Splitting the progressive vote

Whenever the topic of voting for the Greens comes up, the question arises of whether this involves “splitting the progressive vote” or “wasting your vote”. In large measure, this suggests results from confusing the Australian system with the “first past the post” (plurality of first preference) system that prevails in the US and Britain. In all Australian voting systems it is possible to vote Green with a second preference for Labor. Obviously, if you don’t do this (by preferencing the Lib/Nats or by exhausting your ballot where this is an option) the result will be to reduce the chances of a Labor candidate being elected. But are there any other cases where this is a risk?

For single-member constituencies, the most common case is where the Greens are sure to run third. In this case, their preferences are distributed, and a Green vote with a Labor second preference is functionally equivalent to a Labor first preference, although the views they express are different. In the rare cases where Labor is sure to run third, the opposite is true. The only interesting case is where the order in which Greens and Labor are going to finish is unsure. In this case, the outcome that gives the best combined Labor-Green chance is that the candidate with tighter preference flows should finish third. That way, there is less leakage of preferences to the conservatives. In practice, I don’t think this is a big deal, but to the extent it is at all relevant, it usually suggests that progressives should vote Green. But there is a problem with this, in that, if people really acted on this analysis, there would be a reward to the party whose voters were more likely to split their preferences.

Broadly speaking, the same analysis applies in the Senate. Most of the time, the total number of Green and Labor Senators elected will be the same regardless of how preferences are arranged between them. Given the complexities of the system, especially with voting both above and below the line, anything can happen, but since these complexities are almost impossible to predict in advance, they can’t really influence a decision on how to vote.

Race to the bottom

I restarted the blog so I could comment on the election, but I’ve found it too depressing to do much. The major parties are engaged in a race to the bottom in every respect, announcing silly focus-group-driven policies and appealing to the worst instincts of the electorate. The mass media have encouraged this, obsessing over trivial scandals and personality issues and disregarding our real economic and social problems. The only serious hope for progress on policy is the Greens but they remain marginalised. I’ll try to offer some discussion of the Greens policies on various issues but at this point, I think, there is little reason to follow the main campaign.

Who has gained from the inequality boom? — Crooked Timber

A question that comes up at CT quite a bit is: who has benefited from the massive increase in US income inequality over recent decades. I finally got around to chasing down Congressional Budget Office data (derived from tax records for the period 1979 to 2005), and the answer, in short is:

  • The top 1 per cent roughly doubled their share of both pre-tax income (9 per cent to 18 percent) and after-tax income (7.5 per cent to 15 per cent)
  • The rest of the top 10 per cent slightly increased their share (from about 20 to about 22 per cent)
  • The next 10 per cent held their share (about 15 percent)
  • The remaining 80 per cent of households saw their share drop (from 58 per cent to 48 per cent of post-tax income, with the biggest drops coming at the bottom. The bottom 40 per cent of households now get a smaller share of post tax income (14 per cent, down from 19) than the top 1 per cent.

    A couple of observations on this.

First, to answer the question “who gained from the inequality boom” we need a counterfactual. If, as is commonly claimed, pro-rich policies raised the average rate of growth of income, people in the top 20 per cent of the income distribution were better off, since they had a constant share of a bigger cake. The effects are ambiguous for everyone else, and, on any plausible numbers, everyone below the median is worse off than they would have been with moderately slower, but equitably distributed growth. On the other hand, if pro-rich policies contributed to the slowdown in economic growth for the period since the 1970s, compared to the postwar boom, then the only net beneficiaries are those in the top 1 per cent of the income distribution.

Second, the picture would probably change a bit if benefits (particularly employment-related health benefits) were taken into account. My guess is that this would probably improve the outcome for the top quintile (since this group mostly held on to benefits which increased faster than wages) and worsen it for those below the median (who have lost access to benefits over time).

Finally, it’s striking that, on the CBO figures, the tax system is almost exactly proportional: that is, it has no net redistributive effect at all. The top 1 per cent have a somewhat smaller share of post-tax income than of (measured) pre-tax income, but that almost certainly reflects their capacity to hide income from the tax system.

Posted via email from John’s posterous

Votes for clunkers

Julia Gillard has announced an Australian version of the cash for clunkers program of the Obama Administration. Reader Ben Elliston writes

read an article some months ago by Jeffrey Sachs evaluating a
similar policy from the Obama administration:

It turns out that the Gillard proposal is even worse than Obama’s.
Sachs calculated the greenhouse gas abatement value of Obama’s scheme
at US$140 per metric tonne. Gillard’s policy will reduce emissions by
1 million tonnes at a cost of $394 million dollars ($394/tonne).

My only observation is that Ben’s estimate is taken directly from the government’s press release, which is almost certainly overoptimistic. For comparison, at about $25/tonne, brown-coal electricity generation becomes uneconomic compared to gas and black coal. At $100/tonne, just about all the alternatives (including wind, nuclear, CCS, and solar) look pretty good. Cash for clunkers is, as Sachs concludes, a clunker of a policy.

And just in case anyone has forgotten, Abbott’s anti-policies are even more focused on this kind of nonsense/

Cover design for the living dead

The choice of cover design for a book is always a tricky process, at least for authors like me who are more comfortable with text than images. A while back Eszter at CT dealt with the problem by crowdsourcing the cover for her book Research Confidential.

I got lots of input from readers here on the text and title of Zombie Economics, but I left the cover design to the professionals, and I’m glad I did. Here’s the cover, based on a horror comic and here,at the Princeton University Press blog, is a discussion of how it came about.

There was one anxious moment when we discovered that the design included a reference to a chapter (on central bank independence) that I’d deleted at a late stage in the process. But the designer came up with a clever tweak that changed the reference (to refer to financial markets) without affecting the impact of the design.

This is the first book I’ve done since I took up blogging (I use to say blogs kill books, but this book grew out of the blog) and the process has left me with renewed respect for the range of skills that are involved in turning an idea and a rough draft into a book.

Posted via email from John’s posterous

Non-policy or anti-policy

My column in yesterday’s Fin (over the fold) advocating agreement between Labor and the Greens on a short-term carbon price was rendered obsolete almost immediately by Julia Gillard’s speech (as it happened, I was in the building next door when she gave it).

Gillard’s non-policy represents a failure of leadership. The best that can be said for it is that the delay generated by this process is only supposed to last for 12 months, and that 150 randomly selected Australians could scarcely do a worse job on this vital issues than our political leaders have done.

But, as is so often the case, Abbott is even worse, offering an anti-policy that would represent an obstacle to any real action. I’m feeling happy about my decision to vote for the Greens. With rather less enthusiasm than before, I’ll still give Labor my second preference.

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Live on video!

After the usual hassles, UQ School of Economics finally has its own videoconference facility, an IP-based Tandberg system, which should (fingers crossed) be interoperable with other standards-based systems. I just did my first conference, and it worked very well. Unfortunately, we are still waiting for an upgrade that will let me run a presentation at the same time as appearing on video. But I’m confident of ultimate success, so I’m now announcing that I’m available to give seminars and talks on a wide range of topics to anyone (subject to time and timezone constraints!) who would like to organise a videoconference. Email me j.quiggin at uq.edu.au if you are interested.