Saturday, July 19, 2014
After the recent shooting down of passenger flight MH17 with around 300 dead by Ukrainian separatists and/or the Russian military, Sinclair Davidson posts Ronald Reagan's speech on passenger flight KAL 007 after it was shot down by the USSR military in 1983, later calling it "forceful and inspiring". This is an echo of similar posts at Hot Air, RedState and Fox News comparing Reagan's strong words with the cautious early reaction of Barack Obama, which already has the tabloids incensed.
As usual, the right is ignoring the facts in favour of a partisan narrative. As Crooks & Liars details and the Monkey Cage blog at the WaPo annotates, Reagan's reaction was rated at the time by the right wing media as inadequate and weak, gadding about on horseback on vacation in Hawaii for days while the bodies of the American victims were still warm. In fact, Reagan eventually did nothing except continue his previous policy of economic opposition to the USSR without direct military engagement, which is pretty much what Obama has been doing against Russia in the wake of Vladimir Putin's annexation of Crimea.
It is refreshing to see such a debate go on without reference to domino theory, which has been thoroughly discredited since it failed to predict the encroachment of communism in the 1980s. There has also been a lot of sighing from the American left about the preponderance of Dubbya-era reprobates in the media talking up re-engagement in Iraq and/or the Crimea. I am as sanguine about that as I am about the IPA's ubiquity on the ABC: these are free countries, they're allowed to have a voice, and we're allowed to laugh at them.
Reagan may have been a lot of things, but one thing he was right about was how to fight an empire: economically, with any military troops on the ground to be confined to smaller proxy battlegrounds. Obama learned that lesson, and he's already putting the Reagan playbook into practice by squeezing Putin with sanctions, using the tragedy to further pressure the EU to join the US in applying sanctions. As is only proper.
Wednesday, July 16, 2014
In honour of Christine Milne's listing of climate change deniers prominent in Australia, I have taken the liberty of adding a few more to bring it up to 22 and arranging them into an Australian football team, named from the backline in traditional style a la the Coodabeens:
B: Brian Fisher, Dick Warburton, Shirley In't Veld
HB: Sam Walsh, Hugh Morgan, Mitch Hook
C: Martin Ferguson, Chris Mitchell, Cory Bernardi
HF: John Roskam, Ian Plimer, Jo Nova
F: Andrew Bolt, Gina Rinehart, Rupert Murdoch
Foll: Bob Carter, Danny Price, Ian McNamara
Int: Innes Willox, Maurice Newman, David Murray
Sub: George Pell
The backline is taken from the panel of the renewable energy target review, which is currently the last line of defence against science and facts. The halfback line is the mining lobby, for which any number of half back flankers could have been chosen since they have all been talking their own book on this issue from the start to deny extra taxes. Morgan is probably due for retirement, but he's going around one last time for another flag.
The centre line includes a left winger at left wing, albeit in name only, as I reckon Martin Ferguson is one of those Labor politicians who is going to end up being more beloved of the right as times goes on (see: Gary Johns). Cory Bernardi wins the right wing spot ahead of a gaggle of aspirants from the Senate clown show. Chris Mitchell sits in the center - not politically, of course, but in the centre of the climate denial team.
The half forward line contains a few IPA hired guns on the flanks, and I could have chucked half a dozen more from the ranks of the wingnut think tanks, but centre half forward could only be occupied by one man: pebble specialist Ian Plimer. There is no rock that Plimer couldn't pick up in Australia and wax lyrical about its geological history with great precision and knowledge... and then proceed to piff in the general direction of intelligent people, to no effect.
In one forward pocket you have Andrew Bolt who is usually fully forward in his attacks, who is in the pocket of the other forward pocket in Rupert Murdoch who is never shy of coming forward and reaching into his pocket, but arguably Bolt's also in the pocket of Gina Rinehart who is your classic roadblock full forward, and has a lot of other teammates in her pocket such as the aforementioned Plimer. Ms Rinehart has a lot of pockets in her overalls.
There are two more jacked-up credibility-free scientists at ruck and ruck rover in palaeontologist Bob Carter and economist Danny Price, but for rover it's a media personality, the host of Australia All Over on ABC Radio, the infamous "Macca". He would also make my team of Australians Furthest Up Themselves, but he makes this list due to his denialism.
