Thursday, May 14, 2015

The zero lower bound government

Another budget has been and gone. Instead of the steaming turd that was the last budget, which was largely blocked by the Senate, this time we have zero. The Abbott government has spent the intervening period announcing bad policies, extracting the maximum amount of negative reaction as the public gradually and painfully rejects them, and then quietly dropping them. What they are proceeding with are much the same settings as were left by Swan, but adding a bunch of conservative nudge items which blow the deficit out. Hockey is deliberately doing nothing in the hope that revenues will rebound naturally from historic lows under Swan.

For me, the most astounding stat from this year's budget is that despite a projected deficit of over $35B, it will actually create an annual lag on the economy of as much as 0.5% of GDP (read it somewhere yesterday, now can't find the link, grr), and will do nothing to help slowly creeping unemployment. From a Keynesian macro perspective, it is the worst outcome possible. Most worryingly, it is based on assumptions that are rosy at best.

I have been feeling for a while that it is only a matter of time before Australia joins the rest of the Western world in hitting the zero lower bound of interest rates. All it is going to take with the current budget settings is one big assumption to be wrong - China hiccuping, the iron price plummeting below $35 as Rio Tinto and BHP Billiton squeeze out competitors, opportunistic currency markets persisting in inflating the $A - for the RBA to be faced with the prospect, given that fiscal policy is so pissweak, of having to further cut rates down close to zero where it is in America, Japan and Europe. And once you reach the zero lower bound and bring on all of the weirdness that happens in an economy as a consequence, it's very hard to raise them again, as Japan showed us from the 1990s on.

Australia under zeroed interest rates would be a scary place, given how our economy is structured so strongly around housing as a speculatory tax haven. If, as some pundits are saying, this budget is a precursor to an early election, that may be the last chance to avoid the unhappy fate of the ZLB. The Liberals don't have any ideas.

Thursday, April 9, 2015

Barmy Harmy and the long walk

Katherine Murphy runs with a nice little analogy:
We can see right now that the Abbott government is doing that long walk that fast bowlers do before rounding on their heel and coming back full tilt at the crease.
Only problem is, this was Tony Abbott's first ball:

Tuesday, March 24, 2015

Club Troppo, Parishioners and High Broderism

When I first started taking interest in Australian poliblogs a few years ago, my first thought was that the Club Troppo web site sounded interesting, based as it was on the self-professed "political centrism" of Ken Parish and Nicholas Gruen. Back then, you had Larvatus Prodeo on the left (now deceased) and Catallaxy Files on the right, and Troppo nominally in the centre as the major group blogs in the Australian political scene. To me, group blogs are the most interesting variation of the form as they encourage dissemination of a range of ideas and viewpoints, producing a variegated editorial line instead of a blaring one-note foghorn. I wish I was part of one of these collectives, and indeed I did contribute a piece on the NBN to Club Troppo in my early time as a poliblog watcher.

As you may glean if you read the comments to that piece, my encounter with the resident Troppodillians was less than successful. Nicholas ended up calling me a mercantilist, which in the modern context is an implacable insult by a liberal Western wonk - never mind that Chinese mercantilism has been kicking the West's butt in the 21st century (that's for another post).

Anyway, one of the Troppo's latest is by Parish, and he engages in some classic "both sides do it" high Broderism to attempt to lay blame for mindless federal obstructionism at the feet of Labor:
... the cycle of retaliatory fiscal mischief goes back decades. I would date the phenomenon back at least to Paul Keating’s cynical and unprincipled demolition of John Hewson’s Fightback policy in the lead-up to the 1993 election, a tactic that Keating pursued relentlessly notwithstanding that he himself had advocated a GST only a few years previously and that John Howard by contrast had had the guts and integrity (not words that most on the Left would associate with him) to support most of the Hawke/Keating government’s necessary deregulatory, market-based reforms over the previous decade.  The gloves were off on fiscal policy from that moment on.
There were many valid and principled reasons for a centre-left leader to oppose Fightback!: slashing of welfare, abandonment of awards, cutting Medicare to ribbons, tax cuts for the rich and widespread privatisations. Yes, the GST was the issue on which the election was won and lost, but it would be disingenuous to concentrate solely on the media frenzy over it and ignore all the other Reaganomics elements which should be anathema to a centrist wonk, as Ken is. Wonks look at the whole policy picture, not just the media sideshow. Fightback! would have kickstarted the pure Reagan/Thatcher model of gutting the social safety net and widening the inequality gap between rich and poor, which Hawke and Keating had implemented while preserving many elements of the Australian social contract that were hardfought over many decades by unions and the rest of the left.

The rest of the article attacks Labor for insufficient adherence to its own ideals, especially around privatisation in the context of Paul Keating's defence of privatisation in the lead up to the NSW election, and then puts the hard word on Labor to establish a Troppodillian idée fixe, the Independent Fiscal Authority. Little to no mention is made of the Liberals in all of this. There is no responsibility for reform laid at the feet of Tony Abbott or any other Coalition leader. The implicit assumption is that the right's position is not even worth discussing.

High Broderism is a term related to Washington Post columnist David Broder, who is the premier exponent of the Beltway village theorem of a controlling group in the centre defining what is and is not acceptable policy according to the conventional wisdom set by an elite of influencers and policy professionals, with anything outside this window labelled as "extremism" and denounced across the press and "respectable" broadcast media. In America, this elite is an unelected and unaccountable set of media commentators and political operatives effectively working as a team, with tenured columnists at the WaPo, NYT and WSJ spruiking for those insiders whose policies they agree with and shunning those with other ideas, with little reference to their popularity with the actual public.

In Australia, we don't really have a "Beltway" as such. Power is more concentrated around Collins St and Sussex St, and Capital Circle just doesn't have a ring to it. Nevertheless, we do have an unelected "controlling group in the centre" in this country which traditionally has sat above political cycles, but it's not made up of pundits and apparatchiks: it's the public service. As befits a country more built along Westminster lines, public servants are the rocks around which the political tides rise and fall, guiding the country with Appleby-esque aplomb past this or that faddish though bubble. As academic advisers to and occasional employees of various governments over the years, Gruen and Parish are part of the wider cadre of public sector policy wonks, which gives their position in the Australian poliblogosphere some quantum of extra weight.

There is a good reason why the likes of Parish address their criticisms solely to Labor: it would be useless to ask the right to pay him any attention, because the local yokels are following the trend in the rest of the West of abandoning all pretence of scientific method in favour of hokum, humbug and junk economic theory. More to the point, Parish and his wonkmates are not only not going to get a gig advising any Coalition mob, the Liberal razor gang has been conducting a quiet pogrom to purge the public service of those not deemed sufficiently discipular to wingnut orthodoxy, from the head of the Treasury on down. His natural role, and that of the reality-based community within the public service - the Parishioners? - is to advise Labor because advising the Liberals on policies backed by traditional Keynesian theory is a fool's errand. This leads to a tendency for he and his posse to lecture Labor and let the Coalition off the hook.

That is not to say Parish et al do not criticise the Liberals. High Broderism denotes opprobrium directed at all sides. The responsibility for fixing the mess thus described, however, is left to the Left to get right to the right-thinking job of giving in to the Right.

Tuesday, March 17, 2015

Short Kicks: Whoa-oh, onion skin

Still snowed under with work, so no time for longer pieces.

- I presume no domain expertise on Aboriginal matters so I can only sit back in my chair while reading pieces like this from the Oz or this from Piping Shrike, One aside from the Shrike stood out for me, though:
By the Martin Place siege, Abbott was toning down the cultural warrior rhetoric, which he could while his main threat was Turnbull. Now in attempting to cling on to right support against a more serious rising threat from Morrison, he has speeded up again.
Yep, that appears to me to be a pretty cutting summation of Federal politics at the moment, as the Christian/Tory wing of Eric Abetz and Kevin Andrews is suddenly the only constituency that Tony Abbott cares about, as it's the factional key to a Scott Morrison succession.

- The Clive 4 Eva bandwagon has its wheels on fire, rolling down the road. He only has himself to blame. If I was an American lefist blogger here I might start railing about the double standard in the media, in that Abetz and Hockey don't get nearly enough scrutiny for their near complete lack of negotiating skills to get the 2014 budget through the Senate. Journos seem to be giving them somewhat of a pass as an indirect commentary on the quality of the independents. How Abbott must yearn for the prudent competence of Tony Windsor and Rob Oakeshott.

- Abbott ate a raw onion in front of TV cameras, brown skin and all. Who does that? Has that ever been a thing? Is he actually clinically insane by this point? What is the procedure for having the Prime Minister taken away by the men in white coats?

Monday, February 16, 2015

Elitism and bullshit

Jeff Sparrow gets on the elitism bandwagon - by which I mean treating elitism as a subject of political discussion all of its own - in examining recent literary ejaculations by David Flint and Nick Cater.
We’re now in a position to understand the relationship between elitist anti-elitism and the more recent anti-democratic turn. Almost by definition, elitist anti-elitism depends on external commentators like Cater or Flint to mystically interpret and convey the sentiment of the masses. If the man in the pub were to argue for himself – or, worse still, to agitate or organise – he’d immediately lose his authenticity. If he starts to talk, he’s half way to becoming one of those hated intellectuals.
Abbott saw no problem with knighting Prince Phillip, since he and Flint know in their bones that only elitists could hate the monarchy. The unpopularity of the knighthood doesn't change anything – it merely shows that the elitists have somehow corrupted the natural instincts of honest folk.
My initial reaction to the nonsense put out by Cater and Flint is to conclude that "elitist anti-elitism" is, not to put too fine a point on it, complete bullshit. Sparrow calls it "mythology", but my gut feeling is that it is just bullshit, plain and simple.

Lest you think I'm merely being scatological for its own sake, bullshit has become a subject for serious intellectual study in recent times. As a rhetorical technique, it has been defined as subtly different from lying and humbug. The difference between lying and bullshit has been summarised thusly:
The liar believes that A is the case, but he wants to convince you both that Z is the case, and that he believes Z is the case. The bullshitter, by contrast, wants to convince you that Z is the case and that he believes Z is the case, but he is indifferent as to whether Z is the case or not[.]
As for a delineation between these two and the concept of humbug, to me it seems committing humbug incorporates some level of pretence, insincerity and/or trickery on behalf of the humbug, but apparently it stops short of outright lying. In the above formulation, the humbug wants to convince you that Z is the case and that he believes Z is the case, but he is ambivalent about whether Z is the case or not. (Ambivalence and indifference can be contrasted by saying that indifference means you don't care, whereas ambivalence means you don't know).

So do Flint and Cater really believe their bullshit, or are they just humbugging it up with straight out lies? Which faith are they arguing in badly? This matters in the sense that it important that the right maintains some semblance of attention towards the truth, because Harry Frankfurt's message with his 1986 essay was that too much bullshit was toxic for the soul. At least if they are merely lying, they can eventually be proven wrong. If they have caught the Baudrillardian disease of forgetting to care about reality in the first place and immersing themselves in their abstracted truthiness, then we're in trouble.

I think, on reflection, that Cater and Flint are engaging in humbug. They have come up with a quasi-intellectual framework of post hoc justification for their identity politics, but they have done no academic work to put this in context of the rest of scientific thought on the issues. They just don't care about the reality of the situation, as long as they keep getting attention and/or cheques. The lies suit their purposes. Don't look behind the curtain, because there's nothing there except an old white man running a scam.

They are not as bad as the George W. Bush era's self-appointed creators of reality, though perhaps that's only because they are so relatively powerless. Thankfully.

Tuesday, February 10, 2015

39/100: fractional factional friction

So, the first #libspill came and went, largely as I predicted with Abbott keeping his job but none of his credibility. The only thing I didn't expect was chief whip Philip Ruddock deciding to make the pre-spill vote a secret ballot - but Cabinet solidarity extended to all but six members anyway (according to the Tele). If that last snippet is true and assuming 35 members in Cabinet went 29-6 against the spill, then the numbers from the backbench were 33-32 for the spill.

Several things should be said that I don't think I've heard much of elsewhere. The first was hinted at by Piping Shrike.
That was true of the entire process, actually. This is the nature of spills in parties in the Westminster tradition, where the party is focused almost exclusively on what Abbott calls "internals". The PM talked about being more "collegiate", but you have to be a member of the right college for that to matter. When he did remember to mumble platitudes about listening more to voters, it was always as an afterthought behind the real targets of his rhetoric, the elected members of his own party. The changes to the ALP's process after the Rudd debacle means that Labor won't make that same mistake, though they will probably discover all new ones.

Speaking of the Shrike, he reckons this could have been Turnbull's best shot.
So what next? It would be tempting to wonder if the right, having instigated this instability, then suddenly going quiet, with those like Howard and Bernardi appearing only at the last minute, had shifted its priority from replacing Abbott to just stopping Turnbull in his tracks. The talk was that Morrison, probably their preferred choice, was not yet experienced enough in senior portfolios to take over. This sounds phoney, probably the numbers weren’t there yet. If so, it would suggest that Turnbull might have just missed the best chance he had to regain the leadership.
That may be true, but it may also be true that 39 votes was the best he was ever going to get from the current party room, populated as it is by so many of the right wing of the party. I haven't seen much analysis of where those 39 votes came from in terms of factional groupings. The narrative of this being a peasant revolt by backbenchers without reference to ideology is too cute, too convenient.

One would assume the Christian/Tory wing of Kevin Andrews and Eric Abetz would be right behind Abbott, whereas the smaller Julie Bishop faction would be mostly for the spill as Bishop has been highly cheeky in the indirectness of her public support for it. The Hockey club (cigar club?) would surely be in a bind at the moment; their leader has been smashed from pillar to post for attacking the Age of Entitlement, to no effect. Would a new Treasurer under a new leader be from the same club, and thus it doesn't matter who is given the poisoned chalice, even though that means the nominal factional leader gets the lemon sars? I suspect the clubbers think Turnbull wouldn't be good for their prospects for advancement, but there are a lot of younger members who have been champing at the bit for the dead wood to be cleaned out of Treasury so factional solidarity wouldn't be all that great. Then we come to the more regional alliances: Pyne's South Australian mob who must be staring at electoral oblivion given how poorly Abbott has treated them; and Greg Hunt whose Victorian cadre stand to lose 6 of their 16 seats if current polls hold up and must feel unloved given the dominance of NSW in the modern Liberal Party.

Finally, there's the Scott Morrison faction, which has been called Right with a capital R, even though Morrison is quoted as having some wet economic positions, and his ascension to Parliament was over the body of a candidate of the Right. Would the members of his faction have been voting for a spill? I suspect not. They would have been some of the first names on the list of 70 pledges that Abbott's numbers men drummed up on the weekend, as loyalty to the leader suits Morrison right now. Some of them may have lied, but not all that many did.

The long game is for Morrison to capture enough votes from enough of these groupings to win a spill, and the obvious first target is the Andrews/Abetz faction because that seems to be the dominant one in this Parliament. Changing their vote en masse in favour of a spill would be a fait accompli for Morrison. Being a committed Christian doesn't hurt his chances of capturing this faction, albeit his religion is of the Pentecostal evangelical variety - but the American Right managed to accept Mitt Romney and his Mormonism, so political factions tend to override religious denominations as long as God is in the House. Morrison has been promoted by both Turnbull and Abbott in his brief career, and he is talked about as a unity candidate. He should be the favourite when the decisive spill in this inexorable process is held.

In closing, it would be remiss of me not to note Sinclair Davidson going all in for Malcolm Turnbull prior to the vote. He misses the obvious solution to his own dithering dilemma: Morrison as PM and a man who can "drive the process"at military speed and efficiency, with Turnbull as Treasurer doing the sales job for hated "reform" that Hockey can't.

Friday, February 6, 2015

Tony Abbott: see you next Tuesday

The #libspill is on. Only problem is: nobody is standing against Tony Abbott yet. Julie Bishop has ruled herself out, as has Scott Morrison. Malcolm Turnbull is the only viable alternative candidate, and he's working the numbers.

I have not had the greatest of luck in predicting these things - I thought Rudd wouldn't run against Gillard and said so on the fateful day that he won back the leadership - but I reckon the most likely scenario is that Turnbull realises he doesn't have the numbers, and doesn't stand. He may run and lose, but that won't solve anything, just as it didn't solve anything when Rudd ran and lost a couple of times before winning. There will be plenty of opprobrium to share around in any case. Abbott's leadership will still be terminal, he still won't have a mandate, and his position will be even worse because he'll have to bone Turnbull from the front bench and appoint someone less qualified.

This all plays into Scott Morrison's hands. Abbott and Turnbull can bash each other up across multiple failed spills, and he can wait for the right moment to come around the outside like Kiwi in 1983. (Note to self: must update sporting analogies to 21st century.) As he rolls out social security policies, Morrison will look like the only one who is still accomplishing anything at a level of competency befitting a leader.

I feel like Steve M. over at No More Mister Nice Blog who is similarly wailing abut Scott Walker being the quiet favourite for the 2016 GOP primary. I think it's important to know the real enemy, and why he is the dark horse based on his attractiveness to right wing extremists. Walker puts the wind up Steve the way that Morrison puts the wind up me: they could cause the most destruction to the apparatus of social democracy if they ever fluke their way into office. Leftists hate Walker and Morrison, but they get results in implementing their hated policies. It's the quiet ones who are most dangerous at times like this.