Anthony Albanese - How long? -2-

[Saint]

How do rising rates hurt asset poor people? Rising rates are an expense paid on investment in assets. If you dont invest in assets then rising rates dont impact you directly. Thus rising assets dont impact renters. The rent price problem is largely unrelated to rising rates and is driven by lack of housing supply.

Rising rates do hurt businesses looking to expand however. The biggest groups impacted by rising rates are sectors related to investment. Why do people think rising rates just impact households and not business?

Whilst i support higher corporate taxes (because they tax foreign investors who dont pay income tax here) they do, however, add to inflation by pushing up consumer prices and thus are not a good policy to introduce during times of inflation.

There has been little evidence of an increase in monopolist pricing (Excluding qantas). Profits rose mostly because of supply side problems created by the pandemic response and they have been coming back down as these supply problems have eased. These profits are completely valid because they help reallocate resources to ease the supply problems that created them. Without these temporary higher profits it takes longer for these problems to resolve leading to shortages. Monopoly pricing is not valid but as i said, there has been little evidence of this behaviour.

Costs rise because of supply-side problems. If profits rise, that's because revenue is rising faster than supply costs. If they were re-investing it, they wouldn't be profits, they'd be included in costs to increase supply.

Rising rates hurt poor people because it makes home ownership and security much, much harder. Many renters are impacted as landlords increase rents to cover increased mortgage costs. (It's a lot more complicated because of lack of supply and increasing demand meaning they can get away with the rises (more profits), but also out of necessity). It also makes it harder for the Government to invest in housing.

There's tons of evidence, anywhere you look, that the inflation cycle was driven by corporate PROFITS (not costs).

Check any large company (Meta, Apple, Exxon, Shell), all of their profits coincide with inflation.

If your hypothesis were true, inflation would have preceded the profit cycle, but it didn't.

Challenging the Consensus on Profits and Inflation

The Australia Institute's research on corporate profits - rather than wages - driving inflation has challenged one of the sacred tenets of Australian economic management, leading to pushback from the likes of pro-business media outlets and the Federal Treasury.

australiainstitute.org.au

 

[Gralin]

Costs rise because of supply-side problems. If profits rise, that's because revenue is rising faster than supply costs. If they were re-investing it, they wouldn't be profits, they'd be included in costs to increase supply.

Rising rates hurt poor people because it makes home ownership and security much, much harder. Many renters are impacted as landlords increase rents to cover increased mortgage costs. (It's a lot more complicated because of lack of supply and increasing demand meaning they can get away with the rises (more profits), but also out of necessity). It also makes it harder for the Government to invest in housing.

There's tons of evidence, anywhere you look, that the inflation cycle was driven by corporate PROFITS (not costs).

Check any large company (Meta, Apple, Exxon, Shell), all of their profits coincide with inflation.

If your hypothesis were true, inflation would have preceded the profit cycle, but it didn't.

Challenging the Consensus on Profits and Inflation

The Australia Institute's research on corporate profits - rather than wages - driving inflation has challenged one of the sacred tenets of Australian economic management, leading to pushback from the likes of pro-business media outlets and the Federal Treasury.

australiainstitute.org.au

then you have the landlords that don't have mortgages putting rent up because either "why should they miss out on the profit, or their living costs have gone up so why shouldn't they get more help"

anyone saying interest rates don't affect renters is either economically illiterate or full of shit

 

[Carn The Berries]

it gets better
raising rates raises inflation
government indexing based on inflation, wait for it, raises inflation

Also the targets the RBA have could be adjusted to match modern society better, because they're still using the same metrics they did 40 years ago

What should the target be? If we use recent history as a guide the target should actually be lower than what it currently is??

 

[Gralin]

What should the target be? If we use recent history as a guide the target should actually be lower than what it currently is??

Which target are you talking about, inflation or full employment?

 

[Carn The Berries]

Which target are you talking about, inflation or full employment?

I was referring to inflation, as this seems to be the primary metric that the RBA focus on.

 

[Gralin]

I was referring to inflation, as this seems to be the primary metric that the RBA focus on.

