I gave two talks yesterday, one in Wollongong and one in Parramatta, about different aspects of the financial crisis. In both cases, my initial destination was the corner of Church and Market Streets and the person who had organised my trip was taken ill and couldn’t attend the talk. By this morning, I was a bit confused as to my location and status.

Brisbane Institute credibility down the tubes

For the last decade or so, the Brisbane Institute has played a prominent and constructive role in the intellectual life of this city. I’ve attended, and sometimes spoken at, quite a few of its functions. But I just got the news that the Institute is presenting a piece billed as an attack on Al Gore and presented by Jay Lehr of the US based Heartland Institute.

Even judged against the low bar set by climate delusionists in general, the Heartland Institute is a disgrace. Its most notable achievement was the publication of a list purporting to be of scientists whose work contradicted mainstream climate science. Such lists, common in the delusionists attempts to deny that they are pushing fringe science, usually contain large numbers of name with few or no relevant qualifications. The Heartland list was different. It contained the names of lots of genuine scientists, but misrepresented their position. Even when scientists protested against this misrepresentation, Heartland refused to take their names off the list on the basis that they (a bunch of rightwing hacks with no qualifications whatsoever) were better placed to interpret the results of scientific research than were the authors of that research.

The Heartland Institute has no legitimate place in public life and anyone who works for or with it brands themselves as a charlatan. It is to be hoped that the Brisbane Institute’s decision to promote Heartland’s lies is the result of a negligent failure to check on the credibility of their speakers rather than a decision to legitimise this body. Still, I suspect it will be a while before I am willing to work any more with them.

(Hat tip: Mike Smith)

Bookblogging: The rise of the EMH

A bit more from my book-in-progress. I’m currently toying with the title Zombie Economics: Seven Economic Ideas that Aren’t Dead but Should Be. As always, I’m keen to get suggestions on this, and on improvements to the text. I’m particularly happy to have putative errors pointed out. If I agree with you about the error that saves me from putting it in print. If not, it will be a point I need to anticipate and respond to.

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The myth of baseload power demand

Today’s Fin has a leader arguing that we should be laying the ground for a move to nuclear power. It’s commendably realistic about the long time lags involved, and argues we should get started on preparations now. My view is that it would be better to wait and see if the US makes progress on its (currently faltering) attempts to revive the industry there. But the thing that really got me going was the repetition of the claim that alternative energy sources are problematic because they can’t meet “baseload power demand”.

I’ve said before that this claim is wrong, but I think it’s time to sharpen my position, and state two claims:

*There is no relevant sense in which baseload power demand is a meaningful concept in our current electricity supply system.

*Any electricity supply system likely to exist in the next 40 years and capable of meeting peak power demand will have no problems meeting baseload demand.

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Fulbright Symposium

Pioneering Australian law blogger (now retired) Kimberlee Weatherall has asked me to plug the 2009 Fulbright Symposium, in Canberra 24-25 August 2009, which goes by the title “US-Australia Free Trade Agreement: The Last 5 Years, the Next 5 Years”. Speakers include original negotiators (Stephen Deady, and I think Mark Vaile), academics and trade commentators; including Professors Mac Destler, Bryan Mercurio and Justin Hughes as well as a range of Australian faces – right across the subject areas. There’s a full list/program at


I’ll be speaking at two public events on Thursday. First there is the University of Wollongong Economic and Social Annual Public Lecture, 11:30 Thursday 23 July 2009 (details here) where I will speak on Climate Change & the Global Financial Crisis. Then I’ll be speaking in the Whitlam Institute Series on the Financial Crisis, in Parramatte, along with Steve Keen and Guy Debelle, on the topic “After the Crisis”. (details here).

Last week, I did a videorecording which was presented at the ACTU jobs summit on Monday 20 July. My paper is here (PDF).

Global warming and the moon landings

This NYT story about moon landing “sceptics” provides some interesting evidence on the broader phenomenon of anti-science thinking on climate change, AIDS, UFOs and other issues. The moon landing case is of particular interest in a number of respects
* There is no real ideological or interest group motive for scepticism beyond a generalized suspicion of governments and scientists
* The style of argument is virtually identical to that of the other cases mentioned above. As the NYT notes

Ted Goertzel, a professor of sociology at Rutgers University who has studied conspiracy theorists, said “there’s a similar kind of logic behind all of these groups, I think.” For the most part, he explained, “They don’t undertake to prove that their view is true” so much as to “find flaws in what the other side is saying.” And so, he said, argument is a matter of accumulation instead of persuasion. “They feel if they’ve got more facts than the other side, that proves they’re right.”

* The claim seems transparently absurd, but actually, it’s not much different from the other cases. All of them require that thousands of scientists and government officials should, for venal or sinister reasons, promote claims they know to be false that they should have fooled millions of other people qualified to examine such evidence, not to mention the public at large, but that, nevertheless, a minority of people with no particular qualifications or expertise should be able to detect the imposture.

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Finance system inquiry, again

My column in Thursday’s Fin was about the case for an inquiry into the Financial system. I quoted well-known free market economist Ian Harper who observed that the breakdown of the efficient markets hypothesis undermined the basis of our existing system of financial regulation, a point reinforced in today’s Fin by former Reserve Bank Deputy Governor, Steven Grenville. This elicited a letter from Sinclair Davidson, offering a faith-based defence of the efficient markets hypothesis as tautologically true, combined with a rather more interesting argument – since the EMH was only developed in the 1960s, it can’t have been responsible for earlier financial crises and therefore can’t be blamed for the current crisis.

This seems to me like an all-purpose Get Out of Jail Free card for economic theories. For example, since inflation occurred on many occasions before Keynes wrote the General Theory, it must be wrong to blame Keynesian macro theories for the inflation of the 1970s.

The problem here is that, even assuming that there is a 1-1 relationship between policies and outcomes, there are many different theoretical rationales for any given policy. EMH justified weak financial regulation and a laissez-faire attitude to financial innovation, but the same policies were justified in different ways long before EMH, and produced the same outcomes on a regular basis.

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