John Quiggin

Among the things I did in New York was visit Tim Smeeding, an economist at Syracuse University who works on income distribution and related issues. Coincidentally, he’s quoted in this NYT story today on the continuing increase in the US poverty rate.

I’m back on air now, after my longest time in some years out of Internet contact, in upstate New York, where I’ve been visiting my friend and colleague Bob Chambers by the shores of beautiful Lake Skaneateles. We spent a few days tossing ideas for new papers around, and generally getting away from day-to-day pressures. I’m now back in DC (Maryland actually) and glad to be turning homeward, though, as usual, I’ve had a very pleasant stay here.

I can see that I’ve missed more news than usual over such a period, and it will take me a bit of time to absorb it all. I’ll start by expressing my best wishes to the people of New Orleans and other areas affected by Hurricane Katrina. I lived in cyclone-prone areas for quite a few years, but never experienced anything worse than a category 3, which was scary enough for me.

I’ll try to post soon on the economic consequences of all this. Most notable is the fact that a local disruption like this could push the price of oil over $US70/barrel. The guys who predicted $100/barrel not long ago must be feeling pleased with themselves.

As for the Australian political news, it’s startling, but I’ll wait until I’m better-informed before I say anything about it. Feel free to jump in with your own interpretations.

I haven’t got time to post anything substantive right now, but I’ll put up the Monday Message Board as usual Civilised discussion and no coarse language. Also, again, nothing about football this week, please.

I’m going to be off air for a few days. So I’m throwing it open, a little early to Weekend Reflections. Please comment on any topic of interest (civilised discussion and no coarse language, please).

The news about the shooting of an innocent man, Jean Charles de Menezes, on the London Underground just gets worse. We’ll have to wait for the results of the current inquiry, and possibly longer before any firm conclusions can be reached (many recent inquiries in Britain have been politicised to the point of whitewash, so there are no guarantees here). Still, it’s hard to conceive of any explanation that doesn’t involve serious stuffups and multiple layers of coverup, going up as far as Metropolitan Police Chief Ian Blair.

One point that hasn’t been mentioned or not much is the implications of this tragedy for any assessment of the anti-terrorism effort. In a case as public as this one, and with a victim as obviously innocent as Mr de Menezes, it was impossible to keep the truth from coming out sooner or later, but it still took nearly a month. Suppose that the victim had been a Muslim – it seems certain that he would have been labelled a terrorist, at least by the method of undenied leaks used to accuse de Menezes of being responsible for his own death.

And for those prone to argue that we shouldn’t be so concerned about a single death in a situation where terrorists have killed dozens, what about failures in the opposite direction? Suppose that in the course of recent operations, mistakes were made that allowed accomplices or masterminds of the bomb plots to escape. How likely is that such things would ever come to light, given the culture of coverup that has been revealed here? And if failures don’t come to light, they won’t be corrected.

The Israeli withdrawal from Gaza, now apparently complete, and the IRA’s announcement that it has ended its armed campaign are notable events in themselves, and bring a little closer the end of two of the longest-running conflicts in the world today, though in both cases there are still plenty of problems

They’re also interesting in the bigger question of whether, and when, the strategy of pursuing political objectives by the use of force (terrorism, guerilla warfare, or conventional) makes sense. In Northern Ireland, and in Israel/Palestine we’ve seen this strategy pursued with vigour by different groups, and it’s reasonable to ask whether any of these groups is better off than if they had stuck to purely peaceful, or at least strictly defensive, methods.

Israel’s settlements in Gaza and the West Bank were set up partly in the hope of securing Israel proper against attack, and partly in pursuit of territorial expansion. Now, after the loss of many lives and the expenditure of vast amounts of money, the Gaza settlements have been abandoned, and it seems clear that the same will eventually happen to most of the settlements on the West Bank. Compare the actual outcome to an alternatives of either unilateral or negotiated withdrawal to the 1967 borders. Can anyone argue that Israel is better off with the approach it has taken.

On the Palestinian side, it seems most unlikely that the final settlement will be on better terms than those on offer at the Clinton-Barak-Arafat summit, and no obviosu reason to suppose that similar terms could not have been obtained years earlier if the PLO had been willing to offer them. Has the pursuit of the armed struggle yielded anything positive?

All the same points apply in relation to Ireland. The position the IRA is accepting now is essentially the same as that of the Sunningdale agreement in 1973. Extremists on both sides rejected this agreement and it collapsed. Thirty years later, neither side has achieved anything beyond entrenching violence and gangsterism (now effectively apolitical)/.

One of the striking features of industrial relations reform is that as strikes have declined, lockouts have increased. According to a recent ACCIRT study (PDF), most working days lost in long disputes (more than a month) are due to lockouts. The extreme case of the lockout, mass sackings with replacement by new workers on worse conditions is, I think, not covered in these statistics, but is increasingly important[1]. Nothing could give a clearer indication of the inherent bias of the reform process than the resurgence of forms of industrial action that had virtually disappeared for most of the 20th century.

The Gourmet Gate dispute in the UK is a particularly nasty example of the process, and one where international action can make a difference. Gourmet Gate is a subcontractor spun off from British Airways, a company with lots of customers around the world . To support the workers in this dispute, go to Labourstart. There’s more on the dispute from Polly Toynbee, who is pretty pessimistic, but I think underestimates the chance that BA can be shamed into some kind of settlement.

fn1. The classic case was the waterfront dispute, where the new employees were, unsurprisingly left in the lurch when their backers decided to settle with the union.

As usual on Monday, you are invited to post your thoughts on any topic. Civilised discussion and no coarse language. Also, please, nothing about football this week.

Google is about to issue 14 159 265 more shares (the number chosen is derived from the decimal expansion of pi) aiming to raise about $4 billion at an average price of about $250 a share. Given that I argued that Google was overvalued at the initial offer price of around $80, it might be time to take another look, both at Google as an investment and at the issues raised by its position in the Internet. In this post, I’ll stick to the first issue.
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The Da Vinci code by Dan Brown. Long after everyone else, I’ve finally got around to this publishing phenomenon. It kept me turning the pages reasonably steadily, which I suppose is the crucial test for a best-seller. But I found the code and the hero’s efforts to solve it pretty annoying. At one moment, he’s performing incredible feats of reasoning, worthy of a Harvard professor and world-leading symbologist. The next he’s stumped by the most simple-minded of anagrams[1] and unable to recognise mirror-writing. And when the readers need information, we either get presented with slabs of facts directly from the author or, even worse, one character lecturing another about things both should know. Couldn’t we just have links to Wikipedia inserted at appropriate points.

fn1. The contorted plot machinery required to justify the whole thing being in English, despite the setter and intended solver being French, are also fairly annoying.

The Australian’s Margin Call column has an amusing comment on the privatisation of Telstra. The policy is rather like Voluntary Student Unionism in that it’s been pushed for so long that no-one in the government can abandon it, even though it no longer has any obvious rationale.

The fact that selling Telstra will make the public worse off in fiscal terms has finally sunk in and I suspect that Nick Minchin and the Finance Department (once the leading agency pushing a sale) would be happy enough to drop the entire idea.

It’s time, as usual for Weekend Reflections. The idea is that, over the weekend, you should post your thoughts in a more leisurely fashion than in ordinary comments or the Monday Message Board.

Judging by his response to this post, Andrew Bolt hasn’t read Swift lately. [1]

Actually, Bolt’s article reads as if he didn’t look at the post at all, but reprinted something he found at Tim Blair’s or some similarly irony-challenged site, without going to the original source to check his quotes. Since that would be a violation of journalistic ethics, let’s charitably assume that the phrase “a modest proposal” didn’t ring any bells with him.
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My column in yesterday’s Fin (over the fold) was about the idea, being argued by The Economist that the low interest rates currently prevailing are the product of monetary expansion rather than a real ‘savings glut’. Today’s Economist puts the point even more bluntly, arguing that capital markets are acting as a barrier to adjustment. It’s certainly striking when a voice of orthodoxy like The Economist reaches the conclusion that financial markets aren’t doing their supposed job.
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Via Chris Mooney, here’s a quick introduction to the latest controversial addition to the science curriculum.

Update A bit more on the history of Intelligent falling and following

Like about a hundred thousand other Brisvegans, my son and I spent the day at the Ekka[1]. A good time was had by all. The great thing about going to the show is that it never changes: laughing clowns, dodgems, fairy floss, show bags and woodchopping are just as they were in the shows I went to as a child. The Ekka has one extra event we’ve added to our list – the Silver Spike tracklaying contest held by QR. And this year they had a human cannonball. It’s a wonderful way to spend a public holiday.

fn1. Short for Exhibition, our annual show.

Via Jennifer Marohasy, I found a report on three articles in Science Express that put the closing seal on the most significant issue in the debate about the reality of human-caused climate change: the disagreement between climate models and data from satellites and radiosonde balloons. Now as Real Climate observes “the discrepancy has been mostly resolved – in favour of the models.”

There aren’t many scientifically literate sceptics (that is, people open to being persuaded by evidence, but not yet convinced) left on the global warming issue, and this evidence, along with the continued warming being observed at all levels, should convince most of those who remain. There’s a bit more history over the fold.
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Britain, France and Germany are busy trying to persuade Iran to abandon efforts to develop nuclear weapons, so far with little success. Cajolery and bribery having tried and failed, how about a bit of leadership by example? Two of the three parties in this effort have nuclear weapons of their own, even though they don’t face any conceivable threat of invasion[1]. Perhaps if they agreed to disarm themselves, the Iranians would be impressed enough to follow suit.

OK, I’m joking about Chirac and France. There’s no way that France is ready to admit that it is no longer a Great Power, and certainly Chirac is not the man to start the process. But, why shouldn’t Blair do something like this? It’s a perfect example of the non-ideological willingness to embrace radical alternatives to established dogma that New Labour is supposed to symbolise.

Of course, nuclear disarmament was the subject of bitter dispute within Labour in the 1980s, and disarmaming now would seem to hand a retrospective win to the left. But, if you buy the standard rightwing line on this subject, the nuclear deterrent did its work the day the Soviet Union collapsed, unable to sustain the arms race. Why hang on to it now? The answer, as far as I can see, is the same as for France. With the bomb, Britain is still one of the Big Five. Without it, Britain stands in much the same position as Italy or (a more populous version of) Australia.

As long as France and Britain sustain, by example, the view that having nuclear weapons is critical to being a Great Power, governments everywhere will seek them, whether or not they actually provide any security.

fn1. Like everyone else, the British and French face the threat that some lunatic in Russia will start firing missiles, or that al Qaeda will get its hands on nuclear weapons. But the logic of deterrence doesn’t apply in these cases, so having nuclear weapons of your own is no safeguard against them.

Over the fold, my draft review of Jeffrey Sachs The End of Poverty. Comments appreciated.
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As usual on Monday, you are invited to post your thoughts on any topic. Civilised discussion and no coarse language. Also, please, nothing about football this week.

Tim Dunlop is back in Adelaide, and blogging again after a lengthy trip back from Washington DC, where he’s been living for several years. I’ll be visiting DC myself before too long, and I was in Adelaide not long ago, but we don’t seem to be overlapping. Also, Chris Sheil has interrupted his hiatus (can you interrupt a hiatus?) with a nice piece of metablogging.

Thanks to a reader at this blog, Nicola’s one per cent pledge has been successful. Congratulations to Imogen!

Meanwhile today is the last day for my Niger famine appeal. So far readers have donated $250, and my matching contribution makes a total of $500. To restate, I’m asking people to donate money to help with the Niger famine (feel free to substitute an alternative cause or organisation if you think it would be more worthwhile). Just send in a comment announcing your donation, or advise me by email, by Sunday and I’ll match it, up to a total of $1000. I’m giving to Medecins sans Frontieres.

Remember this is all tax deductible. So, if you’re on the top marginal tax rate, a donation of $100 actually costs you only $50. With my matching $100, the total amount given will be $200, enough to save many lives. But, if your budget is tighter, and you don’t benefit from tax deductibility, even $10 or $20 can make a difference.

