Making Things Matters

From Bankers.asn.au - Source: Australian Bureau of Statistics 5206. National Income, Expenditure and Product. June Quarter 2003: Axiss Australia

Guest post by Viv Forbes

According to those pushing the (Australian) carbon tax, 500 bureaucrats googling away quietly in Canberra and generating little useful except carbon dioxide exhalations, are more valuable than 500 farmers, foresters, fishermen, workers and miners whose machines also generate more of the same harmless carbon dioxide in order to produce the food, fibres, hardware and energy needed for our daily existence.

It is a suicidal policy to levy a carbon tax on people who produce things but not on those who don’t.

Such an attitude shows how removed from reality the deep green mentality has become.

It is only since humans learned to harness carbon energy that we have been able to generate sufficient surpluses to support art, culture, academia, bureaucracy and big cities.

In the green energy society, before coal and oil replaced our hay burning horses and bullocks, most of the food produced was consumed by the large farming families, their labourers and their draught animals. Any surplus went to service people like butchers, bakers, blacksmiths and saddlers. Cities were small and there was little left for the tax man.

It is not the bureaucracy or the carbon tax that produces eggs for breakfast, electricity for the toaster, gas for the barbie or petrol for the car. It is hard working men and women with resources, skills and carbon powered machines.

Making things matters.

Viv Forbes,

Rosewood    Qld   Australia
forbes@carbon-sense.com

I am happy for my email address to be published.

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72 thoughts on “Making Things Matters

  1. Viv, that pie chart is nearly 9 years out of date. I suggest you update it with more recent data or provide an explanation of why it is so out-of date. I’m on your side and I’m finding it hard to swallow. Credibility is going to suffer.

    REPLY: I added it, not Viv, to illustrate industry in Australia. It was the only ready made pie chart I could find. I’ll happily substitute another if you have a suggestion for one. – Anthony

  2. Is there a similar chart that compares people that create wealth and pay taxes versus those that only receive taxes? Note that anyone that is paid by taxes does not effectively pay any tax; they simply return some tax revenue back to the pool so that they can later receive it.

    Once the number of voters in a country that derive their income from taxation exceeds about 40% the country is doomed to a downward socialist spiral.

    The trick is to understand that ‘need’ and ‘want’ are two different things. A country may ‘need’ taxation paid firefighters, police, armed forces and judges but many not need taxation paid international prestige, pre-school daycare, or funding for economic refugees.

    • @Ray Donahue You probably need either a browser update, more memory and/or a faster connection. When there are a lot of comments those with lower end systems often have trouble.

  3. Andrew30,

    Funnily enough, 40% of the Greek economy is from the public sector…a sector that DOES NOT generate wealth!

    Mailman

  4. @Andrew30: The distribution of goodies is a secondary variable. It doesn’t really matter if the goodies are distributed mostly by government or mostly by markets. If there aren’t any goodies to begin with, the country will collapse. And the only way to get goodies is to GENERATE SURPLUS VALUE BY MAKING THINGS, as Viv said.

    Successful countries range widely from high-welfare to low-welfare. Successful countries have only one thing in common: they MAKE THINGS.

  5. polistra says: January 29, 2012 at 11:08 am
    @Andrew30: The distribution of goodies is a secondary variable.

    I disagree.

    It does not matter how much a country makes, if the 40% of more of the population are non-makers than the wealth of 60% of the taxed entities are paying for 100% of the spending. If the non-makers have a lifestyle near equal to the makers then each taxed entities needs to be taxed for 50% of their wealth OR the country must borrow money from the bank deposits of the makers or the bank deposits of makers in other countries. Neither of which are possible to re-pay without increasing the taxation rate on the taxed entities to more than 100%.

    Since the 40% voting block is sufficient to deter a government from cutting the largess, the country is doomed. People have not been known to knowingly vote in favor of a degradation of lifestyle of for their own unemployment.

  6. polistra says: January 29, 2012 at 11:08 am
    @Andrew30: If there aren’t any goodies to begin with, the country will collapse.

    I disagree.

    When the Europeans first arrived in Canada they had picks, shovels, axes, seeds and some draft animals. They did not bring any ‘goodies’.

    The deal was that you needed to build a shelter and collect enough food and cut enough firewood to survive the coming winter or you would die. There was no welfare system but there was a big motivation to get off your but and get to work.

    Canada did not collapse.

  7. Mailman says:
    January 29, 2012 at 11:08 am
    “Andrew30,
    Funnily enough, 40% of the Greek economy is from the public sector…a sector that DOES NOT generate wealth! ”

    Another problem of the Greek is that they have many state-owned companies. Their largest private sector enterprise is Hellenic Bottling, the local Coca Cola licencee. State-owned companies are theoretically capable of “making” things; the problem is that, usually, they are not in a hurry to do so.

  8. Certainly, “[i]t is a suicidal policy to levy a carbon tax on people who produce things but not on those who don’t,” but those who push the carbon tax know full-well that 500 bureaucrats are far more powerful than any number of those who produce things that people need to eat or to use to sustain them, even more powerful than the elected representatives of the people who falsely believe that those elected representatives have much power to change things.

    The real political power is with the non-elected bureaucracy. The bureaucracy is virtually impervious to any possible consequences posed by elections.

  9. This sums up many of our problems today – it has created an environment in which unscrupulous, dishonest, scare mongering, greedy ‘climate scientists’ can flourish:

    “Spanish scientists announce the discovery of a perverse, perplexing atom

    The new element is Governmentium (Gv). It has one neutron, 25 assistant neutrons, 88 deputy neutrons and 198 assistant deputy neutrons, giving it an atomic mass of 312.

    These 312 particles are held together by forces called morons, which are surrounded by vast quantities of lefton-like particles called peons.

    Since Governmentium has no electrons or protons, it is inert. However, it can be detected, because it impedes every reaction with which it comes into contact. A tiny amount of Governmentium can cause a reaction normally taking less than a second to take from four days to four years to complete.

    Governmentium has a normal half-life of 3-6 years. It does not decay but instead undergoes a reorganization in which a portion of the assistant neutrons and deputy neutrons exchange places.

    In fact, Governmentium’s mass will actually increase over time, since each reorganization will cause more morons to become neutrons, forming isodopes.

    This characteristic of moron promotion leads some scientists to believe that Governmentium is formed whenever morons reach a critical concentration. This hypothetical quantity is referred to as critical morass.

    When catalysed with money, Governmentium becomes Administratium, an element that radiates just as much energy as Governmentium since it has half as many peons but twice as many morons. All of the money is consumed in the exchange, and no other byproducts are produced.”

  10. Actually, the carbon tax levy on producers does end up getting paid by the non-producers–in the added costs of consumption and forgone growth, additional unemployment and lower investment. Essentially, it gives the non-producers more clout in rationing out the declining stock of goods made by the producers, all in the vain attempt to control climate. Looks like the madness of crowd behavior to me. The carbon mania has replaced the Dutch tulip craze, on a higher post industrial level.

  11. Anthony Watts says:
    January 29, 2012 at 11:02 am

    “@Ray Donahue …When there are a lot of comments those with lower end systems often have trouble.”

    Dunno, I’m running 4 GB on a quad core system and cable, Tips and Notes is always a slow loader for me. (Nvidia GTX 460)

  12. grumpyoldmanuk
    January 29, 2012 at 10:33 am

    Viv, that pie chart is nearly 9 years out of date.
    ###

    And it is probably still accurate. This type of data does not move much on a decade scale.

  13. I think a more recent chart may be even more skewed away from producers. Does anyone else but me get the impression that our U.S. business is much more involved with googling, facebooking, and giving super-Mario more weapons or whatever in a new X-Box game in recent years? And our possible recovery last quarter is all based on Bulls#*t? Maybe I am just too old and a luddite, I don’t know…

  14. The graphic shows mining at 5% of GDP. According to the Australian Government (so it could be wrong), mining and oil account for over 9% of GDP and almost 50% of all exports (including services).
    So Australia is one of the largest exporters of CO2 and plans to adopt a carbon tax. This is an effective way for the Federal Government to further tax its own exports.

  15. Had Fisher observed the Greenspan/Bernanke Fed in action, he might have updated his theory with a revision. At some point, capital betrayed into unproductive works has to be either repaid or written off. If either is inhibited by reflation or regulatory forbearance, then a cost is imposed on productive works, whether through inflation, higher interest, diversion of consumption or taxation to socialize losses. Over time, that cost ultimately hollows out the real productive economy, leaving only bubble assets standing. Without a productive foundation, as reflation and forbearance reach their limits, those bubble assets must deflate.

    — Foreword to Fisher; The Debt-Deflation Theory of Great Depressions (1933)

  16. Producers will just pass on the tax costs to consumers. Of course, they will get blamed for the price rise — just as the bureaucrats plan and expect. It’s up to the producers to explain the reason. Unfair,yes; but it’s the way the game is played. Politicians count on the public and businesses being diffuse and individually weak.

  17. Peter Miller – Thank you for science I can understand.

    Can I add another element? Europeanunium which, when it reaches critical mass, produces a black hole.

  18. Go to the link below: Table 04 has current & past employment in Australia by sector:

    http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.003Nov%202011?OpenDocument

    It only goes up to November 2011, and doesn’t seem to have a “government employee” option (although there is “public admin” & “healthcare & social assistance” etc), but you ought to be able to do a chart or two with it. Heck even without such an option it should still be obvious that in terms of CO2 vs economic utility there’ll be differences between, say, miners & public admin types.

  19. I don’t have a pie chart, but the latest figures by segment (for 2009-10) from the Australian Bureau of Statistics are here, under “Industry”:

    http://www.abs.gov.au/AusStats/abs@.nsf/Latestproducts/5204.0Main%20Features22010-11?opendocument&tabname=Summary&prodno=5204.0&issue=2010-11&num=&view=

    Sorry, I can’t copy the graphic and it is not precise enough to convert to a pie chart. However, since the chart above, manufacturing has fallen from 12% to 8% of GDP, while mining has risen from 5% to 10%. Finance and insurance services has also grown, to 11%.

    Mining, which underpins our prosperity and exports, is of course very energy intensive. So, the increasing energy prices nobble our most productive and fast growing sector – that would be the one where we have a comparative advantage in world markets. Brilliant.

    BTW, the public sector is around 35% of the Australian economy, which is modest by European standards and comparable to the US.

  20. As a fellow Australian from Sydney I am of course particularly irate about the Carbon Tax starting this July. There may be some hope of it going when the Government (inevitably) changes next year, but that’s not for sure. Join me in writing regularly to politicians on both sides bringing to their attention material from this site.

    The one single point I believe we need to get across to governments worldwide is that backradiation has absolutely no effect on a warmer surface – neither warming nor slowing the rate of cooling. It cannot even melt a bit of frost on the ground. This single physical fact (proven computationally by Prof Claes Johnson last year) is sufficient to completely demolish any concept of an atmospheric greenhouse effect.

    What I believe we need is a substantial prize for anyone able to prove otherwise and actually show that spontaneous blackbody radiation can warm a warmer surface. It cannot and the reward would never have to be paid. But the fact that it never is paid out should be ample justification for the world (and even the Australian Government) to scrap their belief in anthropogenic global warming.

    There have been faster rates of warming in sea surface temperatures before WWII than at any time since the war. There is no way that SST data over the last hundred or more years indicates anything more than about a 0.5 deg.C increase in the long-term trend by 2100. Evidence abounds that natural cycles are the sole reason for climate change, and such cycles suggest long-term cooling in the not-too-distant future. There is no evidence of AGW and there never will be.

  21. I agree with just about everything said here with the qualification that services can produce wealth just as making things can. A company that performs accounting services for another business less expensively than they could in house lets the non-accounting company keep more of what wealth they generate. Keeping wealth from being destroyed by inefficiencies is, indirectly, wealth creation. It’s just that government services, much like soviet manufacturing, destroy most/all/more wealth that they create–when they create any at all.

    The wealth of created things is made more valuable by the hoteliers, hairdressers and horse racers who don’t make things but make wealth more worth having while even while employing large numbers of people. It is unfair to target those who accumulate resources, make physical objects and generate material wealth, but it’s unfair to target anyone who is productive–whether they manufacture, mine, or produce services.

  22. Off to QLD today using that nasty carbon polluting machine called a plane. But this article sums up the lunacy going on in the lucky country.

  23. johanna says: January 29, 2012 at 2:38 pm

    “So, the increasing energy prices nobble our most productive and fast growing sector – that would be the one where we have a comparative advantage in world markets. Brilliant.”

    “BTW, the public sector is around 35% of the Australian economy, which is modest by European standards and comparable to the US.”

    Now, add the not employed (unemployed, welfare, refugees, etc) to the 35% to get the numbers of people living on the taxes of makers and what percentage do you get?

    So they increasing energy prices on your most productive and fast growing sector to keep giving the largess to the near 40% if the electorate. Why do you sound surprised? Where did you think the money was going to come from?

    The Canadian Prime Minister has said:
    “Kyoto is essentially a socialist scheme to suck money out of wealth-producing nations.”
    “As economic policy, the Kyoto Accord is a disaster. As environmental policy it is a fraud”

    The ‘leaders’ in the 40% plus tax receiver countries Need the taxes (suck money out of wealth) from the carbon dioxide tax ‘environmental policy’ to maintain the illusion of social success for 40% plus of the voters.

    This has nothing to do with climate, science, temperature or polar bears; only power and illusion.

    Europe is doomed, the US is close but I think Australia may be closer.

  24. Snake Oil Baron says:
    January 29, 2012 at 3:22 pm

    I agree with just about everything said here with the qualification that services can produce wealth just as making things can. A company that performs accounting services for another business less expensively than they could in house lets the non-accounting company keep more of what wealth they generate. Keeping wealth from being destroyed by inefficiencies is, indirectly, wealth creation. It’s just that government services, much like soviet manufacturing, destroy most/all/more wealth that they create–when they create any at all.

    The wealth of created things is made more valuable by the hoteliers, hairdressers and horse racers who don’t make things but make wealth more worth having while even while employing large numbers of people. It is unfair to target those who accumulate resources, make physical objects and generate material wealth, but it’s unfair to target anyone who is productive–whether they manufacture, mine, or produce services.
    ——————————————————————————-
    Of course you are right, and the richest economies have a preponderance of ‘tertiary’ industries, while the poorest have mainly ‘primary’ industries.

    But every economy is different, and has unique advantages and disadvantages. In Australia we have a vast landmass inhabited by 22 million reasonably well educated people and stable government. Mining, which needs relatively few (but highly skilled) workers to produce a lot of wealth, and exports, is a perfect fit for Australia, and without it we would be more like South Korea than the US. Agribusiness is another winner. Yet these are the kinds of industries that will disproportionately bear the burden of increased energy costs thanks to the carbon tax and lunatic subsidised green energy schemes.

  25. “It is only since humans learned to harness carbon energy that we have been able to generate sufficient surpluses to support art, culture, academia, bureaucracy and big cities.”

    I think you will find that agriculture (about 10,000 BC), and metallurgy (a little later) had a little to do with it as well.

  26. I agree with Snake Oil Baron, services count also. The mechanic who repairs your automobile, the doctor who treats your illness (in the U.S. at any rate, most doctors are yet government employees), even those who entertain you, don’t make tangible “things” , but do add to the economy.

    The fact that the U.S. is becoming a service economy doesn’t mean that our individual income has to fall. There are lots of services that are highly paid. I worked as an R&D engineer in industry. My only “product” was a final report, yet I was well compensated.


  27. Stephen Harper in Davos January 2012
    This is somthing that almost all current western leaders just don’t seem to get.

    The above youtube video is not as good as the content.
    For a better quality video, with one lead in commercial
    [Harper tells Davos that hard choices needed now
    Rich countries take wealth for granted, PM tells World Economic Forum]

    http://www.cbc.ca/video/#/ID=2190494228

    For some reason this speech was not as widely reported as the Occupy Davos Igloos.

  28. ‘The powers that be’ have, for a long time, thought that we wouldn’t be manufacturing any more and were willing to pass that off to China, et al. We were supposed to move to some kind of more advanced economy based on innovation. The trouble is that China will probably learn to innovate just as well as we do. It doesn’t matter to the 1%. They will still be rich but the rest of us have been feeling the resulting stagnation of our personal wealth over the last thirty years.

    Ceding our industries (mostly to the orient) was a stupid idea. Setting up the rules to aid companies in exporting our jobs was a stupid idea. Making things does matter.

    There is some hope. The tools, that used to be too expensive for all but large companies, have become cheap enough for individuals and small companies. CNC machines and 3D printers are becoming common. Maker culture is blossoming. We are beginning to see the same conditions that enabled important companies like HP and Apple develop in people’s garages.

    Of course the government can still kill new wealth creation with taxes and repressive regulation. It’s our duty to prevent them from doing that.

  29. Mailman says:
    January 29, 2012 at 11:08 am
    Andrew30,
    Funnily enough, 40% of the Greek economy is from the public sector…a sector that DOES NOT generate wealth!
    ——————————————————————————————————————————-
    In the UK it’s 53% – we are a good socialist country and going down the europan with the rest of them.

  30. It seems like green is the wrong color to describe the opponents of atmospheric CO2. Grey or brown would be more appropriate. Feed the plants and they will feed you …all seven billion of us.

  31. Brilliant!

    On another thought, gas prices have really increased in the US. How much has that yielded a reduction in gas usage.

  32. REPLY: I added it, not Viv, to illustrate industry in Australia. It was the only ready made pie chart I could find. I’ll happily substitute another if you have a suggestion for one. – Anthony

    The color choices in that pie chart are a nightmare of unfriendly colors for the red green color blind. I suspect there are divisions between the pie sectors covering the entire lower right half of the chart, but I cannot see them. In fact I cannot even see the colors in that whole side of the chart. My color checker tells me they are a light turquoise 205,255,255 which is just about the worst possible color (other than light cyan) for those with red-green color blindness (ie 10% of your audience).

    It would be greatly appreciated if you could create some color differentiation in that segment of the chart (preferably changing those colors substantially).

    There are resources that list colorblind friendly color choices which should be strongly considered by anyone presenting data graphically on the web.

    Larry

    [REPLY: Larry, point well-taken, but as Anthony has pointed out, he borrowed the graph from another place and editing it would be extremely difficult if not close to impossible. If any commenter has the time and expertise, I’m sure Anthony would be happy to entertain a replacement. -REP]

  33. thingadonta says:
    January 29, 2012 at 4:14 pm
    “It is only since humans learned to harness carbon energy that we have been able to generate sufficient surpluses to support art, culture, academia, bureaucracy and big cities.”

    I think you will find that agriculture (about 10,000 BC), and metallurgy (a little later) had a little to do with it as well.
    ============
    Just say the word, Viv.
    The dogs will slip their leash.

  34. Mardler says: “In the UK it’s 53% – we are a good socialist country and going down the europan with the rest of them.”

    “A nation of shopkeepers” selling each other shoes made in China. Not a whole lot of creation of wealth, anymore. The ultimate outcome of Socialist economic theory.

    People like Gillard are parasites on the wealth-creating capability of Australia.

  35. It seems to be the commonplace here, as well as almost everywhere else, that the
    US doesn’t manufacture anything anymore. Like many things that “everybody knows” it is complete nonsense. The US is,and has been for a long time, the biggest manufacturer in the World.

    http://mjperry.blogspot.com/2012/01/top-500-us-manufacturing-firms-had.html

    Top 500 U.S. Manufacturing Firms Had 2011 Sales of $5 Trillion, Almost As Much as Japan’s GDP

    “MP: The comparisons above help put the enormous size of the U.S. manufacturing sector into perspective and demonstrate that American manufacturing is not withering and disappearing, but thriving, expanding and prospering. In terms of profits, the American manufacturing sector will have its best year ever in 2011. Based on data currently available through the third quarter, the U.S. manufacturing corporations are on track to earn more than $600 billion in profits for 2011, which will be a new record high, and double the profits in both 2008 ($26.6 billion) and 2009 ($28.6 billion), and 36% above the pre-recession level of $44.2 billion in 2007. American manufacturing is alive and well”

    The percentage of the US economy that manufacturing represents has indeed declined, but that decline has been matched almost exactly by the decline in manufacturing by the rest of the world. I commented some time ago on the cost breakdown of an iPhone. Since they are assembled in China, from parts sourced from all over, and therefore carry a Made in China label, China is credited for the full $400 retail price when they are brought to this country, while in fact the Chinese only collect about $6-7 of the total revenue from the product while the biggest majority of those revenues stay in the US.

  36. In the quote in my comment above MJP seems to have bolloxed his numbers a bit. The data he referenced is here.

    http://www2.census.gov/econ/qfr/current/qfr_mg.pdf

    After-Tax Profits and Sales, Third Quarter 2011 – Seasonally Adjusted

    U.S. manufacturing corporations’ seasonally adjusted after-tax profits in the third quarter of 2011 totaled $149.5 billion, down $7.1 (±0.5) billion from the after-tax profits of $156.6 billion recorded in the second quarter of 2011, but up $25.3 (±1.0) billion from the after-tax profits of $124.2 billion recorded in the third quarter of 2010. Seasonally adjusted sales for the quarter totaled $903.0 billion, not statistically different from the $900.8 billion recorded in the second quarter of 2011, but up $141.6 (±9.4) billion from the $761.5 billion recorded in the third quarter of 2010.
    Seasonally adjusted after-tax profits per dollar of sales were 9.1 cents for the quarter, compared with 9.7 cents for the second quarter of 2011, and 8.5 cents for the third quarter of 2010.
    Seasonally adjusted sales for the quarter totaled $1,648.0 billion, up $24.6 (±4.7) billion from the $1,623.4 billion recorded in the second quarter of 2011, and up $193.5 (±16.5) billion from the $1,454.5 billion recorded in the third quarter of 2010.

  37. Yes indeed.
    I am a dollar multi-trillionaire. Zimbabwean dollars, sadly. I have a Zimbabwean $100 trillion dollar note. So why aren’t I dancing around Bill Gates going “Sucker on you mate, I’m number one?”
    Because the money’s worthless. And it’s worthless because their Government fell prey to the same error that you rail against in your post and they made their currency worthless.
    It’s the same error the Australian Labor Government is making with their Carbon Tax. You phrase ithat mistake as “(Not understanding that) Making things matters.”
    There’s an old puzzle, somewhat like an IQ test, we give to pre-pubescent children to teach rational thinking. It goes “You’re in a lifeboat lost at sea. It contains a large amount of food and gold coins. It’s overloaded, and you must throw something overboard or it will swamp and you’ll die. What do you throw?”
    The correct answer of course is to throw the money. But the carbon taxers would all fail that particular test.
    Australia’s Labor Government loudly proclaims that they’ll compensate people for the higher prices caused by carbon taxes by giving them the cash raised by carbon taxes. Thus, they conclude, no-one will be financially worse off with carbon taxes in place. But as Jo Nova points out, they can’t compensate the Nation for the productivity loss the taxes cause. Making stuff matters.

  38. When comparing ‘makers’ and ‘not-makers’, pay attention to ‘voluntary transaction’ and ‘forced transaction’. If my accountant saves me money, I voluntarily pay him. If a bureaucrat costs me money, I am forced to pay him.

  39. Anyone reading the comments this far must think we Australians are thick-headed dolts. After all, how hard can it be to produce a chart of what our free democracy earns and spends?
    Supporting a huge bureaucracy also means that we must never know how much it costs to support this huge bureaucracy.
    Good luck to anyone trying to find the figures!

  40. jl says:
    January 30, 2012 at 12:08 am

    Anyone reading the comments this far must think we Australians are thick-headed dolts. After all, how hard can it be to produce a chart of what our free democracy earns and spends?
    Supporting a huge bureaucracy also means that we must never know how much it costs to support this huge bureaucracy.
    Good luck to anyone trying to find the figures!
    ———————————————————-
    Actually, the figures are easy to find, in State and Federal Budget Papers, ABS reports, research papers etc.

    What is it that you are unable to find out?

    As I mentioned in my post above, the public sector is about 35% of the Australian economy. However, most of this is not spent on shiny bum bureaucrats but on public sector services and their employees such as roads, schools, hospitals and other health services, police, defence, etc.

    I am not commenting on this figure one way or another, merely pointing out what it is and what it means.

  41. Quite right. Of course we need “stuff” – in fact, as there are more of us now than ever there used to be, we need more stuff, particularly if developing countries’ citizens are to be dragged out of abject poverty. We (all) need services, too – health care, education, even banking, although that has become more like a cancer on society than a service in recent years.

    When I was a spotty sixth-former in school in the late 60s, we sat round discussing how, as “automation” spread across industry to remove the need for people to do the most dangerous and dirty work (think, e.g., mining, the old-fashioned way), the model would have to develop from “40-40-40″ (working 40 hours a week for 40 weeks a year for 40 years of your life) to 30-30-30, 20-20-20, or whatever it panned out to. Well, four decades or so later, we see many families struggling to survive with both parents working, where they used to be OK with one; most people having to work ever longer hours for their crappy wages; everyone, employed or not, paying ever more in tax for public services which yet struggle to do their jobs satisfactorily. Meanwhile, a few at the “top” of this system take more and more and more as they tell everyone else to work harder and feel guilty about “contaminating” the environment. Factories which used to employ thousands now employ – probably in a “cheaper” country – hundreds, or even fewer, to make the same amount of stuff; sure, the stuff is slightly “cheaper” in price, but the increased profit margins serve only to feed an ever-greedier “élite”, with no provision made for finding useful employment for the workers who have been thrown out of work by this “improved efficiency”, still less for moving towards that “20-20-20″. What’s the real price of those goods? Kids, who used to be able to look forward to being useful citizens in useful jobs, now see – rightly – that their options are shrinking out of sight and are rarely, in any real sense, useful – and when you ain’t got nothing, you ain’t got nothing to lose. There has been no attempt at all to spread the “goodies” even nearly equitably; all profit is now leached out, mostly into the banking sector and away. Where those in the boardroom used to earn a dozen or so times the average wage, they now help themselves to hundreds, thousands of times as much, leaving the rest to starve. The situation is quite untenable.

    I was poleaxed by the first sentence in the first programme of a recent BBC series, “Money”, which illustrates the extent of the problem: “There is enough money in the world today to make every man, woman and child alive a millionaire.”What??? Just pause for a moment and think about that.

    There’s nothing wrong with riches as such, of course: if there weren’t an incentive to use your smarts to get ahead, nobody would bother and society would stagnate, at best. What is absolutely missing today is the philanthropic spirit of the likes of Andrew Carnegie, who observed that “he who dies rich, dies disgraced” – he has taken, but given nothing back. The occasional, much-publicised Bill Gates vaccination project, or whatever, simply does not begin to compensate the human race for the wholesale parasitism of those who just take and take and keep quiet about it because they can, because they own the governments which make the rules and the lying media which keep their activities discreetly out of sight. That parasitism is what is destroying – has already largely destroyed – our once über-competent Western societies: these people must have a really good laugh when they hear the rest of us referring to them as the “élite” – literally, the “best”. Yeah, they’re the best, all right. The best at helping themselves and screwing everyone else. The best parasites. The best destroyers.

    When – if – we can work out a structure of society which enables most people to earn their living honestly and gain respect by doing something useful, rather than condemning them to life in a desperate “underclass” and making them into a problem, then maybe, just maybe we’ll be able to work our way – literally – towards living in a decent, and safe, society. In recent decades, all I have seen is accelerating progress in the opposite direction, and that is a profoundly worrying, terrifying thought.

    Sorry about the length of this comment, but it’s a huge subject, and one which drives me to despair whenever I think about it. Even so, thanks for putting it here.

  42. Thanks Viv for an interesting comment on the distribution of Australia’s national income, expenditure and product.

    The finance/insurance wedge, categorised as a service industry is labelled as increasing 146% between 1984-2003.

    The paper, Ambler (2012) In the Eye of the $torm discusses the US and UK insurance industry and the securities market which ‘spreads risk related to the <occurrence of natural disasters.’ (my bold).

    Reinsurance risk as an asset class (p9) states that Insurance Linked Securities (ILS) ‘have outperformed other financial instruments in recent times.’ (my bold)
    Description here of ILS http://www.naic.org/capital_markets_archive/110207.htm

    Ambler’s paper provides a link to Consumer Affairs, where complaints about Homesite Insurance discuss tree overhangs, shingle roofs and the consequences following storm damage for home owners.

    http://www.consumeraffairs.com/insurance/homesite.html

    Ambler http://scienceandpublicpolicy.org/images/stories/papers/originals/eye_storm.pdf

    In Australia, given that property is valued by the Value-General to determine site and capital value, rates and levies proscribed by state and local governments and regulations enforce vegetation, building material and design that reflect a carbon market, this all becomes something of a quagmire.

    Additionally when the Federal Australian Bureau of Statistics (ABS) implements and then controls classification and data collections of environmental factors: biodiversity, water allocation, green house gas emissions, land use and management, climate and natural resources, sustainability………………….well, what more can one say?

    ABS Environment AND Energy http://www.abs.gov.au/websitedbs/c311215.nsf/All+documents+by+Title/Environment+and+Energy?opendocument#from-banner=LN
    note link to Other Related sources of Information.

  43. Well the calculations of the impact of the carbon tax have been done and added up to less than the impact of the recent flood disasters.

    So given hand waving vs sums I go for sums.

  44. LazyTeenager says:
    January 30, 2012 at 4:41 am

    Well the calculations of the impact of the carbon tax have been done and added up to less than the impact of the recent flood disasters.

    So given hand waving vs sums I go for sums.
    ————————————————————-
    Without entering into calculations, I am intrigued by your conception of economics.

    How does one loss (eg by flood) negate another loss (eg by an additional tax)?

    A loss is a loss. The whole point of civilisation is to minimise losses. Are you telling people who lost their houses in the floods, and will now cop an extra tax, that it is all relative?

  45. @ Steve C
    The economy is not the reason for despair that you conclude.
    Certainly parasites and theives are an oppressive burden; like muggers and governments they take what you have produced to use for their own purposes.
    But that does not apply to any of the individuals that you’ve mentioned. There’s not a one of them that has taken one cent, without returning greater value in the opinion of the person who’s paying the money.
    Steve Jobs never stuck a knife in people’s ribs demanding they give him their money- instead he produced products that people wanted more than they wanted the cash used to buy it. Bankers don’t sneak into your house at night with a gun in hand. Instead they provide services that people want so desperately they’ll seek out the bank, chase up proof of their identity, and references, and proof of income and ability to repay, and evidence of their assetts. Those in the boardroom ‘helping themselves to thousands of times the average wage’ are worth their salaries in the opinion of the people who actually pay those salaries. Otherwise they wouldn’t pay them.. If you were paying their salary you’d be entitled to a vote. Otherwise it’s none of your business and no skin off your nose. It’s certainly not one penny out of your pocket.
    It’s worth noting that this is unlike the situation where Governments pay their employees ‘wages comparable to the Private Sector’- because in that case every penny comes out of your pocket.
    As for ‘sharing the goodies around’- the per capita charity of U.S. citizens is the highest in the world.
    You refer dismissively to ‘The occasional, much-publicised Bill Gates vaccination project, or whatever’. It’s worth pointing out that this individual’s charitable donations are bigger than the total charitable giving of my entire nation in it’s entire history. And unlike government generosity, he is not giving away other people’s money. In addition, he is encouraging others to do likewise.
    The average newlywed couple moves into a house five times the size of that which our parents did at the same stage. They start their married lives with the plasma televisions and new cars that our parents envisioned as the rewards due at the end of their working lives.
    You seem to believe our standard of living has declined. Let me quote:
    Indeed, research that my colleagues and I at Per Capita have been conducting on the cost of living and quality of life in Australia confirms that Australians have it better than most and better than ever.
    More of us have jobs, make and save more money, pay down our debts with less difficulty, own bigger houses and better cars and take more trips abroad. Furthermore, the costs of many of the products we regularly buy are decreasing. According to a recent CommSec report our average wages are now buying us more milk, bread, margarine, cheese, steak, chicken and petrol than it did a year ago.

    From Australia’s ABC article on the cost of living.
    Check your facts. The things that you’re complaining about are either not true, or are the things that make you a rich citizen of a rich nation.

  46. @ Lazy Teenager
    The logic of your post escapes me.
    It seems to be along the lines of ‘a kick in the teeth is not as bad as cancer’, wrongly implying that we should therefore all be willing to accept a kick in the teeth.
    Nevertheless I would be keen to see the ‘sums’ that you refer to. Since the carbon tax is supposed to be forever, isn’t that an infinite amount of money? I’d appreciate a link.

  47. Gary said @ January 29, 2012 at 2:31 pm

    Producers will just pass on the tax costs to consumers. Of course, they will get blamed for the price rise — just as the bureaucrats plan and expect. It’s up to the producers to explain the reason. Unfair,yes; but it’s the way the game is played. Politicians count on the public and businesses being diffuse and individually weak.

    I thought that blaming price rises on the carbon tax had been made illegal. Even listing the tax as a separate item would be an offence.

  48. hotrod (Larry L) said @ January 29, 2012 at 5:50 pm

    REPLY: I added it, not Viv, to illustrate industry in Australia. It was the only ready made pie chart I could find. I’ll happily substitute another if you have a suggestion for one. – Anthony

    The color choices in that pie chart are a nightmare of unfriendly colors for the red green color blind. I suspect there are divisions between the pie sectors covering the entire lower right half of the chart, but I cannot see them. In fact I cannot even see the colors in that whole side of the chart. My color checker tells me they are a light turquoise 205,255,255 which is just about the worst possible color (other than light cyan) for those with red-green color blindness (ie 10% of your audience).

    It would be greatly appreciated if you could create some color differentiation in that segment of the chart (preferably changing those colors substantially).

    There are resources that list colorblind friendly color choices which should be strongly considered by anyone presenting data graphically on the web.

    Larry

    [REPLY: Larry, point well-taken, but as Anthony has pointed out, he borrowed the graph from another place and editing it would be extremely difficult if not close to impossible. If any commenter has the time and expertise, I’m sure Anthony would be happy to entertain a replacement. -REP]

    REP Replacing colour in a graphic is fairly trivial in Photoshop, or PhotoPaint. Think Search & Replace in your word processor. If Anthony’s too busy, he can send me a graphic & I will do the edit for him. Bear in mind time zone differences between the US Left Coast & Australian Eastern Time.

  49. Service industries by their very nature cannot “create wealth.” They can concentrate it, and facilitate cash flow, but the services do not create value.

    Manufacturing creates value by converting something of lesser value into something of greater value. For example, a steel mill takes ore (low value), adds dollars in the form of work and energy, and produces steel (high value) and more dollars. A service industry simply moves those dollars from one place to another, often times extracting value from the process at the same time. A service-based economy is by its very definition unsustainable.

  50. hotrod harry, good on you but I provided a much more up to date set of figures in black and white a long way above.

    Leo Morgan, you have been too kind. What the LT is discussing is that first you get kicked in the teeth, then you get cancer. But, you should be grateful that new teeth are cheaper than chemotherapy. Or something like that. Anyway, the fact that new teeth are cheaper than chemo means … could someone please remove these lizards … of course a natural disaster plus a tax is better than a natural disaster minus a tax.

    Damn lizards. Every time I interact with LT, there they are.

  51. thepompousgit says:
    January 30, 2012 at 10:02 am


    REP Replacing colour in a graphic is fairly trivial in Photoshop, or PhotoPaint. Think Search & Replace in your word processor. If Anthony’s too busy, he can send me a graphic & I will do the edit for him. Bear in mind time zone differences between the US Left Coast & Australian Eastern Time.

    True enough that is why there is no excuse for the originator of that graphic to have used such a horrible set of colors. If you are presenting data graphically on the web it is YOUR job to make the data understandable for the reader.

    The point is that color blindness is one of the most unrecognized handicaps and we need to fix that. Especially among those who present data graphically on the web.

    Did you ever take a color blind test as part of enrollment in a chemistry class? You need good color vision to do many required tasks in chemistry like solution titration. How many boys fail chemistry simply because they have an unrecognized color blindness handicap.

    I did not even know I was red-green color blind until I went into the military!

    Do your data processing devices and house hold accessories assume you have normal color vision and only tell you of a fault by changing a green indicator light to a yellow or amber light? Or change a dark amber light to a similar tone red light?
    How many charts of essential information presented in lecture halls and business conferences assume that all the people in the room have normal color vision?

    Are you even aware that some laser pointers used in lecture presentations are absolutely invisible to those who are red-green color blind?

    It is not my job to fix a document presented for public presentation. That responsibility falls to the presenter of the information. I can change it so I can see it (although I did — and routinely do, so I can evaluate the information), but many times it is simply not worth my time to fix someone else’s screw up. Like you said, it took me all of 5 minutes on my home computer where I have the editing tools to do it, about the same time it takes to spell check a document.

    Rules for colorblind friendly graphic presentations.

    NEVER use pale pastel colors, especially yellows, greens and cyans on a white or near white background. They can work (poorly) on a contrasting dark background.

    Always separate colors of similar gray tone (if presented in black and white) with other strongly contrasting colors.

    Give users an alternate visual key to the content by including line shading or key letters in the color block, or some other means besides color like line weight in charts to make similar colors distinctive.

    Make sure that the color of a chart or graphic element is “identical” to the color key used in the chart.

    Many times folks use a color grabber to pickup a color not from the actual data presentation but from a color grabber chart and the actual color triplet RGB code for the keys is slightly different from the actual color used in the data presentation. For those of us required to use color tools to discriminate colors based on their html hex or decimal color triplet that sometimes leaves us with a color key who’s actual color triplet is half way between two similar data colors so we still have no clue except verbal context to figure out the data.

    Larry

  52. Steven Bellner says:
    January 30, 2012 at 10:15 am

    Service industries by their very nature cannot “create wealth.” They can concentrate it, and facilitate cash flow, but the services do not create value.

    Manufacturing creates value by converting something of lesser value into something of greater value. For example, a steel mill takes ore (low value), adds dollars in the form of work and energy, and produces steel (high value) and more dollars. A service industry simply moves those dollars from one place to another, often times extracting value from the process at the same time. A service-based economy is by its very definition unsustainable.
    ————————————————————
    Steven, I suggest that you go and live in a ‘sustainable’ economy like Mali if that is what you believe. They have an economic system such as that you espouse, and are possibly the poorest people on the planet.

    Far from being wasteful decadence, the growth of tertiary industry has meant that millions of people can be educated, get health care, be protected by police and fire services and so on.

    Your model of ‘service industries’ as adding no value was tried and failed – look at East and West Germany. By all means, be a Puritan or a Marxist in your private life. But, it has nothing to do with economics.

    Reverting back to the topic, the mining industry in Australia is at the cutting edge of techniques of extraction, transportation, processing etc. People who charactertise it as “digging stuff up” have no conception of what a modern mining operation looks like.

  53. hotrod (Larry L) said @ January 30, 2012 at 11:15 am

    thepompousgit says:
    January 30, 2012 at 10:02 am


    REP Replacing colour in a graphic is fairly trivial in Photoshop, or PhotoPaint. Think Search & Replace in your word processor. If Anthony’s too busy, he can send me a graphic & I will do the edit for him. Bear in mind time zone differences between the US Left Coast & Australian Eastern Time.

    True enough that is why there is no excuse for the originator of that graphic to have used such a horrible set of colors. If you are presenting data graphically on the web it is YOUR job to make the data understandable for the reader.

    Preaching to the converted (in my case) Larry, I’m happy to say :-)

    Man, did I ever cop stick for blogging about web page useability & accessibility these many long years ago:.

  54. @ Leo, thanks for the response. You make some interesting points, which show some differences in perception between us.

    In particular, I’m not convinced by your saying that the (to me) overpaid boardroom boys are defined as being worth their remuneration by “the people who are paying the money”. But who is paying that money? Ultimately, most of the highest-paying sectors are mighty international companies, banking, and so on: their customers are the governments who tax us ordinary folk to the hilt to provide the money in the first place. The decisions are made by the peers of the beneficiaries: the “old boys’ network” is a present that just gives and gives. Result, we all pay, but get no say. Even where we get to buy an actual product from a company, we’ll be paying plenty tax on top, and there are many “financial instruments” designed to screw Joe Public hollow.

    Here in Britain, for instance, there is continuing unease about the fallout from widespread use of “Public-Private Initiative” contracts, whereby large quantities of public money are committed to contracts with private companies to build public assets like hospitals. The deal, apparently, needs to be “sweetened” to tempt the company into it by guaranteeing them so many million a year profit for the next xx years. One budget-build hospital with maintenance “issues” later, we find that the company has exercised rights buried deep in the small print, and cheerfully walked off with their guaranteed millions which we all have to go on paying for decades, with interest. And if you suspect that it would have been far cheaper just to have built that hospital as a public project, don’t bother looking for any information: that’s all covered by “commercial confidentiality” and is safely out of sight. As is, of course, the entire, euphemistically named “defence” sector – now there’s a business, the customer deliberately blows the expensive goodies to bits and comes back for more and more! It’s all pennies out of all our pockets. It’s “the privatisation of profit and the socialisation of debt”, over and over.

    I’ve no real issue with a Steve Jobs, or a Paul McCartney, who has given the world a better mousetrap or an unforgettable song, being able to live well – and if I seemed “dismissive” about Bill Gates’ generosity, I unreservedly apologise. I have every respect for him doing what he is doing, and was alluding more to the fact that for every million he disburses, there are an awful lot more millions doing no more good than just enriching the few who play with them. A few who haven’t given the world that mousetrap or song, but just like the millions. Whether one person should be taking personal decisions on the scale of mass vaccination is also a moot point, of course, as is the morality of Sir Paul’s copyright, after his death, being hawked around among the Sonys and Disneys of the world to rules heavily influenced by those companies’ lobbyists.

    That BBC figure again – they will have been using GBP, so that’s at least £7,000,000,000,000,000. That’s a lot of goodies up there while ordinary people in our rich western countries are thrown out of jobs and homes, millions starve in Africa, and whole countries teeter on the edge of bankruptcy. I think that shows a problem, and by and large it’s not the ordinary person in any country who has made any of the decisions which led to it. Every time, cui bono? Not us ordinary folk.

    As for life being better than ever, I would agree there, in material respects at least. My view is undoubtedly coloured by things like living in a country which has now, for many years, e.g. encouraged tenants of public-sector (council) housing to take out a mortgage and buy the property cheaply, while deliberately then not spending the income from that process to build any more public housing. All good dogma, it all “frees up cash” for sinking into more Public-Private “Initiatives” to beggar us all over again, but there are many young couples over here who would dearly like to be able to move into any home, a “commodity” currently in very short supply. Meanwhile, a few astute operators buy up those same houses when former tenants can’t pay their new mortgage, or when the market dips, as “Buy to Let”. Let at a multiple of the old council rent, and with a much less secure lease, probably to students (who will be paying the debt in the future) or maybe benefit claimants (paid from the public purse). And thank goodness (/sarc) we’ve got rid of those embarrassing old Rent Tribunals, which used to be able to decide whether a rent was fair at that price. Really cramped the style, that.

    From what you say, Australia isn’t going down the pan quite as fast as us, and good luck to you. Let’s hope your standard of living can withstand your shiny new Carbon Tax, an area where you’re surely ahead of us and won’t be benefiting. :-(

    Maybe I’m just a pessimist. At least that way you don’t get any unpleasant surprises!

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