Tony Abbott continues his rampage against Australia

I think the quality of decisions Tony Abbott and his cabinet have made over the past 4 months are bad enough to call him the worst Prime Minister in the history of Australia. Hopefully this will be ended with an election sooner than

The Great Barrier Reef is a global treasure that is matched by very few treasures in the magnificent breadth and scope of diversity. It is a major feature of the world that has no equal in its size, scope, and beauty, and has been called the largest organism in the world. I have been fortunate to be able to see a small part of the Great Barrier Reef in person and is a memory I will never forget and I can't personally think of many other places that are as unique as the Great Barrier Reef that I would like to see, besides the rainforest that is only a few kilometers away from the Great Barrier Reef. Northeast Australia is one of the most beautiful places in the world and I am furious that Abbott's government is taking the easy way out of a short-term problem that will damage an unparalleled gem in the world.

http://www.aljazeera.com/news/asia-pacific/2014/01/australia-approves-barrier-reef-dumping-plan-201413152726546347.html-

Changing to a Parliamentary System won't change enough.

One Law Professor made an interesting paper that claims that in order to solve our political disfunction we should move to a Parliamentary System. You can read a summary here. His three major points are that 1) our government is currently disfunctional, 2) our system could be fixed by moving to a parliamentary system aka a system where the executive is selected by the legislature, and 3) no other proposed change will fix the disfunction of not having a parliamentary system.

There are a few major problems with this paper however.

If we take the United Kingdom as our archetypal Parliamentary system wee need to analyze how well it works. the UK's House of Commons right now is 303 Conservatives, 57 Liberal Democrats, and 255 Labour, among other smaller parties. There are 650 members of the House of Commons total, which leaves 35 members of smaller parties. If the last election was proportional you would expect that the Conservatives had won 47% of the vote, the Liberal Democrats 9% of the vote and Labour 39% of the vote.

This is just plain not the case. In the last election the Conservatives won 36% of the vote (overrepresented by 11%), Liberal Democrats won 23% of the vote (underrepresented by 14%), and Labour won 29% of the vote (underrepresented by 10%).  The largest problem of the current American House of Representatives, a ruling minority, is also present under the British system. Last year we saw the results of gerrymandering where the Republicans lost the vote but won the seats, and looking at the key swing states of Ohio, Pennsylvania, Michigan, and especially Florida, we see that there was clear gerrymandering going on that gave the Republicans a large advantage. Looking at the riding by riding results in the last UK election you find that Labour and the Liberal Democrats stole votes from each other which gave the Conservatives a majority (despite winning 52% of the votes nationwide together). This problem is very clear when one looks at the results.

Rick Hasen doesn't solve this major problem.

His third proposal is also wildly off base. By allowing people to use ranked voting and vote for third parties without wasting votes it will fix the disfunction of having a government with only two parties and no opposition on the left to the Democrats consistent pandering to Republican demands to move further and further right. a Parliamentary system alone won't fix this problem, ranked voting will. Just turning our President into a Prime Minister won't fix disfunction if the House can still be gerrymandered and the Senate still exists. No problem is really fixed with this solution.

Parliamentary or Presidential systems are both good, I see no major advantage that they have for each other, but ranked voting systems have a very clear advantage over First Past the Post, and when you compare the results of Australia's elections (where they use IRV) with Britain's elections (where they use First Past the Post) you find an enormous difference in how accurately the makeup of Parliament represents the national vote, and comparing Britain's elections with America's elections shows only a difference in how the head of government is selected, but no real difference in how the government represents the people. Also, I must say that comparing party list methods (like Germany) resemble the inaccuracies of Britain and America more than the more proportional representation of Australia.

The Eight Countries, what we can learn from Japan

The following pieces of common wisdom that I hear in today's political debate bother me:

1. Debt kills economies. I can understand how a deficit that is really high could be a real drain on tax revenue eventually through the marvel of compound interest, but no country is to that point yet, there are other factors at play in Greece.
2. To have a developed nation you will have a high debt.
3. The Euro is a doomsday machine, countries need to maintain their own currencies to be viable, to merge countries in one currency is a terrible idea.

