It’s good to see Judith Sloan moving into comedy

Judith Sloan

Judith Sloan

It’s good to see Judith Sloan (Productivity Commission and Australian Fair Pay Commission Commissioner, Director of the Westfield Group and Board member of the Lowy Institute) moving into comedy.

In the Weekend Australian (Nov. 26-7), she writes,

…in a perfect world, the ideal arrangement is for employers and employees to reach agreement about wages and conditions by mutual and private consent.
(p. 22)


In the real world, there are more employees to choose from than there are employers. In the real world, employers hire trained negotiators to carry out their end of the bargaining.

In the real world, employers wield more power than employees.

So in the real world, employees increase their power by acting collectively.

Continue reading

A publicly funded healthcare system could eliminate the US deficit


Noam Chomsky (pictured right) has recently claimed, repeatedly, that moving to a publicly funded healthcare system would provide sufficient savings to eliminate the deficit from the US budget. In what follows I show why his claim is plausible.

Here’s Chomsky’s claim in black and white. In response to current discussion about measures for dealing with the US deficit, Chomsky notes that it is

Not even discussed … that the deficit would be eliminated if, as economist Dean Baker has shown, the dysfunctional privatized health care system in the U.S. were replaced by one similar to other industrial societies’, which have half the per capita costs and health outcomes that are comparable or better.
(Chomsky 2011b)

Here’s a relevant excerpt from Baker’s blog:

The problem with Medicare is that our healthcare system is broken; we pay far more than other wealthy countries for our care and get worse outcomes. We don’t need to fix Medicare; we need to fix our healthcare system, and this is something we should have started yesterday.

The remedies are actually easy; the problem is that the political will does not exist to challenge powerful vested interests such as the insurance industry, the pharmaceutical industry and the doctors lobbies. Close to 20% (about $500 billion a year) of our healthcare spending is wasted on financing the insurance industry and the paperwork requirements that it imposes on providers.

We pay almost twice as much for prescription drugs as other countries. If we could get our costs in line, it would save us close to $100 billion a year. If drugs were sold in a competitive market without patent protection, we would save more than $200 billion a year. If we paid our doctors the same salaries as those in other wealthy countries, we’d save another $80 billion a year.
(Baker 2009)

That’s a potential total saving, on the most generous interpretation, of $880 billion. That’s exciting. The normative claim that people should have access to publicly funded healthcare would be all-the-more convincing if it could be shown to save the US a bucketload of money. But notice that Baker’s talking about total healthcare spending, public and private, not simply healthcare spending from the US budget. You cannot claim savings in the private sector as savings to the US budget. If a public healthcare system reduces private healthcare spending, those savings cannot be claimed as budget savings because the expenditure was never counted in the budget. Therefore, for Chomsky’s claim to be true, a public healthcare system would have to provide sufficient savings in the US budget alone to eliminate the deficit—no easy task for a country that has a largely private healthcare system and a massive budget deficit.

So let’s crunch the numbers.

Continue reading

Arguments against the carbon tax


Are you, or have you come across, someone who is against the carbon tax proposed by Julia Gillard? People oppose the carbon tax for a number of reasons—some strong, some weak, some simple, some complex. They may oppose any attempt to put a price on greenhouse gas emissions, or they may oppose Julia Gillard’s carbon tax in particular. Three major reasons underlie general opposition to greenhouse gas emission pricing: (1) opponents believe the full cost of a product should not be included in that product’s price; (2) opponents believe global climate change does not exist; (3) opponents believe that global climate change exists but that human action cannot mitigate it. This post will deal with the first reason, which is also the easiest to rebut.

Continue reading

High-speed rail debate in the US

High-speed rail in Japan

High-speed rail in Japan

On November 9 2010, Keith Yost, columnist with the Massachusetts Institute of Technology newspaper The Tech, published an opinion piece stating the case against high-speed rail (HSR) and large-scale infrastructure projects in general. In his article, ‘Derail high speed rail: It’s time to end the liberal fetishization of infrastructure’, Yost, who also blogs at The Sensible Technocrat, argues that the US should abandon proposals for high-speed rail because the potential cost is too high compared with the potential benefits. The pattern of urbanisation in the US makes HSR unviable, Yost contends. Homes and workplaces are spread across urban centres, making node-to-node transport such as HSR ill-suited to the needs of US citizens. The flexibility afforded by cars is a much better fit, he argues. This argument may apply to US HSR proposals, but it’s largely irrelevant to the Australian discussion.

The main proposal in Australia is for a high-speed rail link between Melbourne and Sydney. The link will provide an alternative to air transport. It’s not simply a substitute for existing rail and automobiles. When considering convenience you have to compare oranges with oranges. So, if the Australian line offers an alternative to air travel, one has to compare the convenience of HSR with the convenience of air travel. And not many people have a form of air transportation parked in their garage. Most of us have to travel to an airport, much as we would have to travel to a station if we were to use HSR. If this is also the case in the US, then the rejoinder also applies there.

Continue reading

Private health insurance will not solve the problems with the public healthcare system

Have you ever heard a public healthcare system story like this: Aunty Jane needs an operation on her knee. She’s been on the public system waiting list for two years. Her surgery is booked for next week. She checks into hospital on the day of her surgery. She’s prepped and ready to go, but at the last minute her surgery is cancelled. The theatre that was to be used for her knee operation is required for emergency surgery. Aunty Jane still waits for her knee operation.

I hear many stories like this one, cases where the public healthcare system lets someone down. What I am struck by, however, is what usually follows. The person recounting the story laments the state of the public healthcare system. But what they usually see as the answer to Aunty Jane’s predicament is private health insurance. So the story goes, ‘If only Aunty Jane had private health insurance, then she wouldn’t have waited the two years; she would have gone in for surgery immediately; she’d be back tripping the light fantastic down at the local dance hall on Thursday nights’.

There are two problems with this response to Aunty Jane’s predicament, however.

Continue reading

Time for a Geelong flood levee?

On November 14, 2009 The Australian Government Department of Climate Change released a report on the risks from climate change facing coastal communities. I receive about 2-4 media releases per day from Penny Wong’s office announcing the Government’s latest policy position on climate change or heralding the publication of the associated White Papers, Green Papers and studies. However, as a resident of the coastal and low-lying town of Geelong I took particular interest in this policy document.

A couple of days after I received this media release Peter Farago of the Geelong Advertiser published an article on the report entitled ‘Drowntown Geelong’. Farago opened the article with the line, ‘Up to 6600 Geelong homes will be under water if a frightening climate change forecast comes true … and there’s nothing you can do about it’. While Farago is correct that there is nothing we can do about the climate change that will cause the estimated 1.1m sea level rise (because sea level rise has a lag time, so the earliest future sea level rise is the result of past climate warming), he is just plain wrong that there is nothing you can do about it. The whole purpose of the Government’s report is to propose adaptations that communities can make to avoid the flooding or inundation of low-lying areas when sea levels do rise. As Penny Wong states in the aforementioned media release, the report ‘shows that Australia must plan to adapt to the climate change we can’t avoid’. So although there is nothing you can do to mitigate the climate change that will cause the estimated seal level rise referred to in the report, there is plenty you can do to adapt to that rise in sea level.

Continue reading