Archive for January, 2012

Let’s get this show back on the road

January 30th, 2012 120 comments

Looking at the latest TV news I have mixed feelings. On the one hand, I’m sick of the confected outrage surrounding the Australia Day incident. On the other hand, if this is what it takes to make the Labor Party realise they have to go back to Kevin Rudd, and sooner rather than later, then I suppose I can live with it.

Categories: Oz Politics Tags:

Monday Message Board

January 30th, 2012 12 comments

It’s time for another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Regular Features Tags:

Social democracy and equal opportunity

January 29th, 2012 43 comments


My critique of Tyler Cowen’s post arguing the unimportance of social mobility has started off, or maybe merged into, of those old-fashioned blog firestorms we used to have back in the day, now also reticulated through Twitter – a few links here, here and here. But rather than criticise Cowen further, I thought I would try to work through the bigger issues involved from a social democratic perspective[1].  In particular, as discussed in comments here, should social democrats favor policies to enhance social mobility, or does mobility between generations make inequality even worse, for example by justifying what appears as meritocracy?


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Categories: Economics - General Tags:

Inflation target tyranny

January 27th, 2012 60 comments

That’s the title of my piece in the Fin last week. As with my previous column, Catallaxy was out with a comment long before I got around to posting here, but it seemed to me to miss the point fairly comprehensively.

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Categories: Economic policy Tags:

How (not) to defend entrenched inequality

January 25th, 2012 46 comments

The endless EU vs US debate rolls on, but now with an odd twist. Although the objective facts about economic inequality, immobility and so on are far worse in the US than the EU, the political situation seems more promising. (I’m not talking primarily about electoral politics but about the nature of public debate.)

In the EU, the right has succeeded in taking a crisis caused primarily by banks (including the central bank, and bank regulators) and blaming it on government profligacy, which is then being used to push through yet more of the neoliberal policies that caused the crisis. And, as we’ve just seen, formerly social democratic parties like New Labour in the UK, are pushing the same line.

By contrast the success of Occupy Wall Street have changed the US debate, in ways that I think will be hard to reverse. Once the Overton window shifted enough to allow inequality and social immobility to be mentioned, the weight of evidence has been overwhelming.

This post by Tyler Cowen is an indication of how far things have moved. Cowen feels the need, not merely to dispute some aspects of the data on inequality and social mobility in the US, but to make the case that a unequal society with a static social structure isn’t so bad after all.
Update Cowen offers a non-response response here. Apparently, disliking arguments for inherited inequality, such as his point 3 (because of habit formation, social mobility reduces welfare) is a “Turing test” for reflexive leftism.

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Categories: Economics - General, World Events Tags:

Not with a bang, but a whimper

January 23rd, 2012 55 comments

Gillard’s abandonment of pokies reform means, as far as I can see, that she has reached the end of the set of reforms she promised as the price of independent support after the 2010 election. Most of the agenda she inherited from Rudd has similarly been either implement, or put on the road to implementation, (typically in a watered-down form) or else abandoned. A visit to the ALP website seems to me to confirm this impression. There are plenty of glossy pictures, but the ideas seem mostly to be taken from Rudd, though drastically watered down in most cases, for example, “School Reform” in place of “Education Revolution”. The only thing that sounds more like Gillard than Rudd is “Trade Cadetships” which reads like a rebadging of Howard’s “New Apprenticeships”.

Can anyone point to any genuinely new initiatives taken by this government (that is, not forced on it, or inherited)? It would be nice to think that there is something more on offer than “Not Abbott”.

Categories: Oz Politics Tags:


January 23rd, 2012 7 comments

A new sandpit for long side discussions, idees fixes and so on.

