income.

    Grumpy Old Economist

    December 7, 2006 at 5:40 pm

  51. So at the income I happened to be at, I earned an extra $1,000 and lost $485 to tax, had my family tax benefit mreduced by $300 and was left with $215 in the hand. So my EMTR was at least 78.5%. Other taxes would add to this.

    Grumpy Old Economist

    December 7, 2006 at 5:42 pm

  52. Fair enough Grumpy.

    One last question. Does everyone receive these family allowance deals, not matter the income level?

    JC.

    December 7, 2006 at 5:43 pm

  53. Two years ago my marginal tax rate was 48.5% and the phase out of family tax benefits was 30%, making my EMTR 78.5%.

    That is exactly how it was for us.

    I am self employed so I cut my salary by 20% and took one day off each week to be with the little ones.

    If you want you can also add in 9% SGL, 10% GST, 5% payroll tax etc, etc.

    terjepetersen

    December 7, 2006 at 5:44 pm

  54. The reason I ask is that my eyes glaze over when I speak to my accountant. 10 mins through, i’m asleep.

    JC.

    December 7, 2006 at 5:48 pm

  55. JC,

    You have to be earning well into the six figures before it cuts out completely. It is the phase out that causes the high EMTRs. However to understand it and calculate it is complex. You need to know the following:-

    1. Taxable income of household.
    2. Taxable income of lowest breadwinner.
    3. Number of kids and their ages.

    Then it helps if you have done some work as an actuary. It is a fucking mess of system.

    Regards,
    Terje.

    P.S. After the last budget it is not quite as bad. It is still like living on a dog chain though. They feed you but don’t try doing anything.

    terjepetersen

    December 7, 2006 at 5:49 pm

  56. right of course, the stupid FTB. how could I forget?

    Jason Soon

    December 7, 2006 at 5:50 pm

  57. Jason,

    Let me guess. You don’t have kids.

    Regards,
    Terje.

    terjepetersen

    December 7, 2006 at 5:52 pm

  58. The Family Tax Benefit depends on households income. The amount you get depends on the nuimber, and ages, of your kids. It abates at 20 cents in the dollar from $40,000 to $64,893. Then it stays constant at the base rate until $64,893. then it starts to abate again at 20% until $92,126. With two kids you get it until your income is $104,317. If you have moe kids, it doesn’t phase out until higher levels. I have a mate with 5 kids under 7 and he gets it until the high 100,000s.

    If your wife dosn;t work, you need to ake account of the other Family Tax benefit (I can never remeber which one is A or B). It phases out at 30%, from memory.

    Grumpy Old Economist

    December 7, 2006 at 5:53 pm

  59. That was garbled. It stays constant from $64,683 to $92,126.

    Grumpy Old Economist

    December 7, 2006 at 5:55 pm

  60. The point is, it adds 20 percent to your EMTR over large ranges of household income.

    Grumpy Old Economist

    December 7, 2006 at 5:56 pm

  61. FTB-A is based on household income. FTB-B is based on the lower of the two incomes.

    I have 3 under 5s.

    terjepetersen

    December 7, 2006 at 5:57 pm

  62. High EMTRs really hit our family hard. I am an (employed) lawyer, my partner is self-employed, and my nephew (who lives with us) is a student. We get hammered every which way.

    It has got that way I’ve set up the appropriate legal arrangements to allow both my partner and nephew to avoid high EMTRs. It really annoys me to have to do this, but it’s the only way the two of them can receive appropriate returns for the amount of work they both put in (carpentry and sysadmin respectively).

    skepticlawyer

    December 7, 2006 at 6:00 pm

  63. It takes a while for people to realise the incentives, but once they do this stuff is deadly for the work ethic. And very hard to wind back. Although Labor started it, Howard has expanded it.

    Grumpy Old Economist

    December 7, 2006 at 6:04 pm

  64. Grumpy I’m pretty sure it still adds 30% for FTB-A. It is FTB-B that phases out at 20%. Much of the improvement at the top end came from shifting the top tax bracket.

    And as you say the thresholds shift depending on the number of kids. I have to get past $115k before my EMTR drops back to normal.

    My other half gets tax free income (otherwise we would be over the limits anyway). However if she earns anything taxable over $6k per annum then she has an EMTR of 65%.

    terjepetersen

    December 7, 2006 at 6:04 pm

  65. deadly for the work ethic.

    What’s that?

    terjepetersen

    December 7, 2006 at 6:05 pm

  66. work is that activity that distracts you from commenting on blogs

    Grumpy Old Economist

    December 7, 2006 at 6:11 pm

  67. No sign of that.

    terjepetersen

    December 7, 2006 at 6:13 pm

  68. I am so glad the court year’s over! Mind you I’m currently organising my nephew’s 18th birthday party (this Sat, Graham Bell, if you read this).

    We supply booze and kangaroo meat (and maybe some piggy, depending on how good it is).

    skepticlawyer

    December 7, 2006 at 7:11 pm

  69. I don’t know that commodification is necessarily just a Marxist category. The commonly used term in finance these days – monetisation – comes to mind as a near synonym.

