Send in the clowns

It’s hard to believe that, three months ago, Australian national politics was (primarily) a contest between two broadly normal political parties. The government was running well ahead, but open to criticism for having talked a lot and done relatively little. The opposition was excessively keen on the maxim ‘the first duty of an opposition is to oppose’, and the alternative policies it proposed were neither as detailed as they might be, nor entirely consistent, but that has always been true of oppositions. Although a change of government in 2010 looked unlikely, there was nothing to suggest that such an event would be a disaster if it happened.

That could not be said today. The government is much the same as before, but the opposition has become a clown show, happy to do or say whatever comes to mind, either to chase votes, secure the support of its base or simply to muddy the waters enough that they have a chance to win in the resulting confusion.

Most obviously, we have an opposition leadership that embraces delusional beliefs on climate science. That would be bad enough if delusion could be confined to denial of the validity of science, but such isolation is not possible. Instead, delusionism is pervading everything the Liberal and National parties do and say.

First up, there are the personnel changes, with the replacement of Turnbull by Abbott, the rise of Minchin to the position of kingmaker and, most absurdly, the appointment of the ‘authentic’ but innumerate Barnaby Joyce as finance spokesman. Of the leadership team, only the marginalized Julie Bishop gives any indication of being connected to the real world. In the key economics portfolios, only Joe Hockey rises to the level of mediocrity, and he’s pretty much discredited by his vacillation during the leadership spill.

Then there’s the shift from ‘scepticism’ (the belief that thousands of scientists have simply got it wrong in ways that can easily be detected by armchair critics) to the kind of full-scale conspiracy theory exemplified by Lord Monckton’s claim that NASA crashed its own satellite to prevent it revealing the data that would disprove AGW theory. While the conspiracy theory has the merit of being more coherent and plausible, it paves the road to absolute craziness (again, see Lord Monckton). Of the leading figures in the Opposition, Minchin and Joyce are overt conspiracy theorists, and Abbott is willing to go along with idea. And whereas the conspiracy theorists were willing to undermine Turnbull throughout his leadership, any remaining pro-science Liberals (with the exception of Turnbull himself and the departing Judith Troeth) are keeping very quiet.

Unsurprisingly, this combination of delusion and incompetence is reflected in the opposition’s response to the government’s climate change policy. Naturally, the ‘science’ is pure wishful thinking, based on a willingess to count highly speculative gains from increased soil carbon as the primary line of policy response. But the economics is far worse – even the advocates of soil carbon don’t claim it can be done in the zero-cost fashion claimed by the opposition. More generally, since the opposition plan amounts to picking some winners, and throwing public money at them, it’s obvious from first principles that it must be more expensive than the government’s ETS.

But of course this doesn’t matter. No one, not even the opposition themselves takes the plan seriously – it’s simply there to meet the political necessity to have a supposed plan to refer to.

Finally, and most seriously, there is the embrace of the reality-free talking point approach that characterises the delusionist commentariat as a whole. Someone like Andrew Bolt is not acting out of character when recycles discredited delusionist talking points on a daily basis. His general approach to politics is no better. And, as the blogosphere has shown (as an archetypal example, see Glenn Reynolds) the longer you are immersed in this point-scoring, talking-point approach to political debate, the more distant becomes any connection to actual reality.

Barnaby Joyce has copped a bit of flak for this, most notably for the fiasco at the Press Club. But Abbott himself is just as guilty as witness his claim that NZ, which didn’t have much of a stimulus package, is doing as well, economically, as Australia. This is obviously false, but that didn’t stop Abbott making the claim or getting, broadly speaking, a free pass on it.

So far, the clown show has been at least a partial success in political terms. This is not all that surprising – at any time, much of the public is disengaged from politics and welcomes a bit of entertainment. And, with this level of disengagement, it takes a long time for the fact that a political party has taken leave of its senses to percolate through the public consciousness, as witness the recent successes of the US Republicans, despite their catastrophic mismanagement in office. So, there is no guarantee that this clown show will lose the next election. But, with luck, the long term good sense of the Australian public will come into play before then.

76 thoughts on “Send in the clowns

  1. The term conservative seems to be a somewhat vague grouping. If it simply means people that vote Liberal rather than Labor it is worth pointing out that the white Australia policy was introduced by a Labor government and dismantled primarily by Liberal governments. Personally I think the term conservatism is more applicable as a description of personal mores than as a political ideology. In it’s most fundamental form it just means resistant to change which depending on the issue can be used to describe just about anybody.