Categories: Regular Features Tags:

Monday Message Board

January 23rd, 2012 9 comments

It’s time for another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Regular Features Tags:

Weekend reflections

January 21st, 2012 20 comments

It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please

Categories: Regular Features Tags:

Not enough votes = broken promise? (Update: as it turns out, yes)

January 20th, 2012 52 comments

Update With brilliant timing, I wrote this post the day before Gillard announced that she was in fact breaking her promise, and would not bring the legislation to a vote. Presumably she had already signalled this to the media, which was why the accusations of a broken promise were being made, accurately if a little prematurely. Yet again, Gillard has lived down to my lowest expectations, while Abbott has (of course) been even worse End Update

Regular readers will know that I’m no fan of our current PM and a strong supporter of legislation to limit the damage caused by pokies and other forms of gambling that rely primarily on problem gamblers for their viability. And, having been overseas for much of last year, there may be some political nuances I’m missing.[1]

Still, I can’t see how Gillard can be accused of breaking a promise to Andrew Wilkie on pokies on the basis that she has failed to get the numbers for it. On that basis, for example, Rudd broke his promise on an ETS, not when he dropped the idea under pressure from Gillard and the NSW right, but when the Senate rejected the legislation. And every government in recent history has made election promises then had their proposals rejected in the Senate (the silly idea of a mandate, supposed to require the Senate to acquiesce in government legislation, never had any effect on this). Occasionally, such rejections lead to the PM being criticised for lacking negotiation skills. But I’ve never before seen such a case treated as a broken promise.

fn1. Most obviously, it might be that the government is secretly encouraging other independents to oppose the law. I haven’t seen any suggestion to this effect, but it’s about the only thing that would make sense of the “broken promise” claim.

Categories: Oz Politics Tags:

The Internet is like a million-page a second photocopier (or is that a series of tubes)

January 19th, 2012 8 comments

Not long ago, I read Daniel Ellsberg’s[1] autobiography, Secrets, and also watched the film, The Most Dangerous Man in America. A striking feature of the book was that Ellsberg’s biggest problem in leaking the Pentagon Papers was the logistical difficulty of making 20 or so copies of a 7000 page cache of documents. It took him and a couple of helpers several months, IIRC. 

Now of course, such a task is easy, as demonstrated by Ellsberg’s successor (allegedly Bradley Manning) who supplied vast quantities of classified documents to Wikileaks. On the other hand, if Ellsberg had been 20 or so years earlier, he wouldn’t even have been able to make a single copy. [2]

The blackout yesterday as a protest against SOPA and PIPA reflects a simple fact about the Internet – it is, in essence a way of making and distributing vast numbers of copies of documents of all kinds.

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Categories: Intellectual 'property' Tags:


January 17th, 2012 59 comments

Last week I got an urgent request from the Fin for a quick-turnaround piece on the latest plan to save the car industry. I got it done within a few hours, and planned to post it here. Alas, I was as slow in doing this as I had been fast in writing the original piece (over the fold)

In the meantime, Sinclair Davidson at Catallaxy took exception to my observation that the mining industry’s nearly-free access to minerals under both private and public land was a bigger subsidy than anything the motor vehicle industry got. In support of the miners, he quoted Mitch Hooke of the Mining Council as saying

He said the proposed new tax would hit the mining industry with such a sledgehammer that it would destroy value, deter investment, reduce growth, and affect every mum and dad who has shares of equity or provides goods.

Of course, if you deleted “tax” and put in “tariff cut”, that’s exactly the same as what the representative of every industry demanding continued tariffs or subsidies has said.

What’s striking about this is the tribalism involved. As I demonstrate in the article, as far as economic efficiency is concerned, the effects of current levels of assistance to the car industry are third-order. Yet the political/cultural right denounces the car industry, while defending rent-seekers like Hooke.

This is part of a more general phenomenon on the right that I will post more on later. It’s taken for granted on the cultural right that some technologies and industries (nuclear power, oil, finance) are good and others (wind energy, electric cars, Hollywood) are evil – essentially a mirror image of what they think we on the left think. For people who are supposed to believe in the free market, this is a big problem.

Argument stuck in second gear

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Categories: Economics - General Tags:

My bet with Bryan Caplan – update

January 17th, 2012 15 comments


Back in 2009, I made a bet with Bryan Caplan that the average unemployment rate in the EU-15 over the following 10 years would be no more than 1.5 percentage points above that in the US. Before talking about the bet itself, I’d like to note that while we disagree about a lot of things, Bryan and I both take a strong stand against war, with a limited exception for self-defence. As Bryan says here, that takes a lot of sting out of the possibility of a losing bet for either of us – agreement on war and peace is more important than disagreement about labor markets in my view. 

Now, on to the bet.

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Categories: Economics - General Tags:

Monday Message Board

January 16th, 2012 16 comments

It’s time for another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Regular Features Tags:

Truth, truthiness and balance

January 13th, 2012 18 comments

Arthur Brisbane, Public Opinion editor for the NY Times, has copped a well deserved shellacking for a column in which he asked whether reporters should act as ‘truth vigilantes’ in relation to statements made by public figures.

Having observed the silliness of asking whether newspapers should (aspire to) tell the truth, the obvious question is: How should they telll it. Here are a some suggestions

1. Its unreasonable to expect reporters to take the burden from scratch in refuting zombie lies. Newspapers, including the NYT, should include a set of factual conclusions, regularly updated, in their style manuals. The most relevant current example is that of global warming. As with the current account deficit (routinely glossed as ‘the broadest measure of the balance of payments’) the NYT should formulate a standard set of words, such as “a conclusion endorsed by every major scientific organization in the world’) to be used whenever the views of Repubs on the issue are mentioned. Similarly, any reference to claims about ‘Climategate’ should include the words ‘a conspiracy theory refuted by a number of inquiries in the US and UK’. Rinse and repeat wrt evolution, the Ryan budget plan etc


2. If the approach suggested above, it will rapidly become apparent that Republicans lie all of the time about everything, whereas Democrats only lie some of the time about some things. A serious paper of record would acknowledge this, noting the partial exceptions like Jon Huntsman. That is, if the NYT were reallly serious about truth, it would gloss every statement by a Repub as (X, a member of the Republican Party claimed Y. Extensive studies by the NYT have shown that most statements by members of the Republican party are false. In this case …)


3. This is a sad state of affairs, just as its sad that Americans won’t have a chance to vote for a serious  Presidential candidate who opposes indefinite detention of innocent people. But that is the situation and organizations like the NYT have limited choices – they can either publish lies or be ‘truth vigilantes’.

Posted via email from John’s posterous

Categories: Economics - General Tags:

Weekend reflections

January 13th, 2012 10 comments

It’s time at long last for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please

Categories: Regular Features Tags:

Unions: outdated or needed more than ever?

January 13th, 2012 17 comments

Writing in today’s Fin[1], Paul Gollan argues that unions are outmoded and that workers would be better off bargaining directly with their employers. Since it’s paywalled, I’ll quote the passage to which I want to respond

Recent examples of industrial conflicts involving the use of the good faith bargaining provisions demonstrate the difficulty of trying to establish workplace engagement in advancing business and employee objectives under the current Fair Work Act. The recent industrial disputes at Qantas, Cochlear, on the waterfront and at Rio Tinto’s Bell Bay aluminium plant and BHP Billiton’s Queensland coalmines, have reinforced this impression, not only for big business but also for many Australians.

Given the seriousness of these disputes, unions and the Gillard Labor government will need to re-examine their position on workplace reform. Importantly, it seems that unions have failed to understand the difference between unions servicing their members and the broader concept of unionism.

Unionism encapsulated a common ethos of solidarity around a cause that all members could understand and relate to under a working-class banner. While years ago unions were enmeshed in this working-class culture, this is not the case in many workplaces today. They are now seen by workers as some distant, third-party organisation external from the workplace.

There may well be examples where Gollan’s claims are true, but I find it pretty hard to swallow the ones he cites. Does he really think that the employees of firms that haved locked their workers out, like Qantas, Rio Tinto and Patricks, or that have repeatedly ignored pro-union votes like Cochlear, are desperate to negotiate one-to-one with their bosses? Clearly, these firms want to get rid of unions for precisely the same reasons as the workers want to keep them, because they are an obstacle to measures that would raise profits at the expense of the workers.

I find the spurious concern for workers expressed in pieces like this even more annoying than the openly pro-boss position of, say, the Institute of Public Affairs.

fn1. One of the consequences of the separation between editorial and market functions that is part of the newspaper ethos is that, even though I’ve been a contributor to the Fin for nearly 20 years, I’ve never been given access to their online version. I had a fairly good deal for the print version, so I was never willing to pay the exorbitant price they asked. But my deal has run out, and the Fin’s prices have been cut, so now, I can at least copy and paste for fair comment purposes.

Categories: Economics - General Tags:


January 9th, 2012 23 comments

A new sandpit for long side discussions, idees fixes and so on.

Categories: Regular Features Tags:

Monday Message Board

January 9th, 2012 30 comments

It’s time for the first Monday Message Board of 2012. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Categories: Regular Features Tags:

Ancient laws

January 9th, 2012 8 comments

An article on the Fairfax website[1] refers to habeas corpus as an ancient legal action from 17th century England. That’s technically true, but shouldn’t the article point out that the crime for which the person in question was convicted (soliciting to murder) and the legal procedures under which he was convicted are even more ancient?

Habeas corpus may be old, and have a Latin name, but it’s still central to common law, and needs to be defended against those who would destroy it in the name of the War on Terror.

fn1. For some reason, it appears under “WA Today”. I did a little digging and the subject of the story is a property developer who once owned a Scottish island with a title attached (not a barony, I’m pretty sure).

Categories: Boneheaded stupidity Tags:

Status quo on way out

January 8th, 2012 57 comments

That’s the headline for my first Fin article for 2102, over the fold

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Categories: World Events Tags:

Land of (unequal) opportunity

January 6th, 2012 19 comments

A little late to the game, the NY Times has quite a good piece by Jason DeParle on the well-established finding that the US is not only the most unequal of developed societies but is also at the bottom of the scale for social mobility.

I’ve been arguing since the Triassic era of blogging that this isn’t a coincidence – a society with highly unequal outcomes can’t sustain equality of opportunity, but until this year (in fact, until the emergence of the Occupy movement) I didn’t see any evidence that the facts were sinking in, even among the majority liberals. Now it’s as if a dam has broken. Some thoughts, cautionary and otherwise over the fold.

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Categories: Economics - General Tags:

Solar rises, nuclear falls

January 5th, 2012 119 comments

My piece for the National Interest is now up. It ran under the headline “The end of the nuclear renaissance”, but that’s only half the story and probably the less interesting half. The real news of 2011 was the continued massive drop in the price of solar PV, which renders obsolete any analysis based on data before about 2010. In particular, anyone who thinks nuclear is the most promising candidate to replace fossil fuels really needs to recalibrate their views. There’s a case to be made for nuclear as a backstop option, but it’s not nearly as strong as it was even two years ago.

Feel free to comment here or at NI.

Categories: Economic policy, Environment Tags:

The nuclear option: AP1000 or bust?

January 3rd, 2012 88 comments

I’m going to relax my prohibition on discussion of nuclear energy, and offer a couple of points to start things off. I expect everything to go in circles as usual, but there’s plenty of room on the comments page, after all.

First, I have a piece coming out soon in the National Interest, arguing that 2011 marked a watershed in the development of energy sources to replace fossil fuels, with nuclear power finally ceasing to be a relevant option, and solar PV finally becoming a serious contender. I’ll add a link when it appears.

I’m sure not everyone will agree, so I’ll also offer a subsidiary claim which, if accepted, would at least simplify the debate. The claim is that the only nuclear technology with a serious chance of substantially reducing CO2 emissions before 2030 is the Westinghouse AP-1000.
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Categories: Environment Tags:

Conservatives and reactionaries

January 1st, 2012 45 comments

Corey Robin’s new book The Reactionary Mind has attracted plenty of attention both favorable and otherwise. I don’t want to offer a full-scale review, but to respond to the central thesis. As I read Robin, his central claim is that the current situation in which people who call themselves “conservative” are in fact radical reactionaries is not an aberration, but the norm, and that this has been the case ever since the first self-conscioulsy conservative thinker, Edmund Burke.

I’d put this more broadly – conservatism (and, it’s opposites, progressivism radicalism) are, in essence ideas about process, but the most people active in politics are more concerned about pursuing particular goals than about the way they get there.

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Categories: Economics - General Tags: