Zero

John Quiggin29 Comments

That’s the new target interest rate announced by the US Federal Reserve today (with a margin of up to 25 basis points). It’s also, following the $50 billion Madoff fraud and the increasingly widespread suspicion that the entire bailout scheme has been operated to promote the interests of Goldman Sachs at the expense of its competitors and the general public, an upper bound for the credibility of the global financial system. And it’s a pretty good estimate of the probability that we’re going to avoid a recession worse than any since the Great Depression.

Without a household name like Citigroup or GS going bust, it’s hard to convey the seriousness of the latest news in an environment where we are already inured to financial cataclysms. But it seems pretty clear that the last couple of days spell the end for both hedge funds (many of which have lost a fortune with Madoff and all of which are subject to invidious comparisons with his decades-long Ponzi scheme) and money market funds, which can’t possibly cover their costs while paying positive net returns, given a funds rate of 0.25 per cent.

Finish Line movie download

Unbalanced

John Quiggin57 Comments

In the leadup to the release of the White Paper, Kevin Rudd said he’d be aiming for balance, and predicted criticism from both sides

We’ll be attacked from the far right and by various business groups I suppose and certainly the Liberal Party for doing anything at all,” he said.

“We will be attacked by extreme green groups for not taking the most radical course of action.”

This kind of reasoning is often specious. For example, we see the Bush Administration being praised for finding a middle course between the extremists one side who want unlimited torture and those on the other side who want torture banned altogether. But let’s grant Rudd his premise this time.

You have to go a long way to the right to find anyone willing to say the government has done too much. As Tim Lambert points out, the Australian Newspaper, long the main outlet for those happy to reject science and trash the environment, is entirely satisfied.

The other side of Rudd’s prediction is satisfied only if you define “extreme green groups” to mean anyone who cares about the environment.

It’s pretty clear that the government has been willing to dump its own supporters in the hope of wedging Turnbull. This kind of thing is characteristic of the cynical centrism implicit in Rudd’s statement.The Projectionist hd

Ghostwritten

John Quiggin36 Comments

This New York Times article on the (apparently widespread) practice of drug companies drafting and ghostwriting scientific articles favorable to their products, and then arranging for academics to publish the articles under their own names, focuses, reasonably enough, on the potential for such practices to mislead doctors and other readers.

As an academic, though, I was particularly struck by the stress that the drug company Wyeth laid on the fact that the nominal authors of these articles were not being paid and endorsed the contents. In reality, having someone write articles for you amounts to not doing the job for which, as an academic, you are paid and, if the articles are sufficiently numerous and well-placed, promoted. It would be far more ethical (or less unethical) to pay academics for product endorsements, published as commercial advertisements.

Of course, in a world where a $50 billion (or maybe $17 billion, who can tell?) fraud barely makes the front page, and a $100 million rip-off is buried somewhere behind the shipping news, it seems a bit precious to worry about allegations of goldbricking academics passing off corporate propaganda as their own work. But at least I can understand how this scam works, as opposed to how a massive Ponzi scheme can be operated for decades under the noses of what are supposed to be the world’s most sophisticated fnancial markets and regulators.

White Flag

John Quiggin118 Comments

The long-awaited White Paper version of the government’s emissions trading scheme is out. I’ve been too disheartened to read anything more than the summary so far. The target of a 5 per cent reduction on 2000 emissions by 2020 seems designed to secure the support of the Opposition, which will probably not be forthcoming anyway. That’s about the only defence that could be made for it.

The government’s main argument in favour of such a weak target is based on Australia’s relatively high rate of population growth. I have no objection to per capita, rather than national, emissions targets in the context of a contract-and-converge agreement leading ultimately to a uniform global allowance per person. But if you wanted to argue that way, the fact that Australia has one of the highest emission levels per person in the world means that our (interim and final) reduction targets must be more stringent than those of other countries.

At this point, the only real hope is that the Obama Administration will take a strong line on the issue. If it does, then the US-EU combination will dragoon recalcitrants like Australia into a sustainable agreement whatever Rudd and Turnbull might say or do about it.

Unhelpful

John Quiggin41 Comments

I was unimpressed by this story on the ABC website, headlined Bill of rights not likely to be supported: Law Society The Adventures of Ichabod and Mr. Toad psp . The story quotes Hugh Macken from the Law Society (I think he is in fact the president) as saying

A bill of rights in terms of constitutional change is probably too far down the track to consider at this stage,” he said.

“It is likely to be quite divisive and as history has shown any divisive referendum which goes up invariably fails, so it tends to be costly failure.”

While literally correct, this remark totally obscures the point that no-one is currently talking about a constitutional change. For some years discussion has focused on the idea of a legislated bill of rights which governments could amend if they chose to wear the consequences of openly acting against human rights. This has already been introduced in Victoria and the ACT, not to mention the UK.

The legislative proposal overcomes the main objectives to a constitutional bill of rights that it would remove parliamentary sovereignty. The objections now coming from, for example, Janet Albrechtsen and other rightwingers have nothing to do, in most cases, with such issues. The problem is rather that they are opposed to the human rights that would inevitably be included in a legislated bill, such as freedom from arbitrary arrest, indefinite detention without trial and torture. We can thank the Bush and Howard Administrations for clarifying these issues.

The world turned upside down

John Quiggin73 Comments

Among news items of interest:

* The US Treasury briefly paid negative rates of interest on three-month bills (it’s now paying a more sensible zero).
* The outgoing Republican Administration in the US is about to nationalize General Motors perhaps proving the old adage, “what’s good for GM is good for the US”
* The Canadian Parliament has been prorogued until late January, precluding any legislative action against the economic crisis, but giving the Harper minority government another couple of months in office.

Any of these stories would have seemed unbelievable a year ago.

Some labour links

John Quiggin10 Comments

I’ve been meaning for a while to post some links to sites promoting campaigns to protect the rights of workers including the right to organise unions. Here are a few
Justice4Luke a site about the case of a union organiser sacked by the charity for which he worked.
LabourStart, an international site supporting union rights in many countries
Evatt FoundationAn Australian site with lots of useful analysis. One of the early Oz political bloggers, Chris Sheil, writes a fair bit there.