Jan 18, 2019
Hi Guys and welcome to Finance and Fury the Furious Friday
edition. This is part 7, the last episode of the miniseries about
all things politics.
- Sorry it took a while to cover, I wanted to do this topic
justice and explain all the steps and outcomes instead of jumping
- We have covered a lot, there are many bits of the puzzle. Who,
what, how, why, and potential outcomes –
- We have been through the Fabians, the political spectrum and
democracy, then how a population is organised (Rules For Radicals),
the fair go, then political progress for equality, then how the
west got to be in such a good position, and how we may lose it.
- If you made it all the way through, awesome work. Thanks for
listening to me rant on this
Final part: What should the government be involved in?
What services should they be involved in?
To start: Have a quick real-world example to look at
- US Government Shutdown: It’s been almost a month, shutdown
since 22/12/18. It’s the longest in US history, everyone has called
it a crisis
- Over border funding: $5.7bn for a wall, already compromised to
make it steel rather than concrete
- As a comparison: US gave Israel $25bn to help build their wall
- Total Government spending (the Fed, States, Etc) is $7.56trn:
this is $20.7bn spending a day
- The Wall is a 0.07% cost to the budget for the year
- Enter the blame game: Irony is Schumer and Pelosi were in
favour of a wall: Until Trump came along. Showing it was mainly
- More political infighting: First time I have seen Democrats
oppose spending more of someone else’s money
- Question: is the US still spinning? Is life going on?
- The longer that the shutdown occurs, the more people in the US
are waking up to how little they need it
- But not for the Government workers and the IRS (their tax
- Workers aren’t being paid, but they will be. They will get back
pay, for the time of the shutdown whilst they were not working. Is
that a good deal?
- But private citizens are stepping in, picking up trash in parks
and helping where they can
- Truth is that the Government has little to do with lives
- It is paying you, it is taxing/regulating you, or it is
- Indirectly though, unfortunately, it affects all of our
Leads to the last part:
What should the Government be involved with, or provide for a
- This differs for where you sit on the political spectrum. It’s
no secret which side I sit on, I value individual freedom and
empowerment rather than the group thinking that everyone should
have equal outcome
- For this episode, I will try and put my bias aside. The
measurement for this episode is: has there been a net positive
benefit or loss to a country based on Government Intervention?
Progress from betterments to our lives, more freedoms, better
health, etc or does it detract?
- Excluded "moral hazards", not saving money because of the
knowledge that the State will provide an age pension and subsidised
housing, and over-use of "free" health services in the absence of
price signals to consumers. All of which isn’t really free
- Won’t have time to do this topic justice in 30 minutes. I will
give the 1,000-foot view. If you are interested in a deeper dive,
let me know
- If I don’t explain something fully, or you disagree, let me
know as well!
What the Government is good at: Net positives
Funding: Science and R&D.
For the past 100 years, most advancement is in fields with the
most money and manpower
- Technology and science: Government Funding has been great.
Advancements over 100 years have been from this, like medicine, the
- Technological advancements in weaponry and nuclear science
during the WWII. Government Funded
- Rocketry and telecommunications during the Space Race. This was
all Government Funded
- Concentrating a large number of engineers and scientists to
work together on the same project will, almost every time, produce
more net advancement compared to if every member worked alone.
- DARPA (Defense Advanced Research Projects Agency) Funded things
like the Internet, Google and Google maps, Windows, WWW, video
conferencing, Siri, GPS, Facebook
- This is good: there is a measurable benefit, which the
population adopted. Through being a demonstrable fact
- Most major developments come when the government diverts large
budgets to achieve progress (rockets and planes). A vast
difference in plane technology from WW1 to WW2.
- Major boost to development, with the failing of technology
progress through history, boils down to individuals with no money
or ability to share it
- Okay for measurable technology, like integrated circuits,
they’re very competitive. If your circuits are faster and cheaper
it can boost profits for your company.
- Other forms of technological progress. Less quantifiable as
potential improvements, the outcomes are unknown
- If they not seen as profitable less funding from the private
sector is likely
- If research and development are financed by investors, they
want to see as high returns as possible
- But this is only part of the story. The acceleration of
technological progress suspiciously correlates with the population
- A higher population creates a higher net number of scientists
/engineers, who can provide more research/work
- China was advanced until the 1400s. There was a trial by error:
high populations, then the EU took over with trial by
- The issue: The Government mandated and Government ran research.
