Archive for the 'Economics' Category

Relaxed if not necessarily comfortable: On (blogging and) politics in the Rudd era

Published
by
Mark
2 weeks, 4 days ago
in Blogging, Economics, Howardia, Media, Politics and Sociology
. 16 Comments

One thing people might have noticed around LP is that we’re focusing less and less on the daily diet of the political news cycle, even if we do still think it’s worthwhile having a bit of fun poking holes in the wilder fantasies of the “media narrative”, and highlighting the comedy act that is the Liberal leadership wars. We’re trying to provide a wider smorgasbord of posts - from policy focused pieces to cultural stuff to all sorts of interesting and noteable things we pick up around the intertubes.

That’s very different from what political blogging was like in the Howard era. And that raises a broader question - why is there such a disconnect between the state of political journalism and anything that anyone actually cares too much about in the Rudd era? I think there are possibly two answers to that question.

The first is that a managerialist government deliberately downplays the politics of governing, and Rudd himself usually avoids sharpening the edges of any political knives, leaving the Liberals hoist on their own petard. This is classic state Labor style, and I still don’t think either the Liberal “strategists” or the commentariat get it. Effectively, if all the colour and movement is on the opposition side - leadership squabbles, hyperbolic pronouncements, noisy personal attacks, they get to fill the space of “politics” in the public mind - to the extent that anyone pays any attention to them at all, it’s a big turnoff. While the government looks calm and unruffled. Waiting for Costello might be a fun game for the meejah to play, but most Australians couldn’t give a flying freak.

Continue reading ‘Relaxed if not necessarily comfortable: On (blogging and) politics in the Rudd era’

How to live with emissions?

Published
by
dk.au
2 weeks, 5 days ago
in Climate change, Consumerism, Culture, Disasters, Energy, Ethics, Markets, Media and Sociology
. 19 Comments

WorleyParsons’ PR coup last week indicated a thirst for big interventions into an otherwise rather bleak energy policy landscape1. The ~$100k feasibility study regurgitated by the MSM (and analysed by Robert here) was, as Brian alluded to, chump change from their handsome profiteering from Canada crapping all over its Kyoto commitments under the Harper Government. It remains to be seen whether WP actually capitalises on its good press and goes ahead with the projects, or simply banks the warm and fuzzies and continues its search for business opportunities elsewhere. If the projects do progress beyond the speculative phase, it would raise some interesting questions around the diversification of a business like theirs into solar (rather than, for example, consolidating its interests in various carbon intensive fields). Continue reading ‘How to live with emissions?’

  1. Two particular stories stand out: (1) Australia’s main carbon capture collective, CO2CRC, flagged the need for an additional $300m to keep the ball rolling on their research; and, (2) In a move which underlines their uninsurability, Parliament moved on legislation to protect Carbon Capture and Storage projects should they leak (or damage lifeforms we have little to no understanding of) ↩[back]

Green disconnect in the Bracks Report

Published
by
Robert Merkel
3 weeks ago
in Climate change, Economics, Environment, Policy and Politics
. 30 Comments

The Bracks Review’s final report was released last Friday. The headline recommendations - in essence, tariff cuts to continue, but direct government handouts to also continue in expanded form until 2020 - have been covered extensively elsewhere. But there’s a hell of a lot to chew on in the other 190-odd pages of the document. Much of the report does a pretty good job of undermining the economic case for continued support, in fact; there’s extensive global overcapacity in the industry, China and India are moving up the value chain, and making cars in developed countries is a very unprofitable enterprise at the moment. Furthermore, the modelling for every single free trade agreement we’ve either a) signed, or b) is in the offing, indicates that Australia’s overall economy benefits, but the car industry won’t. So, if the car industry is all important, why are we so keen on signing FTAs that undermine it? But one of the most fascinating sections discusses the impact of climate change on the automotive industry. There is an enormous gap between what the science and the global politics are saying, and how much impact on the sector this is judged likely to have.

As has been said any number of times here on LP, the government’s election promise of 60% emissions cuts by 2050 has been left behind by events; the science is calling for steeper cuts, and any global deal is going to involve Australia making disproportionate cuts because of its enormous per-capita emissions. Absent cheap, environmentally benign carbon air capture and sequestration technology, this will necessarily involve the virtual decarbonization of Australia’s transport sector, and probably over the period of a couple of decades. Thankfully, this looks like it may actually be achievable, through technologies like the plug-in hybrid, the first production example of which will be the Chevrolet Volt.
Continue reading ‘Green disconnect in the Bracks Report’

Obama ♥ Jesus

Published
by
Kim
3 weeks ago
in Culture, Economics, Foreign Elections, Industrial Relations, Poverty, Religion, Sociology, USA and War
. 39 Comments

Joan Walsh at Salon asks whether America is “now officially a Christian nation”. She’s thinking of this - Obama’s appearance along with John McCain at Pastor Rick Warren’s Saddleback Church:

One of the candidates for president strolled onto the stage at a massive megachurch in suburban Orange County Saturday night and started joking easily with the Rev. Rick Warren, maybe the most popular evangelical leader in America — but just plain “Pastor Rick” to the candidate. He talked about his certainty that “Jesus Christ died for my sins, and I am redeemed through him,” said Americans should be soldiers in the fight against evil and defined marriage as between a man and a woman — “and God is in the mix.” This particular Christian candidate was so on his game that after a segment on domestic policy ended, Warren told him — his mic still live as the TV feed cut to commercial — “Home run.”

