In a previous LP discussion, I made the claim that we were almost certain to be materially better off in 2030 than we are now. When challenged on this topic, my big mouth stayed flapping long enough to offer an inflation-adjusted $500 bet on the topic, which was duly taken up by LP readers Paul H and David R. While my original claim was on per-capita GDP, we have agreed to adjust the bet to real mean household disposable income. We’ve also agreed that an equivalent amount of wine, instead of the cash, will serve as the bet stake.
Below the fold, read our respective (and somewhat lengthy) justifications for why we think we’re going to win our bet. Suggestions for appropriate wines (to be purchased around 2020, I’d imagine) also appreciated - though I wonder with climate change whether we’ll be drinking warm-climate Scottish shiraz…
Robert Merkel: We will be richer in 2030
Since the industrial revolution, per-capita incomes in developed countries have been on a long-run increase. Wars, epidemics, depressions, and the like have resulted in temporary dips, but over multi-decade periods we have become immensely richer, on average. Let’s consider, for instance, the 22 year period 1929-1951 - a period covering the Great Depression and World War II. While I don’t have statistics for Australia, the US Bureau of Economic Analysis has some useful ones. Mean disposable income did dip rather savagely during the Great Depression, from the equivalent of around $5,800 in 2000 American dollars to around $4,300 at the depths of the depression in 1933. But disposable income had completely recovered by 1939, and by 1951 had increased by 43% from the 1929 value to the equivalent of $8,408. Australia has seen a similar pattern. We are, on average, richer than our parents, and much, much richer than our grandparents.
Why is this so? In large part, because of the stock of physical and intellectual capital we’ve gradually built up. We have the inherited legacy of all the factories, roads, telecommunications links, ports, and whatnot of previous generations, but more importantly, we have the benefit of the hard-earned knowledge that they’ve accumulated. This knowledge is partly big, obvious things - jet airliners, personal computers, mobile phones - but there’s innumerable other things, often related to organizational behaviour, that have also contributed to our richness. Therefore, if you’re going to argue that we’re going to be poorer in 2030, you have to believe one of two things:
- The process of innovation will grind to a halt, or at least be substantially slower in future.
- That external factors will overwhelm our ability to innovate to a greater degree than at any time in the past century or so.
The first proposition is somewhat tempting. What could possibly compare to the introduction of the telephone, the automobile, the jet airliner, the pill, the computer and the other “big bang” inventions of the 20th century? Haven’t we reached a point of diminishing returns? While we can’t be certain, there doesn’t seem to be any sign of such. The second proposition - that external factors might intervene - is also quite fashionable at the moment. At the moment, biggest perceived threat to continued prosperity - and perhaps the major reason why Paul was prepared to take this bet with me - is the threat of Peak Oil. Let me just note that I’m not doubting for a minute that oil is a finite resource. The statement that production of crude oil from conventional source may peak soon, or may already even have peaked, may well be correct. But the idea that oil is such a unique commodity that no substitutes exist is totally fallacious. I’ll first note that the idea that as far as our non-energy petrochemical needs go, they make up a small part of total oil usage, and can fairly straightforwardly be synthesized from natural gas, coal, or biomass; hydrogen for making fertilizer with the Haber Process can be obtained from coal, or by electrolyzing water, if necessary. Furthermore, oil is not used in large quantities for generating electricity, and hasn’t been since the oil crisis.
But oil seems kind of hard to replace for transport usage. But this ignores the power of price to pop up alternatives. Until recently, oil has been so cheap, and its environmental issues not sufficiently widely recognized, that there has been no incentive to pursue substitutes. That has now changed, and, lo and behold, substitutes are now appearing. Aside from existing substitutes like natural gas, there are no insuperable technical barriers to the current most plausible substitute for petroleum - the gradual electrification of ground transport. The GM Volt has been approved for production; GM are starting to spend money preparing a manufacturing facility for it, so they appear to be deadly serious this time around. It’s a plug-in hybrid vehicle (that is, you can plug it in to recharge the batteries) with a 65-kilometre all-electric range, with the first production models late in 2010 and a projected price somewhere around 35,000 US dollars. Several other major manufacturers are also promising all-electric, or plug-in hybrid vehicles, in similar timeframes. Now, the schedule for the Volt and its competitors will almost certainly slip a few months between now and then. But that is completely irrelevant to the situation in 2030. The transition away from oil may well be rather rocky - though I doubt it; transport and energy make up a far smaller fraction of the economy than people seem to think. But, in any case, any such transition will probably be virtually complete by 2030.
