Archive for May, 2008

Weekend reflections

May 31st, 2008 49 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:

Videoconference: the upload

May 31st, 2008 11 comments

I’m putting up part 1 of the talk I gave in Adelaide last week, on prerecorded DVD. I’ve posted it on YouTube for the moment.

I tried posting directly within WordPress, but that didn’t work well and I thought that even if I used FTP to put the file up, the effect on server load would be pretty bad. So, I’d appreciate any alternative suggestions.

Parts 2-4 are over the fold

Read more…

Categories: Environment Tags:

Bate and tobacco

May 29th, 2008 20 comments

In discussing Roger Bate’s response to my article with Tim Lambert in Prospect defending Rachel Carson against the slurs of the DDT lobby, I thought it would be best to leave aside the question of Bate’s links to the tobacco lobby (already discussed in comments to an earlier post) and focus on Bate’s substantive concessions that the supposed ban on antimalarial use of DDT was mythical and that the Carson-inspired ban on agricultural use of DDT was beneficial.

Unfortunately, a number of our more gullible local delusionists took this as an admission that Bate had never really been a tobacco lobbyist and that they hadn’t really been suckered by a particularly nasty piece of tobacco industry PR, in this case a diversionary attack against the World Health Organization. (Here, for example is Currency Lad at Club Troppo). If they had taken a moment to think, they would have realised that picking a fight with Tim Lambert over a question of fact is a very silly thing to do, especially now that he has access to that gift that keeps on giving, the tobacco archives.

This post from Tim (promised as the first in a series) lays out chapter and verse on Bate’s dealings with the tobacco lobby (and even finds a mention of his offsider, Richard Tren).

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Categories: Environment Tags:

Carbon taxes and fuel prices

May 29th, 2008 61 comments

This is an appeal to my many numerate and well-informed readers to check my calculations. I’ve been asked to do a quick estimate of the implications of including motor transport (particularly petrol) in a carbon tax/emissions trading scheme. Since it’s easier to model, I’ve decided to look at carbon taxes at rates of $20. $50 and $100 per ton of CO2.

Since a litre of petrol produces 2.3 kg of CO2 when burned, the taxes correspond to 4.6, 11.5 and 23.0 cents/litre, and I’m going to assume that the addition of margins yields final increases of 5, 12.5 and 25 cents/litre.

Given annual consumption of around 30 billion litres (this is petrol + diesel, but I’m going to treat it all as petrol), the revenue generated is $1.5, $3.75 and $7.5 billion, ignoring demand responses (of course, we want demand responses, but I’ll leave this for alter I think).

Coming to a very rough assessment of compensation, if the proceeds were divided equally amoung households in the bottom half of the income distribution (about 5 million of them), the payment would be around $300, $750 and $1500 respectively.

If anyone can see any big holes in my calculations, I’d be very grateful to have them pointed out. More generally, any constructive comments appreciated.

Categories: Economics - General, Environment Tags:

Labour losing ground ?

May 29th, 2008 23 comments

Don Harding of La Trone University has been digging into the Budget Papers and he’s found something startling – Projections of a sharp decline in the labour share of national income. As he says, this seems implausible on the face of it, but if the projections are right it’s a much bigger deal than food or petrol prices.

Update I’ve add Don’s supporting calculations in Word and Excel formats

Categories: Economics - General, Oz Politics Tags:

The Great and Unremembered War

May 28th, 2008 29 comments

This piece by Edward Lengel n in the Washington Post has a lot to say about something I’ve long regarded as critically important in explaining the strength of the war party in the US: the absence of any real recollection of the Great War of 1914-18, the opening round of the bloody conflict that dominated the history of the 20th century, spawning Communism and Nazism, Hitler’s War and the Cold War, and even, in large measure the continuing war in the Middle East. Of course, the US came late to the war, and its losses (50 000 combat deaths) were comparable to those of Australia, with 10 per cent of the population. But there is more to it than that.

