Author: John Quiggin

A nice round figure

John Quiggin33 Comments

According the Bureau of Economic Analysis, US household saving was 0.0 per cent of income in June. I was going to boast that we in Australia were doing better, having had negative savings for several years now, but a check over at General Glut’s Globblog informs me that the ABS figure deducts depreciation of privately owned housing (correctly in my view,though others disagree) while the US does not. Both measures omit capital gains, and the validity or otherwise of doing so is central to any assessment of the sustainability of the present economic trajectory.

Regardless of this, the collapse of household saving in the English-speaking countries suggests to me that, with deregulated capital markets, the low real interest rates that have prevailed recently, particularly in the US, are not consistent with any significantly positive savings rate. It follows that such low interest rates can be sustained only so long as someone else is saving: either households without easy access to credit or foreign governments. Business may save some of the time, but low interest rates make borrowing for speculative investment quite attractive I can’t see this lasting too long, and therefore conclude that real interest rates have to rise.

Morris Who?

John Quiggin38 Comments

New South Wales has a new premier, someone sufficiently obscure (to me, at any rate) that his name didn’t even occur to me when I thought about possible successors to Bob Carr last week, and suggested that the NSW machine would do well to look outside their own ranks. Instead, they’ve picked someone who’s been a minister for two years, and whose main claim to fame is that he’s a protege of Graham Richardson. Having done so, they managed to fix up an uncontested appointment, apparently under the impression that voters are worried by any suggestion that their rulers might not only believe in democracy but practice it from time to time. I’ve seen many instances of this kind of deal, but can’t recall any that led to electoral success. And, given that Iemma’s first action was to sack his deputy, I doubt that this will turn out to be an exception.

What thought process can have led the Sussex Street machine to think this was a good idea? Given the absence of any obvious candidate, wouldn’t it have been a good idea to leave this one to the Caucus to sort out. Even pure self-interest might have suggested keeping their nose out. In the quite likely event that Labor loses the next election, the machine will certainly cop a large share of the blame, whereas, should they win, the credit will go to Iemma personally.

I think this is yet another instance of the hammer-nail problem. What the machine does is stitch up deals, so any problem looks like the occasion for a stitch-up.

The real de facto ban

John Quiggin5 Comments

The widely circulated claim that the antimalarial use of DDT has been banned, costing millions of lives, seems finally to have been refuted (score one for the self-correcting blogosphere!). For those who haven’t followed this one, here’s one of my contributions, with links.

The last line of treat for this argument is the claim that there is a “de facto” ban on antimalarial use of DDT (agricultural use is banned, and a good thing too, since this builds up resistance). Tim Lambert nails this one, assisted in a lengthy comments thread by Ian Gould, a regular commenter on this site also.

There is a sense, though, in which all antimalarial strategies are subject to a de facto ban: there simply isn’t enough money to implement them. The Roll Back Malaria partnership has a comprehensive program to halve the burden of malaria by 2010, which could be implemented for a fraction of the cost of the Iraq War (or, to be evenhanded with the examples, the EU Common Agricultural Policy), but it’s almost certainly not going to happen.

What I’ve been reading

John Quiggin8 Comments

I’ve decided to do a pre-announcement review of the candidates for the 2005 Hugo Award for best novel. I’ll post a draft before too long, I hope.

But one vision of the future disturbs me. I was reading Charles Stross’ Iron Sunrise (a strong contender, but I liked his Singularity Sky better), set in the 24th century, and he introduces a character who had inherited the masthead of The Times and announced his profession as “warblogger”.

I don’t really suppose our little virtual community is going to last a thousand years, or even 300, but just in case, can’t we find some way to agree on a better name than “blogger”?

Credit where it’s due

John Quiggin10 Comments

Via Harry’s Place, it appears that the US is going to be evicted from its base in Uzbekistan. Although no reason has been given, it’s reasonable to assume that the Karimov dictatorship objects to US pressure for an investigation into the Andijan massacre.

This is unequivocally good news, and the Bush Administration should be given due credit for not backing down. There’s no mention of the policy of extraordinary renditions (shipping suspects to Karimov’s torture chambers for interrogation), but now that his regime is openly hostile, it is to be hoped that this dreadful practice will cease also.

Cultural criticism

John Quiggin17 Comments

My review of Affluenza by Clive Hamilton and Richard Denniss was in yesterday’s Fin (subscription only). Thanks to all who commented on the earlier draft.

One point that attracts a strong reaction whenever I make it refers to

the vigorous hostile reaction to arguments of this kind. Although this reaction is often phrased in terms of attacks on ‘paternalism’ or (switching genders) the ‘Nanny State’ it is notable that policy proposals for differential taxes on luxury goods attract far less hostility than do purely cultural critiques of excessive consumption. The former threaten only the hip pocket of luxury consumers, while the latter threatens their sense of self-worth.

The response is typically along the lines of “My self worth is fine: I just object to people giving me unsolicited advice to change my lifestyle.”

Well, let’s see. In the time it took me to, read the book, write this review and get it published, I’d say I received at least thirty phone calls from people suggesting that I needed their services in relation to mortgage refinancing, negatively geared investments, telephone plans and so on. I was presented with hundreds of advertisements on TV and the Internet suggesting that I should consume more of just about everything. Even walking down the street, I’m presented with billboards, direct solicitations and so on, all with the same message. And, then, of course, there’s spam. Yet half the blogosphere seems to be upset by the mere existence of a book suggesting they are spending too much.

I don’t object to the TV ads: if I want to watch AFL on TV, it has to be paid for, and the ads are part of the deal. And as long as I don’t get hit with sneaky pop-ups and so on, the same is pretty much true for Internet ads, though I tend to avoid ad-heavy sites, and only run into them by mistake. But if I accept TV and Internet ads a straightforward commercial transaction – my attention as long as the ads can hold it, in return for the content it’s bundled with – then the billboards, spammers and phone pests aren’t just annoyances, they’re thieves, trying to take my valuable attention without paying me for it.

With the exception of spammers and phone pests[1], I don’t have a strong objection to advertising in general, though some examples annoy me. Still, when I see people complaining about the coercive nature of Clive Hamilton’s arguments, I have to wonder if they’re living in the same country as I am.

fn1. I’ve signed up for the ADMA “Do not call” list, but this is purely voluntary, and doesn’t include most of the worst examples.

Dr Who as a blogger

John Quiggin6 Comments

Apparently Dr Who returns to Cardiff (what is it with Cardiff?) tonight, to confront a surviving bodysnatcher from an earlier episode in this series. I think I’ll watch the footy instead. But Series 2 (of the New edition) looks more promising, with a return of the Cybermen and (at least so I’ve heard) the Daleks.

Nick Barlow advises that the Doctor will be played by
“T4
David Tennant dressed to resemble either Jarvis Cocker or the stereotypical image of a member of Crooked Timber.

The Ribena test (Crossposted at CT)

John Quiggin17 Comments

In the July edition of Prospect Erik Tarloff reviews What Good are the Arts? by John Carey. Tarloff’s critique (subscription-only link I think, but give it a try) is summed up in the write-off

If I prefer Ribena to Château Lafite, does that make me a fool? No. It’s just a matter of taste—as it is for art. That is John Carey’s thesis, and it’s wrong

I haven’t read Carey’s book yet, but as far as I’m concerned, Tarloff is wrong. Not having read the book, I won’t assert that Carey is right, but he is certainly raising the right questions.

The difference between ‘Art’ (I’ll defend the scare quotes later) and mass-produced cultural products is, in most respects, just like the difference between Château Lafite and Ribena. One takes a lot of skill and indefinable talent to produce, and an experienced palate to appreciate , and the other is cheaply produced in bulk and reliably appeals to basic tastes we all possess[1]

In fact, this comparison is too favorable to ‘Art’ since a lot of stuff produced under that banner, and accepted by its official representatives, has none of the merits of Château Lafite, while lots of things that don’t make into the canon are subtle and complex.
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