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Wednesday, 21 September


Is there a case for a basic income guarantee – Part 2 Bill Mitchell – billy blog

This is Part 2 in the mini-series discussing the relative merits of the basic income guarantee proposal and the Job Guarantee proposal. The topic of a basic income guarantee seems to evoke a lot of passion and in all the discussions I rarely read anyone going carefully through the macroeconomic implications of bringing in a scheme. I get lots of E-mails accusing me in varying degrees of politeness of being on a moral crusade in my opposition to basic income proposals. I wonder how much of my work over the years such correspondents have read. Not much is my conclusion. Whatever you think of the morality of having a system where some people work while others are supported in one way or another without having to work, even though they could (so I exclude the aged, sick, severely disabled here), the fact remains that a policy proposal won’t get much traction from me if it has a deep inflation bias and adopts neo-liberal explanations for economic outcomes like unemployment. I will also never support a proposal that absolves the national government from taking responsibility for providing enough work via its currency capacities and treats individuals expediently as ‘consumption units’ – to be maintained at minimum material levels. Anyway, we explore a few of those issues in this blog.

What is the problem that needs to be addressed?

How we construct the problem conditions the way we attempt to solve it. Mitchell and Watts (2004: 3) say that “It is easy to pose a ‘false problem’ and then develop rhetoric to ‘solve it’.” We sketch their argument in what follows (page references are to their article).

In a public policy setting, it is crucial to construct the initial problem in a meaningful way to ensure the solutions are effective. So in advancing the debate between basic income proponents and Job Guarantee proponents what exactly is the nature of the problem that they are seeking to address?

In the first instance, and the debate in fact goes well beyond this, both proposals clearly aim to address the problem of income insecurity.

There is no doubt that poverty rates have risen in many countries as a result of the GFC and the auterity policies that have been pursued by misguided governments in its aftermath.

Many researchers and policy commentators seize on this type of data as the basis of their advocacy for the introduction of a Basic Income Guarantee (BIG) as the primary policy weapon against poverty.

They highlight the fact that there is a lack of employment alternatives available to citizens in poor nations and that the introduction of a BIG would seem to be an easy way to eliminate poverty.

The provision of an unconditional BIG, set at a ‘liveable’ level and payable to all citizens, is advocated by a number of public policy theorists as a means of addressing income security.

But an effective solution requires that we understand “the underlying rather than proximate causes of income insecurity” (p.3).

But it goes further than this. To assemble an array of possible solutions, we also have to understand the power that a currency-issuing state has in terms of solving the underlying causes. If we have an ill-informed understanding of those capacities we are prone to define the possible policy set too narrowly and thus exclude preferred solutions.

We argue that this failing is endemic to the basic income proposal.

It is obvious that the basic income advocates attempt to solve the income insecurity directly but, in so doing, fail to address its underlying causes – namely unemployment.

But even more telling is that basic income proponents, in general, categorically fail to understand the realities of modern money in fiat currency economies. Accordingly, they operate within the false belief that such governments are financially constrained.

This, in turn...


Video of the Day: World’s first manned solar helicopter flight Renew Economy

University of Maryland students say they have achieved an aviation first, getting their manned, solar powered helicopter off the ground.


New Zealand’s zombie miracle John Quiggin

Twice in the last couple of days, I’ve bumped into the seemingly unkillable zombie idea that the New Zealand economy is doing well and ought to be a model for Australia. Checking Wikipedia to make sure I hadn’t missed anything, I found that, as of 2015, NZ income per person was 30-35 per cent below that in Australia, as it has been ever since the miraculous reforms of the 1980s and 1990s. NZ is down with Italy and Spain on most rankings, while Australia is comparable to Germany (above on some rankings, below on others).

This wasn’t always the case. Before the reform era, New Zealand and Australia had almost identical income levels, among the richest in the world. NZ took a bigger hit from British entry into the EU in the early 1970s but after 50 years, that can scarcely serve as an excuse (and of course, no one is predicted that Brexit will be a gigantic benefit to NZ; rather the reverse)

Then there’s migration. I dealt with this here, but I’ll repost crucial points over the fold.

The current period of approximately zero net migration doesn’t mean New Zealand’s labour market is outperforming Australia’s in any absolute sense. As a result of migration flows over the past thirty years, there are around 650,000 New Zealand citizens living in Australia, equal to around 15 per cent of the citizen population of New Zealand. The number of Australian citizens living in New Zealand is far smaller, at around 65,000.

It may reasonably be assumed that a substantial proportion of expatriates, given comparable economic opportunities, would prefer to live in their home country. So, if the New Zealand labour market offered prospects comparable to those in Australia, we would expect to see a substantial net flow from Australia to New Zealand.

Importantly, New Zealand citizens are not eligible for Australian unemployment benefits. Thus, at any time when the Australian labour market is in a cyclical slowdown, as it is at the moment, the option of moving to Australia is unattractive except for those who have strong employment prospects. Conversely, the option of returning to New Zealand makes sense for unemployed New Zealanders, regardless of their prospects at home.

