There’s an interesting story in today’s Fin (subscription only) about a study of a remote NT Aboriginal community which found that government spending per person there was substantially less than the average for NT residents in general. I don’t know how general this is, but I’ve seen similar results before. The idea that “we have spent massive sums of money on Aboriginal problems and have nothing to show for it” is based on dubious empirical assumptions. A common source of this thinking, at least when ATSIC was around was to look at the total amount allocated to Aboriginal health, education and so on, without netting out the amount that would otherwise have been spent through the mainstream health and education budgets.

Also in today’s Fin, I have a piece on oil prices. Most of it will be familiar to readers, but I’ve put it over the fold anyway.
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… that reduces presumably rational people to babbling incoherence. In today’s Age, Christopher Scanlon of RMIT writes

Australians want monarchs who maintain the fantasy of monarchism, who embody the impossible ideal of monarchy …The problem with the Windsors is that they’re just too much like us. Their lives are as complex and contradictory as our own. And because of that they’ve soiled the fantasy of monarchism as some kind of divine state.

and two paras later

The Danish royals appear enough like us to be comfortable; they’re not aloof like those stuffy dysfunctional Windsors.

BTW, I found the same problem myself. I was going to write on this topic and suggest that we pass our own Act of Succession, offering the Australian throne to the highest-ranking European Royal willing to marry an Australian[1]. I thought this would go over well with both monarchists, republicans who care only about having an Australian head of state, and aspiring princesses/princes, between them enough to make up a majority. Then I realised that, unless the legislation was drawn up carefully, we might end up with Prince and Princess Michael.

fn1. I see Mark McKenna has much the same idea.

If you’re trying to reconcile unlimited wants with limited resources, and someone is willing to lend you the money, borrowing looks like a neat solution. For nations, collective borrowing is measured by the current account deficit[1]. Until quite recently, however, it seemed to be generally accepted that there was a limit beyond which such borrowing was imprudent and that the limit was around 5 per cent of GDP.

There are some good arguments against the traditional view, and we’d better all hope they are valid, though I fear they are not. I’m working on a big piece on this. More soon I hope.

fn1. More precisely, by the capital account surplus which is equal and opposite to the CAD.

This kind of thing makes me think that the NSW Court of Criminal Appeal has some sort of death-wish. It has overturned a conviction in a lengthy drug trial, on the grounds that the wrong person signed the indictment, although it was common ground that this had no effect on the fairness of the trial. Following a series of disastrous decisions to hold retrials in gang rape cases, which have already led to amendments to the law designed to repudiate the Court’s judgements[1], I’d have thought the judges would be cautious about playing this kind of game with technicalities.

A decision like this is bound to produce a further reaction, and probably an over-reaction, from the legislature. We could easily see changes to procedures, designed to preclude further appeals of this kind, that eliminate important safeguards against unfair trials. In their quest to protect the niceties of some imagined ideal system of law, appropriate to a world of unlimited resources and costless trials, the Court of Appeal is gravely damaging the system we actually have to live with.

fn1. For example, the Tayyab Sheikh case elicited an amendment to rules about publicity, and the recent successful appeals by the Skaf brothers have produced rules allowing retrials to be conducted on the basis of transcripts.

My piece in today’s Fin puts the argument that long-term US interest rates must rise in view of the many pressures (increasing inflation, massive trade and budget deficits) in that direction, and that intervention to hold them down will eventually fail. (I’ve put it over the fold)

Coincidentally, the US trade deficit for November came in at $60 billion, easily breaking the previous records, and despite lower prices and a sustained devaluation relative to the euro, $A and other currencies (though not the Chinese renminbi).

This was, as far as I can tell a surprise to the markets (unchanged at $55 billion) was the par prediction, and the US dollar promptly weakened. But the 10-year bond rate remained unchanged. This makes no sense at all, but I’ve given up expecting financial market outcomes to make sense. General Glut has a chart from Robert Scott of the Economic Policy Institute on another aspect of the puzzle as well as detailed commentary on the trade figures summed up by the observation This report is ugly 1000 ways till Sunday

I think a partial resolution of the puzzle in the Scott chart is that the last turnaround in the trade deficit was achieved through a combination of depreciation, budgetary tightening, higher interest rates and demand contraction (that is, a recession). The same was true, broadly speaking, in Australia. There is, in general, no painless way of fixing a trade deficit on this scale.
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The weekend Fin (subscription required) has a profile of the eminence grise of right-wing Melbourne poltiics, Ray Evans. It includes a comment from this blog on the various Astroturf organisations Evans set up when he was working for Hugh Morgan at Western Mining (not greatly to the benefit of WMC shareholders as far as I can see). Here’s the quote used by the Fin

Australia has a string of such [Astroturf] setups, all apparently created by Ray Evans of the Western Mining Corporation. The most egregious is the Lavoisier Group, an organisation for climate change contrarians (about as plausible as creationists calling themselves the Mendel society) . If you move along to the (anti-Aboriginal rights) Bennelong Society you’ll find an almost identical website with the same postal address, shared with the (anti-union) HR Nicholls Society . The (monarchist) Samuel Griffiths society is from the same production line, though not quite as brazenly so.

So what is it about names like these that screams “Astroturf�? Most named institutes are either named in honour of the founder, or are explicitly partisan institutions whose name indicates their affiliation, as with the Evatt Chifley (Labor) and Menzies (Liberal) foundations. It’s not clear that those named would always agree with what is published in their names, but there’s some reasonable basis for presuming that this might be the case.

There’s been a lot of discussion on the Monday Message Board, responding to a piece by Gerard Henderson asking why Australian ex-Communists aren’t treated with the same disdain as ex-Nazis (Louis Nowra has said something similar). Meanwhile over at Catallaxy, they’ve been debating Mark Lilla’s book The Reckless Mind: Intellectuals in Politics This gives me a chance to repost my thoughts on this topic from last year.

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Here’s a neat example of creative giving. For 24 hours (this has apparently been extended a bit), Michele Agnew is promising to give a one dollar donation to Oxfam for each (non-spam) comment posted on her blog. The place to comment is here

Thanks to Scott Hagaman for the tip.

This is a blank post, put here to deal with problems linking to the top post on the page.

I’m still in relaxation/holiday mode, so I don’t plan a permanent fix of the problem for a while. Thanks to Yobbo, who has pointed out a diagnosis and possible solution in the comments.

I watched some of the telethon last night and was impressed by the amounts of money being raised. The entertainment was a little less to my taste, but I suppose you can’t please everybody, so the aim is to attract as many as possible.

The worldwide response to the tsunami disaster has been equally impressive, though no more than was merited by a tragedy on such a large scale. But tsunamis are not the only disaster affecting humanity. Preventable diseases kill millions every year, and the disability caused by diseases like malaria is a huge drain on economic growth in many poor countries. For $US50 billion a year, we could implement the program proposed by the Commission on Macroeconomics and Health which would, quite literally, save millions of lives. Based on our share of developed-country GDP, Australia’s share of this would be only about $1 billion. The US could finance the entire program with the money currently being spent in Iraq. Europe and Japan could easily meet their shares by scrapping farm policies that harm both domestic consumers and poor farmers in less developed countries. Or the whole thing could be done out of private donations of around fifty dollars per person per year – well below one per cent of personal income.

If we could only make the kind of concern that’s been displayed over the past couple of weeks a permanent feature of our personal and political priorities, the world would be a much better place.

Update Reader and Uni of Maryland colleague Darrell Hueth points me to this piece by Nicholas Kristof arguing that the use of DDT in anti-malarial programs should be expanded. This issue has been debated at length on this blog, and I think Kristof gets the balance abotu right. Also, if you’re interested in an economic take on the costs and benefits of malaria prevention, the chapter by Mills and Shilcutt in Bjorn Lomborg’s book Global Crises, Global Solutions , coming out of his Copenhagen Consensus exercise, is well worth reading[1].

fn1. As I’ve previously observed, the Copenhagen Consensus, considered as a ranking exercise purporting to private that action to mitigate global warming is a bad idea, was a dishonest political stunt. But a lot of resources went into it and they weren’t all wasted.