A new prime minister but the same old problem: the mining industry claims the resource super-profits tax would damage it and the economy, whereas the government claims it would be great for the industry and the economy.
And both sides have "independent modelling" to support their claims.
If that doesn't make you sceptical about the use of modelling in the political debate, it should. But if you need more, try this: the two...
Saturday, June 26, 2010
Wednesday, June 23, 2010
Our media roasts old chestnuts
If a genie appeared from a bottle and offered me one wish, I'd choose to be a columnist on a major newspaper. So I guess you could say I love my job. But there are times when I feel compelled to warn people to be careful about what they read, hear and see in the media.
Many people assume the media give them a representative picture of what's going on in the world beyond their own experience. But this is a misunderstanding...
Monday, June 21, 2010
God give us better armed forces, but not yet
Kevin Rudd's chronic tendency to over-promise and under-deliver means the Australian Strategic Policy Institute's annual review of the defence budget is always an object lesson in how his long-suffering purse-string ministers manage to square the budget circle each year.
The fact that the Howard government was prepared to neglect many areas of spending that the Rudd government isn't - education and infrastructure, for...
Saturday, June 19, 2010
Population fall poses immense new challenges
Peter Costello used to say demography is destiny. Like many of the things he said, that's an exaggeration. But it is going to have a big effect on your future.
Demography is the study of human populations. In principle, it's quite separate from economics. But economists are likely to be saying a lot more about it - and boning up on it - because demographic change will have a big effect on the thing they care about most:...
Wednesday, June 16, 2010
Wanted: some belief in a leader
As I lay in bed one freezing morning lately I wished it would rain so I wouldn't have to get up and go jogging. But it's a free country - if I disliked the idea of going out into the cold so much, why didn't I just stay in bed? Because I knew if I wanted to be fit there was a small sacrifice involved. I also knew that when I make an effort I feel better than when I don't. All of us make similar decisions every day.
There's...
Monday, June 14, 2010
What would Jesus do about economic growth?
Should Christians support capitalism? According to a leading English layman, despite all its material benefits, capitalism as we know it contains moral flaws with serious social consequences.
I'm in no position to preach to Christians, but I'm happy to pass on the views of Dr Michael Schluter, founder of Britain's Relationships Foundation, which will be of interest to a wider audience (and can be found at www.jubilee-centre.org/resources.php?catID=1).
Schluter's...
Saturday, June 12, 2010
The economy's animal spirits
John Maynard Keynes first recognised it when seeking to explain why the Great Depression happened even though the economic theory of the time said it couldn't. But it's taken the global financial crisis to help us rediscover that truth: the main reason economies fluctuate as they do is the changing psychology of the people who compose the economy.
Keynes called this our "animal spirits", which is the title of a book by George...
Wednesday, June 9, 2010
NSW budget: Staying on target needs steady hands
So far, so good. A government on its last legs, with everything - and nothing - to lose, has delivered a responsible budget.
Of course, whether the good guys within the Keneally government can keep holding the line against crazy, panic-stricken decisions until election day is another matter.
The Treasurer, Eric Roozendaal, can - and does - boast a return to budget operating surplus two years earlier than expected, with...
At last a strategy that will ease the housing shortage
It has taken Australians a long time to twig that rapidly rising house prices aren't as good as they sound. For ages home owners happily imagined higher prices made them richer. But richer in what sense?
For a start, you can't get your hands on that wealth unless you're prepared to trade down to a smaller or cheaper place. You can borrow against it, but what's so great about that? You still have to pay interest - and pay...
Monday, June 7, 2010
How Keynes, not mining, saved us from recession
You never judge economists by whether they get their forecasts right. They rarely do. But they score points in my book if they're willing to work out why they got them wrong - and make the results public.
This is what Treasury's chief forecaster, Dr David Gruen, did in a speech to the Economic Society in Sydney on Friday.
I don't hold out much hope that such exercises will help produce better forecasts in future. But they...
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