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Showing posts from July, 2012

Update: Australians are huge outliers on surpluses

From Moneybox:

Recall that in the United States, the emergence of a modest fiscal surplus in 1999-2000 prompted immediate political pressure for massive tax cuts. George W. Bush argued that the surplus was evidence that the government was overtaxing the public. Alan Greenspan argued that if the surpluses were left in place, they would lead to socialism. A non-indebted government, after all, is a government that's buying up the means of production. Compare that, which is really the typical and expected public response to surpluses as I mentioned in my post the other day, to the Australian attitude. Have a look at the Howard government's budget papers and their most significant boast is the surplus and how many they've successfully delivered.

There's not really a preferable position. The weird Australian view was really helpful in the boom years because it enabled the delivery of a needed surplus; it's less so in the downturn because it's made the deficits …

Not all macroeconomic tools can be independent

As a follow-up to my long-winded post on fiscal policy, it's worth doing a comparison with monetary policy, the other major macroeconomic lever.

Monetary policy, in the form of interest rates and money-printing, is obviously controlled by an independent authority, the central bank. The effect of this is broadly good - interest rates largely get moved with respect to the state of the money supply, aggregate demand and so on, and not because of loud electoral voices demanding lower mortgage payments. Imagine if the federal government controlled the RBA cash rate, given how much political attention gets paid to mortgage stress and bank-bashing. Would rates ever rise? Instead, the RBA has done a pretty good job of managing rates to maximise demand and output.

So given that fiscal policy is also a tool which can be used to achieve similar things, would it be better managed by an independent body? From a strict economic perspective, the answer is almost definitely yes. A body that could…

Digest

Did you read my post about libertarianism? Don't bother. Read this instead.Ezra Klein with a great post about safety nets, risk and return, as regarding Mitt Romney. A seriously great post. I might write more about it soon.You think you're being a US-politics-loser, and up pops a piece praising Australia's electoral politics. It is actually pretty good reading to blow away a bit of cynicism - we do much better than America!This is cool. (Ha!)This is amazingly well done: Kim Kierkegaardashian, combining the philosophy of Soren Kierkegaard with the tweets of Kim Kardashian. Yep.

The law of the imagined middle

I guess this is just the good old pundit's fallacy rearing its head again, but why does Tom Switzer think that "middle Australia" is as dyed-in-the-wool conservative as he is? The context is a strange and apparently unprompted attack on Malcolm Turnbull.

The gist of the article is this: everyone's always going on about how Turnbull should lead the Liberal Party - but hold up there! It's not dissimilar, in concept, to the excoriations of Kevin Rudd which came out around the February leadership challenge. This kind of thing can be quite valuable: it's important, in understanding a government, to know why it made personnel changes and what internal problems it has had; deciding who is the best person to lead a parliamentary government is something that is much better handled when we know how they do at the tasks of parliamentary government as well as the tasks of public leadership.

This article, though, goes astray because it doesn't tell us why Turnbull di…

Twitter is not that big a deal

More briefly, there's something else which annoys me about Michael Pascoe's piece which I think is emblematic of the annoying tendency of columnists to want to explain everything in the context of some big narrative. If you clicked that link, you will have seen that my opinion on the 'big narrative', at least as far as journalism goes, is pretty low.

The overarching narrative in this piece is that social media and our own short attention spans have ruined political leadership and decision-making. It leans pretty heavily on Thomas Friedman's op-ed which has been pretty comprehensively trashed in plenty of other places on the internet. So I don't have all that much to add, except that if you thought Pascoe's piece was largely a series of disjointed and meaningless quotes from somebody else's article, you were wrong - it's a series of quotes, from somebody else's disjointed and meaningless article.

Laying the foundations

Michael Pascoe reckons, somewhat circuitously, that governments these days are not getting obviously good and simple policy changes done as well as they might. This is attributable, in his view, to the rise of "popularism" and political cowardice which encourages governments to stick exactly to what their constituents already think, thus avoiding electoral danger but also failing to lead.

I've written(/spoken) before about why the phenomenon of parties moulding to existing views is bad for politics, even if it seems to be democratic. It's not quite the leadership point Pascoe makes, but the upshot is the same - you shouldn't just base your policy on what the polls say people want at the moment. But whereas my prescription was to stand on values and policy, and let the people decide if they agree, his is just to ram through the policy that is "bleeding obvious" and ignore the polls in the name of leadership.

This is of course a technocrat's dream. It…

Malcolm Turnbull on marriage equality

Malcolm Turnbull used the Michael Kirby Lecture to make a supremely compelling case for marriage equality. It's a really good speech, and it's hard to disagree with anything he says. But of course people have found a way, and not just anti-equality campaigners but people in favour. This is bizarre.

The apparent problem is that towards the end of the speech Turnbull suggested that "the numbers are not there for gay marriage in this parliament". That's pretty widely accepted as being the case given the Coalition isn't opting for a conscience vote. Turnbull thinks it would probably still be the case even with a conscience vote - fine, he's relatively well-placed to make that kind of judgement and it seems like a reasonable proposition. The response given in the speech is that the numbers are present for civil unions and we should legislate for the rather than "letting the perfect be the enemy of the good".

Amanda Lohrey in The Monthly

I just picked up July's The Monthly and read the first article. It is fantastic. You should read it.
It begins:
Our political culture has never been more cynical; it is fraying at the edges, mired in ignorance and negativity. There are too many good things in this article to comprehensively quote, and since I just found it online you should just go and read it, but I'll pick out a few bits.

As Faulkner observed, "the politics of distrust are easy" and, he might have added, based on a number of facile assumptions.  The first of these is that politics is a uniquely dirty pursuit largely confined to political parties run by ruthless scoundrels. People who routinely cheat on their tax returns think nothing of asserting that politicians are only in it for what they can get. This is the Australian way. ... And I wonder about those people who routinely disparage politics and politicians. Have they never sat on a company board, or the committee of a sporting club, or a schoo…

Dr No

I never really bought into the 'relentless negativity' narrative when it was truly in vogue last year. Certainly Coalition policy was thin on the ground and there were a lot of attacks on the government being launched. In the year after an election, though, that's essentially par for the Opposition course. My objection to Tony Abbott's conduct last year was not that it was negative but that it was just dumb. "The carbon tax will create perverse incentives for companies, be regressive and largely ineffective" is not really less negative than "great big new tax"; the former is clearly a much more helpful contribution to policy discourse.

Recently, though, Abbott and several of his front-benchers have moved into a zone that really is pointlessly destructive and ridiculous. It's one thing to criticise, even in a stupid and irritating way, a policy which you actually oppose (well, currently oppose, at least.) It's a different thing altogether t…