La La, La Rouche, again

Via Mark Bahnisch, this piece from the Oz on the links between Barnaby Joyce and the LaRouchite Citizens Electoral Council. The story fits into the rather misleading “Crazy Barnaby” theme that has been developing since Joyce was appointed Opposition Finance spokesman by Tony Abbott.

It’s misleading not because Joyce isn’t influenced by the LaRouchites but because this is presented as a personal idiosyncrasy. As I pointed out here the great majority of the political right, including most rightwing commentators at the Oz and most of the current Opposition frontbench derive their opinions on environmental issues such as global warming and DDT, directly or indirectly from La Rouche[1].

fn1. Mostly indirectly, because of LaRouche’s insistence on implicating the British Royal Family in the alleged genocidal plots of scientists, environmentalists, and the Left. If he would only drop this stuff, he could be the new Matt Drudge or Glenn Reynolds.

Bookblogging: Implications of trickle down

Another section of my book-in-progress, this time on the implications of trickle-down. I’m getting lots out of the comments, even if I don’t respond to everything, so please keep them coming.

One thing that would be really useful to me is references to publications (probably popular, rather than journal articles) by prominent academic economists that clearly espouse some of the implications of trickle-down discussed here. More than most of the ideas I’m criticising, trickle-down economics tends to be a background assumption rather than something which comes out into the open, and I want to avoid the suggestion that I’m attacking a straw zombie here.
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Asset sales and the FTA

With opposition to the Queensland government’s proposed asset sales showing no signs of abating, the government has attempted to sugarcoat the pill by making various promises about maintenance of employment and working conditions, preference for Queenslanders as shareholders and so on. Most of these gimmicks have been tried before, and commentators of all kinds have quickly dismissed them. But one point that came up when something similar was tried in NSW is that some of these promises might breach the US-Australia Free Trade Agreement, which restricts our sovereignty in all sorts of surprising ways.

Dr Patricia Ranald, Convener of the Australian Fair Trade and Investment Network sent me the following summary of the issues.

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Bookblogging: Trickle down Part 1

I’m pushing hard now to finalise a draft of my book-in-progress,

It’s currently titled Zombie Economics:Undead Ideas that Threaten the World Economy. The title is pretty much locked in, but the subtitle is still open for change if anyone has any suggestions. You can read the first few chapters (not quite an up-to-date draft) at wikidot.

The chapter I’m working on now is Trickle-Down Economics, which seems a fairly soft target after the challenge of presenting a critique of the “micro foundations” approach to macroeconomics. But, there are still plenty of difficulties starting with the point that, of course, no-one espouses Trickle-Down Economics under that name. On the other hand, while the view that pro-rich policies will benefit everyone in the long run is widely held, I don’t know of a good general term that describes it.

Anyway here’s the opening section. As always, comments and criticism much appreciated.

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Statement on asset sales

I’ve done this as a press release. See if anyone bites


The government’s announced plans for privatisation show that Queenslanders are unlikely to get a good deal from the proposed asset sales, according to Professor John Quiggin of the University of Queensland. Professor Quiggin was one of a group of 21 leading Australian economists who stated in November that the government had failed to put forward a serious case for privatisation, and that an informed public debate was urgently needed.

Professor Quiggin stated:

* The use of a 99-year lease rather than an outright sale is a device commonly used by governments seeking to make privatisation palatable, but one that makes no commercial sense for assets of this kind. The public loses the asset just as surely as if it had been sold, but gets a lower price because the buyer does not become an outright owner

* The proposed public float of the QR coal and freight business, with the government retaining a minority shareholding large enough to retain effective control makes sense only on the assumption that no trade buyers were willing to pay an effective price. Purchase of shares in such a float would make sense only if they are offered at a substantial discount, meaning that the people of Queensland will almost certainly receive an inadequate price for this asset. The giveaway of shares to employees is typical of the cosmetics used by governments in packaging unsound and unpopular privatisations.

The entire privatisation scheme should be scrapped, and debate over the the desirability of asset sales, and the way to generate the best value for the public should be started from scratch

Spinning like a top

The spin surrounding the Queensland mid-year budget review was interesting and a bit puzzling. All the initial spin was gloom and doom, in keeping with the government’s claim that the dire state of the budget necessitated asset sales[1]. But it turned out that the deterioration in the budget was entirely due to a couple of fairly arbitrary accounting entries for extraordinary items – a projected loss on land purchased for the failed Traveston Dam project and some federal government money that was not going to come in. The underlying picture was an improvement f $800 million a year. This more than cancelled out the deterioration between the pre-election economic statement in February and the post-election budget in June.

I was set to take this nonsense on but by the next day, Treasurer Andrew Fraser was singing a very different song, saying

Treasurer Andrew Fraser described the losses as a “mask” hiding a raft of stronger indicators, including a forecast of 1 per cent growth this year after the previous negative 0.25 per cent.

It is really hard to make sense of this

fn1. This claim doesn’t make much sense. In general, if privatisation is good (or bad), a change in the budget position won’t affect that. About the only case to the contrary is where public ownership provides services that are not paid for by users. In this case, asset sales are like an expenditure cut. But that doesn’t seem to be applicable in most of the cases we are looking at here,