Aug 31, 2012

Noahpinion: Desire Modification: the ultimate technology

"It's not having what you want/ It's wanting what you've got"
- Sheryl Crow

"We sell you the serenity to accept the things you can't change, the courage to change the things you can, and the wisdom to know the difference."
- advertisement for Metadesire, Inc. in "Utility Functions" (by Noah Smith, in progress)

What is the ultimate technology? Several suggestions have been made. One is faster-than-light travel, which (if allowed by the laws of physics) would open up the entire Universe to human exploitation. Another is self-bootstrapping artificial intelligence, which could (and hopefully would) invent anything humans could invent, and so save us from all further exertions. A third, much discussed in the past decade, is mind upload (sometimes called "brain emulation"), which would allow us to exist in any world of our choosing, and essentially be gods (as long as nobody pulled the plug from outside).

As ultimate technologies go, being a god is hard to beat. And mind upload makes faster-than-light travel look a little silly...why explore strange new worlds when you can just create them? But I think there is an even more ultimate technology out there for the taking - one that is probably a lot easier to create than any of the ones I named. That technology is desire modification.

First, let's imagine the ultimate form of desire modification (or "d-mod" as I will sometimes refer to it). In this ultimate form, each person would have a computer in his or her brain that could change his or her desires, habits, beliefs, personality, and emotions in any conceivable way. Here are some thoughts about what that would imply for the human species:

1. Obviously, the technology would be incalculably dangerous. If the brain computers were hacked, people could be made into slaves, zombies, or worse. So the technology would only be adopted after extreme precautions had been taken and shown to be effective.

2. Such a technology would mean the instant end of economics as we know it. Utility theory assumes something called "local nonsatiation", which means that people always want more of something. With d-mod, local nonsatiation goes right out the window, since you can instantly dial yourself to a "bliss point" where you are just perfectly satisfied and don't want anything else. That's the end of scarcity.

3. Just as personality upload makes FTL travel look a bit silly, d-mod makes personality upload look a little silly. Why bother creating new worlds when you can just like the world you're in? Why "hack the world" when you can just "hack the human"?

4. When we can decide what we want, desire becomes less important than meta-desire. What do we want to want? And what do we want to want to want? Etc. D-mod is like putting the parameters of the utility function in the utility function itself. The result could be very chaotic if people keep changing and changing (because each new change induces a desire for another change). But most people are likely to end up in fixed-points or "cul-de-sacs", where they want to want exactly what they currently want.

5. However, not everyone will end up in the same cul-de-sac. The resultant "clades" of humans will be very, very different from each other, much more different than people are now. This will make human interaction very weird. In fact, in a sci-fi story I'm writing, I refer to the rapid adoption of d-mod as "The Weirdening", and I think the Weirdening would (will?) be even weirder and more important and less predictable than the "Singularity".

6. With humanity divided into clades by motivation and personality type, evolution would be very important. For example, suppose some people just decided to pump up their happiness to ridiculous levels, and eliminate all of their wants or needs - instant nirvana. These "happies" (note the semi-pun) might just sit on sidewalks, letting their beards grow long, until they either died of starvation (which iswhat rats do when given this option) or were kept alive by altruistic passers-by. Alternatively, imagine people turning themselves into "zipheads" who only care about work (I stole the term from Vernor Vinge). "Happies" and "zipheads" would quickly die off or be switched back to other personalities by concerned family and friends; in the end, they would be survived by clades who want long-term survival and possess more complex, well-rounded sets of motivations.

7. However, after all this talk of zombie slaves and Weirdenings, I should note that I personally think that d-mod will be pretty benign. Most people just want to be happier, more motivated, kinder versions of the people they already are. Although we could conceivably become a planet of bizarre posthumans, I think the more likely outcome is that we'll end up pretty close to where we started. But the extra life satisfaction that we'll get from d-mod, even so, will represent a bigger a boost to utility and happiness than any technology before or after. It will put the lie to the old (and wrong) idea that technology doesn't change human nature.

OK, so hopefully your mind is as blown as mine was when I thought of all this back in the summer of 2010. (Random aside: I did come up with all this on my own, after reading some Charles Stross stories about personality upload and thinking "How come these people have godlike control over their worlds but are still so dissatisfied all the time?" A little while later I happened to read Greg Egan's novel Diaspora, which had already explored most of these ideas and questions decades ago. So, while I can claim originality, I can't claim primacy for these ideas. For other sci-fi books that deal with d-mod technology, see Vernor Vinge's A Deepness in the Sky, George Alec Effinger's When Gravity Fails, and of course Aldous Huxley's Brave New World and Philip K. Dick's Do Androids Dream of Electric Sheep?).

Now, back to reality. Obviously we are a long way from the kind of d-mod I discuss above. But how far away? Rudimentary d-mod technologies already exist, and are already big business. The main examples are antidepressant medication such as Prozac, recreational pleasure drugs such as Ecstasy, and "study drugs" such as Adderall. Deep brain stimulation of the nucleus accumbens, used to combat severe depression, is another example. A third is meditation, which is used to increase calmness and sometimes reduce certain desires (remember, skills and techniques also count as "technologies" - Buddhists and others have been exploring d-mod for thousands of years). Motivational speakers, self-help books and courses, and psychotherapy also partly fall into the d-mod category. So the market is already there; d-mod is a product that sells itself.

The real possibility for the explosion of d-mod technology, and the resultant Weirdening, comes from advances in neuroscience, computer science, and the intersection between the two. Drugs are a blunt instrument; computer chips are precise. So watch this space. The "fourth industrial revolution" of desire modification will be the biggest and most important. And possibly the last. But if it's not the last, will it matter?

VMware to roll HP with virtualized data centers

WHAT THEY DO: VMware provides virtualization and virtualization-based cloud infrastructure software designed to help organizations streamline the way they build, deliver and use IT. In July, VMware acquired Nicira, whose OpenFlow technology will be folded into VMware's portfolio of virtual networking software.
The Pitch
VMware has helped so many businesses virtualize their servers that now the company wants to help them virtualize entire data centers.
Virtualization helps organizations cut hardware and power costs while gaining greater flexibility, and VMware has captured the lion's share of this server virtualization market. So now the company wants to virtualize other aspects of IT operations, such as storage, networking and support for client devices. VMware's vision is to tie all of these resources together to create "fully virtual data centers," says Steve Herrod, VMware's CTO.
"By having all the major pieces controlled by software, the software-defined data center can be used to provision all enterprises services on demand," Herrod says. Such an architecture, in theory, would require fewer machines and fewer support personnel. It would also allow organizations to respond faster to changing market conditions.
The Catch
The software-driven data center looks promising for VMware. "The whole idea of the enterprise data center is being rethought and moved into the cloud," says Gary Chen, an analyst at IDC (a unit of CIO's parent company).
Beyond server virtualization, though, VMware is in uncharted waters. As CIOs broaden the scope of virtualization, they'll need management tools to automate and watch over their virtual resources, only some of which may be VMware's, says Carl Brooks, an analyst at 451 Research. "That is a very different proposition than providing a hypervisor," Brooks says.
VMware's vCloud management tool may excel at managing VMware cloud deployments, but IT organizations will want a single console to deal with both VMware and non-VMware resources. This is why the company's acquisition of DynamicOps in July was a key development; DynamicOps's software can manage both VMware-based clouds and alternatives such as Amazon's cloud.
Also, the audience for virtual data centers may be limited, given that VMware requires organizations to use x86 hardware. It will take some time for many organizations to move mission-critical applications to x86 hardware, says Charles King, lead analyst at Pund-IT.
Nor are all enterprises gung-ho to virtualize every aspect of their data centers, King adds. "The cost of failure, especially for large enterprises, typically outweighs the benefits of wholly virtualized environments, so it makes sense for organizations to support those processes and applications with dedicated mission-critical systems," King says.
The Score
Despite potent competitors such as Microsoft and Citrix, VMware still leads the way in enterprise virtualization--a springboard for providing cloud services. "The virtualization vendor best-suited to enable that market evolution is VMware," King says.
Although VMware itself doesn't offer a public cloud service, more than 100 third-party hosting providers now use the company's vCloud management package for their own cloud services. According to VMware, those cloud services are used by 350,000 customers in 24 countries.
"We want to offer a lot more choice in regions and types of clouds," Herrod says. "It's about developing a large ecosystem of public clouds."

Fire is out. Better kindle something new

Amazon on Thursday issued a cryptic notice that the Kindle Fire is sold out, a week ahead of a press event at which the online retailer is expected to unveil its jazzed-up replacement.
  • Amazon has a major press conference scheduled for next Thursday in Santa Monica, Calif., where it is widely expected to reveal a new model of its Kindle Fire tablet.
    Mark Lennihan, AP
    Amazon has a major press conference scheduled for next Thursday in Santa Monica, Calif., where it is widely expected to reveal a new model of its Kindle Fire tablet.

Mark Lennihan, AP
Amazon has a major press conference scheduled for next Thursday in Santa Monica, Calif., where it is widely expected to reveal a new model of its Kindle Fire tablet.