Oh, and John McCain was there, too.

Rick Warren’s been one of the most prominent megachurch Pastors arguing that Evangelicals can vote for Democrats.

Partly Obama’s appearance is electoral calculation - the Democrats have been talking about how to walk the faith talk since some (misleading) exit polls in November 2004. But I have no doubt he’s sincere. So much for separation of Church and State. Continue reading ‘Obama ♥ Jesus’

Economics, Planet Janet style

Published
by
Kim
3 weeks, 4 days ago
in Economics, Ethics and Media
. 11 Comments

The other day when I was talking about the findings in the Essential Research poll about public attitudes towards banks and passing on Reserve Bank interest rate cuts, I linked to Janet Albrechtsen’s column in which she loudly denounced populist bank bashing and asserted the Government and citizens should all be grateful to the banks:

The bottom line is this. The more the PM and the Treasurer bash the banks, the more they hurts Australian borrowers. Bank-bashing may feel good at the time but the subsequent pain will outweigh – heavily – the momentary pleasure. Anyone who understands the economy should understand that.

Anyone who understands economics? That apparently doesn’t include the Reserve Bank’s Deputy Governor Ric Battelino, who made these remarks to the House of Representatives Standing Committee on Economics yesterday, reinforcing a “detailed case” from Assistant Governor Phil Lowe:

When we look at bank profitability, we find that Australian banks are around the top of the international range. On the surface, this could indicate a lesser degree of competition than elsewhere. But when we look a bit deeper it seems that an important reason for the high profitability of Australian banks is their unusually low bad debt experience.

That’s directly opposed to Planet’s arguments, any disagreement with which she denounced as “hypocrisy” and “ignorance”. Let’s dwell on the first of those nouns. Stephen Mayne revealed on Tuesday that Albrechtsen’s husband John O’Sullivan works in the banking sector, and that their family wealth was enhanced by remuneration including Commonwealth Bank shares worth $5.1 million. O’Sullivan received them as a senior CommBank exec. Does Janet disclose any of this? And this is the mob who have been crusading all week for the public “right to know”?

FuelWatch dead

Published
by
Robert Merkel
3 weeks, 5 days ago
in Energy, Markets, Politics and Transport
. 63 Comments

Apparently Nick Xenophon has decided that FuelWatch is bad. According to ABC online:

“When you consider that four government departments have said that this could actually put prices up rather than down, when you’ve heard the evidence from the Senate committee process it’s been quite damning,” he said…”We’ve seen from the Perth experience that it has forced a number of independent operators out of business,”

As Joshua Gans points out, this is just a tad logically inconsistent. How are the prices (and thus retailer margins) simultaneously going to go up, and independent retailers go out of business?

Continue reading ‘FuelWatch dead’

Newspoll Tuesday: Labor 57-43 (populist bank bashing edition)

Published
by
Kim
3 weeks, 6 days ago
in Economics, Markets, Media and Polls
. 16 Comments

The details can be found at The Poll Bludger’s joint. Nelson’s down 2 points (within the moe) but no doubt that will start off another round of Costello fantasising, even if the audience for that sort of idiocy will be even less than it usually is with the Olympics and all. It’ll be as meaningless as the change in the poll, and the relatively meaningless measure itself.

Of much more interest is the new kid on the polling block, Essential Research (which btw has Labor 58-42 on the 2PP). The online poll has been mixing it up a bit with different questions. You can read all the results here, but I wanted to focus on the question on interest rates and the banks.

Continue reading ‘Newspoll Tuesday: Labor 57-43 (populist bank bashing edition)’

Pension review paper prompts calls for immediate increase

Published
by
Mark
3 weeks, 6 days ago
in Disability, Economics, Government, Policy, Politics and Poverty
. 81 Comments

Unsurprisingly, the release of the government’s discussion paper on the pension system has prompted calls for immediate action. Perhaps the opposition were all waiting for Godot Costello somewhere because The Greens appear to have been first out of the starting block, with Senator Rachel Siewert calling for an instant $30 increase and damning “yet another review”.