    And Jason – I don’t know whether Rudd is aware of this, but Marx would happily agree with you that people are selling their labour services. Though he’d call it labour power. The early Marx in his humanist Hegelian phase of course would make a point about alineation and subjectivity which sounds to be more what Rudd is getting at.

    Mark Bahnisch

    December 7, 2006 at 7:51 pm

  70. Which is a lorry-load of bulldust, Mark, and only makes sense theologically – not politically.

    skepticlawyer

    December 7, 2006 at 8:08 pm

  71. Well, SL, if that’s so I’m not entirely sure Jason’s distinction is anything other than a theological one. Just sayin… since he and Marx appear to have very similar views on the commodification of labour power/services through monetary exchange and contract.

    Mark Bahnisch

    December 7, 2006 at 8:18 pm

  72. Which isn’t necessarily a bad thing…

    skepticlawyer

    December 7, 2006 at 8:27 pm

  73. Not saying it is!

    Mark Bahnisch

    December 7, 2006 at 8:45 pm

  74. I think SL was saying that commodification of labour services isn’t a bad thing. Which is my point. The relevance of my distnction is that Rudd seems to have gotten it into his head based on this piece and others I’ve seen that talking about a deregulated labour market is a bad thing because it amounts to treating human beings as things that can be bought or sold.

    Jason Soon

    December 7, 2006 at 8:48 pm

  75. It’s not human beings being bought and sold that’s a bad thing. It’s what they can do – this is a good thing!

    skepticlawyer

    December 7, 2006 at 9:04 pm

  76. There is no such thing as commodification. It’s bullshit. Almost everything from labor, services to products are unique.

    I used to think that something as basic as coal is a commodity until I found out there are numerous varieties. Wheat has many, many varieties.

    One only has ot go to a cattle yard auction to see that people make selection based on many factors that 4 hooves.

    Labor cannot be commodified in any way as people will awlays have unique strengths and weaknesses no matter how basic the job involved.

    The problem the left has is that it thinks of people as masses and groups, not as individuals. Commodification of labor is nonsense. Hiring someone even in the most basic job is not an easy process as people come with many strengths and weaknesses that an employer has to figure out and take a gamble.

    Trust the ALP to sell individuals down the river.

    JC.

    December 7, 2006 at 9:08 pm

  77. Jason – I, for one, welcome Howardian Mini-Me’s opposition to the stem-cell enormity. This demonstrates one of the good things about Rudd from the perspective of the ‘Christian Democrat right’ (if you will). That acknowledged, his family-related angle on IR doesn’t resonate with the same kind of sincerity. It’s looking and sounding like a ginned up schtick – much like the amateurish buttressing from Hayek and Bonhoeffer – and I doubt Julia “Empty Fruit Bowl” Gillard will bolster the tactic’s solidity or gravitas.

    C.L.

    December 7, 2006 at 9:12 pm

  78. “It’s not human beings being bought and sold that’s a bad thing. It’s what they can do – this is a good thing! ”

    Don’t they just poison everything?

    They just wanna keep us on the reservation hoping we never leave their sight. They lose us forever if they can’t keep us in the reservation. We mey actually see who their thieving ways.

    What is incredibly shocking to me is to see non union labor support the union push to fuck labor reform. The unions are by their nature parasitic in that they bid up the wages of their members at the expense of non union labor. Hence they cause unemployment or lower wages going to others.

    Unions in fact are the enemy of labor except except their members.

    If people understood this, the ALP should not get any more support than the union membership.

    JC.

    December 7, 2006 at 9:15 pm

  79. Labor cannot be commodified in any way as people will awlays have unique strengths and weaknesses no matter how basic the job involved.

    I’m unclear on what you mean by this, JC. It would imply a unique price for the sale of any individual’s labour services.

    Mark Bahnisch

    December 7, 2006 at 9:16 pm

  80. I think that’s what he’s getting at, Mark. As someone who’s ‘crossed the line’ from poverty to wealth, one of the most liberating things was to be assessed and respected as an individual. I hope I never have to cough ‘union dues’ again. They just don’t represent me.

    skepticlawyer

    December 7, 2006 at 9:22 pm

  81. “Rudd seems to have gotten it into his head based on this piece and others I’ve seen that talking about a deregulated labour market is a bad thing because it amounts to treating human beings as things that can be bought or sold.”

    Think about the logic of this trog. Given that to him all human beings are bough and sold on the labor market. A regulated labor market would simply mean less of them were. So by this trogs logic it is better to have less humans bought and sold than more.

    Fm, can you just walk in off the street and become iopposition leader these days?

    “HELP WANTED”
    An position is availble as head of the Opposition in Canberra. No creativity of intelligence required. Good conditions. Please apply to the ALP office in Canberra”

    JC.

    December 7, 2006 at 9:24 pm

  82. Hi mark

    No two people ever offer the same services. They can’t as we are pretty unique individuals.

