Archive for April, 2003

Clan of the Cave Bears

April 15th, 2003 Comments off

Although I don’t keep careful track, I had always thought of Alan Wood as being relatively optimistic about the performance of the US economy, and its implications for Australia. But his latest piece puts him firmly in the camp of the ultrabears. He endorses the calculations of British economist Wynne Godley

But according to Godley’s calculations, using conservative assumptions about US growth, interest rates and private borrowing behaviour, this can’t go on. As the private sector swings back to saving, even if only modestly, the US is heading for current account and budget deficits of the order of 8 per cent or 9 per cent of GDP, with implied foreign borrowing rising from about 25 per cent of GDP to 60 per cent.

The US may be able to sustain the deterioration for some time if it is seen as the best place to invest, as it may be because of the poor economic performance of Europe and even more so Japan. But it is unlikely to be sustainable politically or in financial markets indefinitely. Investors have already taken a pretty big haircut betting on US share prices and the dollar.

So how to adjust? A huge rise in US exports relative to its imports would do it, but that needs a powerful demand expansion outside the US, and how is that going to come about given the state of the European and Japanese economies? Well, a large depreciation of the US dollar could do the trick, but is likely to be resisted by US trading partners.

Godley’s conclusion, which seems all too plausible, is that the US economy will not recovery properly and there will be a long, depressing era of growth recession. Unless, of course, the US can revive the new-economy miracle. Don’t hold your breath.

I’ve been putting forward much the same viewpoint for years, and I’ve done the same calculations on the current account blowout. But a deficit of 8 or 9 per cent is one of those trends that can’t be sustained and won’t be.

I disagree with the assumption that, because US trading partners don’t want a depreciation, they can prevent it happening. I see the adjustment coming through a combination of low growth, inflation and real depreciation – basically a rerun of 70s stagflation.

Categories: Economics - General Tags:

For the record

April 14th, 2003 Comments off

Shortly before the fall of Basra (4 April), I noted a report in The Times, saying that the British were encouraging looters. The report said

The British view is that the sight of local youths dismantling the offices and barracks of a regime they used to fear shows they have confidence that Saddam Hussain’s henchmen will not be returning to these towns in southern Iraq.

One senior British officer said: “We believe this sends a powerful message that the old guard is truly finished.”

I thought I’d better record this before it went too far down the memory hole. When we come to allocate the responsibility for the destruction of archeological treasures and so on, it will be important to recall that this was the product of deliberate policy, not mere neglect.

Update I’m stunned. A string of commentators in the thread take the line that if the Coalition encourages desperately poor young men to loot government buildings, then stands back while they do a comprehensive job of stripping everything in sight, they’re not to blame because “they only meant Ba’ath party offices and the like”. I was struggling for an analogy for this but res ipsa loquitur .

Further update A further line of exculpation is that the Coalition forces couldn’t have anticipated, when they encouraged looters, that the looting would extend to sites like the Museum. Except that, as the WashPost reports, they were repeatedly warned about the likelihood that the Museum would be looted under the cover of civil disorder (it appears that professional thieves, looking for gold, played a major role in the attack, while generic looting helped them overwhelm any resistance and cover their tracks). The Coalition response was to create as much disorder as possible, then ignore pleas from the Museum for protection.

One last update Bargarz has been particularly sniffy about this post. Interesting, given that he himself approvingly noted the looting of a French cultural centre.

Categories: World Events Tags:

What I'm reading, and more

April 13th, 2003 Comments off

La Divina Commedia by Dante Alighieri. Well, not exactly. I’m not reading the original, but an English translation (the much-praised and much-criticised Dorothy Sayers version). And, as with Das Kapital, I’ve only read the first volume, L’Inferno, so far. On a previous reading, a few decades ago, I got to the end of the Purgatorio. My ambition is to read it all in Italian with the assistance of a translation, but I think that’s a long way off. In the meantime, I’m enjoying the image of the simoniacal Popes, stuffed headfirst in a hole, with each new arrival pushing the others further down. I also recently read At the Court of the Borgias, a relatively restrained private diary kept by the official in charge of protocol.

