It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please.
Everyone does it and in any case, there’s nothing anyone can do about it (crosspost from Crooked Timber)
The general reaction to various revelations of spying by the US on its friends and allies, particularly in contexts such as trade negotiations has been “everyone does it” and “in any case, there’s nothing anyone can do about it”. And, as regards direct retaliation against the US, that’s pretty much right. The situation is a bit different for junior members of the Five Eyes[^1], such as Australia. A case now being heard at the Permanent Court of Arbitration in The Hague could set a precedent that will make such spying a high risk exercise.
I’m travelling at the moment, so updates are a bit erratic. A few days ago, I had a piece in The Guardian looking at the way the Abbott government is rejecting scientific advice on just about everything, notably including the Murray Darling Basin, on which I worked for a good many years. Comment here or there.
I’ve long been mystified by Julia Gillard’s position on equal marriage, and her almost complete silence on the matter. However, on a recent Google search, I found this, which left me even more mystified than before
“I do understand that the position I took on gay marriage perplexed many people, given who I am and so many of my beliefs. I’ve actually had lot of conversations with many of my old friends about this, some of whom have got a different view than me.
“But, I’m a lot older than you,” Ms Gillard told the young man, “and when I went to University and started forming my political views of the world, we weren’t talking about gay marriage indeed as women, as feminists, we were critiquing marriage. If someone had said to me as a twenty year old, ‘what about you get into a white dress to symbolise virginity, and you get your father to walk you down an aisle and give you away to a man who’s waiting at the end of the aisle’, I would have looked with puzzlement and said ‘what on earth would I do that for?’.
“I’m conscious that these may be views that have dated and that the way people interpret marriage now is different to the kinds of interpretations that I had. I think that marriage in our society should play its traditional role and we could come up with other institutions which value partnerships, value love, value lifetime commitment. You know, I have a valuable lifetime commitment and haven’t felt the need at any point to make that into a marriage. So I know that that is a really different reasoning that most people come at with these issues, but that’s my reasoning.
So, apparently she used to be against marriage altogether, but now wants to promote alternatives. If I read her correctly, she proposes to do this by stopping some people from getting married at all, while retaining “traditional” marriage for others. Is the idea that we could gradually extend the ban, for example, by prohibiting various kinds of mixed marriage until no-one at all could get married? Or is there some more coherent argument I’ve missed here?
A new sandpit for long side discussions, idees fixes and so on.
It’s time for another weekend reflections, which makes space for longer than usual comments on any topic. Side discussions to sandpits, please.
The High Court has ruled, correctly in my view, that the ACT legislation which briefly established equal marriage was in conflict with Commonwealth Law clearly intended to do the opposite, by defining marriage as “between a man and a woman”. We might not like the practical result, but consider how things would be if the court had gone the other way and was then confronted by a state trying to ban equal marriage after a change in Commonwealth law.
And, this is clearly a matter for the Commonwealth to decide. Abbott implied before the election that he would be open to a free vote in the New Year, and Labor should push him on this. The politics of this are pretty awful for Abbott – he’s using his control of the LNP to block a reform supported by the majority of Australians and already in place in most civilised parts of the world. On recent form, he’ll probably try to tough it out for a while, but will cave if enough pressure is applied.
The final question is whether equal marriage would pass on a free vote. The last vote wasn’t encouraging, in view of the number of Labor members who opposed it, but some of them have gone and others, I think, have followed Rudd and Obama in “evolving” on the issue. The Nats will presumably be solidly against, so the real question is: how liberal are Liberals?
fn1. In my view, Rudd should have bitten the bullet after his change of view, and demanded a free vote from Abbott (the alternative being a party line vote with Labor and Greens in favor). But, the same advisers who gave us the early election and the Northern Australia nonsense thought otherwise, with results we now have to live with.
With the closure of GMH locked in, it seems virtually certain that Toyota will follow the same path in the end, along with most of the supporting components industry. It’s possible that a well-designed policy, combined with a sustained depreciation of the $A, could keep the industry alive (the fact that it survived the end of the high tariff era was largely due to the Button Plan in the 1980s), but this is the Abbott government we’re talking about, so it seems unlikely.
The impending end of the car industry constitutes the effective end of large scale manufacturing in Australia, at least as the term is ordinarily understood. The remaining manufacturing sector consists mainly of basic processing of agricultural and mineral products for export, along with food and beverages for the domestic market. Elaborately transformed manufactures, on which such high hopes were pinned in the 1980s and 1990s have been declining for years, and will be confined to niche markets once we stop exporting automotive products.