    So long as I’m being precise about terminology I should say that I think racism is widespread and benign. What is problematic is not racism (presumptions based on race) buy racial bigotry (presumption that a person is inferior based on race). Presuming that a Chinese looking women speaks Chinese merely on the basis of race is benign racism, presuming that a black guy is stronger than a white guy purely on the basis of race is racial bigotry.

  2. @TerjeP (say tay-a)
    I think the distinction between making assumptions about someone based on their race and inferring inferiority based on race is rather in the eye of the beholder. The effects are just too subtle to parse in many situations. I agree it’s pervasive and race based assumptions are often not meant by the person holding them to be offensive or malign but that doesn’t mean that they aren’t. Have you ever worked in a country where you are not in the majority race? I have and I can tell you that it’s different when you are in the minority and you have to deal with a lot of incorrect assumptions being made about you based on your appearance. It’s part of life and not on the level of racial vilification or violence but it is not without effect. This is an interesting read White Privilege: Unpacking the Invisible Knapsack By Peggy McIntosh.

  3. In a strangely obtuse way TerjeP you have proven my underlying premise of diversion and confusion also how simply it is to perform (although that was never my intent ). As entertaining as it is by focusing on my use of a simple word ‘white’ (which was an after thought but cheap shot at the liberal party traditional supporter base – ie the demographic that Abbott is attempting to shore up), the trend of discussion has switched to the white Australia policy away from the ‘clowns’. Proving as I stated the basic premise of my comment we are not enjoying a rational credible debate of economic principles on an ETS. If that occurs we are bombarded with half truths, misrepresentations, confusion, diversion and delay of the underlying science – it is all false (The Monkton Principle – the name is interchangeable). You could say I am a healthy sceptic of market mechanisms as the underlying premise is we are rational beings, it can not take . The debate about the diabolical policy issue that this is – is not occuring meaning the immediate effect is an undermining of democracy and naturally policy compromise. Both parties in one way or another are open to and influenced by the multinational army of lobbyists, which has never been more apparent than the gross pandering performed by the previous Government . Turnbulls speach is ironic when you consider the launch of the opposition carbon reduction rorts bucket. By invoking Frontier Economics (same firm dusting off an ETS solution for Xenephon and Coalition) as having supported the fund FE when asked had to qualify their review. No comparison performed. Underlying this response however was also a question which was the best solution – Xenophon’s which was provided by FE. FE also remarked they had to protect their client’s interests (paraphrased). We should be asking whom are their clients, govt etc obviously. Whom did they represent in responses to the Garnaut Review? – it is their to see.

    I tip my hat off to you for a masterful yet entertaining diversion. By the way the “White Australia Policy” was first initiated under the Immigration Restriction Bill in 1901, ironically opposed by the british government, to our denigration formally end until 1973 and 75 when all racial qualifications were removed from immigration policy which did not mean it did not continue or come back in some form. Which party just like this discourse on the topic at hand is immatarial. I am also happy to debate this and the liberal parties attempt to create an Australian aristocracy (remnants can be found at the Melbourne Club) in another forum at another time 😉

  4. sorry after rational beings was meant to include it can not take into consideration the vulgarities of irrational behaviour let alone supply side dominance and gouging.

  5. @Salient Green

    At risk of feeding a troll, perhaps Andrew could expand on why he thinks Bob Brown is a clown, or perhaps he could just educate himself a little about the man before shooting his mouth off.

    Don’t bother. Andrew pops up here and at LP on the very odd occasion and almost every time he pops up it is to make the same comment, which is to compare the Greens with One Nation.

  6. RE @ 49

    Donald, I hear a rumour Turnbull wants to run again in Wentworth but as the ALP candidate this time. Do you think the Alp will acknowledge his covert membership as he was a good secret agent for them? I know a lot of ALP members around here who voted for him last time.

    BTW what is WUWT?

  7. @Tony G

    Very funny. The Liberal Party has turned into a comedy serial and Turnbull is a bit of an idiot, but Abbott and Minchin and Joyce set out to make him look a right intellectual (and they have succeeded, if only in relative terms).

  8. If you levy a tax on something, then promise to give 100% of the tax revenue back to the people, then surely the result is zero?

    Wouldn’t it make more sense to apply a small carbon tax, and spend all the tax on building clean energy generation infrastructure?

  9. @Mathew

    If you levy a tax on something, then promise to give 100% of the tax revenue back to the people, then surely the result is zero?

    The result is revenue neutral but the result may not be zero. The results may include

    a) a transfer of wealth
    b) a re-shaping of spending patterns

    Taxing and refunding is like the opposite of a loyalty program. A loyalty program rewards you by making it marginally cheaper (or giving you valubale benefits) for continuing to patronise a service. A tax and 100% liquid refund program allows you to repurchase 100% of your taxed services, but plainly, many will choose to spend their money on other things.