But my main activity for the weekend has been more physical – along with my son Daniel, I’ve been at a karate camp. Martial arts are an essential skill for modern academics , but not one of my natural strengths. So karate camp was like travelling back in time to school, except this time I was at the back with the slow kids. Top Deja vu experience – being made to do fifty pushups for talking in class.

Despite my limitations, I’m enjoying karate very much. Brisbane and Gold Coast readers might want to check out our dojo website.

Categories: Regular Features Tags:

Fairy gold

April 11th, 2003 Comments off

My opinion piece in yesterday’s Fin (subscription required) was about public-private partnerships (PPPs). Final para

As long as financial innovation is seen to be good in itself, politicians will continue to pursue these schemes, not as a method of optimally allocating a complex set of risk, but as a source of fairy gold, from which valuable public assets can seemingly be spun out of thin air. Of course, just like fairy gold, this illusion will disappear in the light of day, leaving a mountain of debt and poorly-structured projects.

Categories: Economic policy Tags:

The day after

April 11th, 2003 Comments off

The military phase of the war has been neither the disaster I feared, and predicted, for much of the last two weeks, nor the bloodless victory I hoped for in the first few days.

As this NYT report says, the total number of Iraqis killed in the war will probably never be known, but it is clearly in the tens of thousands. The vast majority were guilty of no crime greater than serving in the army, mostly as conscripts, and subject to the threat of death for desertion or failure to fight.

Compared with Australian experience, the death toll appears comparable with that for the whole of World War II, but lower, relative to population, than that for World War I.

Saddam’s was an evil and brutal regime, but the war is not justified simply by his overthrow. The US and its allies are obligated to deliver the promise of a free, democratic and prosperous Iraq, and a just settlement of the Israel-Palestine issue. These will be difficult, expensive, and often thankless tasks. My opposition to the war (leaving aside the spurious debate about weapons of mass destruction) was based mainly on my doubt that the Bush Administration would have the capacity, or the will, to carry through with these obligations once Saddam was gone. My doubts have not been allayed by the conduct of the war

However, I was overly pessimistic about the course of the war, and perhaps Bush (or, more realistically, Blair) will prove me wrong about the peace. I hope so.

Categories: World Events Tags:


April 10th, 2003 Comments off

It looks as if the military phase of the Iraq war is almost over, and with less bloodshed than appeared likely a week ago. Whatever our views about the war we can all be thankful for this.

Categories: World Events Tags:

Word for Wednesday: Sovereignty definition (s)

April 9th, 2003 Comments off

Both globalism and internationalism imply some sort of limits on national sovereignty. The main source on this topic is Stephen Krasner’s book Sovereignty: Organised Hypocrisy. Krasner distinguishes four different concepts of sovereignty. International legal sovereignty is the acceptance of a given state as a member of the international community, and is, in most cases, relatively uncontroversial. Westphalian sovereignty is based on the principle that one sovereign state should not interfere in the domestic arrangements of another (supposedly, this was the principle underlying the Peace of Westphalia, which ended the Thirty Years War in 1648). Interdependence sovereignty is the capacity and willingness to control flows of people, goods and capital into and out of a country. Domestic sovereignty is the capacity of a state to choose and implement policies within its territory.

During the 1980s and early 1990s, the emerging literature on globalization focused primarily on the apparent erosion of interdependence sovereignty and Westphalian sovereignty. Much of this literature was primarily concerned to criticize ‘realist’ models of international politics in which the Westphalian notion of the state as a unitary actor are taken as axiomatic.

