Monday Message Board

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please. If you would like to receive my (hopefully) regular email news, please sign up using the following link You can also follow me on Twitter @JohnQuiggin, at my Facebook public page   and at my Economics in Two Lessons page

33 thoughts on “Monday Message Board

  1. Clive Hamilton has a piece in the weekend Guardian saying the election result has been over-analysed and over-reacted to; a small number of votes the other way and the post election narrative would be totally different. This is absolutely true. He then proceeds to over-react by proposing a strong alliance between Labor and the Greens combined with a strategy to win over the kinds of affluent erstwhile Liberal voters who turfed out Tony Abbott and turfed in Zali Steggall in his place .

    There’s a few problems with his analysis.

    First, Steggall-type voters, who have elected independents in previously safe Liberal seats, have not shown any inclination to support the Labor Party. They do care about climate change. They also care about keeping their tax avoidance schemes (Steggall said she opposed the Labor Party’s tax policies on negative gearing, franking credits etc) and if you asked them would probably support the crushing of the CFMMEU.

    Second, outer suburban and regional voters, who previously voted Labor and this election voted Liberal or National either directly or indirectly via Palmer and Hanson preferences are not to going to go back to Labor if Labor gets closer to the Greens. On the contrary, Labor will probably lose even more of these voters if it does. This follows from Hamilton’s analysis, though he doesn’t join the dots. He said that Adani and such like is really one front in a broader cultural cleavage, which is true. But Labor isn’t going to win back its ex voters who are on the other side of these cultural issues to the Greens by getting closer to the Greens.

    To win a majority Labor needs votes from people who are completely alienated from each other on cultural grounds. This is a big ask.

  2. The prospect of the Libra seems interesting news as Facebook has 2.8 billion subscribers. The article below from Project Syndicate is very negative on this prospect – it wants the innovation stopped – but I am confused myself.

    The value of the Libra is apparently to be pegged to a basket of currencies. I assume you buy 100 Libra for a certain number of US (or perhaps Australian dollars) and these dollars are deposited in a reserve account. I have been told that Libras are 100% backed by reserves. Then it can act as a medium of international exchange that presumably competes with major currencies. Is that so? If so how can a “run” on the Libra occur as the author below suggests is possible.

    It seems a prospect with major international consequences. I’d be interested in views from people who know a bit about this.

  3. “To win a majority Labor needs votes from people who are completely alienated from each other on cultural grounds. This is a big ask.”

    Yes. This is a dilemma for most social democratic parties, made more complex by the fact that in most democratic jurisdictions they are being squeezed by parties that find it easier to appeal to one side or the other of those cultural divisions. In Australia there is no reason to expect either the Greens on one side or the UAP/ONP-type parties on the other side to quickly cease winning enough votes to deprive Labor of a majority. The emergence of some organised party-political expression of what Zali Steggall represents would only complicate things further.

  4. “This is a dilemma for most social democratic parties”

    The Labor Party has done well to still exist, though this may be due to the electoral system which helps keeps the old established parties in place. Throughout Europe the social democratic parties either actually or effectively no longer exist (France, Italy, Greece) or are well on the way (Germany).

  5. Smith 9, According to the Project Syndicate piece the problem is that sovereign governments would not be likely to come to the rescue of a collapsing Libra. S I guess people lose confidence in The libra and wish to get, say, US dollars for their Libra. :

    “He also needs a commitment from governments to enforce the web of contractual relations underpinning the currency, and to endorse the use of their own currencies as collateral. Should Libra ever face a run, central banks would be obliged to provide liquidity”.

    This does not seem the reflect the lack of will by Facebook but by Central Banks.

  6. Insert an ***ISM, and now – university-ISM.
    Via civilisation-ISM via Paul Ramsay-ISM [ cash for kulcha-ism ] all in “the best interests of the university”.

    “”By approving the degree the council has acted in the best interests of the university,” she said in a statement. “It will enable progress to continue despite any continuing legal challenge to the vice-chancellor’s earlier approval decision.”

    Woolonging Uni and Jillian Broadbent seems to have taken “students should participate, at however humble a level,” literally and has forgotten;
    “The function of the university was to advance knowledge by original and critical investigation, not just to transmit the legacy of the past or to teach skills. Teaching should be based on the disinterested search for truth, and students should participate, at however humble a level, in this search. Hence the classic view that the university was a ‘community of scholars and students’ engaged on a common task. ”

    “Humboldt argued that universities did their work best, and were most useful to society and the state, when they were isolated from immediate external pressures. Although the nineteenth century was the golden age of laissez-faire capitalism, no-one then suggested that universities should be run as commercial organizations.”

  7. Harry

    either way, it’s a huge risk. Facebook has 2.5 billion users, and that doesn’t count Instagram and WhatsApp. It’s not hard to imagine all those users having 20 trillion dollars worth of Libra. If they all rush to the exits all at once, oy vey.

  8. Smith9

    Possibly I have misunderstood you (in which case I would appreciate clarification), but it seems to me that you are suggesting the following points:

    (1) There are two different groups of voters (each of which you describe specifically)
    (2) which are alienated from each other on cultural grounds
    (3) and both of which are currently favouring the Coalition over Labor
    (4) and both of which Labor needs to attract more support from in order to win elections
    (5) which is going to be difficult.

    I’m not sure that all of these things are true, but they might be: however, if they are all true, there is another point which stands out to me as having been left out of the analysis, namely, that (if the analysis is correct) the Coalition is currently succeeding in doing exactly the thing which (it is being suggested) is so difficult for Labor, namely, attracting support from both the groups indicated. Is there some basis for supposing, not merely that this is a difficult task, but that it is more difficult for Labor than it is for the Coalition?

  9. J-D
    (1) requires qualification. There are two groups of voters who do or did vote Labor either directly or by preference, which might crudely be called the Green Left and the working class. But there are also other groups of voters, including the upper middle class environmentally aware who used to vote Liberal but now independent, and there’s the voters who always did and always will vote Coalition

    (3) is not correct, since one of these groups votes Labor and the other the Coalition. (Obviously not all working class voters vote coalition, but enough of them to change enough seats.)

    The Coalition doesn’t have a cultural clash problem because it has succeeded in putting together a majority with the suburban-regionals, while sacrificing affluent seats (such as Warringah and Mayo) with others going from safe to not-to-safe or marginal.

    It would be interesting to see average income levels in Coalition versus non-Coalition seats. Coalition is probably higher, but not by as much as it was in the old days.

  10. rog

    That judgment (without having read it) would seem to follow from the time when Joe Gutnick sued for defamation and the High Court said that just because a defamatory statement is made using new technology doesn’t stop it being defamatory.

    Now, if Facebook itself could be sued for what is published on Facebook, that would be a game changer.

  11. Harry Clarke,

    I am no expert on crypto and token currencies. I can only give my lay opinions.

    It appears that the Libra will be a token currency not a crypto currency but you are probably aware of this. It’s being based on a basket of currencies is interesting. I can only guess that if the basket is constructed to match the currencies used to buy Libra and to match their volumes then average purchasers of Libras (each using one currency presumably) will be taking the currency risk not Facebook.

    Will Facebook keep 100% reserves? If they do there can be no run on reserves that would actually over-draw reserves, one would think. But how much creative accounting could Facebook do at any point in time and would the fund be hermetically quarantined from all other Facebook finances? Could Facebook put the fund in “safe” US government bonds and earn some interest? Then it’s safe as long as US bonds are safe and honoured. Will that be forever?

    It’s hard to see a token currency pegged to a basket being the subject of speculation. It’s pegged to the basket. How can it get any other value? But maybe I am missing something there.

    The bigger picture, in my view, is corporations seeking to supersede government fiat currency. But that would require (in this case) converting Libra from a token currency into a crypto currency. That might be Facebook’s long term plan. They could even sugarcoat the conversion by adding a premium to holders of the token currency at conversion. After that it becomes a speculative crypto currency. If corporations get cryptos strong enough they could conceivably obsolete government fiat currencies starting with the weakest fiat currencies first. The long term game is full corporate control of the global economy and the money system with the obsoleting of government. Not saying they will get there but that is the logical end goal for corporate oligarchs.

  12. Smith9

    I’m sure you intended that as clarification, but the effect on me was the opposite. I now have no idea what your point is. I suspect vaguely that you’re suggesting some reason why it’s harder for Labor to put together a majority than it is for the Coalition (although I’m not confident I’ve got even that much right), but I can form no clear understanding of what that reason is supposed to be.

    (I understand that at the most recent election the Coalition did succeed in putting together a majority, whereas Labor did not: but at Australian elections it’s usual for one of them to put together a majority, and by definition when the Coalition does Labor does not; conversely, when Labor does the Coalition does not. That election results are asymmetrical in this way is a mathematical necessity and therefore does not support any particular further interesting conclusions.)

  13. J-D

    It’s not just one election. Since 1993 the Labor Party has put together a majority once. 1993, not coincidentally, was when the Greens emerged as a political force in federal politics. Labor has the Sisyphean task of winning Green Left voters and working class cultural conservatives. This is extremely difficult which is why it is the party of near-permanent Opposition.

    At the state level, by the way, this problem does not arise because culture issues are not important. Indeed cultural conservatives want their state government services (schools, hospitals, transport) which Labor is good at delivering (better than the alternative in any case) so the cc’s vote Labor in state elections. Just look at Queensland. There are huge numbers of people who vote LNP (or give them their preference) federally while cheerfully voting Labor at state polls.

  14. Smith9

    If there were a situation where it was difficult or impossible for Labor to put together a majority without attracting the support of both the group you describe as ‘Green Left voters’ and the group you describe as ‘working class cultural conservatives’, but it was not equally difficult for the Coalition to do so, then that would predict or explain a situation in which the Coalition wins more elections (and more easily) than Labor. But in that situation, there would have to be a reason why it was harder for Labor than it was for the Coalition to put together a majority without attracting the support of both those groups, and I’m getting no idea from your comments of what you think that reason would be.

    On the other hand, if there were a situation where the Coalition could easily put together a majority without attracting the support of both the groups described, but Labor couldn’t, there would have to be a reason for that, and I’m getting no idea from your comments of what you think that reason would be.

  15. J-D

    The Coalition doesn’t need Green Left voters and doesn’t try to get them because they will never vote for them. The Coalition can and does put together a majority by attracting working class cultural conservatives and traditional conservatives (who will always vote for them). The Coalition’s job is easier because the people it needs to attract to make a majority don’t hate each other.

  16. So what you’re saying is that Labor needs to attract both of these groups which (or so you’re saying) hate each other; but the Coalition doesn’t need to attract both of them. Still unanswered is the question: why is is possible for the Coalition to achieve a majority without attracting both of these groups, but not possible for Labor?

  17. Because traditional conservatives + enough working class cultural conservatives > 50%. This is the winning formula for the Coalition.

  18. Net zero update:
    Updatable page at Climate Home listing countries with net zero emissions targets: ***

    EV update: EV car sales in China broke through 5% in the first 5 months of 2019, reaching 5.6%. (*** Whatever you can say about the ambiguities and twists of Chinese policy on coal and PV solar, it’s very clear for carmakers: go electric or die.

    What about vehicles other than cars? The electric share for vans and other light commercial vehicles (under 6 tonnes) is slightly higher than for cars: Reuters say 6% (**** “Nearly two dozen” Chinese cities have aggressive pollution policies that are reinforcing government subsidy carrots with pointy sticks.

