Showing posts from 2017

BMW had the Most Cars at DM2017!

Did you wonder how many cars in your favorite marque made the show? Here's the 2017 breakdown.

Corruption fighter joins contest for South Brisbane

Corruption fighter and Game of Mates author Dr Cameron Murray has thrown his hat into the ring to challenge Deputy Premier Jackie Trad for the hotly contested South Brisbane seat at the upcoming Queensland election.

University of Queensland economics lecturer and corruption fighter Dr Cameron Murray will be contesting the seat of South Brisbane as an Independent candidate.

After the release of his book earlier this year on political favouritism in Australia, entitled Game of Mates: How favours bleed the nation, Dr Murray decided it was time to take the next step and try and enter politics to clean it up.

“People are sick of professional politicians working in the interests of their mates rather than the hard-working public,” said Dr Murray. “Across the state, people have been telling me they want a fresh approach, free of corruption and big-party backroom deals, and that needs real people with experience from outside of politics to put their hand up and offer a sensible alternative.”

“I h…

A Bitcoin Bet

I have yet to hear reasoned arguments about why Bitcoin should be considered a currency. Nor have the perceived advantages over existing currencies and their settlement systems ever really been properly elucidated.
Somehow that does not stop people believing that Bitcoin is a currency. In many cases, people argue that it is even better than existing national currencies without even knowing about the security and settlement features of the current payment systems used across the world. Perhaps this is why the benefits of crypto-currencies are never made clear, and all you get is hand-waving about governments debasing their currency, being anonymous, or some such thing.

Bitcoin is a financial roulette wheel, spinning on ideology, and attracting suckers with every turn. It has none of the core features of a currency, which means it will never be used as one.

Professor Jason Potts, a founder of Crypto Economics, seems for some reason to think otherwise. On Facebook, I suggested to a mutual f…

Finding Australia's "missing million"

I am responding here to Aidan Morrison's brilliant deep dive into the ABS population statistics entitled "The Missing Million: Is Australia's migration rate actually high?".

1. The ABS always strings together their data after series breaks. It is really bad in the economic data where the whole concept of what they are trying to measure can change (like the 1998 CPI revision). You could do a similar deep dive into every ABS dataset and finish with more questions than answers. 

2. Many people who use the data (including most of those people in your example) know there is a series break in 2006. But as you have shown, it doesn’t really make much of a difference in the end. The divergence with the raw arrivals/departures data that started in the early 2000s remains. The new 12/16 rule applies symmetrically to those who leave and arrive, and although the ABS notes that it increases the NOM estimate during their 2003-06 test period, this was kind of the point. They were cla…

A random physicist takes on economics

Jason Smith, a random physicist, has a new book out where he takes aim at some of the core foundations of microeconomics. I encourage every economist out there to open their mind, read it, and genuinely consider the implications of this new approach.

Go get it now. It only costs a few bucks.

So what do I think? His approach is exactly what economics needs - a set of fresh eyes on the basics.[1]

The book is, fundamentally, an introduction to Smith's new view of what I would call ‘microeconomics as the emergent characteristic of random agents in constrained situations’. Or, more simply put, why you don’t need rational decision-makers for a useful economic theory that makes good predictions.

To get some sense of why this is important, economists are often criticised for getting the big picture stuff of macroeconomics wrong, like missing the financial crisis. But in reality, the economic micro-level stuff, about responding to relative prices, making choices based on incomes and preference…

Economic bandits

Get the book via

A string of successful Game of Mates speaking events has happened recently -- in Kuranda, Sydney, Canberra, and Melbourne. I can't take all the credit. But, James, our bandit in the Game of Mates, can. He has been extremely active all across the land and people are starting to notice.

One issue that has repeatedly come up at these events is the rise of 'strategic representation' of the economic benefits of major projects in planning applications. For example, a land subdivision proposal might include plans for a new university campus, eco-tourism facilities, and more, in order to be able to claim the project will generate billions of dollars of economic benefits to the region. But the reality is often that these additional facilities are completely infeasible and will never happen. They are just included in the application to beef up the claimed merits of the project, for there is no obligation from the approval to follow through with the ful…

Long live food waste

One issue that occupies the minds of environmentalists from across the political spectrum is food waste. Around one-third of all food produced for human consumption is never eaten. To environmentalists, this is astonishing and terrible.

But, unfortunately, they are completely wrong. And I say that as a fervent environmentalist.

It is actually a world with zero food waste that is a terrible place to be. We absolutely do not want to be that world.

The reason is this.

Food waste is, in practice, a tremendously important global food insurance policy. In a world of zero food waste, if a natural disaster, such as a flood or drought, hits some of the most productive agricultural regions, both food production and food consumption will fall dramatically. There is no buffer. If production falls, food consumption falls by an equal amount.

If a flood, for example, wiped out a quarter of world food production one year, in a world with zero food waste the per person food intake must also fall on average…

Population debate now mainstream

After years of being an 'off-limits' topic, a debate has finally emerged in the mainstream media about an appropriate level of immigration to Australia.

As a background, immigration levels have been rising steadily since the late 1990s, with record inflows after the financial crisis of 2008, as the below ABS chart shows. The break in the data series is a change in the measurement, now applying a "12/16 month rule" of residency that captures immigrants who travel to their home country periodically, but reside in Australia for 12 out of the past 16 months. This brings the data in line with many other countries, like Canada.