During the 1990s, a neoliberal account of globalization came to the fore. The starting point of the neoliberal account of globalization is the observation that states have abandoned or lost much of the interdependence sovereignty they possessed for most of the 20th century. It is then argued that this loss of interdependence sovereignty entails a loss of domestic economic sovereignty, so that states are constrained by the pressures of international capital markets to follow the neoliberal policy agenda of deregulation, privatization and small government, regardless of the wishes of their domestic electorates

A similar view is implicit, though not always clearly argued, in postmodernist and ‘Third Way’ accounts of globalization, notably that of Giddens 1999. In addition, left-wing writers such as Panitch and Strange, while deploring convergence on a neoliberal policy agenda, broadly accept the claim that such convergence is the result of technologically-driven developments in the world economy.

The most effective criticism of the factual validity of the neoliberal story of the end of domestic economic sovereignty has come from writers with a social-democratic viewpoint. The crucial observation is that globalization is not fundamentally new, but is, in large measure, a reversion to the economic institutions of the 19th century. The experience of the late 19th century casts doubt on claims that the loss of interdependence sovereignty implies the erosion of Westphalian sovereignty. The claim that the loss of interdependence sovereignty entails the adoption of neoliberal domestic policies is similarly problematic.

Categories: General Tags:

New on the website

April 9th, 2003 Comments off

I’ve finally got around to posting my Fin Rev piece on blogging. Although I didn’t use the much-debated word ‘parasitic’, I think I contributed to this characterization with my concluding paras:

claims that blogging will displace traditional media are not merely premature but unsound. Bloggers are dependent on the public record, and that public record is largely created by traditional media. It’s only possible to unearth a 1983 Trent Lott speech if that speech has first been recorded.

The mass media have more deeply-rooted advantages arising from the simple fact that they are mass media. Despite the growth of ‘narrowcast’ media like blogs, it is clear that the vast majority of people want to see and read the same things their friends and workmates do, at least some of the time. The fact of a shared experience that can form a basis for discussions, a source of catchphrases and so on is at least as important as the actual content of the experience.

It is unlikely then, that weblogs will displace traditional newspapers any time soon. Nevertheless, the dream that anyone who wants to should be able to publish their own newspaper is closer to reality than at any time in history. The implications have yet to become fully apparent, but are sure to be profound.

Categories: General Tags:

Cold Duck

April 8th, 2003 Comments off

The war has fogged my vision to the extent that I missed an important post on the central focus of civilisation, namely coffee. Gummo Trotsky selects “Latte” for his word of the day and writes

I think we can forego the Macquarie Dictionary link on this one – we all know what latte is. It’s what the out of touch inner city elites drink to wash down their lunch-time foccaccias or croques-monsieur while their less pretentious suburban cousins are happy to settle for a cappucino and a toasted sanger.

If this item from yesterday’s Age is any indication, there’s a lot of people in the out-of-touch inner city elite. And the numbers are growing. According to a survey by BIS Shrapnel, latte consumption grew by 50% over two years with 225 million dollars worth of lattes sold last year. Assuming that the retail price of a cafe latte is $2.50, that’s a total of 90 million cafe lattes.

Gummo follows up with some extrapolations suggesting that in a few years, latte drinkers will be in the majority.

I would view this prospect with horror, but I think it will not come to pass. Latte is the Cold Duck of the 21st century, and like Cold Duck will be shaken off with a shudder as people realise what real coffee is about.

Categories: Life in General Tags:

Junk science

April 8th, 2003 Comments off

A couple of months ago, I made the observation that

there is now almost no academic discipline whose conclusions can be considered acceptable to orthodox Republicans. The other social sciences (sociology, anthropology, political science) are even more suspect than economics. The natural sciences are all implicated in support for evolution against creationism, and for their conclusions about global warming, CFCs and other environmental threats. Even the physicists have mostly been sceptical about Star Wars and its offspring. And of course the humanities are beyond the pale.

I didn’t extend this claim at the time to the Australian right, but looking at the most recent Quadrant, perhaps I should have. Quadrant has been the biggest backer of historical polemicist Keith Windschuttle (whose fabrications have just been exposed yet again) and a keen promoter of global warming ‘skepticism’.

But when writing the above, I assumed that creationism would not find any support on the Australian mainstream right. I was wrong. The April 2003 Quadrant has a piece by Jenny Teichmann attacking Darwinism and claiming that support for Darwinism arises from the fact that it promotes atheism. The piece is short (less than two pages) but very confused – not surprisingly given that it draws on Windschuttle’s massively confused mentor David Stove, also an opponent of evolution.

One article doesn’t define an editorial stance, and perhaps the next issue of Quadrant will contain a vigorous defence of evolutionary theory. But running a piece like Teichmann’s is yet another indication of the declining intellectual standards of what was once a major journal.

While I’m on this general topic, the same post noted that, having been caught in a piece of glaring dishonesty, the National Review Online covered it up by amending its Web Site without acknowledgement. This seems to be standard practice on the US right. Cato’s change of name from ‘Project on Social Security Privatisation’ to ‘Project on Social Security choice’ was similarly unheralded. And, more recently, Tim Lambert has caught the Independence Institute and the Heartland Institute amending or suppressing articles by John Lott of the American Enterprise Institute where he has been exposed making false claims about defensive gun use.

These people have read their Orwell of course, and seem to think of Websites as being like the memory hole, where the past can be erased. They don’t, however, seem to be aware of Google archives, let alone the Wayback Machine.

Of course, Orwell was talking about Stalinist rewriting of history. And, until recently, anti-scientific irrationalism was more common on the political left than on the right. But those days are gone, and it’s now advocates of truth and rationality on the political right who have to blush for the company they keep.

Update Professor Bunyip (permalinks not working) weighs in as assistant counsel for the defence in the Windschuttle case. As always with Windschuttle, the evidence of participants in the conflict who denied doing anything wrong is preferred to eyewitness evidence against them. By Windschuttle’s account, the fabrication of Aboriginal history is not the product of recent leftwing historians but a conspiracy stretching back to the beginnings of European settlement.

As I pointed out in an earlier piece on junk science, facts are inconvenient things. If you do science or history honestly, you will always come across facts that don’t suit your preconceptions, and will need to acknowledge this openly. Plenty of leftwingers have failed this test in the past. But Windschuttle fails it to an extent unparalleled outside the rigidly disciplined ranks of Marxism-Leninism from which he (and, I think, Bunyip) came.

Does this all matter? Well, yes. This is not an argument over old bones but part of an organised campaign to assure white Australians that if the Aboriginal population is suffering now, it is their own fault. In essence, the line is that, until they sort out their own problems (drink, violence etc), we (whites, that is) have no need to worry and no wrongs to atone for. This is even more false and dangerous than the mirror-image claim that, since problems like drink and violence are the result of oppression, Aboriginal communities cannot be expected to do anything about them.

Categories: Environment Tags:

Talking past each other

April 7th, 2003 Comments off

Ken Parish has posted on the depressing blog debate over the war, saying

Apparently thoughtful, rational people on both sides interpret exactly the same facts in diametrically opposed ways to fit their preconceived and immovable viewpoints, or choose to believe only those press reports that suit their ingrained prejudices.

Kevin Drum at Calpundit discusses the same issue, linking to Arthur Silber who says

Since the war began two weeks ago, I have noticed the following (it began well before then, but has become much more noticeable recently): almost every strongly prowar blog that I read references many stories which support the rosiest scenarios about how this war will play out, and what will happen in a post-war Iraq (and beyond). Similarly, most antiwar blogs I read link to many stories raising questions about the positive scenarios, stories which may show serious troubles arising, both now and in the future.

While there is some truth in this, the basic problem is more fundamental – the two sides are no longer interested in each others’ arguments.

Roughly speaking the prowar bloggers are concerned to argue that Bush was right in asserting that the US could and would crush its enemies. Their main concerns are that the Coalition should win quickly and suffer minimal casualties.