Lengel (a military historian writing on Memorial Day) makes the striking observation

Americans haven’t forgotten about the doughboys. We just didn’t want to hear about them in the first place.

and continues

“The boys would talk if the questioners would listen,” said one embittered ex-doughboy. “But the questioners do not. They at once interrupt with, ‘It’s all too dreadful,’ or, ‘Doesn’t it seem like a terrible dream?’ or, ‘How can you think of it?’ or, ‘I can’t imagine such things.’ It shuts the boys up.” … The Civil War and World War II seem to lend themselves to good storytelling, as long as one avoids the ugly, depressing bits. They appear to have clear beginnings and endings, with dramatic heroes and villains. They move. World War I, by contrast, with its images of trench warfare and mustard gas, is not so easy to manipulate in a marketable manner. Popular historians consequently avoid it.

It would be charitable to interpret the reluctance of Americans to talk about the horrors of the Great War as evidence of inherent pacifism and perhaps this element was present. As Andy McLennan points out in comments, the main reaction to WWI was an increase in isolationist sentiment: the problem was Europe, not war itself. After isolationism was discredited (which did much to strengthen the War Party) from a distance it looks like WWI was simply forgotten,and the end state is functionally equivalent.

In any case, in the long run, the absence of this most bloodily futile of wars from historical memory has been a huge boon to the war party. With a historical memory of war dominated by the “Good War” against Hitler and the Axis, it’s unsurprising that Americans have been much more willing than the citizens of other democratic societies to accept war as part of the natural order of things.
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Categories: World Events Tags:

Regular inflation in Australia: Guest post from Bruce Bradbury

May 26th, 2008 23 comments

There’s been a fair bit of discussion of inflation in the comments threads. Bruce Bradbury of the Social Policy Research Centre has sent in a guest post (in a PDF over the fold), making the point that the cost of regular purchase, notably food, has gone up by more than the Consumer Price Index. This implies that irregular purchases (consumer durables like TV sets and cars) must have gone up by less than the CPI and in fact the inflation rate for these items over the past three years has been only 0.5 per cent. Bruce’s conclusion

This gap perhaps explains some of the divergence between the expressed concerns of consumers and the complacency of economists. Though consumers know that their next TV will be much better than their last one for much the same price, they are still struggling to meet their weekly supermarket and petrol station bills.

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Categories: Economics - General Tags:


May 26th, 2008 75 comments

It’s taken six months, and there have been some near-misses along the way, but for me, the weekend announcement that the government will be reviewing the collection of GST on the full (excise-inclusive) price of petrol is the Rudd government’s inevitable first big policy failure. I don’t know where to start on this. First, the objection that it’s “a tax on a tax” is just silly. The effective burden of the GST falls, inevitably on inputs of primary factors (labour and natural resources including land). Since both are taxed, the entire GST is “a tax on a tax”. Politically, the government abandons the high ground it occupied on the issue, while not providing serious competition for the Libs on the low ground. It also undercuts Rudd’s correct statement only a few days ago that the government had done all it could on petrol prices. And environmentally, it’s a sign of impending disaster.

About the only consolation is that, like Nelson’s five cent excise cut, it will never happen. The idea is bound to be shot down in the review for the reasons I’ve mentioned. But there are plenty of other opportunities to cave in, and it looks as if this government is going to take them. The only remaining faint hope is that Rudd will pull those who’ve floated this stupid idea into line, at the cost of throwing away the advantages they held over a divided and confused opposition.

Categories: Oz Politics Tags:

Monday Message Board

May 26th, 2008 24 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:

Peak car

May 25th, 2008 47 comments

Today’s Fin (paywalled unfortunately) includes the neat neologism “Peak Car” from transport consultant John Cox, making the point that car travel in developed countries is unlikely to increase further. I’ve tended to disagree with Cox in the past: for example, with this 2006 piece, which stated that public transport is in terminal decline. This was just at the beginning of the recent resurgence in public transport use, particularly noticeable in Brisbane. Still he’s right about the peak, or more precisely plateau in car travel, matching what’s happening to oils supplies. I’d take it further and say that the inevitable (given no growth in supplies and increased demand from China and India) decline has probably already begun.

