Remembrance

John Quiggin20 Comments

The two minutes of silence at 11 o’clock was a good time for reflecting both on the bravery and sacrifice of those who have died on war and on the futility and evil of war.

Those who died and all those who endured the horror of war should never be forgotten, both for the fate they suffered and the bravery with which they faced it.

November 11 marks the armistice that brought a temporary end to the first Great War in Europe, a war fought over trivial rivalries between empires that were either destroyed or mortally wounded in the process. The Great War bequeathed us Nazism and Communism, and set the scene for most of the terrible wars that plagued the 20th century. The War was a terrible crime, which carried within it the seeds of even greater crimes. All those who helped to cause and promote it, including the rulers and governments of the time (with a tiny handful of brave exceptions), deserve eternal condemnation.

See also this fine piece at Making Light

The other big November 11 remembrance is the sacking of the Whitlam government 30 years ago. Larvatus Prodeo has a string of great posts about the dismissal, plus links.

How long can this go on ?

John Quiggin18 Comments

The record US trade deficit of $66 billion naturally raises the question “How long can this go on?”, and not in a rhetorical sense. To be more precise, the question is “How long before the US trade deficit starts declining” and my best estimate is “No more than two years”.

The reasoning is simple. Given two more years of growth in the deficit, the annual current account deficit will be around 1 trillion dollars (about 8 per cent of GDP) and accumulated net debt will be pushing 40 per cent of GDP[1]. At this point, the effects of compound interest start to bite, as interest on the accumulated debt adds to the income deficit. If trade deficits continue to grow, or even remain stable, the current account deficit explodes. This can’t continue.

If a trend can’t continue, it won’t. Therefore the US trade deficit must begin to decline, and soon. Flow-on effects to Australia are likely.

To be continued …
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Some good news on the terrorism front

John Quiggin10 Comments

The Blair government has been defeated on the floor of Parliament over a proposal to let police hold terrorist suspects for up to 90 days without charge, with 48 Labour members joining the Conservatives and Liberal Democrats in an amendment reducing the period to 28 days. It would certainly be good if Australian “conservatives” were conservative about things like habeas corpus.

And having lived by the bomb, JI bombmaker Amrozi Azahari has apparently died by it, blowing himself up to avoid capture by the Indonesian police. The Indonesians have done a great job in capturing, trying and convicting the main members of the JI terrorist network. Their one failure, not nailing “spiritual leader” Bashir on a major charge, was due, as much as anything else to the refusal of the US authorities to allow Bashir’s main lieutenant, Hambali, whose evidence could have been vital, to testify.

Game over ?

John Quiggin40 Comments

Among the many long-running policy debates in which I’ve been involved, the most drawn-out (except maybe for the one about private infrastructure and PPPs) has concerned micro-economic reform and productivity growth. For the last decade or so, the Productivity Commission and others have been claiming that reform has generated a surge in productivity growth, notably multifactor productivity growth (the term ‘multifactor’ refers to the fact that capital as well as labour inputs are taken into account) estimated by the Australian Bureau of Statistics.

One reason the debate is so drawn out is that the ABS presents estimates for ‘productivity cycles’, which are supposed to smooth out year-to-year fluctuations. Until very recently (in fact, until two days ago), the most recent cycle for which estimates were available ended in 1998-99, and this showed strong MFP growth. Arguments that this was a cyclical recovery or the result of increased work intensity were waved away.
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How to deal with terrorism

John Quiggin84 Comments

Sixteen people have been arrested in Sydney and Melbourne and charged with terrorism offences. While the individuals involved are legally entitled to a presumption of innocence, the police were right to act when faced with evidence suggesting a threat.

What’s important here is that the threat has been dealt with under criminal law, rather than through the use of arbitrary powers of secret detention, as proposed in the new anti-terror laws. Moreover, it appears that the offences created by the 2002 legislation are sufficient to encompass a wide range of terrorist activities. By contrast, it’s hard to imagine how the revival of the notion of sedition in the 1914 Crimes act could have proved useful in this, or any similar case.
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At the Academy

John Quiggin10 Comments

I’m at the annual meeting of the Academy of the Social Sciences in Australia. I’ll be talking in a symposium on Ideas and Influence on the topic “Economic liberalism: Fall, Revival and Resistance”. This evening there’s a public lecture from Paul Kelly on Rethinking Australian Government, at the Shine Dome (Academy of Science).

I had dinner last night with Max Corden, one of the great names in Australian economics, and we had a fascinating discussion about trade and current account deficits and the ways they might come back into balance smoothly (or not).

Then there was a colloquium on the topic of a Bill of Rights, at which Hilary Charlesworth and Larissa Behrendt spoke, which produced a couple of new (to me) developments. First, most people seem to have abandoned the idea of inserting a Bill of Rights into the Constitution, favouring a legislated Bill instead. Rather than being entrenched, this would require courts to interpret laws consistently with human rights as far as possible. If governments wanted to pass laws inconsistent with the Bill of Rights they could do so, but they would have to be explicit about it.

The second point is that the ACT has already passed such a Bill and that other states are considering it. This is part of a more general trend where the old assumption that the only way to achieve desirable progress is to centralise power in the federal government is being overturned.

Mine enemy’s enemy

John Quiggin29 Comments

I haven’t found enough information on the riots in France, to make any useful comment on what’s happening, except an obvious one, that the Chirac government has made an awful mess of things.

In this context, there’s an expectation about that leftists should defend Chirac and his government, and therefore be embarrassed by his failures. The first time this expectation arose was when (thanks to poor performance and co-ordination on the left) Chirac ended up in a run-off against Le Pen for the presidency in 2002. Hence it was necessary for the left to campaign for a strong vote against Le Pen and, necessarily, for Chirac. Then in 2003, Chirac’s government led the opposition to the Iraq war at the UN, by virtue of its permanent membership of the UNSC, rather than because of its great moral standing. Still, the war had to be opposed, and Chirac therefore had to be supported.

But the argument that ‘mine enemy’s enemy is my friend’ can only go so far. Much of the reason why French Gaullists annoy US Republicans is that they have so much in common. There’s little doubt that, if Chirac had the kind of global power that Bush does, he’d abuse it in exactly the same way. Australians and New Zealanders, who’ve seen Chirac and his predecessors throwing their weight around in the South Pacific (long used as the site for French nuclear tests), are well aware of this. The same kind of heavy-handedness is evident in domestic policy and seems to have contributed to the riots.