Archive

Author Archive

Sandpit

March 12th, 2018 5 comments

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

Categories: Regular Features Tags:

Monday Message Board

March 12th, 2018 32 comments

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.

Categories: Regular Features Tags:

Economics in Two Lessons: Chapter 3

March 10th, 2018 4 comments

Thanks to everyone who commented on Chapter 2 of my book, Economics in Two Lessons. I’ve learned a lot from the comments but haven’t yet had time to respond to them.

Now here’s the draft of Chapter 3. Again, I welcome comments, criticism and encouragement.

The book so far is available
Table of Contents
Introduction.
Chapter 1
draft of Chapter 2
Feel free to make further comments on these chapters if you wish.

The Generation Game is over (at least for me)

March 7th, 2018 19 comments

For more than a generation, I have been criticising the Generation Game, that is, the insistence on dividing society into groups based on birth year and imputing different characteristics to each group. Today, I’m following the classic advice for those involved in an endless war: declare victory and get out. The basis for my claim is that I’ve managed to publish my latest critique in the New York Times, under the headline ‘Millennial’ Means Nothing (paywalled*). I expect this will reach more people than anything I could do with the blog, so I will leave this topic and move on.

* It’s fairly easy to get around, I believe.

Categories: Politics (general) Tags:

Free speech, unfair dismissal and unions (crosspost from Crooked Timber)

March 5th, 2018 27 comments

(Reposted from Crooked Timber, hence written for a mainly US audience, but referring to the Australian debate.)

I’m seeing a lot of comments from the political right and centre-right worrying about the possibility that workers may be fired for expressing conservative views. For example, here’s David Brooks (paywalled, I think) linking to Andrew Sullivan.

It strikes me that this would be a really good time for people like Brooks and Sullivan to campaign for an end to employment at will, and the introduction of the kind of unfair dismissal laws that protect workers in most democratic countries, but not, for the most part, in the US. Among other things, these laws prohibit firing employees on the basis of their political opinions. Better still, though, would be a resurgence of unionism. Union contracts generally require dismissal for cause, and unionised workers have some actual backup when it comes to a dispute with employers.

Read more…

Categories: Politics (general) Tags:

Monday Message Board

March 5th, 2018 17 comments

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.

Categories: Regular Features Tags:

ABC biased against coffee?

March 2nd, 2018 24 comments

After the kerfuffle about Emma Alberici’s piece on company tax, I’m highly attuned to signs of bias at the ABC. And, sure enough, I just found one. Its an article on coffee consumption that quotes just one authority, Laure Bajurny of the Alcohol and Drug Foundation, where her Linkedin profile describes her as a content developer.

Read more…

Categories: Economics - General Tags:

A snippet on bounded rationality

March 2nd, 2018 25 comments

A Crooked Timbercomment on my last post, about Chapter 2 of my book-in-progress, Economics in Two Lessons, convinced me that I needed to include something about bounded rationality. I shouldn’t have needed convincing, since this is my main area of theoretical research, but I hadn’t been able to work out where to work this into the book. I’m still not sure, but at least I’ve written something I’m reasonably happy with. Comments, praise and criticism welcome as usual.

Read more…

Categories: Economics - General Tags:

Economics in Two Lessons: Chapter 2

February 28th, 2018 11 comments

Thanks to everyone who commented on Chapter 1 my book, Economics in Two Lessons. I’ve benefited a lot from the comments and implemented quite a few changes.

The book so far is available
Table of Contents
Introduction.
Chapter 1
Feel free to make further comments on these chapters if you wish.

Moving along, here’s the draft of Chapter 2. Again, I welcome comments, criticism and encouragement.

Categories: Economics in Two Lessons Tags:

Tweet trouble

February 26th, 2018 29 comments

According to Chris Mitchell at the Oz (paywalled, I think), I’m the mastermind (or at least a mastermind) behind the original version of Emma Alberici’s now-rewritten analysis of company tax cuts. Here’s Mitchell

In Alberici’s case a lot of weight was given to left-wing academic John Quiggin and economist Saul Eslake, a prominent commentator whose position on the central question — do corporate tax cuts eventually trickle down as increased wages? — seems to have changed over the years.

