Archive for February, 2008

Progress in Iraq

February 27th, 2008 63 comments

Looking for information about the implications of the ‘surge’ in Iraq, I found this NY Times report, which seems to sum up a lot of relevant points, and ought to prompt some rethinking of firmly held views. The key points

  • The American-led military campaign in Iraq is making enough progress in fighting insurgents and training Iraqi security forces to allow the Pentagon to plan for significant troop reductions
  • Attacks on allied forces have dropped to 30 to 40 a day, down from an average daily peak of 140

  • Thirty-six American troops died in Iraq last month, the lowest monthly death toll in over a year

  • More Iraqi civilians are defying the insurgents’ intimidation to give Iraqi forces tips

  • Even some of the administration’s toughest critics now express cautious optimism

  • There has been a steady increase in the capabilities and numbers of Iraqi units

As they say, read the whole thing. Then check the publication date.

Categories: World Events Tags:

Hamlet without the Prince

February 26th, 2008 9 comments

In the February edition of Prospect, William Skidelsky has a piece on the decline of book reviewing. As is standard for any adverse trend in the early 21st century, blogs get a fair bit of the blame. The write-off (lede for US readers) says

the authority of critics is being undermined by a raucous blogging culture and an increasingly commercial publishing industry

and the conclusion is

blogging is best suited to instant reaction; it thus has an edge when it comes to disseminating gossip and news. Good criticism requires lengthy reflection and slow maturation. The blogosphere does not provide the optimal conditions for its flourishing.

As a slow, mature critic, I’m sure Skidelsky is well placed to make authoritative judgements of this kind, based on the kind of lengthy reflection unknown to gossipy bloggers. Still, it would help us instant-reaction types to follow him if he had, you know, cited some actual blogs, perhaps even some that run book reviews.

Categories: Books and culture, Metablogging Tags:

This one’s for you, Al

February 25th, 2008 40 comments

For quite some time now, regular commenter Al Loomis has been decrying representative democracy as no democracy at all, and extolling the Progressive alternative based on citizen’s initiative, referendum and recall. I don’t have a strong opinion on any of these, except that none would make enough of a difference for me to fight hard one way or the other.

The main reason I believe this is that all of these constitutional arrangements have been in place in California (along with some other US states) for many years, and my, admittedly casual, observation of that state suggests that it is no better governed than, say, Queensland. Moreover, to the extent that the special features of the Californian system have worked the results have been mixed at best.

As regards initiative and referendum, the most prominent instance is surely Proposition 13, which limited property taxes. While it’s no doubt an exaggeration to blame this measure for the decline of the California public school system, it’s pretty clear that this was a bad policy choice. That’s true even if you’re hostile to taxation, since the property tax loss has been made up in part by a range of other taxes and charges which yield less revenue but almost certainly more distortions.

The big example of recall was that of Gray Davis who was replaced by Arnold Schwarzenegger. As far as I can see Davis was an adequate governor, as is Schwarzenegger, so my view that these provisions don’t make much of a difference is unshaken by this case, And even though these provisions date back to the early 20th century this was only the second time a governor had been recalled in US history.

Anyway, the purpose of this post is to let Al have his say, at any length he wants, on why adopting these provisions would transform Australia into a truly democratic society. As always, keep the discussion civilised, but within that constraint, I’d be keen to see some vigorous debate.

Categories: Politics (general) Tags:

Time to give the B team a turn?

February 25th, 2008 57 comments

The NSW Liberals are the perennial B team of Australian politics. Since the emergence of the current two-party system, they (and their UAP/Nationalist) predecessors have held office only when incumbent Labor governments have either split or been so long in office that the accumulated arrogance and corruption is too much to take*. On those criteria, the performance of the Iemma government suggests that the Libs may finally be due for a turn. But there are a couple of obvious problems: the next election is not due for a couple of years, and the Liberals have never looked capable of presenting a credible alternative than they do now (to be fair, they look marginally better for the change from Debnam to O’Farrell).

So, I’d prefer it if Labor had a go at internal renewal. John Sutton’s suggestion that Iemma be replaced by his deputy, John Watkins, looks like a start. There’s also the possibility of an old-style party-Parliamentary leadership split over electricity privatisation, with threats to force the resignation of Treasurer Michael Costa. Again, the sooner the better, as far as I’m concerned.