Except it's not because they want unemployment at 4-4.5%

Despite their mandate including maintaining full employment

 

[Not Important]

yes albo, where? didn’t take long to find someone with a record of dislike of palestinians to become the special envoy to combat anti-semitism - a needed role but an unsuitable person

 

[Gralin]

yes albo, where? didn’t take long to find someone with a record of dislike of palestinians to become the special envoy to combat anti-semitism - a needed role but an unsuitable person

Not actually a needed role and not one that is going to lessen antisemitism or Islamophobia if they find someone for the second one.

The nazis and others will just use it, where's the special envoy for white people etc

 

[Seeds]

Costs rise because of supply-side problems. If profits rise, that's because revenue is rising faster than supply costs. If they were re-investing it, they wouldn't be profits, they'd be included in costs to increase supply.

Rising rates hurt poor people because it makes home ownership and security much, much harder. Many renters are impacted as landlords increase rents to cover increased mortgage costs. (It's a lot more complicated because of lack of supply and increasing demand meaning they can get away with the rises (more profits), but also out of necessity). It also makes it harder for the Government to invest in housing.

There's tons of evidence, anywhere you look, that the inflation cycle was driven by corporate PROFITS (not costs).

Check any large company (Meta, Apple, Exxon, Shell), all of their profits coincide with inflation.

If your hypothesis were true, inflation would have preceded the profit cycle, but it didn't.

Challenging the Consensus on Profits and Inflation

The Australia Institute's research on corporate profits - rather than wages - driving inflation has challenged one of the sacred tenets of Australian economic management, leading to pushback from the likes of pro-business media outlets and the Federal Treasury.

australiainstitute.org.au

So your issue with the first point is not the supply and demand dynamics have pushed prices and profit rates up but that the profits arent being reinvested ? While i agree this is a problem. Its a problem for long run supply. Saving profits rather then reinvesting them helps reduce inflation by reducing the velocity of money. If firms were reinvesting it would add to inflation in the short run would it not by increasing demand without any impact on supply as investment has a lag before it creates new capital? The key to reducing supply constraints in the short run for goods and services was to get people working again, bring immigrant workers back and boost up the utilisation rates of existing capital which fell dramatically during the pandemic.

Like any product, Rents directly having nothing to do with landlord costs. The media reporting of this problem is wrong and shows a basic lack of understanding of economics. Rents are a function of demand for rental properties vs supply of rental properties. Its a lack of housing supply that has pushed up rents combined with a sudden influx of housing demand from immigrants (note i think higher immigration helps fix our long run issues with housing but in the short run I will admit has created a demand supply imbalance that is adding to rental prices). The only feedback loop that landlord costs has on rents is that higher landlord costs may reduce the amount of people who want to be landlords which may reduce the amount of investment in new housing stock. But this effect will take years to impact given the lag in releasing land and building homes (its also minimal in my view as i think lack of land releases by government is the greatest supply constraint at the moment).

On your last point you have cause and effect wrong. The higher profit rates were a function of supply problems and thus an outcome of inflation. Not a driver of it. Its the supply problems which boosted up prices (i.e. inflation) and created higher profits for companies that could continue to operate. Demand also rose in certain sectors unexpectedly due to pandemic rules which made people increase demand for certain goods and services and this helped boost prices and profits in these sectors. But its not the profit causing it. Profit is the outcome of it. Profits would cause inflation if we had increased monopoly behaviour. Monopoly pricing behaviour is definately a problem (especially in IT), but it was a problem before the pandemic. In the papers ive read (and its been a year since ive seen a new one since inflation has come down now) i havent seen any evidence of an increase in monopoly pricing. There are exceptions ofcourse. Qantas being one of them. But it does not appear this has been the norm. Again, the media reporting of this issue has been terrible because the media dont understand economics and like to fuel the class divide debate because it gets clicks.

 

[Not Important]

Not actually a needed role and not one that is going to lessen antisemitism or Islamophobia if they find someone for the second one.

The nazis and others will just use it, where's the special envoy for white people etc

that may be so. but fairness dictates you either do both or not at all . albo said he'd appoint someone in each case - fulfil your undertaking, albo.

