Fresh Economic Thinking: Recent Episodes
Cameron Murray
Cameron Murray is famous for questioning sacred cows and conventional wisdoms of both left and right. We chat about Cameron's latest Twitter battle and then delve into a controversy. Wide-ranging analysis - no topic out of bounds - inequality, regulation, housing, superannuation, lockdowns, tax, war, the meaning of life.
fresheconomicthinking.substack.com
I sat down last week for a long conversation with Aziz Sunderji, data wizard and author of the Home Economics Substack.
Subscribe to Aziz now. You won’t regret it.
With a background in banking and finance, Aziz comes to the question of housing with a focus on asset pricing and investment incentives. This means he diverges from much of the public policy conversation that merely assumes home prices should always be lower, but planning regulations and zoning are in the way.
But he also comes with a lot of technical and design know-how.
He has built a website summarising the Great Debate on housing supply and price, and a mapping tool called ProMap. Aziz was able to show me live on screen how ProMap can reveal patterns in the data that are usually hard to see, such as the migration to the suburbs and the price gains in suburbs relative to city centres since COVID.
You could say that his ProMap tool has made housing analysis Great Again.
It would be a dream to have a tool like that for Australian property data.
I hope you enjoy our conversation.
Table of contents
0:00 Intro
2:51 Backgrounds in finance and property
12:43 Writing books about housing
20:54 The Great Debate compendium
31:56 Where AI helps and where it fails
36:15 The ProMap housing data tool
43:36 Urban cores versus suburbs
58:00 Doubting the zoning explanation
1:02:47 Housing as an asset with a yield
1:11:38 Monopoly, land, and patient owners
1:15:49 An elevator pitch for the housing crisis
1:19:57 What the housing crisis really is
1:33:44 Austin, Tokyo, and closing thoughts
References:
Aziz’s Substack, Home Economics
Aziz’s mapping tool, thepromap.com
Aziz’s microsite, The Great Debate
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Regular co-host Jonathan Gadir encounters a heated debate on the AusFinance subreddit about the merits of Australia’s superannuation system, something Cameron often raises.
Also, we comment on the emergence of culture within subreddits and respond to some of the comments on Reddit about Cameron’s work. The rise of Pauline Hanson and One Nation becomes somehow relevant to the whole conversation too!
Enjoy this chat and leave a comment with your thoughts.
Starting next week at FET is a four-part analysis that I hope will become a reference point for understanding key concepts related to housing production.
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Why a feasible change of use is different from commercial feasibility
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How prices determine the cost of building new homes via choices of density and quality
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Housing supply is not new housing production
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Why landbanking is a normal market outcome of balancing present and future housing
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Friend of the show Mike Fellman joins me to chat about all things macroeconomic. We pick up on a previous conversation I had with Moses Sternstein about the interest burden from public debt.
Mike has a deep understanding of bond markets, macro policy, and money. It was a good chance to ask him about Modern Monetary Theory (MMT), which is a school of thought in economics that focuses on monetary operations and both sides of the monetary balance, which includes the debt (the liability to the government) and the asset (the Treasury bond held by the public or other organisation).
Is the MMT view really that different from the standard macro view? And where does a lot of the fear about public debt come from? Who really bears the cost of interest on public debt?
We dig into these questions. Enjoy the conversation.
Follow Mike’s terrific Housing Hell Substack here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Moses Sterstein runs the terrific Random Walk substack. I stumbled across his creative insights a couple of years ago when someone sent me an article he wrote about the mythical housing shortage.
Since then, I have kept track of his views on evolving macro-economic and demographic trends.
This conversation was a chance for me to see how his independent analysis had led him to some similar views to mine on housing markets, but also test where we differ on the likely social, economic and political effects of long-term demographic trends.
It was a surprise to hear that we have both arrived at a similar view on the application of monetary policy being too broad for many of the industry-specific inflation concerns we have today.
Enjoy this conversation and find Moses on Twitter here and at his Random Walk Substack below.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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This week, regular co-host Jonathan Gadir is back to discuss inheritance taxes.
Are they the fairest tax that helps everyone start life on a more even footing? Or are they a nightmare of rules that require intrusive monitoring of gifts and that destroy family businesses?
We take some initial steps towards understanding how much tax revenue is possible, the problems involved, and the intergenerational issues at play.
An article of mine from 2014 on inheritance taxes is here.
And a link to The Australia Institute report we mentioned on inheritance taxes and gift duties is here.
Don’t forget that I am hosting a Land and Housing Economics workshop in Brisbane on 9-10th June 2026. Find out more here and come along to get into the weeds on property economics.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Economics can be thought of as the study of human conflict. Prices are one way to settle conflicts over who gets what.
So how does an economist think about war, and emergent cultural and political forces that create conflicts amongst groups?
Paul Frijters runs Academia Libera Mentis, a new education institution for minds that dare. He documents this grand education experiment here at his Subtack.
Paul and I go way back. Paul was my PhD supervisor, and we co-wrote Rigged, a book that dives deep into the way political favouritism operates in Australia. He has studied the way human societies function, particularly how the underlying emotional drivers of greed and love generate loyal groups as well as fierce competition.
He even has a book with Gigi Foster about that called An Economic Theory of Greed, Love, Groups, and Networks.
This underlying understanding of humanity should be extremely helpful for assessing potential scenarios in major global events, like the war in Iran. Although I am very much on board with the economic thinking about greed, love and groups, I am very much in the dark about the history and current tensions driving this new conflict in the Middle East.
Paul has recently lived in Saudi Arabia and has been studying the region in detail. So enjoy this chat and keep in mind how things have unfolded between when we recorded, on 16th March, and what is happening when you listen to it.
You can find Paul’s academy website with details of upcoming open days and events here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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One of the most requested guests on FET has been Professor Steve Keen. Steve has been a student of economics since the 1970s, and a critic of the oversimplifications of the neoclassical economic school. He was an academic at the University of Western Sydney for many years, and Head of School at Kingston University in the mid-2010s.
One thing Steve taught me is to really think about the hidden assumptions in our economic models, which has been extremely valuable to me during my economic journey.
Our conversation starts with Steve’s concerns about the Vietnam War draft, and moves on to his epiphanies about what was missing from economics education. We discuss his attempts to model the key insights of Hyman Minsky about the economic behaviour that generates macroeconomic cycles, and the state of the economic debate.
Oh, and we talk about the very controversial issue of money creation by banks and the public Treasury!
Find Steve’s YouTube channel here.
Steve’s Debunking Economics podcast is here.
And of course, Steve writes on Substack at Building a New Economics, which is where you can find his latest writings and conversations.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Most Aussie’s know Jim Penman’s face from the side of green trailers dragged through the suburbs as his franchisees mow lawns.
But Jim is more than a businessman.
He has written multiple books, has a PhD, and will run for election in Northcote, Victoria with the Libertarian party in November 2026.
I wanted to find out what motivated Jim to run for politics, ask him about where he sees government waste and interference reducing our quality of life, and of course broach the topic of fertility, which he has a unique view on.
It turns out that zoning and planning regulations are a big deal for Jim. Although we weren’t able to agree on much about this topic, we were able to break apart why our views differed.
Find out more about Jim, his books, and try chatting with “AI Jim” at his website, jimpenman.com.au. Find him on X/Twitter here, and pre-order his new book Birth Rate Crisis here.
Don’t forget about my upcoming Land and Housing Economics workshop on 9th and 10th June in Brisbane. Tickets here. PDF flyer attached below
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Jay Lasker, aka Crémieux on Twitter/X, has spent the past few years digging into bad science and its bad data, especially in health science.
For example, the rise in autism is almost solely due to expanded diagnosis and the incentives to get a diagnosis. This is especially relevant for policies like the National Disability Insurance Scheme (NDIS) in Australia, which pays out on the basis of a diagnosis.
Worse, because this idea of a rise in autism has become a global meme, people and politicians are already searching for answers and interventions to prevent it from getting worse! Before asking the question “Is the data correct and showing what we think?”, we jump to the question “What should we do about it?”
Indeed, many of the troubling social trends that seem to capture our collective minds are pure data measurement artefacts. They aren’t real. We can stop worrying.
Find Jay’s terrific Substack here.
And for his excellent regular posting on Twitter/X find him here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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You may have heard that our town planning system of rules and institutions that govern land uses in cities and often across the country is stifling new housing production, causing high prices.
But much of the commentary misunderstands how town planning rules operate.
I chat with Sydney town planner Tim Sneesby about how the system works, from a strategic level of creating zones and desired outcomes at a broad level, including earmarking infrastructure locations, to the day-to-day operations of assessing applications against those broader plans.
I also push a little on some of the potential perverse incentives—wouldn’t town planners prefer to create cumbersome rules to keep themselves in a job and make their roles valuable even if there is no (or negative!) social benefit from those rules?
For example, this article notes a rise in town planners per new home developed and the economic cost of regulating so many aspects of building designs.
Let me know what you think?
All comments are personal views and not those of Tim’s employer or associated entities.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Interested in learning more? Fresh Economic Thinking runs in-person and online workshops to help your organisation dig into the economic issues you face and learn powerful insights.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Has the cultural and political pendulum swung too far in favour of women?
That’s the argument made by David Maywald in his new book, The Relentless War on Masculinity.
He doesn’t argue that women have done this. But even men in power are still fighting the battles of many decades ago. David looks at education and health outcomes, noting that women became the majority of university students four decades ago.
There are four ways in which the cultural and political bias is expressed, called the Four Horsewomen. Once you understand them, they are hard to miss.
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Misandry — the hatred of men, as well as the systemic contempt for men.
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Gamma bias — the psychological tendency to interpret male and female behaviour through different lenses. A man who asserts himself is labelled aggressive, while a woman doing the same is praised as confident. A mother who works long hours is celebrated for her ambition, while a father who does so is criticised for neglecting his family.
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Gynocentrism — societies that focus on women, are primarily concerned with female perspectives and interests, and take a feminine point of view.
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Gaslighting — convincing men that their concerns are imaginary. Speak up about family law bias, and you’re told you must hate women. Question the “gender pay gap” narrative, and you’re accused of being sexist.
David explains how to perceive these biases by whether the same judgment would be made regardless of the gender of the person being observed.
As a father with two sons reaching adulthood, the most interesting data point was that young men (aged 15-24) only sit behind men over 65 in the strength of their views about traditional gender roles. Perhaps the pendulum is swinging back.
Here’s a chart showing these trends, courtesy of analysis by e61 Institute.
Finally, an excerpt from the book is in the article below at David’s Substack.
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Interested in learning more? Fresh Economic Thinking runs in-person and online workshops to help your organisation dig into the economic issues you face and learn powerful insights.
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During the COVID panic one of the sane voices was congitive scientist Mark Changizi. He saw the resulting panic as an emergent social and cultural phenomenon, and went as far as to sue the Department of Health and Human Services (DHHS) for directing social media companies to censor what they deemed as misinformation.
In this conversation, Mark talks of his intellectual journey, from mathematician and physicist to congitive scientist. He describes the overarching view of human perception and coordination as evolved tools and how leads to social patterns that would be replicated in any civilised large scale cooperative creatures. Would aliens also be debating free markets and communism?
Here’s one example of evolved traits.
Why do humans perceive visual illusions rather than have an accurate visual receptor? Because our visual perception evolved to anticipate outcomes, not accurately represent the light hitting the eyeballs.
This was a fascinating discussion, and stay tuned for Mark’s comments on academia and his life since leaving academia 16 years ago.
His latest book is called Motorcycle Mind, and I would recommend his previous book Expressly Human.
Please find Mark at the following.
Youtube: https://www.youtube.com/@markchangizi X: https://x.com/MarkChangiziWebsite: https://www.changizi.com
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Wouldn’t it be great if we had a coherent way of understanding the economics of housing supply?
You might be surprised, given the confidence of the prognostications of public commentators, that most don’t have a broadly accepted economic theory of why homes are built.
It’s all ad hoc and often contradictory.
Here, Tim Helm walks through the main empirical patterns that need to be explained by our economic theory of housing supply, and steps through why most current approaches are a poor fit.
A good written explanation is here.
Thanks for listening.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Previously, I have described an educational experiment happening in a castle in Belgium, called Academia Libera Mentis (ALM). It is run by my friend and co-author, Paul Frijters, with his wife Erika Turkstra, and alongside Gigi Foster and many others.
In this episode, we discuss the story of this endeavour, as told in the upcoming book Minds that Dare. You can read about the trials and tribulations of this educational endeavour at the ALM substack.
Check out the ALM website and the courses available in 2026.
With a bit of luck, you might see me at ALM at some point in 2026.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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A long chat with power engineer Ben Beattie about Australia’s energy conversation, some of the muddled economics and arguments in favour of privatisation, public provision, and more.
