Author: John Quiggin

Climate and catastrophe (updated)

John Quiggin58 Comments

The National Snow and Ice Data Center (NSIDC) has just announced that Arctic ice cover has reached its minimum extent for 2012, far below the previous record[1]. Peter Doherty discusses some of the implications here. As far as the broader debate about climate change is concerned, there are some big implications.

* First, this is irrefutable evidence that the climate is changing, and that the idea that climate change stopped or slowed down after 1998 or 1995, as delusionists have regularly claimed, is nonsense. On the contrary, the loss of Arctic ice is accelerating, far ahead of model predictions{2] In this context, I have yet to see any “sceptics” actually accept the evidence proving them wrong. But, with a handful of exceptions, we have silence rather than the usual rash of talking points to explain the evidence away. A notable example is Andrew Bolt, who ran lots of posts claiming there was no problem (most recently here), but hasn’t mentioned the topic since the minimum extent record was broken nearly a month ago.

Update While the blog was off-air, Bolt came up with a snark about the Antarctic, which presumably is supposed to offset the long string of posts he made claiming that there was no problem in the Arctic. As usual, Bolt’s talking point has already been debunked, here at Skeptical Science, but you can do it yourself. Compare Bolt’s graph of the Antarctic, showing a small increase in the winter maximum, to the NSIDC graph of the Arctic showing the summer minimum collapsing. End update

* Second, the “catastrophic” part of the delusionists favorite acronym “Catastrophic Anthropogenic Global Warming” is looking a lot more likely. Not only will an ice-free Arctic produce a bunch of feedbacks that accelerate warming, but it will substantially affect climate conditions in Northern Europe, though exactly how remains to be seen.

On the other side of the coin, there’s one predicted catastrophe that didn’t happen. As elsewhere in the world, the introduction of the carbon tax did not “send a wrecking ball through the economy”. In fact, adverse effects are barely detectable. Of course, a lot more action is needed, but the near-universal view of economists that the cost of stabilising the global climate will be of the order of 1 per cent of income is certainly supported by the evidence from the initial steps in this direction.

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How Europe Saved Obama

John Quiggin18 Comments

That’s the title of a piece that I wrote for the National Interest, responding to the ECB decision to undertake unlimited bond purchases. There’s been lots of news since then (on which I’ll write if I get time), but it only confirms the key point – Romney’s dwindling chances relied heavily on a European economic crisis happening before November, and that is now highly unlikely. The key paras

When Barack Obama celebrates his second inauguration next January, the man who did most to ensure his election victory is not likely to be there. But perhaps the president should make a note to reserve a seat for the head of the European Central Bank.

With no convention bounce and little prospect of a convincing win in presidential debates, challenger Mitt Romney’s hopes have been centered on an October surprise. Under the current circumstances, that means an economic shock sufficient to discredit Obama’s promise of a slow but steady recovery from the economic crisis. Until last week, that shock seemed likely to come from Europe. The possibility of a Greek exit from the euro, seemingly off the agenda a few months ago, had reemerged as a major factor in the investment plans of U.S. companies.
…
Last week, however, new ECB president Mario Draghi finally bit the bullet. Announcing that “the euro is irreversible,” Draghi committed the ECB to unlimited purchases of government bonds. Weidmann, the sole dissenter on the ECB board, has so far not carried out his threat to resign.

The ECB decision marks an effective end to the euro-zone sovereign-debt crisis, though not to the European depression or to the failed policies of austerity. At best, the euro zone is now in the same position as the United States and Britain: there is the prospect of a sluggish recovery but no immediate danger of collapse. A true recovery will require both a shift in central banking policy from targeting inflation to targeting nominal GDP, which looks a bit likelier now, and a shift from austerity to fiscal stimulus, which does not.

Debating Judith Sloan on labor markets

John Quiggin70 Comments

Yesterday I took part in a debate with Judith Sloan, organised by the Economic Society of Australia, on the topic of labor market regulation. Before commencing, Judith paid me the backhanded compliment of saying that debating me was “like wrestling an eel”. I’ll take the complimentary part of the implication as “very difficult to beat”, while rejecting the suggestion that I’m prone to slipping from one position from another. I admit that I haven’t maintained the exact consistency of those market liberals (like Sloan) whose views appear to have remained unchanged since abotu 1980, but there has been a lot of data since then, some of it supporting the case for market liberalism but a lot going the other way.

My slides for the debate are online in PDF format and also Keynote for Mac.

The Dark Lord of Queensland politics is …

John Quiggin27 Comments

Me! At least according to Shadow Treasurer, Curtis Pitt, who observes, of Queensland Treasurer, Tim Nicholls:

there is one name the Treasurer won’t dare speak—the Treasurer’s own Lord Voldemort Professor John Quiggin. He does not want to draw attention to the analysis by the Federation Fellow, because it is a truly independent analysis—one which puts a sword to the Costello audit.

Seriously, I do seem to have this effect on Treasurers. Nicholls’ predecessor, Andrew Fraser was equally unwilling to speak my name or face me in debate. And Peter Costello, admittedly an ex-Treasurer, but one who held the position for twelve years, declined to respond to my critique.

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Some unsolicited advice for Campbell Newman

John Quiggin58 Comments

If I had just won an overwhelming election victory by defeating a government that had
(i) dumped its election commitments in an effort to reduce public debt and restore a AAA rating
(ii) made a mess of the public hospital system

I could think of lots of things I might do after taking office. But there are two things I definitely wouldn’t do …

Big Brother kills literary awards: the Newman government in a nutshell

John Quiggin21 Comments

The sum of money isn’t huge[1], but if you want to sum up the Newman government in a single policy decision, it’s this: to save $200k, they could either scrap the Premier’s Literary Awards or withdraw a promised grant to fund the next series of Big Brother. Of course, they went for Big Brother, and boasted about it.

Update Although the funding is gone, the Premier-free Queensland Literary Awards have gone ahead, with a win for Frank Moorhouse, who has just brought out the final volume in the trilogy that began with Grand Days. I’m very keen to read this – the first two books were superb.

fn1. Compared, for example, to the $100 million they splashed on vanity projects for the racing industry which could have saved the jobs of of 1000 or so nurses.

Queensland budget – profligacy for everyone except the PS

John Quiggin18 Comments

Queensland Treasurer Tim Nicholls has just brought down his first budget, following the announcement by Premier Campbell Newman of massive public service job cuts justified by apocalyptic rhetoric. Yet apart from those job cuts, the budget (in combination with measures announced previously) doesn’t show much in the way of fiscal discipline. Among the most glaring examples

* An $80 handout to all households, with no targeting, nominally to offset water bills
* A previously announced freeze on electricity prices for households, paid for out of general revenue
* The replacement of the $7000 first home buyers grant with a $15 000 grant for buyers of new homes
* Handouts to tourism, racing and other sectors

Measures like this are par for the course for state budgets, but not what you’d expect from a government faced with a fiscal crisis, comparable to Greece or Spain.

The government has fiddled at the edges on revenue, but is doing nothing (or even adding to the distortionary concessions) on payroll tax and land tax.

In essence, the government is relying almost entirely on cuts to the public service, focused on the health sector. This is a high-risk strategy to put it mildly. It may well be that the health bureaucracy is bloated and inefficient, but that doesn’t mean that creating a new layer of regional management is going to improve things, especially when their first task is to implement arbitary cuts in the number of nurses and other employees. Campbell Newman says his promise that “frontline jobs are safe” now means “frontline services won’t be affected by job cuts” but this is just wishful thinking. There hasn’t been any analysis of how to improve efficiency, just an edict that numbers need to be cut.

In these circumstances, it’s virtually inevitable that waiting lists will blow out. And inevitably, when you have long waiting lists, people will die waiting. At that point, the question will be whether the government can hold its nerve and admit that it was lying about the frontline services, or whether we’ll see expensive panic measures to fix the problem.