Ozblogger Gianna points to this report in the Australian and suggests that it falls to me to sort it out. Looking at the thinning ranks of Australian econobloggers, she’s probably right.

The report is based on a Labor press release which appears to be based on the income tax statistics for 1999-2000 and 2000-01. The central claim

JOHN Howard’s battlers are going backwards, with new tax research showing that lower and middle-income earners suffered a reduction in real incomes of up to $430 a year between 2000 and 2001.

Analysis of Australian Taxation Office figures carried out by the Opposition, which adjusts earnings against increases in the cost of living, has found the incomes of Australia’s middle class shrank by between $150 and $430 a year.

The figures also show the gap between the rich and poor has widened, with the incomes of the wealthiest 5 per cent of taxpayers increasing by $4159 a year in real terms over the same period and their average taxable incomes increasing from $146,661 to $150,820.

I wouldn’t put a lot of weight on this – it’s only a couple of years data and the numbers were affected by the introduction of the GST in that year. That said, there’s no doubt that the basic claim of the release is true. Almost everyone (even, as I recall, the Centre for Independent Studies) agrees that the inequality of market incomes has been increasing over the past twenty years or so, though different studies date the increase at different times and attribute different causes.

Although real incomes have generally risen for all income groups over the past decade or so, the bulk of the gain has been concentrated among the top 20 per cent of income-earners. The rate of growth of real incomes for everyone else has been very slow. So it takes only a modestly bad year, or a price shock like the GST to see real incomes going backwards.

Under Hawke and Keating, the increasing inequality of market incomes was offset to some extent by progressive changes in tax and welfare policy, but the reverse has been true under Howard. One of the experts cited in the report suggests that the figures are distorted by tax concessions associated with negative gearing and encouraged by the cut in capital gains tax under Howard. That’s probably true, but, contrary to what he says, implies that the real picture is even more unequal than that given in the statistics.

From Dawn to Decadence: 500 Years of Western Cultural Lifeby Jacques Barzun. As the title indicates, a rather dyspeptic, but very well-informed big-picture piece that raises two items of particular interest.

First, the book, published in 2000, employs a variety of quasi-hypertextual linking devices, though it does not mention either hypertext or the Internet. The Zeitgeist at work ?

Second, Barzun refers to Bentham’s famous claim that,

given equal pleasure, pushpin is as good as poetry

. The dictionaries I’ve looked at merely say that pushpin is an obsolete children’s game, but Barzun asserts that pushpin is bowling (I assume some relative of skittles).

For me, at least, this sharpens up Bentham’s point a great deal. I have to confess that, if Barzun is right, I get a good deal more utility from pushpin than from poetry (of course, the invention of the automatic pinspotter and the decay of modern poetry are relevant factors). On the other hand, I (implicitly, given my general position) support the use of taxes on pushpin to subsidise the production of poetry and the retransmission of old poetry to new generations.

Comment spammers have somehow got around my IP banning and have rendered the display of recent comments largely useless. I’ll try to fix this as soon as I can.

This piece by Michael Kinsley is presented with the write-off (what Americans call the “lede”) “I’m for free trade but” usually means you’re not for free trade at all. Kinsley makes some good points in the article, demolishing a rather silly NYT Op-ed piece by Charles Schumer and Paul Craig Roberts but his central claim is contradicted by his own observation that

Almost everyone acknowledges some exceptions to the general rule that a nation is better off if it doesn’t try to tell its citizens what they are allowed to buy from or sell to foreigners.

In other words, nearly everyone, including Kinsley, is “for free trade, but”. Kinsley tries to salvage his argument in the next sentence where he says

A free trade butter (FTB) is someone whose exceptions take a big bite out of the rule itself.

(as an aside, I note that the annoying acronym is introduced but not used thereafter). This move won’t work. Who is to decide what is “a big bite” and what is a modest exception, acknowledged by “nearly everyone”, and therefore part of a “reasonable free trade position”?

The point can be made in relation to the issue of trade and labour rights which, as it happens was the subject of one of my earliest blog posts. Kinsley is hopelessly vague on this, as was the article by Kristof to which I referred then. He is open to the notion of

working conditions so wretched and wages so low and practices, like child labor, so heartless that you do want your own government to ban imports of the product at issue, to avoid the taint of association and, with luck, to pressure the exporting nation to change.

, but rejects the idea that American standards of health, safety and wages should apply globally.

These extremes leave a gap wide enough for a Hummer to drive through, and fail to make the distinction between process and outcomes. There is no reason why workers in poor countries should not have the same sort of legal protections and bargaining processes, for example with respect to rights of union representation, as those in rich countries. Given lower levels of productivity the outcomes in terms of wages and conditions won’t be as high as those in rich countries. It’s reasonable to use trade policy as a lever to demand protection of workers rights, but not to exclude imports simply because the people who produced them received low wages.

I haven’t got time to discuss capital movements where, these days, even free-trade stalwarts like Jagdish Bhagwati are in the “but” camp.

In a recent post on the ethics of quotation, I referred to a doctored quote by environmentalist Stephen Schneider, in which he is made out to advocate scientific fraud in the interests of the environment. As I’ll argue, the use of this quote has served to show up, as dishonest or inexcusably sloppy, dozens of Schneider’s opponents, while doing only modest damage to Schneider himself.

(Warning: Long post follows)
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Paul Krugman is routinely called ‘shrill’ for his attacks on Bush’s economic policy, and particularly the shift to large and chronic budget deficits. He certainly invites this, with routine comparisons to banana republics like Argentina. So Krugman took some satisfaction a couple of days ago, in pointing out that former Treasury Secretary, Robert Rubin is now speaking in similarly shrill tones.

Now the IMF is getting shrill too.

Update This is front-page news in most of the Oz papers today, but bloggers got to read it yesterday

Talking of the NYT, it ran this AP piece headed Powell Refutes Report Saying U.S. Overstated Iraq Threat. The body of the article makes it clear that Powell said he disagreed but produced nothing that would prove the report false (in debating terms, he rebutted the article, but in logical terms, he did not refute it).

At least in educated Australian English the use of “refute” for “deny” is still, I think, unacceptable. Has the language changed in the US, or has the NYT slipped up on this one?

Update watch 13 game of death in divx download hottie and the nottie the free Reader Sven notes that the NYT has changed “refutes” to “dismisses”. The blogosphere at work or just the sub-editors coming back from a long lunch?

The question of quotes has come up once again. This piece by Daniel Okrent called The Quote, the Whole Quote and Nothing but the Quote
from the New York Times gives a pretty good discussion of news ethics regarding quotes. The Times policy states that it’s completely illegitimate to change the actual words of a quote

Readers should be able to assume that every word between quotation marks is what the speaker or writer said,” according to the paper’s ”Guidelines on Our Integrity.” ”The Times does not ‘clean up’ quotations.

and the discussion makes it clear that it’s also illegimate to elide words or sentences from a quote without a clear indication that this has been done. In a newspaper, this would normally be done by separating the parts of the quote with additional text. In academic writing, it’s usually acceptable to mark an elision with dots … on the assumption that the omitted material was not relevant to the point being made.

This still leaves open the question of when a quote should begin and end. As Okrent observes a quote, by its nature, is always “taken out of context”.

except when a newspaper prints verbatim transcripts, all quotations are taken out of context. The context is the actual conversation or press conference in which words get uttered; the printed pages of a newspaper can only rudely duplicate it.

The rule Oklert suggests is that the quote cannot be shortened in a way that changes its meaning, for example by the omission of significant qualifications. The main discussion concerns a quoted statement by President Bush that ”I will support a constitutional amendment which would honor marriage between a man and a woman, codify that.” In fact, he said “If necessary, I will support a constitutional amendment which would honor marriage between a man and a woman, codify that.” without stating precisely the conditions that would make such an amendment necessary. The NY Times had to apologise for this error, but the initial apology wasn’t considered unconditional enough – hence Okrent’s article.

All of this is of interest in view of the controversy over the (in)famously doctored quotation by Stephen Schneider which has been reproduced all over the blogosphere, in which Schneider is made out to advocate scientific fraud in the interests of the environment. I’ll post more about this shortly.

Everyone who’s ever done research has run into cases where the data fail to match up to prior expectations. As the saying has it, there’s nothing so tragic as a beautiful hypothesis slain by an ugly fact. I’ve just run into something of this kind in relation to the debate over road safety that’s been going on for some time on this blog. I’m still thinking about how to interpret the data I’ve found, but for the moment I’ll just report it.
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On the principle that we’ll remember it if he’s right, and forget it if he’s wrong, Chris Sheil predicts electoral defeat for Bush and Howard in 2004. A loss by Howard is certainly a possibility, particularly if the housing market tanks rapidly, but I think the odds in favour of Bush are strong.

Now that Saddam has been captured, I think Iraq will be, at worst, neutral for Bush. I think a substantial US pullout is on the cards once the June deadline is met. If there are genuine elections and a reasonably stable government by that time, it will be reasonable to claim ex post that the benefits of the invasion exceeded the costs. Even if this isn’t the case, the Republican base and much of the swing vote will be satisfied with shooting Saddam and pulling out.

On the economy, I think there’s probably enough momentum in the recovery to carry Bush through to November even if long-term interest rates rise substantially (as they ought to, in view of the CAD and budget deficits). Again, I see this as a near-neutral issue rather than a big winner for Bush.

The big advantage for Bush is that, given his political position, he doesn’t face a budget constraint. Bush can promise more tax cuts and more military expenditure while matching the Democrats on any domestic expenditure issue that has electoral bite. Of course, this will imply unsustainable budget deficits, but it’s already clear that no-one outside the Democrat camp is going to call him on this. The NYT Op-Ed page may not like the deficit but its news columns are sticking to “he said, she said”. If the Republicans say they have a magic money tree, that will be reported in the headline and any refutation will be buried in the body of the report.

It’s politically impossible for a Democratic candidate to match Bush on this, and even if this weren’t the case it would be most unwise. The adverse consequences of chronic deficits won’t emerge for a few years yet. For Bush that means, in effect, that the problems can be left to his successors. But for a first-term Democrat it would spell disaster. And the worst possible outcome would be for a Democrat to try and outbid Bush, then lose anyway.

If a victory is not to prove worse than a defeat,the Democrats have to run on the complete repeal of the Bush tax cuts (this is Dean’s position and, I think, Gephardt’s also). Unfortunately, I don’t think it will be possible to win on this platform.

While I’m linking to Chris, I’ll note that he picked up the slack while I was off air with this post which was better than what I would have written on the same point.