I’ve enjoyed being in Hobart for the first time in more than 20 years. I walked over to Battery Point yesterday morning and enjoyed the historical marker, which said in part
“During the Crimean War panic, a third battery was constructed. Following tradition, it was poorly sited and constructed, and inadequately equipped … More was spent on uniforms and prizes for the volunteer artillery company than on maintaining the guns”
Hobart-based readers are invited to hear my Giblin lecture on the topic “The Information Revolution and the Post-Economic Society”. It’s mainly a look at the role of non-economic motives in Internet-based innovations, including open source software, blogs and wikis. At the University of Tasmania, 5:30 pm this evening.
Just to confuse matters, there are two Giblin lectures, both in honour of the same Giblin. The other used to be presented at ANZAAS meetings, and has now migrated to the Economic Society. But, looking at his Wikipedia bio he did more than enough for two; and the entry omits his role in the Premiers Plan and his work on the export multipler.
Ben Bernanke has been appointed to replace Alan Greenspan, who’s been Chairman of the US Federal Reserve for just about as long as I can remember (the Volcker squeeze was in the early 80s, so he hasn’t been there forever, but it often seems that way).
Bernanke was the obvious candidate, but there was always the possibility that Bush would decide to mend fences with the base by appointing some obscure[1] supply-sider a la Harriet Miers.
Bernanke’s appointment suggests a general bias towards an expansionary monetary policy for the US, and therefore continued low short-term interest rates for Australia. He was prominent in saying that the Fed would not tolerate deflation, and could print money if necessary. More recently, he’s taken a very relaxed view of the US current account deficit, seeing it as the inevitable counterpart to a ‘global savings glut’. I agree with him on the first point but not on the second; there’s a significant risk that the wheels will fall off the entire policy, leading to a rapid depreciation of the dollar and an uncontrolled increase in interest rates, both of which would flow through to Australia.
Market movements were consistent with this analysis (stock prices went up, the dollar fell and the 10-year bond rate rose), but weren’t very big, suggesting that no-one is expecting really big changes.
fn1. This is a redundancy, as there are no prominent supply-siders in the US economics profession. That is, not in the sense of supply-side popularised by Jude Wanniski and Arthur Laffers, although Mundell shares the supply-side liking for a gold standard. Almost all economists are supply-siders in the sense that they think attention should be paid to the supply side of the economy as well as the demand side.
The aptly named Chas Savage in yesterday’s Age.
I’ve been thinking about the upfront cash payments that are apparently part of most recent PPP contracts signed by the RTA in New South Wales. In essence, the government is borrowing money at the average cost of capital imputed to the project (I’d guess this is at least ten per cent), paying fees to the consortium for the privilege and repaying the loan by increasing the allowable monopoly toll. As Chris Sheil said in comments on the previous post, this takes us back to the good old days of selling taxes.
These arbitrary payments undermine claims that PPP contracting has matured and that everything is now to do with value for money and optimal risk allocation. THe purported official rationale I saw was to “ensure that taxpayers are not out of pocket”, which is redolent of the kind of cash-based accounting mentality that got us into the private infrastructure mess in the first place. This is an illustration of the fact that we’ve never got past the kind of deal-driven rent-seeking mentality that has characterised these boondoggles all along.
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It’s time, once again for the Monday Message Board. As usual, civilised discussion and no coarse language, please.
I’ve been too busy to keep up this supposedly regular feature, but I have been reading lots of interesting stuff in the last few months. Over the fold, I’ll list some of them and try to write a sentence or so about each. (I’ll probably keep updating this for a couple of days as I get time). I plan to review some of these, so your suggested priorities would be of interest.
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The Walkley magazine (home of the Walkley awards for journalism – the nominees are in this issue), has a feature about blogging, including a bit from me. The money quote from the main article is
Daily Telegraph columnist Anita Quigley spoke for many journalists when she wrote on August 10, 2005: “Why some pimply-faced geek, sicko or average Joe Blow thinks someone else wants to read every random thought that crosses their mind is beyond me. Alongside the belief that we all have a novel in us – we haven’t – blogging is the ultimate form of narcissism.�
There’s also an online blogging forum, but it hasn’t really got started yet.
Also from the Telegraph, a piece by Malcom Farr, which I’ll link without comment. Hat tip, Surfdom
I only recently caught up with the fact that the Cross-City Tunnel and other PPP projects in NSW involve upfront payments (in this case around $100 million) from the private parties to the Road and Traffic Authority. I haven’t had time to work through the implications of all this, but it certainly raises a lot of questions.
Reading Maggie Gallagher on how gay marriage will bring an end to marriage as an institution for procreation and Leon Kass on how the Pill has ruined courtship, you can see the usual story of a vanished golden age. For Kass, it’s the turn of the 2Oth century when “our grandfathers came a-calling and a-wooing at the homes of our grandmothers, under conditions set by the woman, operating from strength on her own turf”. For Gallagher, it seems to be the 1950s.
The assumption is that turning the clock back a century (or half a century) will be enough to restore the golden age. In fact, the turn of the 2Oth century was a period of moral panic cast in terms very similar to those of Kass and Gallagher. As effective family planning became possible for the first time, the birth rate plummeted, falling from 5.1 births per married woman to 2.6 in the space of only forty years for the cohorts born between 1860 and 1900. My mother wrote the book on this. It’s loaded with quoted denunciations of selfish females pursuing pleasure at the expense of their duty to the race.
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John Quiggin 