Government bodies paid to research problems will always find a
problem. What happens if there is no problem? No money, so then
there is no social platform to run on
- As long as the Government doesn’t take over tech or directing
the research, but acts as an investor, this could even make money.
Just like universities.
- It’s a double-edged sword: The faster things change, the more
creative destruction. This is not a bad thing. For example in the
past with farming, too much at once is bad and it creates unrest.
The Government doesn’t like it, and the population gets unhappy
- Other research: $850,784 for a study of Italy’s Catherine de
Medici, a noblewoman who became queen consort of King Henry II
(King of France) 1519-1559. Is this needed?
National Protection and services: All good
- Police and Firefighters: Emergency services workers all help
the population. They protect and keep us safe, and enforce the rule
On the Fence: Positive and negatives preface Education and
health are perfectly fine
But not perfect with funding models: there are no incentives to
minimise costs, it’s the opposite. If you don’t use all of your
budget, you won’t get more to use next year
- Infrastructure: On the fence, It is needed but at what cost?
- East West link in Melbourne: Estimated $800-900m has been spent
on a road to never be built
- NBN: has cost at least $50bn to date and simply a huge
high-risk mistake, no private company would ever have built it.
(Rudd) The government ignored improvements in wireless technology
and continuing moves away from landline. NBN will face stiff
competition from 5G mobile technology and sold at a huge loss.
Valuation only at $10bn
- Health: National Health is declining even though we are more
advanced than ever
- Cost blowouts: Royal Adelaide Hospital is the 3rd most
expensive building in the world (per square foot) it has 600 beds
and cost $2.5bn
- Still teaching the food triangle that depicts that carbs are
great, but stay away from healthy fats and proteins
- Where do most of the world’s advancements in medical technology
and medication come from? The USA.
- If Americans didn’t have a profit system, we would not have
most of the meds or medical tech we do
- Education: Is great. But, where have you learnt more? At school
or on the job? If still at school, it’s hard to answer
- I am no expert, I need to learn more. I have got a few books by
John Gatto and others to finish
- What I do know so far? Government Education is a new concept in
past 100 years, it’s modelled around factory workers
- Education levels are higher now, looking at literacy rates. Was
it government policy, or a changing world?
- When the Government took over in the early 1900s, the
population needed to work, not go to school (Farmers, etc). it
forced education they didn’t need, there was low attendance.
- Today there is a higher % of population in
- All schools private: More competition, lower fees all around.
35% are independent/ catholic currently
- But wouldn’t work: not really private, Australia has no-profit
schools (private higher education does, there are 170 of them)
- Australian Average Education is $20-30k for independent
schools. One of the highest education costs in the world
- What might help: Education (Self Education focused on the
individual around needs)
- I went to school in Austria for a while. The system is set up
more for the kids’ interests
- There are nine years of education. Then there are a series
of vocational-technical and university tracks to follow
- University, gymnasium, and Trades like the Polytechnische
- Putting everyone through the same meat grinder ends up leaving
everyone behind, becoming a learned helplessness
What it hurts
- Economic: The quest for equality, where most research funded
from the government or special interest groups show the need for
government intervention with this
- In the early-20th century: the view that progress was being
stifled by vast economic inequality
- The cause was minimally
regulated laissez-fairecapitalism with monopolistic corporations;
- Often violent conflict between workers and capitalists would
erupt due to the claim, so it needed to be addressed
- Sherman Antitrust Act: made it illegal for anti-competitive
practices (monopolies, cartels, predatory pricing) in the 1890s
- This was helpful and helped improve competition and remove
- But is it obsolete? 60-80% of advertisements through Facebook
and Google. Twitter and their competitor Gab just gets shut
- 21st Century: Legislation to redistribute, which is not so
good. Tax people to pay for things for others, in other words,
- Welfare state: Reliance on government also increases what
revenues governments need
- Tax: Mandatory financial charge imposed on the taxpayer by the
- From 1915 to 1942 Income taxes were introduced. A relatively
new concept in society as previous taxes were on wealth and land
- Rome had a 1-3% tax on value of wealth owned for citizens, in
times of war you got a vote if you paid tax
- Progress: Everyone gets a vote and can vote for more
redistributions, changes voting a bit
- Equality through social organisation. A change of policy to
affect the population, where we get political activism
- Question: Is it better to let people choose to adopt something
or are they forced to?
- Legislate for compelled compliance in society, introduce laws
to control society. Make it the way progressives want
- Governmental power of the population is increased when some of
the population want it
- Issues: Speech (limits freedom) with racism and ‘speech laws’,
or ‘hate speech’ who defines hate?
- Already illegal to incite violence through speech, telling
people to hurt someone
- Sonja Kruger was taken to court for blasphemy for her comments
2 years ago about a ‘Muslim ban’ in the US
- Only from nations with links to Terrorism, not Indonesia (1#
for Muslims), or Egypt (1# for Arab)
- Claimant took her to human rights tribunal, she pays costs
upfront and taxpayers pay for claimant
- The individual is the extreme minority. If you don’t protect
the individual’s rights you are failing at protecting minorities.
Islamophobia or homophobia is incorrect terminology as a phobia is
an irrational fear
- Rewriting history to suit a narrative, Australian History
lesson: Labor party was the one who implemented the White Australia
Policy, the ALP wanted more direct methods of exclusion than the
- Menzies and Holt (two Liberal Conservatives) were the ones to
start dismantling it. Interesting how perception changes
- Environment: Is the improvement in cleanliness from Government
Regulations, or from improving technology?
- Nobody wants to see pollution or to ruin the earth. But for all
the taxes on climate change, what benefit is there?
- Water: Green/ALP opposition to building new water storages.
State governments tried to reduce demand by increasing prices (also
generating revenue). Haven’t had a dam built for a capital city
since Melbourne’s Thomson Dam in 1984
- Drought reappeared from 2003 to 2010. There is little scope for
further water savings
- State governments panicked and rather than build dam, they
started spending on desalination plants (massively more expensive
to build and operate than storage dams that can fill at virtually
- Melbourne plant cost $4 billion, Sydney cost $1.803 billion,
Gold Coast cost $1.2 billion, and Adelaide plant cost $2.2 billion
- Sydney plant's costs are more than $500,000 a day, and it
has not supplied any water since 2012
- Desalination also uses enormous amounts of electricity and
(despite not being used) is responsible for adding $100 to
$200 annually to household water bills.
- Electricity: Destroying electricity system, replacing cheap and
reliable coal-based generators with wind and solar power.
- Electricity costs are double those of US and Canada.
Power prices have increased 60+% in the last ten years
- Huge subsidies for renewables and a failure of regulation are
the main causes.
- Subsidies paid to producers of renewable electricity
are $3 billion per year, yet power is more expensive
- Coal and nuclear are the two cheapest sources of base load
- Carbon emissions by the rest of the world. Our efforts to
reduce "greenhouse" emissions won't work
- We make up about 1% of global emissions, which is high for our
- Australia's shunning of coal or nuclear energy is the
equivalent to Saudi Arabia banning the domestic use of its
- While wanting to regulate prices, we can’t have both (low
prices with low supply)
- Side note: immigration 3rd to 1st world, individuals use 20
times the emissions they did previously. Logically, for lower
emissions, against immigration automatically as it increases
emissions being produced.
- How far do we go? Currently, people want the Government to have
large involvement in ‘combating climate change’
- Religious fervour about it, like modern blasphemy
- Again, nobody wants to live in a toxic environment (pollution).
But, everything is relative.
- The US in 2009 gave $26.1bn to climate change, $641m was
- You are a scientist, it is easy funding and good pay. But have
to prove that the problem is there, just like before if there is no
problem, then no money
- School kids and protesters demanding the Government drop
- We are the ones that emit, but they need a parental figure to
walk in a fix the problem for them
- Introducing stresses in their brain which increases cortisol. A
constant confusion, fear of climate can lead to long term negative
impact on brain development
To wrap up this series:
- A lot of what the Government does can be handled by the private
- If private companies or employees don’t perform, they get
replaced. The Government never replaces itself
- What you can do:
- Talk about politics (only if you are interested). There is a
stigma in society about talking about politics, why? Best way to
have population avoid it altogether if it is never spoken about,
and then no need to pay attention and removes the possibility of
people discussing ideas
- Same with money, it's impolite to talk about money? Why?
- Opening facts into the public conversation, it makes people
think for themselves, not just repeat false rhetoric
- Most people know more about what is happening in their
favourite tv shows than in politics. The tv show has very little
impact on your life compared to current political events.
- Opens a debate about the issue, rather than silencing one
group, everyone should be heard
- Don’t be afraid to speak your mind, learn as much as you can
for what is relevant
- Make your own path in life and be less reliant on external
forces. This is what gives you individual liberty
- Which is at the heart of financial freedom!
If you made it through, thank you very much for listening to
this series. I hope it wasn’t boring and was actually
If you have any questions or want me to explore one of these
topics further, you can let me know on the contact page here.