Carbon taxes are also an assault on free markets
Tuesday, March 31, 2009
The Left have run the falsehood the recession is due to free markets. Rudd relishes in a moralistic reformulation of economic action through the offshoot of Marxism, ’social democracy’. Not that Rudd is an ideologue. He is thick he genuinely does not have a clue as to what he is gassing on about. To spell it out, in much of what Rudd and his Cabinet are doing, Mussolini got in first. The trouble is, Rudd is in Office for the same reason Bracks, Brumby and Anna Bligh have won successive elections, the closed gene pool that has all but destroyed the Liberal Party, the Right.
The public debates and fights that should have occurred in the past have never been mounted, because the Right have suppressed new talent in the Liberal Party, appointed as Parliamentary advisers lazy illiterates, and have been entrenched by their pets the CIS, IPA, and blundering clowns in the media such as Albrechtesen, Bolt, and Blair. Together this lot not only got the case for free labour markets completely wrong, they ensured Cabinet did not receive the advice needed, and the public never apprised the true case as to way they are good for all.
While the likes of Des Moore, Ray Evans, Senator Minchin, and Michael Kroger ensured sound advice never reached Cabinet (these shallow mediocrities cannot to admit they are wrong - it means giving way to superior men), $3000+ a week man Bolt told Australians on modest pay they are ingrates for not realising they are as wealthy as he is. Albrechtsen’s put in a special contribution by sneering at ACTU guns and smearing at couple of them. Through all this, they asserted as true all the fallacies the ACTU relied on to defeat reform of labour markets. Between them and Hugh Morgan smiling into the camera that, he believed, loved him (ABC in 2005), they destroyed the campaign (the true case can’t be destroyed) and blew HMAS Liberal Party to smithereens.
Likewise, the fight against Greens lies and the corresponding anti-economic policies. “Watermelon reds’ in the Liberal Party, three of them former Ministers for the cult of environmentalism, Campbell, Kemp, and Turnbull, compounded the damage. As in economics, the Right and their clunker tanks suppressed, steafastly did not use those who were fighting from within the solid bastion of sciencem. They could have been weilded with great impact in public forums, from major media outlets, to direct debate with boosters of greens lies and this is what is most needed in Australia - as on other grave matters. In contrast, the diseased Left are swift to use talent. The result is, on the scientific front, the fight is now a desperate battle, since Rudd’s carbon tax is to be imposed mid 2010.
The position on the economic front has been worse all along, as the above summation of the Right’s wrecking of the labour market fight indicates. It’s not simply that the economics commentariat in the media are, to say the least, deficient. With only the Right’s clunker tanks, IPA and CIS, and their pet journalists, it has been a right disaster. Though, to be sure, The IPA’s and CIS’ claim to be leading free market think tanks is a lie, reflected in the abysmal poison they pump out.
On the other hand, Greg Lindsay has come clean and ceased pretending his superannuation fund the CIS is a free market think tank. They are in there serving their pals who hope to become wealthier through carbon taxes. What disturbs Lindsay is that I have fingered the truth. It also disturbs him genuine Liberals who donate to the CIS are beginning to appreciate the treachery. What those donors should appreciate is, the IPA are also intellectual frauds, and is still at it destroying the fight against what will be a devestating tax.
There is an exception at the IPA, Alan Moran. Moran has written some articles in which he came as close as he dared to admitting what he well knows, Jackson is absolutely correct on the economic case against carbon taxes. Then, the IPA is the Kemp family slush fund and play pen for Andy Pandy Kemp, his pal Chris Berg, and they have been joined by, surprise by surprise, William Morgan, Hugh Morgan’s son. Hugh Morgan, with his pal and a few other thuggish buffoons hope to collect an extra few billions on the back of destruction of efficient coal based energy companies, through their ‘nuclear powr company’ that will have to be subsidised by a large factor ( this is Walker’s and Morgan’s notion of entrepreneurship).
We had the Berg-Professor Sinclair Davidson paper on manufacturing calling for ‘industry policy, and in which they also conceded the Greens lies and policies. It occurred to me on reading it when it was published, are they pointing to a ‘nuclear power plant’. Anyway, Davidson is still to make good on his claim the inverse of the J curve is not true (it is true); the clock is still ticking Davidson.