Check out Ben’s Baseload Podcast here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Interested in learning more? Fresh Economic Thinking runs in-person and online workshops to help your organisation dig into the economic issues you face and learn powerful insights.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Is Australia’s housing market REALLY functioning normally? Regular co-host Jonathan Gadir pushes back on my recent statements about the housing market doing exactly what we should expect it to do in a conversation with Josh Szeps at his Uncomfortable Conversations podcast.
I also respond to Steve Keen’s idea that the secret to lower home prices is regulating access to credit, such as with tighter rules limiting loan sizes to a function of current rent or value, which he expresses in this video.
My basic view is that this can certainly change the speed of price adjustment in the housing market by preventing some trades, possibly dampening a bubble, but it won’t change the overall long-term average price level. It might also inadvertently make first home buying harder, not easier, which was a frustration of the strict credit controls pre-1980s.
I explain more about the economic forces that constrain what housing markets can do in my book The Great Housing Hijack. This is why I argue that rather than trying to fight these forces, simply side-step them with subsidised non-market housing for the groups we think should be able to access it.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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James Nuzzo’s sports science and health research shows the gap between perception and reality when it comes to gender issues. This research, and especially his public comments about his various studies, got him cancelled and squeezed out by Edith Cowan University. You can read about it here in detail.
As someone with an interest in the pursuit of truth and who is frustrated when the public conversation is at odds with the data, this topic is of interest.
For example, few would realise that women became the majority of university students four decades ago, and are now the majority of staff too. So why is there still such a big push to give women more opportunities in higher education when it is men who have been behind for decades?
Find James at X/Twitter here, and sign up to his newsletter below (and enjoy his Graph of the Week too).
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Interested in learning more? Fresh Economic Thinking runs in-person and online workshops to help your organisation dig into the economic issues you face and learn powerful insights.
Fresh Economic Thinking is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Would you believe that the same stories told in Australian housing debates about a lack of supply were dominant in Toronto, Canada, right up until the bust?
I speak with Canadian real estate analyst and broker John Pasalis about how the market has changed in the past few years in Canada—from a speculative mania, to a sudden stop, to a new slow grind.
Amongst it all, new apartment construction has plummeted, banks are facing numerous financing risks, and the outlook is soft.
We also pick up the importance of the post-COVID immigration boom on the housing story.
Find John’s Move Smartly podcast here, and follow him on Twitter here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Interested in learning more? Fresh Economic Thinking runs in-person and online workshops to help your organisation dig into the economic issues you face and learn powerful insights.
Fresh Economic Thinking is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Regular co-host Jonathan Gadir pushes back on my claim that Australia’s economic complexity is fine. Can a more complex economy generate better job choices and higher wages? Is it really okay to outsource the production of fundamental ingredients to a modern economy to other nations? Is Cameron just spouting nonsense neoclassical economics?
Tune in to hear these questions answered, and find the original article here for paid FET subscribers:
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Too often, the public debate about housing focuses on costs and ignores investment returns to property owners.
Mike Fellman was an economist at Freddie Mac and is now a property investor. He explains in this conversation how important the investment dynamics in housing are for understanding what gets built where.
Find Mike on Twitter/X here and read his “thread of threads” that explains many of the misperceptions about the financial drivers of housing markets here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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How do organisations that emerge to help people end up degrading over time and becoming a plain old shakedown?
That’s the topic I discuss with regular co-host Jonathan Gadir.
Although we don’t mention it, my book Rigged, co-authored with Paul Frijters, explains many of the economic mechanisms behind the degradation of institutions into what could be described as a rent-seeking mafia.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Will rent control destroy your city? Or is this a slogan economists use to signal their tribal allegiance?
Cahal Moran, aka Unlearning Economics, discusses his intellectual journey into economics and the discovery of many shortcomings of how economics is taught and practised.
Cahal’s latest Current Affairs article is called Rent Control is Fine, Actually.
Watch all his YouTube videos here, and find his terrific video on rent control we discussed here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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With all the cost-of-living crisis talk these days, you might wonder if it is possible for young Aussies to get ahead financially. But there is a group of people out there winning the financial game of life with their approach to financial independence.
The perfect guest to discuss personal financial habits is Matt, who runs the Aussie Firebug website, where he documents his journey of to financial independence, retire early (FIRE). It is well worth checking out if financial independence is on your agenda.
A couple of years back, Matt hosted a debate between me and Scott Phillips on superannuation, which you can listen to in two parts below.
As a financially independent person, Matt was able to start multiple businesses, one of which is a co-working business called The Collective Co-space. You can find it here.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Interested in learning more? Fresh Economic Thinking runs in-person and online workshops to help your organisation dig into the economic issues you face and learn powerful insights.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Taxpayers Alliance Chief Economist John Humphreys joins the FET podcast to talk all things tax. Is it possible to tax unrealised gains, as is proposed on superannuation accounts over $3 million in value? Maybe. But why bother doing it when it mostly changes the timing of taxation rather than the revenue?
We speculate as to whether it is a daring political manoeuvre—propose something you know your opposition will find outrageous to trick them into arguing for exactly the tax setting you actually want.
Enjoy this conversation on taxes, strange politics (where was this super-tax conversation pre-election?), my favourite topic of Effective Marginal Tax Rates, and more.
Side note: One thing John and I have in common is that we both want to scrap the superannuation system. I explain my reasons in this article.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Interested in learning more? Fresh Economic Thinking runs in-person and online workshops to help your organisation dig into the economic issues you face and learn powerful insights.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
Given the Australian media’s obsession with the housing crisis, it would come as a shock to many that the share of after-tax disposable income spent on rent by renter households is lower in 2025 than it has been for most of the last decade.
But that’s what ANU Professor Ben Phillips found in his latest research on rental affordability (you can find it here or download it below).
In today’s FET video podcast, I chat with Ben about this surprising data and how we can make sense of it in light of current housing “crisis” debates.
A key part of the story is this chart. It shows the share of disposable income (after-tax) income spent on housing for renter households. Notice that the most unaffordable period by this metric was 2012-2018.
The situation is not great for renters on the lower incomes.
There are people struggling at the bottom of the income distribution to keep up and rent where they previously could. But they are struggling to compete with those household who can pay higher rents.
One interesting part of our discussion was the big difference between the price growth in rent advertisments and price growth of rents paid by all renter households. The chart below, from Ben’s report, shows that advertised rents (in this case using Corelogic’s data) diverge from rents paid by all renters in a cyclical way, and by a surprising amount, with advertised rents being between 10% and 40% higher than rents paid by all renters.
Currently, the gap is near record highs.
The existence of a gap comes from the fact that turnover in the rental market is about 2.5% per month, or 30% per year, and the distribution is such that some properties turnover more than others and hence appear more regularly in the advertised rental figures. But why is the gap so cyclical?
We also chat about the fierce media debate playing out around the proposal to increase tax on the gains in superannuation accounts for the marginal amount over $3 million, which is just the top 0.5% of accounts.
This has been a hot topic online.
We chat about the feverish and unhinged reaction to what is a minor tightening up of an overly generous tax break that affects very few people.
And if you missed my recent deep dive into why scrapping superannuation could make us all better off, try this article.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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There is an interesting debate taking place in urbanist circles.
Is more density good for families because it helps reduce housing costs, or bad for families because it creates a lifestyle and environment that is not conducive to large families?
Indeed, we might consider changing our policies and regulations based on what we think is the answer to this question.
But do we have a reasonable answer?
Daniel Hess runs the More Births Substack and is on Twitter @MoreBirths. Daniel has taken up the case against density because of its potential fertility effects and is my guest for this FET podcast video episode.
Here is one of his articles on the topic.
But Daniel is not alone in his concerns. The negative correlations between urban density and fertility are clear to many.
In this episode, we discuss global and national fertility trends, and I push Daniel to justify why we should be concerned about these trends—after all, low-fertility places are the better places to live, have more opportunities for women, and many nations historically encouraged lower fertility to generate economic growth. In Hong Kong, the saying was “Two is enough”. In South Korea, it was “Stop at two, regardless of sex”. In Bangladesh, it was “One child is ideal, two children are enough”.
Were they all wrong?
I press Daniel to make the case for why low fertility is so bad, given that low fertility countries are generally the most desirable ones to live in.
Here are three previous FET articles on the general topic, which show that I am not so concerned about declining fertility.
A main issue Daniel identifies when it comes to the effect of housing density on fertility is the step-change in appropriateness of housing for families when increasing density from detached homes to apartments, even if the internal space in each dwelling is similar. Because of this, suburbia could be the secret sauce for high fertility.
This makes intuitive sense to me.
My own home is about 100 sqm internally, which is not too different from many nearby apartments. But it is on a 300 sqm lot and is therefore much more family-friendly than the 100 sqm apartments available in buildings just down the road.
Maybe intermediate densities, like the small homes and townhouses that are more popular in new subdivisions these days, can still be as conducive to family formation as homes on large lots while economising on space and infrastructure.
Unfortunately, this density is the most difficult to promote in existing areas where incremental change to much higher density and towers is usually the most economical for the property owner.
We didn’t have a chance to dig into the popular idea in urbanist circles that the market will accommodate all needs at all locations, but regulations prevent large apartments that can accommodate families from being built. If we could deregulate to unleash the large-format family apartment, then this fertility and density issue might be resolved.
For example, here’s one such statement
The fastest growing category of Toronto homes have zero bedrooms: Bachelor units grew by 28 per cent, jumping from 22,355 to 28,765.
"Basically, the only housing getting created in Toronto tends to be high-rise: 30, 40, 50 storeys," Mr. Moffat said. It's hard to put in units with three-plus bedrooms in those types of buildings.
A mix of high land costs, restrictive zoning, using investors as preconstruction funders and high development charges pushes builders away from creating family-style units, according to Mr. Moffatt.
I think such claims are 180 degrees wrong on the effect of regulations. Generally, if town planning rules limit housing types, they do so by preventing apartments so that detached homes are built instead, or requiring apartments that are built to be above a minimum size (or, in the language of The Great Housing Hijack, they restrain uses below the density equilibrium).
But even having more three-bedroom and larger apartments would miss the step-change benefit of detached housing for families.
Daniel comes down on the side of zoning regulations that promote detached homes where they would otherwise not be the market outcome.
A key economic pattern that comes up in our conversation is that although young people have many detached housing options in smaller towns, they still commonly move to large cities and pay a premium to live in smaller apartments.
For example, in Japan, small towns are giving away houses for free to try and attract families. In Australia, as in most places, housing is large and cheap in regional towns, yet the young people who grow up in those towns usually leave for higher-density places.
Should we take this as evidence that low fertility and higher density lifestyles are a choice being actively made? If so, why is it bad?
Finally, what of fertility policy?
Should we pay a $5,000 per-child baby bonus, like Australia has done, and now Donald Trump is proposing? Or are social and cultural factors more important? After all, a lot of the decline in fertility was promoted through intentional moral suasion and cultural shifts, so perhaps this is the way it will reverse.
I hope you enjoy the episode. I am keen to read comments from you all.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Was voting easy and efficient for you? This is something we should all appreciate.
Australia’s electoral commission makes voting easy. Our preferential system improves on first-past-the-post single-member electoral systems. And all of this happens quietly and quickly for $30 per vote, thanks to the Australian Electoral Commission.
Together with Jonathan Gadir, we riff on the good, the bad, and the ugly of elections.
As always, please like, share, comment, and subscribe. Thanks for your support. You can find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
Here’s some recent paid subscriber FET content you might have missed:
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Anna Samson has had a decade-long career in aid, was a US State Department-funded Fulbright Scholar, and has a PhD in international relations and American foreign policy.
In this episode we discuss the inadvertent economic and political outcomes of foreign aid on receiving nations.
What surprised me was Anna’s view on the scale of the rent-seeking across the aid industry and the transformation of the aid project into one of strategic military and economic interests rather than one of humanitarianism.
Apologies for the audio quality.
Please read Anna’s full article below about foreign aid, its failures, and its creeping national security objectives.
As always, please like, share, comment, and subscribe. Thanks for your support. Find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
The United States has had its fair share of Presidential foreign policy doctrines over the years.
The Truman Doctrine underpinned America’s Cold War containment policy to stop the spread of communism and Soviet influence.
After the 2001 terrorist attacks on the World Trade Centre, the Bush Doctrine brought us preventative military strikes and the ‘if you’re not with us, you’re against us’ principle.
Just over 50 days into his second term, the Trump Doctrine is shaping up to be ‘you can’t make an omelette without blowing up the entire chicken coop’.
