107 thoughts on “Monday Message Board

  1. For confused economically illiterate quasi un-partisan people like me can any wise betters provide insights on two questions?

    1. What is the explanation for ‘Cyprus’ out of the 200+ theories I’ve read? I am confused totally but I think hearing the wisdom of Ozblog cant hurt. Is Cyprus an evil outpost of the Russian Bear? Is it just another banking centre in Europe which happens to be in trouble during the German election because it followed the English (City of London, Luxemborg) model – grow your banking economy and stuff the real economy? Is this about the Geopolitics of gas supplies? Is it about delusional Central bankers?

    2. Is there anything to stop the domino effect?: Cyprus > Greece > the PIIGS + France + the Netherlands > the EU > China > the World Economy > 2008+++ > my superannuation.

  2. The palpable hostility of the cando government to renewable energy continues. Instead of recognizing the way distributed solar power reduces the wholesale cost of electricity and reduces loads on the high voltage distribution networks, they still propose to daemonise and slash feedin tariffs. Is this simply crassly uninformed populism; propping up the profitability of the electricity generators; tugging their forelock to old king coal of the nineteenth century; or that they are utterly clueless?

    http://reneweconomy.com.au/2013/qld-solar-pv-households-facing-dramatic-tariff-changes-63606#comment-42287

  3. rambling entry….(not like the pig in that poem about drunkenness)….

    unelected government officials

    the potential costs of litigation outweigh the perceived benefits of employing a “known” candidate

    if there is an open position then anyone connected in any way with the candidates or employers can not be involved

    therefore positions within a government office that are sufficiently high grade should be filled by an expert independent committee

    independent

    what’s verifiably on paper should be the guide – not subjective opinions based on limited recent experience or personal connections with the candidate

    nor on the opinion of people not qualified to give them – especially if they are already in a compromised position

    where it leads otherwise is into clubs within government

    not registered clubs and not secret either

    clubs that form on the basis of consensus about the way of things – fine if they are squeaky clean but not so if they are incautiously human

    that’s what would emerge if a group forgave a faulter, not because they are human and make mistakes, but because it’s a case of “covering ranks” lest exposure of one might lead to difficult questions – and all so very unconscious

    this is the nature of some of the members of the club

    other’s are less complex – they simply obey those laws of nature so well described by writers such as Kahneman – they do what they believe they can get away with because it’s right – the idea that they might be wrong might never have entered their mind. At most such fleeting thoughts would be shrugged off as inconsequential

    rationality is always an after the event thing

    i’ve seen supposedly “rational” leaders loose it so completely that it’s never forgotten – by anyone

    proving so obviously that they are like everyone else except for one thing – they can provide eloquently delivered rational explanations for what they might have done in the past

    and if you lack eloquence or the energetic enthusiasm to feign it, you’re toast

    look at Krugman he’s forever one skilled at “wit of the staircase” yet his follow ups are not bad (no i don’t support (or directly reject) his economic theory)

    it’s the talkers vs the thinkers

    the talkers have it simply because they have it over the thinkers when communicating with the majority who seem to mostly be neither thinkers or, really, when you think about it, talkers

    pop

    ps

    http://sniff.numachi.com/pages/tiPIGINEB4.html

  4. @Newtownian

    The EMU (Economic and Monetary Union) of Europe was always doomed to fail.

    1. The zone is not an Optimum Currency Area (OCA) or anything like one.
    2. Horizontal and vertical fiscal transfers cannot be handled as in a federated nation state.
    3. Sovereign nations lost currency sovereignty and thus control of fiscal and monetary policy.
    4. The EMU monetary apparatus is not under proper democratic oversight.
    5. The monetary apparatus was/is captured & suborned by financial and corporate interests.

    Anyone who still supports the EMU concept (includes Prof. J.Q. and Ernestine Gross at last reading AFAICT) needs to explain why the empirical outcomes are so bad (several nations now in depression – the PIGS etc.) They also need to explain why points 1 to 5 are not an issue in their opinion. They also need to explain away if they can the congruence between points 1 to 5 and the woeful empirical outcomes of the EMU.

