Kennys on Superfast: Some quick responses

John Quiggin18 Comments

I’ve now had a look at the study by Chris and Robert Kenny, Superfast: Is It Really Worth a Subsidy?. Some immediate responses

* The study starts from a presumption that broadband policy is an intervention, which may be compared to a putatively natural market outcome. This assumption is clearly inapplicable to Australia, where Telstra used as a regulatory bargaining chip its monopoly position as the only plausible supplier of new broadband infrastructure on a large scale. The NBN was the only way to move forward

* The study finds a variety of reasons to discount estimates of the benefits of superfast broadband, without giving any basis for lower estimates

* (Very important, I think) The study lacks any sense of quantitative magnitudes. Looking at the (upper bound) estimate of $40 billion for the NBN, what would be a reasonable social return? Allowing for fairly rapid depreciation (say a 10-year lifetime) and a 5 per cent real rate of return, we would want a net service flow of $6 billion per year, about 0.5 per cent of GDP (the right measure in this case, since depreciation is taken into account). If we assume the network is implemented over 5 years, we need additional growth of 0.1 percentage points per year. The estimates criticised in the report are far higher then this

* While the report discounts various possible sources of demand (eg home nursing) it trivialises the obvious commercial benefits of faster and sharper video-on-demand, video telephony, immersive gaming and so on, and disregards the point that, on the basis of past experience, we can expect new uses of high-speed internet even if we can’t yet identify them

Epic Oz Meltdown

John Quiggin25 Comments

The periodic meltdowns at the Oz (see here and here) have been growing ever more bizarre. But it will be hard to top this episode, where editor-in-chief Chris Mitchell threatened to sue academic Julie Posetti for defamation. Posetti’s supposed defamation consisted of two Twitter posts summarising a speech by Asa Wahlquist, for many years the leading environmental reporter at the Oz. As Posetti summarised it Wahlquist found working for the Oz under Mitchell “excruciating” … “torture”, because of the paper’s anti-science stance

I’m a bit behind on this – as usual, Tim Lambert is the go-to guy, and there are more reports at Crikey, LP and the ABC.

What is most amusing here is the way in which a string of Oz journalists spontaneously line up to write articles saying that Chris Mitchell would never tell anyone what to write.

What is most significant, looking at the Murdoch press more generally, is Murdoch’s willingness to trash the credibility of his media assets, built up over a long period, in the pursuit of ideological agendas and (perhaps) short-term profits. The Oz was never a great paper, but it used to be a good one, even if it was pretty reliably conservative. More strikingly, the same process is going on at The Times (of London), once regarded as the world’s ultimate journal of record. The same is true of the Wall Street Journal – before Murdoch took over the general view was that even if the Op-Ed pages were barking mad, the news was always accurate. Now the distinction between news and opinion is disappearing fast.

And the same can be said for the political right as a whole. Their eagerness to see plain issues of fact (WMDs in Iraq, global warming, the existence of a DDT ban) as subjects for political debate hasn’t done them much harm in the short term. But as the “epistemic closure” fuss a while back shows, everyone is increasingly aware that truth and falsehood are no longer meaningful terms for those on the right. This will, I think, entail some big costs for them in the long run.

The wonders of the Internet

John Quiggin30 Comments

From my hotel room in London, I read this SMH report, headlined “NBN benefits ‘grossly overstated'” which in turn refers to a report by “British telecommunications consultant Robert Kenny and Charles Kenny from the US Centre for Global Development” released (in London, as it happens) a couple of days ago.

Five minutes with Google is enough to determine that

* the Centre for Global Development is a genuine and reputable thinktank, with no particular axe to grind

* Charles Kenny is not what you might call an Internet enthusiast, having written, in 2002, a piece entitled Should we Try to Bridge the Global Digital Divide.
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Austerity in the UK* — Crooked Timber

John Quiggin8 Comments

Visiting London briefly, I’m struck by both the drastic nature of the cuts being proposed by the Coalition government, and the bitterness of the response. By comparison, the austerity measures being proposed by most eurozone governments seem both less regressive and more sustainable in the long run, and the demonstrations in response to be much more in the nature of normal politics, with an element of street theatre.

I haven’t had time for a detailed analysis, but a quick comparison of the eurozone cuts listed here, and the measures proposed by the Coalition seems to me to bear this impression out. Maybe it’s just lack of detail in the eurozone list, but (except maybe in Ireland) there seems to be nothing like the mass withdrawal of public services and the focus on punishing the poor for the crimes of the rich that is the hallmark of the Cameron-Clegg regime.

This, again, seems to me to cast doubt on analyses that focus on the role of the EU and the euro. As far as I can see, UK policy is essentially unconstrained by the EU and is driven by the demands of ratings agencies and the financial sector generally. On the plus side, the Bank of England has been more expansionary in monetary policy than the ECB, but it’s been equally supportive of fiscal austerity which is the main problem.

  • My intended allusion doesn’t jump off the page as I’d hoped, but UK political and social discussion has, to this visitor at least, a distinct late-70s air at present.
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Murdoch backs Bligh

John Quiggin23 Comments

Michael Stutchbury’s piece a while back supporting the QR asset sale (my critique, his response) turns out to have been the first of many as the Murdoch press tries desperately to talk this flop up. But the punters aren’t buying, and even some of the subeditors appear not to have got the memo. This (unsigned) piece in the Courier-Mail says that, rather than repaying the debt that was the pretext for the sale, Bligh and Fraser plan to spray much of the proceeds on electoral bribes of one kind or another. The text gives the most positive spin possible, but the headline referring to a “desperate push for votes” gives the game away.

And if Bligh and Fraser weren’t feeling desperate, the comments on the story ought to make them so. In 127 comments, I didn’t find one that actively supported the government, although there were a fair few that were also critical of the hopeless LNP. My personal favorite from “Skeptic”

Hands up those who reckon they can be bribed by this behaviour. If so, I have a bridge to sell you. Oh, wait, they’ve sold that too…

Bligh and Fraser are doubtless on the way to well-paid sinecures in the financial sector. But those members of the Labor Caucus who don’t have anything lined up post-politics must soon realise that their only chance of keeping any seats at all next time round is to sack them both.

The crisis of 2011 – in 2010? — Crooked Timber

John Quiggin54 Comments

Back in July, no one seemed to be talking about a shutdown of the US government following the Dems loss of control of the House. Now the only question is – when?

David Dayen at FDL says it could be as soon as December (I don’t understand the mechanics well enough to confirm or reject this claim). Among those looking forward to the shutdown, the most notable, for a variety of reasons is Alan Simpson. Obama must really be feeling the gratitude there.

There’s still a chance that the Dems can manage a pre-emptive capitulation/collaboration so massive that some on the other side will be willing to cash in their gains without taking the risk of a shutdown. I imagine that would entail, at a minimum, full extension of the Bush tax cuts, effective repeal of the health care bill, no more money for the unemployed, Social Security ‘reform’ and a bunch of spending cuts directed at the tribal demons of the Tea Party. Of those, health care is the only one where I can see the White House taking a stand. I’m less clear about the priorities of the Congressional Dems.

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