Now the IPA has published another position paper that is also destructive mush:
Tim Wilson, Australia’s delinked and non-compliant emissions trading scheme, (PDF format, March 2009).
Criticisms:
Wilson demonstrates the undergraduate, textbook feebleness of the Right. He argues from perfect competition. Perfect competition is a myth. To say the least, therefore, it has nothing to do with genuine free markets.
The myth is the sole grounds for the falsehood of market failure. In so far as there is ‘market failure’ it is all due to capital destroying governments and central banks and their lousy monetary expansion and never due to free markets. The dangerous fiction is the case for regulation, which strangles investment and entrepreneurship. This fiction the Right and their clunker tanks do not merely concde, they believe it is free market economics.
The above is crucial, because Wilson asserts an ETS would work in a perfect maret:
“in a perfectly competitive market, permits will flow towards their highest valued use. Those that receive lower value from using the permits have an incentive to trade them to someone who would value them more”.7
However, he continues, since the pertinent markets are imperfect, they can be ironed out by ’sound’ regulation:
Bowen lays out the conditions for, an efficient and effective global emissions trading market as:
• Having efficient rules and administrative arrangements (including monitoring, enforcement and penalties).
There is the crucial point, in the overall cause of free market cause. The IPA and the CIS have not defended it for over three decades/t. They have been party to destroying free markets because perfect competition is not only a myth, it is, as orthodoxy as it were, also an assualt on free markets. The major effort of the IPA and CIS over decades reflects this, working out how to regulate markets. These clowns are not intellectually equipped to fight the Left.
Wilson asserts
Trading schemes allow those required to buy carbon permits to assess their mitigation options by investing in new technology, changing their inputs, modifying outputs, reducing production, and so on, against the cost of buying a carbon permit…
Greg Lindsay asserted carbon taxes would make alternative technology economic. It is a false claim. This is given in the tax is against any capital that is a criminal offence under carbon taxation. What carbon taxation is, is an assault on specific capital combinations, such as a coal based energy plant. But, carbon taxes are wider in impact and on two counts:
1. all firms require economically produced energy; it is a major input cost for many. Manufacturing firms are being wiped out overseas because of this impact.
2. It might be theoretically true a tax is directed at a specific combination but it is not necessarily true. The tax can hit other capital combinations, hit them immediately too.
Next:
Carbon markets operate essentially the same as a normal financial market. The value of a financial product is diminished the more are issued, or the credibility of the equity to underwrite the financial product is uncertain. If a carbon permit is traded at a certain price it is essential that “the value of the credit will be maintained”.
This sounds dangerously like the ‘dual economy’ falsehood - ‘a real economy’ -production, and the financial market paper ‘economy’. Financial markets and capital are one. The second is impossible without the former, which is the generator of capital formation and allocation. As for the value of, say, shares, that is decided by the expected future earnings of the investment in a firm. ETS ‘credits’ have no value at all, rather well brought out by the fact ETS is a capital destroying tax.
ETS is not generated by free markets, nor are they similar to them, nor can they be rendered the same. It is an attack on financial markets, as an attack on capital. Greg Lindsay also asserted the lie carbon taxes can be raised as market instruments. Both Lindsay deliberately refused to admit the destructive force of carbon credits on firms in Europe. We know what Lindsay’s motivation is, so what is Wilson’s excuse!
I’ll leave off the examination of the IPA paper for now, and resume it in another item. Yet, the above already is damning, drawing out again why the Right have betrayed the Liberal Party and Australians. It is a deadly fight against a highly destructive tax and what do the IPA and CIS do but sell Australians out by causing great damage to this grave cause.
It is worse than incompetence, keeping in view the CIS and IPA have also advised Liberal Party Cabinets, Federal and States. As for the public fight, they secure the field for diseased Greens, Kevin Rudd and Penny Wong. While they busily wreck and betray another grave cause, they smear any genuine Liberal who can fight such causes. The notion this lot are defending the free market cause must be their in-house joke. I wish it were a good laugh too.