Bush lied

With Americans increasingly convinced that the Bush Administration lied to sell the war in Iraq, Bush and his defenders are pushing an idea that’s been refuted quite a few times before, but obviously needs another go. This is the claim that “everyone believed that Saddam had WMD’s”. Hence, it’s argued, even if the Administration misread the evidence, this was an honest mistake, shared by others. The argument is bolstered by citations from the Clinton Administration, Democrats who supported the war and claims about the concurrence of the French and other intelligence services.

For this argument to hold up, it’s obviously necessary that people believed in Saddam’s weapons independently of what they were told by Bush and Blair. After all, the whole point of the criticism is that the Administration’s lies led people to support the war.
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Weekend reflections

Weekend Reflections is on again, a little late this weekend. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

Remembrance

The two minutes of silence at 11 o’clock was a good time for reflecting both on the bravery and sacrifice of those who have died on war and on the futility and evil of war.

Those who died and all those who endured the horror of war should never be forgotten, both for the fate they suffered and the bravery with which they faced it.

November 11 marks the armistice that brought a temporary end to the first Great War in Europe, a war fought over trivial rivalries between empires that were either destroyed or mortally wounded in the process. The Great War bequeathed us Nazism and Communism, and set the scene for most of the terrible wars that plagued the 20th century. The War was a terrible crime, which carried within it the seeds of even greater crimes. All those who helped to cause and promote it, including the rulers and governments of the time (with a tiny handful of brave exceptions), deserve eternal condemnation.

See also this fine piece at Making Light

The other big November 11 remembrance is the sacking of the Whitlam government 30 years ago. Larvatus Prodeo has a string of great posts about the dismissal, plus links.

How long can this go on ?

The record US trade deficit of $66 billion naturally raises the question “How long can this go on?”, and not in a rhetorical sense. To be more precise, the question is “How long before the US trade deficit starts declining” and my best estimate is “No more than two years”.

The reasoning is simple. Given two more years of growth in the deficit, the annual current account deficit will be around 1 trillion dollars (about 8 per cent of GDP) and accumulated net debt will be pushing 40 per cent of GDP[1]. At this point, the effects of compound interest start to bite, as interest on the accumulated debt adds to the income deficit. If trade deficits continue to grow, or even remain stable, the current account deficit explodes. This can’t continue.

If a trend can’t continue, it won’t. Therefore the US trade deficit must begin to decline, and soon. Flow-on effects to Australia are likely.

To be continued …
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Some good news on the terrorism front

The Blair government has been defeated on the floor of Parliament over a proposal to let police hold terrorist suspects for up to 90 days without charge, with 48 Labour members joining the Conservatives and Liberal Democrats in an amendment reducing the period to 28 days. It would certainly be good if Australian “conservatives” were conservative about things like habeas corpus.

And having lived by the bomb, JI bombmaker Amrozi Azahari has apparently died by it, blowing himself up to avoid capture by the Indonesian police. The Indonesians have done a great job in capturing, trying and convicting the main members of the JI terrorist network. Their one failure, not nailing “spiritual leader” Bashir on a major charge, was due, as much as anything else to the refusal of the US authorities to allow Bashir’s main lieutenant, Hambali, whose evidence could have been vital, to testify.

Game over ?

Among the many long-running policy debates in which I’ve been involved, the most drawn-out (except maybe for the one about private infrastructure and PPPs) has concerned micro-economic reform and productivity growth. For the last decade or so, the Productivity Commission and others have been claiming that reform has generated a surge in productivity growth, notably multifactor productivity growth (the term ‘multifactor’ refers to the fact that capital as well as labour inputs are taken into account) estimated by the Australian Bureau of Statistics.

One reason the debate is so drawn out is that the ABS presents estimates for ‘productivity cycles’, which are supposed to smooth out year-to-year fluctuations. Until very recently (in fact, until two days ago), the most recent cycle for which estimates were available ended in 1998-99, and this showed strong MFP growth. Arguments that this was a cyclical recovery or the result of increased work intensity were waved away.
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How to deal with terrorism

Sixteen people have been arrested in Sydney and Melbourne and charged with terrorism offences. While the individuals involved are legally entitled to a presumption of innocence, the police were right to act when faced with evidence suggesting a threat.

What’s important here is that the threat has been dealt with under criminal law, rather than through the use of arbitrary powers of secret detention, as proposed in the new anti-terror laws. Moreover, it appears that the offences created by the 2002 legislation are sufficient to encompass a wide range of terrorist activities. By contrast, it’s hard to imagine how the revival of the notion of sedition in the 1914 Crimes act could have proved useful in this, or any similar case.
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