Australian Politics Forum - Warren Truss rejects economics 101

freediver

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Warren Truss rejects economics 101
May 18^th, 2011 at 10:00pm

Not only does Warren Truss (leader of the nationals) reject economic fundamentals, he claims that economists agree with him.

There seems to be a growing trend from the coalition to misrepresent the views of other people as agreeing with them. First we had Abbott trying to put words into Tim Flannery's mouth. This comment from Truss was made on the same day:

http://www.ozpolitic.com/articles/coalition-climate-change-policy.html#warren-tr...

Quote:

This is the kind of ‘wonder’ tax that the government wants to impose upon the Australian people. Economists say it will not work. If you give all of the money back to people by way of compensation, they will not try to change their behaviour, so it will make no difference whatsoever to CO2 emissions. Indeed, it will probably make them worse, because one of the things that this tax will do—as we heard today in question time and as we have heard in the media over recent times—is make doing business in this country more costly.

Surprisingly, the media did not pick up on this comment. His reference to economists is especially interesting, as there is a strong economic consensus in favour of pricing mechanisms. Truss' explanation shows an unfamiliarity with basic economic principles that is bewildering for a political leader. If the money is returned to taxpayers (eg via reduced income taxes) there will still be a very strong incentive to reduce emissions. Most items will actually become more affordable, as they incur relatively few emissions and the increase in price will be more than offset by the reductions in income tax. Those few items that incur high greenhouse emissions (think of the 80:20 rule) will become far less affordable. If the compensation was 'perfect' people could theoretically buy the same things and pay more for some and less for others. However, the reality is that unless people will die without an item then they will gradually substitute the now less affordable ones for the more affordable. Even if an item is necessary, there are many ways to obtain it that will have varying levels of emissions associated with them. Upstream of the consumer, suppliers will be faced with similar choices when it comes to their costs. This is the reality that economists refer to when they talk about 'supply and demand'. This is the reality that Warren Truss claims to reject when he says the tax will not work. This is the reality that Warren Truss rejects when he claims that economists share his view.

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BatteriesNotIncluded Gold Member Offline MediocrityNET: because people died for this! Posts: 26966	Re: Warren Truss rejects economics 101 Reply #1 - May 19^th, 2011 at 1:50am ..and the media accept economic fundamentals? Peak Oil is a fundamental what????????????????????????????????????
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cods

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Re: Warren Truss rejects economics 101
Reply #2 - May 19^th, 2011 at 6:19am

freediver wrote on May 18^th, 2011 at 10:00pm:

Not only does Warren Truss (leader of the nationals) reject economic fundamentals, he claims that economists agree with him.

There seems to be a growing trend from the coalition to misrepresent the views of other people as agreeing with them. First we had Abbott trying to put words into Tim Flannery's mouth. This comment from Truss was made on the same day:

http://www.ozpolitic.com/articles/coalition-climate-change-policy.html#warren-tr...

Quote:

This is the kind of ‘wonder’ tax that the government wants to impose upon the Australian people. Economists say it will not work. If you give all of the money back to people by way of compensation, they will not try to change their behaviour, so it will make no difference whatsoever to CO2 emissions. Indeed, it will probably make them worse, because one of the things that this tax will do—as we heard today in question time and as we have heard in the media over recent times—is make doing business in this country more costly.

Surprisingly, the media did not pick up on this comment. His reference to economists is especially interesting, as there is a strong economic consensus in favour of pricing mechanisms. Truss' explanation shows an unfamiliarity with basic economic principles that is bewildering for a political leader. If the money is returned to taxpayers (eg via reduced income taxes) there will still be a very strong incentive to reduce emissions. Most items will actually become more affordable, as they incur relatively few emissions and the increase in price will be more than offset by the reductions in income tax. Those few items that incur high greenhouse emissions (think of the 80:20 rule) will become far less affordable. If the compensation was 'perfect' people could theoretically buy the same things and pay more for some and less for others. However, the reality is that unless people will die without an item then they will gradually substitute the now less affordable ones for the more affordable. Even if an item is necessary, there are many ways to obtain it that will have varying levels of emissions associated with them. Upstream of the consumer, suppliers will be faced with similar choices when it comes to their costs. This is the reality that economists refer to when they talk about 'supply and demand'. This is the reality that Warren Truss claims to reject when he says the tax will not work. This is the reality that Warren Truss rejects when he claims that economists share his view.