    Cyprus has all the above problems plus its house-of-cards tax haven status, its exhausted land, soil, fishing grounds etc., and its status as a non-viable mini-state. Most small nations, being mini-states, city states or small island states are non-viable economically and need to integrate with a larger neighbour. They suffer from dis-economies of small scale. Cyprus also suffers from being partioned because of its strategic location and there are no healthy states around it to absorb it as a province anyway. Basically Cyprus is FUBAR. (Fouled Up Beyond All Repair).

  5. @the Peak Oil Poet

    another version

    It was an evening in November,
    As I very well remember,
    I was strolling down the street in drunken pride,
    But my knees were all a-flutter,
    And I landed in the gutter
    And a pig came up and lay down by my side.
    Yes, I lay there in the gutter
    Thinking thoughts I could not utter,
    When a colleen passing by did softly say
    ‘You can tell a man who boozes
    By the company he chooses’ —
    And the pig got up and slowly walked away

    p

  6. “s it just another banking centre in Europe which happens to be in trouble during the German election because it followed the English (City of London, Luxemborg) model – grow your banking economy and stuff the real economy?”

    Broadly speaking, yes – Ireland and Iceland are probably better examples.

  7. @John Quiggin
    Except that Iceland seems to have remembered Keynes’s old adage:

    “If I owe the bank a hundred pounds and can’t pay it I have a problem. If I owe the bank a million pounds and can’t pay it the bank has a problem”

    You need to index for inflation from the 1930s

  8. I think the eurozone is a good idea. The problem is not joining the eurozone. The problem is joining the EU and / or not keeping your finances under control.

    When the Bretton Woods gold standard ended it was nearly two decades before policy makers figured out how to operate effectively in the new environment. When it comes to fiscal policy and the eurozone there seems to be a similar learning curve. To be honest I thought policy makers and market analysts would have figured it out by now but I suspect they are stuck in a redundant paradigm and likely to remain stuck for some time.

  9. p.s. Being in the eurozone is a bit like being on the gold standard. Except a gold standard is easier to exit. Both are unforgiving of governments that spend recklessly. But the gold standard can be exited if you really want out. Exiting the eurozone is logistically much harder.

  10. @Ikonoclast

    Thanks Iconoclast – useful. Comments:

    Emotionally I like “5. The monetary apparatus was/is captured & suborned by financial and corporate interests.” However the same can be said about the US, UK, the EU and probably Oz Canada and NZ. Not as bad perhaps but the point here is Cyprus isnt unique.

    Regarding “4. The EMU monetary apparatus is not under proper democratic oversight.”
    I’m not sure whether that situation is special either. Seems most currencies except maybe in China are controlled by a small Oligarchy of technocrats rather than democratically (the latter would lose us Market Confidence). You might even argue (though I’m not) that the EU is sort of democratic and the ECB and IMF are sort of under government control.

    Regarding “3. Sovereign nations lost currency sovereignty and thus control of fiscal and monetary policy.”

    Yet again its arguable that all nations are losing their sovreignity when they float their exchange rate. So again Cypress isnt special.

    Which I guess leaves the first two. These to me seem issues of scale and parallel JQ’s comment that Ireland and Iceland are better case study comparisons for budding thesis students. I wonder if in the end it just reduces to ‘might is right’ and small nations have to adapt whatever way they can.

  11. @Newtownian

    We still have formal control of our currency in Australia. By that I mean fiscal policy is set by the elected government and monetary policy is set by the Reserve Bank under a “remit” or delegation of powers from the Government. The Government could at any time change legislation and resume part or all of the Reserve’s monetary policy setting powers (interest rate setting).

    Fiscal policy power means power over receipts (taxes), expenditure (outlays) and thus power over macroeconomic settings like the sizes of budget deficits and surpluses. EMU countries lose part of this fiscal policy power. Governments which have fiat currencies can “print” money to cover deficits. Net deficits over time are the rule because as the economy grows the money supply must grow commensurately or else there would be a shortage of high powered money; a kind of liquidity squeeze. Net deficits are funded by creating currency units by fiat (that is ex nihilo or out of nothing). This is the case when the government has the fiat currency power.

