Archive for the ‘mining boom’ Category
Monday 1 November 2010
When the CPI for the third quarter came in at 0.7 per cent many opined that this means that the Reserve would hold the line on rates. However, others argued that the 1.3 per cent rise in the producer price index indicated inflationary pressure was emerging and that this would force the Reserve to raise rates. So what is the real situation?
Monday 18 October 2010
The Australian dollar’s parity with the US dollar is causing considerable concern. Andrew Robb, Liberal Party shadow treasurer, is arguing that the rising dollar could hollow out the economy. (Dollar’s rise makes mini-budget essential, Andrew Robb, The Australian 15 October 2010).
Monday 11 October 2010
While a number of commentators thought it likely that the mining boom would force Glenn Stevens, governor of the Reserve Bank of Australian, to raise interest rates I took the opposite view. So far I have been proved right. I reasoned that one would have to be an idiot to focus entirely on the mining boom at the expense of other factors. And Glenn Stevens is no idiot, even though his economic reasoning is deeply flawed.
Monday 16 November 2009
The concept of economic rent is an absolutely dreadful fallacy that has been a permanent part of economic theory since John Stuart Mill published his Principles of Political Economy in 1848. Fortunately it has been largely ignored with respect to economic policy. Enter Treasury boss Ken Henry who in his wisdom has decided that a resource tax based on this long-refuted fallacy is an absolutely spiffing idea. According to this genius a tax on what most economists call economic rent could yield $20 billion to $25 billion over the next ten years. And guess what? It will be absolutely costless. Why? Because economic rent is an unnecessary surplus the taxation of which has no effect whatsoever on investment and output.
Monday 14 June 2010
A short time ago Gina Rinehart — Australia’s richest woman — helped lead a protest in Perth against Prime Minister Rudd’s destructive resource rent tax. The striking thing about this event is that no one who addressed the crowd, including Rinehart, indicated even a passing acquaintance with the true nature of the tax. If they had done so perhaps they would have realised that the reasoning upon which the tax is based is totally fallacious.