Robert Manne asks Will this war work?.

Perhaps the most relevant para is:

“Few principles are more fundamental to the conduct of international relations than the idea of non-interference in the internal affairs of sovereign states. Such a principle precluded international military action against even fouler tyrannies than Saddam’s – like Stalin’s or Pol Pot’s. If such a principle were ever to be revoked, it would certainly require general agreement between countries and strict provision for collective action through the United Nations. The international order would be thrown into chaos if individual countries came to believe that they possessed the right to take unilateral military action against what they judged to be an unacceptably tyrannical regime.”

I think the doctrine of non-interference has had its day. But Manne is right to point to the chaos that will arise if individual countries decide to appoint themselves as judge, jury and executioner in the affairs of others.

Is this “defence” of telecom shill Jack Grubman from Forbes.com an inspired parody of bubble-era thinking, or a perfect example of the real thing. I’ve quoted it in part, with the best bits italicised. You decide!

Jack’s praise was not based on nothing. It was based on research! But many people misunderstand the nature of research. Jack didn’t ask whether the company was likely to be profitable. He asked whether the share price was likely to rise. And to know that, he had to know the thinking of the very same institutional investors who so admired him.

Nowadays, everyone is all over Jack because he had friends in the industry, especially Bernard Ebbers, who invited Jack to WorldCom board meetings. A few years ago having friends was a good thing. They called it being connected.

Now they’re calling the same thing a conflict of interest. But as Jack himself once said, “What used to be a conflict is now a synergy. …Objective? The other word for it is uninformed.”

Jack caused synergies for his employer, too. He didn’t just stand to the side and predict where stocks would go. He helped make it happen by encouraging telecom companies to sign up to have Salomon sell their IPOs. Some estimates say Salomon earned $1 billion in investment banking fees from the industry.

If Salomon paid Jack $20 million a year, it wasn’t because he predicted well. Nor was it because he had the good looks or the winning personality of other bankers. It was because the bank believed he helped generate those fees. His ability to generate fees was a direct result of investors’ belief in him. Somewhere along the way–around the same time that the telecom industry lost perhaps $2 trillion in market value–people stopped believing.

So let’s not blame Jack for causing the fall of telecom. If they still believed in Jack the way they once did, the fall never would have happened.

I hadn’t heard of John Humphreys, who is organising the Kyoto counterpetition with Alex Robson, but, in the era of Google, no-one is truly obscure. It turns out he’s the President and founder of the the Australian Libertarian Society, and Alex is part of the Honorary Executive.
Not, as Seinfeld would say, that there’s anything wrong with that. Still, it’s my view that, if you’re asking people to sign a petition you’ve written, it’s best to be upfront about your organizational affiliations.

Judging by the tagline, I imagine this guy thinks Democracy’s Quiet Victory is also a victory for free-market capitalism. Regardless, this is a well-reasoned article supporting an optimistic view of world events.

Tim Blair refers to me and other signatories of the Kyoto petition as “alleged economists”. This is an interesting epithet to be applied to, among others 30 professors of economics. If Tim wants to say we are bad or mediocre economists, let him say so, but terms like “alleged” are silly, just like the use of “pseudo-intellectual” as a derogatory term for “intellectual”. The implication is, of course, that somewhere out there are “real’ economists and intellectuals, whose rigorous analysis invariably agrees with the uninformed prejudices of people like Tim. Or should I say- the uninformed prejudices of “people” like “Tim”?

For those interested in following up this issue, I’ve linked to a counterpetition being organised by my colleague Alex Robson, a letter from Alan Moran of the IPA supporting the counterpetition, and an article on approaches that would permit us to meet our Kyoto commitments at low cost and in some cases with a net benefit. Moran and Robson take great exception to the suggestion that there are policies that would both reduce emissions and improve the economy. As I’ve already pointed out, reducing subsidies to the aluminium industry is a case in point. Since Moran is a professional advocate for fossil-fuel intensive industry, he’s unlikely to be impressed by this argument, but other economists thinking of signing the counterpetition might want to ponder it.

Thanks to Tex, I found this interesting piece entitled Rich people work, too. As far as I can tell it was published on the very day that Salomon telecom shill Jack Grubman retired with a payout of $US32 million (on top of millions already received in salary). I suppose putting out ludicrously inaccurate forecasts does constitute “work” in some sense, but I could have done better (in fact, did) in my spare time.

A fascinating piece from the NYT magazine.

Here’s a cached report from the SMH in which President of the NSW Law Society John North denounces mandatory sentencing laws which are, of course, the ultimate method of ensuring proportionality. He’s right about mandatory sentencing, but this contradicts his criticism of the sentence imposed on gang rapist X.

At the Crossroads by Jane Kelsey. Jane has been one of the most prominent critics of free-market ‘reform’ in NZ. I’m reviewing her latest books (which echoes the titles of at least three Australian books taking radically different views) for New Zealand Economic Papers. I’ll post the review on my website in due course.

David Morgan is back from paternity leave