If Iemma and Costa lose their jobs before pushing their privatisation through, it will, no doubt harm their prospects of well-paid post-political sinecures. But the financial sector looks after its own, and I’m sure something will be found for these loyal allies.

* I can’t recall ever reading much about the 1965 election which brought the startlingly corrupt Askin government to power, and introduced the one sustained period of Liberal rule with (I think) four election wins in a row. Still, Labor had been in for 24 years and the rightwing machine that has produced so many of our current hacks was already in charge, so I don’t think this can be a big exception to the rule.

Categories: Oz Politics Tags:

Monday Message Board

February 25th, 2008 22 comments

It’s time once again for the Monday Message Board. Please post your thoughts on any topic. Civilised discussion and no coarse language, please.

Categories: Metablogging Tags:

What I found on Wikipedia today

February 24th, 2008 3 comments

In mathematics, the monster Lie algebra is an infinite dimensional generalized Kac-Moody algebra acted on by the monster group, that was used to prove the monstrous moonshine conjectures.

Read more…

Categories: Metablogging Tags:

What I’m Reading: Stem Cell Century

February 24th, 2008 4 comments

Research on human stem cells has been at the centre of one the more ferocious science policy debates in the US, only partially cooled off by recent claims that the necessary cultures can be generated from samples taking from adults, rather than from human embryos destroyed in the process.

“Stem Cell Century: Law and Policy for a Breakthrough Technology”

by Russell Korobkin (with a joint chapter on patents by Stephen Munzer) is a useful guide to the way the debate evolved in the US. There doesn’t seem to have been anything like the same controversy in Oz, although there has been at least one notable example of what might be called common or garden scientific misconduct.

Perhaps because the US stem cell debate is a bit remote for me, I found more interest in the chapters showing how commercial interests in research collided with general scientific ideals of free communications and with donors’ anger when they found that their donated (or appropriated) body tissue had been used to make highly profitable products.Kieran Healy of CT

wrote the book on the latter topic


Much of the debate about the relationship between donors and researchers on these issues has been cast in the framework of “informed consent”, which I think is not very helpful here. Neither I think is a focus on property rights over body parts. The real issue is how to finance the provision of public goods like medical research, characterized by highly uncertain returns.

I’ve looked at how to pay for medical research before and generally reached the conclusion that patents are not the best way to go, a view that is strengthened by a reading of Stem Cell Century. Looking at the conflicts discussed here, it seems that they might be less severe if successful research were rewarded by prizes, including ex gratia payments to crucial participants such as tissue donors.

Read more…

Categories: Books and culture, Science Tags:

Videopresentation invitation

February 23rd, 2008 21 comments

With the release of the Garnaut report, it’s time for me to look again at ways to reduce my carbon footprint. I’ve been trying to reduce air travel, turning down invitations and offering to do videoconferences instead. That’s had some success, but mostly people aren’t set up to handle video, and, by the time invitations are made, there are often arrangements in place that make it difficult.

So, I’m going to take the initiative, and announce that I’m available to offer video presentations on a wide range of topics (climate change, water, infrastructure, digital economy & culture, employment and macro policy in general, among others). It’s easiest for me in business hours (9-5 pm, Mon-Fri, AEST) as that’s when I can use the UQ facilities, but I’m willing to look at alternatives at other times, if there’s someone who can handle the setup.

Obviously, I can only do a finite number of presentations, either in person or by video, so get in with your request.

Read more…

Categories: Environment, Life in General Tags:

Weekend reflections

February 23rd, 2008 20 comments

It’s time once again for weekend reflections.Feel free to write at greater length than for a standard comment thread. As always, civilised discussion and no coarse language.

Categories: Regular Features Tags:

Glass half-full department

February 22nd, 2008 55 comments

The government’s response to the Garnaut report has been less than enthusiastic. Still, who would have thought, a year ago, that the news would be “government reaffirms target of 60 per cent cut in emissions” and that the only effective criticism would be from those saying the target is too soft.
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Categories: Environment, Oz Politics Tags:

What have the Romans ever done for us?*

February 22nd, 2008 45 comments

Most long-lived dictatorships have at least some positive achievements, and, the world being what it is, most dictators have some unattractive enemies. These facts have generated a couple of marathon threads at Crooked Timber, following Chris Bertrams post’ on Castro and mine on Suharto** , not to mention vast numbers on Saddam.