Calculated Risk points to this report from the US Dept of Transportation, showing the first yearly decline in several decades, and includes a graph which shows that the recent decline follows several years of flattening

Weekend reflections

May 25th, 2008 8 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:

On the bleeding edge of videoconferencing

May 24th, 2008 8 comments

Yesterday, I appeared on video a National Symposium to be held by the Australian Agricultural and Resource Economics Society in Adelaide (details here and program (PDF) here).

Unlike previous videoconferences I’ve done for smaller seminars (audience up to 30 who can fit into a dedicated venue) presenting to a big event like this posed lots of difficulties, though most were satisfactorily resolved at the end. After initially giving assurances that they could handle a videoconference, the venue advised that they didn’t have an ISDN line, or any adequate alternative, and that installing a line would cost thousands of dollars. We looked at various computer-based options, but eventually decided that we would be unlikely to get sufficient reliability and video quality that way, so I stepped back from the frontier and made a DVD of my presentation which I mailed to Adelaide. Even that fairly low-tech approach created some problems, as playback of computer-burned DVDs turns out not to be 100 per cent reliable. There was a scramble to find a setup that would play the DVD, but it all went well in the end.

The plan was to take questions by audioconference, and this was incorporated in a panel discussion where questions were addressed to several speakers. The organisation on this point was a bit ad hoc, and the sound quality was very poor. Fortunately, perhaps, the format only allowed for one or two questions per speaker.

A benefit of going this way is that it’s reasonably easy to make a podcast. Unfortunately, my slide design, which works fine on standard projection equipment, and seems to have gone OK in the DVD, is very hard to read in a small movie format. Even with this poky format, 30 minutes of video turns out to be too big to upload. I’ll have to split it into parts. I’ve attached the presentation for the moment, but even that is 8.3MB..

Overall, my experience here is an indication of some of the kinds of adjustments that need to be made if videopresence is going to replace air travel on a large scale. None of them are huge in themselves, but they reflect the marginal status of this option When the problems are overcome, the advantages, such as the permanent availability and reusability of the video and podcast will be substantial, but at the moment, it’s still on the bleeding edge.

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Categories: Economics - General, Environment Tags:

Spin and silence

May 23rd, 2008 30 comments

Glenn Greenwald reports that the story of secret Pentagon efforts to set up a group of supposedly independent military experts, who then ran the Administration line on network TV, detailed in the New York Times a month ago, has made the standard transition from “we don’t illegally manipulate the news” to “of course we did that, why are you still making a fuss about this old story“.

No news, or even meta-news there. What’s really striking is that, as far as I can tell, none of the TV networks implicated in the story have reported it on-air in any way, and most have made no response at all (with the exception of CNN, none responded substantively to questions from the NY Times, and I haven’t seen anything since). And with the story now in the old news category, they have clearly succeeding in keeping it from their viewers, with the exception of assiduous readers of the NYTimes or blogs. Apparently, if it isn’t on TV, it didn’t happen. And of course, if it is on TV, it probably didn’t happen either, at least not the way we get to see it.

Categories: Media Tags:

World biodiversity day

May 22nd, 2008 18 comments

According to Wikipedia, today is the International Day for Biological Diversity. I don’t tend to write much about this, but my concern over global warming is based, to a great extent, on the losses in biodiversity that will inevitably result from climate change, even at rates that don’t greatly damage human economic activity in general.

Categories: Economics - General Tags:

Don’t sell water down river

May 22nd, 2008 8 comments

That’s the headline for my article in today’s Fin. It’s a nice pun (sub-editors love this kind of thing) but I should clarify that in fact, I am in favour of upstream irrigators selling water to flow down the river to restore natural flows and provide drinking water for Adelaide.

You can read the full article here on the RSMG blog.

Categories: Economic policy, Environment Tags:

Climate, Water and Adaptive Responses

May 21st, 2008 9 comments

Getting back to serious business, that’s the title of a National Symposium to be held by the Australian Agricultural and Resource Economics Society in Adelaide tomorrow and Friday (details here and program (PDF) here).

