Carbon tax inflation fears evaporate

Posted to The Age (24/7/2013) on 24/7/2013 at 6:26 PM
Comment on "Carbon tax inflation fears evaporate"
http://www.theage.com.au/business/the-economy/carbon-tax-inflation-fears-evaporate-20130724-2qj4q.html

The sky has not fallen, but many roofs will and people will not have roofs over their heads. The set of data represents The Beauty and The Beast. This may lead to another rate cut during the next RBA meeting, but the carbon tax definitely causes the rise in prices for essential utilities not only affecting ordinary consumers, but also industries employing the workforce of Australia.

With rising running costs, Australian produced products will be less price competitive in the world market, and therefore less export to other countries and more imports from countries which can supply cheaper alternatives. To balance the companies' books, wages will have to be reduced, leading to staff cut and creating higher unemployment.

Tony Abbott was a bit over enthusiastic to predict the Armageddon too soon, but the carbon tax, speaking realistically, will bring much misery to those who do not have backup reserves to live on.

Economy takes a hit but it's far from a disaster

Posted to The Age (2/6/2011) on 2/6/2011 at 11:32 AM
Commenting on "Economy takes a hit but it's far from a disaster"
http://www.theage.com.au/national/economy-takes-a-hit-but-its-far-from-a-disaster-20110601-1fgpg.html

Correct me if I am wrong:

GDP = private consumption + gross investment + government spending + (exports - imports)

One of the parameters is private consumption which includes utilities. By discounting the great jump in utility prices through no increase in actual "quantity consumption", how can any economist justifiably comment that there was a GDP increase if of all the natural disasters factors are removed.

One must be very careful in examining all the underpinning components, and not to treat everything as a basket case. For a long time I argue that many economic models are incorrect, in the sense that dollar values are used instead of unit prices. Unit price takes care of and normalises quantity consumption.

Growth in consumption is paramount! Great real!