It’s time for the Monday Message Board, where readers are invited to post their thoughts on any topic (civilised discussion and no coarse language, please). There will doubtless be plenty of posts from me on the election, and plenty of room for discussion, so I’d encourage Message Board comments on other issues.

Rafe Champion alerted me to this piece by John Stone on the politicisation of the public service, and the role of retired public servants. Stone makes some valid points, but since he refers to his own dealings with government, I think it’s reasonable to point out that Stone himself is responsible for the first big breach in one of the most important conventions that used to prevail in Australia; namely that retired public servants and politicians should retire fully, or at least not take jobs that involve a potential conflict of interest with their previous positions. Stone had barely retired as Secretary of the Treasury when he started attacking the government vigorously in newspaper columns, and not long after that he was elected to the Senate for the National Party (as I recall, double-dipping his public service pension in the process). Since then, we’ve seen a steady erosion of the notion of the public service as a lifetime career, and of political office as the final stage in a career, preferably one marked by achievements outside politics.

A stint in politics or the public service is now seen as a routine stepping-stone to a more lucrative career in business, particularly highly-regulated businesses or lobbying and PR firms, where the contacts and inside knowledge acquired in the public sector represent a valuable asset. Given that people are starting with that expectation, it’s bound to affect their dealings with the business sector. Everyone they meet there is a potential future employer. And, of course, as the transition approaches, the temptation to do some more explicit mutual backscratching becomes stronger. The disgraceful behavior of former Health Minister Michael Wooldridge[1] before his departure for the private sector is one of the more egregious examples.

fn1. As noted here, Wooldridge approved a $5 million grant to the Royal College of GPs for a building to help co-locate several doctors’ groups. That same organisation subsequently employed him as a consultant.

It’s Monday again, and time for the Monday Message Board. Post your comments on any topic (civilised discussion and no coarse language, please). I’d be interested in general reactions to the Olympics – too much sport or not enough?

It’s Monday again, and time for the Monday Message Board. Post your comments on any topic (civilised discussion and no coarse language, please). Any reactions to the latest Children Overboard news?

It’s Monday again, and time for the Monday Message Board. Post your comments on any topic (civilised discussion and no coarse language, please). Any reactions to the latest Children Overboard news?

It’s Monday again, and time for the Monday Message Board. Post your comments on any topic (civilised discussion and no coarse language, please). As a discussion-starter, I’d be interested in thoughts on the likelihood a Kerry victory and its implications for Australia.

It’s Monday again, and time for the Monday Message Board. Post your comments on any topic (civilised discussion and no coarse language, please).

Since most of my regular commenters participate in MMB, this is a good time to announce that GG Sedgwick is running the 2004 Blog Comments Award.

There’s no category in the awards for this, but I’ve always believed that this blog has the best comments section in the Oz blogosphere, and one of the best anywhere. Thanks to all those who’ve made it so.

There’s an interesting piece by Brad DeLong in Saturday’s Australian Financial Review, which I can’t find anywhere online.He lists four reasons why interest rates can be expected to rise in the future. The first two are just two facets of the same thing – the embrace of deficit finance by the US Republicans in both Congress and the executive branch. The third is closely related: the failure of Western European governments to address the coming fiscal crisis associated with retirement income policies. All of these are currently being offset by the willingness of the Chinese and Indian central banks to buy US and Euro bonds in an effort to maintain competitive exchange rates. But this can’t last forever.

The fourth factor is “the inability of Western European governments top enact sufficiently bold liberalising reforms to create the possibility of full employment, together with the failure of Western European monetary policy to be sufficiently stimulative to create the reality of full employment”. I have some doubts about this. Leaving aside any questions about the efficacy of “liberalising reforms”, it’s far from clear that the adoption of stimulatory monetary policy in the short run is conducive to low nominal interest rates in the long run. I would have thought that just as stimulatory deficits in a recession need to be offset by larger surpluses during booms, an active monetary policy implies a larger variance in interest rates over the cycle.

More significantly, it seems to me that, on a crucial point Brad has the argument backwards. He says “Believers in low interest rates … point to rapid technological progress, which has boosted output.” In general, technological progress ought to create new investment opportunities at high rates of return, while the associated increase in asset values should raise current consumption. This should raise the real rate of interest, not lower it. In fact, this is precisely the argument Brad makes in relation to India and China.

On checking, I was surprised to find out that the ratio of nonresidential gross investment to US GDP is near an all-time low, at 10.0 per cent (you can get the data from the Bureau of Economic Analysis . Taking account of the increasing share of computers and software, which have high depreciation rates, it seems likely that the net investment share is lower than ever. Maybe this can be explained if all the technological progress takes the form of capital-saving reductions in the cost of computing and telecommunications. This would reduce demand for capital (but ought to increase demand for labor, something that has evidently not taken place).

It’s Monday again, and time for the Monday Message Board. This is a chance for everyone to give their comments on any topic. Also, if you have longer pieces you’d like to draw to the attention of readers, feel free to post a link. I’ve been a bit slack about policing the “no coarse language” rule in the last couple of weeks, but please adhere to it and stick to civilised discussion.

It’s Monday again, and time for the Monday Message Board. Post your thoughts on any topic (civilised discussion and no coarse language[1]).

fn1. Readers are welcome to consider how the norms of this blog, which I think work quite well, relate to “political correctness” and “civility”.