I’ll be appearing, but not in person. As discussed previously, I tried to arrange a videoconference, but that didn’t work, so I went instead for a prerecorded video appearance, which will be followed a bit later by a panel discussion in which I’ll take part by audioconference. I’m arranging to have the video turned into a podcast and will post this, along with my presentation, for anyone interested.
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Categories: Economics - General, Environment Tags:


May 21st, 2008 36 comments

As I’ve said in the past, I’m tired of stoushes with global warming delusionists, and of blogwars more generally. I’ve adopted a policy of banning/deleting trolls here, and, as far as possible, ignoring them elsewhere. Unfortunately, I didn’t feel I could ignore Graham Young’s attack on me, Robyn Williams, Tim Lambert and others in Online Opinion of which he is Chief Editor. OLO has made a valuable contribution to Australian public debate, and has a well-justified reputation for serious discussion (despite Young’s propensity for publishing silly anti-science pieces on climate change). That reputation will be trashed if it becomes a platform for intemperate and partisan rants (violations of Godwin’s Law are a pretty good indication of this, in my view).

I did write to Young to attempt a resolution, and sent him a lot of links and documents trying to explain why (contrary to his claims) I thought it was appropriate to report Fred Singer’s close involvement with the tobacco industry, and its relationship to his role in the global warming debate (prominent now, but even more so in the 1990s when he and Fred Seitz got the organised delusionist movement going with the Leipzig Declaration and Oregon Petition)[1][2]. However, apart from the offer of a reply (if I want to say that I’m not a brownshirt, I can do so here in much less than 800 words, and have done), he wasn’t interested.

At this point, I’m going to let the documents speak for themselves. Over the fold, I’ve linked and quoted an article from the American Journal of Public Health, and two (of many) documents from tobacco company archives, released as part of a settlement of litigation against them by US state governments. If any readers feel that I’ve been unfairly selective here, I invite you, as I did Graham, to Google “Fred Singer” + tobacco, or search the archives yourself.

That’s it from me on this. If readers’ comments indicate general agreement that I’ve unfairly traduced Singer’s reputation, I’ll retract. Perhaps, if the evidence appears convincing to most, Young might respond appropriately.

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Categories: Environment, Metablogging Tags:

New book on uncertainty

May 20th, 2008 5 comments

Sorry for putting up a second plug in a few days, but it seems as if, after the usual delays, quite a few things of mine are coming out that might be of broader interest than most of my academic work. I’m a contributor to a new book, Uncertainty and Risk: Multidisciplinary Perspectives, edited by Gabrielle Bammer and Mike Smithson. It’s discussed in this piece on the ABC website, which talks about Rumsfeld and ‘unknown unknowns’, a topic I’ve talked about before (here at Crooked Timber and here on this blog).

There’s lots of interesting views of uncertainty, in all sorts of fields, from statistics to jazz. You can watch a slowTV video (parts 1 and 2) or hear a more complete podcast of the book launch, with a public lecture on uncertainty and intelligence (in the CIA sense) by Michael Wesley.

One thing that is, unfortunately, certain is that the price of the book will be far too high for all but the keenest readers, so you’ll probably have to wait for it to reach the library if you want to read it – there’s not even “Search Inside” on Amazon.

"Uncertainty and Risk: Multidisciplinary Perspectives (The Earthscan Risk in Society Series)" (Earthscan Publications Ltd.)

You can, however, get 15 per cent off the UK price (save ten quid!) with this flyer

updateHere’s an extended ‘teaser‘ (4.4 Mb) with TOC and one chapter. More to come at the website of the book.

Categories: Books and culture Tags:

Burma appeal final

May 19th, 2008 1 comment

I’ve just sent off my donation to the Burma appeal. I’m reposting the final tally drawn up by James at Club Troppo. We never quite worked out which site gave most, but I’m happy to declare it a glorious tie. Thanks again to everyone who helped.