Conversely, summarising drastically, the antiwar bloggers are concerned to argue that Blair was wrong in presenting the war as an emergency exercise in international law enforcement. Their main concern is that the war has been justified on the basis of legal and political arguments that have now been exposed as largely spurious and on the basis of promises about the conduct of the war that have now been abandoned.

For a brief period, the Iraqi attacks on Coalition supply lines and resistance to the occupation of Southern cities produced an intersection of these two sets of concerns. Prowar bloggers mostly saw the question in more strictly military terms – was the Rumsfeld strategy being proved wrong? Antiwar bloggers saw this as evidence that both the war and the subsequent occupation would be bloodier and crueller than had been claimed and some hoped that an enforced pause in the US advance might lead to some sort of reconsideration.

The picture of mutual incomprehension was completed with the US military successes of the last week. From the prowar viewpoint these represented proof that the critics had been wrong all along. From the antiwar viewpoint, the relevant facts were the escalation in the number of civilian casualties, the further relaxation of restrictions on targeting, the use of weapons like cluster bombs and the massive death toll among Iraqi troops most of whom are conscripts.

In these circumstances, it’s scarcely surprising that the same facts are interpreted in diametrically opposite ways.

Categories: World Events Tags:

Monday Message Board

April 7th, 2003 Comments off

It’s time once again for your thoughts and comments on any topic (civilised discussion and no coarse language please). My suggested discussion starter – has the war killed blogging ?

Categories: Regular Features Tags:

All about oil?

April 6th, 2003 Comments off

While we wait for the fall of Baghdad, and hope that it is as quick and bloodless as possible, it’s hard to think about much else but war. However, I have no idea what will happen next and no capacity to influence it, so I’m going to try to stick to economic aspects of the war for the moment.

Quite a few people have asked me to respond to various scenarios involving the role of the US and euro as competing reserve currencies. Since all these scenarios involve oil, I thought I’d try to clear the ground a bit by discussing the question “Is it all about oil?”.

The crudest (I use the term advisedly) version of a war for oil would be one in which the US seized Iraq’s oilfields and took the oil without paying for it. A more standard imperialist procedure would be to impose a highly unfavorable contract on the defeated government or a puppet government imposed by the conquerors. I don’t think the invasion of Iraq is a war for oil in this sense.

A more subtle idea is that the aim of the war is to expand Iraqi production and thereby drive down the price of oil. This kind of thinking is certainly present among those who pushed the war, but it must be remembered that high oil prices are good for the US oil industry which is obviously influential. So again, I don’t think a plan to drive down oil prices is a major motive for war.

There are however, several senses in which it is ‘all about oil’. First, the idea that the US (and to a lesser extent the UK) should have a big say in the way the Middle East is run is based on the assumption that oil reserves are crucial. There’s a nasty dictatorship in Burma, but don’t expect to see the Marines there any time soon.

Second, although the US oil industry as a whole has no interest in overthrowing Saddam, companies that supply oil industry services, like Halliburton and Brown and Root stand to do very well out of things, and have already grabbed the most lucrative jobs in the putative reconstruction.

Third, and most importantly, the logic of the postwar outcome ensures that it will be about oil to a large extent. It looks certain that the immediate outcome of the war will be US military rule which is illegal in terms of international law – having purportedly invaded to uphold UN resolutions, the US & UK have no grounds for resisting UN control of Iraq, but this is evidently unthinkable.

Hence, the only legal way to deal with the oil would be to leave all the earnings with the UN either to buy food and medicine or in trust for some democratically elected Iraqi government in the future. But that would leave the US footing the bill for reconstruction, and this is not going to happen – there is hardly money allocated for it and the US is deeply in deficit. Nor is there any serious prospect of internationally supervised democratic elections in the next year or two

Hence, sometime shortly after the war, either the US or a puppet government imposed by the US military will assert ownership of the oil by right of conquest and will use it to start paying the bills for reconstruction, most of which will go to US contractors. This isn’t exactly the same as pumping out the oil and shipping it back to the US without payment, but I don’t think that the difference will impress the rest of the world.

Categories: World Events Tags:

What I'm reading

April 6th, 2003 Comments off

I’m doing a review of Remaking New Zealand and Australian Economic Policy: Ideas, Institutions and Policy Communities by Shaun Goldfinch. In essence, the core purpose of the book is to ‘compare and contrast’ to help work out why the NZ free-market reformers got things so badly wrong. Wrinting in 2000, he observes:

Despite policymakers in New Zealand being able to achieve their policy aims to a remarkable extent and notwithstanding claims that New Zealand provides an exemplar of economic reform, the New Zealand economy has generally not performed well since 1984 as measured by commonly-used economic indicators.

Goldfinch gives a lot of evidence to support the standard critical view, that the New Zealand system with a unitary & unicameral government and a relatively small elite was open to capture by a small group of ideologues, what Brian Easton calls ‘market Leninists’, who then bypassed or over-rode any critical views. As Goldfinch says

there are good reasons to suppose that better policy can be made through compromise and negotiation

Since the election of a Labour government which raised the top rate of income tax and partially reversed the 1991 labour market ‘reforms’, there has been some recovery. A few hardy defenders of the reforms outside NZ have had the chutzpah to suggest that the credit is due to Roger Douglas and the Business Roundtable but within NZ, Rogernomics is discredited beyond all hope of revival. It’s been dumped by the Nationals and even the free-market ACT party relies mostly on law-and-order populism for its modest electoral appeal.

Categories: Regular Features Tags:

There they go again

April 5th, 2003 Comments off

Of course, truth is the first casualty in war. But the frequency with which good news has been reported by the Coalition, only to be retracted a day or two later is unparalleled in my memory. [At least on our side of wars - perhaps Saddam lies more than the Coalition, but does anyone really want that to be the test].

The latest and potentially the most serious case, relates to the fatwa (judgement) supposedly issued by Grand Ayatollah Sistani calling for non-resistance to the Coalition forces. This was announced on Thursday by the the US Central Command, a rather strange medium for Shi’ite fatwas. Today, the BBC is reporting that nobody associated with Sistani knows anything about the supposed fatwa. If it turns out to be a fabrication, the chances of a successful peace, already slim, will dwindle even further.

Categories: General Tags:

A war of absences

April 4th, 2003 Comments off

In response to my posting about Salam Pax, various people have pointed out implausibilities in the story, not to mention the fact that it’s fourth-hand news at best by the time I reported it. It struck me that this is becoming a war made up almost entirely of mysterious absences. In some ways Bin Laden set the pattern, but it has been amplified in the war on Iraq. There’s Saddam himself (dead, alive and in command, or already on the run?), the welcoming crowds of liberated Iraqis (hostile nationalists or still scared of Saddam’s secret police ?), the Republican Guard (demolished or run away to fight another day ?).

Most of all, there are the Weapons of Mass Destruction. As I pointed out before the shooting started, this was an issue which, for all practical purposes would be resolved on the first day. If Saddam had weapons and was not amenable to containment, the militarily effective time to use them was while US forces were still concentrated in Kuwait. When this didn’t happen, it was widely reported that Saddam’s weapons were concentrated in a ‘Red Zone’ and that Republican Guard units had orders to use them when Coalition troops entered the zone. Clearly if this had been true, weapons would have been used or found by now. Now perhaps, they are being stored for a final siege of Baghdad.

Some on the Coalition side are preparing a backup case, in which thecasus belli will remain intact indefinitely, even if no weapons are found. According to this story, it may take as much as eight months to manufacture find the evidence. (link via Tim Dunlop).

As with so many others, I find this war confusing as well as deeply depressing. I don’t know what to hope for now except that the people of Iraq will soon enjoy the peace Salam Pax took for his name and that he (?) will be among those who survive to enjoy it.

