Crean bites the bullet

John Quiggin9 Comments

Simon Crean has gone up a bit in my estimation by announcing his own spill rather than waiting for the Beazley push to organize one.

I’m not a huge Crean fan, but he has at least tried to put forward an alternative some of the time. When the best his enemies can come up with is someone who was an undistinguished minister, has already lost twice, contributed nothing to the policy debate in six years as Leader except the phrase “small target strategy”, and has contributed nothing more in two years on the backbench, I can’t believe the Caucus will be stupid enough to change leaders.

A decisive win for Crean could really turn things around. Labor is already close in the opinion polls and there’s now a Liberal leadership story to absorb the attention of the many political journalists whose approach is that of the gossip columnist. A strong focus on issues (Medicare in particular) could have Howard regretting his decision to stay on.

Castles vs IPCC

John Quiggin5 Comments

Keneth Miles has been posting quite a bit on the Castles critique of the IPCC economic projections used in estimates of global warming. I started a long piece six months ago, but have been too busy to do all I wanted. So, in the best blogging spirit, I’ve decided to post what I have and let the debate go on.

For those who don’t want to read a complex and lengthy post, my conclusion is

No-one can predict with certainty, but the IPCC estimates don’t seem noticeably different from those used in other long-range forecasts. It seems unlikely that they are biased towards overestimation of likely growth in emissions.

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VMT

John Quiggin2 Comments

Reader Kevin Wenzel raises the point in email that, contrary to what might be inferred from one of my posts, the US death rate per vehicle mile travelled is only marginally worse than that in Australia. I actually addressed this in my Fin article, but since this is virtually inaccessible, I’ll state my points here.

I have three problems with deaths/VMT as the measure of road safety.,
(a) It doesn’t take account of vehicle occupancy. So a car with passengers counts the same as a car with driver only, although more people are travelling and therefore at risk of death or injury
(b) It’s not relevant in relation to risks to non-motorists: from an economic or libertarian viewpoint these are of particular concern since they’re involuntary externalities
(c) It takes car-dependence as given. This is a complex issue, but it’s striking that distance travelled/vehicle has remained almost constant in Australia, a country with similar geography, population growth and income growth, while in the US it has grown strongly.

(Small) gains from trade

John Quiggin13 Comments

Kieran Healy links to a paper by Pierre-Olivier Gourinchas and Olivier Jeanne in which a calibrated growth accounting model is used to show that the gains from unrestricted capital mobility are likely to be of the order of 1 per cent of GDP. Gains from risk sharing aren’t mentioned but other papers are cited to say that these are of a similar magnitude.

Those who listen to the general pronouncements of economists might be surprised by the modest size of the estimated gains. But for those who have looked at similar exercises in the past there is no surprise here. One of the better-kept secrets of economics is the fact that most studies suggest that the replacement of a typical high-tariff regime (say Australia’s in the 1960s) will yield long run benefits of about 3 per cent of GDP.

Those who raise questions about this point are likely to be brushed off with a reference to supposed dynamic gains, not captured in this ‘static’ analysis. This brings us to an even better-kept secret. These ‘dynamic gains’ have about as much basis in neoclassical economic theory as the Tooth Fairy.

To complicate matters a bit further, there is a theoretically respectable category of dynamic gains, arising from the removal of distortions in intertemporal resource allocation, but these are even more modest than the static gains. In fact, the gains looked at by Gourinchas and Jeanne.

The last line of defence is the idea of X-efficiency, or the ‘cold shower’ effect of competition. As Chicago stalwart George Stigler was the first to point out, this idea is based on the fallacious assumption that additional work effort is costless. This fallacy is hard to kill, but anybody who’s experienced 1990s-style ‘workplace reform’ knows it for what it is. I’ve been hammering away on this point for at least a decade, for example here and here (PDF), but with very little impact.

Glad to be wrong: Part 2

John Quiggin5 Comments

Jack Strocchi has engaged in some justified gloating at my expense in relation to the Israel-Palestine peace talks where progress has been much better than I expected, though success is still far from being assured.

Sharon’s concession that the Israeli occupation is untenable, and apparent acceptance of a contiguous Palestinian state means that there is now no logical alternative to a deal similar to the Clinton plan of a few years ago. Although Sharon would undoubtedly like to keep substantial parts of the West Bank, the logic of the process will push it towards a limited exchange of territory. But Sharon is still hedging, and may be hoping to wait out the notoriously short US attention span. Still, Bush, prodded by Blair, has gone a lot further than I thought he would, and has dragged Sharon with him.

Having made this concession, I’ll point out that, as I predicted, the Bush Administration is making just as much of a mess of the occupation of Iraq as it did in the case of Afghanistan, and for the same basic reason. They have been prepared to spend billions of dollars and lots of attention on war, but almost nothing on peace.

In an odd sense, the postwar mess in Iraq has been good for the Israel-Palestine peace process. It’s clear now that if the peace process fails, the chances of a successful outcome in Iraq would be greatly reduced by resurgent anti-US feeling throughout the region. That along with the failure to find WMDs and the gradual realisation that Iraqi casualties were much higher than first claimed, would discredit the case for war, although this would probably take the form of gradually disillusionment (as with Gulf War I) rather than a sharp swing in public opinion. So Bush has a lot riding on this, and Blair even more so.

Thought for Thursday

John Quiggin13 Comments

Having had plenty of interest in my posts on road safety and speeding. I thought I’d work it up into a column for the Fin (Subscription required). Thanks to everyone who participated in the debate, on all sides of the question. This ‘road test’ certainly helped to sharpen up my arguments, and maybe also helped people on the other side of the question to clarify their position. Here’s the closing bit

One of the great strengths of the campaign for road safety has been the bipartisan support it has attracted. Labor, Liberal and National Party Transport ministers have been willing to brave the mindless reactions of those drivers who consider that their special skills should exempt them from the rules applying to the common herd (80 per cent of drivers class themselves as ‘above average’). Even more remarkably, their political opponents have refrained from trying to score cheap political points at the expense of public safety.
Until now, that is. Victorian Opposition Leader Robert Doyle pandered to the leadfoot vote at the last election with a proposal to legalise speeding, in the form of a 10 per cent tolerance above speed limits. Despite a comprehensive thrashing, he’s returned to his ‘soft on crime’ line, with complaints that the Bracks government is enforcing speeding laws too vigorously.
Doyle raises the tired argument that speeding fines are motivated by ‘revenue raising’. Even if this were true, what would be wrong with that? Governments have to raise revenue, and dangerous drivers are at least as good a tax base as gamblers, homebuyers and wage employees, the targets of the main taxes left to state governments. In fact, however, the increase in fines seems to be contributing to a renewed decline in road deaths, which have fallen sharply in 2003.
If he had any chance of being elected to office, Doyle’s irresponsible demagoguery would be dangerous. As it is, it gives his long-suffering colleagues yet another reason to dump him.

Word for Wednesday: Rule-Consequentialism definition

John Quiggin21 Comments

This is a followup to my earlier posts on consequentialism/utilitarianism. A notable debate in the literature on this topic is on whether, from a consequentialist or utilitarian perspective, it is best to try always to choose the action with the best consequences (act-consequentialism) or whether to try to find those general rules which, on average, yield the best consequences, and follow those rules even when in particular cases, they yield bad consequences (rule-consequentialism).
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Is Poverty Obsolete ?

John Quiggin11 Comments

I’ve been reading Clive Hamilton’s Growth Fetish on which quite a few bloggers have already commented. I agree with some of the points Clive makes and disagree, sometimes strongly, with others. I may do a full length review some time, but for the moment I’ll post a bit at a time.

I’ll start with a point of disagreement. Clive dismisses traditional social democratic concerns with absolute deprivation as being relevant, at most, to those in the bottom 10 per cent of the income distribution.

Taking food as the most basic necessity and the US as the developed country where social democracy has lost most ground, I looked for stats and found this briefing by the US Department of Agriculture. The key finding:

89.3 percent of U.S. households were food secure throughout calendar year 2001. “Food secure” means they had access, at all times, to enough food for an active, healthy life for all household members. The rest (10.7 percent) were food insecure at least some time during the year, meaning that they did not always have access to enough food for active, healthy lives for all household members. In 3.3 percent of all households, one or more household members were hungry at least some time during the year. The remaining 7.4 percent obtained enough food to avoid hunger using a variety of coping strategies such as eating less-varied diets, participating in Federal food assistance programs, or getting emergency food from community food pantries.

The figure is close enough to Clive’s 10 per cent, but this is a one-year snapshot. Since people move into and out of poverty, it’s clear that the proportion of Americans who have problems feeding their families at some time in a given period of say, five years, is well above 10 per cent. And this is using a very tight definition of deprivation at a time when the US economy, though past the absolute peak in 2000, was still doing very well by the standards of the last two decades. I’d say that the traditional social democratic concern with poverty is not yet obsolete.

Resurrection of Troppo Armadillo

John Quiggin6 Comments

By force of circumstance, Ken Parish has moved yet again. This time he’s sharing digs with Scott Wickstein at Ubersportingpundit. Ken already has his first post up, about being given (undesired) ringside tickets at a divorce. The archives are still lost behind the cyberfuddle permissions shield, but we can hope that they are not permanently bloggered.

I was feeling pretty disheartened about the prospect of a blogworld without Ken and his co-bloggers, so I’m very grateful to Scott for his rescue effort. Please update your links, bookmarks etc. With amazing efficiency (for me), I’ve already fixed my blogroll.

BTW, as Gianna mentioned in a recent comments thread, Scott has joined the self-revelatory trend and posted a picture. Not what I expected either.

Grand theft auto (repost)

John Quiggin6 Comments

Preface to repost A commentator on my previous post accused me of being anti-fun. I’m reposting this to show I’m pro-fun, as long as other people’s fun doesn’t threaten to kill me.

Original post 11/11/02

Tim Blair, as usual, defends his right to play with dangerous toys, like guns and fast cars, devoting a comprehensive fisking to a piece by Hugh McKay about speeding. I didn’t find McKay’s article that interesting when I first read it, but judging by Tim’s response, it hit the target.

On libertarian grounds, I’ve been planning to suggest some sort of theme park, analogous to smoking rooms and safe injecting rooms, where lovers of guns and dangerous driving could act out their Grand Theft Auto fantasies without endangering the rest of us.

But I was wondering – where could such a park be located? Then it struck me that large parts of the US are like that already, except for all the ordinary decent people trying to live there. I don’t suppose it would be too hard to persuade most of the population of, say, South-East Washington DC, to move somewhere nicer, leaving the gangsters and drug dealers behind. The park would be there, ready-made, for Tim and friends to enjoy.

The economic viability of the park would be greatly supplemented by reality TV. I, for one, would happily sign up for pay-TV just to watch this.

Update I missed it, but Tim has indeed blogged again on this very topic, with the headline Government good. Drivers bad Certainly if the drivers I encounter on a daily basis are a fair sample, the second part of Tim’s headline rings true