Burma summary

Many thanks to the readers who responded to our joint Burma campaign with John Quiggin by donating to aid agencies assisting the victims of Cyclone Nargis. They include:

Dylan Nicholson (100), John Warburton (100), Kim Weatherall (150), Stephen Luntz (350), Robert Merkel (100), Laura (50), Declan Kuch (50), Andrew Bennetts (200), S. Obeyesekere (100), Kj (90), Simon Rumble (100), Jed (100), Nicole Milazzo (90), Titus (200), Lindsay Jones (100), Michael D (50), Michael Stanley (100), Jack Strocchi (50), Penguinunearthed (200), Ian Gould (100), Julian Quennell (100), anon (50), Joe (250), Mark Lilywhite (200), Dan Woods (70), Cathy (50), Susan Hogan (100), Helen Smart (100), NPOV (100), Joe D (50), CFQ (100), an anonymous donor (100), and a bloke from Eudlo (200).There was also a very generous donation from Courtney and Adam, whose amount they requested not be disclosed.

Of the above, John and I reckon $4280 to be documented or as good as documented. Club Troppo writers and affiliates will match this at fifty cents to the dollar, as promised. These include: Geoff Honnor, Jim Belshaw, Legal Eagle, Patrick Fitzgerald, Margaret Farrell, Saint, Patrick Garson, Ingolf Eide, Nicholas Gruen, Ken Parish and myself.

John is paying an additional fifty cents, that is, $2,140 from his own funds.

The total raised from the effort is thus $8,560.

Arabella Imhoff informs me that she and some friends raised $1750 for a group operating Burma. John was notified of some other large donations too, and although we weren’t able to include these amounts in the total matched, we are happy to acknowledge them.

Congratulations all round. At this stage We’ll just have to hope that the money gets through. If not, the agencies in question presumably will put it to good use somewhere. I’ll try to update on this later in the week.

Categories: Life in General Tags:

Godwin quinella

May 19th, 2008 65 comments

Just about everybody these days knows about Godwin’s Law, and its standard corollary, that the first person to introduce an allusion to the Nazis into an Internet debate automatically loses. Not, it would seem, Graham Young, chief editor of Online Opinion. In the course of an article denouncing the ABC’s Robyn Williams, he takes a sideswipe at me, calling me a brownshirt. Not content with his automatic loss, he goes for the quinella in this companion post, accusing Williams of being a communist.[1] Bizarrely, Young admits in comments that this allegation (now widely reproduced on the Internet) is untrue, but does not bother to correct the post, let along apologise.

The cause of all this: making some critical observations about various global warming “skeptics”. Young doesn’t (and can’t) deny the truth of these observations, which I suppose is why he feels the need to crank up his rhetoric to the point of this spectacular double Godwin with pike. Rather he complains that pointing such facts out is “not nice”.

I’ll be back with more on this later, I expect, but for the moment I’ll settle for the automatic win.

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Categories: Environment, Metablogging Tags:

Monday Message Board

May 19th, 2008 44 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:

In praise of Rachel Carson – Bate responds

May 18th, 2008 6 comments

Roger Bate of Africa Fighting Malaria has responded to my article with Tim Lambert defending Rachel Carson against the claim that she promoted a ban on DDT that has killed millions of people. Not surprisingly, he doesn’t like the article, and says we’ve overstated the extent of his work for the tobacco industry, though he doesn’t deny working for them. Since we’ve already debated that point with a commenter in the previous thread (the evidence is here with more detail here), I won’t go over it again, except to agree that we could have said more about the extent to which Bate has moved away from his initial position and his links with the tobacco lobby.

Instead I want to start with a focus on the areas of agreement which turn out to be surprisingly large. Most notably, Bate states

there are many ill-informed arguments for the use of DDT to be found, especially online. I may not have done enough in the early years of this decade to respond to those excesses, and may even occasionally indulged in them myself, but for many years I have tried to be logical.

He makes no attempt to defend Steven Milloy, the main target of our article, or his many imitators in the media and blogosphere (some Australian examples here and here.)

Bate also endorses Carson’s warnings on the dangers of overuse of agrochemicals, of which DDT was a major component, and the ban on agricultural use of DDT. He doesn’t challenge any of the points made in the article about the failure of the attempt to eradicate malaria using DDT, or about the role of resistance.

In fact, the only factual error he claims (leaving aside disputes about AFM and its funding) actually supports our case. The article stated that the public health exemption from the US ban on DDT had apparently never been used, and the word “apparently” was dropped in editing. Bate points out that DDT has been used in the US on a number of occasions, so that even the fallback claim of a “de facto” ban, pushed by many blogospheric promoters of the DDT ban story, is not true.