An immediate policy implication of the end of car production is that it’s time to drop a bunch of policies whose rationale was to support the domestic industry. The most obvious candidate is the FBT concession, just reinstated by the Abbott government. But there’s also the maintenance of some of the worlds weakest fuel efficiency standards, driven by the desire not to tilt the playing field against Falcons and Commodores. More generally, a whole range of pro-car policies will need to be reassessed, given that they increase our dependence on imports and therefore our vulnerability to terms of trade shocks.
There are direct implications for employment policy, arising from the job losses that are about to take place, and longer term implications for education and training. More on these soon, I hope.
Another day, another stuffup from what already looks like the most incompetent government in Australian history. The Abbott government’s treatment of the car industry has been a disaster in policy terms, and just as bad as far as process is concerned. The key policy failure was the decision to retain fringe benefits tax breaks for cars (90 per cent of which are imported) at a cost of $1.8 billion over the forward estimates, while withdrawing Labor’s promise to give a much smaller amount in additional assistance to the remaining domestic manufacturers GMH and Toyota. Assuming Toyota also pulls out, every bit of the FBT concession will be public money sent overseas, with the exception of the slice creamed off by the salary packaging industry.
The policy process was even worse, announcing an inquiry, then pre-empting the result with a combination of leaks (of course, ABC stenographer Chris Uhlmann was happy to provide anonymity for the source) and Parliamentary taunts. Unsurprisingly, the new GM management in the US was sufficiently unimpressed to pull the plug immediately.
For the diehard fans of microeconomic reform, I guess this counts as a win. But even for them, it’s primarily a matter of cultural symbolism. The protection given to the car industry was so small that on a standard economic analysis, the welfare costs are utterly negligible. And of course, the benefits of protection were swamped by the costs of a chronically overvalued $A, which in turn reflects all manner of policy failures, from global financial deregulation to the subsidisation of the coal industry.
In the midst of proclaiming a budget crisis and sacking thousands of public servants, Campbell Newman’s LNP government announced that they were going to demolish the tired Executive Building, in which Newman and other senior ministers work, and get the private sector to build them a new one. This, we were told would cost the Queensland public nothing. As I pointed out at the time
it’s blatantly obvious that if you tear down a building and put up a new one with exactly the same purpose, you are taking on additional debt, whatever the accounts can be made to say.
That was obvious from first principles, but now the Auditor General has pointed out that the deal is even worse than that, saying
“Without a competitive sale process and given the significant difference between the book value and the sale price achieved, prima facie it raises the issue of whether the state can demonstrate that it obtained best value for money for the assets it sold.”
. This isn’t surprising. Whenever one of these “money for nothing” deals is pushed through, you can be sure that the public is being ripped off for more than if the payment had been out in the open.
The Opposition has estimated the net loss to the public at more than $2 billion, and that looks to me to be in the right ballpark.
As a comparison, if you take $100000 as a round estimate for the savings in salary, on-costs and so on from dismissing a public employee this luxury project blows, over its lifetime, the annual savings from cutting at least 20 000 jobs, the number originally proposed by Newman. This was later cut to 14 000, quite a few of them replaced by outside contractors. So, it’s probable that, over the first time of the LNP government, the loss on this one piece of public extravagance will wipe out more than half the savings made by the sackings. Let’s hope the first term will also be the last.
And, with the Abbott government doing its best to help at the Federal level, reports like this might finally help to demolish the silly idea that the LNP has some sort of advantage in economic management.
I’ve seen a number of interesting things in relation to road safety lately, some of which have caused me to revise my thoughts.
First, there’s the question of retesting for older drivers. This seemed self-evidently desirable to me, based on data showing very high fatality rates per km driven and that in most collision involving older (75+) drivers they are at fault. However, a Twitter discussion (must work out how to do Storify!) following this Background Briefing showed that things aren’t nearly so clear-cut. The fatality evidence isn’t really helpful, since it just reflects the fact that an accident is more likely to be fatal to an older person than to a younger one. The differential hazard is far greater for falls, which suggests that forcing older people out of cars may not be beneficial. And overall, the evidence on the benefits of testing appears to be mixed at best (the Monash expert quoted in BB overstates the case a bit, in my view).
