John Quiggin

I’ve never been a big fan of scandals, but occasionally you can’t ignore them. That’s true of the scandals currently afflicting the Labor government. As regards the Thomson accusations, if he is guilty he should resign his seat and will in any case be forced to do so if convicted. That will probably end the government if it happens, but there’s not much I can add in the way of political analysis.

The accusations against Julia Gillard published, and quickly retracted, by The Australian under Glenn Milne’s byline are a different matter. Not only has the content of the retracted article become public knowledge, but News Limited appears to be walking back from what at first appeared to be an unreserved apology, notably in comments by Hartigan and in Andrew Bolt’s column on the topic.

In these circumstances, Gillard has no alternative but to disprove the allegation that she derived a financial benefit, even unknowingly, from the fraud committed by her former boyfriend. That seems like a pretty clear-cut question of fact, which should admit a resolution even nearly 20 years after the event.

On the other hand, if the falsehood of the allegation can be proved, the case that News Limited in Australia is playing the same dirty tricks as its UK and US operations becomes all that much stronger, as does the case for treating the entire organisation as a political propaganda/lobbying operation rather than a newspaper publisher in the traditional sense. And, of course, Gillard would have a very strong case for defamation.

All of this pretty much kills my suggestion for a graceful exit by Gillard after the passage of the carbon tax. Until she can put this one to rest, a resignation would look like an admission of guilt.

Because of writing and travel commitments, I’ll be blogging less frequently for the next few months. I’ll try to put up some open threads – please keep discussion on these threads civil and friendly, so that I don’t have to intervene in their management.

I’ve been planning for a while to write a post arguing that the one thing Julia Gillard can do to (at least, potentially) salvage her place in the history books is to secure passage of the carbon price package (and preferably the other outstanding items left over from the Rudd era, such as the mining tax legislation and health reform), then step aside, and let the Labor party choose a new leader. I was going to wait until the package was passed, but for various reasons, I’ve decided it’s time to speak up on this.

I’ve been very critical of Gillard, but I’m probably less hostile to her at this point than the majority of Australians. On the other hand, her success in holding a fragile government together, and in securing agreement on some complex pieces of policy, suggest she is much more appealing in person than her public persona would imply. My limited contacts with people who’ve worked directly with her support this view, as does the clear belief of her supporters that, if only we could see the “real Julia” we would all like her.

Unfortunately, that’s no longer a relevant possibility. After more than a year in office, there seems very little likelihood that the negative view of Gillard, based on her public record, is going to change, no matter how many rebranding exercises she undertakes. Her last chance, a big bounce when the release of the carbon price package showed the spurious nature of Abbott’s scare campaign hasn’t come off. Moreover, despite her contribution to getting the package together, she can never get past her promise that there would be no carbon price under her government. Only with a change of leader can Labor sell the carbon price.

As regards the choice of alternative, my natural inclination is for Rudd, but it seems clear that his colleagues won’t go that way, and he is doing a good job as Foreign Minister. Wayne Swan has been a good Treasurer, but he is too closely tied to the coup against Rudd and the dumping of the CPRS. Greg Combet would be my preferred choice, but Stephen Smith would also be good.

Given a change of leader, and if they aren’t forced to an election early, I think Labor still has a good chance. Abbott is incredibly unpopular, considering the circumstances, and the hostility towards Labor is very much focused on Gillard personally. If the government can survive long enough to see the carbon price in place, Abbott’s scare campaigns will collapse completely.

Matt Yglesias says

Many on the right and center indicate that in order to restore the economy, President Obama needs to do more to cater to the whims of rich businessmen. Many on the left feel that this is exactly wrong and that in order to restore the economy, President Obama needs to do more to stick it to the rich and dispossess them. History suggests that both are wrong.

He goes on to give plenty of evidence for the wrongness of the first proposition, and none at all for the second.
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The seemingly imminent downfall of Muammar Gaddafi may not represent “the end of history”, but, for the moment at least, it’s pretty close to being the end of tyranny, in the historical sense of absolute rule by an individual who has seized power, rather than acquiring it by inheritance or election. Bonapartism (if you exclude its more specialised use to refer to supporters of the Bonaparte family claim to rule France) , is probably the closest modern equivalent. Forty-odd years ago, this kind of government was the rule rather than the exception in most regions of the world (notably including South America and the Communist bloc), and was represented even in Western Europe by Franco and Salazar.

Now, there’s Mugabe clinging to a share of power in Zimbabwe, along a bunch of less prominent, but still nasty, African dictators in the classic post-colonial mode (in the original CT version of this post, I underestimated the number of these who are still around, but they are clearly a dying breed). Add in a handful of shaky-looking strongmen in the periphery of the former Soviet Union, and that’s about it for tyrants in the classical sense.

Normally classed as tyrants but not meeting the classical definition, Kim jr, Assad jr and Castro minor (and some others mentioned in comments), the first two of whom are certainly tyrannical in the ordinary modern sense, but all of whom inherited their positions, as of course, did the remaining absolute monarchs. The historical evidence, starting with Cromwell jr, and running through Baby Doc Duvalier and others is that regimes like this hardly ever make it to the third generation. They combine the low average ability inherent in hereditary systems with a lack of either royal or revolutionary, let alone democratic, legitimacy.

More interesting cases are those of Museveni in Uganda and Kagame in Rwanda, illustrations of the point that tyrants in the classic sense need not be bad, at least relative to the alternative they displaced. But these seem to be isolated examples, owing much of their appeal to the horrors that preceded them and the fear that those horrors might return.

More surprising to me are the number of cases where classic tyrants, having established one-party states, have been succeeded by self-selecting oligarchies – China is the most striking example, but Singapore also fits. Looking at the evidence of the past, I would have predicted that such oligarchies would either collapse in short order or see the emergence of a new tyrant, but there is no sign of that for the moment.

I don’t have a good theory to explain the rise of so many tyrants in the modern period, beginning with Bonaparte (or maybe Cromwell), or the sharp decline of this form of government from around the mid-1960s. But it seems that it’s a development worth noting.

fn1. Putin is often presented as being a near-dictator. But he doesn’t need to repress his opponents – it’s pretty clear he would easily win elections in Russia with or without doing so. Conversely, there’s no real evidence to suggest that he could or would hold on for long if public opinion turned sharply against him.

That cute subeditorial pun is the headline for my most recent Fin column (over the fold).
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Hello everyone, it’s your friendly Ozblogistan Tyrant here.

I plan to migrate our servers to a different data centre tonight. There will be some disruption during the move, and it may take time for your DNS records to be updated.

We’re moving from the Fremont data centre, which has turned out to be about as reliable as a Ford Pinto, to the Dallas data centre (I look forward to your big-hats-and-oil jokes).

In this very silly hit piece in the Oz, Graham Young says that I “imply” that many climate delusionists are (or were) tobacco hacks. His wording in turn implies that they aren’t or might not be. Of course this is a simple question of fact, well documented in Naomi Oreskes Merchants of Doubt. But, as a fun exercise, I thought readers might be interested in a “Six degrees” crowdsourcing exercise for the leading individual and institutional advocates of climate delusion. Candidates score

1. If took tobacco money or public anti-science position on tobacco (denying risks of active or passive smoking)
2. (a) Direct link (co-authorship of, or institutional affiliation for, climate delusionist pieces) to person or institution in group 1, or advocacy of tobacco interests on issues like advertising, plain labelling etc
3. Direct link to group 2

etc.

Bonus points for

(a) anyone who can make a clear case for a climate delusionist with a score of 4 or above
(b) first anti-science commenter to claim “ad hominem”, “guilt by association” etc. Working for, or with criminals like the tobacco lobby, is indeed a guilty association. Those who have inadvertently entangled themselves with links to the tobacco lobby can always repudiate them.

… to everyone who sponsored my half-marathon run for the Queensland Cancer Council, which raised over $3000. My race performance was ordinary, but the generosity of my readers, on this and previous occasions, has been extraordinary.

I’ll be taking down the banner ad shortly. I’ve tried to thank all those who gave money, but some were anonymous, and my disorganisation is such that I’ve surely missed others. So, thanks again for a great effort.

It’s rare to take on Paul Krugman in an argument and win, and I agree with him most of the time anyway (these two facts are correlated!). So, this is the first time, and will probably be the last, when I can claim a win in such an argument.

Krugman has long criticised the eurozone on the grounds that it is not an optimal currency area and that the European Central Bank must therefore pursue an unsatisfactory “one size fits all” policy, too contractionary for economies that are doing badly and too expansionary for those that are doing well. Back in February, I argued that in fact ECB policy was “One size fits nobody” and that even Germany was vulnerable to its contractionary effects.

The latest statistics suggest that German growth was already stalling then. Today, Krugman is also pointing to a “one size fits none” policy.

At this point, it’s time for a suit of clothes, and that means a new tailor. And, in that respect, the bad news may have a silver lining.

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After Michael Stutchbury’s full-length hit piece, and at least two Cut&Paste snark items in the last week, I would have thought the Oz would have had enough of sliming me for a while. But no, it’s back with yet more.

This time, it has delved into the primordial and come up with Graham Young, last seen scoring a double Godwin with pike, making both Nazi and Communist analogies in a single post.Young pushes the now-standard Oz “help, I’m being oppressed line”, naming me and Clive Hamilton as the enforcers of orthodoxy.

I’m starting feel guilty turning the full power of my blog against a mere national newspaper, backed only by a multi-billion dollar corporation. I’ll talk it over with Clive at the next meeting of the central committee.

It’s past time again for the Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

Last week I appeared, by videolink, before the Senate Committee on New Taxes, to talk about the government’s carbon price and compensation package. I made some dot points, over the fold.

The inquiry was interesting, with one Senator insisting that the carbon price was different from the GST because, under the GST, businesses could claim their inputs and therefore didn’t have to pay anything. I tried to suggest that this was only true for businesses that didn’t add any value (it is, after all, a value added tax), but to no avail.

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Top billing on their web front page goes to this piece saying that the police haven’t (yet) found evidence that News of the World hacked the phones o 9/11 victims in the US, as they did with British victims of the 7/7 attacks, and their families. This banner treatment of a non-story contrasts strikingly with the sotto voce news coverage of yet another arrest in the case a couple of days ago.

In citing Steve Williamson’s negative but content-free review of my book, the Oz Cut and Paste section decided to puff Williamson’s credentials as an expert (an interesting move in the light of Paul Krugman’s evisceration of this kind of rank-pulling argument from authority).

Sad to say, the Oz proved as unreliable as ever on this topic. It described Williamson as “the doyen of modern monetary policy”. “Modern monetary policy” (and, even more, “modern monetary theory”) is a term most closely associated with the post-Keynesian chartalist school.[1] Williamson’s actual claim to fame is something called “New Monetarism”, which is about as strongly opposed to Keynesianism as you can get (at least while still doing DSGE-style macro). But such subtle distinctions are lost on the knee-cappers at News Limited.

fn1. I guess the Oz could be claiming that the term “modern’ here just means contemporary, and that Williamson is the dominant figure in guiding monetary policy today. It’s hard to know whether this more insulting to Ben Bernanke or to Williamson himself, who isn’t exactly a fan of actually existing modern monetary policy.

Yves Smith, whose Naked Capitalism blog is essential reading, is guestblogging for Glenn Greenwald this week. Her latest post sums up a lot of evidence on the adverse effects of inequality, and includes a reference to a post of mine. In summary, the huge growth of inequality in the US has harmed everyone below the 90th percentile of the income distribution in the obvious way – they get a smaller share of a cake that isn’t growing very fast, and has been shrinking since the crisis began

But even people above that level, but outside the top 1 per cent are worse off in important ways. They’ve maintained or increased their share of national income, but they aren’t rich enough to insulate themselves fully from the adverse consequences of living in a highly unequal society. Yves sums up a bunch of the evidence on thsi.

Finally, there are those in the top 1 per cent of the income distribution, now pulling in 25 per cent of all income. Members of this group can, if they choose, ignore the collapse of the society outside their gated communities, and focus on enjoying the wealth they extract from it. On recent evidence, that’s what they (or at least their political representatives) are doing, while also managing a very effective set of divide and rule tactics for the rest of the population.

A couple of very minor updates on my stoush with News Limited, and particularly the Oz. In my response to Michael Stutchbury I raised two main complaints. First, Stutchbury was being precious in complaining about vigorous language on my part, given that the Oz editorial team (writing under cover of anonymity) had accused me of having a totalitarian mindset, but didn’t have the guts to name me, referring instead to an opinion writer in a financial tabloid. My second complaint was that Stutchbury was being disingenuous in claiming that the Oz supported carbon prices.

The other day, my Facebook news feed included a link to a Stutchbury piece from July referring to Abbott “mounting a powerful case against Gillard’s carbon tax”. Not exactly consistent with the supposed Oz line! As you would expect from someone who opposes a per tonne tax on something he believes to be weightless, Abbott’s arguments were in fact lame. The points that most impressed Stutchbury relied on Bjorn Lomborg’s Copenhagen Consensus exercise, something that even people on the right saw through years ago.

Trying to locate the piece again, I stumbled on this piece of snark (scroll to the end) in the “Cut and Paste” section, where the anonymous troll who runs the piece thought it clever to repeat the “opinion writer in a financial tabloid” jibe. Totally gutless. And these guys look down on bloggers.

Meanwhile, the Australian’s War on Science continues. Tim Lambert has instalment #67.

Update And, what do you know? Twitter tells me that today’s Cut and Paste has cited the Williamson review of Zombie Economics, without, of course, mentioning the fact that it has been comprehensively trashed in the blogosphere. I wonder if Williamson would be happy about being quoted approvingly by the gutter press. As for me, any publicity is good publicity. If the Oz opinion page weren’t so unreadable, I could expect a bit of a bump in book sales from this free plug.

I’ve seen this kind of article many times but is it correct? I’d say that I’ve generated several million words in papers, newspaper articles, blog posts and so on since I got my first Mac in 1984 (a bit over 100kw/yr for 25+ years, for something like 3 million), and also attracted maybe 10 million more in blog comments (over 100k of non-spam comments. Of that, I’ve lost
* a fair bit of material I produced before 1990, when hard disk space was v expensive, and stuff had to be stored in various external disk formats. Sadly that includes my first econ theory book and a book of satirical songs I turned out in the 198s0
* The first year or so of comments on my blog in the now-obsolete Haloscan system.
* The blog has also suffered a lot of linkrot, including internal links to its older incarnations
* A lot of my older text is in formats that can now only be read by extracting a text-only format, and some old stuff (eg pre .qif financial records) is in formats that are no longer readable in any way. But again, that’s mostly a problem with pre-1990 stuff.

Compared to my slightly obsessive desire to preserve every revision of every piece I’ve ever written, those are substantial losses. But compared to my paper records, my digital stuff is almost perfectly complete, not to mention instantly accessible and searchable.

S&P’s decision to downgrade US Treasury bonds from AAA to AA+ has elicited various reactions, some of which I’ll doubtless repeat here. Obviously, S&P has no particular expertise (apparently it couldn’t even get the arithmetic right) and based on its historical and continuing performance, its opinions ought to carry no particular weight with anybody (they say so themselves, when under pressure over obvious cases of misrating, asserting that they are merely offering an opinion).

On the other hand, it’s also pretty obvious (and even more so after the Repubs successful use of the debt ceiling to force Obama to abandon any call for tax increases along with the cuts they both wanted) that the US has some fairly intractable problems in dealing with its (technically quite manageable, but still substantial) public debt. Finally, as I said last time I discussed this, a decision of this kind (including a decision to maintain AAA ratings) is inherently political

There are two reasons why S&P’s choice of rating matters more than, say, my own opinions on the matter
* First, a lot of investors still pay attention to ratings agencies, for whatever reason
* Much more importantly, agency ratings are embedded in global regulations concerning prudent management of investment. If a second major agency were to join S&P in downgrading, large numbers of institutions would be debarred, under existing rules, from investing in Treasury bonds

That’s clearly unsustainable, so what will happen?

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Tomorrow is the day for the Brisbane Running Festival, and my wonderful readers have donated $3020 to the Queensland Cancer Council. My preparation hasn’t been all it could be, but I’ve had a big boost from the support I’ve received during #quiggingate controversy with News Limited and others. So, I’m going to do my best to meet the original target, which was to do a minute under 2 hours for each $1000 raised, that is, a time of 1:57. I hope to stay with the two hour pace runner for the first half, then, lungs and legs permitting, make my big break. How likely it is that this will actually work, I don’t know, but I’ll report back tomorrow.

Update Haven’t got final results, but failed to break 2 hours. I was a little behind the pace at 18km, but planning a big burst. Instead, I tripped over an uneven bit of footpath (I’m starting to think someone is out to get me this week!) and went face first into the pavement (photos coming). That took away a lot of energy and it was all I could do to jog to the finish line. If the race time was a bit disappointing, the good news is that our collective fundraising effort for the Queensland Cancer Council was the second best overall , with $3020. That’s a marvellous effort, of far more value than a few minutes more or less taken to finish 21.1km.

I’ve been very gratified by the number of my fellow economists who’ve come to my defence[1] following the attack on me in the Oz. Among the first was Joshua Gans at Core Economics. I wrote to thank him, but haven’t got around to a public mention. Now that I am around to it, it’s a good opportunity to mention that Core Economics is a great blog, where quite a few of Australia’s leading economists (aka my mates) hang out. Go and read some of the posts.

fn1.* With notably rare exceptions * (I’m (ab)using this blogmeme ironically), any members of the profession who agreed with the hit have kept pretty quiet about it

That’s the title of my piece in the Fin yesterday, reproduced over the fold. Feel free to discuss, but please take anything related to nuclear power straight to the sandpit, and even there, try to avoid repeating the same old points.

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Here’s a new sandpit for lengthy side discussion (general and nuclear-power related), rants on idees fixes and so on.

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. In keeping with my attempts to open up the comments to new contributors , I’d like to redirect discussion, and restatements of previous arguments, as opposed to substantive new contributions, to the sandpit(s). In particular, please post nothing related to nuclear energy. As always, civilised discussion and no coarse language please.

At one point in Zombie Economics, I tried a Popperian (or maybe Paulian) smackdown, saying that some defenders of EMH used arguments that effectively rendered it unfalsifiable. I thought that was a bad thing, but apparently at least one reviewer disagrees. Following my stoush with Murdoch, a commenter pointed me to this piece by Stephen Williamson of Washington University at St Louis, who has apparently been asked to review the book for the Journal of Economic Literature. Williamson claims that I am badly confused about the EMH, and that

Market efficiency is simply an assumption of rationality. As such it has no implications. If it has no implications, it can’t be wrong.

He follows up with “Like the “efficient markets hypothesis,” DSGE has no implications, and therefore can’t be wrong.”"
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The NSW government has released a a frothing at the mouth press release claiming that a carbon price will devastate the economy. As Mary McCarthy would say, every single word in it is a lie, including “a” and “the”. Top billing has to go to that old favorite of shonky advertisers “up to”, as in a carbon price will ” force up electricity prices for NSW households by up to $498 a year.” The Commonwealth Treasury modelling, which I’ve checked, gives an average cost increase of $3.30 or about $170 a year.

Although the analysis is attributed to NSW Treasury, they apparently weren’t hackish enough for the government, which had to go to Frontier Economics to get the answers they wanted. I’m waiting to see the report, but in the meantime, my reactions to the press statement are over the fold

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Not exactly, but Paul Krugman, writing in his NY Times blog, has backed me up in my latest stoush with the Murdoch Press, as has Brad DeLong. As Paul says, this kind of attack is a badge of honour.

The Brisbane Running Festival is on Sunday, and I’ll be attempting the half-marathon. Thanks to the generosity of readers here, we’ve raised $2320 for the Queensland Cancer Council. It would be a great encouragement to me to get the total up to $2500 or even $3000.

As I mentioned a while back, my preparation has been disrupted, so I’m not confident of breaking the two-hour mark as I originally planned – my original funding gimmick was a minute below that mark for every $1000 raised. But I will be trying hard to run the entire race, and do the best I can as regards time.

I’ve tried to thank all the donors individually, but I’ll offer a collective thanks to you all now, in case I missed anybody

Responding to the Mordor-inspired debt ceiling deal, I thought it was time for a Lord of the Rings post

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The Oz has always been thin-skinned, and my piece in the Fin the week before last attacking the Murdoch press (I’ve reprinted it over the fold) was bound to elicit a reaction. It came in the form of a full-length hit piece, written by Michael Stutchbury and including a fair few quotations to this blog. The headline An economist who is good in theory but on the far left in practice gives the general line. It has a bit of a phoned-in feel, like an exercise in party solidarity rather than a sudden concern with my errors and obviously wasn’t a spontaneous outburst – Stutchbury told me had been directed to write it. That’s part of the price of working for the Empire these days (compare Caroline Overington’s part in the attack in Julie Posetti).

Mostly, the piece doesn’t misrepresent me – it’s quite true that I think Barack Obama is too centrist, and that Julia Gillard doesn’t care about equality. However, as I said to Stutchbury during our phone conversation, it’s a bit precious to complain about various pieces of colorful language on my part in a paper which referred to me as having a “totalitarian mindset”. At least, unlike the anonymous editorialist who penned that description, Stutchbury calls me out by name rather than coyly referring to “an opinion writer in a financial tabloid“.

More significantly, Stutchbury ducks the issue on climate change, saying

On climate change, Murdoch has backed giving the planet the benefit of the doubt. The Australian supports putting a price on carbon over Tony Abbott’s direct action. But the journalistic default should include some scepticism over whether scientists can accurately predict the climate decades ahead.

He must be reading a different paper to the one that has now racked up 60+ entries in Tim Lambert’s Australian War on Science series. And that’s without considering the truly appalling stuff put out by News International outlets like Fox and the Sunday Times.

Update Michael Stutchbury has called me to take issue with my statement that he told me he had been directed to write the piece. That was my recollection of our conversation, but he was very firm in rejecting it, and I’m not going to insist on my version of events, so I’ve struck out that part of the original post.

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