Month: November 2007

Arbitrage lost

John Quiggin10 Comments

I’ve mentioned before that the fact that most bookies have Labor odds-on to win, while the Liberals are favoured in about half the individual seat markets (they were ahead in a majority until recently) seemed to create arbitrage opportunities. A nice piece by Tim Colebatch resolves the apparent paradox to my satisfaction at any rate.

The paradox is explained by the fact that of the 29 seats in which the odds are closest, the bookies have the Coalition as favourite in 23 and Labor in just six. The law of probabilities suggests that if Labor gets anything like the vote being recorded in the polls, it will win a lot more than six of those seats.

The only blemish in this explanation is that there’s no need to refer to the Labor vote in the polls. Given 29 seats that are nearly even-money, it’s reasonable to expect Labor to pick up at least 10, just on the basis of the betting odds.

Going to the more general question of prediction, 2007 has been a win for the polls in their contest with pundits and punters as to who provides the best prediction of election outcomes. Labor jumped to a winning lead in the polls as soon as Rudd replaced Beazley and has held that lead, with only marginal erosion ever since. The pundits and the betting markets have gradually come into line, but it’s hard to believe that they would have done so in the absence of the information provided by the polls.

Of course, it’s still possible that Howard will come back, as he has done in the past, but that will just prove all predictions wrong.

The greatest of crimes (reposted from 2004)

John Quiggin23 Comments

Another Remembrance (or Armistice) Day and we are still at war. I posted this in 2004, and have nothing to add or change

November 11 marks the armistice that was supposed to bring an end to the Great War in 1918. In fact, it was little more than a temporary and partial truce in a war that has continued, in one form or another, until the present. Hitler’s War and the various Cold War conflicts were direct continuations of the first Great War, and we are even now dealing with the consequences of the Balfour Declaration and the Sykes-Picot agreement.

The Great War was at the root of most of the catastrophes that befell the human race in the 20th century. Communism, Nazism and various forms of virulent nationalism all derived their justification from the ten million dead of 1914-18. Even the apparently hopeful projects that emerged from the war, from the League of Nations to the creation of new states like Yugoslavia and Czechoslovakia ended in failure or worse. And along with war, conquest and famine came the pestilence of the Spanish Flu, which killed many more millions[1].

And yet this catastrophe was brought about under the leadership of politicians remarkable for their ordinariness. Nothing about Lloyd George, Clemenceau, Bethmann Holllweg or the other leaders on both sides marks them out for the company of Attila or Tamerlane or Stalin. How could men like these continue grinding their populations through years of pointless slaughter, and what led people to follow them? In retrospect, it is surely clear that both sides would have been better if peace had been made on the basis of any of the proposals put up in 1917 on the general basis of of “no annexations or indemnities”. The same was true, in reality, at any time from the outbreak of war in 1914 until the final collapse of the Central Powers, and even then the terms of 1917 would have been better for all than those of Versailles.We should think about this every time we are called to war with sweet-sounding slogans.

War is among the greatest of crimes. It may be the lesser evil on rare occasions, but it is always a crime. On Remembrance Day and always, this is what we should remember.

fn1. It’s not clear whether the War exacerbated the pandemic, for example through massive movements of people and widespread privation. But it seems right to consider them together when we remember the War.

Poor Americans?

John Quiggin83 Comments

As I mentioned a few days ago, using current market exchange rates, Australia now has a higher income per person than the US. Matthew Turner observed the UK passing the US a few months ago and estimated several years ago that the critical value for the Eurozone is around $1.46, which was reached in the last couple of days. I haven’t checked on the GDP comparison, but the yen and franc are also rising

Of course, it would be silly to use these numbers to support a claim that Americans are, on average, worse off than people in other developed countries. The Purchasing Power Parity indexes produced by the International Comparisons Project of the World Bank provide a much better (though far from exact) basis for comparisons of this kind. But, for the many advocates of free markets who’ve used the economic performance of the US as the basis for their case, there’s a big rhetorical problem here. You can, I suppose, argue along the lines “The market values the output of the average American less than that of the average European (or Australian) but analyses prepared by international bureaucrats show that Americans are actually better off, and therefore we should prefer the market to the state”, but it’s not a position I’d want to defend.

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Policy speech ?

John Quiggin18 Comments

Does anyone know if this election is going to include an election policy speech in the traditional sense from Rudd or Howard (or has there been one that I missed?). In every election I can recall, the party leaders made a speech setting out their major policy commitments. With two weeks to go and the big money spent long ago, I’m wondering if this tradition has been abandoned.

Latham does Seinfeld

John Quiggin28 Comments

Mark Latham has a piece in the Review section of today’s Fin, excoriating the policy convergence that has characterized the election campaign, and Australian politics more generally. The catchphrase that’s caught media attention is “a Seinfeld election, a show about nothing”.

I generally agree, though I’ll note that, to complete the case, Latham needs to do a bit of convergence of his own, arguing that the election doesn’t matter as regards climate change because the big powers will decide everything. I disagree. Howard’s status as Bush’s most reliable ally makes this one of the rare occasions when what Australia decides will make a difference.

Incoming mail on IR

John Quiggin26 Comments

In my morning mailbox, this piece from Chris White, offered as a guest post. I’ve only got time to copy and paste, so I’ll leave it to readers to discuss.

I should mention in advance that my rules regarding civil discussion apply especially to guest posts. Feel free to agree or disagree, but people who are rude to my guests will be asked to leave.

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LP attacked by spammers

John Quiggin1 Comment

Mark Bahnisch of Larvatus Prodeo writes:

Hi folks

We’ve had major problems over the last few days with a spam attack of
unprecedented size, which has rendered LP almost unusable due to
constant database errors. We’ll be upgrading and moving to a new host
over the weekend (at which point we’ll disappear altogether for a few
days).

Basically, the increased traffic we’ve had since the election began
(up by about a third on normal) has made us a more attractive target
to spammers.

In the meantime, we’ve found turning comments off keeps the site
working as the spammers posting comments is the cause of too many
database connections open at once – hence the outages. We’ve picked
the new host for greater reliability as well as more bandwidth.

In the meantime, we’ve set up a backup blog – LP in Exile – where
we’ll be crossposting and where comments can be posted:

http://larvatusprodeo.wordpress.com/

We’re also appealing for donations to assist with costs involved in the move:

http://larvatusprodeo.net/2007/11/06/blog-issues/