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Welcome for visiting my blog. Hope you enjoy the visit and always welcome back again. Have a nice day!


MySchool website and closing gaps

Comments on Andrew Penfold “Gillard's schools site should be used to help close the gap”, 26/02/2010, http://www.theaustralian.com.au/news/opinion/gillards-schools-site-should-be-used-to-help-close-the-gap/story-e6frg6zo-1225834524594

It is not an issue as clear cut as Penfold thinks it is.

It is a dilemma: should the government put more resources for places you have better strengths or the areas where it has been revealed that you don't do well?

If you are a private operator with the overall outcome in mind, what would you do?

What Penfold’s logic is no different to throwing good money onto bad.

It is an issue that many people easily fall over into a trap.

But it is an difficult issue: how to treat public schools where there are significant gaps in performance? A closed related issue is: how to close the gap between Indigenous and non Ingineous students? It that just a funding issue?

Australian top economic advisor - Treasury

Comments on Henry Ergas "Energy efficient, benefit deficient", 26/02/2010, http://www.theaustralian.com.au/news/opinion/energy-efficientbenefit-deficient/story-e6frg6zo-1225834522960

The article starts with the following:

"EVEN if the pink batt program hadn't been bungled, it was a waste of money.
There is a forecast Treasury got right last year: that the government subsidies for insulation would create jobs for workers with few skills and virtually no training. Pity that combination proved fatal, but then again, as Tom Lehrer famously put it: " `Once the rockets are up, who cares where they come down? That's not my department,' says Wernher von Braun."
What is Treasury's department, however, is that the subsidies are such poor public policy. That four young people are dead, and thousands of homes seriously exposed to the risk of fire, is tragic; that this happened because of a program that lacks any credible rationale is a scandal.
That program has been shut down, of course, along with the solar panel subsidies.
But it forms part of a bewildering range of commonwealth, state and territory initiatives aimed at promoting energy efficiency, most of which remain in place, and additional measures, replacing those cancelled, have been promised. Yet not one of those initiatives would pass a credible cost-benefit test."

This is what our top national economic advisor has done!

Remember the famous advice on tackling the recession: go early, go hard, go household?

That was probably underlying the cash handouts, including to those left here for overseas and had already been dead.


Chameleon Rudd is double standard

Comments on Dennis Shanahan “Standards sacrificed to save position”, 24/02/2010, http://www.theaustralian.com.au/news/opinion/standards-sacrificed-to-save-position/story-e6frg6zo-1225833635697

Kevin Rudd says: "I think the proper definition of ministerial responsibility is as follows: one, that a minister, when charged by cabinet with the implementation of a program, has commissioned, through his department, appropriate risk assessment as to what measures should be put in place for the proper implementation of the program; secondly, that the minister then acts appropriately in response to the departmental advice that the minister receives in the implementation of that program," Rudd said.

"Against those core measures, I stand by the minister, as I did last week, as I'll do next week."

But Mr Rudd, who should be responsible for those deaths and fires as a result of the implementation of that insulation program? Who should be responsible for the waste of taxpayers’ money either due to the poor work of some insulators or due to the compensations for those good insulators who lost businesses and work as a result of the disastrous program?

Somebody or people must be held responsible for those matters. Is that the cabinet? Is that the minister? Or is that the department?

If no one takes the responsibility for the unfortunate deaths and fires and waste under the Rudd government, is the government a responsible one, or is the government economically conservative?

Rudd's best way out of the ETS dilema

Comments on Paul Kelly “Labor in denial as ETS fairyland fractures”, 24/02/2010, http://www.theaustralian.com.au/news/opinion/labor-in-denial-as-ets-fairyland-fractures/story-e6frg6zo-1225833619589

The ETS has always been a flawed policy both domestically and internationally.

It has been some politicians' strategy to be able to use it to its political advantage by gifting permits to whoever they like at the expense of efficiency and equity, and some financial institutions' dream to create opportunities for making money for them.

Some bureaucrats also like it because they can have control over parts of it.

It has the false name of market approach, but it is far from it.

The best policy of climate change or emissions reduction / control is either a global carbon tax with an equal per capita distribution of the global revenue from it.

If such a global scheme is not done, the the best policy for a country is to imploe a domestic carbon tax and a carbon tax on imports with an equal per capita domestic distribution of the revenue.

Researchers need to be factual and logic thinking

Comments on Xiao Geng “US-China economic imbalance: Alternatives to appreciating the Chinese yuan”, 23/02/2010, http://www.eastasiaforum.org/2010/02/23/us-china-economic-imbalance-alternatives-to-appreciating-the-chinese-yuan/

The article raises a fundamental point: there are other mechanisms besides exchange rate management to address the so called imbalances, if they are indeed an issue at all as opposed to crises panicking, straw-fetching exercises by some interested parties and some no brain people.

