Category: Boneheaded stupidity

P@ssw0rd follies

John Quiggin14 Comments

I have a piece in Crikey (reproduced over the fold) under the title ‘Our spy agencies know less about cybersecurity than the Daily Mail‘.

The central point is that our leading cybersecurity agency, the Australian Signals Directorate, has just rolled out a policy requiring users of government agency websites to change their passwords every 90 days and to use composition rules based on a mix of alphanumeric and special characters. As even the Daily Mail has pointed out, these practices are thoroughly discredited, to the point where the expert responsible for them has publicly recanted.

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The Minerals Council of Australia pushing zombie ideas

John Quiggin28 Comments

Fighting zombies is a tiresome business. Even when you think you’ve finally killed them, they bounce back as often as not. But it has to be done, and there are some benefits. When you see a supposedly serious person or organization pushing zombie ideas, it’s an indication that nothing they put out should be presumed to be serious.

There can be few zombies more thoroughly undead than nuclear power in general, except for the idea that nuclear power is a sensible option for Australia. The strongly pro-nuclear SA Royal Commission demolished this zombie so thoroughly that it should have taken a decade at least to regenerate.

But here’s the Minerals Council of Australia, which has taken a break from promoting coal to push the idea that Australia needs a nuclear power industry and that the biggest obstacle is a legal prohibition imposed in 1998. The supporting “analysis” is riddled with absurdities, some of which have already been pointed out. I’ll give my own (incomplete) list over the fold

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Millennials are people, not clones

John Quiggin3 Comments

The Washington Post has an article on millennial attitudes to Trump, broken down by race/ethnicity. The results won’t surprise anybody who’s been paying even minimal attention. Other things equal, millennials are even more hostile to Trump than Americans in general. Of course, other things aren’t equal; as with the population at large, African-Americans most unfavorable to Trump, and whites are least so, though no group is favorable on balance.

What’s surprising, or at least depressing, is the contrarian framing of this as a counter-intuitive finding, against a starting point assumption that millennials should have uniform views. I can’t blame the author of this piece for taking this as the starting point; it’s taken as axiomatic in the vast output of generationalist cliches against which I’ve been waging a losing battle since the first millennials came of age in the year 2000.

Just to push the point a little bit further, this study only disaggregates millennials by race. If, in addition, you took account of the fact that millennials (on average) have more education, lower income and less attachment to religion than older Americans, you would probably find it impossible to derive statistically significant differences based on birth cohort.

Sense and senselessness in transport policy

John Quiggin32 Comments

I’ve been doing various pieces of work on transport. Here’s a quick update:

* I’ll be speaking at a one-day seminar organised by the Institute for Sensible Transport in Sydney on 8 August. It should be a good event for those with a professional interest in road pricing and related topics.

* For those with a general interest, I have a section over the fold from my book-in-progress, Economics in Two Lessons. Comments and criticism much appreciated.

* While I was a Member of the Climate Change Authority, I put a lot of work into a report the Authority did on vehicle fuel efficiency standards. With the rejection of just about every other policy measure to reduce CO2 emissions in Australia, this was the government’s last chance to do something useful. Naturally, Turnbull and Frydenberg went to water the moment the denialists who dominate the LNP raised an objection. Perhaps, now that the laws of mathematics have been subordinated to Australian law, Turnbull can solve our problems by simply decreeing a change of sign, so that an increase in emissions becomes a decrease.

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Mindboggled

John Quiggin39 Comments

I’ve never been a fan of Senator David Leyonjhelm, but even so, I find it hard to believe he made the mindbogglingly absurd statement attributed to him by today’s Oz. Accusing Bill Shorten of a $1.85 billion black hole in relation to his policy of keeping the levy on high-income earners,

But Liberal Democratic senator David Leyonhjelm yesterday called out the Labor costings as disingenuous. He said it was “misleading budgeting” because Labor had no way of extending the deficit levy from opposition.

Say what? On this basis, no Opposition should ever announce policy of any kind. And of course, that goes many times over for members of fringe parties that have no chance of ever forming a government. I’ll be interested to see if he claims to have been misquoted.

Regardless, Leyonjhelm is one of a stream of regrettable politicians to be drawn from the ranks of the Institute of Public Affairs (IIRC, some even worse possibilities were derailed by racist indiscretions on social media). I won’t name names, instead repeating my possibly unhelpful endorsement of Chris Berg as the only person associated with the IPA for whom I have any intellectual respect.

Gotcha!

John Quiggin40 Comments

Like most people, I don’t like being suckered. But I was well and truly suckered by Aaron Patrick of the Australian Financial Review today. Patrick wrote to me saying he was doing a feature article on penalty rates and I gave him a long interview setting out my position. In particular, I made the point that, if (say) a 10 per cent reduction in wages produced only a 1 per cent increase in hours of work demanded by employers, the average worker would end up doing more work for less money. This is a standard point in the analysis of minimum wages.

As it turned out, I was wasting my breath. All Patrick wanted was the concession that lower wages might produce some increase in employment, thereby justifying the Gotcha! headline ‘Even union economists accept cutting penalty rates creates jobs’.

Given my history with the Fin, I shouldn’t have been surprised, I guess. But my general experience, even since Michael Stutchbury became editor, has been that most AFR journalists are straightforward professionals.

Also, most journalists these days understand that the game has changed with the rise of blogs and social media. Twenty years ago, the only response to a shoddy smear like Patrick’s would be a letter to the editor, which might or might not get published long after the event. Now, I can respond here and on Twitter, Facebook and so on. My readership might not be as big as the measured circulation of the AFR, but, after you deduct all the people who only look at the business pages, it’s not that different.

In any case, Patrick and the Fin are on a hiding to nothing with this one. Most people work for a living, and most have worked out by now that when the bosses talk about flexibility and productivity, they mean “work more for less”.

Easytax redux redux

John Quiggin29 Comments

I got a brief run in the Murdoch press regarding Pauline Hanson’s revived proposal for a 2 per cent tax on all transactions (floated 20 years ago as “Easytax“). I was reported as follows: “University of Queensland school of economics professor John Quiggin said a 2 per cent tax would destroy small business and see a collapse in government ­revenue.” and the story was headlined “One Nation policy would ‘collapse the economy’” The headline is an exaggeration, but the quoted passage gets my opinion right.

Easytax is an example of a “cascade” tax, common in Europe a century or so ago. The point is that the tax rate is applied to the whole value of each transaction along the chain from primary producer to consumer. For a big firm, like Woolworths, the answer is simple: integrate backwards along the chain by taking over your suppliers. Then you pay the tax only once at 2 per cent. Small businesses, who can’t do this, end up paying the tax themselves, on goods that have already been taxed many times. So, they go out of business, and the total value of transactions falls far below the level used in the original calculation that a 2 per cent tax would be sufficient. Hence, government revenue collapses.

It was precisely because this process was happening that the French (the innovators in this field) dumped the cascade tax in favor of a value-added tax (VAT), the same model used in the GST. They were followed by the rest of the EU and then most of the world, except the US, which still relies on retail sales tax (levied only once, but still messy and narrowly-based).

The story also says “A spokesman for Senator Hanson said she had only advocated investigating the policy.” But the fact that such a nonsense idea is still part of One Nation thinking gives the lie to the suggestion of Hanson’s coalition partners in the LNP that this iteration of One Nation is different from the last. It’s just as racist and ignorant as ever. It’s not Hanson that has changed, but the LNP which is now indistinguishable from One Nation.

Dutton, cringeworthy and (literally) un-Australian

John Quiggin40 Comments

Peter Dutton’s attempts to promote an “uprising” in support of Christmas, and against “political correctness gone mad” are un-Australian in all sorts of ways, but most obviously in the stunning cultural cringe they reflect. He’s borrowed the catchphrase of a British tabloid in an attempt to import a US culture war campaign that has been going on so long it’s a Christmas tradition in itself (I observed that it was old stuff, back in 2004). This guy is the best the Trumpist faction of the LNP/ON can come up with?

The magic pudding, yet again

John Quiggin30 Comments

I’ve just done an interview with Channel 10, about cost blowouts on the infrastructure projects supposedly funded by Mike Baird’s asset sales program. I made the point that such blowouts are more likely when projects are funded from special pots of money rather that avoid normal processes of budget assessment.

More tiresomely, I repeated a point that I have been making for 20 years, and that (as far as I know) every economist in Australia agrees with. Selling income generating assets does not provide any additional capacity to invest in non-income earning assets such as (untolled) roads, schools and hospitals Exactly this point was made by the Secretary of the NSW Treasury in relation to PPPs back in the 1990s (I’ll dig out a link).

Despite this nonsense idea being refuted over and over again, it continues to be believed by politicians of both parties and to get a free ride from our economically illiterate press, most notably (since it ought to do better) the Financial Review.

I’ve given up hoping that this will change. Fortunately, privatisation is so politically toxic that justice is usually served in the end.

New Zealand’s zombie miracle

John Quiggin39 Comments

Twice in the last couple of days, I’ve bumped into the seemingly unkillable zombie idea that the New Zealand economy is doing well and ought to be a model for Australia. Checking Wikipedia to make sure I hadn’t missed anything, I found that, as of 2015, NZ income per person was 30-35 per cent below that in Australia, as it has been ever since the miraculous reforms of the 1980s and 1990s. NZ is down with Italy and Spain on most rankings, while Australia is comparable to Germany (above on some rankings, below on others).

This wasn’t always the case. Before the reform era, New Zealand and Australia had almost identical income levels, among the richest in the world. NZ took a bigger hit from British entry into the EU in the early 1970s but after 50 years, that can scarcely serve as an excuse (and of course, no one is predicted that Brexit will be a gigantic benefit to NZ; rather the reverse)

Then there’s migration. I dealt with this here, but I’ll repost crucial points over the fold.

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