More directly relevant to me (at least for the next decade or two) there are some suggestions regarding cyclist: a one-meter clearance requirement for cars , relaxation of abolition of helmet laws and requirements for licensing, rego and third-party insurance. The first is obviously sensible, the big issue being enforcement. On the third, I agree in principle with licensing and TPI, the main problem being what to do about children. Registration seems undesirable until we have a proper system of road pricing.
On helmets, I’m genuinely ambivalent, particularly after witnessing a head impact accident this morning (no injury, thanks to helmet). I would always use a helmet, but I’m not happy about the claim that Australia should have different helmet laws than Europe because our roads are more dangerous, and our drivers more aggressive. Granted that this is true we need to change these conditions. The obvious first step would be to reduce the current 60/50 speed limits for suburban streets and subarterial roads respectively to 50/40. This would greatly benefit road users (including both cyclists and older drivers) who can’t or don’t want to travel at or near existing speed limits. The welfare cost of slightly lower limits would, in my view, be trivial. I have zero sympathy for those (echoing smokers and polluters of all kinds) who want their convenience to justify imposing risks on others.
The other point though relates to those aggressive drivers. Whereas the evidence on older drivers is weak, there is ample evidence that aggressive driving, manifested particularly in traffic violations, is associated with higher crash risk, as is at-fault involvement in a previous crash. The current points system is absurdly lenient in this respect. The 12 point allowance lets drivers be convicted over a serious offence (running stop lights, speeding in a school zone etc) every year without any restriction on driving, and the suspension period for violators is only few months. I’d suggest a lifetime allowance of 24 points, with permanent restrictions thereafter, as well as reducing the three year allowance to 8 points, and increasing suspension periods.
The restrictive treatment of drivers at the older and younger ends of the age spectrum contrasts sharply with the treatment of a drivers license as a natural right for the 25-75 group, to be withdrawn only in extreme cases. In my view, aggressive drivers should be taken off the road to make them safer for the rest of us, including non-motorists and those whose reflexes aren’t sharp enough to cope with the high-speed high-risk driving of others.
There’s more I can’t locate now. Enjoy and suggest more in comments.
We’ve been used to imagining the global supply of euphemisms as limitless, but if Dennis Shanahan keeps at it, the world will be running short by the time the Abbott government leaves office. In a single column (Google it) he manages to refer to “accusations of broken promises”, “the shift on the Gonski education promise”, “the repudiation of Labor’s Gonski education promises”, “The management of the Gonski “unity ticket” on education funding”, ” accusations of broken promises” (again), “The readjustment of expectations on Gonski” “the painful Gonski process” and “a cusp of credibility”. Given his leader’s penchant for three word slogans, perhaps a three-letter word starting with “L” might be what Shanahan is reaching for here.
The announcement that Rio Tinto is to close its alumina refinery at Gove struck me for a number of reasons, starting with the fact that members of my family are affected by it. First up it’s worth noticing what’s mentioned (the high dollar and low aluminium price, which flows through to bauxite and alumina) and what isn’t (the carbon tax and legislation for its removal). Having claimed that he was going to save industries like alumina and aluminium smelting from the carbon tax “wrecking ball”, Abbott is now shown up, once again, as a fraud.
In the short run, the obvious policy implication is that the RBA needs to be firmer in pushing the dollar down. It was, I think, a mistake to hose down talk of direct intervention, as was done recently. Given our declining terms of trade, we should be closer to $US0.80 than $US0.90 now, and heading down further.
The bigger question of interest, though, is the future of aluminium. The big story of the past 10-20 years has been the massive growth of production in China, driven by cheap coal-fired power and lots of subsidies. That’s driven prices down to historically low levels (inflation-adjusted, probably record lows). Production in Australia is now clearly uneconomic, but even the Chinese are losing billions.
Declining prices have driven steady growth in demand for aluminium. Since the supply of recycled aluminium is dependent on past production, there has been a multiplied effect on demand for primary aluminium, which is the big driver of greenhouse gas production in this industry.
The general assumption (as with most trends) has been that these trends will continue indefinitely. But it’s clear that prices have to rise just to cover costs, and will rise further as China starts to price the local and carbon costs of coal-fired electricity. Moreover, in technological terms, aluminium is definitely a 20th century commodity. Its inherent properties of lightness and strength gave it great advantages, but it is now being displaced in advanced uses by carbon fibre and in some basic uses by lightweight steels.
