Posted by: graemebird | February 18, 2009

TREASON TO CIVILISATION ITSELF:Humphreys Betrays Economics, Liberty And Science In A Single Article.

 Here Humphreys continues with his advocacy of the carbon tax for which he will give no scientific or economic justification. Except for an argument which amounts to saying that heroin addiction is likely not as bad as Malaria. Why not have neither? Here is his article in full:

 We need to start an emissions debate. Following the Garnaut report  the Australian Government commissioned, reviewed and reported on an emissions trading system four times in the past year, but it wasn’t until now that it finally asked the fundamental question of whether we should have a trading scheme at all.This may sound like a Monty Python joke but it’s exactly what the Government has done. Herereport we have seen a discussion green paper, Treasury costings, then a white paper exploring the details of the proposed carbon pollution reduction scheme. All this was done before we had a proper debate about which policy approaches provided the most benefits and least costs to Australian society. This back-to-front approach needs to change.

To his credit, last week Treasurer Wayne Swan announced an inquiry into whether there was something better than a trading system. The loud answer from scientists and economists from across the political spectrum was yes: a carbon tax.

Some of the most prominent climate change activists – from NASA scientist James Hansen to former US vice-president Al Gore – prefer a carbon tax to a trading system. They are joined by economists, including free-market Nobel laureate Gary Becker and Harvard professor Gregory Mankiw.

Left-leaning groups such as the Earth Policy Institute, Sierra Club and the Australia Institute have a shared interest with free-market groups such as the American Enterprise Institute, the Centre for Independent Studies and the New Zealand Business Roundtable in recognising the relative merits of a tax compared with a trading system. Even the chief executives of Duke Energy and ExxonMobil have come out in support of a carbon tax.

Of course, the climate change policy debate should not be based on popularity but careful analysis of the benefits and costs of various options. The problem in Australia is not that the wrong policy won in the battle of ideas. The problem is that the battle never took place. We need to have this debate.

If the Government is determined to introduce further climate change policy, there are plenty of reasons a carbon tax may be better than a trading system.

While they both put a price on greenhouse emissions, the carbon tax provides certainty about the price, while traded permits may vary from nearly free to exorbitant. Not only would a carbon tax provide certainty for business but a consistent stream of tax revenue would allow the Government to offer offsetting tax cuts.

Linking a carbon tax with offsetting tax cuts would go a long way to reducing economic fears of climate change policy.

Opponents of a carbon price correctly point out that all taxes have costs and that a carbon tax may lead to distorted decisions and capital destruction. However, if a carbon tax were linked to other tax cuts then the economic costs of one tax would be offset by the economic benefits from lower taxes elsewhere.

There have been several suggestions regarding which other taxes should be reduced. I previously have raised the prospect of cutting income tax or the present fuel tax. The American Enterprise Institute has argued for a reduction in payroll tax. If done well, it is possible that a revenue-neutral carbon tax may be good tax policy, irrespective of its effect on greenhouse gases.

There are other reasons for preferring a carbon tax.

Because a carbon tax doesn’t impose a fixed amount of carbon emissions, it allows a greater degree of flexibility so that businesses and consumers can adjust to the changing circumstances.

In trade theory it is well understood that tariffs are better than traded quotas. Similarly, a carbon tax is more flexible and efficient than the trading system.

Other costs of a trading system include compliance costs, administration costs, wasteful rent-seeking behaviour and the cost of picking winners when carbon credits are allocated.

Climate change is an important political issue in Australia. But if we are serious about tackling the challenges of climate change in an intelligent way, we need to get past the easy promises of just doing something and work out which policy approaches are the most beneficial and least expensive.

A modest revenue-neutral carbon tax is preferable to a trading system and the House of Representatives inquiry announced by the Treasurer offers the Government an opportunity to reopen the climate change policy debate.

John Humphreys is a research fellow at the Centre for Independent Studies in Sydney. He is the author of Exploring a Carbon Tax for Australia and is speaking tomorrow at a CIS round table on climate change policy.

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Responses

  1. Thanks for posting this article in full, it gives a good status of the debate.

  2. I hope you’re aware that the probably large font text you have above the cut and paste is basically invisible.

    thanks for promoting Humphrey’s article

    WHERE AND WHEN IS THIS CIS ROUNDTABLE BEING HELD HUMPHREYS? I’D WANT TO GET AROUND THAT TABLE AND ASK A FEW QUESTIONS THAT YOU CONTINUE TO DODGE AND LAY DOWN A SERIES OF HOME TRUTHZZZZZZZZZ

  3. Graeme – check this article out:

    http://www.counterpunch.org/hudson02122009.html

    It’s not brilliantly structured, and I’m not always on the same page as this guy, but there are some useful points made, which completely expose the massive deceit behind the Bank Bailout.

    Like his predecessor Hank Paulson, Mr. Geithner claims that recovery cannot occur until the banking system is put back on its feet in sufficiently solvent and indeed, prosperous condition to “get credit flowing again,” he said. “Without credit, economies cannot grow at their potential.” But is the solution really to create yet more debt for the already debt-ridden U.S. economy? It was the Greenspan debt bubble that brought it to a halt! Interest and amortization charges on new debt will eats into the ability of consumers and companies to spend and invest. Claiming that economic recovery must be led by renewed debt creation threatens only to deepen debt dependency and further erode discretionary consumer spending power.

  4. The only “deceit” behind the bailout is that the same crowd who drove their financial institutions into the ground now use their political influence to use taxpayer money to maintain their privileges.

    The sad thing is that we have no choice but “saving” the financial system if we still want to have an economy. I just hope Geithner uses the bully pulpit to restructure the whole sector via new antitrust laws.

    Financial institutions that are to big to fail are to big to exist.

  5. No Patrick thats absolutely wrong. We do not need the banks to stay in business for us to maintain a stable level of spending. All of the banks could go under, and so long as you had me running monetary policy and not the ignorant Australian economists, this would in no way hamper our recovery. In fact it would be a great thing because the big four banks are about the least productive non-governmental outfits in Australia other than government departments.

    There is NO ADVANTAGE whatsoever in subsidising these guys. Its immoral. And its bad economics. And the fact is we would not need to be doing it now if my advice given in the middle of last year had been taken.

    That we throw money at these people come rain, hail or shine is due to the ignorance of our economists. The belligerent ignorance of our economists. And also to their hard-core sellout nature.

  6. We’ve got to get away from this idea that we are dependent on all these government departments and banks and need to keep throwing resources at them. Its true that it may take decades to fully move to a voluntary society if we started right now with full committment. And I do leave open the possibility that in the end it may be impossible to do without some government services. I cannot see that far ahead. I know it would be hard work to get a voluntary society right. A lot of hard work.

    But for fucksakes. This notion that we have to keep subsidising the banks. Well we ought to send that to the fires right away. We’ve got to stop giving them first access to cheap newly created money. This is a subsidy. If you gave me loan money at bargain basement rates I’d be a millionaire in no time flat. Its the same for banks. The Americans giving them that discount rate. And even the way our own banks work. Its a disgrace. Because its just as much of a subsidy for them as it would be if it was applied to me.

    There is a reason why our recognized economists are so ignorant. If they weren’t and were not sellouts either then all these scams would have to come to an end.

  7. I said saving the financial system not some particular banks, or their current management. (I even said I hoped Geithner would use his position to restructure the sector!)

    The problem is you can’t just let them fail, just look at what happened when they simply left Lehman Brothers fail. It almost brought the whole world’s economy down because all the current institutions are completely interconnected.

    A sound financial system, i.e. institutions which invest the savings of their depositors into other enterprises, is vital for any economy. One way of doing so, and most likely what is going to happen, is a Gvt intervention (nationalization-restructuring-privatization).

    Last but not least, Geithner is the new Secretary of the Treasury of the USA. His policies have nothing to do with Australian banks.

  8. No no. You CAN INDEED LET THEM ALL FAIL if you know what you are doing. If you understand monetary-economics you can let every one of the mutherfuckers go under and it make no difference to business spending at all. It would be a fucking liberation. But you have to know what you are doing and be free of all religious impulses in favour of the dark arts of macromancy. Or any double standard where you think 10 000 regulations, government compulsion cash, legal tender……. you cannot afford this bigotry or mental block where you view these things as not really right…… but 20th order business…… you cannot have that idea on the one hand and on the other hand be such a fucking stooge and dupe that the one regulation of the reserve asset ratio is just that one regulation….. more repulsive and unacceptable than the thousands of other acts of initiated force that you have just got through bullshitting that they are 20th order business.

    So no. We don’t need to subsidise the banks. We can stop this practice right now. Even before fully privatizing money. But to be able to do this we would have to have economic advice from economists who were not hypocrites or lunatics.

    And most particularly we would need that advice from economists who actually understood economics.

  9. “I said saving the financial system not some particular banks, or their current management. (I even said I hoped Geithner would use his position to restructure the sector!)”

    No no no no no. You don’t have fucking economists doing restructuring. Particularly not a know-nothing like Geithner. You don’t have consultants setting up a new industry. Big business ought to result from small business successs. So the best way for this deal to have gone ahead would have been for all the big guys to have their asses against the wall and to be forced to sell off one branch at a time to keep from going under. And so you have many small banks, some of them surely owned by massive corps I would expect, coming into the market via this route.

    Thats a restructuring of sorts. But its no violation of property rights which your flippant and hubristic notions of restructuring would entail.

    The Americans have financialised the economy and therefore gotten up to a further double figures of parasitism on top of the parasitism of their three levels of government.

    Hence a move to a total lack of financial sector subsidy would entail a general shake-out of players so that 20% of people employed in the financial sector suddenly become 3%. When that happened we’d wind up with a whole lot of little banks. And then success of some would lead to a healthy industry for the first time since the Dutch Golden years.

  10. Yeah Michael. Hudson is pretty much on the right track.

  11. Fisk. What do you make of our economists equating selloffs to the Chinese communists with free trade and with the textbook examples of the benefits of free trade under capitalism?

    I figured it might strike you that there was a rather yawning logic deficit somewhere in there.

  12. Um, yes. I have thought about this, and it does seem odd that foreign government acquisitions of our resources would be equated with “free trade”. The FTA with the US was particularly awful, albeit on different grounds, given that the provisions were mostly about “intellectual property” (which is not free trade) and US government tenders – ie taxeaters. That seems to have nothing to do with free trade at all.

    The whole China bandwagon is a different kettle of fish – it’s got less to do with mollycoddling taxeaters and more to do with handing over our sovereignty. “Libertarians” just love international government, controlled by communists, for some reason.

  13. Jason writes:

    Chinalco is listed on the NY and other foreign stock exchanges. it is just another corporatised government business enterprise like the ones we used to have. Obviously while we oppose stuffing up our own economy by having the govermennt owning business enterprises, what business is it of ours if other governments do the same? Would people also oppose a Singaporean company which likely also has some govt ownership buying stuff here or is it just that the Chinese goverment is seen as less committed to commercial development than the Singaporean govt? I don’t see how this is any different from any other enterprise except that the party has blunted incentives to maximise share price but so what?

    Actually, NEITHER scenario would be acceptable. There is no case for a foreign government taking over our resources, period.

  14. It looks like Steve Edney has the most sensible opinion on that thread. Everyone else is practically on their knees begging Hu Jintao to be their master.

  15. Well what do you know. I suppose its just pot luck with these loony-toons.

    If we had no company tax and if income from extraction industry work wasn’t taxable we could do it all on the basis of homesteading and royalties. Thats when the capitalistic model would apply. Then if a Taiwanese millionaire wanted to homestead a claim near where BHP was drilling and we got the royalties from what he pulled out, employing our guys, well of course then everyone stands to gain.

    The leasing system combined with our company tax lends itself to bigshoteria. Since you always have these fixed costs no matter what the world price is or your level of activity. People have to understand how that gas giveaway to China could have happened. And its really about these leases. If it was on my preferred system that would never have happened.

    The way we are going the economists will have most of our resources companies majority Chinese Communist owned, and most of our best resource areas also snapped up under their control.

    Our guys have to generate income tax for both the company and for their employees. But international outfits and big companies can just employ offsets that the small-cap does not have. So in a tight period the big-pocket guys will just come in and end up owning everything. Whereas done my way our little guys would simply cut costs to stay profitable.

  16. It’s not about free trade – it’s about Communist control of our resources. That’s what these people really want.

  17. Sure seems that way. You think Jason figures he’ll be on the up and up as an inside Quissling? What goes on inside the mind of that inscrutable chinaman I’ll never know. But they all just seem to lose track of the original reasoning that lead them to impute free trade benefits so they no longer understand where these benefits apply and when they are not likely to.

    Imagine having all these Chinese communist businessmen around here schmoozing with our Canberra parasites. Things are bad enough as it is without actively expanding their influence.

  18. Wow. That fucking rock outrage. How can these utter loony-toons get away with it. You cannot clear rocks from your land because the natural way of things was the rock found its way there on its own.

    We’ve just got to start punching these cunts. And the other thing is these articles ought to name names. Those articles ought to have said who it is that is oppressing the property owners and not the individual bastards hide behind their poxy institution.

  19. These are the sort of evil bastards the Humphreys and Sinclair have come out in fervent support of with their carbon tax.

  20. Notice that having been proved utterly wrong FDB and Adrien are laying low for awhile. But they will not actually change their mind about anything.


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