What are the implications of these facts, both for the policies we should support and for the moral judgements we should offer? I have a couple of fairly obvious points to make about policy, and some less clear thoughts about moral judgements.

Read more…

Categories: Politics (general) Tags:

Garnaut review

February 21st, 2008 48 comments

The Interim Report of the Garnaut Review is just out. Over the fold, I’ve attached the report and also a quick response from me for Crikey, largely based on hearing Garnaut a couple of weeks ago.

Read more…

Categories: General Tags:

Lowering the NAIRU

February 19th, 2008 96 comments

Among the relatively few points the opposition has scored in this Parliament has involved the unwillingness (or, in the Opposition’s telling, inability) of Treasurer Wayne Swan to respond substantively to a question from Malcolm Turnbull about the level of the NAIRU (non-accelerating inflation rate of unemployment), AKA “the concept formerly known as the natural rate”.

At this point I was going to refer readers to Wikipedia but, as with quite a few economics articles, it’s not entirely satisfactory. However, rather than complain, I’ve edited it to include a slightly better explanation.

Coming back to Australia, the fact that inflation is rising suggests that, if the NAIRU exists, we are now below it. It doesn’t seem as if there is much scope for fiscal and monetary policy to be tightened further. Given the risk of a breakdown in global credit markets, raising interest rates any further seems very dangerous. And the tax cut promises (which should be kept – the credibility of political processes is more important than the risk of inflation) mean that the scope to tighten fiscal policy is limited.

What remains is the possibility of reducing the NAIRU by improving the performance of labour markets. Education and training will help in the long term, but not so much in the short run. What is needed is to take advantage of the tight labour market to reduce long-term unemployment and to bring discouraged workers back into the labour market. At this phase of the cycle, the best policy instrument to achieve this goal is a targeted wage subsidy. Employers who take on workers moving off unemployment and disability benefits, or re-entering the labour force after a long absence should receive a subsidy for a period of say, three to six months. I’ll try to post a bit more on this, and why it’s superior to suggested alternatives like cutting minimum wages, before too long.

Crikey going cheap

February 19th, 2008 1 comment
Categories: Media, Metablogging Tags:

Howard haters

February 18th, 2008 157 comments

Throughout the last few years of the Howard government, anyone who criticised the government, or suggested that Howard was not the best person to be Prime Minister of Australia, could be sure of being labelled a “Howard hater”. A quick Google finds this trope being used regularly by Miranda Devine, Paul Sheehan and Gerard Henderson, and being taken up by their numerous blogospheric supporters.

This was always silly. Perhaps there were people motivated to oppose the government because of a personal animus against Howard rather than his actions and policies, but if so I never met any. Of course, people who disliked Howard’s policies tended to dislike Howard, and some people who hated Howard’s policies hated Howard as a result, but using a term like “Howard hater” to explain opposition to the government is like explaining the effects of opium by reference to its dormitive qualities.

The real motive underlying the use of “Howard hater” as a term of attack was the recognition that he and his government never commanded enthusiastic support from most Australians, merely a judgement that they were better than the alternatives on offer. Once this changed with Labor’s (long overdue) choice of Kevin Rudd as leader, the government was doomed.

Tonight’s Four Corners suggests that much the same was true of Howard’s colleagues. While only Costello and a couple of his closest supporters came across as Howard haters, most of the rest showed a notable lack of enthusiasm, and willingness in retrospect, to blame Howard for the government’s defeat. Tony Abbott’s undiminished loyalty just enhanced the contrast with the rest of the crew.

In terms of policy, the most startling revelation was Joe Hockey’s claim that members of the Cabinet voted for WorkChoices, including the abolition of the “no disadvantage” test, and were then shocked (or pretended to be) that people were disadvantaged. This news ought surely to sink resistance to Labor’s reforms, and may indeed have been intended to achieve this purpose.

Categories: Oz Politics Tags:

Monday Message Board

February 18th, 2008 13 comments

It’s time once again for the Monday Message Board. Please post your thoughts on any topic. Civilised discussion and no coarse language, please.

