Kyoto ratified!

John Quiggin12 Comments

The lower house of the Russian Duma has voted to ratify the Kyoto Protocol. Although some formal steps remain, this was the last real hurdle to be cleared before the Protocol could come into force.

The only signficant holdouts now are the US and Australia. The Bush Administration has, as expected, said it will do nothing, and Howard will presumably follow. The ratification will pose some significant problems for Kerry, who has tried to sit on the fence so far – his position appears to be that he would seek to renegotiate the treaty to make the terms more favorable to the US. Realistically, this is probably a sensible outcome for the world, but I don’t know in practice how a treaty that’s already in force can be renegotiated unless all parties agree, which seems unlikely.

Unfair to the readers

John Quiggin3 Comments

I’ve never been a great fan of Steven Landsburg’s ‘Everyday Economics’ columns in Slate[1]. While he occasionally has something interesting to say, a lot of his columns are what Orwell called ‘silly-clever’, such as this piece defending looting. Economists are often prone to this kind of thing, and it doesn’t do the profession any good in my view, but it’s usually not worth refuting.

Landsburg’s latest piece is in a different category. It’s a repetition of dishonest rightwing talking points about taxation that have been refuted over and over, but apparently need to be refuted yet again. As is his wont, Landsburg seeks to defend a paradoxical claim, namely, that “Bush’s Tax Cuts Are Unfair …To the rich.” He makes a total hash of it.
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Read the whole thing, Part II

John Quiggin4 Comments

Following up on the theme of manufacturing decline, here’s a piece by Ronald McKinnon of Stanford, linking the decline of US manufacturing to the low rate of national savings. I’m not entirely convinced by the argument, which seems to rest heavily on the manipulation of identities that gave rise to the twin deficits hypothesis, but I’ll think about it a bit more.

It is certainly striking that all the English-speaking countries seem to have a broadly similar pattern of large current account deficits, low household saving, and rapid decline in the manufacturing sector (more I think than can be accounted for by long-run structural change). This would be an obvious basis for contagion in the event of a financial crisis affecting the US.

Careerists

John Quiggin29 Comments

Quite a few people have pointed me to this piece by Barry Cohen which produces the unsurprising conclusion that Labor’s MPs are drawn from a very narrow range of occupations: union officials, 29; teachers, 18; state MPs and ministerial staff, 16; public servants, 14; party officials, 8; lawyers, 8. Before discussion what’s wrong with this, it’s worth pointing out that the situation is not that different on the other side of the aisle. Replace union officials with employer group officials, teachers with farmers and public servants with doctors, and you’d account for the great majority of Coalition MPs and ministers.

Whereas people once went into politics after spending a fair bit of time doing a variety of different things, political office is now part of a small set of fairly well-defined career paths. What’s mroe disturbing to me is that, at least for people who reached the heights of ministerial office, politics was almost always the last stage in a career. Now aspirants to the ministry are setting themselves up with contacts, and obligation networks for the time when they can really make big money, as consultants, lobbyists, chairmen of boards and so on. We don’t have to imagine the effect on public policy – there are already some egregious examples out there.

The only way to fix this, in my view, would be to greatly expand membership of political parties, and the only way to do that would be to give the members a real say in determining policy. Since that’s not going to happen, I don’t see a solution for this problem.

How to kill a country

John Quiggin15 Comments

That’s the title of a book-length denunciation of the US-Australia FTA, by Linda Weiss, Elizabeth Thurbon and John Mathews, published by Allen & Unwin. A lot of the material will be familiar to readers of this blog, but there is an interesting chapter on quarantine. It makes the point that our quarantine laws have been successfully defended in the WTO (far from friendly to any sort of restriction on trade) but will now be subject to unaccountable bilateral processes with the US, very similar to the situation with the PBS. Even if you regard the title as a little too apocalyptic, it’s clear that this is a terrible agreement from Australia’s point of view and that, if it falls over on the issue of pharmaceuticals, that would be a very good thing.

You read it here first

John Quiggin29 Comments

Bob Carr has proposed

a new deal on federalism in the wake of the Howard Government’s big election win, offering to hand over responsibility for the health system to the Commonwealth.

In return, Bob Carr says, the Federal Government would give the states total control over schools and TAFE.

This is pretty close to what I’ve been arguing (along with Chris Sheil) for some time) though I tentatively suggested giving TAFE to the Feds.

I don’t suppose Carr gets his policy ideas from blogs, but perhaps there’s some indirect influence somewhere.

Time management tips

John Quiggin15 Comments

If you’re reading this, it’s a fairly safe bet that you’re in need of time-management tips[1]. On the other hand, the idea of a blogger giving time management tips is problematic, to say the least. Undaunted by this contradiction, I’m going to offer a few. The details reflect my main activity, which is academic research but may be more or less adaptable to other kinds of jobs.
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Where have all the young fogeys gone ?

John Quiggin15 Comments

One of the features of the post-election that has struck me is its similarity to themes that emerged in the Thatcher years in the UK. For example, Miranda Devine’s claims about youthful support for the Liberals, taken down here by Don Arthur, reminded me of talk about the young fogeys who were redefining cool in the Tory mould. These people would have been in their twenties then, and in their early forties now, but, while some of the individuals who set the tone are still around, the generation they were supposed to symbolise is lost to the Tories. According to Wikipedia, the average age of Tory party members is 65.

This post by Henry Farrell of Crooked Timber makes the point that the Tory attempt to remake Britain in a free-market mould was a catastrophic failure, at least in party political terms.

. By crushing unions, privatizing state industry, trying to shift the North England economy from manufacturing to retail commerce, introducing market reforms to the welfare state, and flogging off public housing, the British Conservatives systematically tried to create a new class of Tory voters that would permanently marginalize Labour. The result was the transformation of the Conservatives into a near-permanent minority – thirteen years later, British voters still don’t trust the Conservative party anywhere near the public services.

Those engaging in triumphalism on the conservative side of Australian politics ought to learn from this lesson

Read the whole thing

John Quiggin21 Comments

Today’s Fin (subscription required) has the first in a series of articles on Australian manufacturing, by Peter Roberts. There’s an odd disconnect between the front page (and the editorial referring to it) and the body of the article. The opening includes the optimistic declaration

The Australian manufacturing sector is now made up, not of survivors, but successful competitors in home and export markets

But the main body of the article is rather less positive. It’s not surprising to learn that manufacturing has shrunk from about 20 per cent of GDP and employment in 1975 to 12 per cent today. But those who haven’t been following the news may be surprised to learn that manufactured exports are declining in nominal terms, and that as the article notes

there has been a seemingly inexorable rise in the manufacturing trade deficit … concentrated in areas such as chemicals, IT and telecommunications … From a high of $37.6 billion in 2000-01, manufacturing exports slumped to $32.9 billion in 2003-04

That’s a decline of about 15 per cent in nominal terms, more than 20 per cent in real terms and more than 30 per cent relative to GDP. Meanwhile imports have risen above $100 billion. I’ve previously looked at the stagnant export performance of the “elaborately transformed manufactures” sector, much-touted under Hawke and Keating, but this is worse than I had realised.

An economic rationalist might respond by saying that if manufacturing is declining, that must be a reflection of market forces and comparative advantage and therefore desirable. This at least a consistent position, though one with which I have some significant disagreements. But it seems silly to me to pretend that things are going well in manufacturing when the numbers clearly point to a rapid decline in all sectors exposed to competition.

Warblogging & GM

John Quiggin47 Comments

Since some readers want to debate these issues more or less continuously, I’m putting up a special-purpose post covering all issues related to the war on terrorism and the Howard doctrine (whatever you think it is) and also on Genetically Modified crops. Maybe there will be some cross-fertilisation or other exchange of genetic material.

For the record, my view on Iraq is that elections must go ahead in January come what may, and that the occupation forces should be withdrawn as soon as possible thereafter. On GM foods I favor stringent safety testing and compulsory labelling, and would like to see more effort put into developing products that would actually benefit people in poor countries and less into political point-scoring.

Having set this thread up, I’ll keep it running as long as needed, and will move or delete comments on these topics from posts on other issues.