The coming dollar crisis

John Quiggin38 Comments

Brad DeLong has a great discussion of the opposing views on the coming dollar crisis.

More soon on this, but my one-sentence take is that the optimists believe that it is possible to generate as much US dollar liquidity as required to prevent a large increase in interest rates (despite a depreciation), without generating domestic inflation in the US. In this, they have recent US history on their side. The pessimists think that, sooner or later, this kind of policy will fail. In this, they have long-term history on their side

The cost of private tollways

John Quiggin22 Comments

Victorian Opposition leader Robert Doyle has been forced to abandon his promise to make the Scoresby freeway toll-free. What’s really interesting about the Age report on the subject is that it starts by referring to a “$2 billion” project, but ends by referring to an Econtech report saying it would cost $4.3 billion to buy out the private contractor. Roughly speaking the first figure is the actual construction cost and the second is the present value of the amount the public will have to pay (the Bracks government estimated the latter figure at $7 billlion). This is a fine example of the excess cost associated with PPPs and private tollways.

In any case, a toll on a road of this kind makes no economic sense. What is needed is congestion pricing, as in London. Having announced an inquiry into ‘radical’ methods of addressing congestion, the Bracks government has ruled out the only workable solution in advance

Telstra and the guillotine

John Quiggin36 Comments

Having taken nearly ten years to sell half of Telstra, the government seems to be in an awful hurry to sell the rest, ramming the necessary legislation through Parliament with almost no debate. Yet it’s clear that they still don’t have a clue about how to sell Telstra for an adequate price, what control they want to exercise in the future or how to implement the policy of structural separation.

It’s hard to avoid the conclusion that this resort to the guillotine was not due to any particular urgency about this legislation. Rather the government had the numbers and couldn’t resist using them. This is a bad sign for the future, both for Australia and the government. Such hubris generally turns out badly for all concerned.

Windschuttle flips again

John Quiggin82 Comments

Henry Farrell pointed me to this Financial Times report of an interview (over lunch) with Keith Windschuttle, which begins with Windschuttle saying he regrets his involvement in the dispute over Australia’s Aboriginal history, seeing as a distraction from his ambition to write a polemical defence of Western civilisation, aimed at the US market, and make heaps of money in the process.

â€?If you have a reasonably big hit in America you’re talking about hundreds of thousands of dollars,â€? he says. “That’s my aim – to have a couple of big sellers and have a leisurely life.â€?

It is unclear how much of this is intended as tongue-in-cheek affectation, but it’s certainly consistent with notable elements of Windschuttle’s past career, which has been marked by repeated political and methodological somersaults.

Although a lot of attention has been focused on Windschuttle’s political jump from Marxist left to Christian right, I’ve always been more interested in his shift in methodological stance. Having made his name as a defender of objective truth against politicised history in both left-wing and right-wing varieties, Windschuttle has become a practitioner of an extreme form of politicised history, and now looks ready to abandon any remaining links to the world of fact.
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Monday message board

John Quiggin78 Comments

It’s time, once again for the Monday Message Board. Civilised discussion and no coarse language, please. I’m hoping to do a post looking at the four years since 11 September 2001, but in the meantime I’d be interested in your thoughts.

Freedom on the March

John Quiggin14 Comments

The Egyptian elections were the subject of plenty of triumphalism when they were announced earlier in the year, and now it looks as if it was all justified. Not only did the elections go ahead, but with 88.6 per cent of the vote going to the pro-American incumbent, Hosni Mubarak, all that talk about how the ‘Arab street’ is opposed to US foreign policy has been refuted once again.

Education: more, please

John Quiggin45 Comments

In a post on education at CT, Chris

floats a hypothesis for commenters to shoot down if they want to.

However, since most of the commenters agree with Chris, it looks like I’ll have to provide the other side of the debate. I’m also not linking to any evidence, though I discussed a fair bit of it here

I’m going to argue, contrary to Chris and most of the commenters on his post that there’s no reason to suppose that, in aggregate, the proportion of the population undertaking post-secondary education is too high, and every reason to continue trying to remove obstacles to participation in education for students from poor and working class backgrounds. Further, I don’t think credentialism is an important factor in explaining observed changes in participation in education or the labour market.
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