Appeal closed Generous readers, listed below, have raised a total of $720. With the matching contribution, that’s a total of $1440. In comments, Ian Gould has announced another forthcoming appeal on the same lines, in support of the LifeStraw, a low-cost water purification device.

Thanks to everyone who contributed.

wilful 50
Stephen L 100
Mark Bahnisch 150
Youie 50
Jack Strocchi & Claire Rodda 20
Harry Clarke 100
wbb 50
James Farrell 50
email 150
Total 720

Nicholas Gruen at Troppo Armadillo is unimpressed by Peter Singer’s Animal Liberation. Nicholas argues that the whole idea is an unnecessary and unhelpful, since we can justify concerns about animals suffering from the simple observation (the basis of Jeremy Bentham’s argument for laws against cruelty to animals) that animals suffer. He says

What does the term ‘speciesism’ add to this? If Oscar Wilde had nothing to declare but his genius, Peter Singer’s book and its central concept of speciesism had nothing to declare but its circumlocution.

I haven’t got a fully consistent position on all this, but I think that, however ugly it is as a word, speciesism is a meaningful concept, and I’m in favour of it. That is, in opposition to Singer’s views on the subject, I’m in favour of treating all human beings, from birth to brain-death as having specifically human rights, simply by virtue of the fact they are humans, and whether or not they are self-aware and capable of perceiving themselves as individuals. I’d argue for this on rule-utilitarian grounds, which I understand to be Singer’s general viewpoint, though the same conclusion could be reached in other ways.
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Nicola’s one per cent pledge needs only one more signatory to come into effect. Here’s you chance to be decisive!

Meanwhile, my Niger famine appeal has raised $500 ($250 from generous readers, and a matching amount from me). It runs until Sunday, so there’s plenty of time to check the lounge cushions for a cache of lost gold coins or whatever.

It’s time, as usual for Weekend Reflections. The idea is that, over the weekend, you should post your thoughts in a more leisurely fashion than in ordinary comments or the Monday Message Board.

The SMH reports a Mini Y2K on the way. I wrote quite a few articles in 1999 poking fun at the whole Y2K scare, and finally managed to get a proper publication out of an ex post analysis (it’s coming out in the Australian Journal of Public Administration but you can read the PDF article here.
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Sinclair Davidson had a piece in the Fin the other day, attacking the Australian Research Council, which pays my salary (Davidson also gets ARC Grant Money, as he notes). The argument turns, not on specific deficiencies of the ARC but on the general claim that pure research undertaken with government funding has little economic benefit. In the good old days, when confronted with this sort of claim, we research types would wheel out a few trusty examples like cactoblastis and ENIAC, but they’re getting a bit old and tired nowadays.

I remember talking about this a decade or so ago, and somebody said the universities were developing this great new communications system that would revolutionise the economy. What was it called? Interweb? WorldWideNet? Mosaica? Can anyone remember what happened to it? If someone could find any evidence that this idea had an economic impact, it might help to counter Sinclair’s argument.
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As with most aspects of telecommunications policy, I’ve been singularly unimpressed by the government’s handling of digital TV policy. We seem to be lumbered with an incredibly costly design, to which we will all be forced to switch in 2008 or thereabouts. However, I’ve been contacted by Alex Encel who argues that the government could resolve many of the problems by bulk ordering set-top boxes (he estimates $10 a box), giving them away (I may be reading this into his proposal, but I think that’s what he ends) and shutting down analog broadcasts immediately. The revenue from reselling the spectrum would more than offset the cost of the boxes. I can’t see an obvious flaw in this, though I’m taking the $10 cost estimate on trust. As Alex points out, you can buy a VCR for $99 these days, and it has a whole bunch of moving parts as well as the basic electronics. Anyway, I hope there are some technically minded readers who can comment on this.
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Bus passengers say thanks to the driver as they disembark.

Peter Costello has singing economists in his sights. There’s quite a few who need to look out, including Geoff Brennan and me