Categories: Metablogging Tags:

Here comes the big one

February 17th, 2008 53 comments

My column in last week’s Fin was about the spreading crisis in financial markets. In the same week, we saw the first indication* that the crisis was spreading to the market for credit derivatives. The possibility of a full-scale financial crisis arising from these markets, which financial market bears have been talking about for years. Whereas the losses from sub-prime loans and related derivatives markets are likely to be in the hundreds of billions, the nominal volume of outstanding contracts in the credit derivatives markets is in the tens of trillions, and interest rate swaps are in hundreds of trillions.

Such amounts cannot possibly be repaid by anybody, so a breakdown in these markets would imply either wholesale bankruptcy or a government rescue involving the abrogation of existing contracts on a scale unprecedented in history. Either way, as noted in the article, large classes of financial assets, and the associated financial markets, may simply disappear. Hundreds of trillions of dollars in derivative contracts may be unwound, reversing the explosion of asset and transaction volumes over the three decades since the Bretton Woods system of financial controls broke down in the 1970s.

Read more…

Categories: Economics - General Tags:

Weekend reflections

February 16th, 2008 9 comments

It’s time once again for weekend reflections.Feel free to write at greater length than for a standard comment thread. As always, civilised discussion and no coarse language.

Categories: Regular Features Tags:

Guest post on welfare quarantining

February 16th, 2008 35 comments

With the problems of indigenous Australia at the forefront of national attention, it’s time to look again at the Howard government’s Intervention policy, and try to assess what has worked or is likely to and what has not. Already the Rudd government has reinstated the permit system – whatever the merits of the system its abolition was an ideologically-motivated piece of mischief in a package that was supposed to be about protecting children. Another difficult issue is the extent to which individual and community benefits should be conditional on requirements that might be imposed by the government or negotiated with community leaders. One particular aspect of this is the policy of quarantining some portion of welfare benefits in a manner similar to the US policy of giving aid through food stamp. I’ve attached a piece by Bree Blakeman and Nanni Concu, who are currently living in an Aboriginal homeland in East Arnhem Land, which raises a number of problems with this policy. I found it very thought-provoking and I hope that it will help to inform the debate.
Read more…

Categories: Oz Politics Tags:

Q&A on mandates

February 15th, 2008 25 comments

The culture wars must really be over when I’m getting my ideas favorably cited by Janet Albrechtsen. Admittedly it’s prefaced by “even leftwing academics like John Quiggin …”, but her opening para follows my analysis almost exactly, and I agree with her on the point of principle.

Albrechtsen is quoting this Online Opinion piece on mandates, in which I argue that the idea that a government with a majority in the House of Representatives has a mandate obliging the Senate to pass legislation implementing its election policies is misconceived. Since both houses are elected, and since no party in recent decades has received a majority of first-preference votes for the Lower House, there’s no general reason why the views of a majority of Senators should be regarded as less legitimate than those of a majority in the Lower House.

Albrechtsen applies this argument to defend the decision of the Senate to delay, or maybe block altogether, the government’s legislation repealing WorkChoices. While she’s right in rejecting the mandate idea, there are still some good reasons why the Senate should not block this legislation.

The first relates to the lame-duck nature of the current Senate, half of which will be replaced in July with the senators we elected in November. If we had fixed terms for both houses, this kind of nonsense would be avoided, but as it is, I think there’s a case that the outgoing Senate would be wise to take some account of the results of the election, in which the Coalition lost its Senate majority in an election where WorkChoices was a key issue. It doesn’t make much sense to hold up transitional legislation preparing for changes that can be shown to have majority support in the new Senate.

The more relevant point though is political. You don’t need to count seats in the House of Representatives, or parse the text of Labor’s policy statement, to know that the Australian electorate rejected WorkChoices at the last election, and that they haven’t changed their minds since then. If the Coalition parties choose to ignore that fact, they’ll pay a steep political price, as they should, in future elections for both House and Senate. That’s how the mandate of the people is delivered in modern Australian democracy.

Categories: Oz Politics Tags:

One-percenters underbid by McKinsey

February 15th, 2008 89 comments

I’ve put up quite a few posts supporting the conclusion of the Stern review that large cuts in C02 emissions could be achieved at very modest economic cost. Mostly, the analysis has focused on policies aimed at reducing developed country emissions by 30 per cent by 2020 and 60 per cent by 2050, and the typical conclusion is that the cost would be around 1 per cent of national income. For Australia, at current income levels that would be about $10 billion per year. Today’s news reports a study by McKinsey estimating a much smaller cost, around $3 billion per year. I haven’t seen the report yet but a quick Google found a similar study for the US.

I suspect the report is over-optimistic in the sense that it estimates the cost of doing the job in the most technically efficient fashion, whereas any feasible policy to induce adoption of the necessary measures will have higher costs. But it’s easy to show that the order of magnitude estimate must be approximately right. You can see this by looking at an absolute upper bound assuming we just replace all energy generation by expensive but feasible sources like solar (given the costs of generation, the extra cost required for large grids and pumped storage to smooth out supply variability is a rounding error here). That cost is no more than 10 per cent of income. Taking account of the obvious adjustment responses such reduced consumption in response to higher energy prices implies an even tighter bound, maybe 5 per cent of income.

The most important criticism to be made here is that it is increasingly evident that a 60 per cent reduction in emissions by 2050 may well not be enough. That suggests that, after exhausting the easy options to improve energy efficiency, substitute away from energy intensive activities and so on, there will be a residual 40 per cent of energy demand, almost entirely electricity, that has to be delivered with less than half the emissions of current best practice. Taking Australia’s current consumption of around 250 Twh/year, that’s 100 TwH at a cost of maybe $25 billion a year (=25c/Kwh) or 2.5 per cent of GDP.
Read more…

Categories: Economics - General, Environment Tags:


February 13th, 2008 52 comments

I watched the opening of Parliament this morning, and the speeches by Rudd and Nelson. Like lots of others I was moved by the occasion, and hopeful that we as a nation can finally make good on the spirit of reconciliation. Rudd’s speech was the best I’ve seen from him, and the promise of co-operation on this issue was inspiring. Nelson was rather defensive, but much of this was probably necessary to secure the unanimous vote in favour of the motion, and his willingness to participate in a joint effort with the government is welcome. Bob Hawke, Gough Whitlam, Malcolm Fraser and Paul Keating were all present.

Hard though it was to get to this point, that was the easy bit. It’s going to take a lot of resources, and a willingness to ignore ideological shibboleths of all kinds, if we are to achieve the kinds of improvements in health, education and general living standards promised today by Rudd and Nelson.

Categories: Politics (general) Tags:

Sir Sir Sir Sir Sir Ninian

February 11th, 2008 18 comments

Following up on the silly idea being floated in the Murdoch press that John Howard might be made a Knight of the Garter (surely Alexander Downer would be a more appropriate choice!), I discovered the interesting fact that Ninian Stephen is a knight five times over (KG, AK, GCMG, GCVO, KBE)[1].

Fine judge and Governor-General as Ninian Stephen was, I find this a bit excessive, and something of a reductio ad absurdam on the whole business of knighthoods.

fn1 For those who don’t recall, AK was Malcolm Fraser’s shortlived notion of adding knighthoods to the Order of Australia, and the rest are British honours – he got the KBE in 1970, three more on becoming GG and the Garter in 1994. My guess is that, if he hadn’t had already had the handle “Sir Ninian”, the other awards would have been more controversial, and might not have happened.

fn2 I should note that academics like myself are not exactly innocent here, and some even string together multiple titles, particularly in Europe.

Categories: Oz Politics Tags:

Monday Message Board

February 11th, 2008 14 comments

It’s time once again for the Monday Message Board. Please post your thoughts on any topic. Civilised discussion and no coarse language, please.

Categories: Metablogging Tags:

Quick links

February 10th, 2008 9 comments

I’ve been too busy to post on a lot of things so I thought I’d just post some quick links with minimal comment. Some very important, and some not.

* One measure of the death toll in the wars launched by Saddam and then by Bush is the number of Iraqi widows, estimated at between one and two million. Widows are largely excluded from paid work and many are in a desperate position.

* A while ago I pointed out that the paperless office is finally on the way to reality. Today’s NY Times takes the story a bit further.

* What have the unions ever done for us

* Finally, some real progress in the struggle against malaria.

Categories: General Tags:

Weekend reflections

February 9th, 2008 24 comments

It’s time once again for weekend reflections.Feel free to write at greater length than for a standard comment thread. As always, civilised discussion and no coarse language.

Categories: Regular Features Tags:


February 7th, 2008 74 comments

I’ve been at the annual conference of the Australian Agricultural and Resource Economics Society for the last few days. I’ve been coming to these for nearly 30 years, and it’s always good to catch up with old friends and colleagues. For many, it’s the first time they’ve seen me without a beard, and quite a few failed to recognise me until I accosted them.

The big change in 30 years has been the rise of environmental and resource concerns at the expense of old-style agricultural economics. Most of my early papers dealt with now vanished policies like the wool price stabilisation scheme, and the analysis of production systems needed to inform such policies. Now the conference has continuous sessions on both water and climate change, and only a handful of papers on production economics.

Ross Garnaut spoke on Tuesday and his talk was pretty sobering. Short version – as regards the likely consequences of business as usual, Stern was an optimist. Unless the world acts decisively, and well before 2020, we’ll have emissions higher than the highest of the IPCC scenarios Stern looked at. What’s worse new information on feedbacks suggests that the models relating emissions to temperature change are also likely to be on the conservative side, as the capacity of sinks to absorb emissions declines.

The positive side of this, I guess, is that the problems arise from China (and to a lesser extent India) growing fast, and that means China has more resources to address the problem, if we can only get the politics right.

One aspect of the latter is the near-certainty that we won’t be able to get away much longer with the notion of historical rights for high-emission countries like the US and Australia. By 2050, under any plausible agreement, we’ll have uniform emission entitlements per person, for everyone in the world, at a level well below our current emissions.

Categories: Economics - General, Environment Tags:

Howard’s economic record

February 6th, 2008 74 comments

If there was one thing John Howard and Peter Costello could reasonably have expected as part of the historical judgement on their terms as PM and Treasurer, it was a positive assessment of their record as economic managers. But a game isn’t over until the final whistle, and the last few months have produced some unpleasant data. Howard and Costello have left higher inflation and (if you impute the whole of the current tightening phase to their policies) higher interest rates than they inherited from the Keating government. Given that the ratio of household indebtedness to income has grown massively, the effective burden of interest rates is far higher now than in 1996.

A judgement based on inflation and interest rates is unfair in some senses. The big achievement of the last 15 years has been to avoid a recession. While most of the credit for this outcome must go to the Reserve Bank (particularly for getting policy right in the Asian crisis of 1997) and some is down to luck, the government should at least be credited for not doing anything to muck things badly enough to derail the Bank’s economic management (I’m assuming here that the housing bubble, to which the government’s policies contributed greatly, will deflate gradually rather than popping us into a recession. That would be a really nasty legacy for Howard and Costello to leave).

Unemployment has also fallen quite a lot, though until quite recently, the improvement in headline figures masked a deterioration in broader measures of employment and unemployment, particularly for men.

The problem for Howard and Costello is that they chose the criteria on which they wanted to be assessed. They never cared much about unemployment, abandoned the whole idea of an unemployment target early on, and their occasional policy interventions were either focus-group driven exercises like “work for the deal” or ideological costcutting like the Jobs Network.

By contrast, they ran hard on “keeping interest rates at record lows” and now have to live with their failure.

Categories: Economics - General Tags:

A sorry business

February 4th, 2008 129 comments

Brendan Nelson’s career as Leader of the Opposition looks to be over before he has even faced the Rudd government in Parliament, thanks to his equivocation over the issue of an apology to the Stolen Generation. If Nelson was fair dinkum about supporting an apology, given the appropriate words, he could have made a positive virtue of it, saying something like “This apology needs to come from the Parliament, not just the government. I’m willing to work with Mr Rudd in preparing a statement that will have unanimous support”.

As it is, he will end up being forced through every possible position from outright opposition to conditional support to the final stage when he’ll be forced to deal with the hardline rejectionists in his own ranks.
Read more…

Categories: Oz Politics Tags:

Monday Message Board

February 4th, 2008 11 comments

It’s time once again for the Monday Message Board. Please post your thoughts on any topic. Civilised discussion and no coarse language, please.

Categories: Metablogging Tags: