The idea that Obama (or rather, the wisdom of crowds in anticipating the election of a socialist-Islamist Obama administration) caused the recession is getting another run, this time from Nobel[1] prizewinner Ed Prescott. I haven’t been able to track down more than a precis of Prescott’s argument, but I assume it’s similar to the version put forward by Casey Mulligan. I had a go at this in my Zombie economics book [2], and here on CT, so, I thought I would link to it here, to give a bit of context to the current flap.
[1] Yes, yes, I know about the Sverige Riksbank. And winners of the economics prize aren’t the only ones to say silly things later on.
[2] Still on track for Halloween, and already taking pre-orders! Join the Facebook group here.
Closing up shop
Hi all,
I’m about to close down comments for the duration. Anyone who would like to continue discussions is welcome to start up a blog or maybe some sort of social media site – email me and I will link to it.
I’ve been meaning to give some recommendations for alternative blog reading. Apart from the big group blogs (like Larvatus Prodeo, Club Troppo and Crooked Timber) you can find interesting reading from some of the smaller ones like David Horton, Tim Lambert and Gary Sauer-Thompson, or just stroll random through the blogroll.
I’ll be doing occasional posts here and there possibly including Crooked Timber, Crikey, The Drum and The Daily Bludge (http://dailybludge.com.au).
See you all in September.
Hiatus
With various commitments, I’ve been finding increasingly difficult to post to the blog, moderate the comments section and so on. Unfortunately, my commitments are only going to increase over the next few months, so I’ve decided to take a three-month hiatus, until early September. According to my current plans, I should have plenty of free time to return, refreshed and ready for more by then. No doubt things will turn up to derail those plans, but hopefully I will still be less busy than I am now.
Should we retire later?
I’m working on a longish piece on how to pay for the global financial crisis, and it seems like a good idea to deal with some side issues separately. One of the standard post-crisis responses of governments, i has been to increase the age at which people become eligible for public old age pensions. This change is likely to flow through to other policies, for example by shaping the presumptions around the tax treatment of private retirement income.
I want to step away from these financial positions and ask the question: does it make sense, in general, for people to retire at older ages than in the past? For those who want the “shorter” version, my answer, on balance, is “Yes, at least in Australia”.
Monday Message Board
It’s time, once again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language.
“I want my country back”
Before the 2008 US election, I wondered how rightwing commentators, quick to hurl the charge of anti-Americanism against anyone who disagreed with the policies of the Bush Administration, would deal with the election of a Democratic President. I shouldn’t have worried. In this , Janet Albrechtsen makes it clear that she sees no need to change her views. An anti-American, according to Albrechtsen is someone who supports the current President of the United States, favors the policies of his Administration, and opposes demonstrators invoking revolutionary slogans against the current government.
All of this is summed up in the favorite slogan of the Tea Party crowd “I want my country back”. In the view of this overwhelmingly white and mostly upper-income group, which started operations within weeks of Obama’s inauguration, the only legitimate government is one that embodies their tribal values and hatreds. If the majority of Americans vote for a different government, then, as in Albrechtsen’s twisted logic, that just means most Americans are anti-American.
Update: Quite a few commentators seem to think I’m misrepresenting Albrechtsen here. I find this bizarre. The first use of the term “anti-American” in her article is para 3, which reads (with emphasis added, given that it seems to be needed)
Not just the sleep-inducing sound and sight of five voices all nodding and shaking their heads to the same anti-American melody. Yes, we all voted for Barack Obama , yes, we all want action on climate change, no to religion, nuclear power, the Tea Party movement, the Bush administration (“evil was being actively pursued every single day”),
Resource rent tax statement
I’ve been busy for the last few days, working on a statement by a group of economists in support of the principle of a resource rent tax to replace existing royalties. The statement calls for informed debate about the proposal and takes no position on particular design issues, such as the choice between the existing system used for the Petroleum Resource Rent Tax (40 per cent on returns above about 11 per cent) and the government’s proposed Resource Super Profits Tax (40 per cent on returns above the bond rate, with a corresponding offset for returns below the bond rate).
My own view is that the RSPT design would be more efficient, but the losers under this design (those who can confidently expect high profits) have been very vocal, while the potential gainers (smaller miners undertaking riskier projects) have not given the government any support. Add to that the fact that the PRRT design is long-established (making scare campaigns a little bit harder) and simpler and there is a strong political case for a compromise along these lines. The most important thing is that the government cannot and should not back down on the basic principle of a resource rent tax.
Here’s the Press Release and Letter.
The policy ratchet and US civil liberties (crosspost at CT)
Apropos of recent proposals to stop giving Miranda warnings to terrorism suspects,
, the reaction is still exactly the same to every Terrorist attack, whether a success or failure, large- or small-scale. Apparently, 8 years of the Bush assault on basic liberties was insufficient; there are still many remaining rights in need of severe abridgment. Even now, every new attempted attack causes the Government to devise a new proposal for increasing its own powers still further and reducing rights even more, while the media cheer it on. It never goes in the other direction.
This kind of policy “ratchet” is quite common, but I haven’t seen a fully satisfactory, or general, analysis of either the metaphor or the phenomenon.
Kiss of Death
Not that long ago, I said that, in the absence of a policy change on privatisation, I’d be putting Labor last on my next Queensland ballot, behind the Greens and, more relevantly, the Liberal National Party. Doubtless as a result, the LNP has promptly .
Weekend reflections
It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. Civilised discussion and no coarse language please.
John Quiggin 