I have chosen seven different countries in very different and some very similar economic situations very deliberately to examine this point. When I have extended certain comparisons here I have found that the examples below are not anecdotes. The information here is mostly from the CIA, IMF, and World Bank via Wikipedia:

1. Australia is one of the most developed nations in the world, ranks second on the human development index, has the 17th highest GDP in the world (top 9%), has universal health care, a debt that is 20% of their GDP, and is currently increasing their domestic investment in mass transit. Their currency is one of the most traded in the world. Their Ease of Doing Business Ranking is 9th. They are a net importer of oil.
2. Japan is one of the most developed nations in the world, ranks 12th on the human development index (top 6%), has the third highest GDP in the world, has universal health care, a debt worth over 200% of their GDP, unemployment under 5%, and is currently increasing their domestic investment in mass transit. Their GDP Growth rate is -0.7%, and their population growth rate is -0.4%. Their currency is one of the most traded in the world. Their Ease of Doing Business Ranking is 13th. 70% of their energy is from fossil fuels, and are a net importer of oil.
3. Greece is one of the most developed nations in the world, ranks 29th on the human development index (top 15%), has universal health care, a debt worth 160% of their GDP, unemployment over 20%, and is currently divesting their domestic investment in mass transit. their GDP Growth rate is about -6%. Their Ease of Doing Business Ranking is 78th. They are a net importer of oil.
4. Germany is one of the most developed nations in the world, ranks 9th on the human development index (top 5%), has universal health care, a debt worth 81% of their GDP, unemployment around 5%, and they have one of the world's best transportation systems. Their GDP Growth rate is between 0% and 1%. Their Ease of Doing Business Ranking is 20th. They are a net importer of oil.
5. Brazil is one of the fastest growing economies in the world, ranks 85th on the human development index (top 45%), has a mixed health care system, a debt worth 54% of their GDP, unemployment around 5%, and are currently growing their transportation system. Their currency is growing in importance. Their GDP Growth rate is over 2%. Their Ease of Doing Business Ranking is 127th. They are a net exporter of oil.
6. Equatorial Guinea is one of the fastest growing economies in the world after the discovery of oil, ranks 136th on the human development index (bottom 27%), their health care system is undeveloped, a debt worth 3% of their GDP, and their transportation is aged. Their GDP Growth rate is 18.6%. Their Ease of Doing Business Ranking is 155th. They are a net exporter of oil. They use the CFA Franc with 5 other countries.
7. Chad is one of the most undeveloped countries in the world, rank 183rd on the Human Development Index (bottom 3%), their health care system is non-existant except for international aid, a debt worth 9% of their GDP, and their transportation is decrepit. Their GDP growth rate is 1.6%. Their Ease of Doing Business Ranking is 184/185. They are a net exporter of oil. They use the CFA Franc with 5 other countries.
8. Mauritania is another one of the most undeveloped countries in the world, rank 159th on the Human Development Index (bottom 15%), a debt worth over 90% of their GDP, and their transportation network is decrepit. Their GDP Growth rate is 1.5%. Their ease of doing business ranking is 159th. They are a net exporter of oil. They have their own currency.

What can we learn from the standings of these seven countries? First of all, the common beliefs about debt do not hold up to these samples, or any large collection of countries. Rich countries have high debt and poor countries have high debt. Rich countries have low debt and poor countries have low debt. Rich countries spend significant money on education and health care and poor countries don't. The belief that sharing a currency between different nations will harm countries holds no water. 

The trend between these different countries shows that investment from a government can make or break an economy. Chad has almost no economy to speak of after years of war and bad government. Japan has the #1 highest debt in the world measured relative to GDP yet still is seen as a good investment. It is easy to do business in Germany, Japan, and Australia, and they have three of the most vibrant economies in the world and are quick to recover. Australia didn't even have a measurable effect from the recession that occurred outside of Australia. Greece, Chad, and many other African nations have had bad government for a long time, and their economies are suffering. This correlation is very strong. The correlation with debt is non-existent, no matter how large the sample is.