It’s nice to be so influential, but there’s just one problem. In Alberici’s original article (here), I don’t get a mention.

But maybe Alberici is presenting my ideas second-hand. Sadly, the arguments I’ve put forward on the topic don’t get a run either. Here’s the summary of my piece in Crikey (also paywalled, I fear)

Optimistic tax models put the average Australian at being 0.1% better off under the proposed company tax cuts. And the good news is they’ll only have to wait 25 years for that tiny benefit to appear!

Alberici doesn’t mention this.

So how did I get top billing? The villain, as usual, is social media. Twitter user (tweep?) Matt K asked me whether there were any mistakes in the Alberici piece and I said no. Apart from a couple of replies to further questions, that was my entire contribution, as you can see from the thread of the conversation. But, as they say nowadays, it went viral, at least insofar as a comment on tax policy can go viral.

Before I knew it, I was being attacked from all directions. Helen Razer said I was a bogus “leftist”, while Aaron Patrick at the Fin hit me from the right because I mentioned Marx and Engels in the draft introduction to my book. To be fair, Razer wrote to explain her position. By contrast, Patrick’s whole technique is verballing and out-of-context gotchas’, so I don’t expect that to change.

I do get a passing mention in the revised column, but since my name is mis-spelt, I think it’s safe to assume that I’m not a primary source. Obviously, Mitchell didn’t get around to reading the original (maybe the research skillz of Newscorp aren’t up to locating it) and assumed that I was quoted there.

While I’m on the subject, Mitchell had an amazing piece a while back (not worth linking, since Paul Kelly and Mark Latham have already trodden this ground many times) about the end of freedom of speech in Australia. The burden of it is that decent, ordinary Australians like Mitchell and Andrew Bolt, limited as they are to major national newspapers and broadcast media, can’t say what they think about Muslims, lefties and so on any more without people on Twitter saying what they think about Mitchell and Bolt. As Tim Dunlop says in a similar context, any less self-reflection and they’d be vampires.

Monday Message Board

February 26th, 2018 8 comments

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.

Categories: Regular Features Tags:

The vocational education disaster

February 23rd, 2018 6 comments

The combination of budget cuts and market ideology has been a disaster for vocational education in Australia. That’s the shorter version of a piece for Inside story based on my submission to the SA TAFE Senate inquiry.

Update: On the same day this article appeared, Labor has come out with a call for a major inquiry encompassing both unis and TAFEs. Whether or not my past advocacy had anything to do with this, it’s a welcome outcome.

Weathervanes

February 21st, 2018 14 comments

I have a piece in Crikey (possibly paywalled) looking at the gyrations of our political leaders on climate policy in general and Adani in particular. I suppose what matters is that you end up facing the right way: on this test, Shorten does reasonably, Turnbull fails miserably and Abbott is laughable.

Categories: Oz Politics Tags:

Economics in Two Lessons: Draft TOC

February 20th, 2018 11 comments

At the suggestion of reader Newtownian, I’m posting a draft Table of Contents for Economics in Two Lessons<em. It's over the fold, with a better formatted version here
Read more…

Categories: Economics in Two Lessons Tags:

Economics in Two Lessons: Chapter 1

February 19th, 2018 5 comments

Thanks to everyone who commented on the draft introduction to my book, Economics in Two Lessons. The revised introduction is here. Feel free to make further comments on it if you wish.

Moving along, here’s the draft of Chapter 1. Again, I welcome comments, criticism and encouragement.

Categories: Economics in Two Lessons Tags:

Monday Message Board

February 19th, 2018 24 comments

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.