The interchange bench is staffed by yet more business rentseekers, of which there are a cast of thousands. In the green substitutes vest is Cardinal George Pell, who doesn't quite fit in with the rest of this list but I suppose will be subbed in once the game is won to rack up some garbage time stats telling us all how right all his teammates were.
Thursday, July 3, 2014
I was retweeted by Brad Delong today for linking to Stephen Koukoulas' latest missive on the results of the current Liberal federal government's campaign of talking down the domestic economy: it looks like it has worked as retail sales have tanked and we're about to enjoy the same sort of quarterly handbrake effect that the US has just endured. This lead to a short (of course) Twitter conversation with Patrick Chovanec about China, which lead to this observation which interested me.
@m0nty for much of the rest of the world, end of China's investment boom is net positive story (relieves deflation, opens up net demand)
— Patrick Chovanec (@prchovanec) July 3, 2014
Chovanec is a Chinese expert of some renown, a former employee under Bill Kristol and a former colleague of Paul Ryan. His blog is interesting reading, in that it is an ongoing attempt by a conservative theorist to understand why this is the Asian Century, and how this is going to lead to China belting the bejeesus out of America in both economic and political power games (if not actual war). He is a bear (despite his protestations), as a conservative academic looking at China must almost inevitably be to jive his beliefs with the ongoing economic and social experiment happening before his eyes based on what he must see as an unworkable melding of private and public control from above. China is still a command economy for the most part, only using those elements of capitalism which are useful for its centrally-determined agendas. As Chovanec notes on his blog, control is actually getting more concentrated among power elites not less. Despite all this, China continues to grow like topsy and it's winning a lot of the contests it enters - like currency wars and its increasingly dominant position in Africa.
Chovanec has issued dire predictions of calamitous domestic Chinese bubbles, as have many watchers over the years, but if the Chinese miracle is merely a mirage then it hasn't dissipated yet. For instance, after he spent a lot of energy talking about how the local real estate "bubble" was ready to pop, it surged again early in 2012, leading to a series of posts floating up reasons as to why stentorian bears like him were so wrong. From the Australian perspective, where it seems apparent that China's restrictions on multiple home purchases are probably why Chinese investors have invaded the Australian real estate market in such numbers to treat empty dwellings like gold deposits, there doesn't appear to be much of an end in sight to the Sino-Australian real estate boom.
Chovanec has also been quoted on recent movements in the heavily subsidised Chinese solar cell industry, as in this NPR interview, and here I think is where his own insights illustrate what is going on.
INSKEEP: So what do the Chinese do now?Just as the TARP bank bailout and the auto bailouts worked perfectly in America, so it appears that China has avoided a series of pitfalls from inefficiencies in its system by temporarily socialising the losses and keeping long-term-viable businesses out of bankruptcy. This is the positive side of too-big-to-fail. Keynesianism is all about smoothing out the peaks and troughs of economic happenstance to prevent long-term damage to the livelihoods of the relatively powerless workers who would otherwise have their careers thrown on the scrapheap of history, for the benefit of the economy as a whole.
CHOVANEC: Well, what they probably do is they dig deep dig into their pockets – the pockets of the central government – and bail out these companies. Because what they’re really afraid of is, you know, we've seen this over the past couple of months, that even relatively small companies, when they fail in China they're so intertwined in terms of their credit relationships and the local economy that essentially everything's too big to fail.
No doubt there is an argument that China's socialisation of losses from Suntech et al is a different situation to TARP and the auto bailouts, since the latter actually made a profit in the end and there might not be such an easy denouement to the Chinese solar cell industry's woes. Similarly to the National Broadband Network in Australia - I'm talking about the original Labor vision, not the emaciated joke it has become under the Liberals - governments are in an unique position to invest in such projects and secure a solid rate of return, because they can accumulate many more benefits from positive externalities than do private corporations. Even if the NBN or Suntech were to represent paper losses on their own balance sheets, the indirect public goods from universal broadband in Australia or the popularisation of solar cells on roofs across China could very well translate into higher taxes from increased general production, or a decrease in spending on policing or environmental cleanups.