The latest mainstream media attention has been at The Guardian, in an article by Tom Westlake, responding to ongoing discussions at MacroBusiness, which has led to some back and forth (here, here, and now here).

No doubt the media will prefer to avoid the main issue, instead attracting clicks with racist rants and name-calling, all the while presenting…

Billionaire Industrial Policy

Elon Musk has lost billions of dollars for nearly a decade trying to make electric vehicles at Tesla in a way that has never been done before.

In the new tech-billionaire space-race, where Musk has also been active with his Space X company, his competitor Blue Origin, run by Amazon CEO Jeff Bezos, has been running at an enormous financial loss, requiring Bezos to sell over a billion dollars of Amazon stock a year to fund his space venture.

In both of these sectors, electric vehicles and space transport, there is no guarantee of any long term profit – there are threats from multiple new entrants as well as incumbents in both sectors. Yet billions of dollars are being poured into these experimental investments.

When governments fund similar decades-long loss-making ventures that expand the economy’s production capabilities, we call it industrial policy. When a billionaire does it, we say it is markets at work.

But there is nothing “market like” about long-term, long-shot, gambles like these…

Game Of Mates: Nepotism Is Costing The Economy Billions

It is no secret that increasingly, workers are no longer enjoying the fruits of their labour as a smaller and smaller group of people and companies come to share the returns of (slowing) economic growth across developed nations such as the US, the UK and Australia.

The ‘jobs for the boys’ model is having a tangible and outsized impact on inequality and it is killing the economy.

It is so tangible you can measure it. And measure we did.

In our book, Game of Mates, I and my colleague, Professor Paul Frijters explore insights from the science of human cooperation and raw metrics of economic costs and benefits, melding this information together to paint a picture of how a nation’s wealth can become siphoned off by a well-connected network of powerful individuals.

Drawing on our own research and that of others, we find that those outside the game are being bled dry, with hundreds of billions of dollars a year of hidden theft taking place.

The book helps to frame a discussion on ‘grey corruption…

Why does a basic income need to be universal?

Image credit: WNYC
A Universal Basic Income is a wolf in sheep’s clothing. Even Australia’s opposition party has rejected the policy proposal on the grounds it is free money for millionaires. So why does this idea continue to be so popular?

Robots are a foolish reason to consider a universal basic income (UBI). And yet so many still want to indulge in such nonsense. The link between technological disruption, income security, and UBI, is weak at best. And existing targeted welfare systems already achieve income support from any type of workplace disruption, robotic or otherwise.

The fundamental idea behind a UBI is that all members of society should get an equal share of that society’s income prior to even attempting to earn a market income, and regardless of what their market income is. It is a worthy principle.

In contrast, a targeted welfare system phases in income support when individual or family income falls below particular thresholds, and phases it out again when market incomes ris…

The bank competition myth

Australian banks are upset. Their $30 billion per year gravy train of profits from the Australian people is finally being slowed down.
A levy on bank liabilities of 0.06% annually was announced as part of the 2017 Federal government budget, and is expected to raise about $1.5 billion per year, or 5% of bank profits.

To be clear, the banking system is a regulated cartel. Its primary function is to provide a public good in the form of the money supply of the country. As such, we would expect it to be uncompetitive, and use tight regulatory controls to ensure that the privileged position of private banks is not being abused.

In my book, Game of Mates, I explain that the result of this uncompetitiveness and lack of adequate regulation in Australia is that over half of the banks' profits can be considered economic rents, which could be taken back with better regulation and shared with the public at large.

I want to use this blog post to explain in detail the underlying administrative mecha…

The impossible home deposit

After reading today about how home buyers need to save over $500 per month for 10 years for a deposit in NSW and Victoria, I thought I would republish the below post of mine from January 2010 about the impossibility of saving a deposit in a market with rising prices. 

Baby boomers and older generations often cite high expectations, and the inability to save, as the main hindrance to the younger generations’ ability to buy their own home. They go into great detail about how much it has always been a struggle to buy a home, and that if young people decreased their expectations and bought something small they could work their way up the property ladder.

I am one of those generation Ys looking to buy my own home, and from this perspective, it is not quite that simple.

The mythical property ladder
The argument that if younger generations decreased their expectations, and maybe bought a small apartment now, so that they could somehow work their way up the ‘property ladder’, is entirely misleadi…

Cleaning lady in Munich (1/2)

Today I want to tell you about hiring a cleaning lady in Munich. Why? because to find the perfect one could be more painful than to find an affordable apartment in Munich. In this blog post I will tell you about my experience with some of the cleaning companies you will find online and I will also include some links to learn about the tax deduction you can claim if you hire cleaning services in Germany.

Let me start by saying that the cleaning ladies, maids, housekeepers, housecleaners... whatever you call them aren't expensive in Munich. The rates of some cleaning companies in Munich start at 16-18 EUR/ hr.

Back in 2015 I signed a contract with Karos Reinigung for a biweekly cleaning service of 3 hours. 

The previous tenant of my apartment used to work with them so when I moved in, I decided to try them. The rate was 16 EUR/ hr (plus VAT which in Germany is 19%). I provided all equipment and cleaning products.

Karos sent me a very young und unexperience lady who didn't speak any …