What I’m reading. When the Boat Comes In by Boris Frankel. It’s a successor to his 1992 book From Prophets the Deserts Come (great title! – and a special mention for the first reader to email me with the source of this literary allusion). It’s not only an analysis of Australia’s economic and social position, but a policy program. I come in for a mixture of bouquets and brickbats, and I’m writing a review essay for Arena, which will probably be out in a couple of months.
As the Washington Post observes, Culprits Are Countless in the recent accounting scandals. But the real culprit, mentioned towards the end of the article is the efficient markets hypothesis. More on this soon!
A further round from Don Arthur on Higher education – Is it a scam?. Don makes a lot of good points, though I disagree with him on an important one. University education does produce human capital, as I argue here. Of course this term needs to be understand in a broad sense, rather than a narrowly utilitarian one, and includes things like ‘cultural capital’, which Don mentions as including an ability to understand and make appropriate cultural allusions e.g. in Glebe to Julia Kristeva and Salman Rushdie.
A very thoughtful piece on the WorldCom collapse by Polly Toynbee. As she says, the US formula of the 90s is now clearly “Yesterday’s model”. The open question is, what will replace it.
While writing my posting about TNR, I wondered who would be the first to argue that, since John Malkovich is a well-known actor, it would be stupid to to take seriously a death threat from him. The prize goes to Jason Soon who writes:
“Does the fact that John Malkovich looks like this make his threat to shoot Fisk anymore credible? Obviously a face like that guarantees Mr Malkovich lots of psycho roles but he’s an actor and no one would seriously regard his little burst of gung-ho bullshit as a serious death threat.” (emphasis added).
Do the initials OJS mean anything to you, Jason?
More seriously, I don’t regard death threats of any kind as an appropriate subject for ‘put-downs’ and point-scoring at the expense of the recipient, particularly with respect to an issue where lots of people on both sides have in fact been murdered.
A depressing post here. The New Republic Online comes about as close as you can to endorsing the use of death threats to silence anti-Israel commentators, in particular, one made by actor John Malkovich against Robert Fisk. There is one weaselly phrase –however reprehensible–, but the anonymous editorialist’s real feeling is in the summing up.
(S)he quotes Fisk
‘ “As journalists, our lives are now forfeit to the internet haters,” Fisk wrote. “If we want a quiet life, we will just have to toe the line, stop criticising Israel or America. Or just stop writing altogether.” ‘
‘Hey, now there’s an idea. ‘
It’s easy to find similar, and, for that matter, far worse, on the other side of the wire. (For example, look at all the equivocal or even supportive responses to the fatwa on Salman Rushdie). But it’s sad to find it somewhere like TNR. The TNR article pretty much proves Fisk’s point. He writes: ‘Slowly but surely, the hate has turned to incitement, the incitement into death threats, the walls of propriety and legality gradually pulled down‘.
As Tim Blair observes, stock markets have barely moved in the wake of the great Worldcom fraud.
On the other hand,
(a) Most US indexes are already lower than they have been for years
(b) Telecom stocks took a pounding (Worldcom was suspended after falling to 20 cents)
Two possible takes on this
(1) These problems are isolated to the telecom sector (and a few others like energy trading, conglomerates, dotcoms etc). Apart from that the economy is looking good.
(2) This isn’t news. Everyone knows corporate accounts aren’t worth the bits it takes to display them on screen.
Jason Soon responds to my post on the failure of radical free-market reform by restating the case for a competitive model in higher education. This is a complex issue, and my counterarguments are too lengthy for a blog post. You can find them in detail in my submission to a recent Senate inquiry. It’s also available as a PDF file
For now, I’ll just observe that, outside fairly narrow forms of vocational training (as exemplified by the Australian commercial VET sector and the ‘University’ of Phoenix in the US), for-profit education has never been a success.
The exposure of massive accounting fraud at WorldCom may not signal the final crisis of capitalism or, as Margo Kingston suggests, the decline and fall of the American empire?
But it surely does signal the end of the kind of American capitalism (what Edward Luttwak called Turbocapitalism) that was presented to the world in the 1990s as the only path forward. The crucial ideas, including shareholder value, incentive-based management and the claim that stocks are always and everywhere the best investment now look every bit as discredited as the Japanese model that was touted in the 1990s.
The NYT agrees with my take, saying U.S. Businesses Dim as Models for Foreigners
My blog is just about a week old, and I haven’t found the Internet this exciting since I discovered Usenet in the early 90s. Even setting up my website five years ago was not as good. Despite wildly varying ideological views, I’ve had a friendly welcome from bloggers across the board, and I’m already getting links and referrals (My return links will be up soon, I promise). It really seems as if blogs might deliver on the original promise of the Web – certainly the technology seems ideally suited for individuals and small groups, with no obvious way of scaling it up to corporate level. No doubt I’ll get jaded and disillusioned one day, but I hope it will be a long way in the future.
This piece on sweatshops by Nicholas Kristof has had a lot of favorable links from the more right-wing members of the blogging community. I found it disappointing. Not that he isn’t right in what he does say, namely that a ‘living wage’ must be assessed in comparison to the alternatives, not to wages in rich countries.
But he stops where the really tough issues start, namely what rights workers for Nike (etc) in poor countries should have. I suggest that they should have the same rights regarding union organisation etc as workers in rich countries. Of course, many of Kristof’s newfound admirers would agree, but with the proviso that no-one should have any union organisation rights.
The proponents of privatisation are crowing following the recent sale of Sydney Airport for $5.6b. On the other hand, writing in the Australian eight years ago, I asserted that privatisation would mean higher charges, higher taxes or both. Was I right? The profitability of Sydney Airport has increased dramatically. But the increase came as a result of a near doubling in aeronautical charges at the facility. This is on top of increases in all the other charges (parking, concession rentals and so on) and the introduction of a slew of new charges (e.g taxi levies). If the government had kept the airports, the flow of money from these charges would have more than outweighed any savings they will get from repaying debt with the sale proceeds, implying a capacity for lower taxes or more spending in the long run.
This pretty much sums up what is wrong with the government’s telecommunications policy. If you think Telstra is too big for its boots now, wait until it’s a privatised monopoly lobbying (and threatening) governments to secure favorable treatment. As Tanner says in the article:
“Telstra has far too much power, it treats consumers and shareholders with disdain and now it’s out threatening legal action against the person who is the alternative minister who is in charge of them.”
New articles on the website
Crossed wires on Telstra Australian Financial Review, 20 June.
Even the old is new again Australian Financial Review, 6 June.
Time to earth electricity Australian Financial Review, 23 May.
Stick to a few principlesAustralian Financial Review, 9 May.
UK turns left for national health Australian Financial Review, 24 April.
The cost of doing nothing Australian Financial Review, 11 April.
I finally got around to checking out the International Democratic Union, of which our own John Howard was recently elected president. I was mainly interested in the repeated use of the phrase “centre-right” to describe someone who is, on his own assessment, the most conservative major party leader Australia has ever had (given his embrace of radical economic reforms, ‘right-wing’ would actually be more accurate than conservative).
The IDU goes further, claiming to embrace parties of the ” centre
and centre right”, and the meeting of the IDU was accompanied by lots of triumphalist rhetoric about the recent electoral successes of the centre-right.
To my mind, the term “centre-right” suggests people like moderate Republicans in the US, Tory and Liberal Party “wets” – all endangered species, if not extinct. The only Liberal “moderates” I can think of are Marise Payne and perhaps Amanda Vanstone, both peripheral figures in the Howard government. The few remaining Republican moderates are either defecting (Jeffords) or being replaced by hardliners.
Admittedly George Bush ran as a “compassionate conservative”, but his government has clearly been a coalition of orthodox rightwingers (Cheney, O’Neill) and the far-right (Ashcroft, Wolfowitz). Colin Powell is the only senior figure who could remotely be described as “centre-right”, and his influence on policy has been modest.
The swing to the right in Europe has followed the same pattern. The striking feature is the disappearance of the old centre-right and its replacement by coalitions of the right and far-right, notably in Austria, Italy and Denmark . This followed the move by parties of the Left to take over the ground formerly occupied by the centre-right, both in substance and in style.
What I’m reading:
The Consolation of Philosophy, by Boethius. This work, written when the author (a 5th century Roman noble in the service of the Gothic king Theoderic) was imprisoned and awaiting execution, is the inspiration for the recent popular book by Alain de Botton. Is philosophy really a consolation in times of suffering? I don’t know, but I also don’t know of anything better.
Bush declares war!!
Sacrifice Is for Losers
(on death duties)
It’s interesting to compare US and Australian coverage of the ballooning US current account deficit. The ABC ran the deficit as the story, noting the reaction on the currency markets ABC News – US account deficit reaches record blow out
NYT buried the deficit blowout in a business story about the dollar. Dollar Hits a 2-Year Low Against Euro And, following its standard practice, it assumed that readers of its business pages would not know what the current account deficit means, glossing it as eA broader measure of the country’s international financial standing’. Even the WSJ does this.
Most of the US media don’t even cover the trade deficit to any extent, let alone the current account. A search on Moreover :: Business Intelligence & Dynamic Content reveals mostly non-US coverage.
So the average American, even an assiduous reader of the newspapers, is basically uninformed about what would anywhere else be regarded as a balance-of-payments crisis. By contrast, the foreign affairs coverage of the NYT has always been excellent and, since September 11, the same is coming to be true of other US media. Perhaps they’re right not to worry, but the currency markets don’t think so.
This is my first blog entry. I aim to use this blog both as a running commentary on what’s happening in Australia and the world and as a guide to
developments on my website, http://www.uq.edu.au/economics/johnquiggin/
Comments much appreciated at [email protected]
Mark Steyn tells his British audience that Australia is “on board” for a US invasion of Iraq without the authorisation of the UN. Writing in The Spectator he says
“Just as a matter of interest, how many countries does George W. Bush have to have on board before America ceases to be acting ‘unilaterally’? So far, there’s Australia, Spain, Italy, the Czech Republic, Qatar, Turkey”
As far as I know, none of the countries listed by Steyn have made commitments to support an invasion, and certainly Australia hasn’t. It’s possible to weasel out of this by quibbling about the meaning of “on board”. But the position and statements of the Australian government have been copied, almost word-for-word, from those of Tony Blair. So why doesn’t Steyn list Britain as being “on board”? Because, of course, his readers would know that he was talking nonsense.
But just when I was getting really annoyed, I came across this piece of light relief “…. Romania has offered the use of its airspace to attack Iraq.” Does Steyn think that Iraq is part of the former Yugoslavia?
I know I’ve been going on a bit about this guy. But he seems to me to be symptomatic of a lot of what’s wrong with thinking on the pro-war side of the debate, and the enthusiasm with which our local warbloggers cite him only confirms this.
Anyway, I thought I’d liven things up by announcing a contest. If anyone can show me a Steyn column* that doesn’t contain
(a) an unattributed or distorted quotation;
(b) a serious factual error; or
(c) a distortion of the truth comparable to that cited above,
I’ll promise not to mention him for the rest of the year.
As is appropriate in a debate about unilateralism, I’ll be judge and jury in my own case. I’ll do my best to give at least an email response to everyone, and to post the results at an appropriate time.
* I have seen a few purely humorous columns from Steyn, which are actually not too bad. Its only when he comes into contact with facts that the trouble starts. So I’m confining the contest to “serious” pieces like the one I’ve cited here.