The critics, all four of them, panned last week’s song. But in the blogworld it doesn’t matter what the critics say – no one can boo me off my own stage. In any case, I got quite a few links and the sincerest form of endorsement, with Jason Soon digging into his own bottom drawer to retrieve an entertaining piece of erotica. So here’s this week’s song. It’s based on the Irish anti-war classic Johnny, I hardly knew you, perhaps better known in the American pro-war version When Johnny comes marching home. The details in the song are a bit out-of-date, but the theme of a radical labor leader who becomes markedly less radical in office will persist as long as we have radical labor leaders (not that there are many around right now).

As I was walking past the lodge, haroo, haroo
I saw a most peculiar dodge, haroo, haroo
Bob Hawke came by and I swear its true
He went in red and he came out blue
And the Liberals didn’t know what to do
Oh, Bobby, I hardly knew you !

Where are the eyes that flashed with fire, haroo, haroo
Where’s the fear you once inspired, haroo, haroo
The bosses love you like a son,
You’ve got the greenies on the run
Flogging yellowcake by the ton
Oh, Bobby, I hardly knew you !

Where’s the workers leader now, haroo, haroo
Consensus is the sacred cow, haroo, haroo
Out wages cut and hours froze
Except for the doctors and such as those
I think that something’s on the nose
Oh, Bobby, I hardly knew you !

Where’s the voice that roared so loud, haroo, haroo
Wheres the left-wing stand so proud, haroo, haroo
You smile so sweet and you talk so glib
You duck and dodge and you fudge and fib
And you sound just like a bloody Lib
Oh, Bobby, I hardly knew you !

I’ve been arguing for years that the usual arguments for privatisation are flawed, and that, in fiscal terms, privatisation will normally make governments worse off. In an excellent piece, Ross Gittins develops and amplifies the same argument with respect to Telstra. As he says, the government’s case rests on ‘schoolboy howlers’ like
(i) supposing that the sale or otherwise of Telstra is relevant in assessing what to do about drought and the Murray-Darling
(ii) counting on the interest savings from selling Telstra without noticing the earnings foregone
And, a point which I’ve particularly stressed,

Will the interest payments saved exceed the dividend income lost?

That depends on how much the shares are sold for. But, probably yes, according to the budget’s imperfect accounting – and probably no if you worked it out properly.

Why no? Because, as we’ve seen, the Government can borrow at such a low rate, whereas a company such as Telstra should be yielding a return well above what you can get on a risk-free government bond.

The moral of the story is that, by now, the Howard Government has so much ego riding on its twin obsessions of completing Telstra’s privatisation and eliminating public debt that it’s prepared to use any argument it thinks the punters might fall for, no matter how silly or dishonest.

. Apart from the minor quibble that, in the short run, it’s necessary to look at retained earnings as well as dividends, this is spot-on.

In the recent discussion about Asia, some critics of the Howard government have overstated the extent to which this government has ‘turned its back’ on Asia. In turn, critics of the critics have caricatured this point to the extent where the fact that we have maintained diplomatic relations with our neighbours, attended the odd meeting, and issued the odd meaningless statement can be seen as proving that there’s nothing wrong with our policy stance. Cavan Hogue gives a fairly balanced assessment, saying

Although exaggerated criticism for political or personal reasons should be put in its proper context, so should the Australian Government’s cumulative actions and statements over a period of years be put in perspective.

That balance sheet shows a government whose public statements have sent the message that Australia is not part of Asia, that relations with Asia must be balanced against important relations with our great and powerful friends, and that previous Australian governments gave too much emphasis to Asia.

If you constantly tell people they are not as important to you as they used to be, then you can’t blame them for believing you.

Always worth reading, Brad DeLong has a great post saying ‘After the Fall of Harvey Pitt: We Are Still in Bigger Trouble Than We Realize’, because of bogus corporate accounting and the bad investments it generated. There’s a striking contrast between the gloom of this piece along with another with reflections on the recent election outcome, and Brad’s buoyant techno-optimism. In particular, while lamenting bogus corporate accounts, Brad takes recent good productivity statistics pretty much at face value. I must admit I haven’t formulated a complete account of this issue, but I’m inherently suspicious of the idea that the blatantly stupid and corrupt investment decisions of the past decade or so could lay the basis for a sustained surge in productivity.

Recent posts on Iraq and Heidegger have attracted attention from some new commentators, some of whom have interesting blogs of their own. I’ve added two to the blogroll.CalPundit (Kevin Drum) writes informed and witty comment from a generally left perspective. He has a nice piece on the estate tax, a progressive measure that Australia foolishly repealed in the 1970s. Armed Liberal, as the name implies, is a liberal (in the US sense) opponent of gun control, and has recently had some interesting posts on “citizens vs consumers”.

An amusing coincidence is that Kevin wrote to me expressing surprise at my observation that my name is routinely misspelt. Meanwhile Armed Liberal mentioned me as “Oz economist John Quiggen”. But since I found out that Google checks for misspellings, I’m not too fussed about this anymore. The saying used to be “It doesn’t matter what they say about you, as long as they spell your name right”. Now it’s “It doesn’t matter what they say about you, or how they spell your name, as long as they link to your blog”.

UpdateNathan Lott also goes for “Quiggen”. I’ve linked to a long and interesting piece on terrorism, which I’ll think more about and perhaps respond to.

The New Republic devotes many columns, of mixed quality, to an autopsy on the Democratic campaign in the US. The best is Noam Scheiber who opens up with:

If you had to summarize the Democratic election strategy in a single sentence–and any more than that would be too generous–it would have been to neutralize the president on the major issues (taxes, the war) and pray that some serendipitous tailwind emerged to push them across the finish line.

Sound familiar?

Don Arthur presents a superb conspiracy theory to explain my recent discussion of Heidegger and Nazism. He suggests that it’s a subtle Bunyip trap. (I can’t make his permalink point to the right post at present)
Don’s got entirely the wrong conspiracy. My not-so-hidden agenda is to establish the admissibility of the political actions of philosophers as evidence against their systems of thought. As I admitted in the comments thread, I’m following the standard prosecutorial strategy of trying for an easy conviction early on, before going on to harder cases like Sartre and Hayek. Of course, this strategy is pretty transparent and Jason Soon, the leader of Hayek’s defence team, has already weighed in with an amicus curiae brief, objecting to the use of Nazi authorship evidence against Heideggerian thought.

As an aside, I wanted to illustrate a point made by Don that, ultimately, it doesn’t matter what the author intended by their words, it’s what we do with them. Arthur Hugh Clough’s marvellous indictment of Victorian hypocrisy, The Latest Decalogue includes the lines “Thou shalt not kill; but need’st not strive, Officiously to keep alive.” I’ve seen these lines quoted in the course of a serious defence of passive euthanasia. If you’re not aware of, or can disregard, the author’s original intent, they don’t do a bad job of summarising the views of passive euthanasia advocates.

But “ultimately” is crucial here. When we’re trying to figure out a complex argument or a complex work of art, it’s silly to suggest that the author’s intentions in creating the work are irrelevant. The distinction is somewhat akin to Popper’s distinction between the ‘context of discovery’ and the ‘context of justification’ in the formulation and testing of scientific hypotheses.

Assuming they’ve got the right guy, the reported confession by one of the Bali bomb suspects is very good news and not only for the obvious reason that these killers must be brought to justice. Success in the hunt for the bombers will help to short-circuit the rising tension between Australia and Indonesia and lay the groundwork for the cooperation needed to beat Islamist terrorism in the region.
On our side of the water, all the people who have been saying that Indonesia is too corrupt and vicious to be any use to us will have their position undercut by a successful investigation, trial and conviction. On the Indonesian side, the same process will help to discredit conspiracy theories about the bombing and will also discredit any groups with whom the bombers were associated, whether or not it can be shown they were acting directly under orders. There are already reports tying the suspect, named only as ‘Amrozi’ to Bashir and JI.
The nightmare scenario is that the Indonesians have extracted a confession from the wrong guy. It’s happened before, and not only in places like Indonesia when police are under pressure to produce a result. Still the circumstantial evidence looks pretty good.
One thing that’s surprising, and a bit worrying, is that Amrozi has been named as the owner of the minivan used in the attack. Given that all other aspects of the operation seem to have been viciously professional, you would expect the bombers would have used stolen vehicles.
Update: According to CNN, Al Qaeda has admitted (or claimed) responsibility for the Bali bombing. I’m not sure what to make of the timing of this admission, which was posted after the reported confession discussed above.

The Australian reports that some major apartment projects have been abandoned due to poor sales, returning us to the sight, familiar a decade ago of razed CBD blocks sitting idle and abandoned. It seems clear that investors in other projects will be trying to get their money out. The $64 billion question – will the panic spread to the market for houses and land, or will those who’ve been burned in the unit market just chase after the next bubble.

A closer look at the text of the U.S. resolution on Iraq raises a number of points, some qualifying my previous arguments and some strengthening them. The first two substantive clauses say that the UNSC:

1. Decides that Iraq has been and remains in material breach of its obligations under relevant resolutions, including resolution 687 (1991), in particular through Iraq’s failure to cooperate with United Nations inspectors and the IAEA, and to complete the actions required under paragraphs 8 to 13 of resolution 687 (1991);

2. Decides, while acknowledging paragraph 1 above, to afford Iraq, by this resolution, a final opportunity to comply with its disarmament obligations under relevant resolutions of the council; and accordingly decides to set up an enhanced inspection regime with the aim of bringing to full and verified completion the disarmament process established by resolution 687 (1991) and subsequent resolutions of the council;

While I’m no international lawyer, the plain meaning of these words is that Iraq has ‘a final opportunity to comply’. If this doesn’t wipe out the argument that the US maintains a right to intervene on the basis of previous resolutions even if Iraq disarms, it weakens it to the point where the US would be better advised to rely on some unrelated casus belli , such as the alleged Prague connection.

Clause 3 states:

the government of Iraq shall provide to UNMOVIC, the IAEA, and the council, not later than 30 days from the date of this resolution, a currently accurate, full, and complete declaration of all aspects of its programs to develop chemical, biological, and nuclear weapons, etc. etc.

This seems to be crucial. As I understand the matter, the US will not be in a position to launch an invasion within 30 days. Hence, if Iraq fails to deliver a declaration within the timeframe, or delivers one that is obviously bogus, there seems little doubt that the UNSC will declare it in breach and something like a repeat of Gulf War I will ensue.

On the other hand, the declaration, once submitted, is a timebomb for Saddam. As soon as the inspectors find something that isn’t on the list, he’s in breach and, as far as I can see, can’t rectify it.

On past form, Saddam typically cheats in the short run, assuming he can back down later if the going gets tough. With the setup in the UN resolution, such a strategy would be fatal. So I think the odds of Saddam being found non-compliant are higher than I’ve previously argued.

Does this constitute a hair-trigger under which the US could invade without waiting to see what the UNSC says? I doubt it. The biggest single difficulty is that putative allies like Qatar and Kuwait are unlikely to want to set themselves up as invasion bases before a decision to invade has been made. Even if all other steps are in place, the process of putting an invasion army in place will take considerably longer than the time the UNSC will take to debate the issue. Hence, I remain of the view that this resolution lengthens the odds against a unilateral US invasion.