    EMU member countries gave up the fiat power to the European Central Bank. The ECB now determines matters of currency creation. EMU member countries are now more like states of Australia. Their budgets (with no fiat money powers) have to balance or else they might have to borrow. Deficits can only be funded by borrowing or by vertical transfers from the Federal Govt in Australia for Australian states or from the European Central Bank for EMU members. Thus the EMU member state lose currency sovereignty and cannot determine its own budget deficit funding position without (undemocratic) pressure from the Troika technocrats and their corporate “mates” (plutocrats) who have a big finger in the pie.

    The so-called Troika (European Central Bank, IMF, EMU) determine fiscal policy of EMU nations in the sense that they put those nations in a straight-jacket of austerity (no deficit / low deficit) policies almost irrespective of the need for demand stimulus and whilst ignoring the democratic pressures, requests and human economic suffering of the nations’ populations.

    The EMU is a corporate, neocon, tecnocrats dream. Democracy is sidelined and economic rule is handed over to the technocrat puppets with the rich oligrachs (plutocrats) as the pupeteers. Thus is democracy neutered and plutocracy triumphant. It’s one of the oldest tricks in the book. Those who hold the purse strings hold the power. It’s that simple essentially.

  12. Per Capita s new annual survey on attitudes to taxation here makes worrying reading . Despite being one of the lowest taxing OECD countries ( and now aparently lower than the Howard period ) Australians are feeling over taxed .. 60% feel we are a high taxing big govt country . Too many years of politicians appealing to fear and greed via a helpful media mean cost of living is confused with cost of lifestyle . Tax has such a bad name now but people still want improving services .

    So the coalition may have this as their problem soon . Surely their performance will also leave them open to the kind of beltings in the press that labor has suffered from day one (regardless of actual outcomes) . It will be interesting to see how much leeway news ltd gives them , and to see how much of a conservative style attack labor uses from oposition .

  13. Hey Ikonoclast, thanks for your posts in this thread I’ve found them pretty illuminating.

    I did have one question which relates to your remarks about the eurozone not being an Optimum Currency Area—being ignorant, I looked this term up on WP and found there seems to be a bit of argument each way about whether the eurozone (or as a separate question, Europe as a whole) was an OCA.

    Just wondering: what’s the basis or source of your obviously strong view that the EMU region is not an OCA?

  14. @Tom

    I follow the blog of MMT (Modern Monetary Theory) specialist, Bill Mitchell. He is an Australian professor currently in Darwin.

    Despite MMT being labelled an heterodox economic theory there is nothing particularly radical about it. MMT demystifies money. By this I mean that MMT analyses what actually happens under the fiat currencies and floating exchange system of the modern monetary system. MMT looks at what happens in empirical fact; at how money is created, destroyed, exchanged and circulated. Whilst MMT is not radical, it is exacting and rigorous in terms of econometric analysis. In practical policy terms, an MMT exponent would advocate similar measures to a Keynesian economist i.e. counter-cyclical budgets; deficits in a recession and surpluses in an overheated boom.

    MMT theorists and certain other heterodox economists predicted the EMU disaster and the GFC or Global Recession of 2009. By this I mean they did not predict the precise timing, nor try to, but they did predict that certain processes were unsustainable and unstable and would in the near to mid term result in severe economic problems. These processes were rising private indebtness and the imposition of government austerity measures i.e. pro-cyclical budgets (balanced or surpus budgets during economic contraction). In this situation only increases in private debt were fuelling healthy spending and thus holding up aggregate demand.

    As soon as private debt reached unsustainable levels, debt growth stopped and deleveraging began. People stopped taking on debt and began paying their debt off or defaulting. This took an enormous amount of demand out of the economy and it sagged. People were paying off debt rather than buying more stuff. At this point, government austerity measures (a tight budget) are the worst move possible as this takes further demand out of the economy and spending and then production sag further. Unemployment increases and its recession or even depression time.

    Neoclassical economists claim that government budgets are like household budgets and the government must spend within its “means”. This is nonsense, at least in the sense that neoclassical economists mean it. The big difference is that a currency-sovereign government can print money and a household cannot. Thus a currency-sovereign government can always print money. It is not constrained by revenue but can spend more than revenue if required.

    Real constraints attend on this spending but the actual printing and spending of fiat currency is not constrained. The real constraints are in the first instance real goods and real services. The government can only buy real goods and real services if they are there to be bought. The other real constraint is inflation and hyper-inflation. However, the inflation bogey is exaggerated by the neoclassical economists. While there is unused capacity in the economy (unemployment above the frictional 2% and unused plant and resources) extra spending can function to increase production by stimulating demand rather than causing inflation. Temporary bottlenecks and capacity constraints in the economy will be an issue and pushing too far too fast wil cause inflation.

    The other cause of inflation is much more egregious. This cause is the unrestrained lending of the private sector which lending causes excessive private indebtedness and inflation, especially asset inflation e.g. inflation in housing prices. Better policy would see private lending for consumption (McMansions are consumption) restrained and this would open more policy room for targetted government deficit spending to stimulate the economy instead. This would see the spending going into needed infrastructure, health, welfare and education.

    In terms of an OCA (Optimum Currency Area), no large continental nation or aggregate of nations is going to be an OCA. There are always regional differences that would require different fiscal and monetary settings if that were possible. However, the benefits of currency union still outweigh the drawbacks IF (big IF) the entire area is a federation under one federal government (like the USA or Australia) and IF that federal government engages in enlightened horizontal and vertical fiscal transfers (a form of fiscal adjustment). This process is compromised in the EMU because it is not a federation but a motley collection of nations. Some of these nations are very motley in themselves too. The process of managing the currency and managing fiscal and monetary policy is compromised as it is partially in the hands of a supra-national but undemocratic entity which is ruled by econocrats and plutocrats not by democracy.

    I think of it this way. One reason a healthy human body remains healthy is because it transmits pain to the brain. The pain is a signal to avoid injury, avoid exacerbating injury and to seek safety, rest and treatment. In a democratic body politic, the body of people can transmit pain to the executive “brain” of the nation, the parliament of politicians. If the politicians hurt the peoples’ interests too much the politicians will soon find out about it and might even get thrown out of government. In the econocratic, technocratic setup of the EMU there is no effective way for people in pain in some nations (e.g. Greece) to transmit this pain to the EMU, ECB and IMF (the Troika). Thus the Troika can continue willy-nilly to inflict real pain and real damage on regional economies without any effective return signals to cease the damage and begin different policies.

  15. @Ikonoclast
    Thank you 🙂

    I have listened to Bill Mitchell speak on the subject of full employment. Very sensible approaches have been suggested.

  16. @Ikonoclast

    Nominally you are of course correct. What I was musing on though was how macroeconomics are controlled/managed overall, what the degree of REAL democratic control is and how the control of money is exercised somewhat differently in other nations but no less effectively.

    When it comes to bureaucratic systems and exercise of power therefrom clearly Europe is much more overt in its use of command/control. And Cyprus + the ongoing lack of come upance for those caused 2008 demonstrates the increasing power of this style of corporate plutocracy and how it behaves when the gloves come off. But what I was suggesting was the system which has evolved over the years and now is operating here is just as effective at disenfranchising democracy.

    Of course we have never been complete masters of our national destinies as the Jack Lang debacle and our near lock step with historical recessions/depressions overseas shows. Nevertheless the last 35 years paralleling the rise of neoliberalism has pretty much dudded the old democracy I was born into, IMHO, but I welcome any observations suggesting otherwise.