    Of course, rebating lower (and some middle) income households means that upper income households transfer wealth down the scale, while encouraging all householders to avoid the tax by making other arrangements.

    It’s also possible of course to spend the revenue on services aimed at the bulk of the populace — semi or illiquid rebates, as you suggest. This becoems a loyalty program for the lifestyle change since you only get the benefit if you use the service. The service may be substituted for one you’d normally pay for, making it a semi-liquid rebate, but again even in that case, it may well be that you save the money or spend it on some less highly taxed item.

  10. Mathew. That is a cut through question that really goes to the heart of the matter.
    To put it another way, would a tax on fuel cause you to drive one kilometre less?
    Would a 5% rise in the cost of electricity cause you to use 5% less?
    Aside from modelling(aka guesswork) there is no way of knowing.

  11. @Fran Barlow
    “The result is revenue neutral”

    Actually, it’s not. As I’ve said before:

    Secondly, taxes impose a deadweight loss to the overall economy, because the reduction in the quantity sold at the higher, taxed price reduces producer and consumer surplus by more than what is gained by the government. Lastly, taxes need a system to evaluate and collect and distribute the revenue, which takes up resources just to move money around without producing anything…One can agree or disagree about whether any particular tax is a necessary burden, given the various arguments about the proper role and extent of tax-funded government, but the underlying facts should never be far from people’s minds when having that debate.

  12. Jarrah – if the tax is merely providing a price signal that the market is failing to provide (eg the cost to third parties caused by emissions) then there may not be any deadweight cost because rather than leading to a misallocation of resources it is correcting a misallocation of resources. Although this does entail a lot of assumptions about the size of the tax and the initial missallocation.

    Matthew – Imagine that you and 10 friends go to a restaurant and that you have all agreed to pay your own way. Every time one of you orders a softdrink I slug the individual with a $20 tax and then give everybody at the table $2. Assuming that I’m up front about this rule will it effect behaviour in terms of ordering softdrinks?

  13. @Jarrah

    The deadweight loss argument is valid if and only if a lot of other conditions are fulfilled. To name a few, there is no excess supply in marketable commodities (ie no unemployment); the minimum wealth condition is approximately fulfilled (ie no working poor); and there are no significant externalities (ie no major negative externality such as anthopogenic AGW due to the unpriced GHG emissions)

    A cap and tax on GHG emissions has the purpose of affecting relative prices of marketable commodities such that actual GHG emission output does not exceed the target (see Lindahl for the first general equilibrium model which deals with this type of problem).

    As our host, Professor Quiggin, has said at least once, possibly many times, under some conditions there is no difference between a cap and tax and a cap and trade system.

    But these are only theoretical considerations. Taking a few little steps toward the actual policy problems, it gets very quickly very difficult to say anything without a lot of empirical information, not only economic information but also scientific and technological information down to the age and capacity of existing energy producers and natural resources – world wide in the case in question. So, as people say, the problem is complex (and, if I may say, the endless invitations for talk feasts from certain libertarians and possibly others, including the people like L.C. Monckton, does not reduce this complexity – it only generates verbal white noise).

    One example of scientific information: I understand that a sequence of cap decisions is required and the exact timing is not known for sure but will depend on future scientific results. This means that a cap and trade system does not provide enough price information whenever the planning horizon for investment decisions is longer than the cap adjustment period. IMHO, a cap and tax system provides more potential flexibility for governments to intervene to smooth transition periods (eg subsidies for renewables)..

    A few examples of economic information.
    1. The foregoing theoretical considerations do not take into account financial markets. I do not know of any non-trivial period in recorded history on commerce in the broadest sense of the word where there wasn’t a problem with finance somewhere in the world. By non-trivial I mean long enough to be relevant for physical capital investment decisions in both, natural resource extraction and processing, in contemporary life. I am happy to be provided with reasonably reliable empirical evidence to the contrary (no economic Moncktons please). The current GFC is, what the acronym says – global.
    2. There are not only significant wealth distribution problems between geo-politically defined countries but there are even bigger problems within so-called rich countries since the GFC than before. IMHO, it is impossible to predict exactly how relative prices will change after a cap has been introduced. It is all very nice to have something like IPART, who regulates consumer prices, except there are limits to their power – it is not possible to force suppliers of energy to supply at negative profits. IMHO, a cap and tax system provides more flexibility than a cap and trade system for the government to respond to unanticipated real income consequences.
    3. I agree with those who maintain that several complementary policy responses, both from governments and from individuals, are sensible, including planting trees for ecological reasons.
    4. To state the obvious, it is beyond the power of one single government to provide the solution. (I find it irritating to read about some people’s apparent belief that no coordinating agent, such as the UN, is required. Isn’t it obvious that when there is a case of a market failure – in the sense of missing markets – the role of markets to coordinate the decisions is suspended and some other coordination mechanism has to be found.)