However, most of the points in the article are debateable.

For example, the inefficient investment argument is likely to be highly misleading and no-economics. Unless the investment is used in ways like the sub-mortgage occurred in the US prior to the recent crises, investment in infrastructure, in urbanisation in productive capacities taking advantage of the low cost capital available are hardly inefficient!

It is unclear what the author meant by the statement of the “rudimentary carbon emission standard”.

From what point of view is the carbon emission standard rudimentary? How rudimentary is China’s carbon emission standard, when taking account on the size of the Chinese population and GDP measured in PPP?

While this forum is probably not meant to allow for full scale and detailed article, one would expect that arguments need to be able to withstand basic factual and simple logic test.

What about the argument about for China to inflate its way out of the imbalance? That sounds more like those arguments for the US to get out of its trouble of government budget deficit and debt out of interesting people. But it is not clear at all if that is the thinking of Chinese policy makers.


Also on the scale of China's economic impact

Comments on Ligang Song “The scale of China’s economic impact”, 23/02/2010, http://www.eastasiaforum.org/2010/02/23/the-scale-of-chinas-economic-impact/

Song's article is an interesting one.

I'd like to comment on some points in the article.

First, some challenges are also opportunities, as touched in some parts of the article. For example, the so called low carbon economy can be both extremely challenging for the world as a whole because it will represent as an additional constraint and possibly very rewarding for some economies. Assuming the presumed low carbon economy or changing towards it will be true in the next couple of decades, one has to consider not only from an absolute advantage, but also a comparative advantage point of view.

From that point, there will be very different implications for different economies. For some, it may be double whamming, while for some it may be a new, rare and extremely valuable development opportunity.

Secondly, while it may be perceived desirable to have a systematic institutional reform, history does not necessarily prove that is always feasible and realisable. China’s economic reforms in the past 30 years or so was on the premise of “cross the river by touching stones” as opposed to a well designed, systematic, big bang approach to reform.

Thirdly, it may be more pertinent to talk about systematically economic reforms in China 30 or even 20 years ago, the reform tasks in that front, while still incomplete, are largely accomplished.

Fourthly, political reforms, while undoubtedly extremely important in the long run, can be equally extremely tricky and difficult. What is the target “model” for political reforms for China? While many people either explicitly or implicitly assume the western style political system as THE model for China to follow, is it an inevitable end and/or path of the political reform?

Fifthly, in terms of the process or stage of economic development, while China’s growth might not be expected to slow, it does not necessarily mean that its energy, resource and carbon intensity of growth will not recede, as the Song states. Definitely the intensity of energy, some resources and carbon of the Chinese economy as a whole is likely to decline. I guess this is the reason and underlying logic why the Chinese government has proposed for its carbon intensity to decrease by 40-45% by 2020 over that of 2005. 40-45% reduction is by no means a small recession in the intensity.

So my view on China’s impact on many things is that it is now at a very interesting stage where there will be a sharp difference in terms of the absolute and relative magnitude. The next phase of the Chinese economy is likely to increase the share of quality growth in its total growth as opposed to a sheer focus on quantity growth. The implications of that transformation on many things, especially on resources, will be very interesting to see.

We perhaps need to borrow an analogue to the adaptive and rational expectations theories in analysing the Chinese economic growth for the next decade or two.


How many of Rudd's ministers are competent?

With the more and more exposure of the government's problems over the last two years, one has to wonder how competent of the Rudd government is and how many of his ministers are competent enough for their jobs.

The line up:

Rudd: Prime Minister responsible for his government

Gillard: Deputy PM, responsible for a number of portfolios including schools and sitting in a number of committees overseeing government strategies and expenditures, school halls and libraries

Swan: Treasurer, responsible for economic policies and budget policy, from budget surplus to deficit and planned hundreds of billions government debt

Tanner: Minister for Finance, responsible for government finance and expenditure, responsible partially for cash handouts to inflate the government debt and worsen budget

Conroy: Minister for Communication, responsible for the $43 billion NBN with no business case study

Wong: Minister for Climate Change and Water, responsible for the failed ETS legislations and Copenhagen debacle

Garrett: Minister for the Environment, Heritage and the Arts, responsible for the insulation failures

Fitzgibbon: former Minister for Defence, the defence payroll debacle and the Helen Liu donations

Conroy is incompetent and corrupt

The Federal Minister for Communication Stephen Conroy has demonstrated utterly that he is both incompetent and corrupt as a minister in charge of the communication industry.

He showed he was economically and fiscally irresponsible and incompetent in the selection of the National Broadband Network, with a price tag of $43 billion without a business case study or cost benefit analysis.

The influence he had over the appointment of a former Labour man to a key post in the NBN Co. shows he is not only incompetent but also corrupt.

His performance suggests that he should resign as the minister, or be sacked.

