Could “it” (1929 or something similar) happen again? Probably not, but there has been no time in the past 20 years when the world and Australian economies have looked as vulnerable as they do today. For those who want to start getting scared, there’s an ample supply of stories about how it could all unravel. This will be one of them.
Following the crises in numerous Asian countries in 1997-98 and numerous South American countries in 2001-02, currency speculators suddenly notice that most of the English-speaking countries are running large current account deficits, and decide this is a problem. There is a panic run on the US, Australian and NZ dollars and perhaps on sterling. Hedge funds get caught with short positions and collapse, pushing major banks to insolvency. At this point, emergency measures, like bank holidays, are needed, and the story fades to black …

How plausible is this scenario? Not very, given that most of the speculators are located in English-speaking countries themselves. But, as
Tim Colebatch notes, Australia has more foreign debt, relative to GDP than Uruguay, which was just forced to close its banks. Given a few more years of big deficits, the US will be in the same position. A dramatic collapse seems unlikely. But it seems equally unlikely that the era of big current account deficits can continue much longer.

Surprisingly little reaction so far to the cover story of the latest TIME Magazine. Entitled “Before Sept. 11 — The Secret History”, it asserts that bungling and infighting in the incoming Bush administration caused a Clinton administration plan for a concerted attack on al-Qaeda to be shelved. The only response I’ve seen so far was from Andrew Sullivan and was fairly lame.
I guess all those warbloggers must sleep in on Monday mornings.

Despite stiff competition from the likes of Ken Lay and Bernie Ebbers, our Aussie corporate athletes Rodney Adler and Ray Williams have hit gold, landing a prominent place in the Forbes.com parade of corporate malfeasance.

The debate over the privatisation of Telstra is producing some interesting alignments. Former minister, Bronwyn Bishop agrees, with Lindsay Tanner and me, that Telstra should not be allowed to buy a television station. Over at the Evatt Foundation, I have a friendly disagreement with Ros Eason, who thinks Telstra should not be compelled to divest things like pay-TV. I argue that renationalisation & divesture is the only way to go
Meanwhile, Ken Davidson demolishes, yet again, the spurious case for privatisation being put up by the government.

About a Boy by Nick Hornby. Good as usual, but it didn’t have the same impact on me as How to be Good or High Fidelity.
I’m also continuing my rereading of David Lodge’s academic comedies of manners. This week it was Small World, a satire on the international conference circuit.

Heather Cochrane at Salon surveys expired domain namese

Heath Gibson invites my comments on this interesting post about an epidemic of plagiarism among Australian university students, and of course I’m happy to oblige. It turns out that ‘plagiarism’ includes such offences as “Cited a journal article when only the abstract was consulted” As Heath says, ‘So on this definition I’m amazed that result wasn’t 100%!’
This reminds me of the claim by Jamie Kellner, Chairman and CEO of AOL/Time Warner’s Turner Broadcasting division that you are committing a breach of contract if you watch TV and leave the room during the ad break (when pressed, Kellner said you could visit the bathroom, but only if you really had to go).
More importantly, it’s bizarre that Australian universities still propound this kind of 19th century notion of honour (important note: I’m using “19th century” as a compliment here) when their managers, with a few exceptions, have abandoned all academic values in favour of market-driven competition. The vice-chancellor now driving public policy, Alan Gilbert of Melbourne, is on record as saying that 19th century texts like Newman’s Idea of a University are totally inappropriate in the modern competitive world. As Heath Gibson points out, in the world outside the university, newspapers and others recycle and plagiarise to their heart’s content, limited only by the possibility that large-scale theft will lead to action under the law of copyright. University managers have done their best to suppress the assumptions of free exchange of information in which notions like ‘plagiarism’ make sense. In the brave new world of ‘intellectual property’, you nail down what you can of your own ideas and appropriate anything from the common pool that hasn’t already been grabbed. The former vice-chancellor of Monash seemed entirely suited to the new world, and it was hypocritical to sack him.

A superb rant from John Derbyshire at the National Review Online on why conservatives should be gloomy.
Since social democrats like myself are generally supposed to have an optimistic temperament, I guess I should put up some reform proposals. I’ll start with the easiest. Derbyshire says:
The next version of MicroSoft Windows will be even buggier and more counterintuitive than the last. That one you know perfectly well, of course — I don’t know why I bothered to include it
The answer is of course “Get a Mac!”

Tim Blair left himself wide open in Thursday’s Oz, but I was busy and Tim Dunlop beat me to the punch. Well struck!

In The Poor Standard of Standard & Poor’s , Daniel Gross writes that ‘ the S&P 500’s bad bubble-stock picks have cost investors billions’. Basically, telecommunications and dotcom stocks were added to the index precisely when they were most overvalued.
The really interesting story in all of this is that the idea of passively investing an index representing ‘the stock market as a whole’ is an illusion. Ultimately, there is no way to avoid the need for judgement about the worth of individual companies. This fact subtly undermines a great volume of economic thinking about market efficiency.