The discussion paper emphasises the fact that 77% of Australians over 65 rely to greater or lesser degree on income support. It also highlights the fact that on current projections, the percentage of the population over 65 will rise from 13% now to 25% by 2047. Few aged pensioners currently supplement their income with paid work, but that can be expected to increase, and there may also be debates about the age cut-in as the labour supply situation alters and health outcomes improve. Because the income support system costs 6.8% of GDP, its sustainability is very relevant, and increases are also very expensive because of the very large number of recipients. The paper also considers those on Disability Support and Carer pensions, where the issues are different for many - with fewer having substantial assets and more receiving some income from paid work.

Continue reading ‘Pension review paper prompts calls for immediate increase’

Principled young women with a passion for punting?

Published
by
Paul Norton
1 month ago
in Australiana, Markets, Melbourne, Poverty, Religion and Sport
. 24 Comments

Mount St Michaels College, a Brisbane Catholic Girls School under the care of the Sisters of Charity, has adopted a novel approach to teaching mathematics.

It’s teaching the girls about punting on the races and at the casino.

This has sparked a moral panic from predictable quarters, as the linked article reports. However, if you’ll pardon the pun, I think the school is on a good thing and should stick to it.
Continue reading ‘Principled young women with a passion for punting?’

Henry Tax Review: the tax architecture

Published
by
Mark
1 month ago
in Economics
. 35 Comments

I haven’t had time to even glance at the paper that the Henry Review released yesterday as the first step in its comprehensive review of the taxation and welfare transfer systems. It’s available here on the web in pdf form. Both Tim Dunlop and Peter Martin have some reflections in posts on their respective blogs.

Very clearly, the fact that it takes a major Treasury research paper to establish the dimensions and scope of our taxation system(s) suggests that complexity is a problem. However, simplification is only one of the possible economic and social goals that could flow from a review of our taxation arrangements. Well resourced business lobbies will be having their say. I’d be interested in any input from any resident tax policy wonks here, and also in a broader discussion about what sort of goals the taxation system should serve.

And if anyone’s clued up on all this and wants to do a guest post, do get in touch!

Supermarkets and prices

Published
by
Mark
1 month ago
in Economics, Food, Markets and Media
. 46 Comments

One of the things that has me most bemused about the Coalition this year is their continued opposition to and belittling of any initiative to make the retail grocery market more transparent - whether it’s web based price comparison or unit pricing. In concluding a comprehensive post on the ACCC’s report into competition in the sector, Tim Dunlop observes:

One final point for now: on what I’ve read so far in the report, and in the media, too much is made of the conclusion that the market is “workably competitive”. The implication is being drawn is that there isn’t much we can do to improve things and that measures that the government wants to introduce like GroceryChoice, unit pricing, relaxation of some zoning rules etc are therefore pointless. Again with my retailers hat on I would say that the increased transparency provided by some of these measures is precisely the sort of thing that will keep the buggers (like me in a former life) honest.

I can see perfectly clearly that the Liberals are trying to turn food prices into Kevin Rudd’s version of John Howard’s interest rates deception - implying that Labor promised that prices would be lower under a Rudd government. They’re also trying to imply that Rudd and co are “out of touch” - another reversal of the tactics of the ALP last year. But, speaking as someone who does his own shopping and would be very interested in comparing unit pricing on say, instant coffee, and in whether milk and bread are cheaper at the local Coles or the IGA up the road, I can’t for the life of me see how anyone who actually shops is going to think these measures aren’t, well, good things even if they’re not earth shattering. Nor can I figure out why anyone who purports to be in favour of market transparency - as opposed to the self interest of large retailers - could find all this to be some sort of evil and intrusive government action. But maybe Malcolm Turnbull has a different view?

Update: Bernard Keane in Crikey explains why the measures proposed aren’t a stunt.

Elsewhere: More on the report from Joshua Gans.

The ultimate public-private partnership?

Published
by
Mark
1 month ago
in Economics, Energy, Indigenous, International, Poverty, Race and Religion
. 40 Comments

In the (new) tradition of rich dude saves the world, someone I’d never heard of, Andrew “Twiggy” Forrest - apparently Australia’s richest man, has been putting his head together with Noel Pearson and Kevin Rudd to announce a plan to create 50 000 full time private sector jobs for Indigenous Australians. Incidentally, I’m sure Pearson is behind the phraseology of a “covenant”, which no doubt appeals to our religiously inclined Prime Minister as well. No doubt such proposals should be judged on their merits, and the whole thing appears fairly sketchy at the moment.

But it is fair, I think, to say that it’s consonant with not just corporate social responsibility agendas, but also with the broader phenomenon of the privatisation of development assistance which we see worldwide - also in the field of public health. One of the criticisms of such programs - often delivered by NGOs deriving funding from foundations owned by benefactors of great wealth - such as Bill Gates - or foundations which leverage money off showbiz or biz or even political celebrity (as in Bill Clinton’s activities) is their paternalism and the lack of an integrated and properly public focus on the true dimensions of a problem - and the tendency or at least the temptation to focus on outcomes which make for good pr. Of course, in the symbolism driven political environment in which we live, you could make equally telling criticisms of a lot of public sector programs. This proposal also obviously partakes in the notion - beloved of Noel Pearson - that work and all its associated ethical dispositions are the solution to most - if not all - social ills.

