John Quiggin

Whenever the topic of voting for the Greens comes up, the question arises of whether this involves “splitting the progressive vote” or “wasting your vote”. In large measure, this suggests results from confusing the Australian system with the “first past the post” (plurality of first preference) system that prevails in the US and Britain. In all Australian voting systems it is possible to vote Green with a second preference for Labor. Obviously, if you don’t do this (by preferencing the Lib/Nats or by exhausting your ballot where this is an option) the result will be to reduce the chances of a Labor candidate being elected. But are there any other cases where this is a risk?

For single-member constituencies, the most common case is where the Greens are sure to run third. In this case, their preferences are distributed, and a Green vote with a Labor second preference is functionally equivalent to a Labor first preference, although the views they express are different. In the rare cases where Labor is sure to run third, the opposite is true. The only interesting case is where the order in which Greens and Labor are going to finish is unsure. In this case, the outcome that gives the best combined Labor-Green chance is that the candidate with tighter preference flows should finish third. That way, there is less leakage of preferences to the conservatives. In practice, I don’t think this is a big deal, but to the extent it is at all relevant, it usually suggests that progressives should vote Green. But there is a problem with this, in that, if people really acted on this analysis, there would be a reward to the party whose voters were more likely to split their preferences.

Broadly speaking, the same analysis applies in the Senate. Most of the time, the total number of Green and Labor Senators elected will be the same regardless of how preferences are arranged between them. Given the complexities of the system, especially with voting both above and below the line, anything can happen, but since these complexities are almost impossible to predict in advance, they can’t really influence a decision on how to vote.

I restarted the blog so I could comment on the election, but I’ve found it too depressing to do much. The major parties are engaged in a race to the bottom in every respect, announcing silly focus-group-driven policies and appealing to the worst instincts of the electorate. The mass media have encouraged this, obsessing over trivial scandals and personality issues and disregarding our real economic and social problems. The only serious hope for progress on policy is the Greens but they remain marginalised. I’ll try to offer some discussion of the Greens policies on various issues but at this point, I think, there is little reason to follow the main campaign.

It’s time again, at long last, for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language.

Julia Gillard has announced an Australian version of the cash for clunkers program of the Obama Administration. Reader Ben Elliston writes

read an article some months ago by Jeffrey Sachs evaluating a
similar policy from the Obama administration:

http://www.scientificamerican.com/article.cfm?id=a-clunker-of-a-climate-policy

It turns out that the Gillard proposal is even worse than Obama’s.
Sachs calculated the greenhouse gas abatement value of Obama’s scheme
at US$140 per metric tonne. Gillard’s policy will reduce emissions by
1 million tonnes at a cost of $394 million dollars ($394/tonne).

My only observation is that Ben’s estimate is taken directly from the government’s press release, which is almost certainly overoptimistic. For comparison, at about $25/tonne, brown-coal electricity generation becomes uneconomic compared to gas and black coal. At $100/tonne, just about all the alternatives (including wind, nuclear, CCS, and solar) look pretty good. Cash for clunkers is, as Sachs concludes, a clunker of a policy.

And just in case anyone has forgotten, Abbott’s anti-policies are even more focused on this kind of nonsense/

My column in yesterday’s Fin (over the fold) advocating agreement between Labor and the Greens on a short-term carbon price was rendered obsolete almost immediately by Julia Gillard’s speech (as it happened, I was in the building next door when she gave it).

Gillard’s non-policy represents a failure of leadership. The best that can be said for it is that the delay generated by this process is only supposed to last for 12 months, and that 150 randomly selected Australians could scarcely do a worse job on this vital issues than our political leaders have done.

But, as is so often the case, Abbott is even worse, offering an anti-policy that would represent an obstacle to any real action. I’m feeling happy about my decision to vote for the Greens. With rather less enthusiasm than before, I’ll still give Labor my second preference.

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After the usual hassles, UQ School of Economics finally has its own videoconference facility, an IP-based Tandberg system, which should (fingers crossed) be interoperable with other standards-based systems. I just did my first conference, and it worked very well. Unfortunately, we are still waiting for an upgrade that will let me run a presentation at the same time as appearing on video. But I’m confident of ultimate success, so I’m now announcing that I’m available to give seminars and talks on a wide range of topics to anyone (subject to time and timezone constraints!) who would like to organise a videoconference. Email me j.quiggin at uq.edu.au if you are interested.

Update I thought Posterous would include the link automagically but apparently not. Here’s Garth Renowden’s site where you can support Abraham and/or bag Monckton.

Ross Gittins repeats the criticism he, Ken Henry and Martin Parkinson, have put forward previously, that economists were either missing in action or actively unhelpful in the climate change debate. I disagree – I think academic economists as a group look a lot better on this issue than do economic columnists, and (on the limited available evidence) at least as good as public servants.

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As I said last time, I’ll be advocating a vote for the Greens. Unlike some commenters here, I plan to give my second preference to Labor[1]. To justify my second preference first, I regard the Liberals under Abbott as utterly unfit for government. Abbott has behaved as an unprincipled opportunist throughout his period as opposition leader, denouncing “great big new taxes”, then proposing taxes of his own with no regard for consistency or good public policy. In office, I expect he would discover that he had a mandate for the hardline rightwing policies he has always favored.

Coming to the choice between Labor and the Greens, this isn’t the first time I have given a first preference to the Greens, but it’s the first in some years. The main substantive issues that concern me are economic management and climate change, but these issues (and particularly climate change) can’t be separate from questions about process and principle. The government has done a good job on economic management, while the opposition has been consistent only in error. On the other hand, the government has made a terrible mess of climate change policy, almost entirely because of its reluctance to deal with the Greens and to confront the opposition and the lobby groups that back them. In the long run, the only way they will be able to govern effectively is through co-operation with the Greens, and the sooner they are forced to realise this the better.

It’s obvious at this point that the CPRS proposed last year is dead, and that a new ETS will have to be developed, hopefully when we have seen some more progress in other countries. For that reason, I think a carbon tax, with few exemptions and a tight cap on compensation to emitters is the best way to go. The Greens idea of a two-year interim carbon tax would be a good starting point for discussion and there is still time for Labor to announce in-principle support for a deal of this kind.

On other issues such as asylum seekers, the government’s position is carefully ambiguous, while the opposition is as close to overt racism[2] as it has ever been. A big vote for the Greens would force the government back towards a decent position.

Then there is the machine politics that led, first to Rudd being forced to dump the CPRS, and then being sacked when this decision had such disastrous consequences. Without excusing Rudd for some earlier failures on the issue, this alone would be enough to deprive Labor of my first preference in the presence of any decent alternative.

It seems reasonable to hope that the Greens will get enough votes to hold the balance of power in the Senate from July 2011. It seems unlikely, except by a fluke that they could do the same in the House of Representatives. But the loss of even two or three inner-city seats would put Labor on notice that its core support can’t be taken for granted.

I’m even marginally hopeful as regards the seat of Ryan, where I live. The incumbent Liberal, Michael Johnson, has been disendorsed over corruption allegations, but claims to be the victim of factional smears and is running hard against the official LNP candidate. The Greens have done well in the past, and might benefit from a flow of preferences.

fn1. This assumes that there is no preference deal made that would lead me to think otherwise. For example, if Labor were to preference Steve Fielding or the like again, I would consider exhausting my Senate ballot in a way that gave a preference to neither major party (to see how, read here.

fn2. The one genuine example of “political correctness” in Australian politics is the one that prevents us from using the word “racist” to describe racism, but there’s no doubt that’s what it is.

The final proofs of Zombie Economics went off to the typesetter this morning, and you’ve all seen this evening’s news. So, I guess it’s time for me to end my hiatus, and make whatever contribution I can to the marvel of democracy. Not to keep anyone in suspense, I’ll be advocating a vote for the Greens.

Hi all,

I’m about to close down comments for the duration. Anyone who would like to continue discussions is welcome to start up a blog or maybe some sort of social media site – email me and I will link to it.

I’ve been meaning to give some recommendations for alternative blog reading. Apart from the big group blogs (like Larvatus Prodeo, Club Troppo and Crooked Timber) you can find interesting reading from some of the smaller ones like David Horton, Tim Lambert and Gary Sauer-Thompson, or just stroll random through the blogroll.

I’ll be doing occasional posts here and there possibly including Crooked Timber, Crikey, The Drum and The Daily Bludge (http://dailybludge.com.au).

See you all in September.

With various commitments, I’ve been finding increasingly difficult to post to the blog, moderate the comments section and so on. Unfortunately, my commitments are only going to increase over the next few months, so I’ve decided to take a three-month hiatus, until early September. According to my current plans, I should have plenty of free time to return, refreshed and ready for more by then. No doubt things will turn up to derail those plans, but hopefully I will still be less busy than I am now.

I’m working on a longish piece on how to pay for the global financial crisis, and it seems like a good idea to deal with some side issues separately. One of the standard post-crisis responses of governments, i has been to increase the age at which people become eligible for public old age pensions. This change is likely to flow through to other policies, for example by shaping the presumptions around the tax treatment of private retirement income.

I want to step away from these financial positions and ask the question: does it make sense, in general, for people to retire at older ages than in the past? For those who want the “shorter” version, my answer, on balance, is “Yes, at least in Australia”.

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It’s time, once again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language.

Before the 2008 US election, I wondered how rightwing commentators, quick to hurl the charge of anti-Americanism against anyone who disagreed with the policies of the Bush Administration, would deal with the election of a Democratic President. I shouldn’t have worried. In this tirade against “anti-Americans” at the Sydney Writers Festival, Janet Albrechtsen makes it clear that she sees no need to change her views. An anti-American, according to Albrechtsen is someone who supports the current President of the United States, favors the policies of his Administration, and opposes demonstrators invoking revolutionary slogans against the current government.

All of this is summed up in the favorite slogan of the Tea Party crowd “I want my country back”. In the view of this overwhelmingly white and mostly upper-income group, which started operations within weeks of Obama’s inauguration, the only legitimate government is one that embodies their tribal values and hatreds. If the majority of Americans vote for a different government, then, as in Albrechtsen’s twisted logic, that just means most Americans are anti-American.

Update: Quite a few commentators seem to think I’m misrepresenting Albrechtsen here. I find this bizarre. The first use of the term “anti-American” in her article is para 3, which reads (with emphasis added, given that it seems to be needed)

Not just the sleep-inducing sound and sight of five voices all nodding and shaking their heads to the same anti-American melody. Yes, we all voted for Barack Obama, yes, we all want action on climate change, no to religion, nuclear power, the Tea Party movement, the Bush administration (“evil was being actively pursued every single day”),

I’ve been busy for the last few days, working on a statement by a group of economists in support of the principle of a resource rent tax to replace existing royalties. The statement calls for informed debate about the proposal and takes no position on particular design issues, such as the choice between the existing system used for the Petroleum Resource Rent Tax (40 per cent on returns above about 11 per cent) and the government’s proposed Resource Super Profits Tax (40 per cent on returns above the bond rate, with a corresponding offset for returns below the bond rate).

My own view is that the RSPT design would be more efficient, but the losers under this design (those who can confidently expect high profits) have been very vocal, while the potential gainers (smaller miners undertaking riskier projects) have not given the government any support. Add to that the fact that the PRRT design is long-established (making scare campaigns a little bit harder) and simpler and there is a strong political case for a compromise along these lines. The most important thing is that the government cannot and should not back down on the basic principle of a resource rent tax.

Here’s the Press Release and Letter.

Apropos of recent proposals to stop giving Miranda warnings to terrorism suspects, Glenn Greenwald observes[1]

, the reaction is still exactly the same to every Terrorist attack, whether a success or failure, large- or small-scale. Apparently, 8 years of the Bush assault on basic liberties was insufficient; there are still many remaining rights in need of severe abridgment. Even now, every new attempted attack causes the Government to devise a new proposal for increasing its own powers still further and reducing rights even more, while the media cheer it on. It never goes in the other direction.

This kind of policy “ratchet” is quite common, but I haven’t seen a fully satisfactory, or general, analysis of either the metaphor or the phenomenon.

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Not that long ago, I said that, in the absence of a policy change on privatisation, I’d be putting Labor last on my next Queensland ballot, behind the Greens and, more relevantly, the Liberal National Party. Doubtless as a result, the LNP has promptly imploded.

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. Civilised discussion and no coarse language please.

I’ve been flat out with final revisions to my book manuscript and various other things. So I didn’t get time to say I would be on Australia Talks this evening talking about the resource rent tax. It went fairly well, I thought. You can judge for yourselves when the podcast becomes available

Not quite sure when I will surface from my current deluge of work. Light posting until then.

* Budget lockup low point: Only instant coffee, had to get my caffeine hit from Diet Coke. High point: Asked for autograph by Treasury officials. Also, a fun dinner with Robert Gottliebsen, Alan Kohler, Natasha Stott-Despoja, the Crikey crew and others. Not quite as lively as some accounts suggested, but a good time was had by all.
* One thing I missed: Got through some of the confusion on the aid budget but wasn’t able to work out if the money for Copenhagen commitments was additional new money (as promised) or old money taken from elsewhere in the aid budget. Unsurprisingly, it was old money
* A bigger thing I missed: What Possum’s Pollytics correctly calls the most important chart in the budget, a graph showing a regression of the size of economic stimulus against economic growth relative to IMF forecasts. The relationship is highly significant, and the coefficient is approximately 1. That is, each dollar of stimulus resulted in (roughly) a dollar of extra output. No doubt this will be subject to reanalysis, but it’s a striking result.

* Tony Abbott’s reply: predictably weak. Freezing public service recruitment is silly symbolism, not a serious way of cutting spending.

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. Civilised discussion and no coarse language please.

Last year’s Commonwealth Budget represented a huge, and, for the most part, successful economic gamble. The gamble last year was that a big budget deficit would yield an economic stimulus sufficient to outweigh the associated increase in public debate and provide a basis for sustainable economic growth in the future.

As the Treasurer’s speech points out, the Australian economy has recovered strongly at a time when the US and European economies are only marginally stronger than at the depths of the recession. Public debt is now projected to peak at 6 per cent of GDP, compared to a developed world average of more than 80 per cent. The government’s claims as strong economic managers have a fair bit of credibility.

This year’s Budget is a political gamble; that the government can win re-election based on that credibility, without offering any significant electoral sweeteners. The government doubled down on this gamble with the series of backflips and repudiated promises in the leadup to the Budget, motivated largely by the desire to achieve an early return to surplus. The political price for these backflips, most notably the indefinite deferral of the CPRS, has been steep, and it’s far from obvious that the Budget will provide any offsetting bounce.
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I’ve changed this a bit to be clearer on points that I hadn’t sorted out in the lockup. It was a long day

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My response to the Budget’s international outlook

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