Sponsored Links

CEO Jeff Bezos was chintzy on details. "Kindle Fire is sold out, but we have an exciting road map ahead," he said in a statement.
It's the latest sign that the book-selling giant has emerged as a major player in other fields, especially in Web services, and is now developing and selling mobile devices, too.
Bezos' declaration covers only Kindle Fires sold online by Amazon. The touch-screen tablet and e-reader remains readily available at many stores that carry consumer electronics and can be found discounted at $179, from $200.
Amazon is expected to unveil a new Fire at a Santa Monica, Calif., press event on Thursday.
Much as Apple's Steve Jobs used to do, Bezos is fueling hype for new mobile devices launched in time for holiday sales. Also, on Wednesday, Microsoft and Nokia are expected to reveal features of an all-new Windows Phone 8. And Apple is expected to roll out out its iPhone 5, possibly by mid-September, as well as a new iPad model before Thanksgiving.
Hype and rumors, at this juncture, surround:
Kindle Fire. Bezos must account for the likelihood that Apple will roll out a smaller, cheaper version of the iPad, which now runs $500 and up, says IDC research director Tom Mainelli.
The new Kindle Fire could have an 8.9-inch or 10-inch screen and might be priced at $300 or less. That compares with the 7-inch screen on the Kindle Fire now, as well as Google's Nexus 7 and Barnes & Noble's Nook. But Amazon could face "downward price pressure if Apple launches a lower-priced iPad," Mainelli says.
Windows Phone 8. This new Lumia handset from Microsoft and Nokia, due on sale Oct. 29, uses interactive self-updating tiles, instead of static icons, to navigate the menu. The same interface will be on Windows 8 PCs and tablets.
"These are great devices, but there is a crucial step missing at the point of sale," says Ramon Llamas, IDC's senior research analyst for mobile phones. Salespeople are in the habit of pitching iPhones and Androids because they're easy to sell, he says.
Apple iPhone 5. Apple made a big iPhone splash last year by introducing the Siri voice-activated assistant. This year the company likely will unveil a thinner, lighter iPhone 5, possibly with a bigger screen, Llamas says.

The end of the retail recession?

Last month, when National Australia Bank issues its index of online retail sales for the year to May, it appeared even e-tailers were experiencing the effects of a broader retail recession, with the growth rate for online sales continuing the gradual slowdown experienced over the course of this year. The latest numbers, however, depict a significantly more positive mood.
It has been evident in the most recent round of annual results from bricks and mortar retailers that something happened quite late in the financial year, with quite discernible upticks in sales and profitability at the tail-end of an otherwise dismal year.
The most interesting results were the 4.6 per cent fourth quarter increase in Woolworths Big W discount department store business, which had been really struggling before that final three months, Target’s comparable store sales growth of 4.5 per cent in that quarter and its Wesfarmers’ sibling Kmart’s 2.2 per cent sales growth. It is the discount department store segment of the market where the retail recession had been most evident.
Today’s NAB online retail sales index showed that online sales growth, which had dropped from 19 per cent year-on-year in March to 14 per cent in May picked up strongly in July, with year-on-year growth of about 25 per cent. NAB chief economist Alan Oster commented that there had been notable growth, not just in online sales, but for traditional bricks and mortar retailers.
That’s consistent with what the Reserve Bank minutes of its board meeting earlier this month suggested, with the minutes recording that the board noted indications that consumer spending had retained some momentum in the June quarter.
With three 25 basis points cuts and one 50 basis point cut to official interest rates in 10 months it perhaps isn’t surprising that some level of stimulus is starting to flow through to household spending, although that may not be the primary reason for the pick-up in retail sales.
It was, of course, from the middle of May that the Gillard Government started splashing vast amounts of cash around as part of its compensation of households for the introduction of the carbon tax. With gambling venues reporting an immediate and significant lift in sales consumers may well have treated those payments as windfalls and simply spent them.
If that were the case, the lift in sales that started in the last quarter of the retailers’ financial year and which, anecdotally at least, has continued into the new financial year could be a short-lived phenomenon.
There are, however, some broader and reasonably encouraging signs that some level of confidence has returned to consumers and businesses, with house prices stabilising and the demand for credit, which had been very subdued, showing signs of life. Maybe it’s because Europe and the continuing prospect of an implosion in Europe haven’t been front page news for some time.
The dive in commodity prices and the shelving of a number of mega mining projects that were on the drawing boards may have an impact on sentiment in the short term, although as that works through the terms of trade and the competition for resources within the domestic economy it might take some pressure off the non-resource sectors and states.
While traditional retailers would be gratified by even a sliver of extra spending in their stores, the increased scale of online spending – $11.7 billion in the year to July according to NAB – and its rising share of total retail sales should lead them to intensify their own efforts to build an online presence.
NAB says that online sales were equivalent to 5.3 per cent of traditional retail spending in the year to July, up from 4.9 per cent in January. Encouragingly for the bricks and mortar retailers pursuing "bricks and clicks" or "omni-channel" strategies, domestic e-tailers dominate the spending, with a 72 per cent share, although NAB says there was a marked pick-up in international sales in July.
Myer’s Bernie Brookes has been saying that, despite their tardy entry to online retailing, the traditional bricks and mortar retail brands will eventually dominate online retailing and that the entrepreneurs that have built the sector so far have "had their day in the sun". 
By this time next year we’ll not only know whether the pick-up in retail sales generally was a cash-splash inspired aberration but it ought to be possible to assess whether the attempt by the bricks and mortar retailers to establish a meaningful online presence has gained any traction