Finally, Bate’s article largely confirms our point that the origins of stories about the mythical DDT ban lie in the leadup to the Stockholm convention, during which, as we noted, some environmental groups pushed for the setting of a target date for DDT to be phased out, but ultimately agreed to preserve the DDT exemption. The link so commonly drawn to the US ban in 1972 is entirely spurious.
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Categories: Environment Tags:


May 17th, 2008 68 comments

It’s hard to know how to keep up with news on the problem of mitigating CO2 emissions – there’s just so much happening – so I’m just going to jot down a few thoughts. This piece on wind power in Salon by Joseph Romm has a couple of particularly interesting snippets I want to jot down.

* since 2000, Europe has added 47 GW of new wind energy, but only 9.6 GW of coal and a mere 1.2 GW of nuclear
* The carbon price required for large scale expansion in wind power (to 20 per cent of all US electricity by 2030) is estimated at $50/ton

Given our larger area of land per person, I’d imagine the economics in Australia would be at least as favorable. Ignoring for the moment the demand response, the revenue associated with permits sold at $50/ton in Australia would be about $25 billion (given current emissions around 500 million tonnes). Taking account of an emissions reduction of at least 20 per cent*, revenue would be $20 billion (enough to fund the abolition of payroll tax and a reasonably generous compensation program for low-income households). The net welfare loss would be much less than this – given the many problems with payroll tax, there might even be a net gain.

* The Salon article is only on electricity, but there are comparable savings to be made in other areas.

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Categories: Economics - General, Environment Tags:

Money Ruins Everything

May 17th, 2008 16 comments

Dan Hunter and I have a paper coming out in the Hastings Communications and Entertainment Law Journal, which economic and technical innovation is increasingly based on developments that don’t rely on economic incentive or public provision. The main examples, obvious enough for readers here, include open source software, blogs and associated technical and social innovations, and wikis. Abstract and links to SSRN over the fold.
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Categories: Economics - General Tags:

Weekend reflections

May 17th, 2008 25 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:

Burma Appeal preliminary results

May 17th, 2008 4 comments

We’re still awaiting some final confirmations, but the total amount promised by readers in the Burma appeal, which closed a couple of days ago, is a bit over $4000. My calculation show that this blog is marginally ahead of Troppo, but seasoned election-watchers will know that results can change with recounts and similar. Anyway, it’s been an overwhelmingly generous response. With our matching contribution raising the total to $8000, it’s the most successful fundraiser ever for this blog, which has now (with assistance from Troppo and many others) raised over $20 000 in total for appeals of this kind.

The situation in Burma remains disastrous, with natural calamity confounded by a government that seems utterly unconcerned with anything except the maintenance of its own power. Still, with pressure coming from the entire world, including ASEAN neighbors who’ve previously been inclined to give the junta a free pass, I’m sure the help to which we are contributing will get through in the end. It will still be sorely needed when it arrives.

Categories: Life in General Tags:

Put a fork in him, he’s done

May 15th, 2008 45 comments

After the fiasco over alcopops, there’s only one reason Brendan Nelson can survive as Opposition leader. All the potential alternative leaders, with the apparent exception of Julie Bishop, have made just as big fools of themselves as Nelson has.

The decision to tax premixed spirit drinks on the same basis as spirits in general was announced weeks ago, without a peep from the Opposition. There are two justifications for the decision, either one of which is entirely sufficient.

First, it closes an obvious loophole in the revenue system. Since most spirits are consumed in mixed drinks of one kind or another, it makes no sense to exempt premixed drinks from the general tax on spirits. If the Opposition thinks spirits in general should be taxed at a lower rate, they haven’t said so, and of course they had 11 years to make the case from the government benches.

