Another instalment in the new draft chapter on Expansionary Austerity, which I’m writing for the paperback edition of Zombie Economics. Comments and criticism much appreciated
The desertion of Liberal (or LNP?) member Peter Slipper to take up the Speakership offers the Labor government a great opportunity, but also the temptation to mess things up disastrously. The opportunity is to see out a full Parliamentary term, long enough to put the carbon tax and MRRT in place in a way that the Opposition will either have to accept them, or announce a credible plan to replace them – something that is clearly beyond the capacity of its current leader.
The temptation is that the corrupt hacks who infest the ALP machine will use the extra vote to renege on the promise to Andrew Wilkie to tackle the scourge of poker machine gambling through precommitment. A large section of the ALP has been tied to the hotel and club industry since time immemorial and have obstructed any reform that would challenge the interests of this industry.
Even disregarding the issue of principle, it would be really stupid to break the deal with Wilkie. The government’s only chance is to survive past the point when the scare campaign about the carbon tax and MRRT will be shown up for what it is. If Wilkie abandons them and one ALP member has to leave Parliament for some reason, the government will fall. In that case, electoral support or opposition from the poker machine lobby will make no difference.
Another instalment in the new draft chapter on Expansionary Austerity, which I’m writing for the paperback edition of Zombie Economics. Comments and criticism much appreciated
We’ve raised over $4000 for the East Africa appeal, more than $8000 after the Australian government’s matching contribution. That’s enough to make a real difference to the lives of hundreds of people living in the most desperate conditions. But there’s still time to reach the appeal target of $5000. I started things off with a contribution and now I’ve done the half marathon as promised, finishing in a time of 1:57:16, more than three minutes below my previous best time. Surely that’s worth the effort of clicking the link and putting in whatever you can afford for this truly worthy cause.
I haven’t used any gimmicks for this appeal so far, but if we reach $5000 I’ll buy and post the after-race photo, which should provide much innocent amusement for readers, what with my special race gear and generally depleted condition.
Update The $5000 target has been reached! Thanks so much to my readers who have, as usual, given generously to help others.
I’m not going to close off the appeal for another couple of days. If you haven’t given already, put in whatever you can afford.
I haven’t heard from the race photographers yet, but presumably they will be in touch, so that I can post the evidence.
Finally, I have just learned that two runners died during the event, the first time this has happened in the 13 years it has been run. My condolences go to their families. Remember, if you are thinking of taking up any strenuous sport ,to build up slowly, have regular medical checks and stay within your limits on race day.End update
A Greek friend has sent me lots of information on links between the suppression of dissent at UC Davis and similar events in Greece from the days of the military junta to the present. Here’s a video commemorating the 1973 uprising centred on Athens Polytechnic, which led to the downfall of the military junta the following year[1]. the last title says “The Polytechneio lives on. In struggles today.” Link
Among the legacies of the uprising was a university asylum law that restricted the ability of police to enter university campuses. University asylum was abolished a few months ago, as part of a process aimed at suppressing anti-austerity demonstrations. The abolition law was based on the recommendatiions of an expert committee, which reported a few months ago (report here, in Greek). There’s an English translation here, but it doesn’t work well for me.
Fortunately, my friend has translated the key recommendations
University campuses are unsafe. While the [Greek] Constitution permits the university leadership to protect campuses from elements inciting political instability, Rectors have shown themselves unwilling to exercise these rights and fulfill their responsibilities, and to take the decisions needed in order to guarantee the safety of the faculty, staff, and students. As a result, the university administration and teaching staff have not proven themselves good stewards of the facilities with which society has entrusted them.
The politicizing of universities – and in particular, of students – represents participation in the political process that exceeds the bounds of logic. This contributes to the rapid deterioration of tertiary education.
Among the authors of this report – Chancellor Linda Katehi, UC Davis. And, to add to the irony, Katehi was a student at Athens Polytechnic in 1973.
fn1. The fall of the Greek junta, only a year after Pinochet’s coup in Chile was, in retrospect, a historic turning point, after which rule by generals became steadily less common.
An irregular message board for your thoughts on any topic. Civilised discussion and no coarse language. Please take lengthy side discussions to the sandpit.
A new sandpit for long side discussions, idees fixes and so on. I’m going to add MMT to nuclear power as a topic that should be confined to sandpits from now on. I’ve had my say on the subject, and the argument in the comment thread doesn’t seem to make anything any clearer.
Update 21 November I’ve revised this as a result of thinking about the comments, though I haven’t yet had time to take all the comments on board. The main change has been to focus specifically on the idea of “expansionary austerity”. As Keynes said in 1937, public sector austerity is desirable if the economy as a whole is booming. And, later in the chapter, I’ll talk about whether austerity is sometimes the least bad response to problems of foreign debt. The claim that is implicit in the current policies of the ECB, the UK Tories and the US Republicans is not merely that austerity is necessary as a response to debt but that it makes sense as a response to a deep recession. This idea is commonly described as “expansionary austerity” End Update note
I’m working on a paperback edition of Zombie Economics and adding a new chapter on austerity. Like last time, I plan to blog it in sections and take advantage of comments and criticisms from readers. I’m opening up with the intro, but plan to serve up something more substantive soon.
The East Africa appeal has less than a week to run, that is, until I have to run. There have been some generous donations, but the need is so great, I hope everyone who can afford it will dig deep, and contribute what they can.
Remember that donations are tax-deductible for Australian readers and that the Australian government will match all donations dollar-for-dollar, so every dollar you actually give translates into 2-4 dollars of desperately needed assistance.