    There are good plumbers, bad ones, really fast/ good plumbers, really slow and great ones. There are plumbers who are naturally creative, who can figure a problem out.

    Give you an example.

    i know electrican who ought to be a brain surgeon, he is so smart. The guy charges like a wounded bull , but boy can he figure out the best way to move ahead. And he is so and quick!

    What am i buying , when I buy his services. Of course I am buying the services of a guy who can lay a electic line. But there is much more that goes with that. He can devise better ways to get the line to where I want it. He can tell me if the architect has put a switch in the wrong place. he can also suggest we use a C-bus system and why.

    I am more than happy to pay above the odds because I know his work is premium. It’s wrong to be looking at this guy as one of many. That’s way i say labor can never be commoditized and should never be looked at like that. that’s why markets are best to sort these issues out and why governments will always act ineptly even with the best of intentions.

    JC.

    December 7, 2006 at 9:35 pm

  83. As for him suggesting society is commodified? where has he been for the last 20 years?

    1 entertainment has never been as unique.
    It would be pointless to even suggest how.

    2.Pick one of the hundreds of courses available in higher ed. Even say Law has become more unique…. with some schools offering a theme to their course.

    3. Lower ed. Pick a private school.

    4 Holidays. We used to have to go 100 km out of the city during the summer because that’s all we could afford. These days pick a spot anywhere round the world. Skiing in the northern hemisphere during the winter. Travel has never been cheaper.

    5 Sport.
    Used to be Footy/ ruby and cricket. tell me it hasn’t segmented.

    6. Clothes. Fashion these days is too show uniqueness with the many styles available.

    7 cars. Even within a model you can change the interior and turn it into another car.

    Need i go on.

    JC.

    December 7, 2006 at 9:49 pm

  84. Deadly, JC. We were going to head to Fiji, but since they’re fond of coups, we’re considering Vanuatu. Mind you, Fiji prices are dropping like a stone in fresh water, so we may finish up heading to Fiji after all (just don’t mention the coup).

    skepticlawyer

    December 7, 2006 at 9:55 pm

  85. Hi SL, thanks.

    Those coups over there are so funny. No one ever seems to get killed or hurt.

    If they’re selling cheap hols it’s probably a good time to take advatange of it.

    JC.

    December 7, 2006 at 10:04 pm

  86. It so funny.
    One side of the left , Crazy Clive, is saying we have too many choices meanwhile the other side is implying we don’t have enough…..

    Now even that ISN’T commodification!!!!!!! Even the left is showing uniqness….. in stupidity

    JC.

    December 7, 2006 at 10:07 pm

  87. Yes, but, Joe, let’s talk about employment – which was what Rudd was on about.

    Mark Bahnisch

    December 7, 2006 at 10:18 pm

  88. “He spoke about the effect of industrial relations reform on the “relational health of young people”.”

    Labor market reform broadens employment opportunities. How on earth does it effect relational health”. It has the propensity for people to move jobs around easier. That’ good thing. A great thing.

    “He referred to “the rapid commodification of care for children, the aged and the infirm and how they were weakening family and other social relationships.”

    Excuse me Mr. Rudd, but I keep seeing all these new aged homes going up offering different services. I keep reading about the different choices in child minding. How could one infer this was weakening socical relationships? There has been a boom in senior and child care over the pasat 10 years.

    “The driver of these changes is time: longer working hours,”

    There is an economic boom. If he had bother ed to read the stats that come out monthly people are taking advantage of overtime to make more money. How is that a bad thing? Is he barking mad?

    “less predictable working hours (thereby reducing the capacity to plan family and community activities),”

    What he means is that people are working on weekends. How is this a bad thing? I love the idea that the supermarket is open 24 hours.

    “more anti-social hours worked,”

    I like the idea that there is a bigpond tech support 24 hours a day. Welcome to flexibility, Mr Rudd. And with bigpond you sure need 24 hour tech support.

    “less flexibility from work for emergency family care and,”

    Can he show examples where workers weren’t allowed to go home to meet emergency needs. It is against the law, I think.

    “an environment where bargaining rights in the workplace for family-friendly work time are reduced for many workers.””

    Balls. With labor market reform, people could pick and choose what kind of work they want to do. It may well suit people to work the midnight shift and be home to see the kids off.

    “He referred to research showing parents’ unsocial working hours harmed children.”

    Cut the tax rate down where people have a choice to stay home with the kids.

    “He linked the rapid rise in childhood obesity to “the impact of fast food in a time-poor environment for stressed working families”.”

    I would say it is parental choice here. Nothing to do with work. Just a bad choice of diet.

    JC.

    December 7, 2006 at 10:42 pm

  89. Here is something from the ICA which could set the cat amongst the pigeons (the Independant Contractors Act has just been passed in parliament and transcends all state laws);

    In June 2006, the International Labour Organisation recognized in principle the legitimacy of the commercial contract and that labour regulations should not intrude into commercial contracts. The Australian Council of Trade Unions has supported this principle, as have Australia’s peak industry associations, including the Australian Chamber of Commerce and Industry.

    The Independent Contractors Act is the first legislation in the world that seeks to apply this important principle in legislative form. The attempt is welcome…

    rog

    December 7, 2006 at 10:58 pm

  90. It’s more dishonest and stupid than that, JC. Rudd likes to talk about “time-deprived” parents and the advent of child-care and aged-care as though these are phenomena caused by WorkChoices or at least the governing philosophy of the Howard government. This is historically mendacious codswallop of a high order. All of these trends pre-dated the Howard government by years and, if anything, were encouraged by a progressive left that exalted “supermums” and welcomed the liberation of (especially) women from the allegedly limiting “burden” of providing care for children and older relatives at the expense of careers. To link these long-term social and cultural trends to the industrial relations philosophy of a government in the year 2006 is nothing less than what would be called – if Howard tried it on – cynical “wedge politics”. As for “relational health”, it would be interesting to know how many marriages were destroyed during Keating’s Great Recession – which he told people (in a very Christian manner) was a catastrophe they “had to have”.

    C.L.

    December 7, 2006 at 10:58 pm

  91. As always, CL, you are so good at expressing the real points.

    JC.

    December 7, 2006 at 11:51 pm

  92. I think its your fixed costs that force you to work more then you otherwise might.

    Whereas your marginal revenues might incentivise you to work more.

    Fixed costs might include your mortgage or rent, your food.

    Marginal revenue is going to depend somewhat on your marginal tax rate.

    If we raise the income tax threshold some folks might choose to work less hours.

    If we cut the top brackets some folks might choose to work more hours.

    If we aren’t in so much debt and our housing costs are a lot less a lot more couples might be able to get by on 1 full-time job or one full-time and 1 part-time job.

    If there is a greater availablility of part-time work and a freer labour market, and as well we have brought fixed living costs way way down then many people might choose to work part-time when working on some project or studying, or work full-time when accumulating funds and they may be easily able to jump from the one situation to the other.

    For social, artistic, business and scientific innovation what we need is massive spaciousness in high-rise.

    So that massively spacious apartments are eventually so cheap that people can sustain them and work part-time.

    This is when you can have two spare rooms just for one business project.

    Or some part-timer can have a recording studio.

    Or a make-shift lab.

    Maybe he puts it altogether on a full-time wage.

    Then he goes to work with all this extra space and second-hand gear that he’s hoarded-like-Smorg.

    And he can sustain it with a part-time wage.

    This is when we can get to a massively innovative society such that we might look at ourselves against the Athenians and not feel like total crap in comparison.

    GMB

    December 8, 2006 at 12:45 am

  93. GMB, that’s a beautiful image. Just sayin.

    skepticlawyer

    December 8, 2006 at 1:52 am

  94. Damnitall.

    This means I might have to put together some sort of hasty reconcilliation with FDB on the sly.

    I’ll probably just go off and sulk for awhile at this new development.

    GMB

    December 8, 2006 at 2:11 am

  95. This means I might have to put together some sort of hasty reconcilliation with FDB on the sly.

    Bird
    Just hold the nose, take deep breath, keep it in and push down. I know you can do it.

    We want the bird of prey flying round freely, unencumbered with soonicisms around its neck.

    JC.

    December 8, 2006 at 2:16 am

  96. Leave me alone. I’m still sulking.

    I can sulk for a very long time.

    I liked it better being Sooned all the time.

    GMB

    December 8, 2006 at 2:21 am

  97. skeptic, you apparently dislike unions. Can I ask whether you’re a member of the Queensland Law Society, whatever it’s called?

    Tony Healy

    December 8, 2006 at 2:26 am

  98. JC, your brilliant electrician might be having a lend of you. The main responsibilities of electricians are not recommending nice lines for cables, but ensuring supplies are connected in such a way that earth protection systems work, thus protecting buildings against fire and people against electrocution.

    Also, re your fighter pilot, F-15s are not carrier aircraft. You probably meant F-14s or F/A-18s. And the lights-out thing doesn’t make sense because they always have special focussed lighting systems for night landings.

    Tony Healy

    December 8, 2006 at 2:36 am

  99. rog, the ILO has never been opposed to contracting.

    It has however been opposed to sham arrangements, and still holds that position.

    The Independent Contractors Act protects the business of labour hire firms by enforcing employent restrictions on contractors.

    Tony Healy

    December 8, 2006 at 2:43 am

  100. Not so Tony, the Act protects workers freedom of choice, something the ACTU and the ALP have fought against for many years.

    rog

    December 8, 2006 at 7:01 am

  101. Healy do us a favour:
    if you’re going to correct someone for getting a F14, F15, F18 confused….. if you’re going to argue the difference between a good, creative contractor and a so so one, save the pixels and the bandwidth as no ones really interested.

    By the way do people leave the room when you enter it?

    JC.

    December 8, 2006 at 8:50 am

  102. He’s the first genuine specimen of the Christian left to lead the ALP.

    Well, the first in a while. In the period between Federation and the Depression, the ALP was rife with them.

    When it comes to identifying the source of hyper competitive behaviour I put it down to … taxation.

    Oh dear. When cartels are fat and happy, competition is sluggish and economic growth is stifled, it’s because of taxation. Whenever hyper-competitive behaviour leads to economic growth, it’s because of taxation. You’ve got a tax bias, Terje, that ignores the fact that there’s always been taxation, there’ll always be taxation, and that wherever people have the choice between jettisoning capitalism or jettisoning taxation, they always jettison capitalism. Yeah, it’s counterintuitive but it’s no less true for that.

    Could I point you in the direction of superannuation funds, awash with cash and willing to invest it in companies promising big returns, because they’ve all got obligations to pay out to baby boomers whose contributions are low but whose expectations are high.

    Given a tax cut I take the view that many and possibly most people will use it to fund an increase in leisure time.

    Where the hell do you go to buy some time? I hope you can do it online from work because I seriously haven’t got time to go to the shops.

    We then find less meaning in the local lamington drive (because it is gone) and seek meaning in places like work.

    I’m much more productive at work than I am making lamingtons, and if you deny that I’ll make some and you’ll have to eat them (hint: make a will first). Public servants are much less likely to be putting in 80-hour, social-life-destroying weeks than people working in the private sector.

    It is also true that one can be hyper competitive without being productive. During those orgies of M&A activity there’s a lot of competitiveness, not much productivity.

    This is an important issue for right-of-centre politics. Those who want greater economic performance are at odds with those religious activists who want to dampen people’s drive for productivity, scientific research, artistic expression and other fruits of the enlightenment. In any “alliance” the latter always win, always. This is why, as I keep saying, Grover Norquist Must Die.

    Andrew Elder

    December 8, 2006 at 9:28 am

  103. Andrew E
    You’ve got the wrong idea of Norquist. Norquist’s idea of an alliance with the Christian Right is solely to draw them into a ‘leave us alone’ coalition not about having them impose their preferences on us. See this
    http://www.reason.com/news/show/30147.html

    On your point about mergers, this is really funny because decades ago critics of the corporation were going on about the separation of ownership and control and how this leads to management fat.
    Mergers and acquisitions may seem like they involve a huge waste on resources on lawyers but their ultimate effect is an incentivising one. Takeover merchants keep management on their toes, They create a market in corporate control – if there is no value to be gained from reorganising a company then the sharks won’t surface And the best way managers can avoid takeover merchants is by running a tight ship.

    Jason Soon

    December 8, 2006 at 9:33 am

  104. A good tradesman will save you money, a poor one will take twice as long to do a bad job which will require fixing.

    rog

    December 8, 2006 at 10:22 am

  105. No, I’m not a QLS member, Tony. And I think you’ll find I’ve been just as scathing about lawyers using occupational licensure to rent seek as I have been about unions raising barriers to market entry on behalf of those already ‘inside’ the system.

    skepticlawyer

    December 8, 2006 at 10:42 am

  106. Elder.

    What on earth was your point?

    People who actually pay taxes don’t ask for tax increases on themselves.

    Not as a rule in any case. The demand for taxation is a demand for taxation of others. And a lot of it seems to come from people who consume taxes and do not pay them.

    That is to say public sector taxeaters.

    But having said that I still cannot see what point you were making.

    [EDIT BY ADMIN – I, GRAEME BIRD, WILL BE FORCED TO APOLOGISE TO FDB BY HAVING THIS COMMENT FORCIBLY INSERTED IN ALL OR MOST OF MY COMMENTS UNTIL I VOLUNTARILY RETRACT OR APOLOGISE TO FDB FOR MY VILE COMMENT ON THE GAIDAR THREAD]

    GMB

    December 8, 2006 at 11:11 am

  107. Tony I don’t dislike unions, I am just not happy about the way that they have used collective bargaining and the strike threat to reduce employment opportunities, to reduce productivity, to promote divisions and discord in the society and to encourage the acceptance of violence and standover tactics in industrial disputes.
    http://www.hrnicholls.com.au/nicholls/nichvo27/champion2006.pdf

    Rafe Champion

    December 8, 2006 at 11:35 am

  108. Rafe individual awards do have some benefits but productivity ain’t one of them.
    The BCA has years tried to find this and not one employer could ever show how this eventuated in the old IR commission.

    The Best example was when an exPM put I think Rio tinto executives through the ringer.

    Bring Back CL's Blog

    December 8, 2006 at 11:42 am

  109. rog, labour hire firms can prevent contractors from accepting staff roles via their contracts with the employer, for a period of six months to a year after the contract finishes. That’s hardly freedom of choice, and it’s just one of many restrictive practices the Independent Contractors Act protects.

    JC, the air force would be mighty interested if the Navy managed to launch and land F-15s on a carrier, since it’s an air superiority fighter that’s not tough enough for carrier work.

    skeptic, good to see you’re not into hypocrisy. So many free trade messiahs shoot from behind such massive protections they don’t even notice them.

    Rafe, OK, but that’s a bigger argument I don’t want to get into right now.

    Tony Healy

    December 8, 2006 at 12:39 pm

  110. Tony
    what the heck are you on about? The professions have been practicing outsourcing for ages.
    I was just working the last 2 weeks with an independent consultant flown in from the US to assist with one of our projects.

    Economists have never organised themselves into unions to bid for wages. One of the managers in my firm doesn’t even have an economics degree – he has a physics degree from Harvard. Another ex-collague was in the medical sciences area before he moved into economic consulting. I myself have been brought in to help with projects in Europe. The knowledge-based industries have been exposed to international competition and outsourcing for ages.

    I have never, ever been a member of a union in all the jobs I’ve held, even the most menial ones in my student days.

    Jason Soon

    December 8, 2006 at 1:11 pm

  111. ‘labour hire firms can prevent contractors from accepting staff roles via their contracts with the employer’

    Who’s preventing who? If you don’t want to be an independent contractor don’t be one. Many people choose to be independent contractors. They’d rather be paid for the project and choose what projects they want to work on.

    Jason Soon

    December 8, 2006 at 1:15 pm

  112. Andy

    Great contribution as always, proving once again that someone can use a keyboard even when on a huge bender.

    Tony Healy.

    Ok, you won. F18s and F15s dont’t fly on carriers. i must admit I now feel humbled.

    JC.

    December 8, 2006 at 1:20 pm

  113. JC, you were jet-lagged

    Bring Back CL's Blog

    December 8, 2006 at 1:44 pm

  114. Homer, you tool …

    Jason Soon

    December 8, 2006 at 1:52 pm

  115. Jason, Norquist has been in bed with the Christian Coalition for years. Any and all nanny-state we-know-what’s-good-for-you interventions can be traced back to Norquist’s evangelical Christians. He’s as much a Washington insider as Hillary Clinton.

    their ultimate effect is an incentivising one.

    The idea of this statement was to be so high-level as to be able to brush off any inconvenient examples. Some M&A activity is wealth-maximising, but others aren’t. Those that are designed to reduce competition, or for plunder, are not at all incentivising and can be detrimental economically to all bar the captains of the pirate vessel.

    Takeover merchants keep management on their toes, They create a market in corporate control – if there is no value to be gained from reorganising a company then the sharks won’t surface

    In theory: yes. In practice: regularly, but not consistently and not often enough to warrant so definitive an assertion.

    People who actually pay taxes don’t ask for tax increases on themselves.

    Not as a rule in any case. The demand for taxation is a demand for taxation of others. And a lot of it seems to come from people who consume taxes and do not pay them.

    The point was to admire the firmness of the grip with which Terje grasped the wrong end of the stick. He blames tax for everything, poor mite, including his vast historic ignorance.

    Demands for taxation mostly come from those who do pay tax and who wish to claw some of it back. They often find their tax rates increase and they seem to bear it with equanimity.

    JC, you’re a wag. If you were as successful as you are funny, you’d have a real contribution to make here. Why not just copy my posts verbatim, people will be amazed at the dramatic improvement.

    Andrew Elder

    December 8, 2006 at 3:15 pm

  116. “Some M&A activity is wealth-maximising, but others aren’t.

    Ok genius, tell us of the takeover bids that don’t raise the premium value of a company. Even one. Even 1/3 of one.

    “Those that are designed to reduce competition, or for plunder,”

    Plunder as im maximizing profits? Dude, what are you drinking these days.

    “….are not at all incentivising and can be detrimental economically to all bar the captains of the pirate vessel.” ”

    Some scceed some fail. All start with the premise of success. You have a cystal ball that tells us which succeed? If you do, i suggest you take the first plane to NYC and make a squizilion.

    JC.

    December 8, 2006 at 3:41 pm

  117. Krudd is going to come a gutser with his ‘commodification’ theory – the majority of ‘commodifiers’ are ex ALP voters wanting to get ahead. Nobody wants to go back to the days of ‘one man one job’, ‘no ticket no start’.

    Most people want to have some control over their lives, not have to ‘work to rule’.

    Big money in the mines now, 8 or so years ago employers were facing the wall, productivity was woeful and unions were going on strike over poor coal prices and outsourcing. Now mines tradesmen are getting +$100K and there is a labour shortage.

    rog

    December 8, 2006 at 4:02 pm

  118. ” Now mines tradesmen are getting +$100K and there is a labour shortage. ”

    don’t wrorry, Rog, Rudd will have this figured by 2020 at the lastest. He’s a fast learner. He’s currently up to date to 1978. Give him time.

    JC.

    December 8, 2006 at 4:07 pm

  119. Ok genius, tell us of the takeover bids that don’t raise the temporary value of a company. Something that gets 22 year olds with more education than sense or background knowledge hot and bothered, but which makes grown-ups despair. Go on, just one. Give me an example of something worked out by lawyers and accountants but which resulted in confusion and fuckups at the customer interface, which would have seen them flee in disgust if there was an actual choice. Give me another example of why perfect knowledge is the sine qua non of libertarianism.

    As I pointed out in my response to Jason I’m not against M&A activity per se. What I am against is the notion that a highly competitive economy is necessarily a profitable one.

    While JC thinks that all profit-taking is plunder, I’d have to disagree. You can try and defend Alan Bond’s smash-and-grab raid on Bell Resources if you like but it was not in any way profitable for anyone except Bond and his henchmen.

    The best M&As are those driven other than by ‘sharks’, by those with a longterm commitment to the industry in which the respective businesses operate. These are the M&As that realises the hopes that investors, and well-wishers like Jason, have for them in terms of profit. These are the mergers that translate ethereal but highly-charged legal negotiations, through patient reorganisation and retraining, through not only sorting the wheat from the chaff but actually getting rid of the chaff rather than the wheat (in terms of asset sales and HR downsizing).

    Sharks get theorists hot and bothered but they don’t achieve much and come unstuck eventually. They do little for the ecoomy and less to vindicate capitalism in general.

    Some scceed some fail. All start with the premise of success.

    This is the nearest JC has ever come to any sort of balanced, thorough analysis, and what a pearler it is. I’m going to link to this so that every time I think JC is a dill, I’ll have this keen insight before me (unless the server goes on strike again).

    Andrew Elder

    December 8, 2006 at 4:28 pm

  120. Oops.

    C.L.

    December 8, 2006 at 4:44 pm

  121. Does this help: .

    C.L.

    December 8, 2006 at 4:45 pm

  122. ” As I pointed out in my response to Jason I’m not against M&A activity per se. What I am against is the notion that a highly competitive economy is necessarily a profitable one.”

    Elder, I’m forgetting Andy for the moment. You really are oppressively stupid aren’t you? How the fuck do you think a highly competitive economy becomes a highly competitive economy. Does this happen by some magical act of God. Do you just will such a thing and puff it happens. A highly competitive economy is an economy that is fueled by savings, which are derived from wages and profits. If an economy were highly competitive it would be attracting savings that fuel capital equipment purchases etc. If it wasn’t profitable, no attraction. Lets not forget that an economy is made of individual firms and trading entities that have to be profitable if the are to survive the competition.

    “While JC thinks that all profit-taking is plunder, I’d have to disagree”

    No I don’ you dullard, you do. You were the one who mentioned the word first and I corrected you.

    See here:

    “Those that are designed to reduce competition, or for plunder,”

    to which I said”:

    “Plunder as in maximizing profits? Dude, what are you drinking these days”

    Which to a normal person not on a bender means that provided the activity is legal there is no such thing a plunder in a liberal economy. You only get plunder when the government mandates monopoly power to a spcieal interest, or you simply steal.

    “You can try and defend Alan Bond’s smash-and-grab raid on Bell Resources if you like but it was not in any way profitable for anyone except Bond and his henchmen.”

    I don’t have to defend anything except to say the old Bell resources shareholders were more than happy to get taken out, otherwise they wouldn’t have sold. After the Bond crash th new aquirers of the remenents of Bell resources were more than happy to buy a cheap asset other wise they wouldn’t have bought it. It was the Bond shareholder that copped it good and proper, doofus.

    “The best M&As are those driven other than by ’sharks’, by those with a longterm commitment to the industry in which the respective businesses operate. These are the M&As that realises the hopes that investors, and well-wishers like Jason, have for them in terms of profit.”

    Ok, Mr. Goldman Sachs investment banking genius. Show us the numbers and tell us how you define sharks. By your definition every firm is a shark because it thinks it is acquiring value, other wise you wouldn’ get the deal done.

    “These are the mergers that translate ethereal but highly-charged legal negotiations, through patient reorganisation and retraining, through not only sorting the wheat from the chaff but actually getting rid of the chaff rather than the wheat (in terms of asset sales and HR downsizing).”

    Two things here, Andy. You’re sermonizing and it seems you can’t tell the difference between wheat and oats. In other words it’s useless babble.

    “Sharks get theorists hot and bothered but they don’t achieve much and come unstuck eventually. They do little for the ecoomy and less to vindicate capitalism in general.”
    KKR is the biggst buyout firm in the world, which has been around since the 80’. It has survived and prospered. It would fall into your defintion of a shark. There are quite a few example of sharks which are now known as private equity firms that have made their investors very rich. Out the window goes this theory of creationsim.

    “This is the nearest JC has ever come to any sort of balanced, thorough analysis, and what a pearler it is. I’m going to link to this so that every time I think JC is a dill, I’ll have this keen insight before me (unless the server goes on strike again).”
    You really are a first class twit, aren’t you? The good thing is you don’t even know how stupid you are.

    JC.

    December 8, 2006 at 4:59 pm

  123. At least there’s someone in the family with brains.

    there’s gonna be some long faces at the dinner table if Ms. Rudd carries though his threat to roll back labor market reform and her profits go out the window. Love to be a fly on the wall when that happens.

    JC.

    December 8, 2006 at 5:03 pm

  124. “Unions in fact are the enemy of labor except except their members.”

    Presumably that is why the material standard of living for the ordinary worker in highly unionised Scandinavia is so much higher than it is in mostly un-unionised America.

    Those evil bloody Swedes are oppressing the poor Yankee worker.

    (Sorry for interjecting. Please return to collectivist group think).

    melaleuca

    December 8, 2006 at 5:52 pm

  125. Steve M, you didn’t tell us where you’ve been all this time. Some info on your travels would be good, or even a blogpost (just drop the link in here so we can all go read when it’s done).

    skepticlawyer

    December 8, 2006 at 5:59 pm

  126. actually he has, sl. he’s even dedicated a post to JC and Birdy!

    Jason Soon

    December 8, 2006 at 6:04 pm

  127. Dang, my bad. Steve’s travelogue is here.

    skepticlawyer

    December 8, 2006 at 6:10 pm

  128. Isn’t the little gal just brazen, Jase. isn’t she such trollope?

    He stole my identity as well as making some appalling racist remaks about me but doesn’t include his own actions in the post that have to be the worst example of behaviour in OZ blogdom.

    All because I called him stupid.

    JC.

    December 8, 2006 at 6:46 pm

  129. It’s an amusing pattern of behaviour.

    1. She comes over to this site.

    2. Makes some appallingly stupid comment.

    3. She is told it’s a stupid comment.

    4. She then makes some racist remark, goes away and sulks , screws up her courage after a few days a repeats the process.

    The gal is not of this world.

    She’s like human pinata with attitude.

    JC.

    December 8, 2006 at 6:53 pm

  130. How did Steve turn into a she? Or are you having a go at me, JC?

    Just wonderin.

    skepticlawyer

    December 8, 2006 at 7:13 pm

  131. no not you, SL. the real sheila. Stephanie to her closest girlfriends.

    JC.

    December 8, 2006 at 7:20 pm

  132. Watch now that I said she’s a pinata type and gave away the drill, she’ll come come shortly all doled up pretending she hasn’t been crying. Just to prove me wrong.

    I’m quite sure she’s always bringing up Sweden because there are some many blond dudes over there.

    JC.

    December 8, 2006 at 7:23 pm

  133. Jason, the point is that the Independent Contractors Act is represented as protecting the freedoms of contractors.

    Choosing to accept a role with a company, or to continue working there when a contract ends, seems a pretty obvious freedom that card-carrying libertarians such as you should endorse.

    Your argument that the worker chooses to take a contract misses the point. Our little contractor decides to stay. One would think an Act that protects the freedom of contractors would at least recognise this right, and even better facilitate it. But it doesn’t. It endorses the labour hire firm in denying that choice and freedom to the contractor.

    Secondly, many people don’t in fact choose to be independent contractors. Those are the only employment arrangements open to them, so they are forced to accept the arrangements offered by labour hire firms.

    Tony Healy

    December 8, 2006 at 7:45 pm

  134. On the subject of protectionism, you’ve steered the discussion into outsourcing, which is a different topic than the hypocrisy of professionals sneering at unions.

    You’ve also used the particular case of economists to argue there’s no hypocrisy, but I don’t really care about economists. I didn’t specifically mention them and don’t intend to.

    The standout examples of professional hypocrisy are lawyers, accountants and medicos, who enjoy enormous benefits thanks to the organised lobbying of their professional societies, functioning in much the same way as unions in terms of self-interest.

    We could also be topical and add the example of wheat farmers, with the single desk marketing system, which is much the same thing.

    Hypocrisy in outsourcing is a different subject.

    Tony Healy

    December 8, 2006 at 7:58 pm

  135. “The standout examples of professional hypocrisy are lawyers, accountants and medicos, who enjoy enormous benefits thanks to the organised lobbying of their professional societies, functioning in much the same way as unions in terms of self-interest.”

    Medicos to some degree, but wouldn’t say accountants and legals are in any way a closed shop.

    Tell us how you would open up those professions, Tony, leaving aside medicos which is a real closed shop.

    JC.

    December 8, 2006 at 9:44 pm

  136. Choosing to accept a role with a company, or to continue working there when a contract ends, seems a pretty obvious freedom that card-carrying libertarians such as you should endorse.

    I’ve worked as a part time shit kicker, a full time professional and as a contractor. I now run an IT outsourcing business. I call myself a libertarian and I would never support a system that lets employers and contractors steal recruiters time and money. A contracts a contract. If you want to destroy the outsourcing and recruitment industries then pass your regulation and then see the contracting options fade. Maybe that appeals to you but I think it would be horrid for a whole swag of people.

    terjepetersen

    December 8, 2006 at 10:07 pm

  137. Actually i don’t understand why this issue requires an act to be passed. If someone breaks a contract it ought to have common law implications. I would have thought the law is retty well developed to cater for this.

    JC.

    December 8, 2006 at 10:33 pm


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: