Harry Clarke On economics, politics & other things

March 31, 2010

Dickheads

Filed under: swearwords — hc @ 8:36 pm

I never liked the Victorian road safety campaign that referred to those who drink-and-drive as “bloody idiots” and I intensely dislike the current description of errant drivers as “dickheads”.  It is offensive for a group of paid civil servants and politicians to endorse use of this sort of language in any campaign.  The expression “dickhead” literally means “penis head”. Using it on public television  degrades the medium and degrades the politicians and civil servants who approve of this language.  I wonder why Premier Brumby won’t use the words publicly but is quite happy to have ordinary citizens assaulted by this language.

I don’t like swearwords that refer to genitalia.  Their use as a tool of abuse reflects an underlying sexual puritanism and contempt for the human body.

Kottke

Filed under: music,people — hc @ 6:23 pm

I have been listening to Leo Kottke for decades – the first time in Chicago around 1983 – he has been performing for 40 years.  He is an astonishing guitarist and has a warped personality that really appeals  - “When Shrimps Learn to Whistle” (no I can’t steal a copy)  is a favourite as is Pamela Brown - “I guess the guy she married was the best part of my luck, she dug him ’cause he drove a pick-up truck”.  Friend JS pointed out this interesting Youtube with Lyle Lovett. This wistful masterpiece with Chet Atkins.  Good preparation for tomorrow and then Easter.

March 29, 2010

Hu gets 10 years jail

Filed under: China — hc @ 6:50 pm

Ex Rio Tinto employee Stern Hu cops 10 years in jail from a Shanghai Court.  I am disappointed – not yet because of the verdict – but at present because of the way the way the trial was implemented.   The bribery charges have not been fully articulated and the ‘stealing secrets’ charges have not been articulated at all – all that was said is that stealing the secrets led to a collapse of a contracting arrangement.  There is the option to appeal and dealings in this case will continue I am sure. Australian’s should not start barking like  ‘mad dogs’ at the verdict and should be respectful of the Chinese court decision.  Until the ‘stealing secrets’ charges are articulated the process of normal commercial intelligence seeking in China will be disrupted to the disadvantage of China and the rest-of-the-world. (more…)

March 27, 2010

Soot

Filed under: China,climate change — hc @ 6:03 pm

Another nice paper from PEW.

Abstract: Over the last decade, a growing body of evidence indicates that soot and smoke from incomplete combustion are major contributors to climate change. Black carbon (BC), a soot component, is a potent climate driver that absorbs sunlight in the atmosphere, changes rainfall patterns, and when deposited on snow and ice, accelerates melting. In addition, soot can cause direct effects on health and agriculture. Climate and other effects of soot are magnified in broad regions where the strongest source emissions occur, but transported soot is also a major concern in the Arctic. The short atmospheric lifetime of soot particles also means that emissions reductions produce nearly immediate results, in contrast to most greenhouse gases (GHGs). (more…)

March 26, 2010

Who is winning the clean energy race?

Filed under: China — hc @ 4:06 pm

It is China not the US – a fascinating report from PEW on the dawn of a new industry.

Globally the renewable energy sector is experiencing explosive growth – investment growth of 230% from 2005-2009.  In 2009 global investment was $162 billion in clean energy.  It is forecast to be $200 billion in 2010. Much of this has gone into wind energy – more than 50% of investment and of installed clean energy capacity.  Solar power is smaller though with strong growth potential given significant solar energy price declines and the potential for new thin-skin technologies.  Germany is the undisputed leader in the solar sector.

The G20 countries account for 90% of this total with China, Brazil, the UK, Germany and Spain having strong GGE mitigation and strong renewable energy policies in place. They have all set renewable energy targets, feed-in tariffs, carbon reduction targets and financial incentives to decarbonise.

China has strong wind, biomass and solar programs  – it is the leading national investor in clean energy, investing $34.6 billion in 2009. Relative to its economy the US lags – it invested only $18.6 billion over the same period.  10 of the 20 G20 countries invested a higher fraction of their GDP in clean energy than did the US. Spain invested 5 times more while China, Brazil and the UK invested 3 times more.

Growth in renewables has been only marginally affected by the global financial crisis – in fact investment in these areas has been an important part of economic recovery plans.

China is emerging as the world’s clean energy powerhouse. It now has about the same level of renewable energy infrastructure as the US.  The installed capaqcity is around 53 GW in both countries.  Overall around world installed capacity is around 250 GW enough to power 6% of world power demands.

Australia invested $1 billion in 2009 which puts it 14th in G20 rankings. It has a 2020 target of meeting 20% of energy needs from mrenewables. Investment is low from growing quickly from this low base.  It has tax incentives for renewable technologies, car efficiency standards and feed in tariffs.

March 24, 2010

A fiscal train wreck

Filed under: macroeconomics — hc @ 10:14 pm

Gregory Mankiw ponders whether the US economy will default on its national debt, inflate to decrease the real value of its debt or (most responsibly) raise taxes massively to what he calls European levels.  He favours the latter view.  Grim reading. A default seems improbable but the second solution – to devalue the debt by further devaluing the US dollar or forcing an appreciation of, in particular, the RMB – is something I have long-believed is highly likely.  If the inflationary solution is adopted I assume the rest of the world will be better insulated from inflationary pressures and stagflationary pressures than it was when the US last reneged on its debts (after the Vietnam War) because of exchange rate flexibility.  Still I hope Mankiw’s forecasts are more accurate than mine.

March 23, 2010

Why Indian students abroad suffer discrimination

Filed under: humour — hc @ 11:13 pm

It was the first day of a school in the USA and a new Indian student named Chandrasekhar Subramanian entered the fourth grade. (more…)

March 20, 2010

China & India & cooperation to sustain the global environment

Filed under: China,environment,India — hc @ 8:22 pm

India and China the world’s emerging economic giants will determine the world’s environmental future – there is also the threat of resource-driven conflicts between the two. This Science Magazine report sets out the issues. The report has to be purchased - I’ll summarise the main issues. (more…)

Attacking China

Filed under: China — Tags: — hc @ 7:07 pm

Paul Krugman suggests that the US should impose a 25 per cent surcharge on imports from China to protect American exports from an undervalued renminbi.  The effect of the alleged undervaluation of the Chinese exports is to provide US consumers with a bonus – to subsidize their consumption.  Maintaining a stable RMB also preserves for China the value of the substantial borrowings the US has made from China. The bellyaching by the US about China is a threat by the US to repudiate part of its Chinese debt.  If China dumps or refuses to continue to fund US debt then the US dollar will fall and the residual value of that debt will take a hit.  Calls by the US for China to revalue its exchange rate are effectively calls for China to stop lending to the US.

The US needs to produce and save more. It needs to stop living beyond its means.  It must rebuild an economy based on producing internationally-valued output rather than operating as a giant casino with far too many spiv schemes for achieving instant wealth via a bloated finance sector – an economy should not be spending 8 per cent of its productive resources on ‘innovative’  finance.   As many have pointed out the US financial system needs to be regulated.

In the days when macroeconomic theory seemed simpler than in its current poses the effect of maintaining fixed exchange rates was seen as equivalent to flexible exchange rates in the long-run because accumulating foreign reserves  would drive up prices in the economy with surpluses and reduce them in countries with deficits thereby automatically eliminating trade deficits – the price-specie-flow mechanism.   This isn’t happening presumably because of the Chinese lending – or is my accounting here in error? This is a question to macroeconomics experts.  The US gains cheap consumption goods from China which it funds, in part, by loans from China which it then threatens to at least in part repudiate.

US commentators, including those on the left, have a nerve criticizing Chinese policies in many areas.  On climate change it is difficult for the US to criticize China when the US itself, a wealthy country, has done so little and China is already doing so much.

March 17, 2010

China a great power

Filed under: China — hc @ 6:39 pm

A fascinating and entertaining overview of Chinese history and where things will go from here – this is a podcast by Ross Garnaut.  He is good at painting the broad picture.

Ross Garnaut only talked a little about climate change issues in China. This article suggests an approach to the issue close to my own heart – an internationally-oriented ETS. (more…)

March 16, 2010

Fry on Catholicism

Filed under: religion — hc @ 3:45 pm

Stephen Fry on Catholicism.   Yes, you would bring that up!

March 14, 2010

SBY

Filed under: Asia,people — hc @ 11:29 am

Indonesia’s President Susilo Bambang Yudhoyono in his address to the Australian Parliament said of the relations between Indonesia and Australia:

‘The most persistent problem in our relations is the persistence of age-old stereotypes, misleading simplistic mental caricatures which depict the other side in a bad light.’ (more…)

March 12, 2010

China thoughts

Filed under: China,economics — hc @ 11:09 pm

Spring has arrived in Beijing though the lakes are covered with a thin layer of grey ice and it is cold (2-4oC) with icy winds when you wander anywhere that has some open space. Pollution-smudged snow drifts are everywhere. Black-tailed magpies (so-called ‘happy birds’) are raucously setting up to breed in massive nests in the spartan winter-frozen trees anticipating warmer weather. The massive building/construction program that dominated the Beijing skyline before the GFC continues unabated after it although- at nominal interest rates that are lower than the current inflation rate – this last happened in 2008 when things seemed really grim. (more…)

March 9, 2010

Positive & Welfare Effects of Carbon Taxes: Some Basic Economics*

Filed under: climate change — Tags: — hc @ 10:26 pm

I prepared these notes for a conference at Peking University, Beijing that I will be attending this coming Saturday. It is late in the day but comments are very welcome.

