Year: 2009

Bookblogging: What next for macroeconomics ?

John Quiggin86 Comments

It’s been slow going, but I’ve finally finished the draft chapter of my book-in-progress that looks forward to a new research program for macroeconomics, an absurdly ambitious task, but one that needs to be tackled. Of course, what I’ve written isn’t fundamentally new – it’s a distillation of points that Old Keynesians, post-Keynesians and some behavioral economists have been putting forward for a while. But I hope I’ve got some positive contribution to make. More than ever, comments are much appreciated.

Update In response to comments, mostly at Crooked Timber, I’ve fairly substantially revised the section on “avoiding stagflation”. While I don’t back away from the points I made previously, I took for granted some things that I’d mentioned in other places in the book. The result made for a fairly unbalanced treatment with an excessive focus on the role of labor militancy. I’ve now tried to put this into proper context. I don’t expect that will satisfy everybody, but this is closer to what I meant to say all along.End update
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GBR Alliance

John Quiggin32 Comments

For the past few days, I’ve been mostly focused on a statement on climate change and the Great Barrier Reef, made by a group of scientists (+ me as an economist) organised by the Federation of Australian Scientific and Technological Scientists, and called, not suprisingly, the FASTS Great Barrier Reef Climate Change Alliance. I’ve put the media release, issued on Tuesday, over the fold. There’s more on the web page including a link to a very valuable document entitled “When is Science Valid?”.

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Fruit loops

John Quiggin174 Comments

It is I think, comparatively rare for a senior political figure to describe equally senior members of their own party as “fruit loops” and “f…wits”, going on to observe that “They don’t know how crazy they look, because crazy people never do”.

But that was exactly the reaction to last Monday’s Four Corner’s program in which Liberal Party Senate Leader Nick Minchin and others went on camera to spout delusionist conspiracy theories of the type Kevin Rudd had pre-emptively denounced only two days previously (i guess he had an idea what was going to be on Four Corners). Minchin described the scientific consensus view that human activity is driving climate change as the result of a communist plot, saying

For the extreme Left it provides the opportunity to do what they’ve always wanted to do, to sort of deindustrialise the Western world. You know the collapse of communism was a disaster for the Left, and … they embraced environmentalism as their new religion.

This is, of course, standard stuff on the political right – I had a string of people pointing me to the latest silly talking point in which a British unfair dismissal case was supposed to prove that global warming is a religion – but it was a big mistake to say it on Four Corners.

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Open letter to Doug McTaggart

John Quiggin130 Comments

Update 12/12: This was initially posted here and emailed to QIC on the morning of 10 November. As yet, no response. And, apart from a snark by Andrew Fraser, no public response to my piece in last week’s Fin pointing out that the government’s case for privatisation was entirely spurious

Dear Doug,

As you may be aware, I have been very critical of the “Myths vs Facts” booklet which is, as far as I know, the only document released by the Queensland government to present its case for sales of public assets. In today’s ABC News, you are quoted as supporting the sales and saying

It can curtail its spending on its infrastructure program and let service quality deteriorate, it can raise taxes to pay for the interest bill that’s building up, or it can rearrange its balance sheet – sell those assets which don’t have a particular need to be in Government hands and own assets that should be,

This statement appears to endorse the government’s claims that investment in non-income generating assets can be financed by the sale of income-generating assets, with no need for additional revenue to service the associated debt. In my view, these claims are obviously fallacious, and I would appreciate clarification on a number of questions. I think these questions admit an unequivocal “Yes” or “No” answer, with supporting argument if desired.

1. Do you believe that the “Facts and Myths” booklet presents a fair statement of the arguments for and against privatisation, offering Queenslanders sufficient information on which to make an informed judgement?

2. Do you endorse the statement that ‘Keeping these businesses would cost the Government $12 billion over the next five years. That’s $12 billion spent on new coal trains and new wharves that can«t be spent on roads, schools or hospitals.?

3. Do you regard the statement that “The total return from all five businesses in 2008-09 was approximately $320 million … When the sale process is completed, it is anticipated the Government will save $1.8 billion every year in interest payments” as providing a fair basis for assessing the fiscal costs and benefits of privatisation?

With my regards,
John Quiggin

Note: A previous version was addressed to Bernie Fraser, but Doug McTaggart’s comments appear more directly relevant.

Armistice Day

John Quiggin59 Comments

91 years ago, the world marked the end of the Great War that had consumed tens of millions of lives, mostly those of young men sent to die far from home in a cause that few could explain, then or now. It was a false dawn. The chaos unleashed by the Great War spawned more and greater wars, revolutions and genocides that continued through most of the 20th century and still continue, in places, even to this day.

I’ve written in the past about the futility of war, and that is the most important thought for this day of remembrance. But there is something else that demands more attention than it has received. The cataclysm of the Great War brought forth monsters like Hitler and Stalin, who killed millions. But the War itself, with the millions and tens of millions of lives it took, directly and indirectly, was loosed on the world by political leaders more notable for mediocrity than for monstrous greatness. 

The names of Asquith,  Bethmann-Hollweg, Berchtold and Poincare are barely remembered, yet on any reasonable accounting they belong among the great criminals of history. Not only did they create the conditions for war, and rush (eagerly in most cases) into it, they carried on even as the death toll mounted into the hundreds of thousands and beyond. Even as the original grounds for war became utterly irrelevant, they continued to intrigue for trivial postwar benefits, carving up imagined conquests among themselves. Eventually, most were displaced by leaders who were marginally less mediocre, and more determined to win at all costs (Lloyd George, Clemenceau, Ludendorff, Hindenburg and others).

How could such ordinary, seemingly decent, men pursue such an evil and self-destructive course, and yet, in most cases, attract and retain the support of their people? I find it hard to understand. 

Posted via email from John’s posterous

Both barrels

John Quiggin65 Comments
That’s what Kevin Rudd gave Australian delusionists in this speech to the Lowy Institute, . I agree with him that there is no point in being polite about this. Those who reject action to address climate change are doing so on the basis of lies propounded by tobacco hacks like Steve Milloy, bought-and-paid-for thinktanks like the IPA, loony world-government conspiracy theorists like Lord Monckton, intellectual cardsharps like Bjorn Lomborg and reflexive contrarians like Richard (‘the dangers of smoking have been much exaggerated’) Lindzen. In years following this debate I have seen no-one (literally and without exception) on the delusionist side separate themselves from these hacks and cranks and present a coherent case. That’s because it is impossible for an intelligent person to reach  delusionist conclusions on this issue while retaining their intellectual honesty.

All that said (and I’ve said it many times before) I was surprised to see Rudd, who is normally pretty cautious, going all out like this. My immediate conclusion is that he doesn’t expect the Liberals to support an amended ETS and is preparing the ground for a double dissolution.