Update Jim Henley reports that Al Jazeera’s English-language site is up here, and there is no mention of salam. So I guess something got confused along the way as happens with rumours of war. I hope so, anyway.

Categories: World Events Tags:

Winning hearts and minds

April 4th, 2003 Comments off

From todays SMH, attributed to the Telegraph

British forces say they have “turned” a number of Ba’ath party members against the regime, who have inflitrated Iraqi military groups hidden in schools and hospitals.

At a smart housing complex outside Basra, untouched by looting from militia groups, British officers approached an Iraqi man at his makeshift stall.

“Do you know,” said one officer, “that unless Ba’ath party members start working for us, we’ll take it that they are working against us and we’ll have them shot?”

As the translator put the message across, the officer explained: “I didn’t really mean that. I’m here to offer him and his family safe passage but with these sorts of punters it’s best to play hard.”

“I see,” said the Iraqi, dragging on his cigarette. “Now I think about it, I do remember something.”

Categories: World Events Tags:

Consistency and inconsistency

April 3rd, 2003 Comments off

Stephen Kirchner raises all sorts of issues in this post (no permalink) which I just found (interestingly enough, just after giving a talk to a leftish audience in which I criticized, among other ‘magic puddings’, the idea that expenditure could be funded by deficits in the long run). After talking in a rather waffly way about the US budget, Kirchner says:

Similarly, it has been amusing to watch many left-of-centre economists re-discover fiscal conservatism now that the government in the US is spending money on stuff they don’t like. John Quiggin characteristically overstates his case in referring to the rise of ‘banana republic populism’ in the US. There are many objections one could raise to the growth in non-defence discretionary outlays under the Bush Administration. But one can’t help but think that deficits of similar magnitude incurred by a Democratic Administration in the wake of a major recession would not occasion similarly alarmist predictions from the likes of Quiggin.

My first response is that it’s a bit annoying when you take the trouble to post almost your entire output on the Web and someone makes this kind of comment without reading what you’ve written. I’ve written many times, and in many different contexts, on the need for a ‘golden rule’ approach in which budgets are balanced (more precisely, public net worth is stable) over the course of the economic cycle. But Kirchner feels free to present me as a recent convert to fiscal conservatism motivated by political partisanship.

The second point is that the objection is not to the current relatively modest deficits, associated, as Kirchner says, with a major recession, but at the projection of deficits growing indefinitely into the future. Brad de Long gives the alarming details in numerous posts on his site.

The final point relates to Kirchner’s own inconsistency. He denies being a Keynesian, but seems to imply that running deficits in recessions isn’t such a bad idea (or maybe he’s just imputing this viewpoint to me). Or perhaps, like the US Republicans, he thinks that deficits are always good. I’ll leave it to him to clarify his position on all this.

To summarise, I don’t see anything wrong with the proposed US budget deficit for this year or next . But if a government of any political color put forward a long-term fiscal strategy as irresponsible as that put up by Bush, I would certainly be raising the alarm.

Update Following a discussion you can read in the comments thread, Stephen Kirchner has now graciously withdrawn the suggestion that my concern about fiscal sustainability is politically selective.

Categories: General Tags:

Word for Wednesday: Internationalism definition

April 2nd, 2003 Comments off

Internationalism is not a political movement like social democracy or neoliberalism, nor is it a central term in a body of argument, like globalisation. Rather, it is a general aspiration. So I’m going to offer my own definition, and try to tease out its relevance to our present problems. As opposed to globalism, internationalism accepts the reality and legitimacy of national governments. This legitimacy arises in part from acceptance of the idea of the nation-state, that particular groups of people (nations) are bound together by ties of common history and language, and are natural units of governments. But the legitimacy of the nation-state is provisional, dependent on both on the consent of the people who make up the nation and on adherence to evolving rules of international law. So, for internationalists, notions of sovereignty, derived from the idea that a king or emperor has the right to manage the affairs of his domain as he sees fit, are problematic.