There is also an obvious line of trajectory from one if not several of the logics of the Northern Territory Intervention. Continue reading ‘The ultimate public-private partnership?’

Liberal lunacy V (Whiteboard edition)

Published
by
Mark
1 month, 1 week ago
in Climate change, Economics, Energy, Environment and Media
. 11 Comments

The Liberals’ position on an emissions trading policy - and climate change - is so obscure that the results of their meeting the other day can be reported in some papers as a defeat for Nelson, and in others as a quixotic victory. Tempers are running so high that the Shadow Cabinet recommendation wasn’t put in writing - lest it leak - and the meeting did policy by whiteboard. But the proceedings leaked anyway. Here are some highlights from Louise Dodson’s story in yesterday’s Fin Review.

It took five hours, a lot of fierce debate and a deal workshopped on a whiteboard, but the coalition party room finally agreed to support Opposition Leader Brendan Nelson on climate change.

…

The party meeting started with the words “climate change is real” being written on the whiteboard. But even this statement could not produce agreement. Backbencher Dennis Jensen said he could not sign up to that statement and it was then removed and replaced by “we give the planet the benefit of the doubt and support action on climate change”.

…

Sources at the meeting said almost all Coalition MPs spoke during the meeting, with one-fifth of them sceptical that there was human-induced climate change, three-fifths of the view that the opposition needed to sort out the position and move on for political reasons and one-fifth arguing against a commitment to an emissions trading scheme specifically by 2012.

Doha trade negotiations collapse

Published
by
Robert Merkel
1 month, 1 week ago
in Developing world, International, Markets and Trade
. 82 Comments

I blame Geneva. It’s such a gorgeous-looking city (see the Wikipedia article for examples), it’s no wonder trade ministers would prefer to keep visiting it than actually reach an agreement. And, so, another long meeting of the Doha round of the WTO has failed to get a deal.

There’s some useful coverage at The Economist (though one should always keep in mind that publication’s biases when reading anything it publishes). Apparently:

In the end, it was a dispute over protection for developing countries’ farmers that proved the deal-breaker. The draft text envisaged a “special safeguard mechanism”—a right for developing countries to raise tariffs to protect their farmers against a surge of imports. America wanted the import volume that triggered the mechanism set relatively high; India wanted it low. Deadlock ensued; and that was that.

Continue reading ‘Doha trade negotiations collapse’

Reality and unreality in the pundits’ world

Published
by
Kim
1 month, 1 week ago
in Books, Writers & Writing, Climate change, Economics, Energy, Environment, Immigration, Media and Polls
. 17 Comments

Let’s take a look at today’s political “news”, News Limited style, and the ongoing construction of the “media narrative” that according to the press gallery gang, is the only news fit to print.

As noted here, The Opposition Organ spent a bucket of dosh to add extra questions to Newspoll, and chose to run with “Voters Want Costello” as its front page headline over the (presumably less welcome to the masthead of denialism) numbers on climate change, showing overwhelming majorities attributing climate change to AGW and support for an ETS, with a big majority for “not waiting on the world”. So that’s establishing the news agenda through polling to feed the current “media narrative” - centring on the Liberal leadership and Peter Costello lovin’ in particular. And selectivity in emphasis. Then we get selectivity in reporting. The numbers in Newspoll, as Possum points out, don’t show that the voters the Liberals need to persuade are particularly persuadable by a putative Costello return:

The Coalition needs ALP voters to shift to the Coalition, yet ALP voters have a breakdown of 15% more likely and 20% less likely. If Costello became leader, he might not lose voteshare, but neither does he look like he would gain much based on these results.

But Dennis Shanahan doesn’t mention that.

Let’s go back a bit and remember, as Mark pointed out in his review, that the extracts from Inside Kevin07 that kicked the Costello talk off were themselves highly selective - one bit of research done before Rudd became leader and highlighted while the other internal polling and focus group research showing Costello for PM being about as appealling as a piece of wet lettuce was studiously ignored. And let’s not forget either that the “Costello the Saviour” narrative basically depends on the publication date of a book! Leadership calculation by publishing schedule! Melbourne University Press and book distributors hold the nation’s future in their hand!

Then, the big showdown Bolta talked up on the Coalition’s emissions trading scheme stance comes - and Nelson gets rolled.

Meanwhile, the Labor government has basically done away with mandatory detention.

I would venture to suggest that is rather more important than all this other confected nonsense.

Continue reading ‘Reality and unreality in the pundits’ world’