Outlook for economy not bright

As far as the economy's concerned, 2013 will be the year when many people's dreams come true. For at least the past two years, many of us - business people and consumers alike - have been convinced the economy is slowing and generally in bad shape. Trouble is, until recently the hard statistics on the state of the economy have persistently refused to confirm this pessimism. But now there's good news for the fearful. The nation's...

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The four business gangs that run America

IF YOU'VE ever suspected politics is increasingly being run in the interests of big business, I have news: Jeffrey Sachs, a highly respected economist from Columbia University, agrees with you - at least in respect of the United States. In his book, The Price of Civilisation, he says the US economy is caught in a feedback loop. "Corporate wealth translates into political power through campaign financing, corporate lobbying and...

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Behavioural economists smarten up government

SINCE it's the summer hols, let me ask you a few personal questions. Do you sometimes fail to read every word of the official letters you get? Do you put off filling in forms or delay paying parking fines or taxes? Are you ever less than scrupulously honest on government forms? If so, I have news: the economists are on to you. Actually, it's the behavioural economists, and their thing isn't to punish you but just make it easier...

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Exertion, not avoiding it, makes us happy

Forgive me for saying so, but don't you think you'd be better off going for a run - or even a brisk walk - than reaching for another mince pie? (The ones my wife made this year were irresistible.) Chances are you don't think it. Or maybe you think it, but you don't intend to act on it. If you can't take a day off on Boxing Day, when can you? I hate to say it, but humans have a slothful streak. We want to live comfortable, enjoyable...

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Workers attacked because of economy's success

THE most despicable behaviour of 2012 must surely be the return of big business people trying to make Australia's employees feel guilty about their high wage rates. Chief executives aren't overpaid but ordinary workers are? Yeah, sure. It makes you wonder whether our business people are knaves or fools: are they knowingly talking nonsense or are they simply economically illiterate? I'm genuinely not sure. I realised long ago...

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Adding the environment to the national accounts

Over the eight years to 2010-11, gross domestic product increased by 28 per cent, whereas Australia's net energy use increased by 18 per cent. So our "energy intensity" - energy used per $1 of GDP - is falling at the rate of 1 per cent a year. In 2010-11 we produced 89 per cent of our total energy supply domestically, with the remaining 11 per cent being mainly imported oil. This took our total annual supply of energy to almost...

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Making sense of the budget surplus saga

I hate to burden you with a topic as earnest as the budget deficit so close to the holidays - I had hoped to write about the idea of giving someone a goat for Christmas - but the saga of whether the Gillard government will manage to get its budget into surplus this financial year has reached farcical proportions. A few weeks ago we learnt from the national accounts that the economy's rate of growth slowed to 0.5 per cent in...

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Executives put their salaries ahead of shareholders

For almost as long as big business has been crusading for a lower rate of company tax, I've been puzzling over its motives. Why are these people fighting for something of little or no benefit to their domestic shareholders and likely to be quite unpopular? The willingness with which our economic establishment has gone along with the calls for lower company taxes is one of the great mysteries of the year. . Now the Organisation...

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The case against a lower company tax rate

One of big business's greatest disappointments this year was its failure to persuade the Gillard government to cut the 30 per cent rate of company tax. On business's economic reform wish-list, cutting company tax is second only to getting more anti-union provisions back into industrial relations law. So you can be sure business will be campaigning for lower company tax in the months leading up to next year's federal election. I'm...

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Poverty rises as you move from the centre

In Bill Bryson's fascinating book, Shakespeare, he says we know remarkably little about the man, and most of what we think we know has been dreamt up by overenthusiastic scholars. But of at least one point he was sure: in Shakespeare's London, rich and poor lived side by side. A case, I guess, of the rich man in his castle, the poor man at his gate. They don't make cities like that anymore. Or rather, modern cities seem to be...

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Economics and wellbeing: beyond GDP

Economic Society, Sydney, Tuesday, December 11, 2012 We had been hoping to have a speaker willing to argue that GDP was good enough to guide our policy decisions without need for modification or supplementation, but he’s unable to attend - which is a pity because I would have been interested to hear his arguments. In the absence of someone in the audience willing to argue that position, I think there’s a lot we can agree on....

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The hidden truth about interest rates

The prize for journalistic innovation of 2012 must surely go to whoever thought of a way to turn a cut in the official interest rate from good news to (the much more valuable) bad news: abandon the media's eternal assumption that everyone's a borrower and let the grey-power lobby bang on about the evils of lower deposit rates. It's such an improvement on the standard good-into-bad transformation: bleating about the greedy banks...

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