The costs of climate change mitigation have been discussed at great length by me and others on LP. Suffice to say that the costs, while large, will represent a relatively small fraction of GDP; certainly no more than 10% or so. Even that high figure would still leave us much richer in 2030 than we are now.
I should note that that the bet refers to mean rather than median income; I’m not ruling out the possibility of a situation like the US where all the gains from economic growth have gone to the rich, and most of that to the extremely rich rather than the moderately rich. But I think even this is unlikely. While income inequality has tended to increase a bit over the past few years, every income segment has gained from economic expansion. And the politics of income inequality are very different in Australia and the United States; John Howard lost office, in large part, because of a policy designed to suppress wages and working conditions.
Finally, for completeness, I note a few possibilities that might lose me the bet. Obviously, a substantial exchange of nuclear weapons could set global civilization back by decades. Or a natural disaster on the scale of a major meteorite strike. Or - and this is probably the most likely scenario - anthropogenic climate change provoking a short-term disaster, such as a sudden change in the Greenland ice cap. While I am truly afraid of the long-term consequences of global warming, and think we need to act now as insurance against some of the more nightmarish scenarios, this kind of disaster occurring in the next couple of decades is, on the currently-known evidence, unlikely. Possible, but unlikely.
But, in any case, I think this is a fascinating question, and I’m grateful to Paul and David for taking me up on this bet. Read his arguments, and discuss our respective viewpoints at length. It’ll be interesting to revisit over time!
Paul H: our living standards won’t go up
You may have heard the one about the financial guru who predicted seven of the last three recessions. I guess I’m the same personality type.
With regard to global warming/climate change, I’ve tended to take an optimistic approach toward technological fixes, so much so, for example, that I tried in 1995 to make a five-figure investment in Ballard Power Systems, the Canadian fuel cell (hydrogen economy) pioneer. It would have been a lousy investment and luckily my incompetent stockbroker, one of Australia’s leading financial lights, was unable to organise it for me.
More recently, in February-March this year, I got very enthusiastic about David Mills’ and Ausra’s ideas for large-scale solar thermal generation. I’m still enthusiastic. From memory, I think I may have posted something on LP. I made a submission to the 2020 Summit and we nominated David for the 2020 Summit.
All silence broke loose.
(You can read about Mills and Ausra at www.ausra.com and I suggest that you do so if you haven’t already.)
So: I’m pessimistic about Australia being able to govern the fossil fuel lobby or to end our suicidal love affair with coal.
Last November we had a bloke build an elaborate shade structure modelled on one he’d built for himself, just a few blocks away. He took us round to his place to show us a design detail.
When we got there at around 4pm in full daylight, his wife, who was alone in the house, had two large unwatched plasma TVs on in the living and family rooms, another TV on in the kitchen, halogen lights on all over the place and air conditioning running full tilt. The shade temperature outside was a balmy 23C.
So: I’m pessimistic about some Australian consumers’ grasp of events.
So why did I take a bet with Robert Merkel that our living standards would be lower in 2030?
Some of the reasons are more-or-less as follows (in no particular order):
Population ageing issues: 2030s decade will be about when the baby boomers are at their costliest;
Possible disasters of the scale of a couple of Hurricane Katrinas caused by global warming / extreme weather events. (I won’t put the kybosh on anyone by suggesting a locale, but I can envisage a couple of places where similar events would represent a catastrophe of wealth-shattering impact on Australia.)