Then why is Japan in so much debt and seeing their economy decrease? First of all, their economy for the majority of the last decade has grown, they have been slower to pull out of this current recession but are on the upward slope at this point, in two or three years the Japanese economy will probably be growing again with or without government intervention, alongside a population that will inevitably continue to shrink. Japan also has one of the lowest tax rates in the world as opposed to Australia which taxes Capital Gains at a very progressive rate. The Japanese stock index fell 50% in 2008, and the people who withdrew those funds have seen very low taxes, which means there is no short-term incentive for keeping your money invested during the hard times because you won't have to pay a lot of taxes, compared to Australia where withdrawing all of your funds in one calendar year will mean you will pay a very high rate of taxation. This means that over the past 4 years Japanese companies have not had the financial resources they need to grow and hire more people, which has caused their economy to slow down, as opposed to Australia's which is still growing. Every other major factor is equal in this situation.

The difference between Germany and Japan is that the German stock index has not plummeted nearly as much as the Japanese stock index, and had a shorter distance to grow back after the collapse. German companies still have capital to grow with, while Japanese companies are strapped for cash. The American market is more like the German market, because the stock markets here in America have rebounded already since 2008 while Japan has yet to finish their recovery.

The root of the matter between the Japanese, Greek, Australian, and German government debts is linked very closely to taxation. All of these countries have very solid safety nets, and the countries whose economies are struggling have very low taxes for capital gains. Risky and dangerous group mentality in these two countries have left businesses with little cash. In Australia, the higher taxes for large withdrawals within a single calendar year have made a very stable stock market where no one would even consider withdrawing their entire stock accounts because of the taxes that would come into place. German banks still have a lot of confidence in them and have capital to work with which means that Germany hasn't collapsed. If there was a panic in the Frankfurt stock exchange like the Tokyo stock exchange (which we haven't seen yet) it would be disastrous to the German economy. That hasn't happened yet which is why German companies are still growing and the German GDP is still rising.

There are a few major points I want to make that follow this data:

1. Good government matters! Having a good government with responsible policies is good for the economy and makes a tremendous difference.
2. If you have a debt, the answer is really simple, you are spending more than you take in, and you need to either cut spending or raise revenue. The answer will usually include raising revenue since most government services go to things that must be done and are public goods in developed countries. This means taxes might rise, but on who will always be a matter of contention between greed and economic efficiency.
3. Progressive capital gains taxes make a huge difference in the way people act in the stock market.
4. Most economic collapses are due mainly to CONFIDENCE which is why Germany hasn't gone to the dogs but Greece has.
5. Low barriers of entry to the market are important, as can be seen in this selection (and once again, any large selection) where countries with high barriers to small businesses forming have routinely depressed economies, as opposed to developed countries. When Georgia moved from high barriers of entry to low barriers their economy boomed, and have been seeing GDP growth around 10%.

Paul Krugman alluded to this in one of his posts last month, and didn't have as much data as I have done... it seems the house of cards that is laissez-faire/Reaganomics/austerity is falling down in data. He also reported that austerity apparantly hurts the economy. It feels good to be validated.

Update on 13 December 2013: I claimed Australia is one of the few countries that taxes capital gains as regular income and their economy didn't collapse, but on closer examination while their economy didn't see a recession, their stock market did collapse, making me doubt the accuracy of my previous statement, so it has been retracted. Apologies.

One Canadian reason for Instant Runoff Voting, or at least Single Transferable Vote

I am looking at the last elections in Canada, which were in 2011 and they use First past the Post voting. Now, Stephen Harper is the Prime Minister, the Conservative Party's leader, and in the election he received 53.9% of the seats. The New Democrats under the late Jack Layton and the Liberals under Ignatieff both pulled the majority of the rest of the seats creating spoilers for each other across the country.

Wikipedia has really good information about the results in Canada in 2011, http://en.wikipedia.org/wiki/Results_by_riding_of_the_Canadian_federal_election,_2011 and http://en.wikipedia.org/wiki/Results_of_the_Canadian_federal_election,_2011 and I recommend looking at the elections where no party received over 50% of the vote. Here is a summary table of the votes received in each of the provinces from there to see the clear change in representation with FPP as opposed to what the people want. I understand this isn't as detailed, but the link above gives detailed information, this is meant as a quick overview.

Across Canada, the Conservative Party received 39.6% of the vote, yet they received 53.9% of the seats.

Province	Conservative	NDP/Liberal/Green	Conservative Seats	NLG seats
Alberta	66.8	33.2	96	4
British Columbia	45.5	54.5	58	42
Manitoba	53.5	46.5	79	21
New Brunswick	43.9	56.1	80	20
Newfoundland	28.4	71.6	14	86
Northwest Territories	32.1	67.9	0	100
Nova Scotia	36.7	63.3	36	64
Nunavut	49.9	50.1	100	0
Ontario	44.4	55.6	69	31
Prince Edward Island	41.2	58.8	25	75
Quebec	16.5	43.5	7	93
Saskatchewan	56.3	43.7	93	7
Yukon	33.8	66.2	100	0

All of these are percentages from the links above.

Looking at a lot of ridings we get a similar picture on a fine scale. The majority of Canadians voted for either the Liberals or the New Democrats, but since they could choose only one candidate their votes were split and Canadians are stuck with Stephen Harper, even though 60.4% of Canadians voted for left-wing parties. The American election that just happened saw a similar result where 51% of Americans voted for their Democratic Representative candidate yet the Republicans are in full control of the House of Representatives due to Gerrymandering. In Britain which also uses FPP the Conservative Party received only 36.05% of the vote but received 47.08% of the seats. The list of British elections that year again shows a large number of seats with the majority of voters voting for either the Liberal Democrats or Labour but still the Conservative gets elected, in many cases the winner won less than 40% of the vote, with the majority going liberal. In the cases where the Liberal Democrats or Labour won, or the one case where the Green candidate was elected if there was redistribution with IRV nothing would change because they would receive the votes from the other left-wing party which means that there would probably be no difference in victor assuming people vote for the same first choice and fill their ballots out correctly which is usually not a problem in the democracies that use proportional representation.

This is an inherent flaw with First Past the Post Voting. It does not represent the majority. America, Canada, and Britain need to adopt Instant Runoff Voting or Single Transferable Vote for our elections so that we can have an accurate representation of what the people want in our democracies and see third party participation with neglected issues rise to give Democracy back to the people! A better choice would be to choose Single Transferable Vote though, which would make it so that third parties would more likely be represented which would increase the possibility that minority views could be heard in our legislatures. This is why even though there should be 17 or 18 Greens in Australia's parliament despite using the alternative vote there is only one Green in parliament. By making large districts with multiple winners as Fairvote proposes we could have third parties represented and vote for the candidates we want without having either a) a very long ballot or b) vote for the party instead of the individual which locks voters into boxes for which party they prefer regardless of candidate.

This is not just western nations too. Malaysia in 2008 saw again the same pattern of a large difference between the votes received and the seats attained between their two large coalitions in 2008 where the right wing got 50% of the vote but 63% of the seats and they also use FPP. India saw their largest coalition receive 37% of the vote and 48% of the seats, and their third largest coalition received 21% of the vote but only 7% of their seats still with the same system. In my opinion a difference over 10% between votes and representation represents a system failure. In the United States in 2012 the Republicans received 48% of the vote and 54% of the seats, while not as extreme as these other countries is also worth noting because it is across the 50% mark.

But is it really that much better with ranked voting? The data says yes. In 2010 the Labor Party received 50% of the vote and 55% of the seats in Australia. In 2009 in Germany the CDU received 33% of the vote and received 40% of the seats while competing against 4 other major parties all of whom received seats. In 2010 in Sweden the Social Democrats received 30.7% of the vote and received 32% of the seats. Australia, Germany and Sweden are just three examples of the larger trend where proportional representation more accurately represents the views of the People and are much better systems. This is why I think we need to move to Fairvote's plan after looking at how India, Malaysia, Britain and Canada's elections reflect our own so much in minority rule with the same inherently broken election system while Australia, Germany, and Sweden have very accurate representation of what the people ask for in their parliaments. To quote CGPGrey from youtube, would anyone accept a sport where there was a 10% chance that the loser could win? Of course not, and we shouldn't accept it in our elections.

Learn more at www.fairvote.org and CGPGrey's channel on youtube.

Here is a map of where different systems are used: http://www.idea.int/esd/upload/ESD%20map-english.pdf