So far, all we have on the US-Australia Free Trade Agreement is a rewritten press release, but I think that’s enough to conclude that this is an election-loser for Howard. The reports have noted that there’s nothing on sugar and nothing much on beef or dairy, but it’s more revealing in some ways to look at the list of wins. Of particular interest is that the US Federal government procurement market has been opened up to Australian suppliers. As of last weekend, our demands included state government procurement as well, particularly in California.

And of course we have yet to see the list of concessions on things like IP, parallel importing and so on. The PBS looks to have been kept off the table, but I wouldn’t count on it.

Overall, this is about as unbalanced an agreement as could be imagined.

Update I’m travelling and haven’t yet had time for a detailed study, but I thought I’d look at the US reponse. Naturally, it’s anything but front-page news. Buried deep in the business section of the NYT, I found this article, which notes, with respect to the abolition of tariffs on manufactures

supporters of the trade pact said its main significance, assuming Congressional approval, was the virtual elimination of import duties on American manufactured goods to Australia. Currently, the United States pays 10 times as much as Australia does in tariffs in the joint trade between the two countries.

This is a pretty fair summary of the distribution of gains and losses in the deal. The Washington Post has a story leading to a broken link and the LA Times nothing I could find.

Further updateI’ll take this chance to welcome Ken Parish who’s back as an active blogger. Ken is deferring judgement, but has a lot of useful links.

Welcome back also to Kim Weatherall who reports that the IP components of the agreement are as expected, that is, about as bad as they could possibly be.

Anyone who’s been following recent discussion of the US economy will be aware that the Bureau of Labor Statistics produces employment statistics from two different surveys, and that the results have diverged radically since 2001. The BLS preferred numbers on employment growth come from a survey of employers (the Establishment Survey) while other numbers, including the unemployment rate are derived from a survey of households (Current Population Survey). As the BLS Commissioner’s latest statement notes (PDF file)

From the trough of the recession in November 2001 through January 2004, payroll employment decreased by 716,000. Over the same period, total employment as measured by the household survey increased by about 2.2 million (after accounting for the changes to that survey‚s population controls).

Not surprisingly supporters of the Administration have been pushing hard to discredit the Employment Survey in favour of the CPS. While noting some reasons for the discrepancy, the BLS seems to be sticking with the payroll survey, noting that there are a lot of problems in estimating employment growth from the CPS, and that the payroll data is consistent with data on new claims for unemployment benefits.

If that’s the case though, the implication appears to be that the CPS results are unreliable, and therefore that the unemployment rate (derived from the CPS) is an underestimate. Allowing for the fact that non-employed people are divided between unemployed and those not in the labour force, the discrepancy could easily be a full percentage point, implying that unemployment is now higher than when the recovery (as measured by output) began. This seems consistent with anecdotal impressions.

I’m reading After the New Economy by Doug Henwood, after Brad DeLong kindly sent me a copy. I plan to do a review of this book, which has already been reviewed by several contributors to Crooked Timber.

I watched the first round of The Einstein Factor, which turns out to follow, in crucial respects, the Mastermind format peculiar to public broadcasters, namely a round of questions on a special topic that would be regarded as too narrow if proposed for a PhD thesis (those today were Jack the Ripper, Australian campaigns in France in WWI and heavy metal bands of the 1980s), followed by absurdly easy general knowledge questions (in one round there was even multiple choice – shades of Eddie McGuire!).

The “special topic” approach is unsatisfactory in too ways. First, even a well-informed viewer doesn’t have a chance of answering more than a handful of questions, which makes viewing not that much fun.

Second, it’s impossible for anyone (including the setters) to tell whether the questions are of comparable difficulty between topics. Which is harder, to name the head roadie for Megadeth or the constable who discovered the body of Jack the Ripper’s third victim? For all I know, one question is comparable to naming the song sung by the Sirens and the other is basic knowledge for all aficionados of the topic. Think about blogging as a special topic from the viewpoint of your non-blogging friends, and see what I mean.

Electoral commentary hasn’t yet absorbed the magnitude of the disaster suffered by the anti-Labor parties in Queensland tonight. It’s true that Labor’s massive majority has been reduced a little relative to the outcome in 2001, but this was distorted by the presence of One Nation, which has now been almost completely eliminated. This was a ‘normal’ election, with no last-minute scare campaign or other disturbing factor, and the coalition has been crushed.

Let’s look first at the National Party. They are supposed to be the alternative government, but they got only about 17 per cent of the first preference vote and have been reduced to the status of a rural rump, as in NSW and Victoria, the only other states where they remain a significant force. The seats they have regained have been in areas that should have been safe and were lost because of the One Nation upsurge. . Outside their heartland, they actually lost more ground this time around, losing the seat of Keppel. In the Gold Coast, where they were once the dominant party, they have disappeared for good. In provincial cities like Cairns, Toowoomba and Townsville they have gone nowhere. Even in the heartland, their gains were partly dependent on the “agin the government” vote in sugar electorates – this will work against them when the Federal election comes around, unless the fabled FTA with the US includes access to sugar markets (and, since GWB has an election of his own coming on, that’s not very likely).

Then there’s the Liberals. They hold about half the Federal electorates in Queensland, but they remain completely marginal in State politics. It’s quite possible that they will hold only one Brisbane electorate in the new Parliament, as they did in the old one. As a resident of Indooroopilly, I only have to walk down the street to be stunned by the idea that this is a marginal Labor seat. admittedly the University of Queensland is a disturbing factor (it brought me here, after all) but the general ambience is that of Toorak or Double Bay. The same is true in spades of Clayfield, which Labor looks certain to retain. At least at the state level, urban electors want schools and hospitals and think Labor is more likely to deliver them than the Liberals.

Perhaps the best feature of the election from my viewpoint is that Labor’s massive win followed the introduction of a new tax (the ambulance levy) and there was no commitment not to raise existing taxes or introduce new ones. There were some justified tax cuts (for example, in stamp duty on house purchases) but the government is now in a position to meet its expenditure commitments without resorting to deficit finance.

State and Federal politics are very different, but the core vote from which the Coalition is working is about 35 per cent. Given a competent campaign, Federal Labor should pick up enough Queensland seats to make the next election a very close call.

The old Australian tradition ‘vote early and vote often’ is under official attack here in Queensland. The pamphlet distributed by the Electoral Office laid great stress on the fact that we should vote exactly once.* And a fair bit of publicity was given to the fact that polling booths are most crowded between 8am and 10am.

*For non-Australian readers, I should point out that not voting at all is not a legal option here. If you want to abstain, you have to do so actively, by turning up and casting a blank ballot.

In the middle of a generally reasonable Newsweek article about the failure to find WMDs, I came across the following para

But if Saddam didn’t have weapons of mass destruction, why didn’t he come clean? After all, he could have given U.N. inspectors free rein; he could have allowed them to interview all of his scientists in private—even outside the country—and let them rummage through his palaces. Faced with war, wasn’t that the sensible option?

But, but …(lapses into stunned silence)

My posts regarding the third-hand junk science on DDT presented by Christopher Pearson have provoked an interesting debate, which leads me to want to clarify my position on the issue. You can find relevant references in my previous posts and the comments threads. Here are the conclusions I have drawn:

The ban on the agricultural use of DDT, beginning in the US in 1972, and much reviled by junk scientists, was fully justified, for several reasons.

• DDT has well-established adverse environmental effects, particularly on predatory birds
• DDT persists and accumulates in human body tissues, which is an undesirable property for any potential toxin. There is strong, but not conclusive evidence of health risks to humans  arising from this
• DDT has broad-spectrum effects, killing beneficial as well as harmful insects, and is highly persistent
• Indiscriminate agricultural use of DDT promotes the development of resistance, reducing or eliminating the usefulness of DDT in its most beneficial use, as an antimalarial

The early success of DDT as an antimalarial in countries such as India and Sri Lanka was not sustained, but this had little or nothing to do with the 1972 ban. The main problems were the development of resistance and the lack of sustained funding. Resistance problems also reduced the effectiveness of antimalarial drugs and there was little commercial interest in the development of new ones.

The use of DDT as an antimalarial, sprayed on house walls or insecticidal nets was not banned in 1972, and never has been. The majority of junk science diatribes, including Pearson, state or imply the contrary, either through ignorance (almost certainly the case for Pearson) or malice.

Between about 1995 and 2000, debate over DDT was intensified because environmental groups wanted a complete phaseout of DDT as part of the UN convention on persistent organochlorine pollution (POP). Environmental groups argued that there were safer, and equally effective alternatives, such as pyrethroids and pressed developing countries to adopt these methods. In some cases, for example in South-East Asia, this worked fairly well. In other cases, such as South Africa, the alternative methods failed or funding was inadequate and it was necessary to return to DDT. During the debate leading up to the POP convention, rhetoric on both sides was heightened, tending to obscure agreement on the basic points that the only legitimate use of DDT was antimalarial and that replacement of DDT was contingent on the provision of affordable and effective alternatives, funded by rich countires. Quoted out of context, some of the arguments on the pro-DDT side have been used by junk science writers to back up their attacks on the 1972 ban. There are some instances in which environmental pressure led to ill-advised decisions to abandon DDT. But far more damage to the viability of DDT as an antimalarial was done by its use as a broad-spectrum agricultural insecticide – the very policy defended by junk science writers.

The current position is that, in at least some poor countries (particularly those where there has been no history of extensive spraying and therefore no buildup of resistance) there is no affordable and effective alternative to using DDT spray on house walls. As long as this remains the case, DDT use should be continued. Where there is a more expensive, but equally effective, alternative, the cost should be borne by rich countries, since the benefits of reduced DDT in the environment are global.

As the boom in Australian property prices comes to add hundreds of thousands to the value of any block of land from which the sea is visible, trees that get in the way of those views have been disappearing rapidly. In most places, this has reached the point where further clearing has been tightly restricted by law, but this has merely produced an epidemic of midnight tree-fellings and mysterious poisonings.

I was told today (but haven’t been able to check it) that Noosa Council has adopted what seems likely to be an effective deterrent. In the event of a suspicious tree death, a new tree will be replanted. While it is growing it will be supplemented by an artificial visibility barrier equal in height and width to the old tree. Perhaps the tree-fellers can find a countermeasure, but it’s not obvious how.

And on this kind of thing, as Noosa goes, so goes the nation.

Kieran’s piece on kids being driven to school reminded me of a post I’ve been planning for a while. One of the issues debated at length on my blog is that of speeding and law-enforcement measures such as speed cameras. I’ve argued against speeding and in favor of rigorous law-enforcement. Not surprisingly, and perhaps reflecting the fact that more than 80 per cent of drivers regard themselves as above-average, this has been very controversial. You can read some instalments in the debate here and here or use the search facility for “speeding”. Unfortunately most of the extensive and interesting comments were lost in a database failure.

In the course of this debate I discovered the fact, surprising to me, that, although the rate of road deaths per person in the United States is nearly twice that in Australia and the United Kingdom, much of this difference can be accounted for by the fact that distances travelled in the United States are a lot higher and are rising (there are problems with the numbers and biases in the measure, but I’ll leave that to one side for now). The differences between US and UK are plausible given differences in population density and well-developed public transport in London at least, but the differences between the US and Australia certainly surprised me. Australia is every bit as car-dependent as the US and has much lower population density.

All of this is a prelude to the fact that, in economic terms, time spent travelling is a really big deal. In their book Time for Life, based on the 1985 US Time Use Study, Robinson and Godbey estimate that the average adult American spends 30 hours a week in paid employment and 10 hours a week travelling (they also, controversially, argue that working time has been falling, not rising). It’s pretty clear that distances and times spent travelling have increased since 1985 in the US (in both the US and Australia, driving is by far the dominant mode of travel).

If, as I’ll argue below, most travel should be regarded as being in the same economic category as working and if, as the stats linked above imply, Americans spend about twice as much time travelling as Australians, then reducing travel times to the Australian level would be equivalent to a productivity improvement of between 12 and 15 per cent. As it happens, combined with the relatively small difference in hours of paid work, adjusting for hours of work and travel would just about eliminate the gap between Australian and US GDP per capita (about 20 per cent on standard PPP estimates).
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Via Lawrence Solum, I found this interesting post from Professor Bainbridge arguing that corporations should not be compelled to pay reparations for past wrongdoing (in this case, complicity in slavery). He says

Punish the wrongdoers, you say? Sorry, but the corporation’s legal personhood is a mere legal fiction. A corporation is not a moral actor. Edward, First Baron Thurlow, put it best: “Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and nobody to be kicked?” The corporation is simply a nexus of contracts between factors of production. As such, there is no moral basis for applying retributive justice to a corporation – there is nothing there to be punished.

So who do we punish when we force the corporation to pay reparations? Since the payment comes out of the corporation’s treasury, it reduces the value of the residual claim on the corporation’s assets and earnings. In other words, the shareholders pay. Not the directors and officers who actually committed the alleged wrongdoing (who in most of these cases are long dead anyway), but modern shareholders who did nothing wrong.

This seems plausible. On the other hand, the obvious implication (one that was clearly implicit in Thurlow’s original point) is that the principle of limited liability is untenable, at least in relation to civil and criminal penalties for corporate wrongdoing. The wrongdoers are, as Bainbridge says, the officers and shareholders at the time the wrong is committed, and they should be held personally liable. The law has moved a bit in this direction in recent years, but Bainbridge’s argument implies that it should go a long way further, restricting the principle of limited liability to the case of voluntarily contracted debts.
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