Articles – Page 2 – John Humphreys

Review of 2012 QLD budget

_{Published in The Conversation on 11 September 2012 under the title “Queensland budget 2012: experts respond”, along with the opinions of two other economists.}

Before the budget came down, Campbell Newman described it as a “once in a generation budget”. That is certainly what Queensland needed. Our long-term budget position is actually worse than the audit report or old budget papers claim, since they don’t factor in the growing fiscal pressures over the coming decades caused by an ageing population. Put simply, current policies are unsustainable, and some tough decisions are needed.

Minimum wage destroys jobs

_{Published in The Drum ABC Online on 11 June 2012 under the title “Unseen damage of raising the minimum wage”.}

The announcement that the legislated minimum wage will increase by 2.9 per cent means that we can expect there to be nearly 100,000 fewer jobs in Australia. In response, commentators and unions have cheered and asked for more.

This is a great example of Bastiat’s old rule about what is seen and what is not seen. When a business downsizes and people lose their jobs, the impact is immediate and visible – resulting in news headlines and stern-sounding politicians. But when the government subtly destroys thousands of jobs slowly and indirectly, they are given a free pass. Of course, that is cold comfort for the unemployed.

Who is Ron Paul?

_{Published in The Drum ABC Online on 14 December 2011 under the title “Who is Ron Paul?”.}

In November next year, Barack Obama will go up against a Republican candidate for the presidency of the United States, and defacto leader of Planet Earth.

But before then, the Grand Old Party (GOP) of the Republicans will need to pick their candidate, which involves an eight-month marathon of rolling mini-elections in 55 states and territories (including Guam and American Samoa) starting in Iowa on January 3, 2012.

The unforgivable stupidity of anti-banking libertarians

_{Published on the ALS Thoughts on Freedom blog & LibertyWorks blog on 13 December 2011.}

At the recent Mises Seminar in Sydney there was a speech by Chris Leithner that explicitly called for the banning of fractional reserve (FR) banking. Leithner and other Australian libertarians (including Michael Conaghan & Benjamin Marks from Liberty Australia) follow the lead of some American libertarians (Walter Block, HH Hoppe, JG Hulsmann — BHH) and argue that FR-banking is fraud and should be banned, and further that it is economically damaging and causes inflation.

These two issues need to be addressed separately. The first is a deontological issue about whether FR-banking is consistent with a free world. The second is a consequentialist issue about whether FR-banking leads to bad outcomes. It is possible that FR-banking is consistent with freedom and yet leads to bad outcomes, and then those libertarians who accept the “non-aggression principle” would have to tolerate FR-banking even if they don’t like those outcomes. But before delving into that debate, it is worthwhile quickly explaining what we are actually talking about with FR-banking.

Benefits-cost analysis of carbon tax

_{Published in The Drum ABC Online on 20 June 2011 under the title “Carbon tax and evidence-based policy”.}

I accept what I see as the mainstream science on climate change. The world has had a warming trend in recent decades, this is partly caused by humans, and I expect it to continue into the future.

I am comfortable with the IPCC range of estimates of warming, which has a mid-point estimate of 2.8 degrees Celsius over pre-industrial temperatures (ie 2.1C above today). I hope the sceptical scientists are right and that warming will be lower, but I find the IPCC estimates plausible and an appropriate starting point for analysis.