You can donate with a credit card, cheque or Bpay by clicking on the “sponsor Me” link below the image on the right.
I spent the day in Canada (Toronto where I gave a talk on Zombie Economics last night). As in Australia, it’s now called Remembrance Day, but its a much bigger deal here, with lapel poppies de rigeur and two minutes silence observed in public venues.
If only we could mark 11/11/11 with a new armistice.
That’s the title of my piece on the passing of the carbon price/tax legislation, in Thursday’s Fin. It’s over the fold
I saw a reference to (US Representative) Paul Ryan’s plan to kill Social Security and Medicare, but only for people currently under 55 (he doesn’t say “kill” of course, but if it was going to make things better he wouldn’t need to exempt everyone likely to care directly about the issue) and it reminded me to post this.
A policy like this has what economists like to call a time-inconsistency problem. To get the policy approved, Ryan needs the votes of people currently over 55 (hence the exemption) and in the current US situation, any Republican majority has to rely heavily on older voters. Say the plan passes. Sooner or later, the combination of demographics and the electoral pendulum means that the Repubs will be out, and the new primarily majority will face three choices (a) Repeal the whole thing if they can do so before it comes into force (b) Keep on paying high taxes to fund benefits they will never receive for the benefit of the selfish old so-and-so’s who voted to cut the rope once they had reached the top; or (c) extend the same cuts to the (as of 2011) over 55’s, and claw back some money for themselves.
If I were an over-55 Republican, I don’t think I would want to count on (b)
* The original grandfather clause was a Jim Crow rule limiting the franchise to people whose grandparents had held it before the Civil War. The UK adopted something similar in relation to immigration in the 1970s. These examples give some good reasons why grandfather clauses (exempting existing participants in a system from unfavorable rule changes) are bad policy in general, though there may sometimes be exceptions
Another sandpit, specifically open for anyone who wants to debate the East African famine, the usefulness of aid and so on. But feel free to talk about other things.
I’m in the US at present, visiting Johns Hopkins University. This kind of visit usually involves plenty of opportunities for eating and drinking, not so many for exercise. To push myself into activity, I’ve signed up for a half-marathon to be run in Philadelphia on 19 November.
That seems like a good occasion for a fundraiser. I know it’s not long since the last one, but I’ve picked a really good cause, namely relief efforts for the East Africa Famine. I’ve set up a fundraising page on Everyday Hero, with a convenient link to the left. The money goes to CARE, and I’ll write to them to ask them to put it towards their East Africa Appeal. But if you prefer to give to another charity engaged in the same effort, or even some other cause altogether.
I’ve put some thoughts about the famine over the fold. However, I’d prefer to keep the comments thread for posts regarding contributions to the appeal, other ways to help and so on. Negative comments will be deleted with prejudice. I’ll open a sandpit soon for people who want to argue about the issues hopefully as well as, and not instead of, contributing to the appeal.
Update As pointed out by commenter Peter Rickwood, the Australian government will match our contributions dollar for dollar. And all Australian donations are tax deductible. So, for someone lucky enough to be in the top tax bracket, you can give $4 worth of help for every $1 of post-tax income you forgo. A dollar a day is all it takes to feed a hungry child, so $100 of consumption forgone is enough to feed a child for a year. You don’t get an offer like that every day! It’s such a good deal, I’ve put some money in to start the ball rolling. End update
For those who don’t follow the economics and politics literature obsessively, Intrade is a market in bets on various kinds of predictions, set up to follow the conventions of a share market. As I’ve discussed quite a few times in the past, the efficient financial markets hypothesis in its strong forms, implies that markets like this should give a better (more precisely, at least as good a) prediction of things like election outcomes than could be obtained from studying polls, pundit predictions and so on. I’ve been sceptical of this, on the basis of casual empiricism and some concerns about whether the empirical tests I’ve seen are biased in favor of the claim being tested.
One thing I haven’t done until now is to enter the actual market to see how it works. I finally signed up, and discovered a few items of interest. First, thanks (I assume) to US laws against online gambling, it’s quite difficult for Americans to participate in the market, which is, at least for legal purposes, based in Ireland. You can’t use a US credit or debit card, and my attempts at a wire transfer from my US bank account failed. Australia has no such restrictions.
Second, and relatedly, the market is quite thin. If the managers of Presidential campaigns cared what Intrade said, they could shift the markets a long way for a very modest outlay. For example, shares in Ron Paul, with a $10.00 payoff if we wins the Repub nomination, are currently trading at 0.27, implying a 2.7 per cent chance. But a Paul fan who wanted to raise his estimated chances could push them up to 0.40 for an outlay of $1000 (there are about 3000 shares for sale at prices between 0.27 and 0.40).
Third, there’s no margin trading, which means in particular, that you need a lot of collateral to go short on a long-odds candidate (at least if I have worked out the system right). Selling short costs $10 a share, less the current price, so if I wanted to sell short $100 worth of Paul shares at the current price (that is about 400 shares), I’d have to put up nearly $4000. I had an elegant Dutch book worked out, betting against Paul and Huntsman (zero chance, in my view) to finance a bet against my preferred dark horse whose odds were equal to the sum of the first two. But that didn’t it work, so I had to just put down my money. Over the fold, my trackside tip ….
A week or so ago I did an interview by Skype videolink with Taryn Hart of Occupied Media, talking about the issues raised by Occupy Wall Street. It’s now available online. I never watch myself on video, but I did listen to the whole thing and, allowing for a fair number of ums, ahs, and circumlocutions, I think the questions gave me the chance to state my ideas, and in some cases to work out on the spot what I thought about various issues.
Recent Comments