fd we are all looking down the gauntlet of higher electricity bills...now how do you expect those of limited means.. to avoid using this product... I am sick of you saying..there are cheaper things out there...

can we expect every car on the market now to have a star rating like our washing machine and fridge...mind you that is only in its use of water.. but how about a star rating on emmissions during manufacture???????

economists!!! sorry but most of these guys dont live in the real world..

a bit like you.... where do we get cheap power from when we cant afford RE....we cant use wood we cant use fire.

its like smoking... put the bloody things in plain packaging wont change a thing.

you believe everything you read that has the same perspective as yourself..so tell me what emmissions does the car you drive burn each time you turn the key... and how many did it burn before it was handed over to you.

you believe all this will make a difference...

how???? by how much? when will it start to make a difference.. when will they know this TAX is working????..they have, and I pressume you have, all this worked out..

everytime someone is asked, they increase the time frame.. I am fed up with hearing that.. it all sounds like guesswork.

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freediver

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Re: Warren Truss rejects economics 101
Reply #3 - May 19^th, 2011 at 9:44pm

Quote:

fd we are all looking down the gauntlet of higher electricity bills...now how do you expect those of limited means.. to avoid using this product... I am sick of you saying..there are cheaper things out there...

Wasn't I saying that you would be compensated? Or was that you saying that?

Quote:

can we expect every car on the market now to have a star rating like our washing machine and fridge...mind you that is only in its use of water.. but how about a star rating on emmissions during manufacture???????

Do you check the fuel consumption rate on cars before you buy? There's a good place for you to save some money.

Quote:

economists!!! sorry but most of these guys dont live in the real world..

So you would have economic policy decided by those who do not understand the implications of their decisions? This whole 'university of the real world' BS is juvenile.

Quote:

a bit like you.... where do we get cheap power from when we cant afford RE....we cant use wood we cant use fire.

You do not actually need power. What you need is the services that you the power provides. There are lots of ways to get those services with less power. For example the house I am in now seems to be far more stable temperature-wise. I did not use the air con at all last summer. It is a nice temperature that I want, not GHG emissions.

Quote:

its like smoking... put the bloody things in plain packaging wont change a thing.

So why are tobacco companies lobbying so hard against it?

Quote:

you believe everything you read that has the same perspective as yourself..

I think for myself.

Quote:

how???? by how much? when will it start to make a difference.. when will they know this TAX is working????

There are ways to measure it. You can measure it for example at the level of individual decisions. This is especially true for industrial users. Economists can also measure the overall consumption. Electricity and petrol prices have fluctuated many times throughout history and economists have a reasonable idea of what the short and long term sensitivity is. I make this distinction because there are many decisions that people only make once a year, once a decade, once in a lifetime etc, so the long term sensitivity tends to be higher than the short term. Anyway, if you want the numbers and details, you'll have to find them yourself.

Quote:

they have, and I pressume you have, all this worked out..

Not completely cods, for the same reason that we do not have to know what the price of every item is going to be in order to choose capitalism over communism.

Quote:

Also, over the very long term, it will be a 'suck it and see' approach. Economists cannot predict things like how new technology, new techniques etc will affect the future. No-one has a crystal ball. We are not now choosing a carbon price for the next fifty years. We are choosing a relatively low price for the next 4 years or so. What happens after that will depend partly on the effect of the tax.

What I can say for certain is that a tax is going to be cheaper than any other emissions reduction mechanism if you use the income to reduce other taxes.

Quote:

everytime someone is asked, they increase the time frame.. I am fed up with hearing that.. it all sounds like guesswork.