Categories: Regular Features Tags:

Economics in Two Lessons

February 16th, 2018 18 comments

I’ve finally committed to delivering a manuscript of my long-overdue book Economics in Two Lessons. As part of the process, I’m going to post the chapters, one at a time, and ask for comments, criticism, encouragement and so on. To begin at the beginning, here’s the Introduction.



Sandpit

February 12th, 2018 9 comments

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

Categories: Regular Features Tags:

Monday Message Board

February 12th, 2018 27 comments

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.

Categories: Regular Features Tags:

Bitcoin kills the efficient market hypothesis (now with full article)

February 9th, 2018 34 comments

I have a piece in the New York Times looking at the implications for the bitcoin bubble for economic theory and, in particular, for the (Strong) Efficient (Financial) Markets Hypothesis (EMH) which states that prices determined in financial markets reflect all the available information about the value of any asset. If that’s true then governments can’t improve on a policy of allocating investment to those assets with the highest market return, which can be achieved by letting private capital markets determine all investment decisions.

Bitcoins have no inherent usefulness, being a record of pointless calculations. They are useless as a currency (their putative purpose) and are now being promoted as a store of value on the basis of scarcity alone. This leaves supporters of the EMH with a dilemma.

If Bitcoins are indeed worthless, then financial markets should price them at zero. But the introduction of futures trading actually boosted the price in the short run. Even after recent declines, there’s no sign that prices will reach zero any time soon.

On the other hand, if Bitcoins are valuable simply because people value them, then asset prices are entirely arbitrary. The same argument can be applied to any financial asset.

Dean Baker at CEPR has a nice followup, making the obvious but crucial point that, since financial services are an intermediate input to production, we want the financial sector to be as small as possible, consistent with doing its essential tasks. As the experience of the mid-20th century shows, a market economy can function perfectly well with a financial sector much smaller than the one we have today. As Bitcoin shows, the massive expansion since then is nothing but wasteful speculation. The financial sector should be cut down to (a small fraction of its present) size.

Read more…

Categories: Economic policy Tags:

No new coal mines

February 9th, 2018 15 comments

It’s just been announced that Aurizon is not pursuing its application to the Northern Australia Infrastructure Facility to build a rail line to the Galilee Basin, essentially because the company hasn’t been able to secure any commitments from putative customers (most obviously Adani and GVK Hancock but also Clive Palmer and others). This is great news. It’s now highly unlikely that coal mining in the Galilee Basin will go ahead any time soon.

Opening the Galilee Basin would have been a huge disaster, so it made attention to focus attention on Adani, as the leading proponent, and secondarily on Aurizon and GVK Hancock. But, with this threat apparently staved off, a more comprehensive policy is needed.

Fortunately, we already have one. The Australia Institute has, for some time, been proposing a moratorium on new coal mines. That allows for a gradual winding down of the industry and gives more protection to existing jobs than there would be if new, competing, mines were allowed to open.

Politically, there’s a precedent, with Labor’s “three mines” policy on uranium. That was a fudge, of course, but it was clearly within the export power of the Commonwealth and it didn’t create any big problems with sovereign risk.

Categories: Economics - General, Environment Tags:

A thought experiment

February 7th, 2018 43 comments

Suppose that the Constitution had made judges subject to the same eligibility requirements as MPs. How would the High Court have ruled in the cases that came before it?

Categories: Oz Politics Tags:

The NFF doesn’t understand the difference between argument and abuse

February 6th, 2018 15 comments

I can remember when the @NationalFarmers Federation was an intellectual force to be reckoned with. Now, its response to a detailed critique of the Murray Darling Basin Plan is lame abuse. It reminds me of this classic Monty Python skit

The Murray Darling Basin Plan is not delivering …

February 5th, 2018 17 comments

there’s no more time to waste.

That’s the headline for a piece in The Conversation I’ve signed along with a dozen or so prominent scientists and economists who have worked for many years on the problems of the Murray Darling Basin. It’s been released along with a Declaration, reproduced over the fold.

Read more…

Categories: Economic policy, Environment Tags:

Monday Message Board

February 5th, 2018 29 comments

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.

Categories: Regular Features Tags:

Greens back renationalisation

February 3rd, 2018 12 comments

The Greens have announced a policy of renationalising the electricity grid, starting with transmission. Since that’s exactly what I proposed last year, it’s no surprise that I agree.

The crucial aspect of the policy is that it should begin with a reduction in the allowable rate of return to a level comparable with the long-term government bond rate. This ensures that the assets can be reacquired at their true value rather than paying the premium invariably associated with regulated rates of return based on spurious market comparators.

On a more snarky note, I can’t resist the observation that these assets were never fully privatised in the literal sense of the term. Rather, in many cases, they were sold to foreign governments operating through sovereign wealth funds.

Categories: Economic policy Tags:

Three gigs at the Senate

February 2nd, 2018 5 comments

I’ve appeared (or rather, been heard by teleconference) at two Senate inquiries this week, one on the Northern Australia Infrastructure Facility and one on the problems of the TAFE system. In addition, i completed a submission to the inquiry into the Future of Work and Workers, which is now available on the inquiry website.

The Future of Work submission was about the way in which technology and labor market institutions have interacted to generate the “gig” economy of insecure employment, continuously threatened by technological disruption. The key point is that decades of anti-union and anti-worker legislation and state action have created a situation where technological change is likely to harm rather than help workers. A summary is over the fold
Read more…

Categories: Economic policy Tags:

Renationalisation needs to break with corporatisation

January 29th, 2018 39 comments

My latest Guardian article is headlined https://www.theguardian.com/commentisfree/2018/jan/29/privatisation-is-deeply-unpopular-with-voters-heres-how-to-end-it. The core of the argument is that, to make a success of renationalisation, we need to do more than buy back privatised enterprises, and run them as publicly owned corporations. We need a different model. A starting point would be the statutory authority model used in Australia with great success, before the Hawke-Keating government adopted the corporatised model as a step towards privatisation.

Categories: Economic policy Tags:

Monday Message Board

January 29th, 2018 19 comments

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.

Categories: Regular Features Tags:

There are more important issues than …

January 26th, 2018 31 comments

… whatever issue on which I want to avoid justifying my firmly held, but indefensible, position.

One of the rhetorical tricks I’ve noticed becoming increasingly common (though I may just have been sensitized to it) is opposition to some proposal, based on the claim that “there are more important issues to discuss”. Here’s a typical example from right wing culture warrior, Kevin Donnelly, campaigning against equal marriage in the leadup to the recent postal survey. Before commencing a lengthy diatribe against gay activism, Safe Schools, alcoholic and abusive parents, surrogacy and so on that barely mentions the topic of marriage, Donnelly says

about 98 per cent of Australians identify as heterosexual and according to the 2011 census figures only 1 per cent of Australian couples are same-sex, with surveys suggesting only a minority want same-sex marriage. There are more important issues to worry about.

If Donnelly believes the issue is unimportant, why is he writing about it? Why not just leave it up to the good sense of the majority of Australians, as the rhetoric of the plebiscite suggested? Why not focus his attention on problems like protecting children from the effects of alcoholism and domestic violence.

The answer is, of course, that Donnelly has no case, or none he is able to make publicly, but nonetheless is very concerned to stop equal marriage. In the absence of a case, he must resort to diversions. So, rather than explain why gay people should be denied the right to marry, he starts off by saying the issue is too unimportant to bother with.

Of course, there are plenty of questions that are too trivial to bother with, and the sensible response is not to bother with them. If pressed, one could reasonably respond “this issue isn’t worth my time, I’ll just go with whatever the majority decides”, but this is hardly ever done.

The only case where this trope is at least possibly justified is as an admonition to political allies not to be diverted into big efforts on trivial issues, when there are more important problems to deal with. Again, though, this only makes sense for someone who is themselves indifferent regarding whether and how these issues are resolved.

Categories: Oz Politics Tags: