| I listened today to historically important speeches by the Prime Minister Julia Gillard and Minister Greg Combet on the Governments’s carbon tax proposal. Of course I knew the announcement was coming but to find out the details of the proposal –in the link - and to hear such a clear and eloquent defence of the proposal from both was exciting. It is a political statement as well as an important application of the principle that markets are the best way of addressing carbon pollution problems. After a series of meandering twists Labor has finally got to the point it should have been at a year ago. Congratulations to all those who contributed to this outcome. It will be a tough time for the Government over the coming months as Tony Abbott unleashes his populist anti-market carbon policy critiques. My hope is that the Australian people will come to recognise the essential economic illiteracy and hypocrisy of the Abbott criticisms. As the Coalition do not have a credible climate change policy my view is that there will be enormous pressure on them not to abandon the Labor policy even should they win the next election. The only way they could credibly do this would be to make explicit either their economic illiteracy or their underlying commitment to climate change denialism. Since the Bob Hawke and Paul Keating years of government there have not been major efficiency-generating microeconomic reforms in Australia. The overturning of the WorkChoices legislation by Labor shows that the faults have not entirely been on the conservative side of politics. Putting Australia on the path towards a less carbon-dependent energy future and doing so in an economically efficient way is a refreshing deviation from trend. I liked this brief report and the sensible brief commentary by Lenore Taylor. An excellent supportive editorial in The Australian. Lazy Friday night listening mainly to Iris Dement but also caught this humorous piece by DeMent and John Prine. Here’s another DeMent effort “My Town”with Emmylou Harris. I like DeMent’s voice,her simply folksy lyrics and her occasional sardonic realism: ”Some say there’re comin’back in a garden/Bunch of carrots and little sweet peas/I think I’ll just let the mystery be”. Perfect. My colleague Dr Jan Libich recorded an interview with Professor Eric Leeper today that I attended. The interview went for about an hour and is recorded in YouTubes. First is part of the interview here and then then an interview with Jan here. An interesting approach to providing teaching material for macroeconomic students. Leeper was pessimistic about the prospects for the US economy. I strongly agree with his view that now was not the right time to seek fiscal consolidation that would deal with the massive budgetary problems facing the US. An expansion program devoted to augmenting deficient infrastructure made more sense though clearly,over the next few years,the budgetary problems that should have been addressed 20 years ago will need to be addressed. His young son Sam joined as all for lunch. I liked the fact that he was a bird-watcher –a kindred spirit. Very sorry to see that the UK’s Book Depository has been taken over by Amazon.com. The competition BD forced on Amazon has been beneficial to Australian book consumers. I was generally buying fiction novels in Australia from BD airmailed from the UK for about half the price of the same book in Australian stores. Amazon UK started to match those deals with a wider range than BD but with the same postage-free policy. The competition will be missed. I am a big fan of Amazon.com too but the red hot poker of competition was forcing a good firm to be even better. I’ll watch and take note but can almost bet book prices will rise. As I remarked in an earlier post the media have totally abandoned the principle of “presumption of innocence”in relation to the claimed rape of a hotel maid. This outrage was fostered by the New York prosecutors and the police who treated him publicly as a criminal. Commentary in the press was written and constructed to assume guilt even if it was acknowledged that he had not had his day in court. Now an equally reprehensible story is going around that the maid in question is a liar who concocted the allegations in order to secure a monetary gain. She is not a defendant in this case but it still seems to me that she too has been denied a “presumption of innocence”. What is the truth in this situation? I have not got a clue but should we not wait for the issue to go to court rather than participate in this horrendous trial by media. Strauss-Kahn was apparently an excellent head of the IMF –he certainly got the seal of approval from Joe Stiglitz –and regardless of the outcome of this case his career has been irreparably damaged. Discussions in the press about his past alleged philandering reflect a philistine puritanism to the extent these past liaisons were based on mutual agreement. His accuser remains largely anonymous but she too has a life and deserves her day in court to make her allegations. Currently she is being identified as a conniving prostitute. We love to be titillated by scandals but this is silly behaviour. It sells newspapers and that is about all. I attended the book launch of the Garnaut review 2011 the other day in Grattan St Melbourne. The guest speaker was Barry Jones who also launched the book. It was an informative,interesting speech and I have been trying to track it down. This is substantially what he said. Barry is a somewhat gruff,likable man who was an innovative political thinker on climate change. This short piece in Foreign Affairs by Alan Blinder is as good a statement as I have seen on the state of the US economy: “The majority of Americans can be forgiven for believing —as they do —that the U.S. economy is still in a recession when it’s not. The economy is certainly growing,which is the definition of not being in a recession. But growth has been painfully slow this year,running at just about a two percent annual rate. No one would call that good performance. It is,in fact,little better than half the growth rate that many forecasters expected when the year began. Reflecting this weakness,forecasts for both 2011 and 2012 are being revised downward”. The difficulty is that the international situation is unfavourable –a coincidental confluence of events in Europe and Japan –and domestic demand in the US is weak. The real difficulty however is the tight budgetary situation in the which will force tax cuts and expenditure cuts. The haste to achieve these cuts is being driven by the conservative side of US politics which wants to “purge”the economy of its capital market excesses. This is exactly what the US economy does not want short-term. A fiscal program targeting job creation would make a lot more sense short-term. Labor Party corruption and/or incompetence seems to have reached new heights with news today that 27,500 pokies were sold for an average of $37,000 per machine for a 10 year entitlement on each machines. These machines generate on average about $100,000 per year. The report by Victoria’s Auditor General claims that Victorian taxpayers lost up to $3 billion on the deal. The Liberal/Nations are generally an unattractive looking bunch of populists but Labor’s sheer incompetence –or perhaps corruption –is breath-taking. There should be a full inquiry into these events. I have discussed Labor’s involvement in gambling many times before. I am pleased that the issue of animal cruelty has been raised in relation to the ritual killing of sheep and other animals for Jewish and Muslim consumers. It is important that humans extend their scope of welfare concerns to both all forms of human life and to non-human life as well. This is not an attack on religious freedom* but a questioning of the implications of certain practices for animal cruelty. Leaving animals killed for human consumption in a slow and tortuous way is simple cruelty and cannot be justified on moral or religious grounds. Of course that this extreme cruelty is compressed into a relatively short period –at most a few minutes –is an issue. Exposing animals to a lifetime of unrelenting misery in a factory farm is probably in animal welfare terms much more harmful that failing to stun them before their throats are slit. But neither does this temporal comparison justify imposing a cruel death sentence. * Of course as an atheist I do not believe or accept these religious theories so to that extent I am intolerant of them. The behaviour advocated by these religious groups increases my conviction that their activities are not being directed by ‘God’. I’ve been working on many things over the past few weeks but took a day off last week to visit Cape Schanck and the National Golf Club. This area lies in a spectacular and scenic part of Victoria. In winter it can be wind-swept and fairly bleak but the scenery remains extraordinary. The National is one of the sand belt environmentss that Victoria is famous for. An awesome links-style setting in which to play golf it includes three courses (‘The Old Course’,‘Moonah’and ‘The Ocean Course’). They are all championship courses and all are ranked in the top 50 in Australia –Moonah is ranked about 6th in standard sorts of rankings. This link gives you an idea of the scenery and character of the courses. They are long –each is around 6500 metres –and they contain some very tough golf holes. If you follow the link and enter as a guest then take a look at the 7th hole on The Old Course. It must be one of the most spectacular par 3′s in Australia. The par 4 16th at Moonah and the par 4 18th at the Ocean Course are each around 450 metres so very tough going. Prevailing strong winds add to the challenge but the condition of the fairways and the greens was as good as I have seen anywhere. Its a private club so you need to be or know a member to play there. There are things in this life that are far more attractive than working in a university. These things cross my mind increasingly. The course is about 100km from Melbourne and half the trip is on EastLink….. I found this report on the incidence of type 2 diabetes in China stunning. An excerpt” “As the economy has grown,ever-increasing numbers of Chinese are eating more,drinking more,driving more and sitting more. Data from makers of soft drinks suggests that sales in the more affluent parts of the country have risen fivefold in the past decade. In lower-income provinces,the increase has been even more pronounced. Cases of the disease are soaring,and show little sign of reaching a plateau. The population is ageing more quickly than in the US,per capita sugar consumption in China has risen 48% since 2001 —and that is before snacking on processed food really begins to blossom. About 10% of adult Chinese suffer from either Type 1 or Type 2 diabetes,which is alarmingly close to the 11% ratio that blights the notoriously obese US.Plans that would see China’s largest producers of high-fructose corn syrup doubling output by 2013 do not inspire confidence that the problem will soon peter out. The difficulty posed by the 10 per cent ratio of adult diabetes sufferers in China is how quickly that unhappy landmark has been reached,and the sort of financial and budgetary recalculations that the pace of increase now demands. A 2007 report by the Economist Intelligence Unit assumed that 4.3 % of Chinese had diabetes. From this,analysts concluded at the time that the epidemic was draining 14 % of healthcare expenditure and causing the country 0.6 % of GDP in lost productivity. Redrawn with one in ten adults afflicted,almost 1.5 % of GDP is lost and treatment costs lurch even higher. New research by the consultancy China SignPost points out that the average per-patient cost of managing Type 2 diabetes is about $US6000 ($5695) per year in America. Using conservative numbers and assuming that China is able to treat about a quarter of its 92 million sufferers at a cost of about $US2000 a year each,that implies an annual cost for diabetes treatment alone of $US46 billion –half the country’s entire official defence budget for 2011″.
HT The Australian Business Section. RM’s win in the US Open golf tournament featured the best golf I have ever witnessed. An astonishingly powerful drive but his work with all clubs in a golfbag was inspirational. Yes and having watched Tiger Woods play that is a big statement on my part. RM’s consistent (and almost unnatural) brilliance was spread over 4 days. He achieved a record low aggregate for the tournament. And RM is only 22 years old. What a future he must have in golf. And what a thoroughly likeable and decent young man RM is to boot. A deserving champion. I hope his youthful success does not harm him. Jason Day the young Aussi from Queensland secured second place –after gaining second place in the Masters. JD is a great golfer and vagain illustrates the triumph of youth in golf –JD might provide competition for RM in the future but the victory today by RM was stunning and overwhelming. The Australian Conference of Economists is being organised by William Coleman at the Australian National University this year from 10-14th July. You can register to attend here. It has a good range of invited speakers. I am always surprised at the high quality papers presented at ACE meetings from those working in parts of the public sector and from less prominent economics departments. Over recent years economists from some of the major economics departments have (for the most part) tended not to attend this conference –leading economists from the University of Melbourne and the Australian National University have been conspicuous by their absence. In my view this is a serious error of judgement on their part. (i) because it is important for the intellectual giants of Australian economics to gain an impression on what is happening in Australian economics and to interact both academically and socially with their fellow Australian economists. (ii) because there is an important role for these intellectual Titans from these austere and renown institutions to help raise the standards of the rest of the profession in Australia. Come on fellas show us how it should be done. There is just so much we can learn from youse. Inspire us! As a straightforward matter of resource allocative efficiency I wonder if economics schools in Australia –and the Australian taxpayer who pays most of the bills –get as much academic value from $5000 spent on an 20 minute presentation at an international conference or the same sort of presentation at the ACE for about one fifth the price. Particularly given the local externalities and agglomeration benefits from the latter sorts of meetings. Throughout my life I have been a somewhat hypocritical carnivore. I eat meat (and invest in agricultural businesses) but fundamentally dislike the notion of killing animals for food. The best way I can live with this hypocrisy is to seek to promote humane treatment of the animals that as a human I do eat. I oppose extremes of factory farming and the cruel treatment of animals generally –we should be prepared to pay more for protein that is gained by humane methods. I think the welfare of animals should be included in society’s welfare function and that the lives of animals should be made as pleasant and free from misery as possible. Animals experience pleasure and suffering and the welfare of all sentient beings matters. In particular,if animals are slaughtered for meat then this process should be as quick and painless as possible. Animals should not be exposed to pain and extreme fear. The recent Four Corners show that featured beef cattle being tortured in Indonesia left me feeling depressed and unable to sleep –the sight that stuck in my head was the steer shivering with fear as it watched other cattle being butchered only a few metres away. The treatment was not related to Islam as some seem to indirectly suggest (cruelty is forbidden under Islam) but to callous ignorance and a human insensitivity to the most extreme forms of cruelty. The export ban imposed by the Gillard government seems to me an appropriate policy response. The Indonesian Government yesterday responded by threatening to appeal to the WTO that Australia had discriminated unfairly against Indonesia because other countries that Australia exports too have the same cruel slaughtering practices as Indonesia but are not being subjected to a ban. This bizarre logic does not deny the cruelty –government officials in Jakarta say they are also concerned with the cruelty –but argues that it is wrong for Australia to seek to stop it in one location if the cruelty is not being addressed elsewhere. My own view is that these other countries should be sought out and the ban on live exports also extended to them. Yes the value of my agricultural investments will go down but the idea that I am profiting from unnecessarily cruel treatment of animals hurts me far more than any profits lost. I hope that farmers do feel the same way. The Australian agricultural sector should not base its prosperity and growth on the barbarous treatment of innocent animals. I have been overwhelmed with academic work of late. My blog postings have obviously suffered and countless thousands of grief-stricken readers around the world have made complaints. In the evenings I ‘ve also entered into an intellectually lazy mode and done the Norm-like,Bogan thing. For recreation I have enjoyed playing with my new Mac computers. I have also been watching some vintage and more recent films by director Roman Polanski. Along with Robert Altman he is one of my favorite movie directors. Polanski is indeed one of the more interesting modern directors. He has a sense of deviance that throws a new light on drama and on the human condition. Polanski is above all else a technically capable director who has been a long-term serious student of film. He has a mastery of the technical side of movie photography and is simultaneously interested in exploring all film genres. Polanski has a perceptive grasp of character and an ability to arouse intense atmosphere. His dramatic films are intensely suspenseful and draw you into their visions. You want to know. Continue reading Thoughts on Polanski In April 2009 I suggested that the idea of paying $750 million to build an unpriced linear feeder road that would feed into Melbourne’s traffic congestion and encourage urban sprawl was ill-advised. Today’s Age confirms this view in a scathing report from Victoria’s Auditor General. With inflation and a cost blowout of 45% from the private contractor the project cost has now galloped away to $2 billion. These sorts of projects will not reduce travel costs and congestion –by increasing unpriced road use demands into the city that will worsen such problems. A disgraceful waste of public money. Its been a while since I have had much positive to say about Tony Abbott and the Coalition but,if this report is correct,they will do the right thing and support moves to introduce plain packaging of the product that is the leading preventable cause of death in the world today –cigarettes. The lunar right should follow the lead of their betters. It creates a near total loss of credibility to support the carcinogen producers and that –no matter how one dresses things up –is what the mad right are doing. Smoking cigarettes was a terrible historical mistake that killed 100 million during the 20th century and will kill many more than that over the coming century. The totally ridiculous ARC rankings of academic journals into A*,A,B and C rankings has been dropped thank goodness. How about an apology from the nitwit academics and academic managers who pushed this stupid scheme as inevitable. Their stupidity wasted a lot of valuable thinking time. Now let’s abolish the current ARC the Stalinist institution that introduced this idiocy. If I get told once more that I need to go along with some foolish proposal from Australia’s inept academic bureaucracy because everyone else is –and because the change is inevitable –I might display a rare instance of hostility and anger. To crow a little as I repeatedly said to colleagues who wanted to evaluate their own colleagues,make departmental staffing decisions, manipulate research and basically scoring to game this daft system:“This ERA system will collapse under the weight of its own stupidity”. It has - the most disgraceful feature of the ERA scoring system is that it even got up for a short period. I always think that actually eating a cake is less satisfying than the anticipation of culinary delight one experiences in looking at them. An exception are the rare,old-fashioned sponge cakes with a layer of creme in the middle and on top and a few strawberries for decoration. Here you see what you will get and disappointment is rare. Here are some totally spaced-out cake decorations. I liked the Nikon. HT VL Report suggests 80% of world’s energy could be supplied by renewable energy sources by 2050. It is interesting how research is showing that renewables are not just green romanticism. Renewable targets are important means of getting things going –developing expertise,encouraging learning by doing,overcoming information and technology-based market failures that imply under provision and in overcoming distortions induced by the lack of credibility in carbon pricing policies. And of course carbon pricing and comprehensive pricing of all the externalities associated with use of carbon-based fuels will prove decisive. | My pre- WordPress posting are here but most have been transferred to WordPress. |
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