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Month: March 2009
Rawls, Cohen and the Laffer Hypothesis
I was in Sydney for a fascinating conference on Evidence, Science And Public Policy. It was worth the trip just to hear John Worrall on evidence-based medicine point out this paper on remote retroactive intercessory prayer [1]. Assuming, as appears to be the case, that the study was totally legit (no data mining etc), the obvious question for me was why anyone would think it worthwhile (ex ante) to test this out.
But that’s not the subject of this post.
Monday Message Board
Its time once again for Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language.
Prime-aged male
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For the last time in my life I am prime-aged in both the mathematical (prime number) and labour-market (25-54) senses of the term.
Earth Hour
I was in Sydney last night for Earth Hour and the difference from the usual city lights was impressive. This exercise is certainly helpful in reminding people of the issue.
On the other hand, I think the implied message of virtuous self-denial is the wrong one. A typical household would save more CO2 emissions by laying out a few dollars to replace one incandescent light bulb with a compact fluorescent than by turning everything off for Earth Hour once a year, not to mention coming out ahead financially. And what’s true for lighting is true for consumption in general. Efficiency improvements and substitution (videoconferencing for business travel, for example) can do a lot more than any plausible reduction in living standards.
Much rests on rescue plan
That’s the title for my article in yesterday’s Fin, reposted over the fold
Weekend reflections
It’s time once again for weekend reflections, which makes space for longer than usual comments on any topic. As always, civilised discussion and no coarse language.
What does the Geithner plan mean?
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My piece in today’s Fin is about the Geithner plan to bail out US banks. I’ll post the whole thing tomorrow (given that the Fin is pay-only, I wait until today’s issue is off the stands), but there’s one point I want to stress.
Most of the debate about alternative bailout plans has been framed around the equivalent pair of questions: liquidity crisis or solvency crisis? and book value or mark-to-market? The Geithner plan assumes that the true long-term value of ‘toxic’ [1] asset-based securities greatly exceeds their current market value, and that the banks are therefore solvent but illiquid. Critics like Krugman don’t buy this.
But the really big question, it seems to me, is what kind of financial system will emerge from the current crisis. Geithner, Summers and Bernanke clearly envisage something very like the pre-2008 system, with a few less players (all the better for Goldman Sachs!) and some tighter regulation to prevent unfortunate occurrences like those of the last year. The advocates of nationalisation implicitly accept that something very different is going to be needed; not permanent public ownership, but a much smaller, more conservative and less profitable financial sector, providing necessary services in the manner of other utility and infrastructure businesses. An obvious dividing point is financial innovation: advocates of Geithner style bailouts are much concerned to avoid discouraging financial innovation, while the critics see uncontrolled innovation as a large part of the problem.
fn1. A side issue I’ve been meaning to raise for a while concerns the salience of “toxics” in US culture generally. As an example, food safety seems to be regarded as a major environmental issue in the US, while in Australia it seems to me to be seen as a minor local government issue, with the archetypal instance being dirty restaurant kitchens suitable for hidden camera current affairs exposes. But it’s hard to tell if my perceptions on this are accurate.
The earth shape controversy revived (earlier posted at CT)
Just about everyone has already piled on to the latest development in the George Will saga – the Washington Post’s belated publication of an opinion piece by Chris Mooney and a letter from the World Meteorological Association pointing out (very politely) that Will was lying in every paragraph of his notorious piece on global warming. And just about everyone has the same take: in the absence of a retraction or correction, the Post is taking the view that Will is entitled to his own facts. (Here’s Matthew Yglesias, for example, and Mooney has a huge list of links at his site).
The absolute refusal of the Post to take a position on the truth or falsity of what it publishes (along with the continued scandal of anonymous sourcing Can't Buy Me Love move
) leads me to a steadily more negative view of the question of whether we actually need newspapers and whether we should regret their seemingly inexorable decline. The standard claim is that without reporters, we in the blogosphere would have no material to work on. But Will’s recycling of long-refuted Internet factoids (something very common among rightwing pundits in particular) shows that, in important respects, the opposite is true.
More importantly as far as political and business news goes, there is almost always someone with an interest in having any given story published. If newspapers are unwilling to take a stand on which stories are true or false, their only function is that of gatekeeper – determining which stories see the light of day and which do not. The potential for corruption in this role is clear, and the reality was obvious particularly in relation to the Iraq war.
Update Lots of readers have inferred that I welcome/wish for the demise of newspapers or opinion columnists. Actually, having written (and been paid for) an opinion column in a national newspaper for the past fifteen years, I am deeply ambivalent on the subject. On the one hand, the deplorable handling of issues like climate change (particularly in opinion pages, but to a significant extent in news as well) the early years of the Iraq war (if anything worse in the news pages than the opinion section), and the ‘inside baseball’ approach to political news in general leads me to think we would be better off without them. On the other hand, there’s obviously a lot to lose here, and it’s not clear how, if at all, some of it can be replaced.
Of course, what will happen will happen, regardless of what I think about it. But maybe if those making decisions about how newspapers are run think more closely about episodes like this one, they might see the need for change, and that change might enhance their chances of survival.
Monday Message Board (on Tuesday)
The Monday Message Board is running late again, but it’s up now for comments on any topic. As always, civilised discussion and no coarse language, please.