  14. If the clowns can get lots of people laughing at, rather than being interested and concerned about, serious long term issues they can keep those issues from being addressed in any meaningful way. Delay on serious action equates to a win for the entrenched interests that don’t want to act on climate change. I’m not convinced that Labor is any more serious about it than Liberals. I’m also not convinced the Australian voting public is engaged enough to demand better policy from governments; doing the least we can get away with and no more than the least that our least developed trading partners do actually has a lot of appeal to people who generally believe the problem isn’t of our making and is for others to sort out. Unlike world wars which did get widespread willing belt-tightening and self sacrifice, issues like climate change, ecosystem destruction and sustainability lack those crude and effective motivations like nationalism and xenophobic fears. Those motivations appear more effective in the cause of denialism.

  15. @Jarrah

    Now there Jarrah, while it is undesirable for significant deadweight losses to attach to any system, since these represent a diversion of the resource into activity of little public utility, providing the losses, (more precisely the transfer costs) closely approximate the minimal cost needed to administer the system the overhead is justified and even these resources are ultimately returned to the pool in the form of new spending.

  16. chrisl :
    Mathew. That is a cut through question that really goes to the heart of the matter.
    To put it another way, would a tax on fuel cause you to drive one kilometre less?
    Would a 5% rise in the cost of electricity cause you to use 5% less?
    Aside from modelling(aka guesswork) there is no way of knowing.

    If you are making the entirely trivial point that the future is unknowable, then yes you are correct. So therefore we should never make any changes whatsoever??

    If you are claiming that price signals don’t work, well you’re just plain wrong.

  17. Ken is right. There is a real question about how much the ALP wants to pass something heavy.

    A plan that had really serious costs would cause electoral damage. A plan like the ETS could have extra-permits introduced if and when it started to bite. It would be like printing money, except that the effects would be positive for the economy. The history of fiat money is littered with governments printing too much money, the idea that this wouldn’t happen was always a stretch.

    I’d always assumed that the ETS would pass and Copenhagen would see a deal. That wasn’t that bad as when it would start to bite credits would be given out ‘just this time’ so it wouldn’t bite.

    No one fore saw the huge revelation of the Climategate emails that substantiate much of what many skeptics were saying, the mess with Pachauri and the press’s new taste for looking at how poor the WG2 report was. This wrecks trust in the IPCC.

    Have you seen the Nature editorial where a number of climate scientists call for either a radical restructure of the IPCC or its abolition?

  18. I like many others are very happy with the Liberals. I give KRudd 2-3 months at most and then the moron will be gone and history will not be kind to him.

  19. I’d like to see Rudd gone at the next election but I don’t think it highly likely.

  20. @Michael
    Quite right. Race has never been used by conservative politicians. Except when it has.

    I’m coming to this late, but this is salutory.

    “And so we get yet another classic expression of the weird conservative view on racism. They’re not exactly for white racism, and they get very upset if you accuse them of being for it. They’re just against doing anything about it and very concerned that efforts to do something about it are having all manner of dire consequences.”

  21. I have to disagree with Pedro that “climategate” showed anything of real consequence to the science underlying AGW; at most the hostile response to facing multiple hostile FOI’s was ill advised but meanwhile denialism has continued to fail to ‘hide the incline’ of ongoing global warming. The climate data, with and without tree ring proxies, shows continuing warming no matter that the mainstream media prefers to peddle the illusion that there’s been a fundamental shift.
    The integrity of the IPCC’s science isn’t significantly changed, only popular perceptions – in the politically spun sense – have changed.
    As for the comments about popular appeals to bigotry in Australian politics I find it worse than distasteful. The children overboard incident comes to my mind as representing one of the worst examples of those kinds of appeals to xenophobia and unstated racism that get used by Australian politicians. To my mind it was one of the lowest of low points in the Howard years; people accused, not only of thowing their kids overboard, but of not being legitimate refugees and of probably being terrorists ( and none of the accusations stood up to actual investigation). They were denied any right to even state their own account of events as they were being smeared mercilessly. Howard and others had to know that the accusations would appeal to the bigotry and xenophobia that runs like an undercurrent through Australia – no populist leaders and spin doctors at that level could be oblivious of that. And it was right on the eve of an election with investigation only possible after the tally was in. That Labor bought into it rather than risk vote losses from challenging that same xenophobic sentiment just took the whole affair deeper into the sewer.

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