Category: Boneheaded stupidity

$300 million

John Quiggin28 Comments

Continuing on silly claims about the Whitehaven hoax, the figure of $300 million is being bandied about as the cost to Australia’s Mums and Dads. I haven’t checked, but I assume that this is the change in market capitalization of Whitehaven from the opening to the point at which the hoax was exposed. That is, it’s the amount that would have been lost if all the shares in the company had been sold at the bottom, assuming this was feasible, which it isn’t. Of course, an equal amount would have been gained by the buyers.

But, ever vigilant on behalf of Australia’s Mums and Dads (I’d like extra bonus sympathy as a Grandad!), I thought I would check to see if any such outrages are continuing. It turns out that the All Ordinaries index has fallen 16 points, or about 0.4 per cent, since 10am. Assuming a market capitalization of 1.2 trillion, that’s nearly $5 billion ripped from our parental pockets in the course of a single morning. Almost certainly, some of this due to spurious rumors, some of which may have been deliberately spread.

Can’t something be done about this? Won’t somebody think of the children?

PS: I see in comments that Alison Parkes has made a similar point

Wouldn’t even know …

John Quiggin57 Comments

… if their a**e was on fire. That’s just about literally true of Australia’s climate delusionists. As the hottest temperatures on record set off the predictable (and predicted) bushfires, they keep on with the same old stuff. This Catallaxy thread has it all, if you can stomach it – bogus statistical claims from fools too ignorant to estimate a trend line and too lazy to learn how, silly IPCC and BOM conspiracy theories, absurd economic alarmism about the allegedly catastrophic effects of the carbon price, CO2 as plant food, and so on. Catallaxy’s main rival in the lunar right stakes, the Oz, chimes in with an editorial snarking about Al Gore. Meanwhile, Christopher Monckton has teamed up with pastor, creationist and bigot Danny Nalliah, who blames the bushfires on God’s wrath, to promote an Australian version of the UK Independence Party.

There is no possible evidence or argument that can shift these guys. The only consolation is that, while ignorance is strength in the short run, a political movement that relies on delusion will fail in the end. The US Republicans, and their supporting apparatus of thinktanks, media outlets and blogs have found that out, having lost both elections and credibility. The same is happening here, particularly with respect to alarmist claims about the devastating effects of pricing carbon.

Meanwhile, back in the real world, I’m starting a long-postponed project on bushfires and climate change with a former postdoc of mine who’s been working in the US for some years and is back for a long visit, having arrived just as the Tasmanian fires started it.

TANSTAAFL

John Quiggin77 Comments

At about the same time as announcing that Queensland was an economic basket case, requiring large scale sackings of public employees to balance the books, the Newman government called for tenders for a project that, among other things, involves demolishing the 1970s office tower in which the Premier, Deputy Premier and Treasurer work, and replacing it with a spiffy new one. Some might see a contradiction here, but according to Treasurer Tim Nicholls, the new building “won’t cost taxpayers a cent“.

I’m tempted to say “if you believe that, I have a bridge for sale”, but of course Australian governments of both parties have become adept in bogus sales of bridges, roads and assets of all kinds. So, I’ll quote the famous aphorism, There Ain’t No Such Thing As A Free Lunch.

In the case of the “free lunch” apparently offered by US bars in the past, it’s clear enough that you are unlikely to get the lunch more than once if you don’t order a beer or two, and that the price of the lunch is included in that of the beer. In a complex transaction like the current one, it’s not immediately obvious how we are paying for Mr Nicholls’ new office. Some of it is in the 15-year lease payable to the owners of the new building, some of it in land being given away with the deal and some of it, probably, in valuable rights being handed over free of charge. What we do know is that, when you can’t see the price of what you are buying it’s almost certainly higher than if you paid upfront.

Of course, we have a Commission of Audit, headed by former Treasurer Peter Costello, that is supposed to expose dodgy transactions in the State’s books. The Committee prepared its draft report over the same period as this deal was going down. The government hasn’t released the report. An amusing, but unlikely, possibility is that the Commission actually did its job and criticised this boondoggle, leading the government to bury the report. More likely, Costello has done his job by helping to create the panic needed to justify 20 000 sackings, and is now just an embarrassment.

Return of ‘Lord Monckton’

John Quiggin79 Comments

While we are on the subject of irresponsible pranks, noted performance artist, “Lord Monckton” is returning to Australia after his highly successful tour a couple of years ago, when I was invited to, and then disinvited from, a debate with him. I had some good lines ready on my part in the conspiracy to impose a communist world government, but I never got to use them. On the other hand, Monckton played the straight man to Tim Lambert, reprising the famous McLuhan moment from Annie Hall.

It’s been suggested that “Monckton” is another manifestation of the multi-faceted Sacha Baron-Cohen, but this is incorrect. Like his model, the marvellous Screaming Lord Sutch, Monckton lives his character 24/7. In fact, Monckton outdoes Sutch in many respects. Sutch regularly ran for the English House of Commons as a candidate for the Monster Raving Loony Party, losing his deposit every time. Monckton topped this by running for the House of Lords, as an independent monster raving loony, and received zero votes. Emulating Monty Python’s Silly Party, he ran three times more, doubling his vote each time.

His latest tour will be a challenge. He doesn’t seem to have much new material to add to the loony climate denialist routines of his previous tours, and much of the audience is now in on the joke. For example, I’m pretty sure that Andrew Bolt tumbled after Monckton’s Galileo Movement prank. Still, fans of WWE wrestling are perfectly happy to cheer the faces and boo the heels, knowing perfectly well that the events are staged and scripted, and indeed getting additional entertainment from the soap opera of the “real story”

A surplus of stupidity

John Quiggin62 Comments

When commentators as disparate as me, Warwick McKibbin, Bernie Fraser, ACOSS the Australian Industry Group and the Business Council of Australia are all in agreement, it might be time for the government, and the opposition to start paying attention. At this point, I doubt that there is a single credible economist who thinks that the government’s promise to return the budget to surplus this financial year is a good idea. Yet the Treasurer remains absolutely committed, and the Opposition is ready to denounce him if we miss the target by even a single dollar.

To restate the case, it’s clear that growth is slowing, and, as usual in these circumstances, monetary policy is becoming less effective. In cases like this, fiscal policy ought to be moderately stimulatory, or at least left neutral, so that the automatic stabilizers (declining revenue and increasing welfare payments) are left to cushion the impact of a slowdown. Instead, thanks to this absurd pledge, the government is committed to matching every reduction in economic activity (and therefore in the budget balance) with its own cuts or tax surcharges.

Obviously, the reasoning here is political not economic. The government suffered badly from the gratuitous “no carbon tax” promise[1] made before the 2010 election. To dump the equally gratuitous “early return to surplus” promise would involve a whole world of pain. And of course Tony Abbott cares nothing at all about good policy, unless it’s defined as policy that will make him PM. So, we have the politicians united on one side of the debate, and everyone who has any idea of economic reality on the other.

fn1. Feel free to parse this in comments, but the fact remains that the Rudd government was elected with a strong commitment to carbon pricing, which Labor then dumped in a loss of nerve before the 2010 and was forced back to (something like) its original position by the election outcome. In this context, the question of whether a specific promise was made and broken is of secondary intersest.

Doing the time warp

John Quiggin34 Comments

Following up on my post about Rachel Nolan’s arguments for privatisation, I ran across this interview with former ALP education minister and attorney general Cameron Dick, generally regarded as a rising star while Labor was in office. Before Nolan, Dick was the only minister willing to go on record with thoughts about Labor’s defeat and he had this to say

he felt the party should have concentrated more on the economy during the election campaign, emphasising the decisions it had made.

‘‘I do think Labor fell into the error, or seriously miscalculated and under-estimated the desire for Queenslanders to hold onto the AAA credit rating,’’ he said.

‘‘And I think the concern Queenslanders had generally about government debt and deficit.

‘‘And I think we were unable to effectively tell our story about investing in infrastructure to keep jobs.

‘‘I mean, that was the strategy we took as part of the global financial crisis.’’

Say what? All of these points would be a great explanation if Labor had lost the 2009 election, after sacrificing the AAA rating to maintain infrastructure and jobs as a strategy in response to the global financial crisis. But, in reality Labor won that election easily. The plunge in the polls came when they announced a drive to restore the AAA rating by selling public assets, mostly infrastructure, and by pushing the panic button with respect to government debt and deficits. All the polls showed that no one except the pollies (and powerful bureaucrats like Doug McTaggart and Leo Hielscher) gave two hoots about the discredited ratings agencies. They hated the asset sales, and dumped the government as a result.

To strengthen my conclusion from last post, while the Newman government has been a disaster, the Labor MPs who supported the sales to the bitter end (all but a handful) brought their fate on themselves, and deserved it. Labor will certainly win lots of seats next time around, and perhaps even win government. I hope they can do a better job selecting candidates whose views reflect those of Labor voters.

Reality bites

John Quiggin47 Comments

The most striking political development of the last decade or so has been the abandonment, by the political right, of any concern with reality. Mitt Romney ran the most deceitful and dishonest campaign in US political history, vowing not to be deterred by fact-checkers. His partisans, in the US and Australia have made denial of reality an artform. This approach has had some remarkable successes, notably in delaying action against climate change. But there is always the risk that deception will turn into self-deception and the US Presidential election illustrated that, with the emergence of “poll trutherism”, the belief that the polls pointing to Obama’s re-election were skewed in order to encourage Democratic turnout.

Now that poll-based predictions have turned out to be as close to accurate as statistical theory would predict, how will the right react? I can think of three possibilities

(a) Going deeper down the rabbit hole with the idea that the “increase Democratic turnout” strategy ensured that the polls were a self-fulfilling prophecy
(b) Attempting to return to reality on this issue, while maintaining delusional positions on other issues, and maintaining faith in the pundits who led them astray this time round
(c) A serious attempt to shift to a policy discourse based on evidence and analysis rather than talking points in support of positions chosen on a basis of tribal faith

I can’t imagine much progress towards (c). Apart from anything else, most of the existing rightwing commentariat would be unemployable if this were required of them. So far, I haven’t seen much evidence of (a), but it may well be bubbling below the surface. Still, at this point (b) looks most likely.

An unpublished letter to the New York Times

John Quiggin33 Comments

Gary E. MacDougal (The Wrong Way to Help the Poor, 10/10/12) claims that the Federal government currently spends an average of $87000 a year on the typical family of four living in poverty. MacDougall’s calculation is out by a factor of at least four and probably more.

MacDougal’s source, Michael Tanner of Cato, treats all means-tested programs as anti-poverty programs. This includes the Earned Income Tax Credit, Family Tax credit and other programs for the middle and working classes. As Tanner admits, these programs have at least 100 million recipients, and probably many more. So, the average payment is less than $10 000, not the $20, 610 Tanner estimates.

It gets worse. The number of recipients doesn’t include children or adult dependents, but MacDougal’s calculation does. His family of four would include at most two benefit recipients, and would therefore receive less than the poverty line income of $23 050.

0.4 percent of a wrecking ball makes …

John Quiggin165 Comments

… a ball bearing perhaps?

0.4 percentage points is the estimate of the CPI impact of the carbon price, published in the Herald Sun (hardly likely to understate it). In the attempt to stop this catastrophe, the Australian political right has trashed its intellectual credibility, embraced lurid conspiracy theories, reduced its leading publications to laughing stocks, and promulgated a string of easily falsified talking points, each one more absurd than the last. So, now that their predictions of doom have come to this, what will be their response? My guess is that they will double down – Catallaxy and Andrew Bolt are already on the job.

Of course, a price of $23/tonne is just the thin end of the wedge. Most estimates suggest that we need a price somewhere in the range $50-100/tonne to produce a long run shift to a low-carbon economy. That might amount to a price increase of 2 or 3 per cent – about the same as the GST.