From an internationalist viewpoint, the debate over the war between Iraq and the US-led coalition has been highly unsatisfactory. On the one hand, the anti-war idea that Iraq is a sovereign nation and that interference with its internal affairs is necessarily wrong cannot be accepted. Saddam’s lack of democratic legitimacy and numerous breaches of international law give the world community the right to protect itself. On the other hand, despite the figleaf of claiming to enforce UN resolutions (now virtually abandoned) the US-led coalition has relied essentially on nationalist arguments that the US has the right to do whatever it sees fit to promote its own national security and national interest. The commonly heard statement ‘S11 changed everything’ can be unpacked into a claim that, in a situation where the US has been subject to direct attack, it is not bound by any concept of international law.

The outcomes of the war so far give strong support to the internationalist view. In particular, the arguments for reliance on international organisations like the United Nations are, in large measure, the same as the arguments for liberal democracy within nations, for example, that no one nation (person) has the wisdom to make the decisions for everyone and that any nation (person) who is given a position of absolute power will ultimately abuse it. It is already clear that on the key issue that divided the US from the majority of members of the UNSC (the claim that Saddam’s weapons represented an immediate threat, and the claim that the calculus of costs and benefits favored immediate action over taking time to build an international consensus), the US was wrong and the majority was right.

Categories: General Tags:

15 minutes of fame

April 1st, 2003 Comments off

The long-rumoured 7:30 Report segment on blogging went to air today. Other Ozbloggers covered were James Morrow, Gareth Parker and Gianna. I thought it was a pretty good introductory piece, with some cool montages. Gareth had a cool shot as a footy umpire (but his blog wasn’t given much of a run) and Gianna was shot with a very arty black background. I did my usual academic office thing, and James was shown at home. It seems like there’s a few visitors who are coming in because of the show, and I’d be interested in your thoughts (click on the “Comments” link, read others’ comments and add your own).

Sadly, Salam Pax, the Baghdad blogger who was featured in the opening of the segment has not posted for more than a week – maybe because Saddam’s police got to him or maybe because of the cutoff of Internet access, now complete since the Americans bombed the telephone network out of existence.

Update A colleague has emailed me to say that, according to Al Jazeera, salam pax is wounded in hospital. He seems to be in the city of Najaf. The doctor said that he was on his computer when his house was hit by a bomb.

Further update There’s a transcript of the 7:30 report segment here.

Further update 5 April Jim Henley reports that Al Jazeera’s English-language site is up here, and there is no mention of salam. So I guess something got confused along the way as happens with rumours of war. I hope so, anyway.

Categories: General Tags:

Becoming the enemy

April 1st, 2003 Comments off

When I first read the story of seven Iraqi women and children killed at a checkpoint while trying to flee the fighting in Najaf, my immediate reaction was “Now, surely, those who have supported the war will see that it can only lead to disaster”. A little more thought made me realise, not only that I was wrong, but that this tragedy will probably make matters worse. War hardens hearts, and this will only make them harder. When this war started, it was claimed that the rules of engagement were the most restrictive of any war in history. Two weeks later, the rules are those of Vietnam in the war zones, and those of Northern Ireland in occupied territory, yet virtually no-one who initially supported the war has conceded that they were mistaken.

We have already come to accept the assassination, not only of top leaders like Saddam, but of anyone associated with the regime, both by bombing and CIA death squads. Shoot to kill policies for suspect civilians have been announced, then expanded. Restrictions on targets for bombing have been dropped. Food and water are being used as weapons, and the prospect of starving the Iraqi defenders out of Baghdad is already being mooted.

Given the increasing frequency of references to Northern Ireland and Guantanamo Bay it’s reasonable to assume that torture of prisoners classed as ‘terrorist suspects’ will begin within the next few weeks, if it hasn’t started already. This will be denied with great vehemence, then, when it comes out, defended as an inevitable response to Saddam’s evil methods.

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