1. Introduction.   Carbon taxes and, more generally, taxes on greenhouse gas emissions, are a widely advocated means of reducing such emissions to address anthropogenic climate change – see, for example, Metcalf and Weisbach (2009).  I examine the positive and normative effects of a generic ‘carbon’ tax that covers the various greenhouse gases, with respect to its tax incidence and welfare effects including ‘double-dividend’ arguments.   I also consider the appropriate choice of carbon tax base – issues of the breadth of the tax are considered as well as whether it should be levied on a ‘destination’ or ‘origin’ basis in an open economy. Then I provide an evaluation of the case for a carbon tax rather than an emissions trading scheme. It is clear that although the analysis focuses on design issues for carbon taxes that many of the same issues arise with respect to emission trading schemes.  The discussion closes with conclusions and final remarks. (more…)

March 6, 2010

Australia’s international trade – numbers that shock & awe

Filed under: trade,Uncategorized — hc @ 2:35 pm

What’s happened to Australia’s international trade over the past 5 years? Most people know that Australia’s trade has grown strongly but I wonder how many understand the dramatic nature of the transformation that has occurred so very recently and despite the global financial crisis.   Colleague RW collated figures for the year ended 2005 and for the year ended 2009 – they are derived from ABS Catalogue No. 5368  Tables 14a, 14b.  I nearly fell off my seat when I saw them.

Over the 5 years total exports to our 14 major markets grew from $126b to $196b.  Imports grew from $149b to $201b.  Exports to China grew from $13b to $42b.  As a fraction of total exports they grew from 10 to 21%.  Our imports from China grew from $19b to $36b. Exports to Japan grew strongly too from $24b to $38b – Japan remains our biggest export market. Exports to India more than doubled from $6b to $14b. The really massive growth in exports of course has been concentrated in the two areas – crude materials other than fuels and in mineral fuels. Obviously terms of trade improvements – surging coal and iron ore prices in particular – have been an important factor.

The surge in our exports over recent years must have been a key factor in preventing Australia going into recession as a consequence of the GFC.  It is a stunning overall picture of the enormous strength and potential of the Australian economy.

March 5, 2010

Labioplasty

Filed under: medical,sex,women — hc @ 10:58 pm

I found this curious and not because the ABC aired what is a  taboo subject – this was the focus of subsequent press critiques. Is labioplasty a media-inspired (airbrush) aberration?  Or is it analogous to having your hair coloured or wrinkles botoxed.  Is curiousity about labioplasty a reflection of underlying sexual puritanisms or of male chauvinism/male fear of female sexuality?  I gravitate to the puritanism line but could be convinced otherwise.

Religious promotion of irrationalism

Filed under: climate change,religion,Uncategorized — hc @ 8:31 pm

I guess that if you believe that Jesus was born of a virgin, was raised from the dead - and could both walk on the water and raise the dead - that it is not completely incomprehensible that you might not believe the science of climate change or the Darwinian theory of evolution.  The more extreme forms of Christianity can be a socially acceptible form of madness.  Moderate Christians who derive moral values from the New Testament without a bizarre belief in the supernatural comprise an influential component of our culture that counteracts excess and – wrong though they are – deserve some limited respect.

March 1, 2010

Gamay

Filed under: wine — hc @ 6:59 pm

One of the world’s rubbish wines that I have always enjoyed is gamay Beaujolais.  I drank a gorgeous, spicy entry-level Paul et Eric Janin Moulin a Vent 05 at Source Dining in Albury a couple of weeks back – I have already indicated that this restaurant offers some of the best food in NSW - the wine list is also superb – ask Steve for recommendations.  We did this that night and he didn’t disappoint. 

The best gamay wines come from Beaujolais and the Loire Valley in France.   The grape itself is a clone of pinot noir without the pretensions of pinot but with a happy affability – and a somewhat spicy, aromatic fragrant finish. Like many of the French wines I drink, it offers a welcome retreat from the overpowering reds that distinguish the Australian scene. Indeed, in Australia, you must pay more to get a lot less – more approachable red wines. 

At Dan Murphy’s I have bought a couple of Beaujolais-Village over the last few days for between $12- $16.  Not great wine but enjoyable. The snobs don’t like this stuff but economists, such as myself, revel in the fact that purchasing it is a market opportunity – a bulk, inexpensive wine with interest.  I don’t think there are more than a few significant gamay producers in Australia – one Yarra Valley producer got tragically burnt out in the 2009 bushfires.

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