Charles Gutjahr

Melbourne, Australia

May 2019

Charles Gutjahr

A short opinion

Huawei

The big Chinese tech company Huawei has been banned or shut out by several Western governments recently, but it's not clear why. I figure it's either:

  • reasonable, based secret intelligence about Huawei, or
  • an overreaction, based on nothing substantial

Either one of those is foolish.

If there is secret intelligence showing a real danger to using Huawei equipment, then the responsible thing to do is warn everyone and allow the industry to avoid and mitigate the risks.

But if there isn't such intelligence and this is an overreaction, then we piss off China unnecessarily, pay more for phones though the lack of competition, and risk splitting the world into two incompatible sets of technology.

I feel like our governments are picking a fight that is going to harm us all without even telling us why.

Charles Gutjahr

Brunswick East, Victoria
Come home soon @amythemighty... the carrots are waiting for you!

Charles Gutjahr

Serbian Orthodox Church Holy Trinity Brunswick
Democracy breakfast. Don’t forget to vote today!

Charles Gutjahr

A short opinion

The Coalition doesn't deserve a reputation for good economic management

Bob Hawke was many things, but I want to highlight one: his Hawke/Keating government was the best economic manager our country has ever had. That's obviously a personal opinion but I think it's fair to say it is a view widely held amongst economists, and certainly what I was taught when I studied economics in the late 1990s.

I try to write an opinion here each week, and I was already planning on writing how I think the Coalition fails at economic management. Hawke's death throws that into sharp relief for me. Why do more people seem to think the Coalition manages the economy better than Labor, when Labor is the one with the good record?

The Coalition threw out an efficient carbon price and replaced it with an inefficient (and ineffective) direct action plan. They defend wasteful subsidies like negative gearing and cash refunds for imputation credits. They focus on the wrong levers like corporate taxes when it's clear that wage growth needs attention. The Coalition made a big fuss about government debt while Labor were in office, then proceeded to double the debt when they got into office.

But their big failure, the one that I wish more people understood, is what Howard/Costello did in the early 2000s. They took temporary revenue from a mining boom and used it to pay for permanent tax cuts. They imposed a ratchet to force smaller government on an unwilling Australian population. The Coalition put their political ideology of small government ahead of responsible management of the economy, and in opposition to what I believe most Australians want: a government that provides excellent services.

I think the Coalition doesn't deserve a reputation for good economic management. They've been our worst economic managers for perhaps 40 years, and I don't see that changing yet.

Charles Gutjahr

A short opinion

Uber

Uber listed on the stock market on Friday and was valued at US$80bn. How is that possible when Uber lost US$3bn last year? Uber loses money because it subsidises every fare... we pay perhaps less than half the actual cost of Uber rides!

I think either Uber is screwed, or we the customer are screwed.

Uber can only be worth that much if it somehow starts making money. It can't wring much more money from its underpaid drivers, because Uber drivers are already struggling to survive. It could raise prices to be profitable, but there's a strong argument that Uber is more expensive to run than taxis... so if it does raise prices, surely taxis will be cheaper and take back the business Uber took from them?

My worry is that Uber becomes a monopoly. That seems like the only way they could be worth US$80bn: they wipe out taxi services, then hike up their prices to a sustainable level. If that happens then we are screwed: we end up with a more expensive taxi service without the regulation or trustworthiness.

I reckon it is up to all of us to prevent that monopoly. Next time you should pick anything but Uber. There are plenty of alternatives — try Ola or Bolt or Shebah or ihail or DiDi or ingogo or GoCatch or Lyft instead. If you haven't tried the alternatives, you should!