So, it seems to me quite plausible that aluminium demand could stabilise over the next decade or two, with the result that most demand can be met by recycling rather than energy-intensive production of primary aluminium from bauxite (via alumina).
Note: I topic-banned regular commenter Hermit from talking about aluminium smelters, as it become an idee fixe. The ban is lifted for this post.
fn1. Has any new PM ever been shown up so comprehensively in such a short time? Not in my memory, which goes back to Harold Holt, and includes some shockers.
The election that brought Abbott and the LNP to power is so three months ago, and the Christmas plotting season is nearly upon us, so it’s time for some good old-fashioned leadership speculation, with the Libs as the target this time around. According to Laura Tingle, most of the interest in the business community is in Turnbull. I think that would be a bridge too far for the Liberals, having dumped him once. So, my money would be on Hockey as the replacement if Abbott keeps messing things up as he has done almost continuously since taking office. While the accuracy of my political judgements is pretty variable, this one from a year ago is looking fairly good.
Hockey has indeed backed off the surplus, showing more good sense than Abbott. I’m nearly alone in this view, but I think he is under-rated. Not a towering intellect, but still among the stronger performers on the LNP front bench.
The usually sensible Crikey team has gone off the deep end (in an editorial sent out as email, can’t find it on their site) on the Australian government’s response to the recent dispute between China and, among others, the US over a group of “tiny uninhabited islands” (even the name is disputed). The longstanding policy of Australian governments, very sensibly, has been to avoid getting between the US and China on issues like this, of which there are a huge number, involving many parties and incomprehensible claims. Crikey not only endorses Julie Bishop’s abandonment of this policy, but uses the loaded term “appeasement” to describe opponents. So, a refusal to get involved in a game of posturing and sabre-rattling that has gone on, in one form or another, since 1949, is equivalent to selling out the Czechs to Hitler.
Crikey draws a comparison with Kevin Rudd’s willingness to take the Chinese leadership to task over human rights abuses, a willingness criticised by Bishop at the time. To see how absurd this is, you need only ask whether Chinese dissidents, who mostly endorsed Rudd’s speech (some thought it did not go far enough) are going to welcome our support for the anti-China position in this territorial dispute. The answer is obvious: for the most part, Chinese democrats fully support the government position on these issues.
The idea that, having just ignored human rights issues in Sri Lanka, the Abbott government has suddenly developed a concern with these issues in China is equally absurd.
I’ve been asked a few times about the Grattan Institute’s new report Balancing budgets: tough choices we need. It’s a substantial piece of work, and isn’t driven by a partisan agenda or special interest lobbying. On the other hand, I disagree strongly with the implicit criterion for policy design. This is nowhere spelt out, but the analysis is clearly driven by the following rule: seek policies that maximize GDP growth, subject to the constraint that the poorest (bottom 20 per cent of) households should not be made worse off.
This is most evident in the recommendation to remove the GST exemption for fresh food and use some of the proceeds to compensate the poorest 20 per cent of households. Let’s compare this with the alternative of raising income tax rates for high income earners (say, the top 20 per cent). By design, neither proposal has much net effect on the poorest 20 per cent. But the food tax falls mostly on the middle 60 per cent of households, since the top 20 per cent don’t spend much more on fresh food than the middle income group. It’s true that the cost of raising money through income tax is higher (Grattan uses an estimated cost of 25 per cent of the gross revenue) than for a food tax (5-10 per cent). But let’s spell this out a bit. Suppose you need to raise $500 in net revenue (roughly speaking what you’d get from the food tax for a household spending $100 a week). Would it be better to impose the tax on Gina Rinehart (in which case, taking account of the economic costs of collecting the tax, you’d have to raise an extra $100 or so compared to the food tax) or on one of her employees. If you regard Rinehart as an extreme example, take the choice between taxing a university professor (definitely in the top 20 per cent) or a campus worker such as a gardener or cleaner (not in the top 20 per cent, but normally not in the bottom 20 either, since this group consists almost entirely of people on pensions and benefits).
The fact is that Howard’s tax cuts, mostly carried on by Labor, used the temporary proceeds of the mining boom to permanently increase the after-tax income of the top 20 per cent. That’s the biggest single cause of the budget problems identified by the Grattan Institute, and the first thing that needs to change if we are to fix those problems.
I think I’ve written before about creative procrastination, but I can’t immediately find it, so I’ll restate my idea here. Whenever you have an urgent deadline, the desire to procrastinate becomes irresistible. Rather than trying to resist it, the optimal response is to succumb, but to have a list of necessary but non-urgent tasks at hand (as I’ve argued before, there’s no need to prioritise non-urgent tasks. Just divide them into those you are going to do, and those you aren’t, then do them in whatever order suits). Now, the guilt induced by the deadline should stop you goofing off on FB, killing boars or whatever, so the desire to procrastinate will force you to tackle the jobs on your list. Then, as the deadline approaches you will finish the job. This works even better if (as is usually the case) an extension of the deadline is possible, but you can conceal this knowledge from yourself until the last possible moment. That way, you get a second round of creative procrastination, plus you have enough time to do the main job properly.
That’s all revision. My new idea for today links this to my long-standing advocacy of word targets. I try to write 500 to 750 words of new material every day. 500 words a day might not sound much, but if you can manage it 5 days a week for 40 weeks a year, you’ve got 100 000 words, which is enough for half a dozen journal articles and a small book. So, that’s my target. If I haven’t written enough one day, I try to catch it up the next day and so on.
And here’s the link. If you’re involved in a big project like a book, or a PhD, there aren’t really any deadlines. But, if you make a rule of being caught up on your word target at the end of the week, you create an automatic deadline for yourself. While doing your best to avoid dealing with this deadline, you create an automatic opportunity for creative procrastination, during which you can deal with admin tasks, write blog posts, sort out your reference system and so on.
Obviously, everyone is different. But this has certainly worked for me and, as a by-product, for you, my readers (at least, those of you who don’t just come here to get annoyed at whatever lefty nonsense I’m banging on with today). In the past 10 years, WordPress tells me, I’ve written over 5000 blog posts, while still keeping up the supply of books and journal articles for which I earn my living, and, I hope, managing to keep plenty of time for family and friends.
A new sandpit for long side discussions, idees fixes and so on.
Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please
I’ve long maintained the view that spies never discover anything useful about a country’s foreign enemies, though they are very useful in suppressing domestic opponents. This is a straightforward implication of game theory, but my attempts to explain it haven’t worked in the past, and I don’t know how to do much better. So, I’m going to restate my arguments from 10 years ago, against the massive expansion of spying that was already under way, and make the observation that the evidence since then strongly supports my case.
Despite an espionage and surveillance effort unparalleled in history, the US NSA has been unable to produce any convincing evidence of stopping even one domestic terror plot. Its best case was someone alleged to have sent a few thousand dollars to Al Shabab in Somalia. The NSA not only missed actual terror plotters like those in Boston, but also performed poorly relative to ordinary police methods which have produced numerous convictions (many of them admittedly, by methods that verge on entrapment).
But if anti-terrorist espionage has proved ineffectual, spying on friendly governments is just plain stupid. This isn’t a zero-sum game, like espionage in warfare, it’s a negative sum game. Australia is now finding this out, but the reflex reactions of “everyone does it”, “we don’t comment on intelligence matters” and so on, remain as firmly embedded as ever.
Of course, while this is stupidity as regards the public interest, or even that of Australian political and business elites as a whole, it is massively beneficial to the security apparatus, and the complex of interests it supports. It’s striking that the only Indonesians who’ve given Abbott any support have been their own spies and secret police, who can expect more funding and greater powers. Doubtless our own spooks will return the favor in due course, if their Indonesian counterparts are caught doing something we don’t like.
Among those hyperventilating about the ABC decision to publish the information about the spying fiasco, Andrew Bolt has been every bit as vociferous and hyperbolic as you would expect. Of course this is silly: the UK based Guardian was going to publish anyway, and if they had, for some reason, chosen not to do so, Snowden and his team could have given it to the Indonesian press, which would have been an even worse outcome for the Australian government.
In this context, it’s worth recalling that Bolt wasn’t always so highminded about protecting our nation’s secrets. Back in 2003, when Andrew Wilkie resigned from the Office of National Assessments because he could not stand the way Iraq intelligence was being “sexed up”, Bolt was denouncing anyone and everyone who suggested that the Iraq war was anything other than a brilliant success based on overwhelming evidence. Somehow, he received a leaked copy of a report written by Wilkie, which, with his characteristic method of selective quotation, he used to attack Wilkie’s credibility. The Howard government (which could not, of course, quote the original report) used Bolt’s article to attack Wilkie. As Mike Seccombe observed at the time
You have to admire the neat circularity of it: top secret information is leaked to a government-friendly journo, who puts bits of it deemed damaging to Wilkie on the public record. Downer’s office briefs Senator Macdonald using that information.
This is part of a more general information. When secrets embarrass the government, leaking them is a major crime. When the government wants to attack its opponents, leaks are just part of politics. I don’t have a problem with journalists who publish leaked information without fear or favor. But someone like Bolt, willing to be used as a conduit for leaks that make the government look good, and then to pontificate about the immorality of leaks that make the government look bad, isn’t a journalist – he’s a lackey.
And looking back again, it’s worth remembering that Wilkie was right, that every word Bolt wrote about Iraq turned out to be utterly, howlingly wrong, and that he has never apologised or retracted. The credibility of anything he writes now should be assessed in that light.
The political right seems eager to open new fronts in the culture wars. The latest, from the WSJ, is running (I won’t link to their piece, but to this translation). I’m happy to say that I am on the correct (that is, left) side of this latest battle. Apparently, liberal elitist runners have bumper stickers indicating the longest distance (in miles) they have run, say 26.2 for a marathon. Real Americans, on the other hand, never leave their cars (except to move from the garage to the couch) and therefore have stickers saying 0.0.
I was going to write something about Abbott’s mishandling of the latest spy fiasco, but I don’t think I can improve on Tad Tietze at Left Flank. I’ll just stress a few points
(a) Indonesia is now a democracy which means that the kind of cosy deals between military/security apparatchiks we used to do are just as constrained by Indonesian public opinion as by Australian if not more. I don’t know who the Indonesian equivalents of Ray Hadley and Alan Jones might be, but I can imagine what they are saying
(b) The idea, still underlying a lot of the discussion, that we can and should dictate terms to the Indonesians is nonsense. The US can get away with this kind of thing (though Obama was wise enough to end the bugging of Merkel’s phone), but we need the goodwill of the Indonesians at least as much as they need ours. The fact that neither we nor they are paragons of human rights policy or the treatment of minority groups is a case of attending to our own problems before lecturing others.
I just read Peter Hartcher’s series on the meltdown arising from the rivalry between Rudd and Gillard. A pretty good summary, I thought, though of course Hartcher was, like me, more in sympathy with Rudd.
The account clarified one point for me. A crucial element of the anti-Rudd story was the supposedly critical impact of leaks before the 2010 election, for which Rudd was widely blamed. I couldn’t remember thinking of these as a big deal at the time, and Hartcher explained why. The most damaging leak (Gillard making some dismissive remarks in Cabinetabout age pensioners) occurred on the same day as Gillard announced the Citizens Consultative Assembly. As this post shows, this appalling idea permanently changed my view of Gillard, which, even after the coup against Rudd had remained broadly positive. “Cash for clunkers“, which came shortly afterwards, cemented my view. By contrast, the leaks were the kind of insider gossip which excites the Press Gallery, but had absolutely no impact on my thinking.
As Hartcher points out, while he was sensible for most of his brief second term, Rudd spent the first two weeks of the 2013 campaign pursuing ideas that were just as silly.
This will, I think be my last word on the Gillard-Rudd rivalry. Feel free to comment, but please avoid attacks on other commentators. Obviously, political figures are fair game, within the usual limits.
A lot has already been said on the occasion of Kevin Rudd’s retirement from politics. Having already written a great deal about Rudd while he was active in politics, I’m not going to add to it. Rather, I’ll reflect on the achievements of the Labor governments of the past six years, which were substantial. They included
* The uniquely bold and successful management of the Global Financial Crisis
* The creation of the NBN
* The design and implementation of a price on carbon
* The National Disability Insurance Scheme
* Plain packaging for cigarettes
among many others. How much of this will survive what, I hope will be one term of LNP government remains to be seen, but Labor can campaign for years on defending and extending this record.
Against that, there were some failures. Most obviously, the government failed to come up with a workable solution to the problem of asylum seekers, and eventually capitulated to the xenophobic rhetoric of Abbott and Morrison (though with the important qualification that Labor greatly increased the total refugee intake, while Abbott has cut it). In addition, despite Rudd’s recognition that the GFC marked the breakdown of the post-Bretton Woods capitalist order, he(and even more, Wayne Swan) rapidly came to treat it as a momentary aberration, and to return to the policy orthodoxy that created the crisis in the first place.
The biggest failures, though, were personal, not political. Rudd’s abrasive egotism was matched by Gillard’s unprincipled tribalism (for her, Labor was an extended family, not a political movement) to produce a series of catastrophes that eventually destroyed the government. If they had managed to work together, as they did with reasonable success for the first two years of the government, they could have been a better team than Howard-Costello or Hawke-Keating. But it seems to be the nature of Australian politics taht such partnerships never worked for long.
That’s the title of my new piece at Jacobin, which links back to a variety of discussions at Crooked Timber, in particular this one from Ingrid Robeyns. Mankiw, whom Ingrid cites, offers an implicit defence of the 1 per cent, implying though not quite asserting, that the gains accruing to those in this group (largely senior executives and the financial sector) have been the price we pay for a process that benefits everyone, yielding a Pareto improvement. As Ingrid says, Pareto improvements aren’t as self-evidently desirable as Mankiw assumes. My argument focuses on Mankiw’s factual premise, concluding that the expansion of the financial sector has made the majority of people worse off. This implies that a response to the global financial crisis focused on attacking the financial sector is feasible as well as being, in my view, politically necessary as an alternative to rightwing populism.
Jacobin doesn’t appear to have a comments section, so feel free to comment and criticise here. I’ve had an interesting discussion with Daniel on Twitter already, but it’s not really a great medium when more than a few people are involved.
The US Congress is rightly regarded as a dysfunctional mess, blocking vital legislation for trivial partisan reasons. But occasionally, things work out for the best. A variety of critics ranging from left and liberal Democrats to members of the Tea Party appear likely to derail ‘fast track’ authority for Obama to sign the appalling Trans-Pacific Partnership. By contrast, the Abbott government is keen to sign this secret deal and has dropped Labor’s objections to clauses that would allow foreign corporations to sue our government for policies inconsistent with the market liberal ideology that informs the treaty. Let’s hope the whole thing is slowed down until the 2016 election year. If that happens, the pressure to renegotiate the deal, or scrap it altogether, will become intense.
Coincidentally, Wikileaks has published a draft chapter from the agreement, hidden from us by our governments and making clear what everyone knows. This isn’t about trade but about imposing market liberal institutions, including strong intellectual property in pharmaceuticals, copyright and so on.
I presented the Colin Clark lecture today, on the topic “National Accounting and the Digital Economy: The Case of the NBN’
Colin Clark’s greatest contribution to economics was his pioneering role in the construction of national accounts. In the industrial economy of the 20th century, the central problem in the national accounting was the need to avoid double counting, by measuring only the value added at each stage of production. This problem is closely related to that of benefit-cost analysis for public projects. In the 21st century digital economy, value is primarily derived from the flow of information rather than physical inputs and outputs. This creates new problems for national accounting, and for benefit-cost analysis. One example of these problems is the question of how to evaluate alternative proposals for the National Broadband Network.
Paul Syvret covered it in the Courier-Mail. I also did an interview with Steve Austin on the local ABC 612, which started off with a brief discussion of Rudd’s economic legacy, and another for AM on Radio National which didn’t make it to air.
The slides are here
fn1. Illustrated with a slightly goofy candid shot, taken in the ABC Green Room
If you want a single episode to summarize the fiasco that is the Abbott government, the first working hour of the 44th Parliament would be hard to beat.
First, the government had to gag the Opposition seeking to get any kind of information about the government’s signature issue, Stopping the Boats. If anyone had said, 20 years ago, that it would be necessary to read the Jakarta Post to find out what our own government was doing, they would have been greeted with incredulity.
Then, having specifically nominated juvenile insults like “Electricity Bill” as the kind of thing his new Speaker, Bronwyn Bishop would rule out of order, he had to watch as his attack poodle, Christopher Pyne used that very insult and was supported by Bishop. Then, of course, Abbott voted to uphold Bishop’s ruling.
Then, having wasted the first hour of the Parliament, Abbott announced his discredited bill to repeal the carbon tax. Meanwhile, the vice-president of our most important neighbour, representing a government Abbott has already insulted half a dozen times in as many weeks, was left to wait in an anteroom.
The Labour government of the last six years had its low points, to be sure. But it’s hard to imagine that those who voted for this crew (or for their former ally, Clive Palmer) aren’t experiencing a fair bit of buyer remorse.