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.

Business Week reports the ‘startling’ fact that US corporate profits have been falling since 1997. This fact was evident years ago to anyone who looked past the bogus reports put out by the companies themselves, and endoresed by the likes of Arthur Andersen. Tax returns gave a much more realistic picture.

Dubya’s Double Dip?

Glassman and Hassett, the authors of Dow 36000 claim that they were right all along, and get slammed by Brad DeLong.
I reviewed this book not long after it came out, and will post a link soon.
Glassman and Hassett are clearly fudging a bit, but I think Brad is a bit hard on them. They haven’t really retreated from their claim that the risk premium for equity will disappear in the near future, even if they’ve pushed the date out a bit. And they are quite right to say that the disappearance of the risk premium would undermine the case for the government as the ultimate risk manager.
Conversely, of course, any evidence that the risk premium is alive and well strengthens the case for government intervention, a point which I’m sure Glassman and Hassett would readily concede .

Ross Anderson is campaigning against Expropriation of faculty IPR by Cambridge University. It makes an interesting contrast with MIT where Faculty members keep their own IP rights the Open Courseware initiative is making course materials freely available.

I haven’t had anything to say about the asylum-seeker issue so far in my blogging career, mainly because I don’t think either facts or arguments are going to change many people’s minds. But I agree with most of what today’s Oz Editorial has to say. For my thoughts as of last year, you can read this.

Let me welcome our latest ‘conservative’ blogger, Alan Anderson,in the traditional fashion, by slamming one of his posts. Alan writes:

“At last! A Higher Education Minister who is prepared to point out the stupidity of a small country having a dozen universities doing the same thing. A bit of specialisation would drive our education dollars a lot further. ”

My take:
(1) In a country the size of Australia, it makes sense to do most things in at least a dozen places (the capital city and one regional centre in each state). Does Alan (or Brendan) think it’s a good idea that all future pharmacists should go to Perth for their studies?
(2) Diversity and specialisation makes sense within a given city. But there was much more diversity 15 years ago, before competition and rationalisation forced everyone to converge on a common market-driven model. In the name of specialisation, nearly every university has introduced a ‘flagship’ MBA, while crippling Arts and Science faculties. At the same time they have converged on a top-heavy managerialist model with one administrator (or even more) for every academic.
(3) What is ‘conservative’ about a higher education system run on the basis of ministerial whim? Social democrats have learned from experience that central planning isn’t as easy as it sounds. This isn’t a reason for not planning, but it certainly suggests a bit of caution. By contrast, once politicians with a ‘free-market’ ideology take up interventionism, good sense goes out the window. Examples include: Jeff Kennett, Kate Carnell and the Howard government in election mode.
For my detailed views on this subject, you can go here.
Having got the bagging out of the way, it’s time for the welcome. It looks like Alan has plenty to say, and will be a welcome addition to our ever-expanding circle.

As Mickey Kaus would say, a new report making big downward revisions in estimates of US economic growth for the last three years “requires further study”. But the likelihood of a renewed recession, starting this quarter or next must now be at least 50-50.
My initial take on the US data is that it shows a declining trend in growth from 1999 onwards, overlaid by an ‘inventory cycle’. That is, when it became clear that the dotcoms were undergoing a meltdown rather than a correction (late 2000), businesses all along the supply chain found themselves stuck with unsalable equipment and stopped ordering, generating the mini-recession of 2001. The end of this process produced the current ‘recovery’. On this interpretation, the real recession, bringing savings back into line with investment etc, is yet to come.

(2/8/02): The Economist has more on this