NHS & PFI

John Quiggin8 Comments

The latest London Review of Books has a great review article by David Runciman (subscription only, unfortunately). The books covered are Restoring Responsibility: Ethics in Government, Business and Healthcare by Dennis Thompson , NHS plc: The Privatisation of Our Healthcare by Allyson Pollock and Brown’s Britain by Robert Peston.

Of these, I’m most interested in the book by Pollock, who’s been a prominent critic of the Private Finance Initiative, particularly in relation to health care. I think the biggest problems with the PFI are going to emerge ten or twenty years into the contracts, when any safeguards written into the original contracts will be obsolete, and the private party will have an incentive to extract as much rent as possible from the remaining life of the deal.

The whole idea of governments signing these long-term contracts is dubious in many respects. It’s bad public policy for a government to bind its successors in this way. And it’s bad commercial policy to sign 30-year contracts for services where ordinary principles of risk allocation would suggest a term more like five years. The PFI and similar initiatives have already run into plenty of problems, but I think the worst is yet to come.

A particularly egregious example came to light in Australia recently. The late, and not much lamented Kennett government signed contracts giving monopoly rights monopoly rights to operate gambling enterprises to two firms, Tabcorp and Tattersalls.

It now emerges that, if these contracts are not renewed, obscure clauses entitle the monopolists to compensation of up to $1 billion.

Darfur again

John Quiggin5 Comments

Via Jeff Weintraub, I got this link from Harry’s Place on possible actions that can be taken to pressure the Sudanese government into calling off the continuing campaign of terror in Darfur. Things have improved somewhat under international pressure, but a lot more needs to be done. A good source of up-to-date information is Passion of the Present

Having opposed the war in Iraq, I should perhaps explain why I support intervention in Sudan. There are two aspects to the issue. The first is simple costs and benefits. A few tens of millions of dollars and some modest military force could save thousands of lives in Darfur. By contrast, the war in Iraq has cost tens of thousands of lives (quite possible more than 100 000) and hundreds of billions of dollars, for prospective benefits that have not yet been delivered.

Second, I think it’s necessary to strike a balance between the extreme claims for national sovereignty, defended, for obvious reasons by the Chinese Communists, and the US doctrine, backed by Howard and endorsed in blood by Putin, that any sufficiently powerful government should be able to do what it likes in response to perceived threats. Where a government engages in war against its own citizens, the international community should be willing to step in, starting with sanctions and going on to safe areas protected by no-fly signs and peacekeepers with rules of engagement that allow them to defend themselves and refugees against any attack. If this leads to the downfall of the government, as it did with Milosevic in Serbia, so much the better. The step of overthrowing a government, even a brutal and dictatorial one, and imposing rule by an occupying army is one fraught with danger, which should be an absolute last resort.

Surfdom is back: but where has it been?

John Quiggin1 Comment

Despite my expectations of a bit more free time, I’ve been scrambling all week, and much of my blogging time has been spent dealing with comment spam and similar nuisances. So, although I noticed Tim Dunlop hadn’t posted for a while, I didn’t get around to emailing him, and I also didn’t tour Ozplogistan as I do when I have free time. Imagine my surprise when I found out he’s spent the week at Tim Blair’s. I’ll be interested to read the comments threads, again when I get time. Meanwhile, Tim D is back on air and blogging up a storm.

Two in one

John Quiggin23 Comments

Today is a bit of a red letter day for me as the late email brought in my second journal article acceptance for the day: the first time I’ve managed this, I think, though I’ve had three rejections in the same day before now. So no more work for me; it’s time to uncork the Hentschke’s Hensckes!Henschke’s

Weekend reflections

John Quiggin26 Comments

This regular feature is back again. The idea is that, over the weekend, you should post your thoughts in a more leisurely fashion than in ordinary comments or the Monday Message Board.

Please post your thoughts on any topic, at whatever length seems appropriate to you. Civilised discussion and no coarse language, please.

Manifestation

John Quiggin6 Comments

Assuming there are no car crashes or political scandals in the next couple of hours, Brisbane-based readers might catch a glimpse of me on the Channel Ten news at 5:00pm, talking about oil prices. Nothing you haven’t already read here on the blog, of course.

A request for help

John Quiggin54 Comments

In the discussion over Michael Duffy’s SMH article, we had a lot of trouble with a survey supposedly showing that 25 per cent of climate scientists doubted the reality of anthropogenic (human-caused) climate change. We’ve tracked the survey downhere and it appears that the relevant question is number 40

Climate change is mostly the result of anthropogenic causes.
Respondents have to answer on a 7 point Likert scale from Strongly agree to Stongly disagree

Tim Lambert observes that this was an online survey, which may raise doubts about the sample frame, though it appears that Dennis Bray, who ran the survey, tried to keep participation limited to those in the study population.

Brian Bahnisch comments

To me the question is too open-ended. Surely any rational, logical scientist would see that “climate change� has been going on a lot longer than we have been walking upright.
It is also possible to think that anthropogenic causes are less than natural ones, but still a significant, indeed critical, influence.
How does he count the fence-sitters who marked “4�?

and I share these concerns.

Anyway, the immediate problem is that Bray has set up some fancy code to display the survey results and neither Brian or I can make it work. It appears to be set for either Mozilla or Windows IE. Can anyone find the results and advise me.

Update Thanks to TIm Lambert, who has located what appear to be the results to Question 40 here The number giving “Disagree” responses (29 per cent) roughly matches the 25 per cent cited by Duffy, who was apparently relying on a second-hand and not very reliable source. But, as we’ve seen the description of the question given by Duffy was incorrect, as was the date of the survey and the description of the sample population, not to mention the characterisation of the thinktank where the results were presented.

There’s obviously a big difference between “the modest warming of the past 150 years is due to human activity” (Duffy’s description) and “Climate change is mostly the result of anthropogenic causes” (Bray’s actual question) and neither represents the IPCC position, which is that at least some of the warming observed over the last 50 years is anthropogenic and that, under current policies, this warming will continue. For appropriate time scales (say, as short as an El Nino cycle or longer than 1000 years) it seems pretty clear that natural causes are dominant, so it’s perfectly reasonable to disagree with, or give a “Can’t answer” response to Bray’s question, while agreeing with the IPCC view.

A couple of thoughts on oil

John Quiggin23 Comments

he price of oil is stlll around $50, and there’s no reason to expect it to fall in a hurry. In particular, if China revalues the renminbi yuan, as is commonly expected, there will be a corresponding fall in the effective price of oil, both for suppliers and for consumers in China and other countries that revalue, for any given $US price. This probably doesn’t matter much on the supply side – everyone is pumping as hard as they can and will probably keep doing so. But China’s demand is probably quite price sensitive, and a reduction in the price could keep demand higher, even in the face of a slowdown in exports to the US.

The other thought that occurred to me relates to climate change. Although there are a variety of ways in which we could mitigate climate change, the simplest would be to double the price of carbon-based fuels. This would certainly reduce demand significantly in the long run (I’ll try and update this with some estimates soon). On the other hand, there’s a lot of concern about the short-run macroeconomic impacts of such an increase.

Well we’ve seen a doubling of oil prices, and substantial increases in coal and gas prices over the past few years, and any macroeconomic impact is undetectable amid the general noise. The cases aren’t perfectly comparable of course, notably

* the rising price has been driven by increased demand, not imposed exogenously

* the effect of rising market prices is to redistribute income to oil-producing countries, and increase trade deficits. This effect wouldn’t arise with carbon taxes and would be much smaller with tradeable permits

Still, the evidence is against the idea that higher energy prices would bring the economy to a grinding halt. Rather, the response so far seems to be a textbook case of orderly adjustment, as people gradually shift away from gas-guzzling vehicles, look again at energy saving options and so on. So far the response has been small, but over time (if supply declines and prices stay high) more substantial responses can be expected.

GW Bingo

John Quiggin1 Comment

Tim Lambert introduces Global Warming Sceptic Bingo. List the discredited arguments put forward by any given sceptic/contrarian/denialist. When you get four in a row, you win. Allow me to suggest another column for Tim’s card with the following entries (refutations of claims are indicated by #)

Uses bogus Schneider quote #
Claims IPCC projections are way off because of incorrect exchange rate conversions #
Claims Kyoto will be economically ruinous #
Relies on Copenhagen Consensus #