    Mechanisms/processes I can think of which have castrated democratic control of the economy (pehaps inefficient and corrupt at times but still more democratic) are as follows:
    1. Reductions in taxes mean government (nominally the embodiment of democracy) has far less cash to fullfil the will of the people as it were. Discretionary spending to deal with crises an new factors (climate change, ecosystem degradation) is even more hit because some pay outs like on defence are not very flexible. And the private sector is incapable of responding to these crises and new factors because it is either short term focused or at best has a depreciation drive horizon of maybe 5-10 years (even less in the mining industry I believe).
    2. Privatization of major public assets for short term gain/pork barrelling -GIOs, Telstra, Qantas and the Commonwealth Bank etc. so we have no democratic control over them either. Nominally those of us who have shares and supeannuation benefits have some control but in reality as individuals we have very little real power because of our small holdings size except to change between Tweedle Dum and Tweedle Dee.
    3. The coopting of both sides of politics into neoliberalism as the ONLY form of (non) governance so that politicians have less and less power with which to support democratic will as it were and fewer ideas of what to do in any case.
    4. The lack of recongition of democracy and politics in the dominant theories and teaching of economics and the lack of credible mature alternative theories of economics e.g. those which include the natural environment in a non-resourcist way.
    5. The rise of our own minerals, retailing, construction, banking and media oligarchs who demonstrate they will exercise power through money and spin as it suits them.
    6. Miscellaneous drivers like improved monitoring and control of mass psychology (the art of the lobbyist, the science of push polling, simple media biases), the hollowed out state of Labor and purging of the old Liberal wets and the death of Unionism.

    Of course we arent living in the OzSSR and there have also been social advances. But the latter are beholden to the money economy and I put to you that democracy as we have known it in this country is dying – and with it democratic control of the economy as surely as has happenned in Cyprus. And plutocracy will still be the end result.

    What would this future look like? The gated enclaves of South Africa seems a model for what happens when civil society becomes dysfunctional, (common) wealth is no longer shared, and money rules.

    Yes of course I realise this is to a degree hyperbolic but I dont sense any alternatives on the horizon e.g. a functional Ecotopia. Perhaps you can offer some insights that suggest otherwise and why we arent a potential Cyprus when the China drip fails.

  17. @Newtownian

    You are right Newtonian. You have outlined very well the path we are going down. And it leads to big trouble, no doubt about it. If we actually wanted to competely wreck the economy and the biosphere we could not do a better job than the neocons are doing already.

    I believe that deep down the smarter neocons know they are wrecking the world and that they positively want this outcome. I am not entirely sure of their motivation but I think I can guess. I suspect once the realisation kicks in that their great wealth does not buy them endless power and immortality then they want to destroy the entire world so nobody else can enjoy it after them. Deep down I think this is the place where their hearts’ blackest wishes have gone to.

  18. @Ikonoclast

    I’d like to believe the neocons and their fellow travellers were about to have their little Damascus moments. But I have seen too little evidence and much to the contrary.

    I offer some case studies by way of illustration (apologies for prioritising the biosphere).
    – Some months ago Richard Heinberg was here proselytizing population gloom with Dick Smith as MC. Now DS proved again he is smart, knows the stakes and is relatively progressive – as well as having a good knowledge of real economics as against wishful thinking. He happily noted too he was a capitalist but graciously admitted he was torn and had no real answer to ecological sustainability issues.

    – A launch of the Melb Uni Zero Carbon Initiative a few years back saw Turnbull and Carr on stage supporting all hugger mugger for the environment. I have no doubt they are totally sincere in their sympathy for ecological sustainability as I’ve seen them at other times and their message has been consistent if not always shrill. Yet consider one made his money via Goldman Sachs in part while the other was in alliance with Macquarie Bank. This seems to place them dead centre in the rotten Godzilla of a financial system. Yet they both made it clear they saw capitalism as the solution despite the unravelling of 2008 as evidenced a couple of years previously.

    – In search of wisdom and insight as to the thinking of the captains of industry a while back I ploughed the depths of what seemed intelligent analysis and had an interest in stopping climate change – only to find it, Business Spectator, is, Steve Keen aside, a tabloid about on par with New Idea.

    – What about the academic fraternity? Ecological economists (who seem more ecologists with an interest in economics) aside I have been stumped. A few are trying to change. JQ and Tim Jackson are good examples of this progressive minority. And I’ve recently been reacquainted with some environmental economists with similar sympathies.

    But the language even they use seems largely Anthropentric despite it being 400 years since Galileo did his earth/man is not the centre of the universe bit. I find this perspective even more perplexing as economics and ecology both deal with systems and numbers and their disciplines share the same root word.

    As a result thus far I have yet to encounter much evidence of enlightened capitalists or workable seeds of such enlightenment.

    Conversely Phillip Adams favorite reformed Master of the Universe Satjyat Das during his book tour made the observation in answer to a question as to what motivated the finance cowboys who knew the perfect storm was coming in the years leading up to 2008 – its simply all about greed.

    So I fear your hope of their self realization will never occur. That said counter examples / options are welcome.

  19. I was reading Andrew Bolts blog today, as you do, and he links to the following Quadrant article.

    http://www.quadrant.org.au/blogs/doomed-planet/2013/03/professor-bolt-and-the-dunce-quiggin

    The article attempts to summarise the back and forth argument between John Quiggin and Andrew Bolt regarding the temperature effect of Australia’s carbon tax. The article headline calls John Quiggin a dunce. Fancy calling a professor a dunce. That’s quite unkind. Anyway the author may not have written the headline.

    Why am I sharing this? I feel it is my civic duty to bring together opposing sides in any such debate.

  20. p.s. I did say a while ago that I don’t read Quadrant. But how can one pass up the chance when JQ is featured.

  21. The next time I hear someone deride climate science I am going to ask him/her what his or her science PhD is in. I won’t be surprised to discover they probably got a Fail in grade 10 science (and several other subjects) and then left school.

    Would we listen to the opinion of an illiterate person (who had also never seen a play) on the literary works of Shakespeare or Tolstoy? Why then would we listen to the opinions of science illiterates in any complex scientific field?

    We are dealing here with people who know so little they no idea of how little they know. Furthermore, it is impossible to appeal to empirical facts or logic in argument with them because they do not know what empiricism and logic are in theory or in practice.

    Andrew Bolt (I infer from the Wikipedia entry) commenced an Arts degree but left after one year by either failing or withdrawing. Thus his educational attainments must be grade 12 grades sufficient to enter an Arts course in a university. I have no way of knowing for sure but it is possible AB did no Senior (Grades 11 and 12) science subjects.

    Andrew Bolt is the worst kind of dishonest, right wing demagogue. He writes purely to appeal to prejudice not reason. He has done this not because he necessarily believes in the positions he adopts but because he has calculated this is the way to get a following and be prominent and “successful” in the journalistic field. He is an unscrupulous opportunist and does enormous damage by confirming and enabling the ignorant and prejudiced in their worst delusions and denials.

    Bolt is the equivalent of a book burner. Large volumes of validated modern science are consigned to the anti-intellectual pyre to be consumed by flames of prejudice and ignorance fanned by Bolt’s hot air bellows and furiously fanning tabloid pages.

  22. Bolt and his like fit the idea of “propagandists & pragmatists” (from a Meanjin article from 1976 on the subject):

    One general point should not escape notice. There is a remarkable correspondence in attitude to truth between pragmatists and propagandists. Both justify the promotion of false beliefs wherever it is supposed that false beliefs have socially useful consequences. Indeed the principal difference between them consists perhaps in this: the ordinary propagandist may know that he is telling lies, but the pragmatist-propagandist, having redefined truth to make it indistinguishable from propaganda, is likely to become inescapably trapped in the supposedly ‘useful’ deceptions and illusions he approves as ‘warranted assertibilities’.

  23. @Ikonoclast
    John Quiggin isnt alone in being a victim of Bolt lies and distortion in the climate area. A few years back the ABC did a program which was largely about climate change and focused around JQ’s colleague Ove Hoegh-Guldberg.

    http://www.abc.net.au/austory/content/2007/s2487313.htm

    For some reason the editor (may they rot in a Venusian Hell) saw fit to ‘balance’ the story with bilge from Bolt. I hadnt encountered Ove before but he came across as the proverbial rabbit caught in the headlights – a creature to pity.

    A couple of years later I was lucky enough to hear him present a plenary symposium to about 2000 specialists in the US – and counter to the ABC hatchet job I was stunned by a really erudite larger than life character. I subsequently grabbed Ove and confirmed over a 90 minute beer and chat session that this 4th generation Ozzie is the sort of academic throwback this country now produces too few of – eminent dedicated passionate smart and a great example I expect to his students. Oh and he is now also coordinating lead author for the forthcoming IPCC assessment report section on the oceans.

    And that fraud Bolt has the nerve to pose as an expert against the likes of him? I can only conclude the mainstream media, even the ABC, is predominantly not about truth any more in any form. Rather its about Bendable Learnings (see Weaselwords), tabloid entertainment and disseminating the excrement of a very ugly public relations propaganda community who have stolen the social discourse for third pieces of silver.

  24. Well folks, every now and again I broaden my horizons and try to see things from other people’s points of view. So, towards that end, I visited Catallaxy….

    There was one thing that really troubled me. On several occasions they unironically called out the Gillard government as being a totalitarian dictatorship and an unmitigated economic disaster in every aspect. The idea that the current government is in any way similar to those authoritarian regimes that murdered tens of millions of people is absolutely disgusting and is the lowest degree of ignorance in trying to pander to the lowest common denominator.

    And as for the imminent economic collapse spiel – let’s look at the biggest economic health measurements. Debt measures are fine. Debt:GDP ratio = 27% and deficit <1% GDP (spectacular especially when the rest of the world suffers in terrible conditions). Unemployment – 5.5% (around the natural rate). Inflation – 2% (very much in line with targets).

    The only conclusion is that those folk live in another reality and nothing useful can be gained from their "insights".

  25. @TerjeP
    I’m not interested in responding to Dawson’s silliness. However, since you’ve linked to it, and since you previously cited Bolt’s wrong number (or a similarly silly one) would you care to take a position one way or the other? I have a prediction about this.

  26. My gut suggests the orthodox view has over estimated CO2 sensitivity. I think Roger Jones probably represents the orthodox view at 0.0038 degrees but I haven’t read the paper in which he presented his logic.

    My position is that a cost benefit approach should be central to the political debate on this policy issue but that it has been largely absent.

  27. TerjeP, while your gut says the orthodox view has over estimated CO2 sensitivity, the hard, unadulterated science says the IPCC consensus view has underestimated it and also the knock-on effects and tipping points. I’ll back the brains of 1000s of top climate scientists against your gut any day.

    I hope all you denialists are consistent and don’t use doctors and hospitals. After all, hard science, statistics, probability modelling and medical consensus views are used to treat people. Gee, you can’t trust that can you? You would be better off going to non-scientific quacks and using snake oil wouldn’t you? (<– Sarcasm!)

    I mean if you were consistent you would do that.

  28. @Ikonoclast if you read the wiki as a whole, you would have noticed that Bolt left university to take up a cadetship at The Age. he worked there for many years including as their asian correspondent.

    the degree to which societies should rely on experts in democratic decisionmaking is an important issue.

    the environment movement has a long history of emotional reactions to risk, a status quo bias, and a focus on worst cases.

    the environmental movement is: unwilling to base policy on the best-available science; unwilling to engage in deliberation and compromise to balance environmental protection against other compelling social and economic interests; and unwilling to consider alternative regulatory strategies that can deliver environmental protection at least-cost.

    The very purpose of the precutionary principle is to put off basing policy on the best-available science and replacing it with fear: shoot first and ask questions later.

    cass sunstein argued that the principle is literally paralyzing – forbidding inaction, stringent regulation, and everything in between. in every case, every step, including inaction, creates a risk.

    precautionary regulation stops major benefits, and produces new risks and deaths that would otherwise not occur. the drug lag produced by a precautionary approach to the introduction of new drugs onto the market is the best example. the dead are many.

  29. you can’t have a cost benefit approach to climate change policy debate with people who deny the premise. -a.v.

  30. I hope all you denialists are consistent and don’t use doctors and hospitals.

    I reject the denialist label.

  31. “I reject the denialist label.”

    Don’t try to deny your rejectionism, Terje. 😉

  32. The temperature effect of an increase in atmospheric CO2 is well described by basic physics. The temperature sensitivity is quite low. The orthodox opinion is that there are natural positive feedback processes that amplify the effect. The size of the amplification is inferred. There is nothing wrong with this approach but to carry on like the inferred value for sensitivity is a rock solid fact is daft. It’s a prediction based on a historical trend. It is highly likely to be revised one way or another.