Standard Chartered : bank to the world’s crooks

Even rivals say StanChart, which itself volunteered the evidence used in the DFS case, has been ill treated. “Banks were entirely right to presume the U-turn exemption was there to be used,” says one executive at a big global bank. “The US decided it wanted Iranian transactions to be able to be conducted in dollars Banks now feel burnt that they are being held out as the world’s crooks.”
As recently as last week, StanChart, which disclosed in 2011 that it was under investigation by US authorities over its Iranian operations, was playing down the likely impact of the affair. With no warning of imminent DFS action, chairman Sir John Peace and Mr Sands both went on holiday after presenting the bank’s record half-year results 10 days ago.
Within a couple of days, though, Sir John was flying from Florida to consult the bank’s New York lawyers and Mr Sands was heading home from Canada to London. A meeting with Mr Lawsky is scheduled for next Wednesday, at which the bank will challenge DFS settlement demands and, more crucially, make its case against being stripped of its US licence. It would be keen to resolve the issue before then, although insiders say that might not be realistic in such a tight timeframe.

Australia in the global wringer | Robert Gottliebsen

Australia is being put through the global wringer. Unless Europe, China and the US each embark on a massive stimulation (Three stimulus stars are rising, August 30) then there are some tough times ahead for Australia.
The now much more confident Julia Gillard is in for a shock because her budget numbers are wrong. But so are those of most of the Coalition state governments.
The global wringer is not about political parties.
This is how the wringer works. Federal treasurers from Peter Costello to Wayne Swan have claimed the credit for our prosperity and each in their own way got used to spending the cash. In fact it was the mining boom that delivered their joy. But that mining boom was really an iron ore, coal and gas boom. And now that boom has turned nasty.
The price of iron ore and coal has collapsed (Politburo pulls the floor from under iron ore, August 30).
Gas has held up better but we are looking at a longer-term global surplus of gas that could not have been imagined two years ago. Normally such events would gave collapsed the dollar so we would have taken much of the commodity price crunch via our currency. The lower dollar would have stimulated other exports and imports would have been replaced by local supply where possible.
But at least to date the currency has held above parity with the US dollar because the world sees us as a safe haven; our interest rates compared to others are high and we are constructing vast projects that drag money into the country.
Of course the high dollar keeps inflation in check and normally that would plunge interest rates. But this time around our banks are replacing overseas borrowing with local borrowing so interest rates compared with the rest of the world are high.
Our federal and state government spending is geared to the boom. Most states are starting to wake up that the game has ended but in Canberra only Martin Ferguson understands what has happened.
If the global wringer kept squeezing us for a year then we would be in a real mess.
How can we get out of it? If China, Europe and the US take to the money printing presses again then we will get a respite – at least for a year or so. If we cease to be the darling of the currency markets, that might send the dollar down to where it would normally go when commodities slump.
By the end if 2014, most of the mining investment projects will be finished and given we have made our mining operations and construction the most expensive in the world, there will be only bolt-on mines or very profitable projects started. Accordingly, that pressure will come off the currency. Eventually construction costs will return to much lower levels. Interest rates will come down unless the lower dollar starts to rekindle inflation.
Meanwhile, Australians need to be on the edge of their seats for tonight’s action at Jackson Hole and the words of ECB President Mario Draghi on September 6

Aug 30, 2012

Trujillo's Folly: to displace Ebay with Trading Post...

TELSTRA has outsourced its flagging classifieds business, the Trading Post, to online classifieds firm, putting in doubt the jobs of further 100 staff and marking the end of the telco's short-lived advertising network.
Telstra has agreed to licence the Trading Post brand and its operations to carsales,com which plans to aggregate the classified business into its brand.
The move to outsource the operations of the Trading Post was foreshadowed by The Australian earlier this week and comes as the telco giant pulls the plug on its Telstra Advertising Network which was launched only 12 months ago.
As many as 60 jobs could be cut from the Telstra Advertising Network after the Multi Channel Network, a joint venture between pay-TV operator Foxtel and Fox Sports, was awarded a multi-year contract last week to take over responsibility for selling Telstra's digital advertising.

Only a folly form Telstra, Trujillo is  still counting the cash he gulled out of the Telstra and Sensis.... 

International IT companies ripping off Australian consumers

With just one price tag Chinese PC company Lenovo has dealt a drastic blow to the integrity of Australia’s IT price inquiry. Despite the raging media storm and ongoing parlimentary inquiry around the outrageous mark-up’s of Australian IT products, Lenovo has chosen to slug Australian consumers around $700 more than what their US counterparts will have to fork out for the Carbon X1 Ultrabook. 
What’s worse, is that the company doesn’t even feel that it needs to give an adequate reason for the drastic price hike.
Talking to CRN, Lenovo’s director of products and solutions David Heyworth argued that the cost of servicing warranties and providing IT support for its customers forced the company to add just under $700 to the Australian recommended retail price. “We have high standards and we wouldn’t compromise on service and support that we deliver through our partners, that’s always been important. That’s where we see a lot of growth for Lenovo, being able to back up our products 100 per cent,” Heyworth said.
We’ve heard such reasons before. Heyworth’s argument fits cosily into ‘the higher cost of doing business in Australia’ argument that companies use routinely. The problem is that the public isn't buying it and they never have. They didn’t buy it before the IT price inquiry, (hence triggering this whole mess) and are unlikely to start listening now.
The argument around the 'added costs of business in Australia' just isn’t transparent and in Lenovo’s case, how can the general public honestly accept that it costs almost $700 more per computer to ensure that it is properly serviced and supported in Australia? Particularly when the manufacturer’s warranty usually only lasts a year, and from then onwards Lenovo is able to slug consumers whatever they want to have their Carbon X1 repaired.
On top of this, another reason widely touted by tech companies for higher prices – the added costs of customs stamp duty  in Australia - has recently been contradicted by Customs Australia's own submission (PDF) to the tech price inquiry. The justifications may seemingly be on shaky ground but it's unlikely that the tech giants are too worried. 
Scant regard for the inquiry
Behind Lenovo's explanation lies a simple truth; the timing of this rip-off shows that the company doesn’t care about Australia’s IT price inquiry or any conclusions it may reach.
As with the rest of the tech giants Lenovo must see it as a toothless, fruitless process that will simply blow over once the government is done appeasing the masses. Why else would they would the majority of them not bother to show up and co-operate with it?
The fact that the world’s major technology players don’t care about our IT price inquiry has been evident  since its commencement in May, but what’s dangerous about Lenovo’s move is it reveals that all of this talk around exposing rip-offs and forcing down prices isn’t really having any effect. In its current format, the inquiry hasn’t changed the attitudes of any of the companies involved.  
Perhaps it may be too soon to cast the whole inquiry off as a failure, but this incident has certainly reinforced lingering questions as to whether this it will actually stop tech rip-offs in Australia.
Calls for direct intervention
This whole debacle has led RMIT senior lecturer and IT price inquiry commentator Mark Gregory to believe Australia’s prices will remain as they are, unless the government directly intervenes and empowers the Australian Competition and Consumer Watchdog to take the tech players to task.
“No way will these tech companies do anything unless they are forced,” Gregory says.
This is quite possibly an outcome that the government wants to avoid. Even Treasury has recommended against it, saying in its submission to the inquiry that the government should work on promoting local competition rather than driving down prices through legislation.
But there may be no way around it. These are incumbent, wealthy technology companies - they aren’t scared of a bit of bad publicity or a panel of politicians.
Neither the media’s commentary nor the government’s inquiry is motivating the tech giants to lower their prices. Perhaps it’s time for the inquiry to stop threatening with words and start taking some action. 

Left wing politics is damaging the economy

The muscle flexing going on at Grocon building sites is a reminder of how good we had it during what Tony Abbott calls the 'golden age' of the Howard government.  In those days we could afford as many of these title fights as we wanted, and the economy would grow nonetheless. The mother of them all, the Patrick’s waterfront dispute, even made pretty decent TV.

But we can't afford it now. Look at the competing forces in the economy, and it quickly becomes clear that a major escalation in building costs – Grocon says it's losing $370,000 a day just at the site in Melbourne's Lonsdale Street – is a golden-age-luxury we can't afford.   Australian Mines and Metals Association director Minna Knight yesterday warned that this kind of dispute would deter inward investment, including $260 billion in resources projects.
That claim is a bit overblown, but when Knight's comments are put alongside falling commodity prices, it's easy to see how much damage the CFMEU can inflict on Australian growth. Overseas investors, including our biggest miners, must revise their forecasts not only for iron ore prices nearly 40 per cent off their peak, but for the risk of rolling industrial action. 