Effects of drought, fertiliser costs and transport costs on agricultural exports and domestic food prices;
Related structural adjustment / compensation / rescue issues for desertification / prolonged drought / inland towns with no water;
“Tyranny of distance” issues: eg affecting trade – say food miles, and eg tourism - worldwide reluctance/inability to indulge in international air travel; (and, domestically) huge land mass / distances that makes transport inherently expensive.
(As a small aside, suppose that we host the 2022 Football World Cup and build all sorts of white elephants to accommodate it, and fewer than 50% of projected international visitors turn up? By the way, I’ll be happy to take another bet on this in due course.);
Disappearance of competitive advantages, eg SE Asia and China will probably have better universities than Australia in 2030 leading to collapse of international education “exports”. Many of these countries will certainly have significantly more intellectual capital than Australia by 2030 so why will they bother with Australia? Similar effects on other smaller service industries;
Urban (particularly outer suburban) design that couldn’t be worse suited to living sustainably;
Entrenched and colossal stupidity, greed and self-interest in both the fossil fuel and financial services industries. Concern about the economic impacts of financial derivatives which Warren Buffett describes as “weapons of mass destruction”.
And here we were with our trillion dollar savings in super, growing at $50bn plus p.a. and no-one has ever paused to ask how we could employ these to nation build! No, instead, we’ll leave it to the Macquarie Banks and Babcock & Browns of this world.
I could rattle on forever and get every one of my arguments countered with a proposal that we will generate all sorts of goodies with coal seam gas and the like.
Argentina: here we come! I hope I’m wrong and hope amongst many other things that we start thinking seriously about David Mills’ insights. I also suggest that people like Garry Weaven with his clout in the industry superfund arena should start pushing his weight, which is potentially massive.
Please note LP bloggers: I have very little spare time and I’m not proposing to respond to people who tell me what a pessimistic doom-mongering prat I am or to people who throw GDP etc. statistics at me. I’ve made the bet, I know it is against the conventional odds, and I’d probably be happier if I lost the bet rather than won it.
Cheers
This is the sort of thing that ought to be picked up by the MSM. Excellent stuff.
Wow, I agree (largely) with Robert! Against Robert’s well-reasoned position we have a grab-bag of fashionable issues that together add up to not much by 2030. A more interesting bet would be: between now and 2030, mean household disposable income will grow by more (in real terms) than it did between 1986 and now. I’d have money on that happening, come hell or high water (apologies).
By the way, the ‘nation’ is being ‘built’ all around you, Paul H, and routinely with the use of superannuation capital. You didn’t notice? Oh that’s right ‘nation building’ is big government projects dealing with big government problems. Please.
BBB
The result of this bet may depend upon an artefact of mean household disposable income.
The number of breadwinners per household has increased over time for at least two important reasons. (There may well be others.)
1. Greater involvement of married women in the workforce.
2. Shrinkage in the mean size of households — notably the rise of single-occupant households.
What effects may these phenomena have in the year 2030?
1. I see no reason to expect that married women will be less involved in the paid workforce in 2030. To state any assertions about this would just be guessing.
2. With the increased real cost of travel, it is possible that populations will become more densely settled. This may result in more salary-earners living under the same roof. Yet these individuals may be earning lower real mean incomes compared with 2008.
Thus, using mean household disposable income as a measure may result in households being more prosperous in real terms, but individuals being less prosperous, at least as measured by real mean disposable income.
That’s the easiest money (or wine) you’re ever going to make, Robert. But I would be buying now, rather than in 2020 - who knows how much tax they’ll whack on booze between now and then.
I’d suggest the caveat that the $500 would be inflation-adjusted should be changed. Tie the stake to the cost of a given quanitity of premium Australian red.
And my money is with Paul actually. I don’t reckon it’s looking too good.
Robert, I also expressed an interest in betting against you (for similar reasons to those Paul H gives, as it happens). If i’m still alive in 2020, I’ll happily put a case of whatever red wine I’m making from my own grapes by then against whatever you reckon that’s worth. (2020 gives me adequate time to both get some vines in, and learn how to make something drinkable from them.) I reckon it’ll be something Spanish, as there’s a red wine grape from central Spain that grows in desert conditions. I doubt that my 20 acre paddock will still be within Goyder’s Line by then.