Nowhere has this approach been more sharply felt than in the dismantling of USAID, a cornerstone of contemporary US foreign policy.
Jettisoning USAID has achieved symbolic and practical purposes; it is both exactly what MAGA fans hoped for and what its critics feared: Trump embracing radical honesty in international relations by saying the quiet bits out loud and rupturing the mythology of the self-limiting guardrails on Executive power.
Moments after his inauguration, President Trump, bolstered by Elon Musk’s analysis of USAID as “not an apple with a worm in it [but] a ball of worms”, froze $60 billion in overseas development aid and then stood down 97% of its staff.
Industry veterans highlighted thecatastrophe the Executive Orders caused: polio vaccination programs halted, tonnes of food aid left rotting in warehouses in the midst of famines, and a stop on urgent humanitarian assistance delivered to hard-to-reach conflict zones.
That’s the problem with applying a Silicon Valley move-fast-and-break-things mindset to government policy: you can’t just CTRL-Z your way out of any unintended consequences.
The recent Supreme Court decision ordering the Trump Administration to immediately unfreeze US$2 billion in existing aid contracts only provides temporary reprieve for those relying on American development assistance. The ruling doesn’t apply to billions in planned program funding or USAID jobs that have already been axed, both of which are the subject of separate legal challenges.
To the President’s detractors, gutting USAID is ideological and myopic. But it’s also another example of Trump seeing which way the crowd is moving and running out in front.
Indeed, rather than leaping to fill the void left by the US vacating the field, UK Prime Minister Keir Starmer announced a 40 per cent cut to his country’s aid budget. France and the Netherlands are also cutting their aid expenditure by about a third.
While Western aid workers are wringing their hands and UN buildings are lowering their thermostats as a cost-saving measure, the sector bears a great deal of responsibility for its own demise.
With little evidence to show aid programs are delivering on their grand promises of economic prosperity and development, spending billions on aid is increasingly justified as a tool to advance donor countries’ national security interests.
This connection is not new: the modern aid system was built by imperial powers to help maintain influence even as their former colonial territories were achieving political independence.
It should come as no surprise that many aid recipients are not exactly mourning USAID’s downfall. They point to numerous instances where USAID used humanitarianism as afront for meddling in other nations’ domestic politics.
For all the talk of ‘empowerment’ and ‘local partnerships’, government-funded foreign aid is rooted in and continues to reproduce historical structures of resource extraction, dependence, market distortion and racism.
Explicitly blurring the lines between humanitarianism and self-interest lays bare the iron fist of neocolonialism within the velvet glove of benevolence.
From the perspective of donor countries, all this real-talk about interests over altruism requires the aid industry to demonstrate bang for taxpayer buck.
It’s no accident that among the first casualties in DOGE’s USAID cuts were expat bureaucrats enjoying all the cushy accoutrements that a career in the aid industry guaranteed.
Government donor agencies - including Australia's Department of Foreign Affairs and Trade (DFAT) — frequently administer aid money inefficiently and ineffectively; 40 per cent of Australian aid investments were rated as 'unsatisfactory' upon completion.
If the aim of aid is to bolster our own security, not only should this causal link be established more directly, DFAT should explain why Australia funds aid over other defence spending with a clearer line of sight to maintaining the nation’s middle power status.
Current approaches to aid program evaluations, including in DFAT’s most recent Performance of Australian Development Cooperation Report 2023-24, do not provide that level of accountability. Taxpayers are expected to accept measures like “capacity building” and numbers of individuals “supported” or “reached” in pursuit of development goals.
USAID’s abolition, while confronting in its audacity, should not be met simply with self-righteous indignation about the supposed nobility of aid work or showing how aid can be weaponised to undercut the West’s rivals.
Instead, it should be seen as an opportunity to rethink the whole foreign aid system. It's a chance to create a world where countries drive their own development and self-interested ‘generosity’ and donor dependence are no longer required.
Decoupling foreign aid from national security will allow this money to do what it does best: humanitarian action based on foundational principles of humanity, impartiality, independence and neutrality.
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Richard Tooth has a plan—save 300 lives a year on Australian roads. How? By using economic ideas to align risks and incentives better.
Take a look at the chart below.
People who die on Australia’s roads are young. Preventing a road death would save 40-50 years of life on average. That’s big. Cancer treatments typically save 4-10 life years, then we get five to ten times the life gains from preventing a road death as many deaths from diseases.
I learnt from Richard that people will change their behaviour on the roads, either by driving more carefully, choosing a safer vehicle, or choosing not to drive at all, given the incentive to do so.
But how to improve people’s incentives?
Richard argues we can do this by changing how we regulate insurers. Give the insurers the right incentives for road-safety and they’ll encourage people to make better safer choices.
And it works.
He points out that relative to Australia insurers in the United Kingdom have greater – but still not optimal - incentives for road safety. In the United Kingdom insurers try to save money on payouts by offering discounted vehicle insurance to young drivers who opt in to telematics, a tool on your vehicle or phone that tracks your driving behaviour (braking, speed, acceleration, etc), which changes behaviour and only the whole reduces risks for all road users.
Here’s a working paper of Richard’s about changing the way insurance functions to align the incentive of insurers with reducing road injuries and fatalities, using the insurance relationship to incentivise safer driving choices.
It makes sense. Although I sometimes wonder whether such marginal changes make big differences, the fact that risk on the roads is heavily skewed by age and across people means that such incentives can have tangible effects on aggregate risks by focussing on those key people.
To give a sense of the scale of the benefits, Richard reckons that such incentive changes through insurance could reduce the road toll in the range of 20% to 40%, saving 300 lives of the 1,300 lives taken on the roads each year and preventing a similar proportion of the 40,000 road injuries.
In all, he reckons there are about $20 billion of benefits from better incentives to reduce overall road risks, while the cost of these changes would be extremely low.
If you have an interest in this policy area, please reach out and I can put you in touch with Richard.
For those who want to dig more into the topics we discussed, try these links
- The 2021-22 Parliamentary Inquiry into Road Safety. Note its the Committee’s Recommendation 26:
The committee recommends that the Australian Government work with state and territory governments, the insurance industry and other road safety stakeholders to investigate opportunities to reform motor vehicle insurance and to develop a roadmap towards policy and law reform.
The Government responded in October 2023.
The Australian Government will raise this recommendation with the state and territory governments, who are responsible for compulsory third-party insurance.
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The Bureau of Infrastructure and Transport Research Economics (BITRE) publishes an annual report that compares Australia's road safety performance with that of other OECD nations. Find it here. The BITRE also reports on the social cost of road crashes, and you can find that here.
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We spoke of the Tullock Spike and how decreasing risks for drivers in the road makes them behave in a way that increases the risks for others. This article on the Peltzman Effect describes the incentives at play.
As always, please like, share, comment, and subscribe. Thanks for your support. Find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
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Paul Frijters runs Academia Libera Mentis from a castle in Belgium. After a distinguished academic career in Australia and Europe, he is creating an academic oasis in the Ardennes for thinking, learning and growing.
I’ve written before about this project.
Today, we reflect on five years of the corona panic debacle, the economic and social fallout we are still experiencing, and what we could have known early on but refused to collectively acknowledge due to the madness of crowds.
We discuss in detail the enormous cost to our lives of lockdowns, the fact that the low-risk nature of COVID was clear early on from things like the Diamond Princess event, and how to minimise panic in the future when the unexpected happens.
You can read the full story of my COVID experience in these two articles:
Unfortunately, here in my city of Brisbane, we are going through another panic and lockdown. We are so far a week into a “cyclone lockdown”.
There have been two days of school closures in a large part of the state, deferred hospital treatments, extra delays of construction work (beyond justified by the weather), and shortages at supermarkets (especially toilet paper, the preferred emergency ration).
It is okay to prepare for potential power losses and strong winds. But “potential” is a key word here. Why did we panic early rather than waiting for better information?
Conditional statements seem too advanced. Differential consideration of risks—based on location in this case, rather than age and health condition in the COVID case—seem too subtle. All I hear is that a risk is a risk, so stop complaining.
The craziest part is how much people love it.
Take action, any action. Will that action help? Who cares! It doesn’t matter. And I fear that the collective impulse that makes for a rich and functional society is exactly the impulse that drives this behaviour. What else will we do to be part of the crowd in the next emergency?
Paul predicted in 2022 that as a society we would learn that an instinct for such action has been nurtured and that new lockdowns would emerge.
Here are some of Paul’s early writings on COVID and the nature of the crowd reaction to it from 2020 and 2021 that we mentioned.
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Here’s a March 2020 assessment of the sheer scale of the human cost of lockdowns, border closures and other policy choices.
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Here’s an August 2020 prediction of a baby bust (with some hope of a small boom).
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Here’s a 2021 explanation of how many physical policies probably led to more virus circulation rather than less.
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And here are some of Paul’s predictions from the comments section of this article about the likely ways the NDIS will be rorted from back in 2016.
As always, please like, share, comment, and subscribe. Thanks for your support. Find Fresh Economic Thinking on YouTube, Spotify, and Apple Podcasts.
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
A few weeks back, I had engineer Ben Beattie on the podcast to explain some of the unappreciated costs of transitioning to a renewable electricity grid.
Before this, Aidan Morrison had explained how many of the costs required to deal with variation in when and where energy is produced from wind and solar were excluded from the (in)famous GenCost report from the CSIRO.
Today, Professor Mark Diesendorf, who has studied the electricity grid and energy markets for many decades, provides the counterargument to these claims and makes the case that renewables will be cheaper in the coming decade.
A couple of insightful points I took away were:
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“Baseload” generation still requires some backup for breakdowns and maintenance
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Sometimes expensive electricity in countries with a lot of renewables is just measuring the expense of the country overall (my interpretation of his point).
We tried to get to the heart of where disagreements exist, and where they don’t, rather than talk past each other. I hope we achieved that.
Find Mark’s writings at https://www.markdiesendorf.com and his latest book, The Path to a Sustainable Civilisation: Technological, Socioeconomic and Political Change, here.
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In a recent FET article, I explained how the rental market adjusts to inflation arising in non-housing goods and services. Find that article here:
The key quote is this:
Another insight from the rental equilibrium is that inflation in non-housing goods means that renter households can pay more for rent because that means giving up fewerother goods and services for an extra quantity or quality of housing. This is the opposite of what many people might expect. Some might think that if goods and services have risen in price then households have less left over for rent, so rents should fall when there is inflation. This is wrong.
In this episode, Jonathan and I discuss the mechanisms at play, whether housing is different and more important than other goods and services, and more.
Enjoy.
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Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
Electrical engineer Ben Beattie runs The Baseload Podcast, providing “common sense and unfiltered commentary” on Australia’s energy sector. Given the enormous investments taking place now (and planned in the next decade) to transition Australia’s electricity grid to predominantly renewables, it is worth keeping a close eye on the engineering and economic realities at play.
To know if the costs of the planned energy transition path make sense given the benefits, we at a bare minimum need to know the true costs.
Follow Ben on X here and read his articles on energy issues at The Spectator here.
In the podcast, we discussed the graph below showing the total generation and demand in Australia’s electricity network (link here). Notice the enormous increase in nameplate generation capacity in the past decade while grid-electricity demand has remained flat. This shows that there has been very little extra energy generated for all that extra investment in capacity, as most of that new capacity is highly variable.
You can find data here on the daily generation from different sources in Australia’s grid. Below I show a typical day with the features we spoke about in the podcast:
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Coal (brown and black in the chart) is being curtailed during the day to make room for solar generation.
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Gas (pink) fills up the even period when solar generation quickly drops off.
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Wind (green) is variable and unpredictable throughout the period.
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A baseload of about 18,000MW of generation needs to be delivered 24 hours a day.
The Frontier report discussed offers an alternative to the Integrate System Plan (ISP) (in the jargon we used, this report shows what Toyota has for sale, not just Ferrari). You can find it here.
Lastly, find below a previous FET article by Aidan Morrison explaining some of the deceptive analysis behind the story of a renewables grid being the cheapest option.
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Follow Cameron and Jonathan on X/Twitter. Buy The Great Housing Hijack here.
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Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
Cameron and Jonathan discuss the trend of moving from Australia to cheaper countries abroad to beat the cost of living and the apparent inability to get ahead down under.
——————
Follow Cameron and Jonathan on X/Twitter. Buy The Great Housing Hijack here.
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Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
Cameron and Jonathan examine Australia’s proposed social media ban for kids aged 16 and find it hard not to be critical of it.
——————
Follow Cameron and Jonathan on X/Twitter. Buy The Great Housing Hijack here.
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Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
Robert Sobyra is the research lead at BuildSkills Australia. Earlier this year Rob predicted that Australian unemployment in December would be above 4.7%. I took the other side of the bet and that now seems to be the winning side.