The abolition of the Australian Building and Construction Commission has clearly emboldened the CFMEU, whatever its leaders say, and industrial relations minister Bill Shorten has the urgent problem of breaking up this dispute to keep some kind of fig leaf over Labor's embarrassment.

But his is not the biggest problem. While Tony Abbott is happy to say the ABCC 'cop' must be put back on the beat, there is no ducking the fact that industrial action under an Abbott government would return to something like the 'golden age' disputes John Howard and Peter Reith fought.

Why? Because at heart these battles are not about workers' rights – other than workers' right to be part of a potent power bloc in Australian politics. While the Gillard government hangs on, the bald power plays of the CFMEU leadership will at least be heard in Labor boardrooms. Under Tony Abbott they will not.
The risk is that in just over a year's time, a perfect storm will blight the economy – tumbling commodity prices, ravaged public finances, increased labour costs putting an extra brake on infrastructure projects, and industrial anarchy.

If that combination arrives, the Australian economy would look more like the early 1990s than the full employment growth story of today.

The big difference is that in the early 1990s, the 'golden age' lay ahead of us. For some time I have argued that only the opposite looms for us now: a top heavy demographic profile with burgeoning healthcare bills, the golden goose of the resources sector rapidly being replaced by overseas geese or just being hit by softening demand (hence the dropping prices), and in particular, a public debt position that we simply will not be able to address in years ahead.

The Keating public debt that John Howard heroically paid off during mining-boom mark one, was smaller than the 10 per cent of GDP our federal government now owes. When the state debts are factored in, we're well above 20 per cent of GDP, and that's before our private debt bubble in the housing market is considered.

Whether or not Knight's predictions are correct for the resources sector, an incoming Abbott government will be slashing public spending, and public service jobs, to try to balance the budget just as unemployment is naturally rising anyway. The vicious circle of slowing business activity, slowing tax revenues, and rising unemployment will do its work, and we won't be back in the golden age of the late-noughties – more the 'rust belt' blight that characterised the Victorian economy in the late 1980s.

The CFMEU leadership won't be worrying it's pretty tattoo'd head over that kind of scenario – union leaders, if not the workers, prosper during times of mass unemployment.

The onus is now on Bill Shorten to prove that Labor can smooth over the Grocon dispute without the ABCC. If he does, Abbott will take the blame for the coming industrial shocks. If he doesn't ... what does it matter? The unions will get the power they crave, and their members, along with the rest of the country, will suffer the consequences.

Price collapse = less tax = revenue collapse

SECURING a clean-energy future, July 10 last year:
THE floor is designed to reduce the risk of sharp downward movements in the price, which could undermine long-term investment in clean technologies.
PM, July 11 last year:
PM: The price ceiling is $20 more than the international price.
John Laws: Why?
PM: Well, we just thought for stability ... 
PM, Hansard, September 13 last year:
THE bill also provides for a price cap and a price floor ... This will limit market volatility and reduce risk for businesses ... 
Mark Dreyfus, Carbon Expo 2011, November 8 last year:
FOR those investing in abatement technologies whose value is sensitive to the level of the carbon price, a price floor helps reduce downside risk. 
PM, November 9 last year:
WELL, we have set a floor and cap so that there can be stability in pricing ... because people are making very long-term investments ... 
Penny Wong, Hansard, February 28:
OUR policy does include a price floor which acts as a safety valve for investors in low-emissions technology by establishing a minimum price for the first few years. 
Christine Milne, May 4:
ESTABLISHING a floor price is critical to certainty, as is sticking by an agreement once it has been delivered. 
Milne, May 8:
GETTING rid of it would not only be a blow to business certainty but would also potentially blow a hole in the budget. 
Greg Combet, The Australian, July 5:
WE have legislated a three-year fixed price period. We are committed to the whole package. 
Milne, Radio National Breakfast, July 4:
IF you allow the volatility that has occurred in Europe, you get kind of chaos in the system.
Sky News Agenda, August 21:
COMBET: We have legislated the floor price; that's quite well known. I am discussing with the European Union the linkage of our schemes. It is an issue that's in those discussions, but we are committed to the arrangements we have legislated.
David Speers: At $15.
Greg Combet: That's the floor price. 
Craig Emerson, August 21, i98FM:
MR Abbott's scare campaign has fallen to the ground; the sky hasn't fallen to the ground as he said it would. 
Wayne Swan, AAP, August 21:
THE sky hasn't fallen in. 
AAP, August 26:
MR Swan says (Tony Abbott's scare) campaign has been exposed as a fraud after Mr Abbott conceded on Saturday that the sky hadn't fallen in with the introduction of the carbon tax and its immediate effect had been less than that of a "wrecking ball".
Combet yesterday:
REMOVING the price floor will simplify the pathway towards full linking, and was an element of the linking package agreed between Australia and the European Commission. By connecting Australian and European carbon markets, linking will ensure a single price for Australian and European carbon units. This provides investors with long-term certainty on the price of carbon pollution, which largely removes the need for a price floor in the flexible price period. 
Lewis Carroll, Alice Through the Looking Glass:
"WHEN I use a word," Humpty Dumpty said in rather a scornful tone, "it means just what I choose it to mean - neither more nor less."
"The question is," said Alice, "whether you can make words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be master - that's all.