Under certain circumstances, where it is done for solid Keynesian reasons, TBTF works. Chovanec and those of his ilk like to say that Chinese leaders don't really know what they're doing and lack a coherent direction for the future, but so far in the 21st century they have been kicking ass and taking names in both economic and political realms. Australia may be inside a rapidly shrinking bubble as the bears say... or the lucky country may have just been lucky one more time.
Thursday, June 26, 2014
Today, apart from being the one year anniversary of Rudd deposing Gillard, is the day where Australia and its media commentator "chooks" try to figure out what is in Clive Palmer's head by poring over the chicken entrails after his presser yesterday with Al Gore. The primary sources are the transcript of the presser (can't find a full one but long excerpt here), and the transcript of his interview on Lateline.
When you have news.com.au declaring victory for Gillard, Business Spectator speculating that Malcolm Turnbull is the big winner and Catallaxy Files calling it as a sting operation on Al Gore, you know we're in Clivezone where the old way of doing things in Canberra has been shaken up a little bit. I think Andrew Bolt's ambivalence is closer to the truth, as there's something there for everyone.
My reading is that Palmer is trying to #occupy the centre, and has orchestrated a deal which all parties can find fault with, but all parties can find something they like - as with all good compromises. He comes off looking a bit like Bob Hawke in the process, which is remarkable for a first attempt by a minor party leader, and certainly more elegant than anything the Democrats or Greens ever achieved.
- Liberals (especially Joe Hockey) should be happy that the new ETS would zero-rated until major trading partners join the party so that it's effectively a short term Keynesian stimulus, but sad that the Rudd ETS framework would be left intact for a future Labor government to switch on without much fuss;
- Labor should be happy that they get much of what they would have achieved if Rudd had won, albeit only medium-to-long-term, and can look forward to cheering on Hillary Clinton to reverse the failure of Copenhagen when she sweeps in 2016;
- Greens should be happy because they get to keep the CEFC and RET (if Clive follows through), even though emissions will blow out again in the short term from the zero-rated ETS;
- The electorate should be happy because Canberra is actually working to produce a compromise.
What Palmer has done is attempted to unilaterally define the terms of battle. Due to him holding the balance of power and - crucially - the failure of Abbott to have the gumption to set down the rules before him, he is probably going to get away with it, because Abbott will most likely accept the terms. Abbott just doesn't have the chops to negotiate anything more favourable, due to a serious lack of talent in his parliamentary team and a lack of empathy with ideological opponents. Whether the proposed amendments are in fact terms of surrender by Abbott or the blueprint for his success is going to be contingent on whether Clinton really does change the world with a tsunami of votes to remove US Congressional blockages in the mooted 2016 "wave" election.
It is Australia's lot to be a cork in the ocean, bobbing about in every which direction the global currents take them. The Palmer deal only makes this more transparent. It's too politically difficult for Australia to bleed itself to lead the way on carbon emission reduction, fair enough, the public has spoken on that. Palmer's compromise ensures that we aren't a roadblock, however, and it would allow Abbott to host the G20 without becoming an international pariah. The pressure should be on the trading partners whom Palmer mentioned. We can say that we'll be there when they are. That is the politics of the possible.
At first blush, Clive has shown himself to have a more deft hand than many would have given him credit for. Clivezone 1, Chooks 0.
UPDATE: Posted this on John Quiggin's thread on the subject:
It is true that the fact that Clive did not make his vote to repeal the carbon tax contingent on passing his ETS amendment does dilute his message somewhat.
Abbott might be well served to follow Clive’s lead and pass his ETS anyway, since it makes a hell of a lot of sense for him politically. It heads off the threat of Turnbull and the wets in general, since Malcolm (or Joe) can’t wedge him on the issue any more. It also means that Abbott can host the G20 without being an international laughing stock, and in fact means Abbott can get on his high horse and lecture Asians about his superior morals, which is right in his wheelhouse. Plus, he doesn’t have to negotiate anything, and the Greens would hate it which makes him very happy. There’s a lot to be said for it benefiting Tony Abbott.
Tuesday, June 24, 2014
The far right is still busy employing the Texas sharpshooter fallacy to attack plain packaging, in the face of all evidence against their arguments. So far, we have seen a succession of attempts which have all been discredited in sequence.
- Claim: Tobacco usage increased after plain packaging went into effect. Wrong; according to the industry itself the market shrank by 2 to 3 per cent in the first six months.
- Claim: Tobacco usage is actually up because the ABS chain volume figures are affected by price changes and there is a substitution effect from smokers shifting to cheaper brands. Wrong; the ABS has confirmed that chain volume is adjusted to take into account the change in mix of price points.
- Claim: Tobacco usage doesn't respond to increased regulation anyway. Wrong; it began sliding as soon as restrictions were imposed starting in the mid-1970s.
- Claim: Tobacco imports are up, surely that must reflect consumption. Wrong; those numbers were caused by the last local tobacco manufacturer shutting its doors.
In addition to those discredited lines of inquiry, there are a number of other claims which are so ridiculous as to not even require refutation, such as that ABS figures can't be relied upon because they are subject to revision, or numerous cases of blatant misreading of data.
The latest bullet hole from these scattershot scatterbrains is the claim that smokers are flocking to the illicit tobacco trade to get their fix. Thus, in the comments of my last piece I had one of the Cat denizens (I'm guessing it's Aristogeiton) post a bunch of links to reports on the illicit tobacco industry in other countries.
Unfortunately, our anonymous friend can post all the links he likes to studies of the illegal tobacco trade in other countries, but none of it relates to the point that he is trying to make: that plain packaging causes Australian smokers to move their consumption to "chop-chop". There just isn't any hard data on that."After all, if they weren't working to change behaviour, why is there such a kerfuffle about it from the tobacco companies?"Why do you think? Because people are buying cheaper brands, because illegal tobacco sales are increasing, they are losing market share and profits.
For instance, Sinclair Davidson linked a study by his RMIT colleagues Lisa Farrell and Tim Fry, which is viewable free of charge at this link. Farrell and Fry use what they call "novel survey data" to claim that tobacco users are price sensitive enough to change to chop-chop when the price of legal tobacco is 2.5 times the cost.
The data were collected by telephone survey during the period March to July 2007; respondents were aged 18 and over and self-identified as regular tobacco smokers. They were asked whether they had ever smoked chop-chop and were presented with a set of questions about its usage, as well as detailed questions relating to their health status and licit tobacco consumption. In total 1,621 interviews were conducted, with a response rate of 63 percent. At the time of the survey, six percent of smokers participated in the illicit market. Basic descriptive statistics tell us that 58 percent of smokers had seen or heard of unbranded illicit tobacco and, of those who reported awareness, 59 percent claimed to have smoked it. These findings are broadly consistent with those of the National Drug Strategy Household Survey...The sample was of a mere 89 smokers, who were already qualified as having moved to chop-chop. This is strike one against the survey, since its data set was taken not from the 100% of smokers but the 6% of chop-chop users. Strike two is that they include some irrelevant obiter dicta railing against plain packaging, when the survey is about price points and not branding issues - they quote British American Tobacco as saying their reaction to plain packaging would be price slashing, but that's their commercial decision and not an actual reason to fail to regulate the industry. Strike three is that this survey was done in 2007 but the study was published in 2011 when the plain packaging laws were debated and passed. This is a deeply flawed piece of work.
If that's the best they can do locally, there's not much evidence on their side.
Having been completely undermined by the facts on tobacco sales under plain packaging, there is no fuel left to fire the juggernaut of wingnut outrage. What was Sinclair Davidson's next salvo? Evidently to get high and write some rubbish about bank branding. Let's go through the craziness in full.
The push for plain packaging - and intellectual property expropriation - began as a consumer awareness campaign. So, for example, consumers might think that ‘Lights’ weren't as unhealthy as ‘regular’ cigarettes.That's the first mistake. The push for plain packaging by government in Australia is a continuation of nudge policies started in 1973 with health warnings on packs. "Light" cigarettes were a branding response by the cigarette manufacturers in the 1950s to the first wave of research linking tobacco tar to cancer. One is a public policy and the other is a private commercial decision - the latter was a failed attempt to avoid the former. Conflating the two is erroneous.
Maybe they were confused. Some of my colleagues who did research into chop-chop discovered that users thought it was healthier than purchased tobacco because chop-chop was organic.If it was the case that there was such consumer ignorance out there, the only solution is more education.
The point being that branding confuses consumers – and the government, we are reliably informed, as a role to play in ensuring that consumers don’t get confused.If a private company is deliberately confusing the public with a term like "light" cigarettes - which still kill you over time, just slightly less quickly - then yes, government does have a role to play to stop such irresponsible fooling of the public.
So where is this leading? Well last week an article in the AFR caught my eye.What? Where did that conclusion come from? If consumers are being duped into thinking competition exists where there is none, then yes government has a role to play there too. Companies don't have carte blanche to say whatever they like, especially in the subcategory of commercial speech. This is not a free speech issue, anyway. Consumer protections trump commercial concerns in a democracy.Banks’ brands misleading public…In its submission to the Murray inquiry, COBA said the position of the major banks was “now so dominant that the majors frame competition in banking as something that occurs only between themselves and within their multiple brands”.It cited independent research from D&M Research showing 50 per cent of customers were unaware of the major banks’ ownership of smaller “competitors” and 80 per cent were unaware that the banks own certain home lenders. “This consumer research strongly suggests major banks are getting away with portraying their sub-brands as independent competitors,” COBA said.There is an on-going assault on branding and advertising that threatens all business. Having succeeded in stigmatising one industry and its consumers, the progressive left are now targeting other industries.
An industry which kills most of its users and seeks to hide the evidence over decades using front organisations like the IPA to argue their case absolutely deserves what it has copped over the last 40 years from the Australian government. Another industry which seeks to hide its lack of competition also deserves to have the disinfectant light of truth shone on its dirty practices.
It's funny how the right, which nominally is supposed to stand up for the individual, seems so often to stand on the side of the corporation against the individual.
Monday, June 23, 2014
Someone linked the ALP-friendly blog The Pub the other day on Twitter, and I read it idly because its stuff too often descends into boilerplate rants, and this one was no different. One passage perked up my interest, though.
People are sick of eternal struggle. They’re sick of politics and stress. They want to relax and enjoy the benefits of this great country they live in, without being hectored, divided into factions and demographics, and then encouraged to disparage, heckle or pick on each other.Now, it is possible to overstate the dominance of Howard's ethos - while he did mouth the phrase "relaxed and comfortable" to describe how he wanted the populace to feel, the culture wars were a hallmark of his reign, with conservative elites pushing on with their social issue battles regardless. As part of Abbott's policy of retreading most of the Howard era, the new culture wars are well underway, not only with the reintroduction of dames and knights but the ongoing efforts to reverse the nanny statism of things like tobacco plain packaging.
Australia is not a hot-headed country. We’re more laid back about our politics. We like to be “relaxed and comfortable”. Culture wars, seething anger, envy, polemics, lies, spin, scandals and the rest are fun while they last, but we’re tired now.
Thus, articles like this one from the Saturday Paper about the sinister, shadowy influence of the Institute of Public Affairs are sonorously intoned into the public conversation, warning of the attacks from the far right. Personally, I think this is all a big nothing. Historically, the IPA has been a perennial loser when the actual results of the battles are tallied up. Howard may have emboldened the right to fill endless column inches with screeds on social issues through the turn of the millennium, but he was the one who implemented tough gun control after Port Arthur, he was the one who nearly doubled immigration intakes over his reign (having learned his lesson after been dumped as Liberal leader in 1989 due to an ill-advised excursion into anti-Asian rhetoric), and he was the one who increased government spending on middle class welfare to create a Big Australia by funding families in true conservative tradition.
Being "sick of politics" is the sort of thing that a Rudd can tap into when he runs as an anti-politician, with mixed results. Abbott is a regular, garden variety politician who lies like the rest of them and can't be trusted. If he's going to go retro Howard on us, he has to understand that an essential part of that was that Howard, like Reagan before him, was secretly a tax-and-spend big government Tory whose electoral success relied in part on disappointing the dries of the IPA. Joe Hockey understands this. If Abbott doesn't get it, he'll get booted out.