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.

Some random thoughts on the US election

John Quiggin81 Comments

As regards the outcomes, it’s all positive except for the failure to make significant gains in the House of Reps. Obama wins easily, the Dems gain ground in the Senate despite defending 23 states against the Reps 10, and some big referendum wins on marriage equality and drug law reform. The good thing about the House is that it’s up for re-election in two years time, without the distraction of a Presidential race.

The popular vote is a more complicated story. At this stage it looks as though Obama will win narrowly. But he would win easily among registered voters, more easily among US citizens, more easily again among US adults and overwhelmingly in the world as a whole. The Dems need to make voting rights a core issue from now on.

The Repubs only lost narrowly, but time and demography are against them. Unless they shift ground on some major issues, they look like being a permanent minority. But the attack machine they’ve built up will savage anyone who suggests such changes. Logic says they’ll find a way, but maybe it will take another, bigger, defeat. Let’s hope so.

Particularly in the Senate, the quality of the Democratic caucus is greatly improved – Ben Nelson, Joe Lieberman and others are gone, while the additions include Elizabeth Warren and Tammy Baldwin. A House win in 2014 could see a genuine Democratic majority rather than one relying on Blue Dogs and Dixiecrats as in the past. That would provide a path to passage of genuine reforms.

It would be great if, now that he doesn’t need to go for re-election, Obama returned to the defence of civil liberties he advocated in his 2008 campaign and his inaugural address. Sadly, I’m not holding my breath on this one.

Race report

John Quiggin6 Comments

Thanks to everyone who sponsored me and Flavio Menezes for the Noosa Triathlon. I finished in 3:04:55, a personal best. The highlight was finishing in the top half (31/72) of my age-gender category for the run leg, the first time I’ve managed this in any leg of a tri. As regards the 1.5k swim, though, the less said the better. Flavio outdid himself (and me) finishing in 2:50. As you can see from the sidebar we raised $2320 for Heartkids which is really great. Thanks again!

Like Catallaxy on a bad day

John Quiggin45 Comments

Journalism academic Julie Posetti has just announced a move from the University of Canberra to the University of Wollongong. This represents a small step up in the status hierarchy, but not exactly front-page news. Except of course, at the Oz, where Posetti ranks high on the enemies list, having induced editor Chris Mitchell to issue absurd threats of a defamation action, based on a tweeted report of statements by a former Oz journalist. So, this story gets the full Oz treatment with references to Posetti’s “notoriety” her “ducking of questions” about the possible move (standard practice when you are in negotiation, AFAIK) and “incidents” that have “rocked” the UC journalism school.

This is pathetic, but typical of what happens when you give a third-rate group blog like The Oz the resources that allow it to pose as a national newspaper.

Food stamps cause global depression?

John Quiggin60 Comments

Chicago is about as close to the American heartland as you can get and still be in a major city (the infamous Heartland Institute is located there, for example), but even so, I’d expect a professor at the University of Chicago to be aware that the USA is not the only country in the world. That’s not true, apparently, of Casey Mulligan, who claims that the continued weakness of employment in the US is due to policies introduced in 2008 and 2009, which ” greatly enhanced the help given to the poor and unemployed — from expansion of food-stamp eligibility to enlargement of food-stamp benefits to payment of unemployment bonuses — sharply eroding (and, in some cases, fully eliminating) the incentives for workers to seek and retain jobs, and for employers to create jobs or avoid layoffs.”

Mulligan’s claims about US policy are dubious at best (see over fold), but there’s a much more critical problem with his argument. If US unemployment is caused, not by a demand shock but by the mistaken policies of the Obama Administration, why did unemployment move in the same way, and at the same time, in many different countries? Did Iceland expand its food stamp program? Does Estonia pay unemployment bonuses? Sadly, no. And while many countries adopted Keynesian policies in the immediate aftermath of the Wall Street meltdown, others did not, and most have now switched to the disastrous policy of austerity. An even clearer demonstration is given by the Great Depression, where nearly all governments pursued austerity policies after 1929 (Mark Blyth’s soon-to-appear Austerity: The History of a Dangerous Idea tells the story)>

This isn’t just a problem for Mulligan. The simultaneous occurrence of a sustained increase in unemployment in many countries, with different institutions and policies undermines any explanation of unemployment that works at the national level. That includes all forms of New Classical Economics, in which unemployment arises from labor market “distortions”, as well as Real Business Cycle theories (except if you stretch the idea of a technology shock to the point where “technology” effectively means “aggregate demand”).

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Last chance to give!

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The Noosa Triathlon is coming up on Sunday, and there’s still time to give to Heartkids, the charity I’m supporting. Just click on the picture in the right-hand sidebar. Or, if you’d prefer a different charity, why don’t you give now, and (if you like) post a comment announcing it. Either way, it’s a great chance to help others.

The carbon price: three months on

John Quiggin83 Comments

The UQ Risk and Sustainable Management Group, which I lead, held a small workshop last week, looking at early experience with the carbon price. We plan to produce an edited volume from it, to be published early next year. A few items of information that were new(ish) to me;

* There’s been a lot of work going on to tighten up estimates of climate sensitivity (conventionally measured as the equilibrium response to a doubling of CO2). The news on this front has been moderately good. The worst case catastrophes are less likely and stabilization at 475 ppm would give a 90 per cent chance of holding the global temperature increase to 2C or less. This is excellent news, since, as I’ve argued previously, it will be a lot easier to get to 475 than to the internationally agreed target of 450. We’re adding about 2ppm/year, so the extra 25ppm more or less offsets the decade of delay we’ve just experienced.

* Just by selecting the right breeding stock, we might be able to reduce methane emissions (belches and farts) from ruminants by around 30 per cent

* Soil carbon storage, much beloved of Opposition climate spokesman Greg Hunt and others, is (almost) a complete furphy

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.