You are asking a very vague question. The IPCC publications make these sort of predictions and acknowledge the level of uncertainty involved. There is no magic number where it suddenly 'makes a difference. If we reduced electricity consumption tonight by 1%, it would make a difference by tomorrow, though I doubt you would be satisfied with the extent of it.

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People who can't distinguish between etymology and entomology bug me in ways I cannot put into words.

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BatteriesNotIncluded

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Re: Warren Truss rejects economics 101
Reply #4 - May 19^th, 2011 at 9:58pm

freediver wrote on May 18^th, 2011 at 10:00pm:

Not only does Warren Truss (leader of the nationals) reject economic fundamentals, he claims that economists agree with him.

There seems to be a growing trend from the coalition to misrepresent the views of other people as agreeing with them. First we had Abbott trying to put words into Tim Flannery's mouth. This comment from Truss was made on the same day:

http://www.ozpolitic.com/articles/coalition-climate-change-policy.html#warren-tr...

Quote:

This is the kind of ‘wonder’ tax that the government wants to impose upon the Australian people. Economists say it will not work. If you give all of the money back to people by way of compensation, they will not try to change their behaviour, so it will make no difference whatsoever to CO2 emissions. Indeed, it will probably make them worse, because one of the things that this tax will do—as we heard today in question time and as we have heard in the media over recent times—is make doing business in this country more costly.

Surprisingly, the media did not pick up on this comment. His reference to economists is especially interesting, as there is a strong economic consensus in favour of pricing mechanisms. Truss' explanation shows an unfamiliarity with basic economic principles that is bewildering for a political leader. If the money is returned to taxpayers (eg via reduced income taxes) there will still be a very strong incentive to reduce emissions. Most items will actually become more affordable, as they incur relatively few emissions and the increase in price will be more than offset by the reductions in income tax. Those few items that incur high greenhouse emissions (think of the 80:20 rule) will become far less affordable. If the compensation was 'perfect' people could theoretically buy the same things and pay more for some and less for others. However, the reality is that unless people will die without an item then they will gradually substitute the now less affordable ones for the more affordable. Even if an item is necessary, there are many ways to obtain it that will have varying levels of emissions associated with them. Upstream of the consumer, suppliers will be faced with similar choices when it comes to their costs. This is the reality that economists refer to when they talk about 'supply and demand'. This is the reality that Warren Truss claims to reject when he says the tax will not work. This is the reality that Warren Truss rejects when he claims that economists share his view.

80: 20 rule?

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*Sure....they're anti competitive as any subsidised job is. It wouldn't be there without the tax payer. Very damned difficult for a brainwashed collectivist to understand that I know.... (swaggy) *

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adelcrow

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Re: Warren Truss rejects economics 101
Reply #5 - May 19^th, 2011 at 9:59pm

Truss is a good example of the dimwitted career pollies the Nationals keep rolling out.
If we look at the percentage of votes the Nats get at federal elections its easy to conclude that they speak for almost no one. But the Libs need all these minor parties to even get close to power so I suppose we are stuck with these morons unless we ban political parties from forming coalitions.

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freediver Gold Member Offline www.ozpolitic.com Posts: 49458 At my desk.	Re: Warren Truss rejects economics 101 Reply #6 - May 19^th, 2011 at 10:20pm 80:20 rule -> http://en.wikipedia.org/wiki/Pareto_principle
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BatteriesNotIncluded Gold Member Offline MediocrityNET: because people died for this! Posts: 26966	Re: Warren Truss rejects economics 101 Reply #7 - May 19^th, 2011 at 11:25pm freediver wrote on May 19^th, 2011 at 10:20pm: 80:20 rule -> http://en.wikipedia.org/wiki/Pareto_principle GOOD ONE!
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BatteriesNotIncluded

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Re: Warren Truss rejects economics 101
Reply #8 - May 19^th, 2011 at 11:33pm

adelcrow wrote on May 19^th, 2011 at 9:59pm:

Truss is a good example of the dimwitted career pollies the Nationals keep rolling out.
If we look at the percentage of votes the Nats get at federal elections its easy to conclude that they speak for almost no one. But the Libs need all these minor parties to even get close to power so I suppose we are stuck with these morons unless we ban political parties from forming coalitions.

