Given I wrote a detailed CPI analysis yesterday (Wednesday), I am using today as if it was my Wednesday post where I cover a range of topics. I was criticised on social media last week for combining in last Wednesday’s post – Launching the CofFEE Financial Resilience Barometer – Version 1.0 (October 18, 2023) – scientific material (the research project results) with commentary on the current situation in the Middle East (and music etc). I was accused of trying to drum up traffic to the research site by including an unrelated discussion on a topical matter (the situation). The point is that in my usual Wednesday post I just roam free and write about all manner of topics that I have thought about in the previous week and which I don’t want to devote a full post too. I don’t play games such as clickbait etc. Anyway, today, I promote a video of a long interview I did in September that has just been released, talk about some framing issues and provide the usual musical segment to calm us all down.
Video – Seeking Full Employment Without Falling Prey to Neoliberal Traps
I recorded aon September 27, 2023, a fairly long interview with Lynn Fries, who is an American Journalist producing video content at Global Political Economy or – GPEnewsdocs – which is based in Geneva.
The conversations – Seeking Full Employment Without Falling Prey to Neoliberal Traps – contains access and a full transcript of the conversation.
The place in Kyoto where I did the Zoom with Lynn wasn’t all that amenable to the task but we did our best.
The traverse that I covered marks some of the material that will come out in one of the book projects I am working on at present.
Here is the YouTube stream of the edited conversation.
When public commentary undermines true purpose
I often read articles or hear media broadcasts where the journalist has a valid message to impart to their readership but frames it in such a way that the message is lost in fiction – and a fiction that then puts the reader offside.
An example this week was this article in the Melbourne Age newspaper (October 24, 2023) – Hate all the monster utes on our streets? Your tax dollars helped pay for them.
You can tell immediately from the title that there are two messages:
1. Too many four-wheel drive SUVs on the road shunting children back and forth to school each day.
2. Our taxes are somehow ‘paying for them’.
The first proposition is correct and something needs to be done about it.
The second proposition is pure fiction.
I should say at the outset that this particular journalist organises the 6-monthly forecasting panel of economists, which I used to be a part of.
I quit earlier in the year because I was sick of the journalist soliciting my opinion and then ignoring it and giving priority to the mainstream views, which were erroneous in my view.
It seems that the exercise was just a whitewashing and a promotion of the mainstream fictions that my profession perpetuates.
So I am not a fan of his writing at all and the problem is that he has a national platform to pump out his story lines.
The correct aspect of the story regarding taxes is that current federal tax policy allows people to “write-off assets like vehicles for tax purposes” – so they can buy massive SUVs and utility vehicles – and then write off significant amounts against their tax liability.
Thus the structure of taxation policy provides incentives to purchase certain products over other products, which is just a statement that taxes affect relative prices and skew consumer choices towards relatively cheaper goods, other things equal.
But to leap from that observation, which is correct, to the next conclusion that:
These tax concessions come at a cost to all of us. The $20,000 threshold, for instance, will result in taxpayers missing out on almost $700 million in revenue over the next two years … taxpayers now have a federal government losing important revenue by giving a tax break to a select group of people …
The loss of potential tax revenue that arises from the subsidy (concession) is largely irrelevant.
It is not a ‘cost’ to me or any other person that pays taxes.
It doesn’t constrain what the government can do on the spending side, except in the sense that it increases non-government spending on more expensive cars/trucks, which may reduce the spare resource capacity in the economy.
The real problem of these SUV armies marauding the streets is the environmental effect.
1. They use much more petrol.
2. They take up more space – at present there is a demand that Standards Australia, which defines standards pertaining to things such as what a normal car parking space in public spaces should be in terms of size, should increase the ‘standard size’ to fit these huge lumps of metal.
That means more land will be cleared in developments to meet the demand for car parking given less cars will fit in the current allocated spaces.
3. They are much heavier and damage the roads more quickly requiring more frequent maintenance.
4. The heaviness relates to another problem – they are death machines in accidents because their centre of gravity is higher and the momentum of their weight means they wipe out smaller cars and their drivers more regularly when an accident between two smaller cars does not wreak the same damage and death.
These are the reasons why the tax concessions are dysfunctional and should be abandoned.
The idea that somehow the main problem is that the federal government has less tax revenue just sidetracks us down the fictional sink hole that the federal government is financially constrained and is using ‘our’ money (as taxpayers) to give the owners of these monstrous vehicles are benefit.
Episode 2 will be released tomorrow – October 27, 2023
You can see what – The Smith Family – is up to next as they struggle with themselves and the complexity of money.
We left them at the end of Episode 1 arguing about whether taxpayers fund government spending.
Kevin makes a discovery in Episode 2 that sets his mind right on the issue but brings him into more conflict with his right-leaning father.
Music – Rolling Stones
One of the first bands I really liked was the Rolling Stones (and also the original Fleetwood Mac with Peter Green).
It is amazing that so many years later they can still pump it out. It gives all of us ageing musicians hope (-:
So they have just released a new album – Hackney Diamonds – which is their first original material album since 2005.
It is another classic from the songwriting skills of Mick Jagger and Keith Richard.
Mick Jagger and Lady Ga Ga are a bit over the top with their remonstrations but the song is great.
That is enough for today!
(c) Copyright 2023 William Mitchell. All Rights Reserved.