Rudd government irresponsible economic and social mamanger

More and more disturbing facts have come to light to indicate that the Rudd government is irresponsible both economically and socially.

I have long argued that the cash handouts packaged as fiscal stimulus was fiscally irresponsible and the $43 billion National Broadband Network without a business case study or cost benefit analysis is economically irresponsible.

I have also criticised its school halls and libraries program as waste of taxpayers' money, its Indigenous housing program incredibly inefficient and incompetent.

The recent debacle in the $2.3 billion insulation programs with a number of deaths and over a hundred house hires and the minister's forced closure of the program, as well as the $250 million gifts to the commercial TV networks, all show yet again that the Rudd is a very poor manager of taxpayers’ money, for all purposes, economically and socially.

We are lucky that it has not taken over the public hospitals from the States. If it had, then the public hospitals would have been another disaster.

The less the Rudd government is involved in the nation’s economic and social management, the better it would be for all Australians.

Voters should now have known what Rudd meant in saying he is economically conservative before and during the last election.

They should register their disapproval in the next election, whenever it will be.


What is Rudd government hiding of the Henry Review report from the public?

Comments on Dennis Shanahan “Indiana Swan and the Chamber of Doom”, 20/02/2010, http://www.theaustralian.com.au/politics/opinion/indiana-swan-and-the-chamber-of-doom/story-e6frgd0x-1225831948370

The Rudd government has been particularly tricky on the Henry Review report.

It is not good enough for the government to act this way: to keep the public and the opposition guessing while the government has the full of government resources, like so many departments of bureaucrats to serve them and design spins for another round of empty promises.

It is a shame that the government can't be truthful to the public by releasing the report and saying to the public that the government is considering it and will come up with its positions in the due course.

Why can’t the government be fair with the public?

This demonstrates Rudd government's trickiness and untrusting of the public.

Health insurance in Australia - a second best solution

Comments on David Uren “Minister shows her unhealthy obsession”, 19/02/2010, http://www.theaustralian.com.au/politics/opinion/minister-shows-her-unhealthy-obsession/story-e6frgd0x-1225831948276

While I am not a fan of health minister Nicola Roxon's direct government regulatory approach to managing the health insurance companies, there are a couple of points in Australia that need to be considered.

One is the issue of the impact of government quasi compulsory insurance (otherwise punished by special levy for income exceeding a level).

The other is the non-competitive nature of the health insurance industry here.

These two issues distort the health insurance industry and consumer choices.

I think a potential solution to these twine issues, that is, to have a default government insurance non profitable organisation to provide a choice for people and to provide a pressure for competitor to private health insurers, so to limit their non competitive behaviours.

Thus, in the presence of government regulatory distortions in the first place, the government should provide a second best solution, as opposed to a heavily regulated approach as it has been for a long time.


IMF overkill on inflation targets

Comments on Stephen Grenville “The IMF's inflation heresy”, 18/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/IMF-financial-crisis-inflation-interest-rates-pd20100217-2R4QL?OpenDocument&src=sph

The IMF has completely lost its way in being an effective international organisation of monetary authority.

It has shown that it has been in panic and its responses to new issues and crises have been rushed.

Since the Asian financial crisis, it has been an international bad as opposed an international good.

It should be completely "reformed" or dissolved.

This is by no means to be disrespect to Prof. Blanchard, but having some academic economists with little real world policy experience in charge of such an international monetary authority has its own problems.

Rudd's difficulties

Comments on Dennis Shanahan “Rudd bumped by opposition story”, 18/02/2010, http://www.theaustralian.com.au/politics/opinion/rudd-bumped-by-opposition-story/story-e6frgd0x-1225831555761

No matter what he wishes to do, Kevin just can't do it now.

In 2007, he was untested and untried, so he could promise and promise, more promise and more promise. The public believed him, mainly because they were fed up with JH.

Now, after more than two years, the real Kevin has been exposed and seen. He has not delivered most of his promises back at the 2007 election.

So can Kevin employ the same tactics to engage the public?

The public are now looking at him with certain suspicions, probably.

They are rightly so.


Kev would be an excellent foreign minister

Comments on Janet Albrechtsen “Kev the chameleon keeps on changing his colours”, 17/02/2010, http://www.theaustralian.com.au/politics/opinion/kev-the-chamelion-keeps-on-changing-his-colours/story-e6frgd0x-1225831111826

Kev would be an excellent foreign minister who would normally require considerable skills he is so well suited for.

Unfortunately, his skill set does not augur very well for a prime minister, although he has considerable political luck to be a prime minister. The problem with him is that the longer he stays on as prime minister, the more damage it will be to his reputation and to the nation’s fortune. If he is intelligent enough, he should have the courage to move on politically.

His relationship with the Chinese appears to suggest that his quest for the UN top job may be effectively over.


Responsding IMF reviews of macro policy framework

Comments on “IMF Draws Lessons from the Crisis, Reviews Macro Policy Framework”, 12/02/2010, by iMFdirect, http://blog-imfdirect.imf.org/2010/02/12/imf-draws-lessons-from-the-crisis-reviews-macro-policy-framework/

IMF has got its policy recommendations wrong so many times, especially in relation to crises, re the Asian financial crisis and the recent financial and economic ones.

Now IMF is talking nonsense again in that paper!

For one thing, countries are different in so many ways and as a result, different macroeconomic settings are required for different circumstances. Why is IMF advocating an approach of one-size-fits-all to inflation targets? It just lacks common sense!

Second, there are other macro policy instruments that can be used in case of the so-called liquidity trap or zero or near zero official interest rate. Why introducing additional costs unnecessarily as a means to deal with a situation that can be better dealt with using other means?

Has IMF considered any cost-benefit effects of the costs of permanently higher inflation and the potential benefits in the context that there are other policy tools available?

IMF has been out of touch with reality and is now even more out of touch.

It appears to be a panic response to its past failures in policy recommendations.

That will not improve but further harm its standing.

One has to wonder what is the use for such an ineffectual and harmful international organisation that is funded by world taxpayers.

Different meanings of monopoly in China

Comments on Sun Tianfu “Consumer angst over reform of China’s age-old salt monopoly”, 13/02/2010, http://www.eastasiaforum.org/2010/02/13/consumer-angst-over-reform-of-chinas-age-old-salt-monopoly/

Noted that this is a translation, I would like to point out that some context may be missing.

The monopoly the author talks about is meant to be State monopoly, but not the normal monopoly in economics where there is only one firm to supply a product or in an industry.

As the article mentions that there is a salt industry association and there were at least 28 major companies in the industry.

In this case, it is still unclear how the State monopoly works, given that there also appears to be private companies, as the article mentions.

Optimism should be based on retionality and common sense

Comments on Jin Canrong “Reason for optimism in Sino-American relations”, 14/02/2010, http://www.eastasiaforum.org/2010/02/14/reason-for-optimism-in-sino-american-relations/

While issues related to human rights and Tibet will be a rhetorical topic between the two countries, they are unlikely to be real obstacles between optimistic and practical relationships between China and the US.

The issue of Taiwan, especially the US continual sales of arms to Taiwan, can become a more and more serious obstacle, and is likely to escalate further in the future as China becomes more confident internationally.

There are two more immediate big issues that are extremely challenging but there should be some practical ways to be resolved if common sense and rationality prevail on both sides.

They are climate change and exchange rates.

For the climate change issue, a rational solution is to adopt a fundamentally market based approach, that is, the principle of polluters pay at the world level, not just inside a country.

For the exchange rate issue, the difficulty lies in the huge Chinese official holdings of the US government bonds. The US has been demanding the Chinese to allow the RMB to appreciate. An appreciation not only affects trade flows, but will have a direct adverse impact on the value of the Chinese official holdings of those US government bonds.

This presents a real dilemma for the Chinese government, especially in an environment of increasingly domestic un-satisfaction over some reforms and rising inequality. Many young people, especially university graduates and students, are increasingly questioning some government policies. If some web opinions are a guide, allowing the RMB to appreciate would be regarded as devalue the Chinese assets, nothing short of treason behaviour.

The Chinese government is really caught between the strong pressure from the US and the increasingly dangerous domestic oppositions.

However, there should be some way out of this dilemma which may require the US to guarantee the real value in Chinese currency of the Chinese official holdings of the US government bonds. If an agreement is reached on that, then it will clear the main obstacles for some sort of decoupling of the Chinese and the US currencies.

So both issues are important and challenging. But there are reasons to be optimistic they can be resolved strategically, as long as common sense and rationality prevails.

IMF should be completely reformed or dissolved

Comments on Michael Stutchbury “IMF's inflation call recipe for rate hike”, 15/02/2010, http://www.theaustralian.com.au/news/opinion/imfs-inflation-call-recipe-for-rate-hike/story-e6frg6zo-1225830282996

Yes, it does look like the IMF is now working as an advocate for the US to inflate its way out of its punishing public debt, at the expense of those US T bond holders.

The IMF's formula for 4% inflation target, if it is true, proves it’s out of touch with economic reality and its panic state in the wake of its own failures as a public international finance organisation in charge of international macroeconomic policies, especially in the wake of the current financial and economic crises.

Countries have different economic situations and require different macroeconomic policies. A one size-fit-all approach advocated by the IMF will be disastrous.

The IMF should be completely reformed, or dissolved.

Australia has done well to weather the world crises and is the only developed economies that avoided a recession due to the legacy of its previously sound macroeconomic management including inflation target at 2-3%.

Why didn’t the IMF study the Australian experience?


Stubborn Rudd ministry to reach its debt ceiling for the nation

Comments on Michael Stutchbury “The stimulus outlay must be reassessed”, 12/02/2010, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/the_stimulus_outlay_must_be_reassessed/

Most people except the Rudd ministry can understand the point and importance of revisiting the stimulus package and make appropriate adjustments.

That package was worked out under the assumption that unemployment rate would rise substantially, but now the reality is it has been falling.

Is the Rudd ministry economically conservative and responsible? Now its performance so far indicates anything but.

It seems Rudd/Swan will achieve their plan for nation's debt to go to hundreds of billions no matter what!

That is what politicised bureaucrats can do!

Comments on Henry Ergas "Much thicker but no wiser", 12/02/2010, http://www.theaustralian.com.au/politics/opinion/much-thicker-but-no-wiser/story-e6frgd0x-1225829337158

To come soon when the comments are available from the Australian website on this article.


Rudd's ETS is neither the most effective nor the least costly

Comments on Paul Kelly “Labor at crossroads in test of Rudd's character”, 10/02/2010, http://www.theaustralian.com.au/news/opinion/labor-at-crossroads-in-test-of-rudds-character/story-e6frg6zo-1225828481744

Paul, while most of your arguments seemingly make sense to a confused and ill-informed Australian public, a lot of them are wrong or incorrect, I am afraid to say.

For example, you say that: "He insists the ETS is "the most effective and least costly" way of tackling emissions. Rudd's argument is correct." Why is "the ETS", that is, the Rudd/Wong's ETS, the most effective and least costly way of doing that? You just took its face value/argument went with what Rudd says with no analysis at all. That may be because you either did not do an analysis or could not do it and has no way to know whether it is or not, does it.

For a moment why is "the ETS" more effective and least costly than a carbon tax that would have a wider coverage and send the most accurate price/cost signals?

Or, why can "the ETS" that would involve so much bureaucracy and traders with no real or added benefit be the least costly?

While I respect you as an acute political commentator and believe you are honest in your comments, I would urge you to do some necessary work or have some advices from those who understand the issues to make your argument really hold water. Otherwise, it is no more or no less than a piece of populist opinion.


Refroming the hu kou system completely and totally

Comments on Ran Tao “Achieving real progress in China’s hukou reform”, 8/02/2010, http://www.eastasiaforum.org/2010/02/08/achieving-real-progress-in-chinas-hukou-reform/comment-page-1/#comment-96245

Talking about real reforms of the hu kou system, one must realise that it is the constraints of other social security and government services systems that will determine the speed of the real reforms.

While the problems presented for migrant workers, mostly referring to those from rural areas, are the talking point, real reforms of the system should be based on the rights of people to choose the locations to live, work, study and so on, and the related underlying efficiency issues.

It is equally applicable to any person in China, except certain people who have the real privilege to choose for their own under the current system. There are so many other people who are affected by the current system negatively, although they are relatively marginalised and are not so obvious as the migrant workers.

If objective of the reforms is not properly understood, they are unlikely to be delivered in the most efficient and effective ways. Or it runs the risk of being half done.

US and Asian economic architecture?

Comments on Claude Barfield “Where is the U.S. in Asia’s future?” 9/02/2010, http://www.eastasiaforum.org/2010/02/09/where-is-the-u-s-in-asias-future/

Claude Barfield argues: "The TPP, a trade and economic agreement among four nations (New Zealand, Chile, Singapore, and Brunei) was signed in 2005. As a vehicle for the United States to advance its interests in Asia, it has a number of attractions."

One cannot help asking a question: how many of those economies belong to Asia and how much does that represent Asia's economic weight?

Perhaps it might be a good starting point to influence the economic architecture of Asia, one has to wonder?

It is really very scholarly indeed!

The author is from American Enterprise Institute for Public Policy Research (AEI). No wonder the question is asked!

The US has no one but itself to blame for its trade deficits

Comments on Michael Stutchbury “West struggles to adjust to China’s rapid growth”, 9/02/2010, http://blogs.theaustralian.news.com.au/currentaccount/index.php/theaustralian/comments/west_struggles_to_adjust_to_chinas_rapid_growth/

“China will eventually require a flexible exchange rate regime with open capital markets,” the Paris-based OECD concludes.

Does it mean anything at all without a timeframe for eventual?

How incompetent those all round researchers are!

But to be fair, doesn't the US have trade deficit problems with countries whose exchange rates are free?

What does that suggest in the context of the US accusation of the Chinese for currency manipulation?

Isn’t it meaning the US is hypocritical and is merely finding someone as a scapegoat to blame for its own problems?

Rudd's new "clothes"

Comments on Malcolm Colless “Courtiers still marvel at emperor's new clothes”, 9/02/2010, http://www.theaustralian.com.au/news/opinion/courtiers-still-marvel-at-emperors-new-clothes/story-e6frg6zo-1225828034972

Rudd's micromanaging and media control, in a sense, may be a reflection of his experience as a diplomat in China. Spins mirror the tactics used for political propagandas in China at that time, though it was better in China then than before.

