It’s time once again for weekend reflections.Feel free to write at greater length than for a standard comment thread. As always, civilised discussion and no coarse language.
I’m putting up part 1 of the talk I gave in Adelaide last week, on prerecorded DVD. I’ve posted it on YouTube for the moment.
I tried posting directly within WordPress, but that didn’t work well and I thought that even if I used FTP to put the file up, the effect on server load would be pretty bad. So, I’d appreciate any alternative suggestions.
Parts 2-4 are over the fold
In discussing Roger Bate’s response to my article with Tim Lambert in Prospect defending Rachel Carson against the slurs of the DDT lobby, I thought it would be best to leave aside the question of Bate’s links to the tobacco lobby (already discussed in comments to an earlier post) and focus on Bate’s substantive concessions that the supposed ban on antimalarial use of DDT was mythical and that the Carson-inspired ban on agricultural use of DDT was beneficial.
Unfortunately, a number of our more gullible local delusionists took this as an admission that Bate had never really been a tobacco lobbyist and that they hadn’t really been suckered by a particularly nasty piece of tobacco industry PR, in this case a diversionary attack against the World Health Organization. (Here, for example is Currency Lad at Club Troppo). If they had taken a moment to think, they would have realised that picking a fight with Tim Lambert over a question of fact is a very silly thing to do, especially now that he has access to that gift that keeps on giving, the tobacco archives.
This post from Tim (promised as the first in a series) lays out chapter and verse on Bate’s dealings with the tobacco lobby (and even finds a mention of his offsider, Richard Tren).
This is an appeal to my many numerate and well-informed readers to check my calculations. I’ve been asked to do a quick estimate of the implications of including motor transport (particularly petrol) in a carbon tax/emissions trading scheme. Since it’s easier to model, I’ve decided to look at carbon taxes at rates of $20. $50 and $100 per ton of CO2.
Since a litre of petrol produces 2.3 kg of CO2 when burned, the taxes correspond to 4.6, 11.5 and 23.0 cents/litre, and I’m going to assume that the addition of margins yields final increases of 5, 12.5 and 25 cents/litre.
Given annual consumption of around 30 billion litres (this is petrol + diesel, but I’m going to treat it all as petrol), the revenue generated is $1.5, $3.75 and $7.5 billion, ignoring demand responses (of course, we want demand responses, but I’ll leave this for alter I think).
Coming to a very rough assessment of compensation, if the proceeds were divided equally amoung households in the bottom half of the income distribution (about 5 million of them), the payment would be around $300, $750 and $1500 respectively.
If anyone can see any big holes in my calculations, I’d be very grateful to have them pointed out. More generally, any constructive comments appreciated.
Don Harding of La Trone University has been digging into the Budget Papers and he’s found something startling – Projections of a sharp decline in the labour share of national income. As he says, this seems implausible on the face of it, but if the projections are right it’s a much bigger deal than food or petrol prices.
This piece by Edward Lengel n in the Washington Post has a lot to say about something I’ve long regarded as critically important in explaining the strength of the war party in the US: the absence of any real recollection of the Great War of 1914-18, the opening round of the bloody conflict that dominated the history of the 20th century, spawning Communism and Nazism, Hitler’s War and the Cold War, and even, in large measure the continuing war in the Middle East. Of course, the US came late to the war, and its losses (50 000 combat deaths) were comparable to those of Australia, with 10 per cent of the population. But there is more to it than that.
Lengel (a military historian writing on Memorial Day) makes the striking observation
Americans haven’t forgotten about the doughboys. We just didn’t want to hear about them in the first place.
“The boys would talk if the questioners would listen,” said one embittered ex-doughboy. “But the questioners do not. They at once interrupt with, ‘It’s all too dreadful,’ or, ‘Doesn’t it seem like a terrible dream?’ or, ‘How can you think of it?’ or, ‘I can’t imagine such things.’ It shuts the boys up.” … The Civil War and World War II seem to lend themselves to good storytelling, as long as one avoids the ugly, depressing bits. They appear to have clear beginnings and endings, with dramatic heroes and villains. They move. World War I, by contrast, with its images of trench warfare and mustard gas, is not so easy to manipulate in a marketable manner. Popular historians consequently avoid it.
It would be charitable to interpret the reluctance of Americans to talk about the horrors of the Great War as evidence of inherent pacifism and perhaps this element was present. As Andy McLennan points out in comments, the main reaction to WWI was an increase in isolationist sentiment: the problem was Europe, not war itself. After isolationism was discredited (which did much to strengthen the War Party) from a distance it looks like WWI was simply forgotten,and the end state is functionally equivalent.
In any case, in the long run, the absence of this most bloodily futile of wars from historical memory has been a huge boon to the war party. With a historical memory of war dominated by the “Good War” against Hitler and the Axis, it’s unsurprising that Americans have been much more willing than the citizens of other democratic societies to accept war as part of the natural order of things.
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There’s been a fair bit of discussion of inflation in the comments threads. Bruce Bradbury of the Social Policy Research Centre has sent in a guest post (in a PDF over the fold), making the point that the cost of regular purchase, notably food, has gone up by more than the Consumer Price Index. This implies that irregular purchases (consumer durables like TV sets and cars) must have gone up by less than the CPI and in fact the inflation rate for these items over the past three years has been only 0.5 per cent. Bruce’s conclusion
This gap perhaps explains some of the divergence between the expressed concerns of consumers and the complacency of economists. Though consumers know that their next TV will be much better than their last one for much the same price, they are still struggling to meet their weekly supermarket and petrol station bills.
It’s taken six months, and there have been some near-misses along the way, but for me, the weekend announcement that the government will be reviewing the collection of GST on the full (excise-inclusive) price of petrol is the Rudd government’s inevitable first big policy failure. I don’t know where to start on this. First, the objection that it’s “a tax on a tax” is just silly. The effective burden of the GST falls, inevitably on inputs of primary factors (labour and natural resources including land). Since both are taxed, the entire GST is “a tax on a tax”. Politically, the government abandons the high ground it occupied on the issue, while not providing serious competition for the Libs on the low ground. It also undercuts Rudd’s correct statement only a few days ago that the government had done all it could on petrol prices. And environmentally, it’s a sign of impending disaster.
About the only consolation is that, like Nelson’s five cent excise cut, it will never happen. The idea is bound to be shot down in the review for the reasons I’ve mentioned. But there are plenty of other opportunities to cave in, and it looks as if this government is going to take them. The only remaining faint hope is that Rudd will pull those who’ve floated this stupid idea into line, at the cost of throwing away the advantages they held over a divided and confused opposition.
It’s time once again for the Monday Message Board. Please post your thoughts on any topic. Civilised discussion and no coarse language, please.
Today’s Fin (paywalled unfortunately) includes the neat neologism “Peak Car” from transport consultant John Cox, making the point that car travel in developed countries is unlikely to increase further. I’ve tended to disagree with Cox in the past: for example, with this 2006 piece, which stated that public transport is in terminal decline. This was just at the beginning of the recent resurgence in public transport use, particularly noticeable in Brisbane. Still he’s right about the peak, or more precisely plateau in car travel, matching what’s happening to oils supplies. I’d take it further and say that the inevitable (given no growth in supplies and increased demand from China and India) decline has probably already begun.
Calculated Risk points to this report from the US Dept of Transportation, showing the first yearly decline in several decades, and includes a graph which shows that the recent decline follows several years of flattening