  33. TerjeP :
    It’s a prediction based on a historical trend.

    What utter garbage. The theory of global warming and early estimates of climate were theoretically estimated long before the historical record was known.

    Also, to deny that there is an amplification means to deny some pretty basic chemistry – such as warm air holds more moisture.

  34. Ken – where did I deny an amplification effect. I actually said it was a reasonable approach. However the size of the application effect is inferred from the historical temperature trend.

  35. As a South Australian I’d say the name Kenny is a redolent one. Tabloid in spirit and and in deed.
    I see our host has just had a birthday. It’s a good site, let’s offer a pat on the back for the man.

  36. Yes PrQ … best wishes on the anniversary of your birth. May you have many more with each more rewarding and promising than its predecessor.

  37. I was watching an interview with Bill Clinton. He is much more interesting than Obama to interview because he is both more extroverted and more introspective.

    Clinton took great pride in his roles in peace in Bosnia and in northern island. Clinton did not get a peace prize for helping Bosnians to sign a peace treaty.

    The Drone Commander in Chief got a peace prize for making speeches.

  38. The political media are indeed a joke and the Latham article, which is part of that same political media, is yet one more example. I agree completely that the failure of media reform was the big event in last week’s parliament. Why then, did it fail? Latham manages to avoid this question and manages to avoid examining the bills.

    Media reform failed because it was the product of a very poor process. As the Greens noted in their additional comments to the Senate Committee report:

    The Greens are on the record condemning the decision made by the government to impose an arbitrary timeframe for examining these bills. The Greens depart strongly from the Committee’s comment that the debate through the Convergence and Finkelstein reviews on media reform issues can be applied to this package which represents slim pickings indeed from those comprehensive reports and detailed recommendations. It is extraordinary for such important bills to be rushed, for witnesses to be given virtually no notice but expected to produce submissions and provide evidence, and for the good will and expertise of Committee secretariats to be abused quite as they have in this case.

    Bad process and lack of consultation is most of the reason for the defects in the package. The original bills had the PIMA appointed solely by the minister. That would be alarming even if Stephen Conroy was not the minister in question.

    The Brits managed to pass a media reform, over the initial opposition of their prime minister, that incorporates actual defined standards, that has an arms-length body dealing with mergers, and that incorporates a fit and proper person test.

    Tying to declare such a major reform non-negotiable and imposing a ridiculously tight deadline ensured the package was never going to pass. I think it’s known as tough as fails legislating.

  39. Alan #48, the current limit on the number of TV stations has unusual effects on media slant and the supply of muckraking. see http://mruniversity.com/courses/economics-media/does-competitiveness-lower-bias showing that more media competition by itself is not a powerful force toward news accuracy.

    In the traditional conception of the demand for news, audiences read, watch, and listen to the news in order to get information. The quality of news is its accuracy.

    But when there are many media outlets, competition results in a common slanting of news towards reader biases in the audience nice they are serving.

    on topics where reader beliefs diverge such politically divisive issues, media outlets profit from segmenting the market and slanting reports to the biases of their niche audiences.

    there is less bland truth-telling and more of the polemics that each market niche wants. this means that left-wing and right-wing media outlets will hound the political enemies of their their audience niche.

    when there are only a few media networks, they instead go for the median viewer/reader and offer a more sedate and less scandal driven coverage. politician enjoy this quiet life.

    more media competition increases the chances of the muckraking that brings down ministers and governments. a clear illustration of the power of infotainment is the Lewinsky affair. The left wing press presented information designed to excuse Clinton’s sins; the right wing press dug out details pointing to his culpability.

    politicians perfer the current restricted level of competition in the media because there will be less muckraking at their expense.

    Little wonder that the media barons were honoured supplicants to whomever is in power in Canberra. Labor’s business mates emerge whenever Labor was in power.

    Threatening to allow cable TV was the big stick in every governments hand until the mid-1990s to extract support or at least subservience from the media.

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