Freeze in Hell

John Quiggin58 Comments

Most of the voters who were panicked into supporting the Howard government over Tampa have now forgotten their fears, while those who were horrified by the Pacific solution and the massive suffering it created (including the loss of hundreds of lives on SIEV-X) still remember. So we’ve seen a gradual easing of some of the most oppressive practices, such as the detention of children.

But the government is still up for gratuitous evil whenever they think they can get away with it, as is indicated by the reaction to the High Court’s decision that the indefinite detention of stateless asylum-seekers is legal. These people have no way of getting out of prison – no other country will take them – and they present no threat to us. But the government is still going to lock them up.

There’s a place in the coldest circles of hell (Ptolemea, to be precise) reserved for Amanda Vanstone, right next to Philip Ruddock.

Other comments Ken Parish has an analysis of the decision He makes a pretty good case that the High Court majority got it wrong, and concludes

I’m not even slightly delighted . In fact it’s a day of mourning not just for Messrs Al-Kateb and Al Khafaji, but for everyone who values liberty, the rule of law and the constraints on unlimited executive power which are so central to liberal democratic principles. What a bunch of miserable bastards.

Miserable bastards as McHugh, Hayne, Callinan and Heydon may be, they are only giving Vanstone and the rest of the government the opportunity to commit their crimes against humanity. They can still choose to set these people free if they want to. There’s more at Barista and Counterspin. I’ll add more links if anyone advises me. Of course, you can imagine what sort of link you’ll get if you support this decision.

A moment of optimism

John Quiggin8 Comments

Following Howard’s stunning mishandling of the FTA debate, I’ve come to a marginally more optimistic view of the whole issue of FTA and PBS. After reading the various statements on both the review process and the issue of generics, it seems to me that a purely legalistic focus is misleading. I think the letter of the FTA gives a fair bit of room to move, allowing for interpretations more or less favorable to the pharmaceutical lobby on the one hand and the PBS on the other. The government has tried to have it both ways, assuring the Australian public that the FTA clauses relating to PBS are meaningless words inserted to placate the Americans, while promising their (very close) friends in the pharmaceutical lobby that they can expect more favorable treatment, consistent with Wooldridge’s efforts to stack the PBAC and so forth. Passage of the FTA without amendment would have made it easy for the government to deliver to its friends when the elections were out of the way and the electors conveniently on the sidelines. Adding amendments directed at specific possible abuses implies, more generally, that Australia is committed to ensuring that the drug lobby gets nothing more than its minimum legal entitlement under the FTA – a nonbinding review, and observation of patent law.

Of course, if the government gets back in there will be plenty of temptation to renegotiate after the election. But at least now the press is awake to the fact that this is a big story, and that there are headlines to be got from exposing cosy deals, dubious claims and so forth.

Our Germs gets a gong

John Quiggin13 Comments

Australia is such a small country that, whenever any Australian gets noticed for anything we all tend to feel a glow of vicarious achievement[1]. So I was pleased to see that Germaine Greer was ranked second in a Prospect magazine list of 100 top British intellectuals. Having enjoyed my burst of patriotic pride, I have to ask what they are smoking in the Old Country these days. The Australian view of Germaine Greer[2] is probably best summed up by Geoff Honnor

Greer has metamorphosised into a Barry Humphries creation: the eccentric old bluestocking aunt who loves to blather on in a colourfully opinionated, slightly shocking way about the great issues of the day. These, oddly enough, seem to always come back to the single greatest issue of all – herself.

In fact, Humphries himself would rank ahead of Greer in my rankings of expat Aussie intellectuals. And if you want an expat with bitterly negative views of home, you can’t go past Robert Hughes (since he’s based in the US, he wasn’t eligible for the Prospect poll).

fn1. And we’re not too fussy as to who we count as an Australian. In particular, any Kiwi who’s done so much as pass through the transit lounge at Sydney airport automatically has their achievements added to the Australian total. OTOH, we’re happy to disown Rupert Murdoch.

fn2. I leave aside the shrinking pool of those who are silly enough to be outraged by her provocations

A striking moment

John Quiggin24 Comments

In Parliament today, Howard solemnly announced that five government departments had looked at Labor’s proposed amendments to the FTA, and all had agreed they would be completely impossible to draft. Latham just laughed at him – he might as well have announced that his advice had come from the Liberal Party secretariat.

We’ve reached the point where anything coming out of the Public Service can be assumed to be propaganda on behalf of the government. This assumption isn’t always correct, but when it matters, it’s usually right. Labor has contributed to this trend, but things are far worse now than when Howard came to office. If Latham wins, I hope he sticks to Labor’s promise to reverse this process.

A good week for Ozplogistan

John Quiggin13 Comments

I got interviewed about blogging again today, this time for Internet.au and it was a good time to talk about blogging. This has been one of the best weeks I’ve seen in Ozplogistan. Bloggers have provided blanket coverage of the debates and political chicanery over the proposed Free Trade Agreement with the US. In quality, breadth and depth, it’s been far superior to the coverage in the “quality press”, not to mention the soundbites provided by TV. Most of the debate has taken place on leftish blogs, and has been generated by posts ranging from mildly sceptical to overtly hostile to the FTA. But commenters have provided plenty of arguments in support of the FTA, and have done a much better job than the media opinion elite, most of which has backed the FTA for the weakest of reasons.

I’ll no doubt miss some people out, but I’ll still note some important contributions. Tim Dunlop provides a very balanced overview of the issues; a good starting point for those new to the debate. Chris Sheil has kept up a running commentary, focusing mainly on the political twists and turns. Brian Bahnisch had his say in the SMH Webdiary; an impressive critique. Kim Weatherall gave excellent coverage of the IP issues, including ‘evergreening’Gary Sauer-Thompson offered an illustrated version Geoff Honnor David Tiley and Rank and Vilewere also good.

Update In the comments thread, Stephen Kirchner points to pro-FTA comments from Peter Gallagher and analysis of public opinion from Andrew Norton at Catallaxy. Also at Catallaxy, Jason Soon weighs in on ‘evergreening’

As I say, I’m sure I’ve forgotten to mention some bloggers and missed others altogether. But if you compare this feast of comment and analysis with the thin and identikit offerings of the mainstream media you’ll see why I think blogging is going to be big news in the future.

How should we pay for medical research ?

John Quiggin33 Comments

In reading the discussion on pharmaceuticals and the US-Australia Free Trade Agreement, I thought it might be useful to look at the more fundamental question – how should we pay for medical research ? In the framework of neoclassical economics, it’s natural to start by looking at the free-market solution. In the absence of government intervention, firms innovate in the hope of securing above-normal profits by offering a superior product. They discourage imitators using a variety of methods such as branding and trade secrets. While these methods don’t work forever, in some cases they deliver enough profits to finance a satisfactory rate of innovation. But, as far as I know, no-one seriously suggests this is the case in relation to medical research. To finance adequate levels of medical research, we need some form of government intervention. There are three main options

* Patents

* Research grants

* Research rewards

Of these options, patents involve the most intrusive government intervention and the largest welfare costs.
Read More »

Explaining Howard

John Quiggin33 Comments

In my preceding posts, I’ve argued that Howard’s rejection of Labor’s seemingly innocuous PBS amendment was a high-risk piece of political brinkmanship, designed to force Labor into yet another backdown. But another thought occurred to me and others (for example, Brian Bahnisch in this comments thread), today. Perhaps the amendment isn’t innocuous after all, and Howard has been told that his great and powerful friends won’t wear it.

Certainly this is the line that Latham needs to push. So far, the debate seems to be going the right way. Howard’s counterargument, that the amendment might discourage US companies from investing in Australian ideas is a dangerous one. As I’ve pointed out previously, it’s inconsistent with the line that, as far as the PBS is concerned, the FTA is a non-issue.

Retrospective framing

John Quiggin25 Comments

It’s well-known that news tends to be framed in terms of pre-existing beliefs and prejudices. If there’s a general assumption that a public figure or a group of people has particular characteristics, stories will be framed in that way, and stories that don’t fit the frame may not get a run.

The coverage of the dispute between Howard and Latham over amendments to the FTA legislation illustrates this. When Labor Senators announced that the FTA would be supported, subject to some amendments, everyone treated this as the kind of minor facesaving that is usual when one side in a dispute backs down.

But as soon as Howard rejected the amendment on the PBS, the tone of media coverage changed completely. Howard is supposed to be canny and cautious, and Latham to be a wild man, liable to break out at any moment. So we get this kind of thing from Michelle Grattan.

It was typically Latham. Just when at last Labor’s course on the Australia-US free trade agreement looked relatively simple – the Opposition would agree to it after voting down the Left – the leader added a new, personal twist.

Grattan patches the holes in her argument by asserting that

The favoured game plan seemed to be that if these were resisted, they wouldn’t be pushed to the point of jeopardising the agreement.

but I saw no evidence of this game plan at the time.

Louise Dodson, Paul Kelly and Steve Lewis all take the same line.

The fact is that it’s Howard who has chosen to play high-risk politics here. No leader in Latham’s position could afford to back down twice in the same day, so his decision to dig in was a forced move, not an expression of character. But the idea of Howard as a reckless gambler doesn’t fit the established script, so it doesn’t get a run.

Greens Economic Policy part 3

John Quiggin9 Comments

In today’s Fin (subscription required) Sinclair Davidson has a response to my earlier article on the Greens’ economic policy. A couple of points in response. First, although he’s kind enough to describe me as “one of Australia’s leading theoretical economists[1]”, he’s happy to dismiss proposals for a Tobin tax as coming from the lunatic fringe, without noting that the late James Tobin was considerably more eminent than either of us as both a theoretical and a policy economist (at least that’s what the Nobel Prize committee thought). Similar ideas have been put forward by a more recent Nobel Prizewinner, Joseph Stiglitz. Of course, there are plenty of equally prominent economists who oppose the idea, but it’s certainly not outside the range of legitimate debate.

The second is a fallacy I’ve pointed out previously in Davidson’s work for the CIS. The Greens assert that middle-income earners pay more of their income in tax than high-income earners. Davidson denies this. His evidence? Australian Taxation Office data on the ratio of tax paid to taxable income. But the primary method of avoiding (and for that matter, evading) tax is the use of legal, semilegal and illegal devices for reducing your declared taxable income. Davidson’s ATO data proves nothing more than that the income tax scale is progressive. The Greens, and many others, assert that tax avoidance is sufficient to offset this progressivity. This is hard to prove either way[2], but Davidson has not even addressed the issue.

fn1. A backhanded compliment in the context of policy discussion, but still a compliment’s a compliment

fn2. My own estimate, FWIW, is that the two roughly cancel out.

Double or nothing

John Quiggin15 Comments

Not content with humiliating Labor over the FTA, John Howard has decided to raise the stakes, by rejecting a face-saving Labor amendment cutting off a minor loophole with respect to the PBS. On recent track record, Howard’s judgement looks sound. Labor will probably cave yet again, and look even weaker than before. This was, of course, precisely the judgement the Americans made on Howard and Vaile. By the end, the Yanks knew Howard would sign anything and proceeded to dictate one of the most lopsided treaties ever seen (in the absence of actual gunboats to enforce signature).

But maybe the worm will turn. The PBS is the most vulnerable single aspect of the deal. If Labor can’t fight and win on this, they can’t fight and win on anything. It seems unlikely, but perhaps Howard has overplayed his hand.