That’s obviously a difficult question, but there’s a subtly different, and even nastier, question behind it, namely “How should we decide where a nuclear power plant should go”. There are obviously all kinds of issues to be resolved. For example, should it be on the coast, and therefore potentially vulnerable to a tsunami? Should it be near or far from population centres?

If we in Australia made a decision to go for nuclear power, then decided to answer all these questions from scratch, it would take years, maybe a decade or more before we even picked a site (look how long we took over the much easier question of a site for the national capital). And, until we answered the siting question, any estimate of the costs of nuclear power would be a stab in the dark anyway. A plant located in the centre of the Nullarbor would be about as safe as you could get, but hopelessly uneconomic.

So, the obvious answer is; Look at what other developed countries have done when faced with the same problem. But it turns out there is a small difficulty. The answer, according to the US, Britain and every other developed country I’ve looked at, is “put your plant next to an existing one, so there won’t be any more trouble than you already have”.

Of course, it’s logically impossible that they always worked that way. But, as far as I can tell, the last time a new site was picked for a nuclear power plant in a developed country was in the 1970s, before Three Mile Island, let alone Chernobyl and Fukushima. Even supposing that experience were relevant, it’s lost in the mists of time – the decisionmakers involved are long since gone, and any records they left are probably buried in the archives.

So, unless we can solve a problem that every other developed country in the world has chosen to duck for 30-odd years, we will never even get to the starting gate with nuclear power.

Although much remains uncertain about future developments in Greece and beyond, one thing can be predicted with certainty: no Greek government will voluntarily abandon the euro. The only parties favoring such a move are the (old-style Stalinist) Communist Party of Greece and the neo-Nazi Golden Dawn, neither of which has any chance of being part of a government. It is almost equally certain that no Greek government will take any further steps to implement the austerity measures previously agreed with the “Troika” of the European Central Bank, the European Commission and the International Monetary Fund.

New elections to be held on June 17 are most likely to produce substantial gains for the Coalition of the Radical Left (Syriza) at the expense of both the traditional governing party of the Left, PASOK, and the rejectionists of the Communist Party. Syriza advocates rejection of the current austerity package but is equally opposed to withdrawal from the euro. Given large enough gains, Syriza could potentially put together a government with support, or at least tolerance, from PASOK and the conservative but anti-austerity Independent Greek Party.

But the election outcome may be indecisive, perhaps leading to a government of national unity. Such a government would have little power to do anything decisive one way or the other.

The least likely outcome is a swing back to the traditional parties, with PASOK and its conservative counterpart the New Democracy Party gaining enough seats to form a coalition government. Even such a coalition would be unlikely to have the political will to enforce further austerity measures. On the other hand, it would certainly not abandon the euro.

Over the last few months, a string of seemingly solid pillars of the rightwing ideological establishment have crashed, or at least wobbled. The typical case has been one of over-reach followed by public exposure and then a rush of sponsors and other supporters for the exit. Examples include

* Rush Limbaugh’s attack on Sandra Fluke and subsequent abandonment by sponsors

* The failed attempt by rightwing operatives at the Komen Foundation to blacklist Planned Parenthood

* The exposure of ALEC’s responsibility for the “stand your ground” laws that played a critical role in the Trayvon Martin case

* Most recently, the  Heartland Institute has seen sponsors bail and its entire Washington team (mostly focused on insurance issues) decamp, promising that their new operation will have nothing to do with climate “scepticism”

In addition to this, but arguably sui generis are

* the attempt (which looks like succeeding) by the Koch Brothers to take control of Cato, easily the most credible thinktank on the right of politics

* the denunciation of the Republican party by Norman Ornstein, long presented as the intellectually respectable face of the American Enterprise Institute

It’s striking that these things are happening at a time when Mitt Romney is running neck and neck with Obama and there is a serious chance that the Repubs will control all three branches of government. So, the intellectual apparatus of the Republican seems to be collapsing of its own accord, rather than because the poltiical tide is running against it.

I don’t have a fully satisfactory analysis of this, but the simple proposition that “truth will out” seems to be working at some level. As long as things are going well, these organizations and pundits benefit from the reflexive assumptions of balance, two sides to every story and so on. But they’ve lied so often and so blatantly that this requires a lot of cognitive dissonance. When they overreach and screw up in the process, the cognitive dissonance is resolved against them. And (subject to the same cognitive dissonance) people now understand that the whole Repub apparatus is like this, so that the obscurity of a group like ALEC isn’t much of a defence when they are caught redhanded.

That’s probably overoptimistic, but its good to have a few wins on this front, after years of successful Swiftboating by the other side.

Posted via email from John’s posterous

In most of these debates, one of my chief antagonists was Dean Parham, who worked for the PC at the time, and is now a Guest Researcher there. Today I heard that Parham had written a new paper on the weak productivity growth of the 2000s. So, I was keen to see what response he would have to my latest work and to my arguments about work intensity. The answer, quite literally is “Nothing”. I have, it appears become an un-person at the PC. Parham doesn’t cite any of my work and, more importantly, fails to mention work intensity at all.

Update The original version of the post contained a somewhat snarky suggestion that Parham had been negligent in ignoring my work. He has written to me to say that this is incorrect. The reason he doesn’t mention it is because, in his view, nothing I have written on this topic, at least since 2004, merits a response.

Further update Dean Parham writes that

the reason I did not mention your work or the work intensity thesis in my paper is that I did not consider it central to the focus of the paper (industry contributions) or even to the contextual motivation of the paper.

Since the contextual motivation of the paper is (as the title suggests) the slump in productivity, I can’t see that this differs from my summary. If Parham thinks my work merits a response, he’s welcome to provide that response here or in any other venue that suits him.

I’ve got some urgent commitments over the next few days, so I won’t be able to return to this topic until later. But in the meantime, here are some of the things I’ve written about this in the last few years. Agree or disagree, I think I’ve put forward a serious case that deserves an answer.

http://www.freepatentsonline.com/article/Australian-Bulletin-Labour/147466277.html

http://johnquiggin.com/2011/08/20/no-hard-and-fast-rule-for-/

http://johnquiggin.com/2012/03/13/enough-of-these-zombie-ideas-lets-be-bold/

http://apo.org.au/commentary/surge-we-didnt-have

Just a reminder, this is an occasion for (perhaps mildly malicious) fun, not for defamatory attacks either on NY Times columnists or on their putative counterparts

European Elections and the Debt Debacle

The victory of socialist François Hollande in the French presidential election has been interpreted, correctly, as a repudiation of the austerity policies imposed on the euro zone by his predecessor, Nicolas Sarkozy, in collaboration with German chancellor Angela Merkel, who endorsed Sarkozy in the election.

Hollande’s win was part of a backlash across Europe, with pro-austerity parties from Britain to Greece taking electoral drubbings. Even in Germany, Merkel’s coalition parties were crushed in a state election in Schleswig-Holstein.

It’s safe to predict that Hollande and Merkel will soon come into conflict over austerity. But Hollande’s real opponents in the struggle over European economic policy are not Merkel and the German government but the European Central Bank and its chairman Mario Draghi.

My one-line summary is that this is probably the best exposition of Australia’s political history, over the period of market liberal reform, and from the viewpoint of the reformers, that we have seen, or are likely to. In particular, it’s better than the main rival, Paul Kelly’s End of Certainty.

The primary new source for the book is a series of interviews with five of the six prime Ministers whose terms in office encompass the period of transformation covered by the book. Gough Whitlam declined an interview, but allowed Graham Freudenberg to speak on his behalf. In addition, Megalogenis makes good use of declassified State Department cables, which report off-the-record discussions between US officials and Australian politicians, giving uncensored (if not always honest) observations both on policy issues and on their own colleagues. This is combined with Megalogenis’ own observations drawing on his long career as a political journalist.

Inevitably, the result is an insiders’ view of the Australian political scene. Given these sources, there is little room for critical perspectives on the dominant story of Australian policy, in which heroic reforms undertaken in the 1980s and 1990s laid the foundations for our current prosperity. This story is common ground for Hawke, Howard and Keating: the only dispute between them concerns how the credit should be allocated between them.

Moreover, while the 1980s reformers present themselves as making a sharp break with their immediate predecessors (Whitlam for Hawke and Keating, and Fraser for Howard) Megalogenis notes some important continuities. It was Whitlam, after all, who made the first break with key elements of what Paul Kelly called the Australian settlement including tariffs, White Australia and Imperial benevolence.). Fraser, in his time in office, was seen as a radical rightwing reformer, sympathetic to Ayn Rand and Milton Friedman, a fact somewhat obscured by his subsequent shift to the left.

Within the constraints imposed by the nature of his source material, and with the exception of his forays into generational cliché, Megalogenis has done a first-rate job. He makes judicious use of the inevitably self-serving accounts presented by his interviewees, balancing them in a way that makes for a convincing assessment. He’s also good in picking out the key events that have defined Australian politics over the last forty years, starting with the acute observation that, if Whitlam had won the ‘Don’s Party’ election of 1969, the course of events would have been entirely different, at least in terms of the political careers of Whitlam and his successors.

The main thesis of the book is embodied in the title, and represents an explicit counter to Donald Horne’s The Lucky Country, where the title is expanded to the observation ‘Australia is a lucky country, run mainly by second-hand second-rate people[1,2] who share its luck … According to the rules Australia has not deserved its good fortune.’ Megalogenis’ argument, widely shared among the elite is that the reforms of the 1980s and 1990s left us well placed to avoid the recession that engulfed much of the developed world.

I’ve criticised this view elsewhere, and won’t repeat myself. I would observe though, that the text of The Australian Moment is much less triumphalist than the title would suggest. Notably, Megalogenis observes that, despite outdoing us in the reform stakes, New Zealand has performed much worse in macroeconomic terms than Australia.

Like Gough Whitlam, I suspect Megalogenis’ book has appeared too late. If it had come out in 2009, when the successful macroeconomic stimulus that drove our escape from the crisis was generally endorsed, and when the leaders who designed and implemented it were still in place, the story would seem convincing. Now, we are faced with parties and leaders who will say anything and clearly believe in nothing, except the desirability of holding and dispensing the rewards of office.

It was purely a matter of luck that Rudd was in office at the time of the crisis, and that Turnbull, as Opposition Leader, was constrained by the need to present a policy alternative with some intellectual credibility. Given the way our political parties have evolved, Abbott and Gillard are far more typical examples of the leadership on offer. And, without saying anything against his successor, we were also very lucky to have Ken Henry in charge at the Treasury.

Still, even if you don’t accept the central thesis, and even if you have to swallow hard every time the word ‘generation’ appears, The Australian Moment is essential reading. However much we might deplore it, market liberalism has defined the past three decades and it must be understood if we are to do better in future.

fn1. I’m sure I remember reading ‘men’ for ‘people’ in the original edition, and this was accurate in 1964. But the Penguin website gives ‘people’ as the authoritative quote, and over the last decade or so, Australia has proved itself to be a land of equal opportunity as far as second-rate leadership is concerned.

fn2. Looking at our current situation, my only quibble is that, doubtless with the rosy view of hindsight, I would now want to substitute ‘third-rate’. I doubt that there has been any time in Australian history when the choice of leaders on offer has been so uninspiring. On the other hand, the leaders of whom Megalogenis is writing, from Whitlam to Rudd, offered a substantially higher level of ability,

The launch coincides with the US publication of a paperback edition, with a new chapter on Austerity. The Italian translation also came out recently, and there are versions coming in French, Greek, Portuguese, Korean and Simplified Chinese. Collect them all!

The education section of the Budget outlook sounds good. In fact, taken at face value, it might be called an education revolution. The headlines state

The Government’s education reforms are delivering real benefits to students from early childhood through to university.

The government is almost doubling the Commonwealth investment in schooling between 2009 and 2013, uncapping Commonwealth funding of undergraduate university places and providing an early childhood education place for every child in Australia.

Unfortunately, all of this requires the kind of close parsing that’s needed in dealing with contractual fine print. While all of these claims can be interpreted in way that makes them more or less true, the implication that the budget contains large new initiatives that will benefit education is entirely false.

Starting with the ‘real benefits’, an economist would assume that this entailed, at a minimum, an increase in real (that is, inflation-adjusted) expenditure per student.

This is hardly the case at the university level. As the Budget papers note, the uncapping of university places has increased the number of domestic undergraduates by 150 000 since 2007, when expenditure under the Commonwealth Grants Funding scheme was around $4 billion a year. Projected expenditure at the end of the Forward Estimates period in 2015 is just over $6 billion.

Allowing for inflation at an average rate of 20 per cent, that’s a real expenditure increase of 25 per cent, rather less than the growth in the number of students. And most of this increase occurred in the Rudd government’s first two years in office, when the idea of an education revolution was a genuine hope, rather than a tired joke.

Another dubious claim is that of the ‘$5.2 billion in extra Commonwealth funding between 2010 and 2015 to fund extra places’. That sounds impressive until you look at the baseline, which allows for no increases at all, even to offset inflation. Over the four years of the forward estimates, real higher education expenditure is projected to increase by a grand total of 3 per cent, or 0.75 per cent per year. With substantial growth in student numbers, that implies a real cut in funding per student.

The story is much the same with child care and early childhood education. There were some big increases in expenditure in the first year of the Rudd government, but since then expenditure has barely been maintained in real terms. When population growth and the inevitable cost increases in a labour-intensive activity are taken into account, service provision will be going backwards.

The really blatant piece of spin is the claim that the government is almost doubling the Commonwealth investment in schooling. On the face of it, this claim is directly contradicted by the Budget papers Schools expenditure was $10.7 billion in 2008-09 and is projected to be $12.9 billion in 2012-13, rising to $14.5 billion in 2014-15. That’s a real increase of around 20 per cent over six years, which would be just about enough to cover growth in student numbers and modest increases in real wages for teachers and other school staff.

It turns out that the claim has been justified by comparing schools spending for the four years from 2009 to 2013 with the four years from 2005 to 2008, and including the stimulus spending under the Building Education Revolution for the later period. Using the same basis of calculation, the government is actually cutting schools spending from a peak of $25 billion in 2009-10 to $15 billion in 2014-15.

In summary, as far as education is concerned, the 2011-12 Budget is claiming (indeed, overclaiming) credit for the past, but offering less than nothing for the future.