This cyclical pattern of variation has been observed ever since the opening up of migration in the 1970s. Initially, it was quite common for the long-term net flow from New Zealand to Australia to reverse in response to cyclical conditions. But as the gap between the two economies has widened, the long-term trend has dominated. Even as New Zealand has recorded one of its best performances in years, and Australia one of its worst, the flow has merely paused, with no clear evidence of a reversal.

For much of the twentieth century, Australian political discussion was dominated by the “colonial cringe,” the belief that only ideas from Britain, and later the United States, were worth talking about. Apparently, all that has changed, and now New Zealand is on the list too. In reality, though, Australia has done a far better job of economic management than any of these countries. •


Australia could, should make wind turbines, says Suzlon chief Renew Economy

Suzlon Energy's Tulsi Tanti says making wind turbines in Australia would be a "win-win", but market must first demonstrate stability, growth.


AGL encourages community to have their say on Coopers Gap Wind Farm Renew Economy

AGL is encouraging local residents to have their say on the proposed Coopers Gap Wind Farm project.


EthosEnergy successfully completes $2m overhaul for Origin Energy Renew Economy

EthosEnergy has been successfully completed a $2m major overhaul of a gas turbine and generator for Origin Energy.


South Korea give boost to energy storage as part of renewables spending spree Renew Economy

South Korea to provide incentives for utility-scale solar operators to install energy storage units as it outlines plans to invest $US27 billion in renewable energies over next five years.


GM’s Bolt to take on Tesla, Norway and Germany link wind with hydro storage Renew Economy

GM is set to take on Tesla with its Chevy Bolt electric car. Meanwhile, big developments in offshore wind and battery storage.


All-Energy Australia "IndyWatch Feed Economics"

With more than 150 industry speakers, more than 100 exhibitors, two networking events and seven conference streams, the All-Energy Australia Conference and Exhibition is back and bigger than ever.


How the jaw-dropping fall in solar prices will change energy markets Renew Economy

The jaw-dropping bids for a massive solar plant in Abu Dhabi will help change the thinking about the future of energy markets. The price offered is one third the cost of local gas generation, and one fifth of the cost of the proposed new nuclear plant in the UK.


Australia facing 1 billion tonne emissions shortfall on current policies Renew Economy

Australia will likely miss its Paris climate commitments by around one billion tonnes of greenhouse emissions by 2030 if it continues with its current policies.


Huge sinkhole leaks waste into Florida drinking water, concealed for weeks "IndyWatch Feed Economics"

Huge sinkhole leaks waste into Florida drinking water, concealed for weeks

A large sinkhole has caused contaminated wastewater to flow into an aquifer in Polk County, Florida in the US.

The sinkhole appeared at the Mosaic phosphate fertilizer plant about three weeks ago, and 215 million gallons of water containing sulphate, sodium and gypsum, which contains low levels of radiation have drained into the aquifer since then, the Tampa Bay Times reports.

The aquifer is the state’s main source of drinking water.

The 45 foot wide sinkhole appeared under a “gypsum stack” of Mosaic waste material, which is created during the process of producing fertilizer from phosphate.

Mosaic claims there is no risk. “Groundwater moves very slowly,” David Jellerson, Mosaic’s senior director for environmental and phosphate projects said. “There’s absolutely nobody at risk.”

The company says it started to divert the water as soon as the alarm was raised. The company became aware of the the sinkhole in late August, but kept it from the public as they said there was no risk. It did inform the Florida Department of Environmental Protection(DEP), but the DEP did not tell the public either.

“The department’s focus at this time is on the oversight of Mosaic’s first-response efforts in order to safeguard public health and the environment,” DEP spokesperson Dee Ann Miller told the Tampa Bay Times.

Mosaic, the world’s largest phosphate mining company,says it has been draining the contaminated water from the aquifer.

Locals say Mosaic – who only last year paid...

Tuesday, 20 September


Credit where it’s due: How distributed energy could save $1bn on grid costs Renew Economy

Rewarding local energy generators for their contributions to the grid could unlock savings of more than $1 billion in avoided network costs, a major Australian study has found.


Gold Coast light rail study helps put a figure on value capture’s funding potential Prosper Australia

by Dr Cameron Murray cross-posted from The Conversation Value capture actually can work when it comes to funding new transport infrastructure. My research on the Gold Coast light rail provides the figures to demonstrate the size of the gains to nearby land values, which were around 25% of the A$1.2 billion capital cost in stage […]


Prosper urges the Local Government Review to mandate Site Value Prosper Australia

Victoria is reviewing its Local Government Act 1989. The original Act is now subject to over 90 amending acts, so the Review is timely and necessary. Buried among the good ideas to improve local government is a very bad one, obliging all councils to use Capital Improved Value as the ratings base. Prosper Australia’s submission […]


Four reasons why electric vehicles may take off in Australia Renew Economy

The cost of the vehicle, the cost of infrastructure and recharging, as well as the fate of petrol refineries may influence the uptake of EVs in Australia.