    For heavy vehicles, there is a sharp contrast between buses and trucks. Electric buses have captured 90% of the city bus market in China, say a quarter of the total, and are flatlining around 90,000 sales a year (**** The busmakers are presumably figuring out how to woo the many rural bus operators making up the larger slice of the market pie. I imagine these customers are more demanding on range, have lower technical and financial resources, are more conservative culturally, and are under much less pressure from local authorities on pollution. Yutong and BYD will surely find a way as prices drop.

    Nobody SFIK sells an electric heavy truck in volume anywhere. The one that could be made today, or any time in the last decade, is a hybrid with electric motors, a battery big enough for the last five miles in cities, and an efficient ICE range extender. For some reason the proposition has not been attractive and everybody is waiting for cheaper and denser batteries for pure BEV trucks. Outside China, Mercedes and Volvo (maybe others) have 25-tonne medium truck prototypes in field trials with real customers. These vehicles are targeted at big-box retailers and distributors with fixed hub-and-spoke routes that can be covered with 100 miles or so of range. Long-distance cross-country trucking requires much more than this, plus a very high-power 1 MW recharging network – a garage extension cord will not cut it. With typical orneriness, Tesla have gone straight for this maximum goal, and have pre-orders for their planned Semi, but no vehicles with customers nor an announced plan for the chargers. My guess is that Tesla have got this one wrong and the incremental strategy of their rivals will win out.

    Battery update: the Fraunhofer IWS institute in Dresden has announced a method to make electrodes for lithium-ion and other batteries by high-pressure calendering, replacing wet paste with a temporary polymer matrix (*** Not only does this save the energy used in drying the paste, it opens the door to chemistries where wet solvents are impossible. A pilot plant is being set up in Finland. IMEC in Belgium, meanwhile, tout advances in solid electrolytes (***

    I’m not qualified to assess quite how significant these advances are. But both institutions are reputable, focussed on workable manufacturing improvements not blue sky lab results, and being in the public sector they lack commercial incentives to hype their work beyond what professional status suggests. The general picture is that batteries will continue to get better as well as cheaper.

    A curiosity: the Fraunhofer technology for making electrodes is a development of that used to coat magnetic recording tape. Remember that?

    Welcome back to the Message Board!

  19. The Sturm und Drang about Israel Folau, and the fundraising for his legal fees, and what his wife said in his support proves – incontrovertibly, unquestionably, irrefutably – that the country has reached peak stupid.

    Social media is the catalyst. It has enabled a non-story that no one should care about except the parties directly involved, into a completely contrived new front in the culture wars with one Pavlovian response setting off the next, ad nauseum.

    Social media has truly de-evolution of the human brain, but instead of taking millions of years it has happened in 10 years. FMD.

  20. The Coalition doesn’t need Green Left voters and doesn’t try to get them because they will never vote for them.

    If this is true (I’m not saying that it isn’t true; this is something I simply don’t know), then Labor does not need to do anything at all to attract the support of these voters; and if Labor does nothing to attract their support, how would that cause problems for Labor in attracting the support of other voters?

    If the total electorate can accurately be broken down as follows:
    a group (or a number of groups) which will never prefer Labor over the Coalition (thus, the Coalition base vote);
    a group (or a number of groups) which will never prefer the Coalition over Labor (thus, the Labor base vote);
    a number of groups which might go either way (the marginal or swinging vote)

    –then either the Labor base and the Coalition base are approximately equal in size, or one is significantly larger than the other.

    If one side has a significantly larger base than the other, then that is their structural advantage (regardless of the composition of the marginal vote), and there is a question about why one side has a significantly larger base than the other. In that situation, the reason why conflicting attitudes between different groups of swinging voters is a bigger problem for one side than the other is because one side has a smaller base than the other, and it’s that which is their disadvantage.

    If both sides have bases which are roughly quantitatively equivalent, then conflicting attitudes between different groups of swinging voters should be a problem for both sides to approximately the same extent.

  21. “if Labor does nothing to attract their support, how would that cause problems for Labor in attracting the support of other voters?”

    If Labor does nothing to attract their support, then it might lose seats to the Greens. Now some not in the Labor Party might argue, who cares?, all that matters is the total Labor + Greens seats. But the Labor Party cares, as seen by the effort it makes in defending its inner city seats from the Greens. But the more it does this, the more vulnerable it is to losing the cultural conservative working class.

    So we had Bill Shorten taking an excruciating line on Adani, trying to please both camps, and in the end pleasing neither.

    The notion that Labor and the Greens can get together in some kind of pseudo-coalition is a fantasy. Aside from the voters in the suburbs and regions who would be alienated, it’s not going to happen because the Labor Right hate the Greens ideologically and the Labor Left hate the Greens personally, and vice versa, in yet another example of Freud’s narcissism of small differences.

  22. Smith, I totally get your argument. What confuses me is that (historically) much of the left leaning or “progressive” policy proposals (eg social, environmental & humanitarian reforms) up for debate within entire ALP establishment often stem from the unions or at least their input is often reported (newsworthy).
    I could be misinterpreting that or the union leaderships might have a given license to offer such input without seeking the blessing of their “cultural conservative working class” membership?

  23. Smith9

    If your analysis is correct, then it indicates an underlying comparative disadvantage for Labor in that it faces significant competition from the Greens for seats in the House of Representatives whereas the Coalition does not face equally significant corresponding competition from another party or political force (or, at least, that the Coalition has not chosen to be as concerned about such competition as Labor is about competition from the Greens).

    That seems plausible. If there was another party of similar strength to the Greens which threatened to win Coalition-held seats (and if the Coalition chose to be concerned about that competition) then the Coalition would have to make more effort to appeal to voters in those seats who might otherwise be attracted to that hypothetical party, and there might be tension between pursuing that goal and the goal of appealing to marginal/swinging voters. In fact, that seems a reasonable description of what happened in Queensland when support for One Nation was at its height.

    However, so far, the Coalition at the Federal level hasn’t yet faced that kind of competition from another party. It hasn’t even been a concern consistently at the State level. The Coalition has faced more competition from Independent candidates than Labor has, but structurally that’s a different phenomenon.

    Who knows what will happen next, though? The structure of the Australian party system has remained stable over a period of instability in many other countries’ systems, but we may yet be about to share in some of their experiences.

  24. Troy Prideaux, your history is at best selectively true.

    For a time in the 1970s Jack Egerton of the AWU was federal president of the ALP. During a national conference he was in the chair when a motion supporting gay rights was debated. When the vote was taken on whether to support the motion he said “all those [p-word, plural] who are in favour raise your hands”.

    (In early 1976, shortly after the Dismissal, Egerton was forced to leave the party after accepting a knighthood from Malcolm Fraser).

  25. Yeah, I was actually referring to the last decade; apologies for not stating that.

  26. Paul Norton

    all very interesting, but the game is different with proportional representation systems. Not only is there is a different mapping of votes into seats, but because there is a different mapping, people vote differently. With PR, voting for party X is more meaningful because party X really could elected.

    And, of course, the Nordic countries are different. They are the only countries in the democratic world where the centre-left parties are and have been the natural parties of government. (Maybe you could add Portugal.)

  27. JQ I’d love to read your reciew if this paper.

    “Market Expectations About Climate Change
    Wolfram Schlenker, Charles A Taylor

    NBER Working Paper No. 25554
    Issued in February 2019
    NBER Program(s):Environment and Energy Economics 

    “An emerging literature examines how agents update their beliefs about climate change. Most studies have relied on indirect belief measures or opinion polls. We analyze a direct measure: prices of financial products whose payouts are tied to future weather outcomes. We compare these market expectations to climate model output for the years 2002 to 2018 as well as observed weather station data across eight cities in the US. All datasets show statistically significant and comparable warming trends. Nonparametric estimates suggest that trends in weather markets follow climate model predictions and are not based on shorter-term variation in observed weather station data. When money is at stake, agents are accurately anticipating warming trends in line with the scientific consensus of climate models.”

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