There are remarkable similarities between his performance and practice in that part of the world.

If Australians continue to elect the same prime minister, the public's intelligence would need to be questioned.

Turnbull courageous but not intillectual enough

Comments on Malcolm Turnbull “Why I support the ETS proposal”, 9/02/2010, http://www.theaustralian.com.au/news/opinion/why-i-support-the-ets-proposal/story-e6frg6zo-1225828034340

The real issue, I guess, is not whether there should be a market approach using price signals for managing climate change. It is about whether the current ETS, as the government proposed, is a good one for a market approach.

Professor Ross Garnaut, federal government’s former climate change advisor, once said the ETS was too compromised and it would be better to start again, although interestingly and mysteriously but hard to understand, he recently appeared to be supporting the ETS again.

The problems with the current ETS are: one, it will provide too much free handouts to heavy polluters; two, the government will use that as a tax tool and redistribute income; three, it will be costly to have so much bureaucratic agencies and middle traders to be involved.

A true market based approach to managing climate change is to use price signal, but not necessarily through ETS, but by directly imposing penalties on polluters, whether they are producers or consumers, whoever pollute, they should and must pay for it.

While Turnbull has stick to his gun with the ETS, he should have a rethink about the best approaches, as opposed to having to pass the current ETS. The urgency to pass the ETS has faded into insignificance after the Copenhagen summit on climate change without a satisfactory result.

That is where a true statesman should distinguish himself from second class politicians.


RBA got confused this time?

Comments on Adam Carr “SCOREBOARD: RBA of unreason”, 8/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/interest-rates-Reserve-Bank-economy-inflation-fina-pd20100208-2FVV5?OpenDocument&src=sph

The RBA is now taking political considerations too early. They should have raised the official cash rate to normal levels that is also appropriate relative to inflation target.

Only in that case, when federal election is called they can afford to be more politically neutral in the campaign period.

Was that the RBA still felt the effects of the global recession on Australian interest rates?

Was RBA also confused/stunned by Copenhagen result on climate change? One may have to wonder.

Intersting "media watch" by Llewellyn-Smith

Comments on David Llewellyn-Smith “THE DISTILLERY: Wholesale destruction”, 8/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/THE-DISTILLERY-Recipe-for-Depression-pd20100208-2FSS7?OpenDocument&src=sph

When David Llewellyn-Smith argues that "It would have been the Bank of China, or some other state-owned enterprise; one that had not over-indulged in the preceding free-market driven shadow banking mania." he is kidding himself and the readers.

Where do you think the Australian government would have done to the four pillars or some even say six pillars policy, even if someone were so silly to suggest a takeover by Chinese banks? Do you think the banks were not as strategic to Australia as to some of the smaller investments in the resource sector by Chinese last year?

David Llewellyn-Smith is questioning others' analysis, where is your analysis?

Very interesting “media watch” by David Llewellyn-Smith! Perhaps it is time for David Llewellyn-Smith to watch his own side.

It is a typical double standard!

China and the world: challanges and opportunities

Comments on Richard Rigby “The challenge of China”, 7/02/2010, http://www.eastasiaforum.org/2010/02/07/the-challenge-of-china/comment-page-1/#comment-96074

While I agree with Richard Rigby on many of his points, I think we should not over-state some of the issues.

Globalisation does not mean every country will be the same and some differences and possibility significant ones will remain between nations, although the world is getting more similar in the process.

While the Chinese including their leaders may need to rethink their approach to their formulation of "nei wai you bie" (meaning there is difference between domestic and international matters), the essence of that formula is likely to remain in the foreseeable future.

Just pause for a while and think about how the Australian government has treated foreign investments, especially more pointedly at the Chinese investments, can't one see the application of that formulation in Australia?

We are used to this, why is it difficult for the Chinese to have loot after their own national interests?

That is just one of the issues that I might have a different view from that of Rigby's in this article.

I feel overstating the challanges may make people forget and miss the opportunities that should arise and present tehmselves and should be grabbed in the next decades to come.

Half right and half wrong: Rudd/Swan financial guarrantees

Comments on Peter Swan “The financial safety net we never should have had”, 8/02/2010, http://www.theaustralian.com.au/news/opinion/the-financial-safety-net-we-never-should-have-had/story-e6frg6zo-1225827616339

It seems there is a difference and should be a distinction between guarantee of deposits and guarantee of banks' other funding.

The former is to prevent potential run on banks even though they may be perfectly healthy but could not have enough cash in the case of a run on them.

The latter, though is a whole different beast and the rationale for the government to step in has been dubious at the best. That was where the Rudd government with Wayne Swan as the Treasurer have some credibility problems with economic management. They just do things without considering their costs to taxpayers with whatever excuses they may have in the context of fear by the public in the wake of the GFC.