 

[Gralin]

that may be so. but fairness dictates you either do both or not at all . albo said he'd appoint someone in each case - fulfil your undertaking, albo.

I'm not saying do one not the other I'm saying do neither because doing it makes things worse not better.

He wants to make it better he and his government need to lead.

Stop attacking protestors for starters

 

[Saint]

So your issue with the first point is not the supply and demand dynamics have pushed prices and profit rates up but that the profits arent being reinvested ? While i agree this is a problem. Its a problem for long run supply. Saving profits rather then reinvesting them helps reduce inflation by reducing the velocity of money. If firms were reinvesting it would add to inflation in the short run would it not by increasing demand without any impact on supply as investment has a lag before it creates new capital? The key to reducing supply constraints in the short run for goods and services was to get people working again, bring immigrant workers back and boost up the utilisation rates of existing capital which fell dramatically during the pandemic.

Like any product, Rents directly having nothing to do with landlord costs. The media reporting of this problem is wrong and shows a basic lack of understanding of economics. Rents are a function of demand for rental properties vs supply of rental properties. Its a lack of housing supply that has pushed up rents combined with a sudden influx of housing demand from immigrants (note i think higher immigration helps fix our long run issues with housing but in the short run I will admit has created a demand supply imbalance that is adding to rental prices). The only feedback loop that landlord costs has on rents is that higher landlord costs may reduce the amount of people who want to be landlords which may reduce the amount of investment in new housing stock. But this effect will take years to impact given the lag in releasing land and building homes (its also minimal in my view as i think lack of land releases by government is the greatest supply constraint at the moment).

On your last point you have cause and effect wrong. The higher profit rates were a function of supply problems and thus an outcome of inflation. Not a driver of it. Its the supply problems which boosted up prices (i.e. inflation) and created higher profits for companies that could continue to operate. Demand also rose in certain sectors unexpectedly due to pandemic rules which made people increase demand for certain goods and services and this helped boost prices and profits in these sectors. But its not the profit causing it. Profit is the outcome of it. Profits would cause inflation if we had increased monopoly behaviour. Monopoly pricing behaviour is definately a problem (especially in IT), but it was a problem before the pandemic. In the papers ive read (and its been a year since ive seen a new one since inflation has come down now) i havent seen any evidence of an increase in monopoly pricing. There are exceptions ofcourse. Qantas being one of them. But it does not appear this has been the norm. Again, the media reporting of this issue has been terrible because the media dont understand economics and like to fuel the class divide debate because it gets clicks.

Inflation drives down the supply of housing because the cost of materials has gone up, resulting in fewer new homes, which drives up the cost. The gap between the price at which a house can be built and what a person can afford has widened, due to inflation.

The supply and demand inequality is the secondary effect of this, not the cause, though there's a lot of inter-relation.

The supply side inflation argument still makes no sense because profits have gone up. If supply costs went up and companies only moved revenue to meet that increased costs, profits would be stagnant.

And it also doesn't really matter because either way, the Government is doing nothing when we all know costs are going up. Doesn't really matter what the cause is. Clearly there's some taxing to be done on historically high corporate profits.

 

[Not Important]

I'm not saying do one not the other I'm saying do neither because doing it makes things worse not better.

He wants to make it better he and his government need to lead.

Stop attacking protestors for starters

and i’m not disagreeing, grales. just saying he filled one appointment post-haste for blatantly political reasons as i see it. while he seems in no hurry to fill the other again for political - some might say exerted pressure - reasons. which is what marque lawyers are saying.

 

[Gralin]

and i’m not disagreeing, grales. just saying he filled one appointment post-haste for blatantly political reasons as i see it. while he seems in no hurry to fill the other again for political - some might say exerted pressure - reasons. which is what marque lawyers are saying.

I suspect that nobody wants to take that role and help wash the governments reputation within the Muslim community

because that is all those positions are about

 

[Carn The Berries]

yes albo, where? didn’t take long to find someone with a record of dislike of palestinians to become the special envoy to combat anti-semitism - a needed role but an unsuitable person

Really? If you're looking for examples of unnecessary government spending, you need look no further.... Neither of these should even have been ideas that were considered, let alone implemented (well... One of them has been )

 

[Carn The Berries]

and i’m not disagreeing, grales. just saying he filled one appointment post-haste for blatantly political reasons as i see it. while he seems in no hurry to fill the other again for political - some might say exerted pressure - reasons. which is what marque lawyers are saying.

100%! Was a Richard Cranium move to do it in the first place, but people are now watching and wondering (rightly) when the second half of the plan will be implemented.

My money is on never...

 

[Saint]

I suspect that nobody wants to take that role and help wash the governments reputation within the Muslim community

because that is all those positions are about

The Terms of Reference will probably include something like:

You can't mention that support for genocide of Muslims is Islamophobia, or that support for that genocide by the Govt is Islamophobia.

Probably banned the words apartheid and Islamophobia.

Something no sane/honest person could abide.

That being said, what has the anti-semitism envoy done? Is she sending texts at $100k a piece like Barnaby?

Classic Albanese saying that he's going to do something then doing something cripplingly limited.

 

[Gralin]

The Terms of Reference will probably include something like:

You can't mention that support for genocide of Muslims is Islamophobia, or that support for that genocide by the Govt is Islamophobia.

Probably banned the words apartheid and Islamophobia.

Something no sane/honest person could abide.

That being said, what has the anti-semitism envoy done? Is she sending texts at $100k a piece like Barnaby?

Classic Albanese saying that he's going to do something then doing something cripplingly limited.

I don't know what she's doing today but in the past year she's said bombing hospitals is good and protesting uni students should be punished by universities and tried to get multiple people fired for supporting Palestine so I'm sure it will go very well

 

[Saint]

I don't know what she's doing today but in the past year she's said bombing hospitals is good and protesting uni students should be punished by universities and tried to get multiple people fired for supporting Palestine so I'm sure it will go very well

What you just said is anti-semitism. /s

If you're critical of the Anti-semitism envoy, but none of the other racial envoys, then that's Jewish exceptionalism and only shows why we need one. /s

 

[Gralin]

What you just said is anti-semitism. /s

If you're critical of the Anti-semitism envoy, but none of the other racial envoys, then that's Jewish exceptionalism and only shows why we need one. /s

 

[Carn The Berries]

The Terms of Reference will probably include something like:

You can't mention that support for genocide of Muslims is Islamophobia, or that support for that genocide by the Govt is Islamophobia.

Probably banned the words apartheid and Islamophobia.

Something no sane/honest person could abide.

That being said, what has the anti-semitism envoy done? Is she sending texts at $100k a piece like Barnaby?

Classic Albanese saying that he's going to do something then doing something cripplingly limited.

I believe that part of the haste to get the appointment made was so that we could have the right representative at... Checks notes... World Jewish Congress...

Special envoy to combat Antisemitism

The Albanese Government today announces the appointment of Ms Jillian Segal AO as Special Envoy to Combat Antisemitism in Australia, as part of our ongoing efforts to preserve social cohesion in Australia.The conflict in the Middle East has deeply affected communities across Australia.The...

www.pm.gov.au

 

[Saint]

I believe that part of the haste to get the appointment made was so that we could have the right representative at... Checks notes... World Jewish Congress...

Special envoy to combat Antisemitism

The Albanese Government today announces the appointment of Ms Jillian Segal AO as Special Envoy to Combat Antisemitism in Australia, as part of our ongoing efforts to preserve social cohesion in Australia.The conflict in the Middle East has deeply affected communities across Australia.The...

www.pm.gov.au

She'll go there, tell them that anti-semitism is on the rise and they'll have a big "we're afraid of everything, can't believe bombing everyone hasn't made us safer" party.

And try to shame the Australian Government into more genocide supporting. Which Albanese will be so scared of bad press he'll announce an inquiry.

 

[Pakenhamsaint]

I shudder to think how man millions are being absolutely wasted on this crud

It has a "how do you do fellow kids" vibe to it.

 

[Puddy]

RBA and government is full of academic idiots who learnt out of books, not in the real world.

That's why they are unable to competently understand the current economic environment.

 

[Not Important]

just do it, albo.