One of the Grand Young Men of Australian blogging, Gareth Parker has announced that he is going over to other side with the offer of a cadetship from the West Australian. Well done!

Under the rules that seem to have evolved, it’s OK for columnists (like me) to have blogs, but not for real journalists, so it looks as if Gareth’s blog “My Two Cents” is no more. It was one I enjoyed a lot, and was an important part of my corner of the blogworld, particularly back in the early days (2002, that is).

Another loss is Stewart Kelly who has apparently succumbed to the ailment all bloggers fear most, getting a life.

Meanwhile there are more arrivals than I can keep up with, so I’ll defer introductions until I get time for an update of the blogroll – soon I hope.

Regular reader James Farrell has asked me to launch a competition with an appealing prize. He says

John, can I have your permission to hold a competition?*

I was just recruited to give a ninety-minute talk in Krakow in January on the Australian Economy.

What the hell am I going to say?

The question: what are the five most important and/or interesting things about the Australian economy from a Polish point of view? Keep it very brief: I don’t need you to write the lecture for me.

I should stress that I’m not getting paid for the talk, apart from an airfare from Budapest.

The prize is a bottle of whatever fancy Polish grog someone recommends to me. I’ll send it to you when I get back.

Entries close Friday noon. So as not to disadvantage the earlier respondents, I place no limit on the number of entries per person. But a later entry would need to be sufficiently differentiated from an earlier one by another competitor to beat it.

A ninety-minute talk! Those Poles must really have some Sitzfleisch.

Via NZPundit via Professor Bunyip via Technorati, I’ve tracked down the study by the New Zealand Land Transport Safety Authority (PDF file) which formed the basis of the estimate that higher speed limits in the US cost 1900 lives.

The study looks at states which had a highway limit of 65mph (about 110 km/h) in 1995, at which time this was the maximum allowed under the National Maximum Speed Limit. The NMSL was repealed in December 1995 and a lot of states increased the limit to 70 or 75. Over the next few years, fatality rates rose, on average, in the states that raised their limits and fell in the states that did not. The LTSA uses a statistical model to check that this wasn’t merely a random fluctuation and to correct for the most important possible source of spurious correlation, an increase in vehicle miles travelled. They find that the increase in fatalities was statistically significant – given that their estimates imply a loss of 1900 lives, it was obviously significant in the ordinary usage of the term.

NZPundit admits to a bit of confusion about the paper and in particular, the divergence between statistical estimates and predictions. To clarify this point, the estimates are those based on the actual outcomes observed in the states in question. The predictions are derived from previous studies that estimated the impact of a given increase in average speeds, and are higher than those obtained here. The suggested explanation is that, since lots of people were speeding anyway, an increase in speed limits does not translate to an equal increase in average speeds, though average speeds do increase.

Supermodel Linda Evangelista is reported to have said that “she wouldn’t get out of bed for less than 10,000 pounds”. I have a similar view regarding possible budgetary savings – if it’s less than $10 million, I’ll leave it to the Department of Finance to chase (of course, I’d probably have a different attitude if economists were paid on a commission basis).

Given my attention threshold, I was pretty impressed to read in my morning AFR that “Travelling ex-pollies cost Australia half a billion”. That looked like some money worth grabbing in my next budget review. Sad to say, it was all a subeditor’s error – the actual cost is half a million. Not only that, but the Internet edition fixed it before I could post a link.

The conference on Public-Private Partnerships I attended today gave me lots of food for thought. Perhaps most interesting was the fact that nearly all the speakers noted that the era of privatisation has passed (at least in the English-speaking countries). I’ve been pointing this out for some years now, but I missed the point when it passed from iconoclastic provocation to conventional wisdom.

It’s time, once again, for your chance to comment on any topic that takes your fancy (civilised discussion, and no coarse language, please).

My suggested discussion starter: which political party will be the next to change leaders? (I’m taking the Democrats to have changed already)

Like lots of other people, I’m sure, I’m getting more and more impatient with the stream of articles about the merits or otherwise of different generations. The main focus is on the Boomers born between 1945 and the early 1960s, and their successors, denoted X and Y, with an occasional nod to the generation who fought in WWII. Those born in the ‘Baby Bust’ between 1930 and 1945 are usually not mentioned, but are, in practice, treated as if they were Boomers (for example, it was the Busters who were the first teenagers and who pioneered rock-and-roll.

My impatience is heightened by the fact that I’ve already published what I immodestly regard as the definitive refutation of the ‘generation game’.

My general point is that, most of the time, claims about generations amount to no more than the repetition of unchanging formulas about different age groups ­ the moral degeneration of the young, the rigidity and hypocrisy of the old, and so on. This is true in spades at present.

I also point out that the use of generational arguments is particularly silly in relation to Baby Boomers because economic and social conditions changed radically over the period when the boomers entered adulthood (the only time at which membership of a given age cohort makes a significant difference). Those born before about 1955* had experiences very similar to those of the preceding Baby Bust generation, entering a booming labour market where not much education was needed to get a good job. Those born towards the end of the baby boom had experience much more like that of the succeeding generations X and Y – in some respects worse, since youth unemployment reached its peak in the late 1970s.

Most pundits who play the generation game simply ignore these inconsistencies. To have all the traits that are commonly attributed to Baby Boomers, for example, you would have to be simultaneously over 65 (to have been around at the beginning of teen rebellion) and under 35 (to have been among the last to get a free university education).

* It’s easy enough to check out my birthdate, but I’ll leave it to readers to do so.

If the Australian Democrats weren’t already doomed, the apparently alcohol-fuelled fracas involving Andrew Bartlett is surely the last straw. Rather than rake over the coals of the last few years, I thought it might be worth assessing their contribution.

The biggest single thing the Democrats have done is to give the Senate a constructive role when it seemed, after 1975, that this was impossible. After 1975 Senate without a government majority seemed like a guarantee of chaos with the axe poised to fall the moment the government’s popularity slipped. And a Senate with a government majority would be waste of space (not to mention money).

Although they didn’t always get it right, the Democrats used the balance of power well, both in their initial phase as a centrist party and subsequently when they became, on most issues, a left alternative to Labor. With luck, the Greens will succeed them in the balance of power and will follow this tradition, driving tougher bargains than the Democrats have done, but still being willing to make the system work.

The pity is that they didn’t merge with the Greens ten years ago. A merger would have been good for both sides. I believe it was considered but was derailed by personal rivalries and party bickering.

The rapid decline of Boeing, until recently the world’s dominant firm in both commercial and military aviation has attracted relatively little attention until it recently attracted the added element of scandal. Writing in Slate, Douglas Gantenbein gives an analysis focusing on top-level mismanagement.

This story fits into, all sorts of economic narratives, but not always neatly. For instance, the ease with which Airbus has captured most of the commercial aviation market from Boeing runs against standard claims about the resurgent US and sclerotic Europe. Airbus looks like a success for industry policy, but then it turns out that Boeing is just as deeply enmeshed in the government trough.

Anyway, what struck me was this observation from Gantenbein

the Boeing 747 stands with Coca-Cola and the Golden Arches as the best-known American products around the globe …. the sheer visibility of Boeing’s products has a kind of halo effect, enhancing America’s status in a way that hamburgers and soft drinks do not. The sight of a European or Asian airport packed with 747s and 777s says one thing about the United States. Those same airports crammed with Airbus A340s—and, before long, with mammoth A380 superjumbo jets—say another.

This meshes quite neatly with a point raised in my discussion of soft power, namely that the success of American cultural exports, like movies and McDonalds

partly comes at the expense of other exporters. In talking about American ‘soft power’, it’s not often noted that, with some important exceptions such as computers, it’s rare nowadays to encounter American manufactured products outside the US.

Gantenbein quotes some economists who assert that

“the single most important sector in the U.S. economy in terms of skilled production jobs, value-added [to products] and exports

. You don’t have to accept this in full to recognise the limitations of claims that the ubiquity of McDonalds and Hollywood movies are a guarantee of global hegemony.

I’m attending a conference on outsourcing at the Centre for Applied Economic Research at the University of NSW*. It’s been very interesting so far and the program for today also looks good (at the Rupert Myers theatre if anyone wants to drop in).

In talking with organiser Kevin Fox, though, it turned out, to my surprise that he was unable to get a speaker, or even any delegates, from the Commonwealth government. The Productivity Commission, which pushed competitive tendering very hard in the early 1990s, is no longer working on the topic, and the Department of Finance showed no interest at all.

It can scarcely be supposed that the issues have all been resolved. On the face of things, efforts at competitive tendering have produced both some big successes (the Productivity Commission claims this for the Job Network) and some glaring failures (the program to outsource Commonwealth IT). It would surely be useful to consider what worked and what didn’t.

This is, I suppose, part of the general problem that a lot more time is spent on making the case for (and against) policy initiatives than on evaluating them after they are implemented.

*If academics had any market power, these would be the ideal occasions to organise a cartel!