World at tipping point, Australia at tripping point, on energy transition Renew Economy

WEC report says stable renewables policies supported by clear carbon price signals remain crucial as world passes tipping point of "grand energy transition". Meanwhile, in Australia...


Why May approved Hinkley nuclear – the “biggest white elephant” in UK history Renew Economy

The people who approved and pushed for the approval of the £18 billion (and rising) project stand to benefit from its approval. Financially.


SunPower acquires AUO’s stake in Malaysian joint venture Renew Economy

SunPower Corp. announced today that it is purchasing AUO's portion of the two companies' joint venture.


Solar price hits record low of 2.42c/kWh, and may fall further Renew Economy

JinkoSolar smashes solar cost record with a bid of 2.42c/kWh in an Abu Dhabi tender. But it's not just the cost of solar PV that is falling dramatically, other technologies such as offshore wind and solar towers and storage are also coming down quickly, a big boost for climate action.


Manhattan explosion being used to coverup US war crime in Syria "IndyWatch Feed Economics"


By Filip Karinja

Before today’s explosion in Manhattan, the news for the day was of the United States airforce conducting four separate airstrikes on the Syrian army in Syria killing 62 soldiers and injuring 100 more.

The soldiers, representing the elected Syrian government, where in battle against ISIS when the US war planes came and were essentially acting as air support for ISIS by bombing the Syrian soldiers near the city of Deir ez-Zor, Syria.

Russia called for an immediate UN meeting to find out why the US had once again acted on behalf of ISIS in Syria.

The United States’ only response was to accuse Russia of grandstanding, avoiding the actual subject as to why they had bombed soldiers of an elected foreign government, a clear act of war.


However, western media has done it best to coverup the latest Syrian incident and when it does talk about it, like all the other times the US has killed innocent people, language such as ‘may’ ‘allegations’ ‘reports say’ ‘could’ is used rather that labelling it as fact.

Australian media has completely buried the story, the same way they didn’t even report on the news in July of this year when US and French planes bombed a Syrian village killing over 85 civilians. Apparently this was not newsworthy either, but news on what some celebrity did that day apparently was.

Hence if you speak to people who get their information from the mainstream media about the incident they will tell you that they have never heard about it, the same people who still don’t know about things like WTC building 7.

Perhaps this is why trust in the mainstream media is at its lowest point in history against all demographics, as people are beginning to wake up to see the bigger picture of what’s going on and why.

For example, when the US isn’t bombing civiliansbombing hospitals,...


Cancer Cure May Have Finally Been Found In The Australian Rainforest "IndyWatch Feed Economics"

Cancer Cure May Have Finally Been Found In The Australian Rainforest

By Christina Sarich

Queensland, Australia — A rare, cancer-fighting compound has been found in nature, and it only grows in one place in the entire world.

This cancer-fighting blushwood berry, also known as Hylandia dockrillii, has been uncovered in a far northern part of Australia, known for its proximity to the Great Barrier Reef and over 70 national parks, in the rainforests of North Queensland. The phyto-active compounds in this berry, namely a molecule which scientists are calling EBC-46, are so potent that they’ve killed cancerous tumors in lab experiments in as few as seven days. Other cancers were eradicated within only 48 hours.

Numerous clinical trials have already shown promise for treating cancer in laboratory animals, including horses, rats, and dogs, and the first human trials on a drug made from blush berries may have kept one woman from having to undergo an amputation of her arm. In a shocking twenty minutes, she says the tumor, “went purple, then black, and within a couple days, the tumor just shriveled up and died.”

The compound causes no side effects, and works faster than almost anything doctors have ever seen. It works specifically on spot-melanomas, like skin cancer.

EBC-46 seems to trigger an immune response when injected into cancerous tumor sites. Our white blood cells then attack the tumor and shrink it so that the body can completely dispose of the cancerous cells which formed it.

Blushwood berries seem to be chock-full of this tumor-fighting compound. QIMR Berghofer Medical Research Institute in Queensland, Australia, recently conducted a study on the blushwood berry and found that in over 70 percent of cases, when the compound was used, cancerous tumors die.

Dr. Glen Boyle, who led the study, says, “There’s a compound in the seed — it’s a very, very complicated process to purify this compound and why it’s there in the first place, we don’t know.”

Boyle explains that the tree is “very, very picky” about where it will grow. He says, “It’s only on the Atherton Tablelands at the moment and they’re trying to expand that to different places of course because it’d be nice to be able to grow it on a farm somewhere.”

Though Dr. Boyle says the blushwood berry compound could be used to augment chemotherapy treatment, there is a possibility that the drug could help cure cancer simply through ingesting the fruit, itself, or applying it topically. No clinical evidence has yet proven the blushwood berry to work in its whole, natural form, but if the compound gained from its flesh is so effective, might not the fruit itself prove efficacious in healing non-metastatic cancers?

Blushwood berry compounds are thought to...

IndyWatch Australian Economic News Feed Archiver

Go Back:30 Days | 7 Days | 2 Days | 1 Day

IndyWatch Australian Economic News Feed Today.

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