Nats and country people will be fast reconsidering their options this century: it has been fairly well established they get not enough from this so called coalition. THEY ONLY HAVE TO LOOK AT WESTERN AUSTRALIA TO SEE HOW REAL PLAYERS PLAY HARDBALL TO GET RESULTS... THEN WE HAVE A BALLGAME ALRIGHT!

Tony Windsor gave them food for thought at that regional Q and A a few weeks back!

Considering food is a major problem globally in terms of the future then i think we may see quite a political reaction given that the internet and other things will need to be provided to keep people on the land! the Liberal Party really need sto start getting a grip and this means offering more to the regions and therefore the nationals when they start playing for real!!!

The nationals will start playing for real when the country people start playing for real.... this is what I am saying will start to become more the case!

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*Sure....they're anti competitive as any subsidised job is. It wouldn't be there without the tax payer. Very damned difficult for a brainwashed collectivist to understand that I know.... (swaggy) *

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Maqqa

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Re: Warren Truss rejects economics 101
Reply #9 - May 20^th, 2011 at 7:44am

freediver wrote on May 18^th, 2011 at 10:00pm:

Not only does Warren Truss (leader of the nationals) reject economic fundamentals, he claims that economists agree with him.

There seems to be a growing trend from the coalition to misrepresent the views of other people as agreeing with them. First we had Abbott trying to put words into Tim Flannery's mouth. This comment from Truss was made on the same day:

http://www.ozpolitic.com/articles/coalition-climate-change-policy.html#warren-tr...

Quote:

This is the kind of ‘wonder’ tax that the government wants to impose upon the Australian people. Economists say it will not work. If you give all of the money back to people by way of compensation, they will not try to change their behaviour, so it will make no difference whatsoever to CO2 emissions. Indeed, it will probably make them worse, because one of the things that this tax will do—as we heard today in question time and as we have heard in the media over recent times—is make doing business in this country more costly.

Surprisingly, the media did not pick up on this comment. His reference to economists is especially interesting, as there is a strong economic consensus in favour of pricing mechanisms. Truss' explanation shows an unfamiliarity with basic economic principles that is bewildering for a political leader. If the money is returned to taxpayers (eg via reduced income taxes) there will still be a very strong incentive to reduce emissions. Most items will actually become more affordable, as they incur relatively few emissions and the increase in price will be more than offset by the reductions in income tax. Those few items that incur high greenhouse emissions (think of the 80:20 rule) will become far less affordable. If the compensation was 'perfect' people could theoretically buy the same things and pay more for some and less for others. However, the reality is that unless people will die without an item then they will gradually substitute the now less affordable ones for the more affordable. Even if an item is necessary, there are many ways to obtain it that will have varying levels of emissions associated with them. Upstream of the consumer, suppliers will be faced with similar choices when it comes to their costs. This is the reality that economists refer to when they talk about 'supply and demand'. This is the reality that Warren Truss claims to reject when he says the tax will not work. This is the reality that Warren Truss rejects when he claims that economists share his view.

It's sound economics freediver

I have already explained it and will again if any lefties needs it again

Unlike other lefties who run away after making a statement - I am happy to back it

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« Last Edit: May 20^th, 2011 at 7:51am by Maqqa »

Bill 14% is not the alcohol content of that wine. It's your poll number

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perceptions_now

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Re: Warren Truss rejects economics 101
Reply #10 - May 20^th, 2011 at 11:29am

Maqqa wrote on May 20^th, 2011 at 7:44am:

freediver wrote on May 18^th, 2011 at 10:00pm:

Not only does Warren Truss (leader of the nationals) reject economic fundamentals, he claims that economists agree with him.

There seems to be a growing trend from the coalition to misrepresent the views of other people as agreeing with them. First we had Abbott trying to put words into Tim Flannery's mouth. This comment from Truss was made on the same day:

http://www.ozpolitic.com/articles/coalition-climate-change-policy.html#warren-tr...