That was how the Rudd essay came about. And that is Rudd government’s economic management credential.

We have seen quite a lot of this kind of economic management, such as NBN, school halls and libraries, etc.

Undoubtedly and unfortunately we will see more of it.


Rudd government ETS performance - hypercritical or conspiracy?

Comments on Dennis Shanahan “ETS costs remain a mystery to Labor”, 6/02/2010, http://www.theaustralian.com.au/news/opinion/ets-costs-remain-a-mystery-to-labor/story-e6frg6zo-1225827292925

It is appalling that the government, even using the full support of public services bureaucratic agencies, can't answer so many simple questions related to the ETS for more than tow years.

What is even worse is that they can use the department of finance at its disposal to cost the Abbott's emissions policy in one day and brand the opposition had under-costed their climate change policy.

One can sense that such poor political performance of stunt is not only hypercritic, but also some potential abuse of power and potential political conspiracy.

The Rudd government needs to raise its game and treat the public and taxpayers with respect both for their money both for their intelligence.


What a fool Mr Sarkozy is!

Second comments on Karen Maley “Inching towards a trade war”, 5/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/China-packs-a-punch-pd20100205-2CRK5?OpenDocument&src=sph

When reading the following:
"French President, Nicolas Sarkozy, raised the prospect of a 'carbon frontier tax' which could be imposed on imports from countries that failed to introduce controls on greenhouse gas emissions.
Such a tax would punish developing countries that are reluctant to force their factories to adopt expensive anti-pollution measures."

I thought the French president is such an idiot with no brain in side.

Most developing countries have not demanded rich countries, the heavy polluters in per capita terms, to pay for their pollution and damage to the climate that affects everyone, and ask for compensations by those polluters.

There is also a heavy account of historical debts by rich countries in this field.

So what is Sarkozy thinking about by enlightening developing countries?

Danckert is one sided

Comments on Sarah Danckert “Is China exploiting ASEAN?” 5/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/Is-China-exploiting-ASEAN-pd20100205-2CRBK?OpenDocument&src=sph

What a remarkable title!

One cannot help feeling the article is more one sided towards against such agreement.

One would certainly be puzzled by the author's unsubstantiated statement, like "With Singapore on board, and the deal still finding support in powerful quarters of the Thai, Indonesian and

Philippine governments, it doesn’t look like China will back down from a deal that reaps such massive rewards."

Rewards to whom? How was that known by the author? One has to ask.

The US just shouldn't and can't be too clever

Comments on Karen Maley “Inching towards a trade war”, 5/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/China-packs-a-punch-pd20100205-2CRK5?OpenDocument&src=sph

There is a practical also easy solution to the currency problem.

The US government would have to guarantee the real value in Chinese currency for Chinese official holding of the US bonds.

Everyone understand that any appreciation of the Chinese currency against the $US now means the Chinese will lose in the value of its holding of the US bonds.

The US should not and cannot make fool of the Chinese leaders in such a stunt by demanding they make a direct loss by their currency appreciation. That is just a game too crude and lack of intelligence.

Once that is done, the Chinese is likely to be more willing to allow its currency to appreciate.

Otherwise, the Chinese government would have a huge political problem with the Chinese public, given that any issues can further exacerbate the unsatisfaction that they already have.

Is Geithner joking or confused?

Comments on “US sees China moving on currency despite rhetoric”, Reuters, 5/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/WRAPUP-3-China-hits-back-at-Obama-over-currency-cr-2CBBZ?OpenDocument

Do people see the contradictory in Geithner's statements in the following two paragraphs?
He (Geithner) said correcting currency misalignments was a key part of US efforts to get the world economy growing on strong consumption and domestic demand, and "not on the basis of an investment-led, export-heavy model again."
"And that requires a level playing field for American exporters generally and we're going to work very hard to encourage those changes," Mr Geithner added.
He is talking about consumption model in the first para, but in the second para he is talking about US exports.
But seriously, what is wrong with "an investment-led, export-heavy model"? If a country needs to invest more, is it wrong to have more investment? Why export heavy is problematic, if import is also heavy? That just means more trade, more international exchange. What is wrong with that?
No wonder the US has been in trouble economically, one only needs to look at its Treasury Secretary, or the quality of that person.
What countries can avoid economic problems if you have such a person in charge of the economy?
What a shame!


ASIC gambles with taxpayers money again!

Comments on “ASIC to appeal Fortescue ruling”, By a staff reporter, with Reuters, 4/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/Australia-watchdog-to-fight-Fortescue-ruling-2BTT8?OpenDocument

ASIC is using taxpayers' money for its own pride and revenge.
The people who are in charge of ASIC and have made decisions that have had significant costs to ASIC and to taxpayers should be held accountable.
They should resign and take their pride in their private capacity.
Their venture and poor work are not costless.
They should not be allowed to be irresponsible and continue to waste taxpayers' money.

