Author: John Quiggin

Good news!

John Quiggin9 Comments

The Waxman-Markey American Clean Energy and Security Act bill, establishing an emissions trading scheme for the US, has been passed by the US House of Representatives. The vote was close, and depended on the last vestiges of bipartisanship, with the 219-212 majority depending on 8 Republicans willing to save the planet (44 Democrats voted against, a few because they thought the bill was too weak). Since good actions by Republicans are so rare nowadays, I’ll salute all eight, as listed here Bono Mack (Calif), Castle (Del.), LoBiondo (NJ), McHugh (NY), Reichert (Wash.), Smith (NJ), Lance (NJ), Kirk (Ill.). My guess is that the narrowness of the majority is a little misleading. In cases like this, the Administration cuts enough deals to get a majority, but usually has a few votes in reserve.

I have no idea how things will go in the Senate, but I’m feeling optimistic that the bill will pass in the end. The Lieberman-Warner bill got 48 votes in 2008 (including 7 Reps) and the Senate is a lot better now than it was then.

Of course, this good news has the implication that Australia could be left at the back of the pack, among the last developed countries to sign on to emissions trading. That’s the price of having a delusional and disfunctional opposition, and of the Labor backroom deals that managed to give Steven Fielding the balance of power in the Senate.

The secret state and public buildings

John Quiggin4 Comments
.!.

Given that we’ve been discussing the transparency or otherwise of public processes, I was interested to get an email saying that ASIO is to get a new headquarters, built on the shores of Lake Burley Griffin. Apparently the public consultation process consisted of some documents posted, for the statutory 10 days, on a Dept of Finance website under the title ‘EPBC referral 2009/8414 Commonwealth new building project’. The project was quietly approved by the Howard Government in 2005 and exempted from oversight by the joint parliamentary public works committee. The Rudd Government continued the secrecy.

You can get links to more info here.

Probity and economic liberalism

John Quiggin159 Comments

Coming out of the utegate/emailgate fiasco, I’ve seen a lot of variants on the claim that interventionist policies, like OzCar, are conducive to corruption, while economic liberalism reduces the scope for wrongdoing. I’ll just offer a few observations (readers with access to Google can fill in the details).

* If the standard of behavior implicit in criticism of Wayne Swan were applied to the Howard government, hardly any minister in that government could have remained in office. That particularly includes Howard and Turnbull.

* The Howard government breached standards of public probity on a scale never before seen with an Australian government, and approached only by the later years of Hawke-Keating and the worst of state governments. Not only did numerous ministers engage in activity that personally enriched them, and would have been regarded as corrupt in any preceding government, but the government consistently undermined the integrity of the public service, engaged in cronyism to an unprecedented extent and (Howard in particular) lied consistently and shamelessly. With relatively few exceptions, economic liberals didn’t complain about this.

* The Thatcher-Major, Reagan and Bush II governments were among the most sleazy and corrupt in the modern history of the UK and US (Clinton, Bush I and Blair were marginally better).*

In summary, the idea that economic liberalism goes with high standards of public probity doesn’t pass the laugh test.

* Defenders of economic liberalism may wish to disclaim one or more of these. But I’m not going to respond, except with derision, to anyone who tries to dodge the issue by any of the standard excuses familiar from apologists for the failure of Communism: never really tried, the fault of the individuals not the theory, etc.Meet the Browns film

Kruistocht in spijkerbroek psp

Refuted economic doctrines #9: Real Business Cycle Theory

John Quiggin12 Comments

Yet another in my series of articles on economic theories, empirical hypotheses and policy programs that have been refuted, or undermined, by the Global Financial Crisis. This one, on Real Business Cycle Theory, is a bit econowonkish, but I’m putting it up here because
(a) I hope some econowonks among the readers might find errors and correct me
(b) Judging by some other recent commentary, RBC still has some interest.

* As indeed, they have. My suggestion of a link between calibration and the GMM has been roundly refuted both here and at Crooked Timber. I can only say, it seemed like a good idea at the time. Thanks for the very useful comments on this point, and on RBC more generally.

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Don't free Mickey

John Quiggin9 Comments

I doubt that this is exactly what Ross Douthat had in mind, but I have been thinking for a while about one version of extending the duration of a limited-scope copyright. I’d support a proposal that gave Disney unlimited duration ownership of Mickey Mouse and similar characters, both for economic and political reasons. The political reason is straightforward: if Disney got its own side deal, they would have no reason to keep up the push for indefinite extensions of copyright for books and other things I actually care about.

The economic reason is that Mickey Mouse is not a character in a black and white cartoon produced in the 1920s (and cribbed off someone else, IIRC), and his copyright protection does not (except incidentally) act to restrict people who want to reproduce or adapt Steamboat Willie today.

Mickey is, in the terminology of the industry, a franchise. Disney puts millions into producing and promoting Mickey every year, and reaps even more millions as a result. I think it’s plausible to claim that each individual franchise of this kind is a natural monopoly, and that we would be less well served with multiple Mickey suppliers, as opposed to competing franchises like Bugs Bunny (there’s an analogy here with the debate over sporting teams and leagues which I’m too lazy/busy to work out in full). So, I’d be happy to allow Disney, Warner Bros, DC, Marvel and so on to have permanent rights over their characters, as long as they kept on using them.

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Costello's moment ?

John Quiggin20 Comments

With Turnbull seemingly doomed, the great sport of Costello-watching gets one last (or maybe not) run onto the field. Will the Libs turn in desperation to the Eternal Bridesmaid, and persuade him to return to the fray? There is a favorable recent precedent with the WA Libs, who persuaded Colin Barnett to reverse a decision to quit, and went on to gain office under his leadership.I’ve never rated Costello, but then, I didn’t (and don’t) think much of Barnett, either.

The big problem for the Libs, I think, is that the Grech scandal goes a long way deeper than Turnbull. Eric Abetz and Joe Hockey are obviously implicated, for example, and the chain of links seems likely to go to Costello as well. And while, as numerous commenters have pointed out, leaks from public servants to Opposition politicians are not that unusual, each such leak constitutes a criminal offence. It’s the kind of thing that “everybody does” from time to time, but it’s only OK if you don’t get caught. Add forgery to the mix, and you’ve got a disaster.

People power and its limits

John Quiggin17 Comments

The authorities in Iran seem to have succeeded in suppressing popular protests for the moment. More generally, it seems clear that “people power” has its limits, summarised by the aphorism that a successful revolution consists of kicking in an open door. That is, if a state is divided, unsure of itself and illegitimate even in its own eyes, a manifestation of mass opposition will be enough to bring it down. But a coherent ruling group, confident of its own rightness and willing to use force against its opponents, can retain power even in the face of a strongly mobilised majority of the public. It remains to be seen which of these analyses applies in Iran.

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