Cricket’s Crystal Career Ball

May 27, 2010

Kevin Rudd reckons the fall in the Australian dollar has nothing to do with his new resources tax. So how does he explain this?

Sure – lots of other currencies have fallen against the USD – but not as much as ours has. Do the calculations yourself at Google Finance.

The Aussie dollar isn’t the only casualty of the resources tax. Treasury’s reputation for impartial advice has been shredded!

A fortnight ago I told you about the dodgy stimulus graph from Treasury discovered by the IPA’s Sinclair Davidson. Now there’s Treasury’s dodgy mining tax rates – this is Sinclair from the Catallaxy Files (a great website if you want to know the economics that no-one else is brave enough to write about).

While we raise taxes – New Zealand is cutting them. Their budget last week cut the top marginal rate on personal income tax to 33% (yep – that’s 33% – our top marginal rate is 45%) and cut company tax to 28%. They did this by increasing their GST from 12.5% to 15%.

I’m still getting great feedback on Chris Berg’s Sunday Age piece on what pigs can teach us about capitalism – he was inspired by Leonard Read’s famous 1950’s essay I, Pencil (if you haven’t read it before – you should – it’s about 2000 words). Here’s a video of Milton Friedman telling the I, Pencil story.

Ever wonder why things (your life, your work etc) don’t go your way?
It’s not your fault.
It’s luck.
This paper What Can International Cricket Teach Us About the Role of Luck in Labor Markets is getting lots of publicity. It’s fascinating stuff – it’s by two IMF economists. They analysed the record of every Test cricketer who debuted between 1950 and 1985. And their conclusion? Basically if you’re lucky enough to debut at home you’ll do better than if you debuted overseas – AND you’ll continue to do better.
Here’s what the Freaknomics guys at The New York Times said about it last month.

Here’s what IPA staff have been talking about this week: In Tuesday’s Age, Sinclair Davidson summed up what’s wrong with the mining tax, and on The Drum, Chris Berg looked at defence spending waste.

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The price of privacy – $110 a day

May 20, 2010

Did you know the government has the power to force you to answer anything it wants to ask? It’s in the Census and Statistics Act.

The Rudd government’s National Health Survey will force 50,000 Australians to tell the government what they eat and drink – and if they don’t they’ll be fined $110 every day until they do. Here’s the story from yesterday’s Herald Sun.

Wayne Swan said in the budget speech that ‘The private sector is re-emerging as a driver of growth”.

If only. Look at these figures from the budget on how government is growing so much faster than the economy:

I got a huge response last week when I told you about this dodgy graph from Treasury. In The Drum on Tuesday, Chris Berg explained why it’s a big deal.

Before you panic about the Gulf of Mexico oil spill – read this by Dominic Lawson from The Independent a few days ago.

Maybe the UK Coalition government is good for something. Yesterday Nick Clegg said he wanted to fight ‘obsessive lawmaking‘. Here and here is what we’ve said about out-of-control legislation in Britain. And does the US military really need 26 pages to tell it how to cook a brownie?

As Greece unravels who do the Greeks blame? American bankers of course! They want to sue them. Presumably no-one in Athens has read articles like this in The Australian today taken from The Wall Street Journal.

Here’s what IPA staff have been talking about this week: In The Australian Financial Review on Friday, I looked at the Rudd government’s lack of self control, and in the Sunday Age, Chris Berg found some government programs to cut. In Tuesday’s Australian Financial Review, Alan Moran said Rudd has made a bad calculation with the mining supertax.

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May 13, 2010

This graph was in the Budget Papers on Tuesday night. It compares the size of stimulus packages against growth projections made by the International Monetary Fund.

Treasury claims the graph demonstrates the bigger the stimulus, the bigger the difference between what the IMF predicted would happen and what actually happened (ie the bigger the stimulus the bigger the recovery).

But the IPA’s Professor Sinclair Davidson asked himself – why are there are only 11 countries in the graph??? The original IMF document Treasury got the data from was a list of all the countries in the G20. (There’s 19 countries in the G20 plus the European Union.)

Sinclair plotted all 19 countries. And guess what? THERE’S NO STATISTICAL SIGNIFICANCE between the size of stimulus packages and economic recovery. Sinclair explains it here.

Why did Treasury include China in their graph but not Russia? or Brazil but not Mexico? … mmm … have Treasury officials learned statistics from the folks from the University of East Anglia?

Last Friday the IPA released the results of a poll of 1000 Australians we commissioned on climate change. Here’s the results:

Full details of the poll are here.

If you don’t already think the Resources Super-Profits Tax is terrible, read these three articles from the last few days by Judith Sloan in Catallaxy, Michael Pascoe in The Age, and Paul Murray in The West Australian.

If you missed seeing Kevin Rudd getting very grumpy indeed on The 7.30 Report last night – here it is (the IPA’s Tim Wilson has this to say about it). But it doesn’t compare to this classic.

And if you’re in the mood for an interesting piece on what American presidents read there’s this from the Washington Post last month. Talking of books the IPA and Connor Court Press are hosting the launch of new book by Cardinal George Pell Test Everything: Hold Fast to What is Good in Melbourne on Monday night – details here.

Here’s what the IPA staff have been talking about this week: Julie Novak in The Australian on the growth of government bureaucracy. Chris Berg in The Drum on the politics of terrorism and in the The Spectator on Australia’s cultural identity. Tim Wilson in the Canberra Times on grocery protectionism. And Tom Switzer in The Age on the real Kevin Rudd.

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Spot the difference game

May 6, 2010

Kevin Rudd’s mining supertax on ‘foreign companies’ has prompted comparisons between him and Hugo Chavez. So as your Rio and BHP shares tank, have a bit of fun and spot the difference:

Question 1 – Neo-liberalism

A) – ‘Neo-liberalism is a dogma of individualism that has led the world to fight like savages against each other’

B) – ‘Neo-liberalism…has been revealed as little more than personal greed dressed up as an economic philosophy…it now falls to social democracy to prevent liberal capitalism from cannibalising itself.’

Question 2 – Climate change

A) – ‘…there are some scientific publications that predict, at the rate in which the planet’s temperature is rising…in 100 years the planet’s temperature will have produced an intense thawing of the ice caps, and a terrible tsunami like the one that devastated the coasts of Asia week ago…’

B) – ‘We gather because the peoples of the world demand that we gather… Each and every one of us here will be judged as individuals. For what we say. For what we do. And for what we fail to do… And whether we have responded in conscience… None of us comes to this conference with clean hands.’

Answers at the bottom.

This is what the IPA said on Sunday about the Henry Tax Review – it’s a grab for more tax. Here and here is the IPA’s Professor Sinclair Davidson on why the mining super tax is a bad idea. But the Canadians are happy about it. If you’re angry about the tax and want to be kept informed of the IPA’s research – click here.

This is a great video doing the rounds that puts President Obama’s budget cuts in perspective. Who thought you could have so much fun with pennies?

The British General Election is tomorrow. And what’s the big story of the last days of the campaign? A vow to abolish the Page 3 Girls of The Sun. (Peta Todd is right on the money!) Chances are Nick Clegg won’t be PM. But in case he is read this piece from Spiked about him.

Here’s what the IPA staff have been talking about this week: Alan Moran in the Herald Sun on the ETS back down. Chris Berg in The Drum on tax history and in the Sunday Age about pigs and capitalism. Me in The Australian Financial Review on the PM’s lack of policy. And finally the piece de resistance – this video of IPA Board member, Michael Kroger on Lateline discussing the failures of the Rudd government.

For those interested in climate change, the 4th International Conference on Climate Change will be taking place in Chicago, Illinois from the 16th until the 18th of May. Additional information can be found here.

Answers: 1A) – Chavez, 1B) – Rudd; 2A) – Chavez, 2B) – Rudd

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