The US risk will eventuate!

Comments on Adam Carr “SCOREBOARD: US risk”, 4/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/SCOREBOARD-US-under-pressure-pd20100204-2BSDF?OpenDocument&src=sph

US risk will be a reality in the not long future from now.

Politically, the US government can't reduce too much of their budget in a time where the economy may continue needing attention and support from the government. Every politician understand that when it comes to votes or voting time, or even headlines when data begins to show bad unemployment.

The adjustment for balancing savings and consumption means the US economy is unlikely to grow in full strength for a sustained period. And this means short in revenue.

So the US government does not have the real capacity to do what might be ideally needed for maintaining the AAA credit rating.

EU's real dilema with the Greece crisis

Comments on Robert Gottliebsen “Europe at a crossroads”, 4/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/Europe-at-a-cross-roads-pd20100204-2BU5S?OpenDocument&src=sph

Robert, after reading you say the following:
"If Europe is not prepared to save its weak states then the future of the euro and the European Union is grim, because the problem states may be cast off. This is a defining moment for Europe."

I would have thought it is not a question of if, rather, it is a question of impossibility.

The main reason for this is that now most major EU countries if not every one of them are not in a position to help others given the consequence or in the wake of the GFC.

In principle some may want to, but in reality none is able to, especially politically considering any the potential economic consequence of any rescue for any countries which would have to contribute.

That is the dilemma they are having now.

So it is not high principle, high moral grounds, it is practicality and circumstances.

What conclusion would you draw had you been a politician in a major EU country?

China's GDP and international exchange rates - which is worse?

Comments on “The holes in China's accounts”, see Business Spectator's Isabelle Oderberg interview with Hong Kong General Chamber of Commerce chief economist David O'Rear, 4/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/CHina-economy-data-David-ORear-pd20100203-2AVVZ?OpenDocument&src=sph

It is shocking that China's GDP data has a 20% margin of errors.

However, there are differences between the National Bureau of Statistics and Provincial Bureau of Statistics. The former is supposed to have better data and a smaller margin of errors.

Further, 20% margin of errors, though large itself, is not too bad as one might think, given the wild swings in exchange rates.

How much the $US has depreciated against the $A, and especially against the Euro over the last few years? Some may be more than 50%, I'd say.

What does that mean for income comparison internationally?

20% margin of errors is bad. The unwarranted wild swings in key international exchange rates seen in recent years are even worse! The former pales to insignificant in front of the latter!

Greek crisis and EU - creative thinking needed urgently

Comments on Karen Maley “Greece's crisis is contagious”, 4/02/2010, http://www.businessspectator.com.au/bs.nsf/Article/Closing-act-in-Greek-tragedy-pd20100204-2BRRZ?OpenDocument&src=sph

Why can't the EU issue EU bonds and lending that to its countries members on agreed, objectively set and discreet basis?

In that way, the EU can be seen as a whole to withstand a crisis in a member country and can also influence member countries to be responsible in its fiscal policies.

I was wondering why people don’t come up with innovative ways and better solutions to problems. What are the EU, including member countries, bureaucrats has been doing?

Everyone needs to be creative!


The less one expect of pollies, the better it can often be

Comments on Glenn Milne “High or low, the road looks rough”, 1/02/2009, http://www.theaustralian.com.au/news/opinion/high-or-low-the-road-looks-rough/story-e6frg6zo-1225825238057

Good to see the pollies are back to work, nominally of course.

They are talking again.

Their purely talking can often be better than they did something, because they often did the wrong thing with the wrong results and effects!

EU's desire for a global environmental body self interested!

Comments on Caroline Boin “Global body can't improve climate”, 1/02/2010, http://www.theaustralian.com.au/news/opinion/global-body-cant-improve-climate/story-e6frg6zo-1225825236806

An important issue that has been deliberately concealed in the climate debate is the right of equal per capita emissions, even the past responsibilities of emissions were to forgiven.

An equal per capita emission right will mean anyone who emits more has to pay more and compensate others for endanger their livelihood. Poor countries do not need the rich countries’ so called “aid” for their climate change actions. They have their right to a good climate and the right to ask those high emitters to pay for damaging the climate.

EU countries, including the US and Australia are double standard and hypocritical in demanding poor countries to cut emissions while the rich countries continue to emit many times more than the poor countries in per capita terms.

Why don't those rich countries talk about universal human rights in this regard? Why should they treat the people in poor countries as second rate citizens?

Unless the rich countries recognise and acknowledge and respect the equal per capita emission right of everyone, rich or poor, a global body that is controlled by rich countries due financial resources, will not help bringing the right actions required for dealing with climate change - it can only advance the interests of the rich at the expense of the poor countries and would be grossly unfair.