News Flash! Today Tonight report the obvious!

Happy New Year!

Creative Commons License photo credit: Patrick Hoesly



I know! Shocking isn’t it?

This evening, according to advertisements, they’ll be reporting on a matter almost as ground breaking as those stories we know and love along the lines of ‘Junk Food! It makes you fat!’, ‘Credit cards – they could put you in debt ‘ or any number of scintillating exposés on dodgy builders (when they’re dodgy, they’re dodgy!), underwear (it comes in all different colours!) and models (they’re pretty!)

They’re airing a story about how speculation and hoarding of property drives up land and rental prices.

It looks like they’ll be laying the blame for this at the feet of foreign investors (blast those evil foreigners!). I wonder if they’ll suggest our Government reform the taxation system? With a fairer land tax, one that was higher and flatter, property hoarding and speculation by investors, foreign or otherwise, would cease.

They may not stretch to flagging such viable solutions, but still, it’s encouraging to see that even prime time Aussie telly has cottoned on to the fact that land hoarding is artificially inflating our property prices. Something Earthsharing revealed yonks ago in the ‘I Wanna Live Here’ report.

Week #2: Can I have some Context?

tohmprof

It’s week 2 and already I know I like my Finance subjects better than my Economics subjects. The key difference is: Context.

I have a sneaking suspicion that Economists have made Economics far harder to teach (and understand) than it needs to be. For example ‘Marginal Propensity to x’ where ‘x’ can be ‘consume’ ‘save’ ‘tax’ etc. Surely there is an easier way to convey the meaning than ‘Marginal Propensity’. I’m sure there are hard nosed Economists that think the distinct nuance is somehow important, but for your lay person, just call it the ‘tendency’.

If I were to be uncharitable, I would say that the Economic emphasis on blinding with scientific language and writing as many lecture slides in pure mathematical symbols is designed to distract students from the fact we are talking about a model of reality, not reality itself.

But being more charitable, I just think it’s because Economics is concerned largely with aggregates. It is a ‘Barn Dance’ for which we are learning what people are ‘supposed to do’ when the RBA lowers interest rates and what not, but there’s very little chance you will ever encounter an aggregate*, so its pretty safe to never mention the actual context of what we are talking about, hence we can have a lecture slide that says nothing more than:

Y = Co + kYD + Go + Xo – (Mo + mY)

Where YD = kC – (kT + To)

Interestingly, the Economics stream doesn’t provide formula sheets in exams, ensuring we expend most of our energy just memorizing these formulas of dubious real world value.

Finance though, will deal with a customer, which is an individual (or an individual making decisions on behalf of the organisation) and thus has no particular concern with aggregates. Thus the emphasis is on the application and being able to explain the concepts in plain English. The formulas are only of concern in knowing which one to use when, and thus Finance do provide a formula sheet. (curiously they are also easier to remember).

The thing that yet alludes me in my Economics subjects, is that I can’t envision what sort of decisions I can make based on these formulas. The only one is setting an interest rate, which will be handy if I end up being Governor of the RBA. Finance again, thanks to the miracle of context is all about making decisions. There is practical value to calculating FV (future value) and discounting it back to PV (present value) given a required rate of return, it would help somebody make a decision.

*A point easier to illustrate with racism, you can easily make the general statements that Australians are as an aggregate ‘loud, classless, jocular, larrikins’. Yet as an Australian moving to India, would you like your new manager to base his treatment of you on what he “knows” about Australians. In other words, would you rather be treated as an individual or an aggregate?

Melanesian Land Issues interview

Vanuatu waterfall 3
Creative Commons License photo credit: M0les

Renegade Economists podcast

Joel Simo from the Melanesian Land Defence Group visited Australia recently via an Aid Watch.

Listen to his interview on the Renegades here…

In discussion with Green Left Weekly Joel says:

Customary land title represents the majority of land tenure in Fiji and Vanuatu and provides locals with food security.

This security provides certainty in times of economic downturn. MILDA argues that during the global financial crisis of 2009, very few people in these communities went without food or housing because of their access to traditional land.

Sukot told GLW: “During the economic crisis, it was very difficult for people in the cash economy. In the traditional economy, everything is very much dependent on land.

“People are able to provide basics for themselves even in economic crisis. The traditional economy is about sharing. This is different to the economy in the US, where the economy is based on selling.

Music

The Shepherd Island dancers were recorded at the 2008 Shepherd Alliance Party’s National Congress.