Hear about why that unemployment uptick was forecast and the puzzling strength of the Australian economy, especially relative to its peers in Canada and New Zealand.
Also learn about how important immigration is, or is not, when it comes to skilled construction workers.
Find Robert on LinkedIn here.
——————
Follow Cameron and Jonathan on X/Twitter. Buy The Great Housing Hijack here.
Please like, comment, share, and subscribe.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
Robert is an insightful Aussie commentator who has written at Fresh Economic Thinking before about the puzzle of the Labor party refusing to move left politically.
Hear Robert’s thoughts on bicycle helmets, superannuation, school lunches and public transport fares and see if you are convinced by the arguments.
Find Robert on X here.
——————
Follow Cameron and Jonathan on X/Twitter. Buy The Great Housing Hijack here.
Please like, comment, share, and subscribe.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
Today we talk about the ongoing mystery of how to get sustained economic growth in Australia and peer nations and some of the political challenges we face trying to break out of this stagnation.
Australian journalist and economic commentator Tarric Brooker coined the term “Burnout Economics” and writes regular analysis at burnouteconomics.com.
Find Tarric on X here.
——————
Follow Cameron and Jonathan on X/Twitter. Buy The Great Housing Hijack here.
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Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
Why does the Australia Human Rights Commission think that the proposed misinformation bill is bad news?
In this deep dive we look at what is proposed in the Combatting Misinformation and Disinformation Bill and its strange provisions, such as the specific offences of questioning elections or referenda and questioning the merits of public health measures.
Looks suspiciously like an attempt to rewrite the history of the COVID era and the voice referendum.
——————
Follow Cameron and Jonathan on X/Twitter. Buy The Great Housing Hijack here.
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Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
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Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of Rigged: How networks of powerful mates rip off everyday Australians via their favourite podcast app.
Chapters will be released weekly over the coming months.
A physical copy or ebook can be bought here.
Rigged was originally published in 2017 under the title Game of Mates, but was …
If you have an interest in land value taxes and Georgism, you might have come across the acronyms ATCOR - “All taxes come out of rents” - and EBCOR “Excess burdens come out of rents”.
Tim Helm, Research Director at Prosper Australia, helps unpack these concepts and how they can be useful for understanding the economy in the 21st century.
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We step through the wild claims in a marketing campaign by the new superannuation lobby group Super Member’s Council. Find those claims here.
Can you believe that after all the fuss of super and getting people off the age pension, one of the big selling points used by the super lobby is that you can still get the age pension?
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It’s a classic economics joke. President Truman once complained about trained economists: “Whenever I ask their opinion, they say on the one hand, so-and-so; but on the other hand, so-and-so, On the one hand, — but on the other hand. I would like to meet an economist with one hand!“
In this episode, Jonathan pushes Cameron to explain why his recent interviews gave the impression that he thought there was nothing wrong with the housing market. Yet at the same time, he pushes for major public intervention. Which is it!?
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These are the final chapters. Thanks for listening, and thanks for your support.
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Michael Matusik has been a property analyst for decades. Find out his views on where we are in the cycle, what types of housing has a promising future, and more.
Follow Michael’s terrific Matusik Missive Substack here.
______
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This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
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Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of The Great Housing Hijack via their favourite podcast app.
Two chapters will be released weekly over the coming months.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
Ben is an economist at the Australian National University. He studies many of the big policy questions in Australia, from housing to childcare to welfare and more.
We chat about the misunderstandings of our economic situation that are perpetuated by the media, and how reality is more boring and generally positive than portrayed.
Find Ben on X/Twitter here.
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This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
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Two chapters will be released weekly over the coming months.
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How should we think about housing? As an asset, like a bond? If so, how would city planning affect its pricing?
Aziz Sunderji writes the excellent Home Economics substack.
Follow Aziz on Twitter here.
_____
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A new report on Speculative Vacancies by Tim Helm, Research Director at Prosper Australia, is out now (full disclosure, I currently do consulting work for Prosper on other projects).
Using water meter data for every residential dwelling since 2018, Tim looked at trends in long-term unoccupied (empty) homes on a suburb-by-suburb basis across Melbourne.
The concept of a long-term empty home is different to what we call housing vacancy, which typically refers to the number of rental advertisements, whether those homes are occupied or not. It is also very different to the concept of empty homes on census night, which is the source of the notorious one million empty dwellings figure.
Looking at this more comprehensive measure of properly empty long-term homes helps illuminate a big unresolved issue in our understanding of housing markets.
As the report says, it is “A window onto the economics of waiting and the hidden barriers to housing supply."
What it shows
The basic story is that the number of year-long empty homes in 31 council areas across Melbourne (excluding 33 postcodes with a high proportion of holiday homes), grew from around 23,000 in 2018 and 2019 (or 1.4% of all dwellings) to over 35,000 in 2021. That’s a one-third increase.
For homes with less than 50L of water use per day over the calendar year, the rate grew from about 3.9% in 2019 to over 5.7% in 2022, before falling a touch in 2023 to 5.2%.
It is also interesting to look back on previous reports and see that in 2012, only about 12,000 dwellings were empty year-round (with no water use) so the number in 2018 was already double the number just six years earlier.
The top ten postcodes in 2023 all had more than 10% of homes using less than 50L of water per day, and a surprising number of postcodes had 3% to 5% of homes with not a drop of water used for 12 months straight.
What it reveals
This is the more interesting part of the report. Let me quote at length.
We don’t understand vacancy well. There is little research on what drives it, partly due to limited measurement.
Some explanations centre on growth- focused investment strategies, investor inattention, tax avoidance, drawn-out estate settlements, loan conditions for investors, and slow adjustment of price expectations. But there is little evidence on which factors matter most or which policies would have the biggest impact.
On another level vacancy can be explained as a result of inequality – a sign that renters cannot afford to outbid the convenience value of an empty investment property. Some homes remain empty simply because their wealthy owners feel no need to use them.
The economic explanation boils down to the relative value of flexibility versus yield. The decision to leave a home vacant depends on the trade-off between option value and cash returns. (The next section explains how this also applies to land development.)
Empty property offers more options. If rents are low, landlords can avoid locking in low returns and the challenge of raising rent later. When sales prices are low, vendors can postpone sale, keeping the property untenanted to ensure the buyer pool includes owner-occupiers. If an owner plans to occupy their property in the future, keeping it empty makes this easier. The idea that property owners balance flexibility against yield is a catch-all explanation for these many and varied situations.
When flexibility is valued highly, leaving property empty is rational. As a stylised numerical example, with a net rental yield of 2.5% and a 5% sale price premium on an untenanted home, an investor waiting for optimal selling conditions would profit by keeping it vacant for up to two years.
The value of flexibility over yield is higher when yields are low and property is valued more significantly as a growth investment. This has been the case in recent decades, with low and falling interest rates. Taxing capital gains less than rental income reinforces this trend.
What about empty homes taxes?
These types of taxes, which add to the cost of flexibility of holding housing empty, seem to work to reduce empty homes and raise revenue. Here’s a table listing eleven such taxes from cities around the world.
Victoria has an empty home tax on its way.
The problems they often face are in the monitoring and enforcement. How do you prove vacancy? How can criteria be gamed?
My thoughts
I don’t think the fact that there are over 30,000 empty homes in Melbourne is what is causing rents and prices to rise. Melbourne has been a world leader in its rate of new home building in the past 15 years or so.
So I hope people don’t interpret the report as saying that this is the cause of prices.
I see it as, like the subtitle suggests, offering a window onto the economics of waiting—in other words, the value of flexibility. This is a very much overlooked feature of property markets and applies much more to vacant land without any homes than occupied land with empty homes.
Any theory of housing production (converting developable sites into homes) and housing utilisation (getting empty homes occupied) much grapple with the dynamic where waiting pays.
An interesting coincidence is that Canada’s CBC did some reporting on empty condos in Toronto a couple of weeks back too. Seems like empty homes are a normal feature of market adjustments, and we need to understand this if we want to understand housing supply in general.
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This was a great conversation that covered some big-picture issues about how an incorrect view of money changes our macroeconomic analysis, and also the finer details of monetary operations.
Find out more about the Modern Money Lab. And for those following closely, here is the document Steven refers to about the RBA buying Treasury bonds to maintain control of the interest rate. The relevant section:
"Under the TAP system there was considerable uncertainty as to whether the Government’s financing needs would be met by the financial market. The Government had the capacity to fund shortfalls by issuing Public Treasury Bills to the RBA ...... The TAP mechanism was not sustainable with increasingly flexible interest rates. As a result, a tender system was first adopted for short-term Treasury Notes in December 1979 and for Treasury Bonds in August 1982."
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Like many well-trained economists, I took Adam Smith’s argument about productivity gains being caused by the division of labour at face value. It wasn’t until I read Joan Robinson dismiss the argument in her 1973 textbook An Introduction to Modern Economics that I began to put the effort into understanding the division of labour.
I realised it was an incoherent explanation for productivity gains.
But I also realised that the pin factory story could provide valuable lessons about economics nonetheless.
Robinson dismisses Smith by suggesting that people can equally divide their labour across different tasks through time. The 18 distinct operations Smith recounts at the pin factory could just as easily be conducted by the same labourer on 18 different days to generate the same output per person over 18 days as in the case where labour is divided between workers.
Further, the fact that relatively unskilled labour could perform any of these tasks adds to the case that it is not specialist skills from the division of labour at play in generating productivity gains.
One-way causality from the division of labour to productivity gains is a highly problematic story.
But that leaves open the question about the actual mechanism that provided the enormous productivity gains in the pin factories of the mid-1700s.
Instead of Smith’s division of labour hypothesis, let me propose a capital investment hypothesis to explain the productivity of his pin factory. This hypothesis suggests that it is the technical nature of capital that determines the way labour will be divided across tasks to maximise output and that the division of labour is a response to this capital investment. The causality goes from capital investment to labour division.
To guide my inquiry I use the structured approach I have described in the past for confronting economic issues by first asking questions about aggregation. For example, why are there 18 tasks to make a pin, not 5, 9, 16, or 37? Why are 18 workers in one pin factory and not 9 in one factory and 9 in another owned by a different entity?
The answer to these questions is capital.
The image above shows the tools and equipment used in the pin factories described by Smith. Notice that the tools and machines in the picture have been designed to more efficiently perform distinct parts of the pin-making process. It is the way the tools have been designed to efficiently break down the task of making pins that leads to the labour division to man the tools.
Smith came close to instead presenting the capital investment hypothesis. He says
…a workman not educated to this business (which the division of labour has rendered a distinct trade), nor acquainted with the use of the machinery employed in it (to the invention of which the same division of labour has probably given occasion), could scarce, perhaps, with his utmost industry, make one pin in a day, and certainly could not make twenty. [my emphasis]
He suggests that the division of labour probably gave rise to the machines, rather than the machines themselves giving rise to the division of labour. This seems very strange to me.
And this logic comes undone later in the paragraph, even though he ignores the inconsistency in his argument.
…the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them. I have seen a small manufactory of this kind where ten men only were employed, and where some of them consequently performed two or three distinct operations. [my emphasis]
Even based on Smith’s observations it is the tools and machines that generate the 18 tasks. People can, and do, perform more than one of them. So how exactly did the division of labour give rise to the invention of the necessary machines that generate 18 tasks with only ten men?
If it was the division of labour that led to increased productivity, labour could just as easily be divided between firms. The fact that pin factories, even with only ten men, still performed all 18 tasks, instead of specialising in just 10 tasks, is clear evidence that there is something special and coordinated about the tasks themselves that arise from the particular capital investments. The tools and machines are designed to be compatible with each other, and if part of the process is done outside the firm, each of the two firms would inevitably be tied to the same compatible capital equipment, and would therefore find gains by merging into a single firm.
The next step in a structured inquiry is to ask questions about timing to see if we can more sharply distinguish between the division of labour and capital hypotheses. If it was only after the machines were introduced that labour was divided in a particular way, then that is evidence for the capital hypothesis. If labour was divided into 18 tasks before the investment in machines, achieving the same tasks in the absence of those specialist tools, then the division of labour hypothesis holds.
Quite clearly when we look at timing, the capital investment hypothesis comes out ahead.
The third and final step in our inquiry is to think about prediction. The capital investment hypothesispredicts that labour task specialisation can respond to capital investments in either direction—either with more division of labour or by adding to the tasks done by a single labourer.
A modern test of these predictions could be garbage collection. With rear-loading trucks, labour is divided between driving the truck and loading the bins. But with more advanced side-loading trucks with robotic arms, the labour is once again undivided between driving the truck and collecting the bins. The progression of capital technology determines the division of tasks.