Quote:

This is the kind of ‘wonder’ tax that the government wants to impose upon the Australian people. Economists say it will not work. If you give all of the money back to people by way of compensation, they will not try to change their behaviour, so it will make no difference whatsoever to CO2 emissions. Indeed, it will probably make them worse, because one of the things that this tax will do—as we heard today in question time and as we have heard in the media over recent times—is make doing business in this country more costly.

Surprisingly, the media did not pick up on this comment. His reference to economists is especially interesting, as there is a strong economic consensus in favour of pricing mechanisms. Truss' explanation shows an unfamiliarity with basic economic principles that is bewildering for a political leader. If the money is returned to taxpayers (eg via reduced income taxes) there will still be a very strong incentive to reduce emissions. Most items will actually become more affordable, as they incur relatively few emissions and the increase in price will be more than offset by the reductions in income tax. Those few items that incur high greenhouse emissions (think of the 80:20 rule) will become far less affordable. If the compensation was 'perfect' people could theoretically buy the same things and pay more for some and less for others. However, the reality is that unless people will die without an item then they will gradually substitute the now less affordable ones for the more affordable. Even if an item is necessary, there are many ways to obtain it that will have varying levels of emissions associated with them. Upstream of the consumer, suppliers will be faced with similar choices when it comes to their costs. This is the reality that economists refer to when they talk about 'supply and demand'. This is the reality that Warren Truss claims to reject when he says the tax will not work. This is the reality that Warren Truss rejects when he claims that economists share his view.

It's sound economics freediver

I have already explained it and will again if any lefties needs it again

Unlike other lefties who run away after making a statement - I am happy to back it

Still practising to be a comedian, Maqqa?

The truth is, as has been seen on countless ocassions, your understanding of general & Global Economics is "somewhat limited".

In fact, you use "spin phrases" and you don't expain it, because of your knowledge limitations.

And, like some others, you generally run from any in depth discussion, because you lack the knowledge to back up your spin, with real facts!

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BatteriesNotIncluded Gold Member Offline MediocrityNET: because people died for this! Posts: 26966	Re: Warren Truss rejects economics 101 Reply #11 - May 20^th, 2011 at 4:27pm .......
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adelcrow

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Re: Warren Truss rejects economics 101
Reply #12 - May 20^th, 2011 at 5:25pm

Yep I must agree, Maqqa's economic advice is always lifted straight from the official Liberal Party line of the day.
He certainly doesnt seem to have any economic expertise or opinions of his own.
If I want to know what Maqqa is going to flood the boards with on any given day I just go to www.liberal.org.au and cut out the middle man Grin

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Go the Bunnies

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Maqqa Gold Member Offline 14% - that low?! Posts: 16000	Re: Warren Truss rejects economics 101 Reply #13 - May 20^th, 2011 at 5:41pm Happy to take you all on perception and death - no need for you to participate until you learn the alphabet first
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longweekend58

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Re: Warren Truss rejects economics 101
Reply #14 - May 20^th, 2011 at 5:43pm

adelcrow wrote on May 19^th, 2011 at 9:59pm:

Truss is a good example of the dimwitted career pollies the Nationals keep rolling out.
If we look at the percentage of votes the Nats get at federal elections its easy to conclude that they speak for almost no one. But the Libs need all these minor parties to even get close to power so I suppose we are stuck with these morons unless we ban political parties from forming coalitions.

Lets look at your ridiculous idea for a moment. Apart form the utter unconstitutionality of your proposal what do you suggest we do at the last election? No one won a majority so do you just hold another election? even with the polls the way they are now, no single party would win a majority. so do we keep having elections every month until we get a result? perhaps 10-20 years down the track?

And if you are going to ban coalitions then you must by the same consequence get rid of preferential voting which is based onthe same concept.

Get rid of that and 30 labor MPs go = mostly to the liberals who even without the nats would then have a majority. Labor would probably never be able to form a govt and it woudl simply be the liberal party or no one.

Do you really want this or are you willing to accept the notion of coalitions which forms the basis of democratic government in every other country?

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