What happens if Paul wins, but the $500 in booze makes him better off than he is now - does he have to give it back?
I think robert will easily win. You only have to look here, here, or here to see that there is just too much good stuff going on for it not to happen. In fact the whole nextenergynews.com website is worth bookmarking as literally every day there are half a dozen ‘good news’ energy type stories. Sure many are proof of concept and will never get off the ground but many are world changing.
I’m happy to stump up the cash to buy the wine now (or at least, now-ish depending if we can agree on what to buy) if Robert is happy to be the custodian of the box. Sadly, I can’t trust myself :-).
My rather simpler reason for thinking Australia will be worse off is a squeeze between the decline of cheap liquid fuel, carbon emissions and the fundamental laws of physics. None of the mooted replacements for liquid fuel work without pushing unfeasible amounts of carbon into the atmosphere or leaving us nothing to eat.
We can fall back on sailing ships for exporting our dirt, but we’ll need lots of them, and our export markets for food depend on “fresh”, which will no longer be realistically possible (except for live animals). Those things will end up knobbling our financial industry.
Gloomy hey!
You’ve got to keep up. There are several well funded startups with promising stuff coming down the pipe that doesn’t require edibles for feedstock.
Or, with sufficient cheap electricity (cough orbital solar cough nuclear cough), you can brute force the creation of liquid fuels using air and water.
I am with you Robert - so much so that I would also agree with BBB that the rate of improvement will also increase.
Jacques Chester wrote:
By the time either of those are ready, I think we’ll have run out of liquid energy to build them. Unless the magical levitating banana is invented (as detailed in an earlier Robert Merkel thread by myself and FDB), we’re in a race we are destined to lose. Dammit, I want my levitating banana!
Unfortunately history is littered with civilisations that thought that they were invincible, and continued to believe that a miracle solution would be found to overcome the intractible problems that they faced.
We of course, being the greatest civilisation on earth, cannot believe that it is beyond us to develop technology to overcome climate change, and considering that this will save us the trouble of even considering drastic changes to our lifestyles, the mirage of a technological fix is even more tantalising.
So my money’s with Paul H.
I should say before it’s too late that when I (and I suspect Adrian) referred to our “money” being with Paul H, it was purely a figure of speech. Unless Paul H wins.
I’m not sure how you managed to miss the point, adrian, but we are discussing whether by 2030 climate change, in conjunction with other factors, will have overcome capitalism’s uncanny ability to improve peoples’ lives. We aren’t discussing whether climate change represent a long-term existential threat to Western civilsation, or any other civilsation for that matter. So now you see the grown ups aren’t really exhibiting a civilsational superiority complex at all. As for miracle solutions, I thought they were the renewable energy mob’s bag?
BBB
Whatever BBB. Thanks for enlightening me on what you think the ‘grown ups’ are discussing.
I think my statement above just about covers it IMHO, your tired and irelevantly patronising comments notwithstanding.
Thanks FDB, my meagre pocket money will ensure that remains a figure of speech.:-)
Of course, in robert’s view, the reasons he has for losing the bet are the sorts of things that means he gets to drink the wine! Win win!
adrian, yeah you’re right. Please consider the patronising tone cheerfully withdrawn.
BBB
Well put. May I just make one small adjustment?
I reckon that effort was sufficiently patronising to raise the tone
I think this will be the easiest $500 Robert ever makes!
Katz, note that the statistical measure is ‘mean real equivalised disposable household income’. The ‘equivalised’ bit means that the data is “adjusted by equivalence factors to standardise the income estimates with respect to household size and composition”.
So those factors you mention will be compensated for by the ABS, and should not affect the outcome of the wager.
@ Jacques @21
So do I.
Robert Merkel: We will be richer in 2030
Its sounds like a no-brainer to me. Nearly every generation has left the next one better off than theirs. Are there any other
suckersastute investors who would like to bet on the alternative position? I wouldn’t mind some of that action.Nonsense. If biofuels ever contribute more than 10% of the world’s liquid fuel needs I’d be astonished. There are vastly more efficient ways to capture the sun’s energy than growing crops, harvesting and refining them into liquid fuels, and distributing the fuel in tankers to a network of service stations.
Photosynthesis is 0.2-0.5% efficient. Internal combustion engines are about 30% efficient. God knows what the losses are in the sowing, harvesting, refining and distribution processes.
Solar PV is already 30% efficient. Transmission losses from the grid are about 7%. The charging cycle of modern batteries is about 90% efficient, as are electric motors.
Yes we have a lot invested in the current liquid fuels infrastructure, but it all depends on the stupendous energy return from conventional crude. If we try to keep the current infrastructure running on biofuels, the processes are so inefficient we’d need several extra planets.
Of course, but it would be far more sensible to use that “sufficient cheap electricity” to recharge electric vehicles.
Will Robert win his bet? Probably. By 2030 I’d say we’d be through the worst of it and may be slightly ahead. Is anyone taking bets on the 2010-2020 period?
True, but anyone who thinks the transition will be easy and without pain is delusional.
carbonsink, I suspect you and Jacques are saying the same thing. I’m not sure that his allusion to ‘promising stuff’ was an allusion to alternative liquid-based fuels, and I’m almost certain he wasn’t talking about biofuels. I completely agree that in the long-term the only game in town will be plug-in electric vehicles: you get scale on the energy production front (whether it be renewable or conventional), you’re probably going to be piggy-backing on improved battery technologies coming out of the gadget market, and you get to use largely existing infrastructure (the transmission grid, outlets in your house, etc.) Anything else, like all this hydrogen rubbish, is waste of everyone’s time.
BBB
Well I don’t know what else “promising stuff coming down the pipe that doesn’t require edibles for feedstock” could possibly mean. Please enlighten me!
Ok, let’s recap. (1) “None of the mooted replacements for liquid fuel work without pushing unfeasible amounts of carbon into the atmosphere or leaving us nothing to eat.” and then (2) “You’ve got to keep up. There are several well funded startups with promising stuff coming down the pipe that doesn’t require edibles for feedstock.” Here’s (3), a possible translation of (2): “There are some replacements for liquid fuel that are being developed by well-funded startups that have nothing to do with biofuels, formerly edible or otherwise. Like plug-in, battery-driven vehicles.” Just a suggestion. I’m sure Jacques will clear up what he meant in due course.
BBB
Glad to see someone is keeping there head in all this gloom and doom.
I dont have to read the blogs to know that Robert has won the bet. (I would like a piece of the action, so I am prepared to put $100 on the bet.) I assume the “we” in this bet is “AUS”, which includes financial stocks and monetary flows.
All you have to do is look at the behaviour of financial markets, which have been correctly predicting high rates of global economic growth for the past generation. The overall trend of financial market asset valuation remains strongly positive, even with the knowledge of the higher costs of a carbon economy being slowly factored in.
That process of asset accumulation is only going to continue, if not accelerate, as giga-countries like China, India, Brazil and Indonesia get on the growth bandwagon. Their economies will compete to produce more and better quality goods which will raise overall global income. AUS will get a slice of that action, from export demand, immigration, innovation and investment.
The fly in the ointment is our economies growth path is the undervaluation of the raw material world: the cost of overusing our geological endowments as a source of wherewithal and the cost of overusing our metereological environment as a sink for waste. The true cost of the ecologic elements of the economic system is much
higher than we thought.
By the same token intellectual property is also undervalued by financial markets due to its free availability of easily reproducible digital goods. The massive digital commons should count as “mental commonwealth”, just as parks and beaches count as “material commonwealth”, even though both do not have conventional market values.
However AUS is well placed to capitalise on the coming global shortage of adequate material sources and sinks. We could make a lot of money out of the global carbon trading economy.
It is likely that AUS’s mineral endowments will increase in value ie improved terms of trade. This is likely to occur even if coal was banned or massively carbon-levied. Also, AUS could utilise its large common area to sequester carbon or re-forest clear land.
No doubt the ecological crisis will tilt the composition of wealth back from the mental to the material. But the progress of AI will see more of the economy converted from material to mental transactions ie actual to virtual.
On balance I think that the accumulation in epistemological capital will greatly outweigh the dissipation of ecological capital. Therefore the net growth in general capital will be strongly positive.
Also, by 2030 Robert (and I if there are any takers) will be richer by the value of this bet.
Don’t worry charles, I’m betting that spelling is less important in 2030 than it is now.
I’m with Robert, but for my own speculatively humanist, anthropological and patronising reasons unrelated to economic or environmental factors.
For some people, the sense that we’re living in “the last of days” lends special meaning to their lives - whether their vision is apocalyptic, Manichean, or just plain gloomy, some people feel that life is more special if it’s under imminent threat of spectacular collapse.
For other people, the sense that “things can only get better” lends special meaning to their lives - whether it’s a belief in the better angels of human nature, or just dumb hope based on the empirical fact that, hitherto, humans have always been up to the task of solving the myriad problems we create for ourselves. Otherwise we wouldn’t be here to fret and fuss over the next tranche of doom that’s slouching towards Bethlehem…
Either way, we believe whatever we need to believe to get us out of bed in the morning. But I’m in the latter camp. I believe the future will be better and I, for one, welcome our coming robot overlords!
I also note in passing that this thread is pretty good evidence to counter the RWDB flying-monkey argument that left-leaning folk are doomsayers and panic-merchants who use fear of future disaster as a means of present political control. I’d direct that canard more to the RWDB “we must tap your phones to protect you from terrsts” camp.
Undoubtedly fundamental primary resource acquisition will become uneconomic, which will reduce real wealth in that area. Much of AUS’s wealth has been due to abundant fundamental resources (top-soil, water, coal).
We depend on nationalised, large-scale fundamental resourcing. THese industries look like dinosaurs as city dams dry up, the Murray-Darling food bowl withers and brown-coal gets carbon-priced to the max.
Down-sizing and localising reduces transport costs but also reduces economies of scale. The market will eventually realise that we have been dissipating our ecological capital when there is a reduction of income flows from these industries, reflected in a major write-down of natural values.
Evidently many cities and rural areas will there will be a trend towards stand-alone local self-sufficiency in resources at a smaller scale and local location. eg backyard or roof top gardens, rainwater harvesting tanks and solar-powered generators.
It might be possible to minimise the higher costs of food and water by shipping or piping it in from areas where it is more abundant. But this will increase energy costs. How much wealth will be lost depends on the possibility of re-forming power stations to run on alternative energies either nuclear, solar or hydro.
So the economics of adapting to climate change very much depend on the development of cheap, renewable, non-carbon based energy systems. This means nothing less than an energy revolution comparable to that which occurred with the introduction of electricity at the end of the 19th c.
It is possible that resource owners and managers may conclude that re-forming the energy industry is too hard and will be too little too late. THen comes the hell-in-a-high-water-handbasket scenario where resource controllers aim to maximise financial capital accumulation and insulate themselves from ecological capital dissipation.
I wouldnt put it past them.
In my original response to Robert Merkel, I said that I would have little time to respond to LP bloggers. I now have a free hour at the end of a busy weekend. (This starts with a spray against BBB against whom I have formed a particular antipathy) but is more amiable after that.
#2 Bingo Bango Boingo:
You said: “Against Robert’s well-reasoned position we have a grab-bag of fashionable issues that together add up to not much by 2030 … By the way, the ‘nation’ is being ‘built’ all around you, Paul H, and routinely with the use of superannuation capital. You didn’t notice? Oh that’s right ‘nation building’ is big government projects dealing with big government problems. Please.”
Lovely manners mate! I never knew that my suggestion that “Garry Weaven with his clout in the industry superfund arena should start pushing his weight, which is potentially massive” is part of a “grab-bag of fashionable issues”. In fact, I’ve been looking in vain for suggestions that the superfunds, and particularly the industry funds, should start taking more of an interest in setting up investment vehicles over which they have more control and that are immune to the financial engineering and fee excesses of some of our more inventive merchant/investment banks. Who said I said anything about “government”? Should I now add “Please” as a rhetorical flourish? Please.
I don’t see much nation-building going on here BBB: most of what I see is Australians continuing down the usual road of spending disproportionate amounts on their homes, increasingly on McMansions/large houses in the wrong places. A friend of ours turned up the other day, disconsolate that his superfund share portfolio contained Allco, ABC Learning and Babcock & Brown Power! What a trifecta!, all selected and managed for him by one of the mostly highly-regarded mob of financial advisers in this town! Good to see super capital employed to such wonderful effect! (Didn’t affect his adviser’s fees though.)
#3 Katz and other posters on the minutiae of the bet
I think we’ve got inflation factored into the bet. I’m relaxed about paying up if it is a close call. If it is a close call, then I regard Robert as having won the bet: and please let’s not have a discussion about what “close” means.
#8 Peter:
Sure, there is an extraordinary amount of invention, but only within the last few days the Bush administration’s Bureau of Land Management issued a 2 year moratorium of approvals for solar farm developments on US federal land. Don’t underestimate the power of the status quo to preserve their patch or to confuse the living daylights out of public opinion in considering alternatives to fossil fuels.
#13 Adrian:
Thanks for the hooray. I suspect there is something missing in Robert’s analysis that fails to distinguish between “imperial growth” / “winner growth” and “world growth”. I think I remember something in Indian Studies at Melbourne Uni in 1966 that looked at the Indian textile industry in the 1830s or thereabouts and how the Lancashire mills snuffed the Indians out.
Sorry, this is very vague and tangential, but I think maybe I’m suggesting something like “Can everyone be winners at the same time?” I think the answer is Not necessarily, and only by clever diplomacy and a new Realpolitik. I don’t think successfully clever diplomacy will happen. I think Australia will be marginalised as an insignificant player in these games. I suspect Rudd’s grand Asia-Pacific initiative earlier this month may have been based on a perception of risk similar to mine. At least, I hope it was! Maybe some LP bloggers can shed some light on this for me.
Whatever, we are in for the ride of our lives – and all we seem to have are focus-group-driven politicians at the helm. Time for some leadership (and bipartisanship? instead of this assinine comic book crap from Nelson and Greg Hunt.). Dr James Henson, the pre-eminent climate scientist suggested last week that CEOs of fossil fuel companies should be tried for crimes against humanity and the planet. I suggest that we put our politicians on notice that we’ll refer them to Henson unless they seriously commandeer every best brain in Australia to try to figure out our best way forward!
#24 Tony of South Yarra
Wow! That was SO illuminating! Time, methinks to institute a code for bloggers called “The blog impact statement”. If you’ve got nothing to say, then don’t say it.
#30s and thereabouts: Jack Strocchi and Mercurius
Enjoyed and respected your comments but they’ll take time to think about. By the time I’ve digested them, LP will probably have moved on if it hasn’t already. This is the fundamental weakness of these blogs – no time for generating considered responses, or at least it is for people like myself who prefer to try to put my brain ahead of my typing fingers.
The term of this bet is 22 years. Joseph Stiglitz was recently reported in the Guardian that “In the US, real middle-class incomes have not yet recovered to the levels attained before the last recession in 1991”. That’s 17 years and I suspect they won’t be rising in the next few years.
Cheers
Paul: we’ll have plenty of time to discuss these issues! Frankly, I think that the long view is more important than day-to-day noise (not to say that the short term shouldn’t be considered; in the long run we are all dead).
As for middle-class incomes in the USA, the picture is more complicated than it seems. For one thing, as I’ve noted, part of the issue is that in the USA most of the gains have been going to the better-off - to a large extent, the fact that the American middle class has been happy to let the uber-wealthy cream off the majority of the gains is a political issue. The second point is that some more libertarian bloggers have been arguing that these figures don’t include benefits - that is, employer-funded healthcare, I presume retirement benefits, and so on. When these are taken into account, the picture looks a bit better.
One other complicating factor is that inflation misses improvements in the quality of goods and services, so real income growth in some ways probably substantially understates how our standard of living improves.