The same would be true in the pin factory. If new tools were invented to get the same result with 5 steps instead of 18, that would be a huge efficiency gain but a major reversal of labour specialisation.
Where is the confusion arising?
What is strange to me is that increasing the number of possible production tasks in an economy means that each person does more tasks rather than fewer—the opposite of labour division.
Imagine a tribe of 50 people that can undertake 100 productive tasks. Then with the invention of new tools, the number of possible tasks the tribe can undertake expands to 150. The average tribe member is now doing three instead of two tasks each.
That doesn’t seem like labour division.
I think the confusion arises partly because of labelling conventions about roles in society rather than actual units of labour being devoted to fewer clearly defined tasks.
Here is a minimal example of mixing up socially-labelled productive roles (i.e. butcher, baker etc.) with actual tasks (baking, mixing, filleting etc.).Inspired by stories about how the division of labour was part of early human tool-making in tribes of Jordan, my example is a six-person tribe that undertakes six defined tasks, of which the two named roles undertake three tasks each. Thinking in terms of roles there are three hunters and three gatherers. That is, two types of specialist.
But in terms of tasks, there are six tasks to be done. Each hunter must be able to track, kill and clean the game. Each gatherer must collect, prepare, and cook the fruits and vegetables.
You might want to argue that the way I define tasks is open to limitless ad hoc classifications. Tracking an animal could be further divided into a team pursuit with specific sub-tasks for each member. Same with cleaning an animal. But this is kind of the point. Any defined task will be a bundle of sub-tasks. But to understand the division of labour we need to keep track of tasks at any one particular level of aggregation and not fall into the trap of calling something specialisation when it is just a different bundling of more tasks into one job.
One of the tribe members now invents the spear and woomera. Regular production of these tools requires three additional tasks to be undertaken by the new toolmaker role in the tribe. One former hunter becomes a tool maker, and one former gatherer becomes a tool maker.
Now, after this new capital invention, we have more roles and fewer people in each of them. Exactly as predicted by the division of labour story!But if we instead look at the tasks, we have more tasks per person. Instead of being able to specialise in one task, like tracking, each hunter must now undertake more than one task on average as there are only two hunters available for three tasks—the same for our gatherers. What we see as specialisation in roles is the automatic result, not the cause, of increasing productive capacities.
What has happened is that the invention of new production techniques has allowed more tasks to be undertaken by each person leading to fewer people in each role.
Here, we again see that it is the nature of capital that defines both roles and available tasks at a societal level, just as within a pin factory the nature of the capital equipment defines the roles and available tasks.
At the macro level, the most productive countries are not full of people doing repetitive narrowly defined non-skilled tasks, but highly educated people doing specialist roles involving a hierarchy of complex and interrelated tasks that require specialist capital and training to master.
So what?
Like many stories in economics, the division of labour as a productivity enhancer has been approached far too narrowly. There are many economic lessons in the story of the pin factory, and if we probed deeper we could understand more about what considerations determine the boundaries of firms, why firms are internally not structured around market principles, and other important questions about how we coordinate productive activities.
There is also a big question about the incentives to invest in new capital equipment and experiment with new technologies. Although economics has a focus on technology as a productivity enhancer, there is really limited coherent theory on what causes faster or slower capital investment. Had we taken a different lesson from Smith about his pin factory, perhaps our knowledge of capital investment incentives would be better today than it is, and we would likely understand the process of economic growth and productivity gain much better than we do.
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If the macroeconomy experiences a radical disruption, is a Universal Basic Income (UBI) going to help? How different is that from existing welfare systems?
And how likely is a rapid shock from a technology change like Artificial Intelligence (AI) compared to other shocks like we experience during COVID lockdowns?
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Just about every nation has a local debate about how it is uniquely bad at improving construction productivity.
But how do economists use that word and can we really interpret what gets measured in a meaningful way?
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This week Konrad Michalski chats about his foray into the world of political satire— how does he as an outside observer decipher the many stories we tell as we fight over the gains from our economic system.
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This is a public episode. If you’d like to discuss this with other subscribers or get access to bonus episodes, visit www.fresheconomicthinking.com/subscribe
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Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of The Great Housing Hijack via their favourite podcast app.
Two chapters will be released weekly over the coming months.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of The Great Housing Hijack via their favourite podcast app.
Two chapters will be released weekly over the coming months.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of The Great Housing Hijack via their favourite podcast app.
Two chapters will be released weekly over the coming months.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
This is a free preview of a paid episode. To hear more, visit www.fresheconomicthinking.com
Paid Fresh Economic Thinking subscribers can enjoy the audiobook version of The Great Housing Hijack via their favourite podcast app.
Two chapters will be released weekly over the coming months.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
It costs $30 billion a year in fees alone and takes 11% of wages as a non-tax compulsory payment from families at the time they need the money most, yet there is no lobby group seeking to scrap the wasteful superannuation system.
Cameron and Jonathan discuss how interest groups sprung up around the super honeypot, and contemplate how to form such an anti-super lobby.
Please leave your comments if you want to be part of such a group!
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Please consider supporting Fresh Economic Thinking — Australia’s newest one-man think-tank—by upgrading to a paid subscription.
Thank you to all my existing paid FET subscribers. You will get the audiobook of The Great Housing Hijack starting later this month via the FET podcast.
Your support helps me do things like a recent debate with Kevin Erdmann about “What makes housing more affordable? Public Investment vs. Market Liberalization”. You can watch it here.
Right now there is a Senate Inquiry into supermarket prices as well as a much more extensive and detailed inquiry by the Australian Competition and Consumer Commission (ACCC).
Supermarkets aren’t my highest priority in terms of the cost to consumers from their conduct (superannuation is far more costly - see here and here). But supermarkets nevertheless comprise a large share of household budgets and directly affect choices in our daily lives.
One dimension of supermarket competition revolves around location choices. Rules around these choices usually involve town planning regulations that seek to cluster retail activities in a hierarchy of locations.
This article is about how town planning rules are used as the basis for often frivolous anti-competitive legal cases, with some detail on a recent case in Brisbane.
But the bigger puzzle is this: Why have supermarkets for so long behaved so anti-competitively compared to other retailers or commercial and industrial businesses?
It might simply be the case that when there are few ways to innovate your product, you innovate on other regulatory margins to outcompete your rivals (see last week’s FET #29 podcast about the electricity pseudo-market).
What else is a supermarket to do to make more money?
A history of taming supermarket behaviour
Look at what has already come out of the initial testimony to the current Senate Inquiry on the topic of preventing competition through location choices.
The questions being put to Metcash CEO Grant Ramage during his session were mostly about land banking by Coles and Woolworths.
In the context of the supermarkets, land banking is a strategy where they buy up large areas of land across the country even if they don't have plans (or permission) to build a store there, therefore reducing competition.
Mr Ramage was asked about this behaviour by Coles and Woolworths throughout his appearance before the committee, and he agrees that they are engaging in land banking.
Senator Ross Cadell gave an example about land banking in the Hunter Valley in NSW, and Mr Ramage agreed that it was an example, where supermarkets can buy a proxy through a developer, gain the centre, and remove the independence.
Senator Dean Smith followed up with more questions about land banking by the supermarket giants, and Mr Ramage responded that he didn't think it was "overt or obvious".
"It happens under the radar, there is no obligation for the majors to divulge when they acquire property, it's not illegal," Mr Ramage says, adding they notify the ACCC and councils when they see it happening.
But this is not the first time that supermarkets have been in the firing line for their anti-competitive conduct. It seems to be the nature of this industry. Brisbane-based property analyst Ross Elliot notes that a senior Westfield executive told him in the 1990s that “we would object to a competitor moving a plant pot if we thought it was in our interests to do so.”
In that 1990s era, we were equally concerned about such behaviour. Here’s a 1999 review of retail trade practices by supermarkets. It took the view that although there was a lot of consolidation in the sector, there were benefits from economies of scale to consumers. What is interesting to note from a quarter of a century in the future is that the market share of Coles and Woolworths hasn’t changed as much as you would think, up from around 55% to 65% (depending on how you count). But there is now no Franklins supermarket chain and we have ALDI doing more than a third of the revenue of Coles today.
There was then a 2002 Grocery Inquiry dealing with the behaviour of supermarkets in their contractual arrangements with suppliers.
Strangely, in 2003 there was a headline about the Trolley Wars. People were upset that Woolworths and Aldi were outcompeting other grocery stores. This demonstrates that we don’t know what we mean by competition. One company comes and outcompetes another and that is uncompetitive. You can’t have competition without winners and losers!
In that same year, the ACCC took action because of Woolworth's conduct around preventing liquor licences from potential competitors.
In 2004, Westfield’s Frank Lowy tried to stop a supermarket on Brisbane Airport land near his Westfield Toombul shopping centre, as well as challenging a new shopping centre in Homebush in Sydney. This is a good line from that article:
The executive director of the Shopping Centre Council of Australia, Milton Cockburn, disputes the allegations of anti-competitive tactics (Westfield is a prominent member of the council). "Lodging legal action is not anti-competitive. What law says you can't defend the interests of your investors and retailers?" Perhaps Cockburn should have a look at the National Competition Council's report on planning and construction laws, which begins: "The major competition restriction in planning legislation is its potential to restrict the entry of new competitors into a market. This may result from ... manipulation of the process by commercial objectors to create delays in decision-making and significant additional costs for potential market entrants."
In 2005 the ACCC intervened to stop attempts by Coles and Woolworths leveraging their power to influence the sales of independent grocery stores.
Then in 2008, the ACCC conducted an inquiry into the competitiveness of grocery retailers, out of which came an undertaking with Coles and Woolworths to phase out restrictive leases that prevented other supermarkets from leasing within the same shopping centre.
During its Grocery Inquiry in 2008, the ACCC identified a practice where supermarket operators would include tenancy terms which may have prevented shopping centre managers leasing space to any competing supermarkets. This had the potential to impose restrictions on the number of supermarket outlets in centres and consequently fewer options for consumers.
"Over 700 supermarket leases were identified through the ACCC investigation as potentially restrictive, and this agreement addresses all those existing leases involving Coles and Woolworths, as well as dealing with all future arrangements. I welcome the cooperation of Coles and Woolworths in the development of this arrangement."
The agreement is in the form of a court enforceable undertaking that has been voluntarily provided by Coles and Woolworths.
More interesting for me is this 2010 report by SGS Economics for the Commonwealth Treasury about the planning system as a barrier to entry for supermarkets, and its comments that competition dimensions should not be a factor in planning decisions.
Yet courts were still busy with supermarkets trying to delay competition using planning appeals with frivolous legal cases even in 2012, as reported here.
Retail analysts say the result is that councils are lumbered with massive legal bills and shoppers face less choice and higher prices. More than 20 appeals against shopping centre and retail plans have been lodged in the Planning and Environment court in the past two years.
A 2009 voluntary undertaking by the supermarkets to remove restrictive lease clauses was a positive move for competition. Still, supermarkets were getting similarly effective outcomes with covenants on property when shopping centres were first developed. Here’s how that works:
"There are a large amount of centres where we are restricted from entering because of covenants," said Aldi's managing director for Victoria, Tom Daunt.
"It can be an outright restriction on the use of land by a previous owner who might be a developer for a major supermarket. The other case is clauses in leases of major supermarkets which effectively restrict competitors with quite dramatic rent reductions (if a rival becomes a tenant in the same centre).
"Covenants on available land and clauses in leases, they are all similar. They are all restrictions of trade."
It’s honestly quite something to see the frequency of these inquiries. I suspect this behaviour is economically motived in the same way that confusopolies emerge in undifferentiated industries like telephone, electricity, insurance, etc. Because there are no technology margins to innovate, you push hard on regulatory margins instead.
Of course, outside of the big two supermarkets, Aldi plays its own game, copying the colours and styles of food brands. The supermarkets have been upset about this.
He pointed to similarities between some of Aldi’s exclusive brands and national brands such as Bundaberg ginger beer, Procter & Gamble’s Pantene shampoo, General Mills’s Old El Paso taco kits and Kellogg’s Special K.
To wrap up this whirlwind history, supermarkets use their buying power to influence the actions of both suppliers and shopping centre owners to prevent competition.
Fine.
But there are also some puzzles.
Supermarkets defend their suppliers when it comes to protecting food brands from imitation. But then they also apparently squeeze these suppliers too. How do we reconcile this?
Shopping centre owners interfere with new supermarket locations on behalf of supermarkets. But I think this makes more sense because new venues compete with all tenancies and it is common to have turnover-based leases where landlords share in the turnover gains of tenants.