Second, the government has made the case that these drinks encourage excessive drinking among young people, particularly young women. AFAIK, no-one has refuted this, and certainly the Opposition has made no attempt to do so. (updatedin fact, tonight’s ABC news has footage of Nelson making precisely this claim in Parliament back in 1996)
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Categories: Oz Politics Tags:

Republicans on the nose

May 14th, 2008 27 comments

While most attention has been focused on the never-ending story of the Democratic presidential primaries, the Republicans have just lost a seemingly safe seat in a Mississippi special election, following two earlier losses including that of former House Speaker Dennis Hastert. As this CNN story says, this raises the prospect of a wipeout in November. The result is consistent with steadily declining Republican affiliation and massive rejection of Bush (who’s reached all-time lows in several polls recently). McCain is still managing to avoid much of the stench associated with his party, but it seems to me this will be a lot harder for him in the context of a general election, where I imagine he will be expected to campaign on behalf of vulnerable Republicans.

I don’t know, though, whether there’s a common pattern of upsets in special elections. Incumbent governments often do badly in by-elections in Australia, since it provides the opportunity for a largely consequence-free protest vote, but this logic doesn’t seem to apply in the US context. I’d be interested in any thoughts from readers

Categories: World Events Tags:

Instant budget reaction

May 13th, 2008 52 comments

First up, I have to say that it was good to watch a budget without having to put up with Peter Costello. Unlike Howard, I never regarded Costello as having any real substance. Even after 11 years on the job, his mastery of his portfolio was a clever barrister’s mastery of his brief, not a serious understanding of economics. Despite his nervous start in the job, and a delivery of the Budget that wasn’t notable for rhetorical flair, Swan impresses me more as knowing what he is talking about. Turning again to the Opposition for contrast, I didn’t think much of Malcolm Turnbull’s response, claiming (on a basis he never made quite clear) that this was a “high-taxing, high-spending budget”, and edging perilously close to attacking the government for closing the alco-pops tax loophole his own side had created. Clearly the Liberals are still trying to work out what they stand for.

Coming to the main point, the government did a good job in keeping its promises, even if households on incomes over $150 000 may feel picked on. The means-testing of Family Payment B was announced before the election, and the threshold could scarcely have been higher than it was.

IIRC, the Howard tax cuts, largely copied by Labor were announced in nominal terms (without allowing for inflation). If so, the higher than expected inflation bequeathed to Swan is actually something of a gift, since it means that bracket creep will pay for (and justify) much of the promised cuts. Looking at the parameter revisions, most of which have been attributed to “the mining boom” it’s hard to believe that the $12 billion or so the government has gained from this source is all due to real increases in revenue, so I think bracket creep is playing a role here.

I was disappointed, if not very surprised, that the budget savings were made up almost entirely of odds and ends, with big targets like the dependent spouse rebate and the FBT exemption for cars left pretty much untouched (the rebate was subjected to the 150K means test). That said, there was enough fat left over from the previous government that it was possible to cut $7 billion or so without causing any obvious pain. It won’t be so easy next time, and I think it would have been better to take some pain this time around. Still with a surplus of 1.8 per cent of GDP, it’s unsurprising that they didn’t feel the need to cut further.

The one big new thing in the Budget (new in magnitude, but not in concept) was the announcement of $40 billion in infrastructure funds, building on the Future Fund and the Higher Education Endowment Fund. This seems promising, especially as the money seems likely to be invested in a mixture of equity and other assets, allowing the government to keep on issuing at least some debt.

Overall, this Budget is reasonable as regards its macroeconomic settings, cautious but reasonably sensible in fiscal terms, and likely to be politically successful (first budgets usually are). But it’s left some hard decisions to be taken later and, with a three-year term, there will only be one more chance before the next election year budget.

Categories: Economic policy, Oz Politics Tags:

In praise of Rachel Carson

May 13th, 2008 25 comments

Tim Lambert and I have a piece in the online edition of Prospect, defending Rachel Carson against the tobacco/DDT lobby. It was cut down for publication from a much longer article, which I’ve appended over the fold. The article shows how the legend that Carson caused the banning of DDT, just as it was about to wipe out malaria, was invented and popularised by tobacco lobbyists, notably Steven Milloy and Roger Bate, who wanted to mount a flank attack on tobacco’s archenemy, the World Health Organization.

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Categories: Environment Tags: