Double the fun

Of the many good things about the Social Democratic victory in Germany, the most delicious is that it’s succeeded in annoying the American government and the French government at the same time. They must be doing something right.

Semi-Daily Journal

Brad DeLong links to this piece from ultrabear Steven Roach, saying:
“Morgan Stanley’s Steven Roach lays out why he is so scared of the business cycle. He’s a lot more scared than I am–I am worried that deflation is a (relatively small) possibility two years hence, while he is worried that deflation is likely in the next year as what he sees as bubbles in housing prices and consumer spending pop. But he’s been consistent in his views over the past six months, while I have been moving in his direction… ”

I have a couple of observations. First, among the serious economists I know, Brad is the one I’d most readily describe as a natural optimist. When he starts getting worried, it’s time to start stocking up on gold bullion and tinned food (actually, if you buy a deflation scenario, you should start stuffing your mattress with dollar bills). Second, there’s some impressive irony in the fact that the most realistic analysis of the bursting bubble is coming from JP Morgan, which seems likely to be the epicentre of any really catastrophic collapse.

GM and foods

Tim Blair and others have been giving the Greens a hammering over GM foods for some time, so I thought I’d have my say. On this issue, I’m a big believer in the principle of subsidiarity, that is, letting the people directly affected make the decisions. Speaking for myself, I’m convinced by the scientific evidence that GM food is as safe as the ordinary sort, that is, not perfectly, but safe enough that I have plenty of bigger things to worry about. On the other hand, the idea of tomatoes with fish genes makes me a bit queasy, and I think I and others should have a choice about whether or not to eat them. Hence, I’m in favor of labelling and I think the producers of GM foods, as the innovators, should bear the cost of this. Taking it a level higher, I think that this is an issue that is within the competence of individual countries to decide. If Australians, contrary to my preference, decide to ban GM foods altogether, then that is our decision to make and we should not be subject to punishment by bodies such as the World Trade Organisation. To paraphrase our beloved leader, we will decide what foods we eat and under what circumstances. Obviously the same applies to poor countries that want to take advantage of GM foods – they should not be subject to bullying from anti-GM Europeans. My only dispute with Tim and others is that I haven’t seen much evidence of GM foods that are actually useful in feeding the poor. Rice with added Vitamin A sounds nice, but it’s scarcely the next instalment Green Revolution. Most of the effort seems to have gone into making crops like soybeans “Roundup Ready’, which is not much use in poor countries. I have a bit more to say in this 1999 article entitled, The pros and cons of labelling are food for thought

Gore blasts Bush's war plans

This speech by Al Gore showed more guts than he displayed at any point in his election campaign. If the Iraq war goes well for Bush, Gore’s political career is finished. But very few wars go well for those who start them, something which Saddam Hussein should know after Iran and Kuwait even if Bush doesn’t.

A big welcome to Alan

A big welcome to Alan McCallum who’s already got into the spirit of things by slamming one of my posts. Judging by his blogtitle, Alan seems to be mainly concerned with the ancient sport of bagging the ABC (Perhaps Ubersportingpundit could extend coverage to this popular activity).

Kyoto counter-petition no-show

The economists statement in support of the Kyoto Protocol, which i helped to organise got nearly 300 signatures (around 30 per cent of the academic economics profession) in three weeks. The counterpetition, announced a month ago, has yet to be released, despite repeated rumors. I think we can conclude that the problem is a paucity of qualified signatories. (The only public Kyoto opponent of any stature in the Australian economics profession, Warwick McKibbin is proposing what is, in effect, a marginal variation on the Kyoto plan.)

Support among Australian economists for sensible economic policies designed to reduce carbon emissions is strong, if not quite as overwhelming as support among qualified natural scientists for the global warming hypothesis itself.

Google searches

Unlike lots of bloggers, I don’t get many hits from strange Google searches. The most regular topics are “definition socialism” and “Bilal Skaf” (I appear to be one of the few to mention the latter by name). But I got a rather disturbing one today “Jew Jack Straw real name”. The name “Jack Straw” has always seemed too good to be true for a member of the Blair government, having been borne by a leader of the peasant revolt of 1381. But as far as I can tell from this Guardian Quiz it’s real – he has done no more than change from a change from a prosaic “John” to a more proletarian and historically resonant “Jack”. I have of course not bothered to enquire about his religion/ethnicity.
As an aside, the French culture minister of the 1990s bore the unlikely name “Jack Lang”.

Another scary story gets a bit closer

As the Washington Post notes, Loan Refinancings are Putting the Squeeze On Fannie Mae. But, as I point out here, the real trouble will come when interest rates start to rise again.
UpdateAaron Task of manages the “Sum of All Fears” scenario, pointing out that Fannie Mae’s problems are intertwined with JP Morgan’s derivative business. Both look susceptible to a ‘100 year flood’ event that hasn’t been factored into calculations.

Europe swings left

The re-election of the German Social-Democrat Green coalition last night, following that of the Swedish Social Democrats last month, marks the end of the European swing to the right that begin with the Austrian elections of 1999 when the far-right (see below) Freedom Party led by Joerg Haider gained 27 per cent of the vote and entered a coalition government with the conservative People’s Party, displacing their previous coalition partner, the Social Democrats. Over the next three years, similar coalitions of the right and far-right, or right-wing governments dependent on far-right support took office in Italy, Denmark, Norway and the Netherlands. In addition, the French socialist government lost office after elections in which the most notable feature was a strong showing by the far-right National Front of Jean-Marie Le Pen.
Most of the right-far-right coalitions are now in serious trouble. The Austrian government has collapsed following an attempt by Haider (a provincial governor) to reassert control over the Freedom Party against its national leadership. Elections are scheduled for November 24, and defeat for the coalition is predicted. Italian PM Berlusconi is frantically trying to change the law to protect himself from trial on corruption charges. In the Netherlands, support for the Pim Fortuyn list has fallen sharply following, among other things, the exposure of its deputy leader as a participant in a violent military coup in her native Surinam. English-language coverage of events in Denmakr and Norway is spotty, to put in mildly, but there’s every reason to hope that the right-wing governments there won’t manage a second term.
The situation is even better in the Eastern Europe, where the far-right has had a series of defeats in the Hungary, the Czech Republic and Slovakia. It now seems almost certain that the expansion of the EU to encompass as many as ten additional Eastern European countries will proceed as planned. The expansion will dismay not only the European far-right, but many on the American right, who are counting on Eastern European countries to provide military bases for a successor to NATOand general support for free-market policies against European social democracy.
Note: The term ‘far-right’ is a convenient catch-all label covering the European parties listed above, as well as like-minded politicians and parties in English-speaking countries, notably Pat Buchanan, Pauline Hanson and Winston Peters. Although there are plenty of differences, there is a clear family resemblance. For example, all are hostile to immigration, although some object to Asians, others to Muslims and still others to Eastern Europeans. I’ll try and come back to this question, and the relationship of the Howard government to the Australian and European far-right, in a later post.

Thanks to Heath Gibson at

Thanks to Heath Gibson at Catallaxy for pointing out this piece of silliness from James Morrow who says, quoting the SMH:

“Remember that “hole in the ozone layer” that’s supposed to cook the Earth, drown tiny Pacific atolls, maintain full employment for an entire industry of academic, activist, and regulatory no-hopers? Put away the sun block; it’s closing up.

The level of chlorine from chlorofluorocarbons in the atmosphere is falling, and the hole in the ozone layer over Antarctica should close by 2050, Australian scientists have revealed.

A jubilant Paul Fraser, chief research scientist with the CSIRO’s atmospheric research division, which made the discovery, said it was now clear that the pain Western nations, including Australia, had accepted after CFCs were banned in the mid-1990s had been worthwhile.

Of course, this will surely do nothing to mollify the sky-is-falling doomsayers who are pushing for Australia and the U.S. to hand over a hunk of their GNP (or, more accurately, stop producing it) via the Kyoto Accords. ‘

Morrow appears to be unaware that the Kyoto Protocol is modelled on the Montreal Protocol which phased out the use of CFCs and is responsible for saving the ozone layer. Similarly, Bjorn Lomborg triumphantly points to the reductions in various kinds of pollution while ignoring the environmental policies that delivered them. No doubt when Kyoto (and its successors) have been in force 50 years, some future James or Bjorn will be crowing that the environmentalists got it wrong on global warming.