Also puzzling is that despite decades of concern about supermarket conduct, and what appear to be fairly aggressive tactics, grocery margins aren’t super high and the composition of players in the grocery market has changed quite a bit. There seem to be concerns when supermarkets are very competitive, squeezing down prices from suppliers, and also when they are anti-competitive.
I think a lot of the games we are playing here could benefit from clearer economic thinking on what competition really looks like.
The point I want to make today is to look at a recent case I’m aware of in Brisbane where the landlord of Woolworth’s at Newstead, is challenging a planning approval for a nearby shopping centre.
A Brisbane case of supermarket conduct
A new trend in Brisbane is the mixed-use retail, residential and commercial precinct. One of the more successful, and still yet-to-be-completed projects of this type is in my neighbourhood called West Village, a cluster of eight towers (seven residential and one commercial) above a retail precinct with medical facilities and other uses.
The model seems to work commercially and with many large sites with existing low-density retail and industrial uses in Brisbane suburbs, there are now planning strategies and rules that accommodate this type (such as the Suburban Industrial Strategy etc).
Another example of this type of project is called Buranda Village, on the site of a dated single-storey shopping centre, which is approved for seven towers (four being residential with around 700 apartments) over a 10,000 sqm retail centre.
The flood-ravaged and now under demolition Toombul shopping centre is likely to get a similar treatment when redeveloped.
But the project I want to talk about today is called Newstead Green, on the site of a car yard in the booming inner-city suburb of Newstead. It is approved for nearly 800 apartments, a major retail, commercial, showroom and lifestyle centre, the owner of the existing nearby shopping centre with Woolworths as the anchor tenant (AMP Capital, now owned by Dexus) is appealing the decision.
You can see the locations of the two sites below.
Notice also that on this map the purple, blue, and green shading are all new towers that have been proposed, and the grey are recently completed towers. This area is seriously developing. Thousands of apartments are already approved (including in this project). This seems enough local population to support an extra full-sized supermarket, which normally needs a catchment of about 5,000 people.
To be clear, the Brisbane City Council is now defending its planning decision to approve the project. The grounds of the appeal are of course many, but this part jumps out (pages 8-9).
i. The economic impact of the proposed development upon Gasworks Plaza will be significant due to the scale of the proposed retail component, its proximity to Gasworks Plaza and the extent of the proposed development’s trade area.
ii. The retail component of the proposed development seeks to replicate Gasworks Plaza which, given its close proximity to the proposed development, will provide no community benefit in terms of convenience or choice.
iii. These impacts will seriously erode the viability and vitality of the retail tenancies at Gasworks Plaza, thereby compromising the function of Gasworks Plaza.
iv. Centres provide a focus for public and private investment and community activity. Considerable investment has been made to provide infrastructure, buildings and businesses both within Gasworks Plaza and the adjoining area. This creates a vitality which is central to its function. By diluting economic activity to another location, direct economic impacts will be significant and the benefits intended by City Plan will be eroded to the detriment of the public interest.
v. The impact of the proposed development on Gasworks Plaza would exceed 15% of sales.
The last point gets to the heart of it.
I doubt there will be a 15% effect from today, especially considering the growth of the neighbourhood that will go along with a project of this scale. They are literally saying that the new centre will compete for customers and that they don’t like it.
Since we know that competition is not a valid argument in planning, this probably won’t fly — it will just cost time, money and the resources of the courts.
But now to the original question of supermarket bad boys.
If there was no supermarket here, but still plenty of retail space, the owner of a nearby shopping centre is unlikely to engage in this type of anti-competitive legal strategy.
If it was a new commercial building, owners of nearby buildings wouldn’t take these anti-competitive actions. If it was a new industrial project, again, the same.
Only supermarkets seem to be this actively engaged in anti-competitive behaviour in all domains, especially around real estate, lease conditions (stamped out by the ACCC), planning and zoning, contract conditions with suppliers, and other regulations.
Why?
Maybe it happens in the shadows more so in other sectors. But does it? Or are supermarkets just the bad boy because they have no other innovation to offer to increase their profits?
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You might have heard this: “The biggest SCAM in life: Paying taxes on money that you make, taxes on money you spend, and taxes on things you own, that you already paid taxes on, with already taxed money.”
A previous FET article explained why this makes no sense, as money circulates and value accumulates. We chat more about why this is wrong and what are legitimate issues in the Australian tax system.
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Do you suspect electricity retailers are scamming you?
You're probably right.
Jonathan rants about how a strange note on his power bill sent him down the rabbit hole to discover just how stupid and funny our energy retail pseudo-market is.
The long bureaucratic incubation of the Better Bills Guideline is here.
Former Greek Finance Minister Yanis Varoufakis says that if the energy market is complicated, it is because it was intended to be complicated so that people don't understand it's a scam.
Here’s Cameron’s first-ever blog post about confusopolies.
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The economic performance of the United States in the past year has been exceptional compared to Australia, Canada and New Zealand.
Here’s why.
The United States is still stimulating its economy with Covid-era monetary policy because of its unique mortgage market with 30-year fixed interest rates.
Manipulating the price of mortgages and via this, housing investment and prices, is the main way we manage the macroeconomy.
We call it monetary policy.
The basic economic idea is that we need households to spend more money to combat a downturn in the macroeconomy. One way to relax the budget constraint of households is to lower interest rates. Doing so reduces mortgage payments for some households and financing costs for buying new homes (and cars and other durable goods) for all households. This extra spending stimulates economic production activity.
Other non-housing effects happen when we change nominal interest rates, or what we call transmission mechanisms. These include effects on business investment decisions which are moderated via the price of borrowing.
One important side effect of monetary policy is that asset prices are tied to interest rates, particularly housing assets, where debt financing is common and risks are relatively low. When interest rates go down it means you can rent money from the bank as a mortgage for a lower cost than renting a home from a landlord. So people do it! When everyone does it, that pushes up housing asset prices.
This is exactly what happened globally during the 2020-2022 Covid panic. I predicted at the time that home prices would rise, despite widespread commentary that they would crash due to economic disruption.
Central banks worldwide have now reversed that policy, raising interest rates to tighten households' budgets and reduce their spending.
But different financial setups in different countries mean that raising interest rates affects household spending quite differently and hence the same interest rate change is more contractionary in some places than others.
This is why currently there is such an economic boom in the United States more so than peer nations with similar monetary policy settings.
The difference is the 30-year fixed-rate mortgage.
When interest rates are lowered, existing mortgage holders can refinance at lower interest rates, which relaxes the budget constraint of households as it does in Australia with our variable rate mortgages.
But when interest rates are raised, this does not constrain the budgets of existing mortgage holders whose repayments are unchanged because of the long fixed rates. There is an asymmetry in monetary policy transmission in the United States that doesn’t exist in Australia.
The chart below shows how few fixed-rate mortgages exist in Australia, at around 15% of mortgages, relative to the United States (~95%) and countries like France (~93%), Belgium (~92%), Germany (~90%) and Mexico (~100%). Australian fixed-rate mortgages are also much shorter in duration, typically 2-4 years, whereas 30 years is the most common in the United States.
This matters. There are $2.2 trillion worth of outstanding mortgages in Australia. Every additional 1% point higher interest rate reduces spending power by $22 billion per year from mortgaged households. These households are likely to spend most of their budget and be saving little. That 1% point higher interest rate gives back most of this amount to bank deposit holders, but these households are holding long-term deposits because they want to save money, not spend it.
So the 3% increase means a decent share of $66 billion less in consumer spending compared to the same interest rate rise if outstanding mortgages all had fixed interest rates.
The data shows that an extra 5% of household income is now used to service debts compared to 2021, up from 13.5% to 18.5%. But this figure has fallen in the United States and almost no change in Germany.
Despite rising interest rates, the asymmetric transmission of monetary policy in the United States means it still has an expansionary monetary policy position, unlike countries such as Australia, Canada, and New Zealand. They also have quite a few fiscal policy programs now being enacted.
These smaller nations with more interest rate-sensitive mortgage markets are likely to see the heat come out of their economies much faster than the United States. Consumer spending is likely to fall sooner, with accompanying increases in unemployment. Perhaps this will lead to lower domestic inflationary pressure.
What then?
The likely reaction will be to lower interest rates.
One risk is that if these small nations start lowering their interest rates, their currency values will decline as traders seek to hold more USD relative to lower interest rate currencies, leading to more inflationary pressure on imported goods and things like petrol, which are very visible to consumers.
An alternative is to use more fiscal policy—perhaps build some public housing. But fiscal policy can be slow. Cash grants are a faster alternative to relax the budget constraint of households.
Whatever we do, these differences in how each country’s economy reacts to the same policy settings matter in understanding economic trends. They also matter when thinking about how to manage macroeconomic cycles as a small nation in a globally connected economy where one of the major economies has an asymmetric transmission of monetary policy relative to its peers.
NOTE: This article explains important differences in how inflation is measured in Australia versus the United States which is also still relevant.
ICYMI: Thanks to paid subscribers I can do things like speak to the students in the Economics Olympiad about careers in economics and housing markets. Watch that conversation below.
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This is a different FET episode. It was recorded in December 2023 in Wellington with Bernard Hickey for his podcast at The Kaka. Tim Helm and I talk about important and often neglected economic details in the housing supply and price debates.
However, in the four months since, Hickey couldn’t find the time to post this conversation, despite the housing topic being a major media story and finding time to interview and upload conversations with many others on this topic.
For some backstory on the heated Wellington zoning debate, please read this FET article.
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What is The Great Housing Hijack? Who’s housing crisis is it anyway?
And why do we need to understand the economic concept of equilibrium to know whether our housing policy will work?
Jonathan and Cameron chat about the new book and the big ideas within it. Get The Great Housing Hijack on Amazon here.
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Thank you to paid FET supporters. Your support allows me to do things like:
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Appear as an expert witness at the Senate Inquiry into Shared Equity (was 5th March)
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Appear at the Senate Inquiry into Retirement (on Tuesday 12th March).
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Conduct a seminar on housing economics for NSW regulator IPART (also 12th March)
The season for change in higher learning is now.
Not only have I started Fresh Economic Thinking as an independent place to do science—conduct research, teach, and engage in public debate—I am also involved as a mentor and teacher at Nova Academia.
Nova Academia is a new college based in a castle outside of Theux, Belgium, run by a team of academics to create an “academic oasis” for research and teaching and to challenge great minds.
The image above is the new campus. It makes me think of the X-men, where gifted students got together in a castle for intensive training in their craft but also to build life skills.
Here’s the pitch.
Where once you were challenged intellectually and became responsible adults, university students find themselves in large impersonal bureaucratic systems that treat you as fragile and in need of protection from wrongthink. You are taught compliance and dogma, leaving you unprepared for the demands of work and adulthood. We – a group of outspoken academics, thinkers, and citizens – have seen our universities abandon you.
Why waste your life in such soulless places? Come join our oasis in a beautiful castle in the Ardennes. Live on a campus with freedom of speech. Discover yourself and the world, and escape from constant fear and online distractions. An open community where art, aesthetics, movement, and genuine interactions are as important as academic content.
Is this for you? It is not a place for passive consumers: it is where you will expand your thinking, become a more responsible adult, set up creative activities for others to join, design solutions to economic and social problems, and prepare for future jobs and studies. Graduates and academics will have made friends, acquired valuable critical and job-relevant skills, and developed improvements to major sectors of our society.
Currently, the subject areas are economics, political economy, and health and well-being. If you are thinking of pursuing further education in these areas, consider this option.
To begin over the next couple of years, the basic course structures are one-year live-in programs that start with 6-months of core curriculum then specialisation and research.
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The Gap-Year Program is for high-school leavers and undergraduates looking for a challenge to expand their horizons and get exposure to new disciplines.
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The Finishing Year Program is for recent graduates and professionals looking to spend time in deep learning about a topic, perhaps one outside their technical expertise.
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The Avant-Garde Program is for young leaders looking to make a difference in the world.
There are two actions to take if this sparks your interest.
First, go here to the website to get the vibe of the place. It is very early days. Pricing is yet to be confirmed. At the moment, Nova Academia is for risk-takers and leaders. It is an experiment in learning.
Second, attend the online information session on 16th March 2024 (which is unfortunately around midnight in Australia).
As I noted, I am part of the mentorship group that students will have access to and will be teaching in early 2025 in some form about the economics of corruption and property markets.
More details about the vision for this new education project are in the below document.
Read more below from Paul Frijters about the problems he sees in modern universities that have left open a market niche for places like Nova Academia.
Problems With the Modern University
Professor Paul Frijters
We observe three interconnected problems with modern academia. Each problem hampers universities’ ability to deliver on their mission to curate free and critical thought, produce new knowledge, and graduate students prepared to serve the needs of their communities.
- Bureaucratic bloat
Universities today are administratively bloated, a phenomenon also noted by many others (e.g., Raewyn Connell) that self-perpetuates via national and international bureaucracies. Bureaucracy naturally expands and expands, costing the time of academics and students. US universities in 2010 were found to function perfectly well with an administration-to-faculty personnel ratio of just 1 to 3, but the typical ratio observed that year was at least 5 to 3, and getting worse. Yale recently reported that it has as many administrators as it has students. This bloat represents easily 50 percent of all expenses in a university and perhaps more than that in terms of lost productivity, if one includes both additional expenses and the production prevented by over-regulation.
An example of how this bureaucracy is self-perpetuating is seen in the process of accreditation. Accreditation agencies, whether private or public, largely measure the presence of administrative staff, policies, and requirements (processes, procedures, KPIs, progress reports, databases, ethics committees, and so on). In turn, accreditation is used as a prerequisite for student access to state loans, for purposes of fulfilling job requirements, or for academics to be able to apply for research grants from state agencies. Receipt of research income is then used in marketing to students and to pursue higher levels of accreditation. In this way, the university bureaucracy is both mandated and protected by the associated national and international institutions around accreditation, research grants, state job applications, and state loans. Only institutions with large endowments – either private endowments, as in the States, or state subsidies in the form of free public land or other state-provided resources – are able to keep up and become known as high-status universities in this bureaucratic race.
Administrative bloat has many other consequences, amongst which is that many university functions now follow bureaucratic rather than academic logic, ignoring the purely academic benefits to activities and focusing instead on finding and privileging reasons for the bureaucracy’s own existence. This leads to a perennial search for problems that can be exaggerated and turned into a justification for more administration (e.g., ‘Is there a problem I can pretend to solve by creating an additional compliance problem?’).
A clear example of this is seen in human subjects ethics policies, which today involve many committees and result in the strange reality that social science academics, whose job it is to do research about humanity, are bound by rules that in no way bind millions of businesses and government departments that treat people far worse than they are treated in most research involving human subjects. The bureaucracy has created a kind of administrative ritual, justified by the need to be careful when doing research with human subjects, that demands yet more administration, goes far further than the law of the land, and naturally crowds out individual responsibility.
- Universities as businesses
The modern university has become a business run for the personal glory and profit of its management, rather than an institution serving a public-good function that reflects the desire for knowledge in a whole community. Universities are now large property owners, suppliers of visas, organisers of consultancy services and places where business and management careers are made, all of which feed a commercial but not necessarily a community mission. Universities today play a real ‘game of mates’ (Murray and Frijters, 2022).
This new orientation has many consequences. One is an inability to effectively caretake the physical and mental health of students, because the question of ‘what good could we do’ is neither the starting point nor any longer built into the self-image of the university. A second is the loss of a positive community story, leaving a vacuum that is now filled with self-hatred and divisive doomsday stories. A third is that relevant research has been replaced by performative research. Fourth, truth is no longer treated seriously, having been replaced by feel-good promises. Fifth, public lectures have reduced in importance and publishing is increasingly seen as a pure status game, leading to territorial issues. Worst of all perhaps is the demise of the university as a place where people try to solve community problems.
- Mediocrity and cowardice
Second-rate and disconnected teaching, based on what students with limited understanding enjoy hearing, is coupled in today’s universities with disconnected theories that are largely for sale (e.g., content for schools of medicine influenced by Big Pharma, theories on taxation and private property pushed by billionaire think tanks, and old textbooks rehashing tired theories that dominate the market and from which disciplines cannot escape). With mass teaching have come low-quality students, dragging standards down, but also the reality that university activities become relevant to institutions (including the state) wishing to manipulate whole populations – reducing universities’ independence.
Immersive teaching and travel are seen today merely as risks, rather than core activities, by university managers who do not weigh the risks versus benefits of university activities with respect to fulfilling a community service role.
The result of these trends, coupled with broader social trends over the past generation, are alarming. Cognitive outcomes and several indicators of university success in the West are now visibly suffering relative to a mere 20 years ago. Not only do our children have lower IQs and a reduced capacity to think abstractly, but the mobility of young people is lower. On top of this, the returns to college graduation vary widely by degree, and facing large numbers of negative-return degrees, over 50 per cent of Americans think degrees are not worth the cost.
These problems feed into each other and mutually reinforce a bad equilibrium for the system as a whole. The incentives are strong for university staff who are low-quality and demotivated to find ways of avoiding higher-quality demands or demands to reduce bureaucracy (which would lead to layoffs). A peer-review system that has metastasized into a mechanism for punishing real innovation and reward for super-specialists by established territorial groups spawns textbooks and academic societies reflecting those territories, creating more barriers to real renewal. The increased importance of research status signaling makes all of this worse, as ‘winning’ on the terms of the existing system becomes more important, punishing innovation and broad thinking even more.
Joy and spiritual meaning have been replaced in today’s universities by dull, low-quality mass teaching and mass research. Strong lock-in effects make escape for existing universities nigh impossible. As early as 2012, we observed that an Australian university wanting to do something about quality or bureaucracy would upset the unions, the existing students, the local politicians, and even the alumni (who would suddenly hear from their own university that the degree they thought was great was in fact not great). New entrants would face extreme pressures to copy the basic failed model, both due to demands for bureaucracy by accreditors and students, and due to the need to look good on signalling measures (rankings, research income, etc.). A pessimist might think the only way to change is for the whole system to eventually lose legitimacy and then implode as the demand for education finds substitutes abroad and in external institutions, like homeschooling.
With great upheavals, making a portion of the population lose faith in the state and in the many institutions associated with power and money, come new opportunities. The signs that we may be at such a juncture now are seen in the increasing percentage of people who have lost faith in the news and in local politicians (shown in surveys like this one), the prevalence of beliefs that standards have fallen, and the rising percentage of people opting out by homeschooling or paying for private education rather than trusting the state.
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Who is Immanuel Wallerstein and does his “world-systems” approach provide insights into our social and economic world?
Check out some of Wallerstein’s writing here, and an interesting an relevant article on his thinking for today is here.
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I talk to Tim Helm about the rise of “Yes In My Back Yard” (YIMBY) as a cultural movement and dig into some of the economics missing from housing debates.
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Australia in 2022-23 has seen record net immigration, as have other countries such as New Zealand, Canada, and the United Kingdom.
We discuss the structure of Australia’s immigration system, the economics of our policy choices, and what might be a more sensible immigration program.
Leith is the Chief Economist at Macrobusiness.
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Have you ever thought it might be possible to retire early? My guest today is Matt from Aussie FIREBUG who has done that. He’s been part of the Financial Independence, Retire Early (FIRE) movement. What’s it all about, and does it make economic sense?
Find out all about the FIRE movement at Aussie FIREBUG.
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What is a property buyer’s agent? How can trading housing be more efficient? And how we can boost the regions to take population pressure off the capital cities?
Hear Pete’s views on these questions and more in this engaging chat and follow him on X/Twitter @PeteWargent.
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You might have heard that renewables are the cheapest new electricity generation technology. But is this claim true?
Physicist and businessman Aidan Morrison looked into the assumptions and analysis in the various reports that produce such claims from organisations like the CSIRO and AEMO.
Aidan has published his initial analysis of the “sunk cost assumption” hidden in these reports at Fresh Economic Thinking back in July. He has also released a terrific video explaining how the analysis gets it wrong.
We discuss these problematic issues in much more detail.
Aidan posts as @QuixoticQuant on Twitter.
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Tim Helm is the Research Director of Prosper Australia. We chat about Tim’s intellectual journey into the economics of property and housing, and his views on housing prices and debates about supply. The Auckland analysis referenced in the episode can be found here and here.
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What are the legal and economic issues that arise when trying to enforce a duty of care to future generations?
Cameron and Jonathan discuss the legal and economic questions arising from the Private Senators Bill by David Pocock intending to “legislate a positive duty of care, creating a requirement for politicians and policy makers to consider the impact of climate harm on young people and future generations.”
This comes on the back of a 2022 Federal Court of Australia ruling in the appealed case of Minister for the Environment v Sharma, which found against such a duty.
This case was brought by “eight brave children led by Anj Sharma (with the assistance of 86 year-old litigation guardian Sister Brigid Arthur), against the Federal Minister for the Environment to protect young people from the future harm caused by the climate change impacts of a proposed coal mine extension project in NSW known as the Vickery Extension Project.”
Read about that court case here.
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There has been a lot of news on both the housing policy and COVID policy fronts recently. Cameron and Jonathan share their thoughts on things like the Housing Future Fund, the latest on Australia’s COVID vaccination injury compensation scheme, a new anti-discrimination bill about COVID vaccines, and news out of the United States about hidden influences behind the COVID mandates, and more.
The Lee Fang article on Pfizer’s lobbying and financial influence is linked below.
The United States Senate report on COVID origins is available here.The Australian bill on vaccine discrimination is here.
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Why does an economist start a website documenting the effect of city upzoning?
Matthew Maltman is an Australian economist who runs the website onefinaleffort.com. In this interview, Cameron talks with Matthew Maltman about the case for experimenting with zoning changes to understand what really happens. Did Auckland fix its housing problems with upzoning? Where are other planning rule changes being tested?
Find Matthew on Twitter at @1finaleffort
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Misha Saul is an investment manager by day, but by night he is also one of the more interesting participants in Australia’s economic, cultural and political debates. He has broad interests in history, culture, war, finance and business, and always gets you thinking. For example, Misha wrote an essay entitled A “New Hong Kong” in Australia? where he mused about building new cities and how we might become more radical and ambitious about what is achievable.
Follow Misha’s terrific Kvetch subtack and find him on Twitter here.
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What exactly is Super? What’s its purpose? How can we do retirement policy better?
This is Part 2 of a special joint episode where Cameron is hosted by Matt from Aussie Firebug to participate in a debate about superannuation with CIO of The Motley Fool Australia, Scott Phillips.
Find Part 1 of this episode here.
Check out Aussie Firebug here.
Follow Cameron and Jonathan on Twitter.
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Please leave a comment with your ideas for future podcast conversations and Substack posts.
Thanks for reading Fresh Economic Thinking! Subscribe for free to receive new posts and support my work.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit fresheconomicthinking.substack.com
What exactly is Super? What’s its purpose?
This is Part 1 of special joint episode where Cameron is hosted by Matt from Aussie Firebug to participate in a debate about superannuation with CIO of The Motley Fool Australia, Scott Phillips.
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What is the purpose of Super?
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Is there an alternative to the current Super system?
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Thoughts on how we could fix the Super system
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Do we actually need to have both Super and the Age Pension?
Check out Aussie Firebug here
Follow Cameron and Jonathan on Twitter.
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Please leave a comment with your ideas for future podcast conversations and Substack posts.
Thanks for reading Fresh Economic Thinking! Subscribe for free to receive new posts and support my work.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit fresheconomicthinking.substack.com
The Economist magazine recently wrote about the “worrying amount of fraud in medical research” and the former editor of The BMJ medical journal, Richard Smith, asked if it is “Time to assume that health research is fraudulent until proven otherwise?”
Too many designated experts in our society are anything but. They get things wrong, and when they do, they impose enormous costs on others.
Is a “f**k up levy” a solution?
Experts would pay a levy so that when they inevitably screw up we can use the money collected to compensate those who bear the costs. This is the idea that kicks off the conversation this week.
Follow Cameron and Jonathan on Twitter.
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Our first FET podcast guest is Catherine Cashmore, an experienced property professional. Catherine’s insights are unique because not only does she have on-the-ground insights about property investing, she has a deep understanding of the theoretical and policy debates about housing and property that have happened since the days of Henry George in the late 19th century.
As well as dealing with this long history of property debates, we ask Catherine about what buyers often get wrong about property investment, whether there is a financial logic to renting instead of buying, and what might be next for Australia’s property market.
You can find out more about Catherine and her thoughts on property markets and policy at the following places.
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The Land Cycle Investor is a free newsletter including lots of cool interviews!https://landcycleinvestor.fattail.com.au/
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Cycles, Trends & Forecasts, containing in-depth information concerning the land cycle, how it applies to Australia and how to use the knowledge to create wealth.https://fattail.com.au/subscription/pan/
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Catherine’s personal website is at cashmoreco.com.au
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Prosper Australia is at Prosper.org.au
Follow Cameron and Jonathan on Twitter.
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Is economic growth possible in a finite world?
It’s a big question. In this episode, we discuss whether economic growth must come with more resource use, whether that is good or bad, whether degrowth is possible, and practical ways that societies get good environmental outcomes.
Also, learn how Cameron has changed his views on this after a decade of research and why he now has an optimistic view about our environmental future.
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“Prediction. In ten years it will be hard to find anyone who will admit to supporting COVID lockdowns, school closures, masks, and vaccine passports.”
That was Cameron’s viral tweet this week. It gets to the heart of the great unwinding of COVID panic, an opinion shift that is becoming more evident by the day.
A similar unwinding is happening in the crypto world with the collapse of the FTX exchange. Those who bought into crypto hype for years are now changing their tune. The libertarian impulse that fed the hype turned out to just be a story, as many losers in this Ponzi scheme are now asking where the financial regulators were all along.
Lastly, in economic news, Australia has seen wage price growth of 3% in the past year, but household spending is up 28%. How can that be?
Follow Cameron and Jonathan on Twitter.
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It has been a tumultuous 2022. Residual COVID panic persists in the news, but the real health issues this year are not COVID. Deaths from all causes are up 17% in Australia in 2022 and are similarly elevated in many countries.
We look at Australia’s COVID vaccine compensation scheme and dig into the puzzle of why the media seems to be ignoring 2,600 injured people who have made compensation claims.
These health outcomes were a policy choice. But no one seems to care.
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We first chat about recent observations from our travels of what you notice about “rich” countries (whatever you interpret that to mean).
Then, we tackle one of my pet topic of Effective Marginal Tax Rates (EMTRs)—that is the combined effect of both taxes and losing welfare from earning an additional dollar (due to “means testing”). David Sligar’s recent article on the topic caught our eye.
I help clarify my argument that capital gains are just incomes with a different label, with nothing unique about them in economic terms compared to wages or other income. We can transform one into the other with accounting tricks. This was the topic of a recent substack post.
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We also take a deeper look at the issues with a new Credit Suisse report that is getting headlines claiming that Australians are the richest people in the world because of our expensive houses. One of the big issues with such reports is the way certain assets are counted by others are not.
In the barney of the week, we look at how New South Wales has refused to cooperate with Queensland’s new land tax laws. Note that the news today (after recording) is that the Queensland government has reversed these announced changes.
We also talk about effective marginal tax rates, a pet interest of mine.
Follow Cameron and Jonathan on Twitter.
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We also take a deeper look at the issues with a new Credit Suisse report that is getting headlines claiming that Australians are the richest people in the world because of our expensive houses. One of the big issues with such reports is the way certain assets are counted by others are not.
In the barney of the week, we look at how New South Wales has refused to cooperate with Queensland’s new land tax laws. Note that the news today (after recording) is that the Queensland government has reversed these announced changes.
We also talk about effective marginal tax rates, a pet interest of mine.
Follow Cameron and Jonathan on Twitter.
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Please leave a comment with your ideas for future podcast conversations and Substack posts.
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We change the pace a little this week and discuss Jonathan’s political dilemma — he has no one to vote for who represents his range of views. Perhaps the way around this is via more direct democracy, whereby you vote directly for each policy rather than voting for a political representative. Or maybe we skip the voting altogether and randomly draw our politicians from the general public, just like we do with juries.
Follow Cameron and Jonathan on Twitter.
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Please leave a comment with your ideas for future podcast conversations and Substack posts.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit fresheconomicthinking.substack.com
We change the pace a little this week and discuss Jonathan’s political dilemma — he has no one to vote for who represents his range of views. Perhaps the way around this is via more direct democracy, whereby you vote directly for each policy rather than voting for a political representative. Or maybe we skip the voting altogether and randomly draw our politicians from the general public, just like we do with juries.
Follow Cameron and Jonathan on Twitter.
Theme music: Happy Swing by Serge Quadrado Music under Creative Commons Licence CC BY-NC 4.0
Please leave a comment with your ideas for future podcast conversations and Substack posts.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit fresheconomicthinking.substack.com
In our barney of the week, we talk about queuing for rentals in Ireland. A viral photo triggered widespread blame on local tenancy law changes. But hot rental markets are a common trend globally in 2022 as all markets readjust from the COVID years.
We talk about Mr 283, the whinging landlord with 283 properties who thought it wise to call talkback radio to complain about a proposed rent freeze. What’s that all about?
Also, we reflect on that time Paul Keating said that the superannuation system can’t function as a national insurance system for the elderly and proposed a better age pension. What the?
Don’t miss this recent substack post about income smoothing referred to in this conversation.
Follow Cameron and Jonathan on Twitter.
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Hot off the presses, Rigged is the second edition of Game of Mates. To mark the book’s release on 2 August 2022, we chat about the new bits which includes hypochondriac level largesse to the pharmaceutical industry. And in our barney of the week, an economist writes a paper for Uber and gets payed $100,000. Economists say there is no wayyy he did it for the money.
Rigged: How networks of powerful mates rip off everyday Australians
fresheconomicthinking.substack.com
https://twitter.com/DrCameronMurray
https://twitter.com/JonoLooseCannon
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What Singapore has that Australia does not is high and growing home ownership and… a public housing developer. Cameron argues instead of fiddling around with arcane schemes like we are now, we should just have the government build homes like they do in Singapore. Cameron’s proposal is called HouseMate. He also confronts myths about rent control in the barney of the week.
https://fresheconomicthinking.substack.com/p/how-to-get-land-into-the-housemate
https://www.abc.net.au/news/2022-02-06/could-australia-learn-from-singapore-to-make-housing-affordable/100801082
fresheconomicthinking.substack.com
https://twitter.com/DrCameronMurray
https://twitter.com/JonoLooseCannon
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Wouldn’t it be nice if the government didn’t give away our resources for nothing to their big business friends? Cameron weighs in on the gas supply crisis as an example of a ‘game of mates’. We talk more broadly about corruption in poor countries compared to rich countries. In the Barney of the Week, Cameron says ‘meh’ to the excitement over getting rid of stamp duty.
Canberra Times article by Ebony Bennett
Australia is about to get ripped off by the gas industry, and it's not the first time
fresheconomicthinking.substack.com
https://twitter.com/DrCameronMurray
https://twitter.com/JonoLooseCannon
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Cameron challenges some of the core beliefs of crypto enthusiasts and economic libertarian types who are into Bitcoin and gold as solutions to inflation. And... should we be terrified of central bank digital currencies that will control what we can buy?
fresheconomicthinking.substack.com
https://twitter.com/DrCameronMurray
https://twitter.com/JonoLooseCannon
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In the barney of the week, Cameron gets Twitter blocked by progressive economist John Quiggin over covid disagreements. Then the topic of the week is why waste - plastic bags or food - isn't such a bad thing.
fresheconomicthinking.substack.com
https://twitter.com/DrCameronMurray
https://twitter.com/JonoLooseCannon
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In this first episode, Cameron talks about a stoush he's having with right-wingers who think regulation is behind high property prices. Then he explains why superannuation is a scam and why the left's support of it is so dumb.
fresheconomicthinking.substack.com
https://twitter.com/DrCameronMurray
https://twitter.com/JonoLooseCannon
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As we emerge from the election, it's time for a significant announcement on a change in direction for the podcast. Some of you will remember our first episode last year was with Dr Cameron Murray.
@DrCameronMurray is an economist who challenges lots of conventional wisdoms, the co-author of Game of Mates, now publishing alot on his own growing substack Fresh Economic Thinking and getting increasing attention in the media for his questioning of sacred cows like the superannuation system or housing, or covid lockdowns.
So... Cameron and Jonathan are going to pioneer a Fresh Economic Thinking podcast. Same name as the Substack. A place to canvass Cameron's latest writing and also enjoy some banter about the latest Twitter argument he's embroiled in. Kind of different - and if this is not to your taste, understood. But if you would give it a chance - there will be some fun podding and hopefully we will be 'mainstreaming' some controversial ideas.
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit fresheconomicthinking.substack.com
In surely the most under-reported story of the last month, people starve as the madness of ‘zero covid’ reaches its logical conclusion in China. Human Rights Watch Senior China Researcher Yaqiu Wang joins us to discuss the nightmare.
Twitter: @Yaqiu
Email us: loosecannonpod@gmail.com
Twitter: @JonoLooseCannon
Parnell on Twitter: @parnellpalme
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Alex Trauth-Goik clears up the myths and explains the realities of China's social credit system. Alex speaks Mandarin and has unique insights on why the Chinese public is generally positive about the use of high-tech surveillance. Is it Black Mirror, Orwell, or just efficient government?
Alex on Twitter: @Alex_Goik
Alex's articles on Medium
Alex on Learning Mandarin
https://theconversation.com/chinas-surveillance-creep-how-big-data-covid-monitoring-could-be-used-to-control-people-post-pandemic-164788
China bans 23m from buying travel tickets as part of 'social credit' system
Email us: loosecannonpod@gmail.com New Twitter: @JonoLooseCannon
Parnell on Twitter: @parnellpalme
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New Zealand's protests and High Court ruling overturning some vaccine mandates. We get an update from Ani O'Brien, Digital Editor of independent media site The Platform NZ
Ani is civil liberties-focused and also a self-described lesbian radical feminist.
Ani on Twitter @aniobrien
The Platform @theplatform_nz
https://aniobrien.medium.com/
Email us: loosecannonpod@gmail.com New Twitter: @JonoLooseCannon
Parnell on Twitter: @parnellpalme
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Special podcast on the Canadian Government's invoking of emergency powers in response to the truckers protest. Jonathan Kay, editor of Quillette and host of the Quillette podcast joins us from Toronto to explain what is going on.
https://quillette.com/2022/02/15/canadas-freedom-convoy-protesters-in-their-own-words/
Jonathan Kay on Twitter: @jonkay and @Quillette
Email us: loosecannonpod@gmail.com New Twitter: @JonoLooseCannon
Parnell on Twitter: @parnellpalme
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William Partlett says Victoria's pandemic response bill is a concern for everyone because it perpetuates the problem of unchecked executive power without scrutiny from parliament or courts. Amidst the backlash, he is hopeful there could be a last minute deal with positive changes. We run through the good, the bad and the scary of this proposed law.
Will on Twitter: @WPartlett
https://theconversation.com/victorias-controversial-pandemic-bill-6-ways-for-the-government-to-show-it-is-serious-about-scrutiny-171600 Email us: loosecannonpod@gmail.com Parnell on Twitter: @parnellpalme
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Dr Sascha Callaghan is a health and technology bioethicist and lawyer who talks health expertise and lockdown. We look at how "science" can't tell us whether to have a lockdown or what kind of risks to take. It's all about values and politics.
https://www.saschacallaghan.com/
Sascha on Twitter: @SaschaCal
Email us: loosecannonpod@gmail.com Parnell on Twitter: @parnellpalme
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Misha Saul, essayist and host of the Eureka Podcast talks liberties under Covid, the perspective of eastern European emigres, dating and relationships.
https://mishasaul.com/
Twitter: @misha_saul
Email us: loosecannonpod@gmail.com Parnell on Twitter: @parnellpalme
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The past president of Liberty Victoria, famous barrister and asylum seeker campaigner Julian Burnside supports curtailing the right to protest in favour of the right to be protected from covid. We ask how does that square with civil liberties and free movement of people.
Julian's Twitter: @JulianBurnside
Email us: loosecannonpod@gmail.com Parnell on Twitter: @parnellpalme
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Constitutional law professor George Williams AO explains the unique Australian legal framework allowing for unchecked power of the Executive to impose... well, anything. Travel bans, border closures - and judges are reluctant to intervene.
Email us: loosecannonpod@gmail.com Parnell on Twitter: @parnellpalme
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Professor James Allan has dedicated his career to arguing that legal human rights protections are a really bad idea. With civil liberties taking a battering in Australia under covid, has he changed his mind? Jonathan and Parnell ask the tough questions about travel bans and all the rest. James Allan's bio This paper makes the case against Australia's lockdowns: Email us: loosecannonpod@gmail.com Parnell on Twitter: @parnellpalme
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Charles Firth of The Chaser and lawyer Michael Bradley of Marque Law talk about the disturbing use of defamation actions to stop comedians, satirists and commentators. Do we need a legal defence fund for the comedians? We talk about Australia's thin-skinned politicians and Australia as the defamation capital of the world. https://chaser.com.au/ https://theshot.net.au/ https://www.marquelawyers.com.au/ Email us: loosecannonpod@gmail.com Parnell on Twitter: @parnellpalme
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What damage is being done by the harsh covid lockdowns in Australia? Economist Dr Cameron Murray, author of "Game of Mates", talks about the 'longevity machine' that is everyday life and how we are crushing it. Are we in a covid panic without a proper analysis of costs and benefits?
https://www.fresheconomicthinking.com/2021/08/covid-logic-vs-public-health-army.html
Cameron's Twitter: @DrCameronMurray
Email us: loosecannonpod@gmail.com
Parnell on Twitter: @parnellpalme
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