The timidity of hope

Nicholas Nassim Taleb of Black Swans fame calls it the narrative fallacy. In narrating the way something happens, one convinces oneself that it was inevitable, that it happened for good reasons.  A nice illustration of it is the way in which Tom Peters’ In search of excellence took the top financially performing firms and then explicated their strategy.  In the next period those firms that we’d been told had gone ‘in search of excellence’ performed unusually badly.  Their original out-performance was luck, not excellence.

One of the things I routinely find infuriating is when the future is predicted with great assurance by some know-all – journalists often fit this bill.  For instance all those calls by journalists that “It will take the Liberals at least two terms to get back”. Then something else would go wrong and they’d say sagely – “Now it’s at least three”.

A corollary of this tendency are these kinds of assurances.

The massive resistance Republicans posed to Clinton in 1993 is impossible to imagine today. The Republican coalition is utterly shattered, and the angry white Palin wing of the party, for all its visibility, is a minority even within a minority. What’s in it for a moderate Republican senator like Richard Lugar of Indiana (who tacitly endorsed Obama), Arlen Specter of Pennsylvania, or Olympia Snowe of Maine to resist Obama on health care or climate change?

Yes, folks that’s Mark Schmitt in Prospect Magazine just after the American election in 2008. Doesn’t look very good does it. I’m no sage, but I would never have bought that even at the time. As Krugman points out:

early on the administration had a political theory: it would win bipartisan legislative victories, and each success would make Republicans who voted no feel left out, so that they would vote for the next initiative, and so on. (By the way, read that article and weep: “The massive resistance Republicans posed to Clinton in 1993 is impossible to imagine today.” They really believed that.)

This theory led to a strategy of playing it safe: never put forward proposals that might fail to pass, avoid highlighting the philosophical differences between the parties. There was never an appreciation of the risks of having policies too weak to do the job.

And then it led the administration to keep claiming that the legislation it had gotten through was just right, long past the point when it was obvious that the policies were inadequate.

And they’re still doing it. This is crazy: when you’re well down in the polls, minimal steps that won’t move the economy and won’t grab voters’ imagination are just a way of guaranteeing a devastating defeat.

I can understand why the people who persuaded Obama to go for the capillaries might still be claiming that they have the right strategy; bu I don’t understand why Obama is still listening to them.

The NSW and Queensland Governments seem to be going to their graves with this kind of timidity moving a few deck-chairs and hoping against hope. A good politician is a global optimiser, not an exclusively local optimiser. Thing is you need judgement to get through the difficulties of a bit of pressure to get to some better place. It’s been in pretty short supply lately.

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conrad
conrad
11 years ago

On the bright side, I notice the same-sex adoption bill got through the lower house in NSW, so perhaps the Labor party there should start introducing all of the other things they have wanted to for the last decade or so, but haven’t due to fear of the mythical Western suburbs bogan.

Mike Pepperday
Mike Pepperday
11 years ago

“go for the capillaries”

LOL. A bon mot to make Observa envious.

Patrick
Patrick
11 years ago

The problem here, at least, is that the oppositions seem equally determined to follow the same strategy!

Patrick
Patrick
11 years ago

Actually, I was focusing on the policies they do propose…not a lot different to each other!

observa
observa
11 years ago

“Thing is you need judgement to get through the difficulties of a bit of pressure to get to some better place. It’s been in pretty short supply lately.”

The question is where does the right judgement lie and I’d say if you look carefully at the current entropy in direction at the Federal level, there’s a bit of truth in all of them that can be distilled out. How so? Well for mine the real overarching concern has been the environment first and foremost although the GFC and immediate economic concerns had been a diversion. The growing spaceship earth paradigm had led the vast majority to believe in the preeminence and urgency of AGW, despite any real understanding of the science behind it. I know High School teachers who had been inculcating pupils with it that had no idea what I was talking about when raising what Climategate and subsequent science challenges to their current orthodoxy meant. Be that as it may there was always the insurmountable hurdle of a global ETS prescription to be overcome and the hubris of those who would conflate the two was to become self evident at Copenhagen. No more so than the swift demise of a PM who rolled the great moral imperative dice and lost. The seeds of that demise were sown with the inevitable compromises that were necessary to begin to implement the CPRS. The timing of a GFC was no doubt a big contributor too for anyone advocating carbon credit creation and trading under the circumstances but in Australia’s case that would quickly fade.

The major problem was hubris and a belief that with such underlying emotional support what could possibly go wrong? The very problem was the support was largely emotional rather than mainly considered and rational. Despite Climategate and all the very problematic challenges to the science since, the population is largely oblivious to that. What they came to believe because that’s what they were told endlessly (or were deliberately not fully enlightened about) was that ‘we’ could simply cap ‘them’ the nasty polluters and make them curb their nasty environmental ways and switch to solar panels and windmills and all would be sweetness and light at negligible cost and won’t the grandkids thank them. Now Bob and Co really believe that so when Julia and Co had to hand out the obvious concessions for the CPRS Bob voted it down with Tony and Co who knew there was a whole lot of crap going down. Strange bedfellows indeed considering their current positions but that’s what happens when you don’t speak to truth for short term political gain or just plain oversight in the emotional rush of blood.

Where are the players at now? Well Tony has had a win with the crap side of the argument and rightly so. However he has to meetoo the feelgood solar panels and windmills to play to the spaceship earth paradigm out there. Bob still believes in capping the nasty polluters but doesn’t want any handouts so a straight carbon tax with more to come is all the go and solar and windmills will fix it all anyway. The fix is nonsense without nukes but that’s the elephant in the room for all until one of them is prepared to shatter the myth of reshiftables (my 2.1KW solar system wouldn’t start the inverter reading on wet cold Friday at midday-zero, zilch, no output at all just like night time) Strangely the electorate never woke up to the fallacy of composition with solar when Garrett had to pull the pin on the SHCP program when it was ‘free’ to all. Still if noone wants to call the emperor’s robes? Then the interesting side issue as Julia wants to tax resources or those super profits which goes down well with an electorate trying to pay its burgeoning power and water bills, etc. Soak the rich and the Chinese can pay anyway. That leaves Tony in a bind because its popular so long as it doesn’t stop the coal trains completely which Bob wants to do along with shutting the coal fired power stations Julia was so careful not to bankrupt with the CPRS, lest all bets are off with La Trobe, etc wholesale power prices and it gets bleeding obvious to you know who.

Right about now you’re thinking like the Independants where’s the truth in this lot and the way forward bearing in mind the punters want delivery on the spaceship earth paradigm. Quite a bit really. The main thing to recognise is you can’t leave it up to any of them to pick winners and decide what’s best for us all but to sensibly set the constitution of our marketplace and then get out of our way and let us get on with it. They’ll just get bogged down with their own hubris and folly and stuff things up big time, whereas the odd small individual stuffup won’t matter in the big scheme of things. We don’t have to believe in AGW to have carbon taxing. Peak oil and the means by which we turn our natural environment to our wants will do just fine to raise the social cost for all. Then Julia is onto something with resource taxing as well. In fact to get the the maximum social pricing effect with carbon and resource taxing it makes sense to substitute them for all other forms of taxation. That should keep Tony happy that it’s not all just a big tax grab. A couple more tweaks and we’re nearly there with a level playing field, third way constitutional marketplace that will have Gaia humming a sweet tune and the world falling all over themselves to emulate us. The rest is hubris, folly and crap.

Tel
Tel
11 years ago

Then Julia is onto something with resource taxing as well. In fact to get the the maximum social pricing effect with carbon and resource taxing it makes sense to substitute them for all other forms of taxation. That should keep Tony happy that it’s not all just a big tax grab.

I rather suspect that Tony knows the ALP better than you do. Switching to pure resource based tax could never rake in as much as they do with income tax & GST. They would have to make do with less, and that means less spending. The ALP simply don’t have the discipline to keep spending down, and the Greens certainly don’t.

Besides, under your system they would have to stand and stare at all this money changing hands while resisting the impulse of reaching out and grabbing. That’s flying pig territory.

observa
observa
11 years ago

“Switching to pure resource based tax could never rake in as much as they do with income tax & GST. They would have to make do with less, and that means less spending.”
Tel, the argument over the level of spending and hence taxation to maintain all our new found kumbaya on fiscal conservatism will always be there but you raise the valid question- Will resource taxing be able to do the current or forseeable job? Implicit in that is the notion that we can’t raise the price of resources to the point where exports are no longer competitive, unless like Bob that’s what you want to see with the likes of coal exports. He’s dreaming if he thinks China would accept that peacefully, let alone Australians having to sweat a lot more for their supper. That was always the problem with carbon caps, that you have to let go of price and the harder you cap the bluer the sky on the price and if LDCs won’t play ball- pffft same deal! However you can’t think resource taxing without thinking land as a resource to be taxed and good old Henry George. Now that widens the horizon significantly and it has to because we also need to replace stamp duty and other forms of land tax and defacto Council and water and sewer rates land taxing with a level playing field resource tax on land based on useage not on value. ie nil for natural up to a maximum for building/bitumen/concrete cover. To tax natural environment in any way would be to encourage its conversion for economic return (those McMansions and tuscan boxes)and we want to avoid that thorny problem with the current system. In fact we actually want to create incentive to do the reverse a la John Walmesley’s Earth Sanctuaries and give the natural environment true countervailing market power to its destruction. Hold that thought.

Now I said if CO2 was the greatest threat to mankind since Sarah Palin you theoretically have the whole gamut of taxation to replace with a straight carbon tax and you can envisage that. It ticks a lot of boxes re equity, simplicity, neutrality, etc cf the current mess, but Copenhagen showed us it’s practically impossible for any country to go it alone. You got that through your thick heads alternative Morgan Sachs fans? So where does that practically leave us? In the interim, before the RoW sees the light and takes up our offer they can’t refuse, we can raise the maximum effect carbon tax by scrapping all other taxes that impact its final profitable sale price(and other resources note) and give the local punters back their gross income in their hands to cope best with that price hike. That’s the maximum price/income substitution effect we can achieve, albeit resource taxing significantly reduces admin collection drag ultimately borne by the battlers. We can get rid of that xenophobic FIRB straight away because local or foreigner, you’ll all pay your resource dues with no more worries about transfer pricing and those nasty sovereign wealth funds. Furthermore if the R0W doesn’t follow our lead, where do you think their their global corporations will want to set up with no company taxes?

With the best social pricing possible to drive us all forward in our own inimitable and individual ways, without armies of whitecoats with Ipads down the supermarket checking what cuts of meat we’re allowed to have this week because of last weeks particular choice, then we don’t need any tax on sweat, ingenuity and entrepreneurship, nor any stamp duty, capital gains tax triggers or the like, to create any friction whatsoever to capital and labour finding the best environmental ways and means to get there as quickly and efficiently as possible. Isn’t that what we all want for our part of spaceship earth, or do you really have some hidden agenda, or think you know what’s best for us all in moving forward in that direction?

There they all are sitting in Canberra having to compromise with the various glimmers of truth they bring to the table and lo and behold Gaia presents them all with the golden opportunity to get cracking fixing the MDB in our own backyard. The river and dams finally runneth over and here’s the opportunity to market price the average long term availability once and for all. Cap the useage and auction the available water returning the revenue to existing licence holders as dividends and begin down the road to complete reliance on resource taxing. What an opportunity not to missed while their cup runneth over.

Distil out the truth and you quickly get rid of all the hubris, folly and crap weighing us all down.

observa
observa
11 years ago

I love a sunburnt country, a land of sweeping plains,
Of ragged mountain ranges, of droughts and flooding rains.
I love her far horizons, I love her jewel-sea,
Her beauty and her terror- the wide brown land for me!

The stark white ring-barked forests, all tragic to the moon,
The sapphire-misted mountains, the hot gold hush of noon,
Green tangle of the brushes where lithe lianas coil,
And orchids deck the tree-tops, and ferns the warm dark soil.

Core of my heart, my country! Her pitiless blue sky,
When, sick at heart, around us we see the cattle die –
But then the grey clouds gather, and we can bless again
The drumming of an army, the steady soaking rain.

Core of my heart, my country! Land of the rainbow gold,
For flood and fire and famine she pays us back threefold.
Over the thirsty paddocks, watch, after many days,
The filmy veil of greenness that thickens as we gaze.

An opal-hearted country, a wilful, lavish land –
All you who have not loved her, you will not understand –
Though earth holds many splendours, wherever I may die,
I know to what brown country my homing thoughts will fly.

A few too many ring-barked forests to be sure but an annual nett wealth tax for the top end of town as the quid pro quo for no income tax, with relief via holding it as natural environment plus a franking credit for resources expended on protecting or creating same should do the trick. Just so long as our elites can get their heads out of global atmospherics and see the local wood for the trees. A better third way market green mousetrap to entice the world to beat a path to our door or else.

Tel
Tel
11 years ago

Observa,
The most significant problem with your vision is that while you disdain, “armies of whitecoats with Ipads down the supermarket checking what cuts of meat we’re allowed to have this week” yet your proposal calls for exactly that. Someone would need to determine which land use is more “natural”, on the basis of arbitrary whim. Is a deep pit mine better or worse than an open cut? Does Gaia protection include supervision of lower rock strata? Is a field a wheat closer to nature than a plantation forest? Is a lead mine more unholy than a gold mine? Is a suburb of weather-board bungalows better karma than a concrete apartment block? You know as well as I do there are no empirical answers to such questions, you just happen to have an opinion on what’s right and you are welcome to your opinion.

You will be needing a whole army of committee appointees to “know what’s best for us all in moving forward in that direction” before you can finish building this silly tax design (and that doesn’t place your efforts as much better or worse than other silly tax designs, but you are defeating your own ideals here).

Less of a problem but still a fundamental obstacle is that you choose to ignore Willie Sutton’s Law, the law that every government follows by keen instinct, but none of them mention. To mention that they are followers of Willie Sutton would expose their lack of moral fiber, but to NOT follow this law is blatent stupidity. Robbing widows and orphans is unpopular, but worse than that (far worse) it is unprofitable. When you bash a man into handing over his last sausage, he fights for all he is worth because it really is all he has to lose, and when you finish you get a broken man, and a partly mangled sausage — sad pickings forcing you to go pick on the next guy.

Lastly, a government can only tax it’s own citizens. Government runs a protection racket and we pay our money in return for not being hurt. That’s what gives money it’s intrinsic value. The people of China have no need to worry about being hurt by the Australian government, they only worry about being hurt by their own government. Thus, they only need to pay tax to their own government. Of course, an international agreement may exist where multiple governments choose to each tax their own citizens in a consistent and even-handed manner, and should such an agreement prove to be mutually beneficial, it may even happen — but you can forget about one country taxing the people of another country (other than a few special cases where military force is directly involved in the transaction, you can figure those for yourself).

Tel
Tel
11 years ago

… the argument over the level of spending and hence taxation to maintain all our new found kumbaya on fiscal conservatism will always be there …

New found kumbaya?!?

There’s nothing new about balancing income with spending. Indeed, the whole idea of keeping accounts is that they do in fact balance, otherwise you are merely amusing yourself scribbling columns of numbers. We in the modern world have become accustomed to balancing any ledger against a debt figure plus interest — where interest rates mystically change seemingly at random and, at least in the USA, happen to be so close to zero that their debt-balancing leverage is open-ended. That concept of arbitrarily balancing things that obviously don’t balance is the new fangled idea. I suggest you go back to an older rekening.

observa
observa
11 years ago

Tel says-“The most significant problem with your vision is that while you disdain, “armies of whitecoats with Ipads down the supermarket checking what cuts of meat we’re allowed to have this week” yet your proposal calls for exactly that.”
Well let’s see shall we? A helluva lot simpler than trying to measure income to be taxed in a finite time interval and then sheeting that home to particular individuals methinks. That 10000 pages of income tax act that’s degenerated into give us a call Hoges and we’ll tell you if we like it so long as we can find you. Farewell the lot of them and the FIRB and the army of accounting legalese arraigned against them. We have more important work for a lot less of them to do.

Can I take it we’re all agreed CO2E calculation for carbon taxing is not a problem? Just let this AGW agnostic know if you think it is and I’ll introduce you to some AGW skeptics to help you put your case more forcefully. Wealth for wealth taxing is a no-brainer. Market value or insured value whichever is the greater and if you can discover some ‘unowned wealth’ lying about, the tax office will share it with you 50:50. If you think divulging wealth is somewhat onerous or perhaps more onerous than divulging income, including all the details pertaining to capital gains, company, trust, partnership, etc, remember most of us will have to declare wealth at some stage in our lifetime, for pension and benefit purposes, right up to our politicians declaration of interests. Would you believe you can even be a 21 year old independent adult studying climatology because your Greeny parents wanted you to help save the planet and they’ll want to know just how green the lot of you are at present? Say no more.

Well you’re right Tel, our third way market green blueprint won’t get off scot free with a bit of complexity and head scratching over categorising resorces and land use as a resource to be taxed. However on that score I note none other than our current Govt want to do exactly that with their MRRT, egged on by Mr Wilkie to make their limited foray into the field somewhat more complex by all accounts. What more can I say, except that it’d be nice if they ditched the complexity and nasty externalities of income taxing in the process. They seem to have come to the correct conclusion that belting returns over 6% might be a tad socially undesirable. On that score I can imagine the bronze cheers of a comfy Kodak with Govts taking that attitude toward their new digital camera competitors or the amalgamated association of blacksmiths aka Henry Ford. No, much wiser to do a bit of social deeming once they’ve really made it on our behalf, unless they’re busy giving the John Walmsleys of this world an environmental legup on our behalf and earning themselves some tax relief.

As far as land use goes there might be some fuzziness around the edges but I don’t forsee a huge problem with that and certainly we have Google Earth to monitor and gauge the nature of the beast. Really bitumen, concrete, brick paving, buildings, tailing dams, quarry and mine pits, etc would all be under the one maximum umbrella, perhaps with man made dams thrown in too. Then there’s various types of agriculture, from grazing to cropping to horticulture and tree farming with native gums cf introduced species. The categorisation and concomitant level of taxation would clearly need to take account of current profitability and export returns, just like a MRRT will. That’s for us to work through and the art of politics and economics and that may change over time as other countries climb aboard. Like a new parliament house this is an overall concept which once accepted requires the plethora of architects, engineers, trades, etc to hammer it all into shape. It’s what we do best bearing in mind we’ll need to progress at a pace that can be accommodated socially and economically. In that reagrd I think the way we handled the GST reform of the WST should give us all great cause for optimism.

Oh and Tel I was being ironic about the deficit kumbaya re Julia and Co- ‘We are all fiscal conservatives now’. Not quite my dear, although admittedly you have some way to go to emulate your international peers. Lucky we’ve got that expensive dirt per capita but we don’t want to press our luck.

Tel
Tel
11 years ago

You might be surprised (given my general libertarian leaning) but I’m not opposed to a wealth tax. This is consistent with my earlier statement that government operates as a protection racket — so wealth tax merely asks people to pay in proportion to the level of protection they are receiving. One of the few things that government does very well is maintain status quo and the wealthy invariably benefit from that. Of course, to be fully consistent I would have to support a poll tax as well, since the most fundamental protection is allowing citizens the right to keep their own life.

A wealth tax obeys Willie Sutton’s Law, a poll tax sadly does not, so that is the main difference. However, in terms of matching income against expenses, a poll tax does at least somewhat make sense.

I’m going to ruthlessly point out your inconsistency, when you start with a statement like:

… tax on land based on useage not on value.

then take a sidestep over to:

Wealth for wealth taxing is a no-brainer.

The obvious point being that most people have their wealth locked up in land ownership, so wealth tax and land value tax are much the same thing (but wealth tax is a more generic principle which can be applied to other things beyond land).

I certainly don’t support the idea of government’s poking around into people’s private homes hoping to discover a bit of undeclared wealth. That’s bloody intrusive and stepping well beyond my concept of good governance. Since you are buying protection, the basic rule should be that if you don’t declare it, then you can’t claim any protection. Thus, if I happen to have a pile of gold bars buried somewhere in the bush at a GPS coordinate known only to myself, and these represent undeclared wealth then I would have no legal comeback should they go missing. On the other hand, should they not go missing, I obviously never needed the state protection for those gold bars and so there is no reason for me to pay for a service that I am not using.

The combination of capital gains tax, plus deliberately managed inflation has become a wealth tax by stealth but I’m strongly opposed to both of those, simply because of their underhanded nature and because of the outrageous privacy intrusion CGT imposes. For example, now you are expected to declare every bottle of wine that you keep for longer than a year, and as a consequence none of the bottle shops want to hold wine for the thee or four years until it starts to taste like it should. That is just wealth tax pushed to the level of vindictiveness — destroying the nice things rather than let rich people enjoy them.

And I think that gets to my basic point: wealth tax works when viewed as a protection fee, but only if the government can resist getting greedy. Charge a reasonable fee for a reasonable service and most people don’t mind paying, but charge an overblown fee for shitty service and it all goes pear shaped quite rapidly. The deeper question being how to create a system of government that is not driven by greed and grabbity grab, when so many aspects of human nature are.

Now you are talking about CO2 as if it were a special case, and quite frankly I see no evidence that there is anything special about CO2 worth mentioning. People who make predictions about the climate have one thing universally in common — they all get it wrong. For example, the CSIRO fact sheet claims:

Projections indicate that by 2030, southern Australia may receive up to 10 per cent less rainfall while northern areas see changes of -10 to +5 per cent.

By 2050, southern areas may get up to 20 per cent less rainfall, with changes of -20 to +10 per cent in the north.

http://www.csiro.au/resources/Climate-Change-Vulnerable–ci_pageNo-2.html

Now the people of Victoria watching their rivers overflow might rightly wonder how such a whacked out prediction could come to pass, but a few years back the general consensus was that Southeastern Australia would be pretty much in perpetual drought. I’m happy to consider taking these people seriously AFTER then demonstrate they can consistently get their predictions right, but until that day comes, carbon is just another resource coming out of the ground like anything else. We already have a vehicle for resource taxation (which is state royalties) but the federal government demonstrated how their own greed has shot them in the foot by grabbing state royalties out of the GST payments and then scratching their heads over why there is no incentive for states to take care with appropriate resource pricing.

By the way, you don’t need to introduce me to any AGW skeptics, I find that typing “climategate” into google comes within the range of things I can achieve on my own. I don’t like discussing too many grinding mechanical details of AGW here, because this is primarily an economics blog and thus there is a whole different raft of failed predictions to discuss.

observa
observa
11 years ago

Tel, I’m probably addressing a wider audience with some of the comments but I’ll address a couple of yours specifically. Climategate and subsequent has exposed the conflation of warmenista science and prescription advocacy with the latter, more specifically the global ETS pipedream being demolished by Copenhagen and to some extent the GFC. JoNova points out the obvious with Deutsche Bank and Columbia Uni as thick as thieves, with chief spruikers Pachauri and Gore previously exposed as the carpetbaggers and shucksters they always were. Now The Team science is being slowly but surely being put into proper perspective. Nice theory but not proven guys. I don’t think they started out as crooks or see themselves as crooked even now, but fell for the temptaion to see things in the data when the enormous hurdle of that 150 yrs of thermometer data finally confronted them. They ended up circling the wagons and drinking their own bathwater and now have a lot of explaining to do.

That said you need to understand most climate change fans wouldn’t have a clue about the science and believe because they want to believe. It presses all their Spaceship Earth buttons and the Left Green Quants are more than happy to oblige. That’s why I have no problem resource taxing coal, LNG and oil via their CO2E rating mechanism if it keeps them all happy. It’s the inherent non-human energy source that’s important to resource tax because it’s what gives us the enormous ability to convert the natural environment to our wants. Plenty of diesel and A D9 Caterpillar beats battalions of the Red Army with picks and shovels but you don’t need to tell them that. They want what we’re having but it makes sense to up the social cost of that lifeblood of capital(and for peak oil perhaps)for environmental and equity reasons. Throw them their bone if they want to rate the relative energy resource taxes via the CO2E mechanism, bearing in mind they run into that export competitive ceiling anyway. That’s a highest common factor problem for them if they do anyway.(ie coal vs LNG)

I take your points on wealth taxing but you need to bear in mind we start from where we are and bear in mind we’re advocating ditching all the intrusiveness of income tax reporting here. Gold bars under the floorboards or cash in jam jars is a always a problem but Centrelink don’t come around with metal detectors now when you fill out those copious forms outlining assets. There’s a catch-all for household contents among all the RE, bank accounts,term deposits, shares, trusts, yada, yada that can easily be fudged now but they largely rely on someone spilling the beans if you do. Struth look at the kerfuffle if a pollie gets it wrong. That would be the same with wealth declarations for ANWT purposes but in the main wealth is much harder to hide than income and certainly so for the top 5% or so of wealth-holders that we’re likely targetting here. Besides we’re giving anyone and everyone the ability to take an ANWT holiday by holding it at any time in the form of approved natural environment holdings.

Wealth for ANWT purposes would necessarily be sheeted home to individuals but obviously needs to be adjusted for stage of lifecycle as well as dependants. ie the threshold would be higher for self-funded retirees than for an 18yr old and spread for mum, dad and 2 kids cf a couple of DINCS and so on. That’s what the political process is all about. How far we want to go with allocating all wealth between private and public raises an interesting point. There is some wealth that might be termed ‘quasi-private’ and nowhere better illustrated than the public/private school debate. Suppose mum and I are just nudging that threshold and junior gets into Timbertop or Kings. All of a sudden junior has become much wealthier with some quasi-private wealth he’s enjoying. Just how should that be allocated? If it aint clearly public then should the old and new school ties have to hold shares in the school? Similarly with the Sanitarium enterprises, the local mosque, church or synagogue. Should the priests, rabbis, imams and their congregations hold all the shares> An interesting one given the takeover of a Newcastle mosque by some more fundamentalist outlook younguns just recently but there have been similar arguments over ownership with particular churchgoing groups as well. One for the secular lefties to sort out no doubt, albeit some of us would be most interested in just who owns what with some of these sorts of amorphous assets.

observa
observa
11 years ago

And speak of the devil-
http://gregmankiw.blogspot.com/2010/09/dastardly-clever-scheme.html
Ah left green quants, aint they grand?

observa
observa
11 years ago

“The Kloppers world view implicitly trusts the market to decide which technologies will take over from polluting industries – he argues any carbon tax must be revenue neutral. Giving the revenue raised back to businesses and consumers, he says, will allow them to decide where to spend the money – and investment dollars will flow in the right direction as a result.”
http://www.businessspectator.com.au/bs.nsf/Article/Kloppers-outflanks-the-pollies-on-carbon-pd20100916-9BTBJ?OpenDocument&src=mp
But if it’s not revenue neutral and relies on ‘reshiftables’ or the divine whims of elected kings like pink batts, green loans and inspectors, not to mention mandated 6 Star Energy ratings for FHB homes and the like, then eventually it will run smack bang into deficits and/or voter resistance to their concomitant high levels of taxation to fund it all. I’m with Kloppers on that score but with a much broader outlook environmentally.