Combet's cut-price carbon caper blows $25 billion budget black hole | The Australian

THE carbon floor price is dead, but it certainly hasn't died alone. Rather, there are so many fatalities in this announcement that Canberra will need a new cemetery.
The first victim of this double pike with lateral twist (nine points of difficulty) is the credibility of the government's budget forecasts.
True, they were already at death's door; yet it was merely a few months ago that Wayne Swan smugly announced a surplus predicated on a 2015-16 permit price of $29.
But even if the carbon price falls to only $10, and then rises after that by 4 per cent in real terms annually, the commonwealth's fiscal position during the period from 2015-16 to 2019-20 worsens by $25 billion. To leave budget outcomes unchanged, the government therefore needs an additional $25bn in revenues, spending cuts or both. Where are those savings, Mr Swan?
But the Treasurer isn't the only minister swinging in the breeze. After all, Climate Change Minister Greg Combet repeatedly stressed that the entire purpose of the carbon scheme was to provide a "predictable, long-term price signal" whose steady rise investors in renewables and other low-emissions technologies could rely on.

Treasurer Wayne Swan orders freeze on $2bn in handouts | The Australian

THOUSANDS of federal grants promised to groups ranging from community bodies to universities are at risk as the government's razor gang seeks billions of dollars in budget savings to offset the sharp downturn in revenue.
The Australian has learned that the Gillard government has imposed an across-the-board clamp on an estimated $2 billion a year in federal grants after cabinet this week received its latest updates on the budget position.
The order for ministers to review all grants and strictly control any funding that has not been already paid or contracted came at Monday night's cabinet meeting.
The meeting was held before Labor's decision to dump the $15-a-tonne floor price for carbon from 2015, the crunching of two dental schemes for a "large saving" and Julia Gillard's departure for the Pacific Islands Forum in the Cook Islands.
The clamp on politically sensitive grants, which number in the thousands and can be vital for community groups in MPs' electorates, has some ministers concerned about a new backlash for an already unpopular government. Other ministers are also concerned the high cost of commitments to the national disability insurance scheme and the upcoming Gonski school education reforms are unsustainable in the long term as government revenue continues to fall. But the tight control on spending from Wayne Swan is designed to keep the government on track to meet its promise of a surplus, forecast at $1.5bn, in the 2012-13 budget.
Federal grants from ministers can range from a few thousand dollars for arts festivals and local sports events, to hundreds of thousands dollars for charities and indigenous groups, and millions of dollars for sport or higher education and innovation bodies.
Last year, the Prime Minister handed out hundreds of grants, including $1.6 million for the Australian Youth Orchestra, $278,000 to the Flying Fruit Fly Circus, $600,000 for indigenous languages and $1.1m to the Australian Football League to fight drugs in sport, as well as hundreds of grants to councils and indigenous communities.
Freezing and assessing grants is a traditional method of treasurers' razor gangs to "check under every log" when trying to cut government spending.
The biggest source of pressure on the budget is the plunge in commodity prices, particularly for the nation's iron ore exports.
The iron ore price suffered one of its biggest daily falls yesterday, dropping $US5 to $US94.80 a tonne on spot markets, its lowest level since the financial crisis, and 37 per cent below the level at the time the budget was being compiled.
Deloitte Access Economics director Chris Richardson said the task of returning the budget to surplus was "getting more difficult by the day". "The iron ore price is not the only thing, but it is the largest single thing," he said.
The Treasurer has conceded that commodity prices are falling by more than the budget had forecast, but said yesterday that it was wrong to take the spot price and make a 12-month calculation on the budget impact.
Mr Richardson said the damage to revenue caused by the fall in commodity prices was being compounded by the continuing strength of the Australian dollar.
"This is hurting company profits, superannuation taxes, and both the minerals and the petroleum resource rent taxes while capital gains tax, across various revenue heads, is still in a hole," he said.
Mr Richardson said it was not yet certain that the deficit this year would be in the order of $10bn, as some economists have suggested, but he said the outlook for 2013-14 was even worse. It would take until the following year for the full impact of the downturn in commodity prices to be felt.
While revenue is weakening, there are new pressures on spending. The new Pacific Solution to the asylum seeker problem carries a heavy cost. According to the expert panel, the cost of re-establishing a processing centre in Nauru will be between $1.2bn and $1.4bn, while the centre in Manus Island in Papua New Guinea would be about $900m over the forward estimates.
Immigration Minister Chris Bowen said the expansion in the humanitarian intake would cost $1.3bn over the four-year budget period, with a $150m cost in the current year.
The new dental scheme announced yesterday will eventually cost only slightly more than the scheme it replaces. However, the existing chronic dental health scheme, which is costing about $1bn a year, is not in the budget forward estimates as the government made a policy decision to cut it in 2008 that it has been unable to get through the Senate.
As a result, the new scheme will have a budget impact over the four-year budget estimate period of about $2.5bn, although this does not start to be felt until the second half of 2013-14. This will have to be offset by savings to prevent damage to the budget bottom line.
Mr Richardson said the new budget costs would be difficult to manage, because the public sector was already trying to achieve 4 per cent efficiency savings to help hold costs steady.
"The stronger the economic headwinds, the harder is the task to hold the line on expenditure," he said. "You can't nip and tuck to make good the money from a revenue short-fall."
Bank of America Merrill Lynch chief economist Saul Eslake said that the difficult budget outlook had not stopped either the government or the opposition from floating open-ended and potentially very expensive commitments, including the NDIS, increased funding of schools, and, in the case of the Coalition, the replacement of carbon tax with an expensive direct action plan and the promise of personal income tax cuts.
Coalition finance spokesman Andrew Robb said it was no surprise that commodity prices were falling.
"The terms of trade (the difference between export and import prices) are 40 per cent higher now than they were in the Howard years, which the government claims to be the golden era for tax revenue," he said. "The terms of trade don't have to collapse - they only have to come back 30 per cent or so and we're looking at $50bn to $60bn deficits for the next three or four years."

