The Conclusion Is To Sell Everything Off To Chinese Communists.

Its painful watching neoclassical dimwits at work. Because they call everything by the wrong names, advocate things that have got nothing to do with free enterprise or liberty, and then  tell everything they are for free enterprise an liberty.

Here’s Humphreys:

“In the Aus-USA FTA we agreed to increase the threshold at which FIRB review was necessary. According to the modelling, that provided one of the bigger benefits of the FTA.

There is no reason this cannot be extended to all trading partners.”

A free trade agreement is a misnomer. Free trade is a local decision. We have crony-socialist government-to-government arrangements but they are in no way free trade arrangements. They are bureaucracy-establishing schmooze-sessions that sell out our sovereignty.  

Now just in passing look again at what Humphreys is saying and let us ask ourselves a question: HAS HUMPHREYS EVER NOT!!!!!!!! FALLEN FOR A COMPUTER MODEL?????

“In the Aus-USA FTA we agreed to increase the threshold at which FIRB review was necessary. According to the modelling, that provided one of the bigger benefits of the FTA.

There is no reason this cannot be extended to all trading partners.”

All down the line Humphreys is a complete dupe when it comes to computer models. Computer modelling is a waste of time really. But its just downright dishonest if they don’t make their assumptions transparent. Humphreys is such a dummy he thinks referring to a computer model that none of us know anything about, is some sort of evidence that selling all our strategic gear to Communist China is a good thing.

Make no mistake about it. The only thing that would satisfy the neoclassical zombies who feature in this Catallaxy thread is to sell all our strategic gear to communist China. Thats what the entire argument is about. And it isn’t about anything else.

Here is the Stephen Kirchner Quote that kicks the name-calling article off. Its an exercise in pure name-calling and it isn’t anything else. Jason Soon decided to call the article ““Capital xenophobia  

 

This is a giveaway but once you know these people you don’t need a giveaway. Because the conclusion is always to sell everything off to communist china. And its got to be vital strategic assets. Or it just doesn’t do anything for these guys. 

Now lets go through this and I’ll make a few small comments. We don’t have access to the full pdf yet. And what Kirchner (a hopeless economist by the way) appears to be in accordance with standard theory BUT ONLY ASSUMING A CAPITALIST ECONOMY. It is absolutely central to these leftist neoclassicals that they interpolate conclusions from a purely capitalist scenario onto our non-capitalist relations. Hence they graft capitalist benefits onto a socialist scenario. This is the key for their ability to advocate long-term strategic sellouts in return for alleged theoretical short-run benefits.

I’m going to make a bunch of small and probably annoying comments within Kirchner’s spiel just to jog peoples thinking into what’s going on here.

“Foreign direct investment, along with foreign investment more generally, provides important economic benefits for Australia.

(this is standard economic theory under capitalism. Its not known if Kirchner has proven this under our interventionist setup in practice.)

FDI increases the domestic capital stock, results in more efficient (impossible to know what he means by EFFICIENT here. Neoclassicals have many odd ideas about EFFICIENCY) ownership of that stock, and supports long-run improvements in productivity, laying the foundations for future economic growth and rising living standards … (all standard stuff and broadly true under capitalist theoretical scenarios).

Yet, on a range of measures, Australia is underperforming in terms of FDI inflows.

 

(Now this is bloody interesting!!!! Because we seem to have trade deficits no matter what happens. We seem to have them locked in. And Kirchner reckons we are underperforming in getting FDI happening? How so? One must wait to read the rest of the article. But this is alarming unless it supports my contention that our banks throw us into trade deficit largely by borrowing off foreign banks, not for sound investment but in and idiotic and futile attempt to support their liquidity since they don’t have a reserve asset ratio. But I will suspend judgement on this matter until I see the rest of his article. The thing with Steve Kirchner is that no amount of a trade deficit is ever enough for him.

 

“The most likely explanation for this underperformance is Australia’s relatively restrictive FDI regime.”

RELATIVE TO WHAT??? I mean I’m interested. But I’m skeptical. This would seem to be a very dubious claim. That we aren’t attracting foreign direct investment and also that we have these really restrictive policies.

But I suppose when you are in a white heat to sell all our resources off to communist China the barriers are always going to be too onerous for you.

“This includes outright statutory restrictions on foreign ownership, as well as sweeping bureaucratic and ministerial discretion to reject FDI proposals based on open-ended criteria thatare inconsistent with the rule of law, increasing uncertainty for foreign investors and Australian residents selling domestic assets.”

How often is this exercised? We are really only talking about really deep pocket undertakings right? And how would this affect things on the computer models? Why would they think they know that restrictions on some of the really big resource rich investments or the infrastructural investments would so terribly reduce our economic performance? Surely this cannot be sustained. Not if you think that economic performance is a matter of big business coming out of powerful small business success.

“… concerns have been raised that state-sponsored entities may pursue political or strategic rather than purely commercial objectives.”

 

This is what its all about. Kirchner is not the least bit interested in small players being able to come here to use Australia as a new business incubator. He’s not the least bit interested in a Botswanan businessmen setting up a local base. Or in some capital goods manufacturer from Holland setting up a manufacturing plant here.

ITS ALL ABOUT FLOGGING OFF NATURAL RESOURCES AND INFRASTRUCTURAL GOODS TO COMMUNIST CHINA.

“However, these concerns need to be put in perspective. Experience with SWFs and SOEs suggests that they are mainly motivated by commercial considerations and maximising returns on investment. To the extent that they pursue other objectives, the costs of such activity are mainly borne by the state-owned entities themselves rather than host economies.”

Well yes if you take a short-run perspective and have no notion of sovereignty whatsoever. Make it very clear. These guys fall almost comatose when you talk about extending more access to private businessmen from countries who cannot hope to get a strategic foothold here. They just get so very weary about us extending this sort of courtesy to businessmen in countries that are no strategic threat.

“Foreign-owned businesses operating in Australia are subject to Australian law. They cannot engage in behaviour that is not already available to Australian firms …”

Canberra is very sensitive to Chinas wishes. They are always attempting to pre-emptively surrender our gear to her. This is just silly talk. There is a pretense that business and politics are in no danger of influencing one the other.

“In relation to the FDI approval process, there are at least two major options for reform. The first would abolish the existing process altogether, extending full national treatment to foreign direct investment. Instead of regulating FDI at the border, the focus for policy would be on regulating foreign-owned businesses in Australia in the same manner as domestically owned firms …

If FDI is to be regulated at the border, then reform efforts should focus on further liberalising and improving the existing FDI approval process. The thresholds for review of FDI proposals should be raised to reflect recent trends in bilateral free-trade agreements.”

Don’t be fooled by this clown. He’s not wanting some character from Leichtenstein to come over here, buy a small business and sell it as a medium-sized business. He’s wanting a Chinese commie front organisation to buy up our resource economy and our infrastructure and call all the shots.

I don’t know WHY these people think like this. I only know that from bitter experience they do.