WA’s Shark Cull

JustinEconomics, PoliticsLeave a Comment

Shark Patrol!Talk about waste. In what seems like something straight out of Yes Minister! or The Simpsons, Western Australia’s Emperor – Colin Barnett – is spending over $20 million of taxpayer’s hard earned to try to do something that fishermen and private researchers would do for free, provided it was legal.

The ingenious plan – the shark cull “shark hazard mitigation program” – was to leave baited hooks 1km off of WA’s beaches in the hope of snaring some man-eating great white sharks. The results? Out of 66 sharks caught, none of them were of the great white variety. Then in a line seemingly straight out of Yes Minister!, the Fisheries Minister remarked:

This catch data proves there are a large number of big sharks near these beaches.Ken Baston

Wow, what an insight. Next they’ll be commissioning a study to show that water flows downhill.

My concern in all of this is why should the government be spending tax dollars on protecting* people who of their own free will go swimming and surfing in shark-infested waters? Surely you could save more lives with those dollars spent elsewhere, if saving lives was the aim and not political vote-seeking; was there no cost-benefit undertaken?

*Whether or not these actions actually protect swimmers is debatable.

JustinWA’s Shark Cull

Talk About Stimulus

JustinEconomicsLeave a Comment

From our friends in the mother country comes this:

THE government has been offering cash incentives of more than £2,000 to strip clubs, lap-dancing bars and massage parlours that hire teenage workers.

As part of a wider scheme to boost employment, the Department for Work and Pensions gives £2,275 to adult establishments that provide full-time jobs, such as receptionist or bartending posts, to those aged 18 to 24. The payments are available as long as employees are neither “performers” nor doing jobs with a “sexual purpose”. Payments of £1,137 are available to adult businesses that hire young people part-time.

Marie Woolf

Proof that government stimulus stimulates. Right?

JustinTalk About Stimulus

Of the Extension of the Suffrage

JustinPoliticsLeave a Comment

In light of the recent Tom Perkins controversy where he claimed $1 should equal 1 vote, here’s a relevant quote from J.S. Mill:

It is also important, that the assembly which votes the taxes, either general or local, should be elected exclusively by those who pay something towards the taxes imposed. Those who pay no taxes, disposing by their votes of other people’s money, have every motive to be lavish, and none to economize. As far as money matters are concerned, any power of voting possessed by them is a violation of the fundamental principle of free government; a severance of the power of control, from the interest in its beneficial exercise. It amounts to allowing them to put their hands into other people’s pockets, for any purpose which they think fit to call a public one.John Stuart Mill, 1859

I strongly disagree with Perkins’ one dollar, one vote idea as it would see puppets elected to maintain the narrow interests of the current aristocracy at the expense of the rest of society, but Mill’s idea is certainly a more interesting opinion towards taxation under universal suffrage. Especially considering this:

Total benefits and taxes, 2009-2010

I wonder, would Mill have included government employees among those “who pay something towards the taxes imposed”?

JustinOf the Extension of the Suffrage

Pro Business, Anti Consumer

JustinEconomics, PoliticsLeave a Comment

The Australian reports on the Coalition’s latest pro business, anti consumer policy:

TRADE measures are being prepared to defend Australian companies against cheap imports as Tony Abbott backs calls to toughen existing laws despite the risk of retaliation from other countries.

The federal government is working on the stronger regime to punish overseas suppliers who dump their products on the Australian market at below cost, sharpening measures that would push up the retail price of the imports.David Crowe

The above is an example of how the Coalition aids vested interests at the consumer’s expense. This policy may as well have come out of the Labour or Green play-book. Just as Clive Palmer only supports free and open markets when it helps his exporting business, the Coalition is more than willing to fall back on the same mercantilist ideology to gain political power at the expense of competition and consumer well-being.

I have written before on why having the support of business does not mean the policy will result in a net gain for consumers and in fact often results in the opposite. This new “anti-dumping” legislation is more of the same: it will raise prices for consumers while protecting local producers who cannot compete, creating a net loss for the Australian economy (especially once enforcement costs are included). It will also be used opportunistically by domestic firms to stifle legitimate foreign trade.

There’s a great paper by Greg Mankiw on the futility of “anti-dumping” regulation and how the costs of the unintended consequences outweigh any benefits it might confer to special interest groups. But if you believe in mercantilism, it still makes perfect sense. Domestic industry must be protected and exports must be encouraged no matter the cost, as exports are somehow more beneficial than regular, domestic sales.

What matters most for an economy to be able to deal with any such games played by foreign competitors is how efficiently they can adjust to changing market conditions. In the rare scenario of true “dumping”, flexibility in labour and capital markets will do more to assist domestic production and consumption than any “anti-dumping” regulation will.

JustinPro Business, Anti Consumer

Clive Palmer is More of the Same

JustinEconomics, PoliticsLeave a Comment

Clive Palmer likes to think he’s different to every other politician but in reality he really isn’t, as his comments the other day showed. He’s a dyed-in-the-wool mercantilist who believes anything that ‘harms’ exporters (more accurately, does not aid) is bad for the country. Thus he conforms with the modern political mainstream where mercantilism and Keynesianism are the dominant schools of thought.

While claiming to be “the enemy of privilege, sectional interests and narrow prejudice”, and believe in “fair, open and competitive markets”, Palmer routinely advocates the opposite when it comes to protecting his primary income source, Australian exports. By doing so he undermines the very institutions he claims to be upholding.

…politicians can now play the game of offering more and more dollars to special interests, while even lowering taxes. The government simply fills the gap by borrowing, imposing a greater debt burden on future generations. Either taxes will have to go up in the years ahead or the government will turn to the printing press to pay what it owes, all the while claiming that it’s being done to generate “national prosperity” and fund the “socially necessary” programs of the welfare state.Richard Ebeling

The above quote is a description of a modern politician from an article published yesterday on the legacy of Keynes by Richard Ebeling. It sure sounds a lot like the big-spending, special-interest serving Clive Palmer to me; just print a bit more money and she’ll be right.

JustinClive Palmer is More of the Same