Warning: after boom it'll be Dutch and go

AUSTRALIA faces a run on its currency, a deeper collapse in housing prices and a bank funding crisis to rival Europe's as it tries to come to grips with life after the mining boom, according to a report from a boutique US advisory firm.
Entitled Australia: The Unlucky Country, the report from Variant Perception argues that Australia faces a classic case of Dutch Disease, the erosion of capability that flows from a resources boom and an overvalued exchange rate.
"The mining sector has crowded out almost all other sectors of the economy and also funnelled credit and liquidity into a housing bubble in the real estate sector," says the report, which has been circulated among global money managers.
The Australian dollar is overvalued on most metrics, one being the hamburger-based Big Mac Index, which has the Aussie 15 per cent to 20 per cent above par, Variant says. But it will need to fall well below par and stay there for some time for the rest of the economy to come to the fore after mining retreats.
"It will be almost impossible to move mining capacity to other sectors in Australia," the report says.
"This is a classic problem for economies who suffer from Dutch Disease. When the hangover arrives, writing off production capacity is often done at a considerable discount to cost.
''In addition, the manufacturing sector is under-developed and will not be able to take up the slack for the loss of momentum in construction and mining."
The report came as June construction figures released yesterday showed housing at its lowest in a decade, down 15 per cent from its peak two years ago. Non-residential building fell almost 20 per cent after
the wind-up of the Building the Education Revolution program. Variant says the Aussie might slide smoothly as a result of the Reserve Bank cutting interest rates, or it could fall suddenly in a European-style crisis in which foreigners pull out of Australian banks and corporates.
"A total funding need from external sources of 40 per cent is extraordinarily high,'' the report says. "This increases the risk yet further should Australia face a funding shock, driven either by events at home (a severely slowing economy), or abroad (e.g., a euro-driven credit event). Australia's net external debt levels resemble those seen in the European periphery. Its net international investment position is deeply negative, worse than that of countries such as Turkey and Brazil."
Variant says the Reserve Bank will come to come to the rescue of the big four Australian banks in a crisis because they are too important to fail.
But Australian analysts dismissed many of Variant's conclusions as nothing new. "They've discovered the current account deficit," said one. "We discovered it in the 1980s and got on with our lives.'' Annette Beacher, the head of Asia-Pacific research with TD Securities, said the analysis was selective.
''There are scant fundamental grounds for comparing Europe with Australia,'' she said. ''Australian banks loosened their prudential standards on home loans only very briefly in 2006-07, and certainly learnt their lesson for the subsequent commodity boom.''
She noted that Australian banks were extremely profitable and now far less dependent on overseas markets for funding.