Climate conspiracy, classical liberalism and Q-Anon

John Quiggin8 Comments

Writing in Reason magazine, Jacob Sullum laments that “Marjorie Taylor Greene Presents Republicans With a Sadly Familiar Choice Between Blind Loyalty to Trump and a Basic Respect for Reality”.

That’s true. But the choice between in-group loyalty and basic respect for reality was a core problem for the right when Trump was still a Democrat, and propertarians/libertarians/classical liberals were among the most prominent enemies of reality. For decades, they advanced a conspiracy theory in which all the governments in the world, backed up by every major scientific institution, were advancing a fraudulent theory of global warming.

Here’s a pretty typical example from Pat Michaels, then the lead climate authority at Cato, being interviewed on Fox

LEVIN: Let me stop you there. Who does these computer models?

MICHAELS: Governments. There are 32 families of computer models that are used by the United Nations, each government sponsored. And all of them are predicting far, far too much warming. … it’s not the science that’s determining how much it’s going to warm. A lot of people don’t know this, but it happens to be true, and you know, we could speculate as to why that paper was published right before the 2016 election? I wouldn’t want to impute causation, but gee, if … … When you buy off the academy, you can get what you paid for …So now, the academy roots for anything that is big government that it feels it can tie onto to maintain this relationship. The roots of political correctness, there are many, manifold and varied. But one of them certainly was the enslavement of the academy.

This seems to me to be more, rather than less, crazy than Trump’s “stop the steal” or even QAnon. At least in these theories, the conspirators are trying to achieving something big – establishing a socialist dictatorship or making the world safe for cannibal lizardoids. By contrast, Michaels wants an equally expansive conspiracy with tens of thousand of particpants (including lots of rightwing governments), whose object is – the establishment of an emissions trading scheme?

Before denouncing QAnon, libertarians ought to take some responsibility for their own leading role in the campaign against reality.

WallStreetBets and financialised capitalism

John Quiggin17 Comments

It’s been hard to miss the chaos that’s arisen from a bunch of Reddit users (on sub-reddit WallStreetBets) getting together to squeeze shortsellers on stocks including GameStop and AMC Theatres. Most of the attention has been confined to the stockmarket action, but I was struck by this piece in The Bulwark[1], making the point that the process has enabled AMC to issue high-priced shares, repay debt and thereby stave off impending bankruptcy.

I don’t have a view on whether AMC should go bankrupt or not, but this is the kind of decision about capital allocation that is driven, in large measure by stockmarkets. The efficient markets hypothesis says that stockmarkets do the best possible job of estimating the value of assets, and thereby guides the allocation of capital. In the absence of the WallStreetBets push, it appeared that the market judgement was that it would be better to steer capital away from AMC, and into some other activity. Now, it’s the opposite.

One possible response is that WallStreetBets is an episode of craziness that will soon pass. But once you strip away newsworthy bits like the role of Reddit and the scale of the price movement, this kind of squeeze (or conversely, short-selling raid) is available, and potentially profitable, to any group of traders who can mobilize the necessary few billion (using options, those billions can be magnified a fair way). That’s part of the reason why stock prices are far more volatile than would seem justified by the arrival of new information relative to future earnings.

If stock prices are more volatile than underlying value, the two must differ most of the time. That undermines the claim that financial markets do a better job of allocating investment capital than would, for example, a central planning board. Even if you don’t want to go that far, there’s no obvious reason why limiting stock trading to (say) once a week would impair the allocation of capital to an extent that would outweigh the savings from cutting the financial down to a small fraction of its present size.

fn1. A Never-Trump website, well worth a look.

All politics is global

John Quiggin8 Comments

Reading about the recent military coup in Myanmar, I’ve seen the view that Biden’s criticism of the coup is undermined by the fact that the pretext for the coup, a supposedly stolen election, was exactly the same as that raised by Trump and the Republican Party in response to Biden’s 2020 election victory.

There’s a problem in this reasoning which is easy to see, but harder to resolve. It makes intuitive sense to say that the United States should not point fingers at other countries when it has the same problems itself. But it seems strange to say that, having just defeated an attempt to overturn a democratic election in his own country, Biden is in some way disqualified from criticising a similar attempt in Myanmar.

The answer to this question is to recognise that Biden does not speak for “the United States”, but for the party he leads. To the extant that his party supports democracy in the US, it is naturally aligned with supporters of democracy everywhere, and against supporters of dictatorship, both at home and abroad. Conversely, Trumpists in the United States are naturally aligned with dictators everywhere and opposed to democrats (with both small and capital “D”).

Read More »

Sandpit

John Quiggin8 Comments

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

To be clear, the sandpit is for regular commenters to pursue points that distract from regular discussion, including conspiracy-theoretic takes on the issues at hand. It’s not meant as a forum for visiting conspiracy theorists, or trolls posing as such.

Coincidence ?

John Quiggin64 Comments

I’ll be appearing (virtually) tomorrow, Monday 1 February to give evidence to the  the House of Representatives Standing Committee on the Environment and Energy’s inquiry on Zali Steggall’s Climate Bills 2020, the core of which is a proposal to set a target of zero net greenhouse gas emissions by 2050. As readers would expected, I’ll be supporting the bill.

At almost exactly the same time, Scott Morrison is going to address the National Press Club, and there are rumours he’s planning an announcement on climate policy. Given the natural human desire to see patterns in the universe, and a little bit of past history[1] it immediately occurred to me that Morrison might announce that the government had decided to commit to 2050 net zero.

Such a decision would make great political sense for Morrison, if he focused on the objective situation rather than in-group loyalties. Now that Albanese has backed away from any firm commitment other than 2050 net zero, Morrison is in a great position to “dish the Whigs” by outflanking him, perhaps by adding in an upgraded 2030 commitment.

Equally importantly, the geopolitical need to act has become urgent. Biden has announced a major climate summit for Earth Day, 22 April, at which leaders will be pressed to enhance their commitments. The main target is China, where the push is to bring their 2060 target forward to 2050 and back it up with some firm action. But of the real laggards, with no zero commitment at all, Australia is the only one that isn’t already a pariah like Saudi Arabia and Brazil. Unless he wants a major international embarrassment, Morrison has to come up with something big, and soon.

This has largely unnoticed by our political class, who are still suggesting that nothing needs to be done until the Glasgow COP in November, and that an election can be held before then.

Read More »

Australia (Act) Day

John Quiggin34 Comments

As usual, 26 January has been marked by protests, denunciations of those protests, and further iterations. Even apart from the fact that it marks an invasion, the foundation of a colony that later became one of Australia’s states isn’t much of a basis for a national day.

A logical choice would be the day our Federation came into force. Unfortunately for this idea, our Founders chose 1 Jan 1901. The first day of the 20th century[1] must have seemed like an auspicious choice for a new country, but it ruled out the anniversary as a national day.

The ideal thing would be to fix the problems of our current system with a republican constitution including a treaty with the original owners of our land. That would provide a date really worthy of celebration.

In the meantime, I suggest 3 March, the anniversary of the day in 1986 when the Australia Act came into force, finally establishing beyond any doubt that Australia is an independent country, entirely separate from the UK[2]. We had by 1986 a constitution and public policy that was at least formally non-racist, thanks to the 1967 referendum and the end of the White Australia policy. Many of the symbolic problems with the current date would be avoided, though the real injustices would remain to be addressed.

It’s true that the Australia Act doesn’t have a lot of resonance. But any date with a lot of resonance is bound to resonate badly for a large proportion of the population. At least this would be a choice nearly all of us could celebrate without worrying too much about its precise significance.

fn1. At least if you start the count from 1CE. I think it would be more sensible to cross-label 1BCE as 0 CE, making 1900 the start of C20. I had always assumed that Dionysius Exiguus, who invented the AD calendar was unaware of the concept of zero, but Wikipedia accords him a prominent role in its history.

fn2. Whether, when and to what extent, we had become an independent country before 1986 remains a mystery, but there’s no doubt after that.

Footnote from, The Economic Consequences of the Pandemic,

John Quiggin1 Comment

The requirement that the rate of growth exceeds the rate of interest on government debt may be written algebraically as g > r. Readers of Piketty’s Capital in the 21st Century will recall that he places a lot of stress on the opposite formula r > g. What is going on here? The answer, in simple terms, is that Piketty is talking about the rate of return to investment, and more particularly the rate of return earned by high-wealth investors. This rate is as much as 6 percentage points higher than the rate of interest on government bonds. The magnitude of the difference, referred to as the ‘equity premium’ is a long-standing puzzle for economists, with profound implications, which will be discussed below.