Month: March 2011

The fruitpickers lament

John Quiggin52 Comments

Way back in the 1970s, I spent a couple of short spells as an unemployed layabout, one of which was ended when I took a job as a fruitpicker, making (IIRC) $2 a day, which even then wasn’t food money (I wasn’t very good at it). Fortunately, the job included some basic accommodation and all the blackberries you could eat. And, even then the whinging from employers who claimed to be unable to get enough pickers was an old story.

Now, I see Tony Abbott is pushing the same line, wanting to stop dole payments in any district where there are (claimed to be) vacant fruitpicking jobs. After four decades of this stuff, we ought by now to have some actual evidence. So, I have a few questions

First, has there ever been occasion when significant volumes of fruit have gone unpicked because of a shortage of pickers? [1]

Second, has there been any occasion on which demand for fruitpickers has been enough that a person with no prior experience could make substantially more than the minimum wage (currently about $15/hour). ? [2]

And if, as I strongly suspect, the answer to both questions is No, what does that tell us about the expectations of the whinging employers. (I suggest, a ready supply of below-minimum wage workers, available on demand when needed, and ready to be sacked the moment they are not)

fn1 Not a strike, or some particular farmer so objectionable that all ir workers quit

fn2 I know that experienced pickers can do a bit better than this, but that’s not the relevant issue here.

Costa’s catastrophe

John Quiggin138 Comments

A catastrophe like the one that befell the NSW Labor Party at the weekend can scarcely be attributed to a single individual, and indeed there were many contributors. But one person stands out above all others as deserving of credit or criticism – former Treasurer Michael Costa. Having risen through the trade union movement, he made his bones in Parliament as a union-busting Transport Minister. Appointed by the utterly hopeless Morris Iemma as Treasurer, he persuaded Iemma to privatise the electricity industry, in direct contradiction of the platform on which Labor had campaigned, and the previous repudiation of privatisation by NSW voters.

As the massive unpopularity of similar moves in Queensland had shown, Labor was doomed unless it repudiated Costa, Iemma and privatisation. The party managed the first two, but, not unfortunately the third.

In keeping with his entire career, Costa quit the day he became eligible for a Parliamentary pension, and immediately emerged in his true colours as an open enemy of the labour movement and the Labor Party.

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Weight loss and climate change

John Quiggin44 Comments

Like a large proportion of the world’s population[1] I’m trying to lose some weight, in my case the extra kilos added over Xmas and the associated conference season. As those who know me would expect, this entails frequent (some might say obsessive) weight measurement, and it’s a frustrating business.

After some quick early gains (or rather, losses) I’m now losing weight at a rate of a kilo a month, or so. On the one hand, that’s good. I’ll regain my target weight well before the next round of temptations. And, on a sustained basis, it’s enough to go from obese to the lean side of normal in a couple of years.

On the other hand, measurement-wise a loss of a kilo is swamped by intra-day and inter-day variations due to all manner of causes. It’s easy for my inner weight loss sceptic to say I’m going nowhere, or for my inner optimist to say that I’m so close to the target that I can relax my efforts.

Thinking about that got me to thinking about broader parallels between weight loss and climate change.

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There goes the neighborhood ?

John Quiggin19 Comments

I just got a plug for a new book by Michael Wesley of the Lowy Institute (published by UNSW, 20 per cent off offer here) for which the blurb states

The challenges that lie ahead are international, not domestic. Michael Wesley, Head of the Lowy Institute, Australia’s most respected policy think tank, argues that the benign and comfortable world that has allowed Australia to be safe and prosperous is vanishing quickly.

Wesley and Lowy have always seemed sensible to me, and I haven’t read the book or even seen a summary of the argument, so I’m shooting from the hip in response (this is a blog, after all). That said, the quoted claim seems to me to be impossible to sustain.

At the global level it’s hard to think of a time when we have been less threatened, at least within living memory. The threat or reality of global war was ever-present from 1914 to 1945, only to be succeeded by the threat of global annihilation in the Cold War. There was a brief period of premature optimism then (though wars continued in Yugoslavia and elsewhere through most of the 1990s) ended by S11 and, in our own region, the Bali terror attack. While the Global War on Terror is still dragging on, it’s become obvious over the last decade that Al Qaeda is not the existential threat that it seemed to be. Nothing new has emerged to replace it. Looking at previous work by Wesley, I suspect he’ll want to talk about the rise of China and India. But China today is far less of a threat to Australia than it was when real communists like Mao Zedong ran the show, and the rise of India seems entirely beneficial to us (among other things, ending the old fear that the starving millions of South Asia would come to fill the empty spaces on our map).

Within our immediate region, the big news is surely the spectacular success of Indonesia in making the transition from dictatorship to democracy. While Suharto kept the lid on things, his regime was scarcely a comfortable neighbour, since no-one knew when it would fall or what would happen when it did. When Suharto finally went, a decade or so ago, there were plenty of risks, with East Timor an festering source of dispute and resenment between Australia and Indonesia, Aceh in open revolt, JI a powerful force, and the military stirring up religious tensions. Now all of these things have greatly abated. And as far as I can see the same is true of problems in Malaysia, the Phillipines, Vietnam (it was only in 2002 that the Russian navy finally pulled out of Cam Ranh Bay) and most of our other neighbours.

The book is described, predictably enough as “A loud and clear wake-up call to Australians”. But unless commenters can point to something I’ve missed, I’m going back to sleep.

The Campbells are coming

John Quiggin9 Comments

Amid the excitement and consternation caused by Campbell Newman’s appointment as extra-Parliamentary leader of the LNP, no-one seems to have noticed a striking fact about the devotion and confidence of his followers. After Bruce Flegg declined some very pressing suggestions that he should spend more time with his family, not a single member of the Parliamentary Party stepped forward to offer the new leader a seat. While commentators have wisely opined that Campbell’s plan might be either crazy or brilliant, the alternative of a quick entry to Parliament, had it been available to him, would have been odds-on to win, given that the LNP was ahead in the polls even under whatshisname, the former leader.

One Nation resurgent?

John Quiggin64 Comments

Until a month or so ago, I was under the impression that the One Nation party had shuffled off into history. So, I was surprised, attending a lunch at which Joe Hockey spoke, to hear repeated questions from reporters about the role of One Nation in attacks on Hockey’s standard against the appeals to racism allegedly advocated by (Lib Immigration shadow) Scott Morrison. Then, on a recent visit to Sydney I heard David Oldfield spruiking the One Nation line on 2UE. And now Pauline herself appears at an anti-carbon tax rally, along with a bizarre cast of characters including Angry Anderson and the League of Rights. Does anyone have any insight into what’s going on here? Is this just some bandwagon-jumping or is there a real resurgence of One Nation and similar groups?

What should the RBA be doing?

John Quiggin45 Comments

My son called the other day to say I’d been mentioned in the Fin as a possible candidate for the the Board of the Reserve Bank. If I were a serious contender, this would be the cue for me to adopt a pose of grave silence on all policy issues, interspersed by gnomic observations to be pored over for their inner meaning. I’m not a serious contender (even if it’s nice to be thought of as someone who might be) so this seems to be a good time for unsolicited advice to whoever gets appointed.

In the short term, I’m pretty happy with the settings of macroeconomic policy. The Rudd government and the RBA got the monetary and fiscal stimulus right in 2009, and the move back to fiscal surplus and neutral settings for monetary policy has been paced appropriately (the government’s insistence on relying on spending cuts rather than scrapping the last stage of the tax cuts promised in 2007 was a big mistake in terms of budget policy, but that’s a different issue).

My concern is rather with longer-term issues arising from the GFC. First, it no longer makes sense to separate monetary and fiscal policy as sharply as was done in the pre-2007 period, given that, in any real emergency, the two will have to work together. That doesn’t imply doing away with central bank independence (we’ve had an independent central bank since the RBA was established) but it does imply a degree of co-ordination between RBA and Treasury more like the relationship that prevailed before the 1990s.

Second, the inflation targeting approach, based on Taylor rules, failed globally in the leadup to the crisis and during the crisis. An important lesson (which Stephen Bell and I, among others, pointed out before the crisis) is that low and stable inflation rates do not imply a stable economy. In fact, they may contribute to the growth of asset price bubbles (what Minsky terms the shift from hedge to speculative finance). There’s still a lot of room for discussion about what should replace inflation targeting, but full employment needs to be given more weight than in the past.

Third, the separation between monetary policy and prudential policy needs to be re-examined. Everything went well in Australia, but the problems overseas suggest we need to take another look at this.

Campbell’s cockamamie campaign

John Quiggin28 Comments

Brisbane Lord Mayor ‘Concrete’ Campbell Newman has announced that he wants to be State Premier, but is not prepared to give up his current job to run for the office. Rather, he plans to run for a seat at the next election, then challenge for the leadership of the LNP, which, he hopes will have a majority. Like Malcolm McKerras and others, I’m bemused by this strategy. What is the Parliamentary LNP supposed to do between now and the next election, and what kind of campaign can be run on this basis? Will there be two policy speeches?

Supposing that Newman has majority support in the Parliamentary LNP, their best option would seem to be deposing the current leader Langbroek (no great loss there, admittedly) and replacing him with someone willing to act as a stand-in. That would be a pretty miserable position to occupy (imagine the fun the government will have with it) but perhaps someone can be found to do it. The situation in the City Council will be similarly farcical, giving Labor a chance of regaining its majority.

However, I suspect that reality will sink in soon, and that this cockamamie idea will be abandoned. Either Newman will back away from state politics or he’ll have to follow the standard route in such circumstances finding someone willing to stand aside and create a by-election.

Between the successful management of floods and this farce, a Bligh government that seemed doomed (deservedly so in my view) now looks to have a good chance of retaining office.

Update It looks as if they are going with the “stand-in” plan, with Jeff Seeney as the bunny. Both Langbroek and Springborg have quit. Seeney certainly won’t outshine Newman, but he can still do the LNP plenty of damage. I still predict Newman will be forced to run for a seat in Parliament before long. Perhaps one of the departing leadership team will be kind enough to make way for him, but I wouldn’t count on it.

The chain of scientific authority

John Quiggin90 Comments

Noted scientist Andrew Bolt assures us that exposure to radioactivity is beneficial. His source is creation scientist Ann Coulter, who in turn relies on all-round scientific expert Tom Bethell, whose Incorrect Guide to Science[1] rejects scientific correctness on radiation, evolution, climate change, DDT, AIDS and many other topics. As far as I know, none of these experts has ever studied any scientific subject at a level higher than high school, which guarantees that they haven’t been infected by the subversive influence of correctness in science (or, for that matter, any other topic).

(Hat tip, Tim Lambert, who points to one of those correct scientists, PZ Myers)

fn1. The full title says “Politically Incorrect”, but this is a bit redundant. No doubt politics are the reason for Bethells incorrectness on science, but that’s true of all his incorrect opinions.