Thursday, June 26, 2014

Clive Palmer feeds chooks their own entrails

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 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.

In summary:

  • 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

Texas sharpshooters seek plain packaging's smoking gun

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.
"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.
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.

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.

Cigghazi descends into farce

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.
Banks’ brands misleading publicIn 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.
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.

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

Reactionary and uncomfortable

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.
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.
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.

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.

Under Abbott, the right wing bully pulpit is well and truly in session, but as yet the government has similarly not made many actual decisions to enact the IPA's agenda. Like Howard, Abbott has increased spending on Tory pet projects like paid parental leave and defence procurement. Unlike Howard, however, Abbott seems to want the Australian public to feel vulnerable and afraid, so that he can verbal the Senate into rubberstamping his cuts to the social security net. The polls steadfastly refuse to show this strategy is going to work. Australians are economically literate enough, since Keating, to see through this bullshit. We know there is no budget emergency. We can see no urgency to slash entitlements.

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.

Wednesday, June 18, 2014

Smoke lobby should be ashen-faced

Plain packaging is only the latest in a series of "nanny state" measures started in 1973 to curb the prevalence of tobacco smoking. The Department of Health today put out a fact sheet to celebrate the success of this bipartisan policy - the star of which is the above graph - which comprehensively debunks the ridiculous stance of tobacco denialism which is splashed across the Australian newspaper today.

The raft of articles, attacking Stephen Koukoulas as he details here, is much the same sort of group bullying tactics as the Murdoch press used against Margaret Simons for her comments regarding the Finkelstein inquiry into the media in 2012. In both cases, the attacks include an accusation that the target failed to disclose their previous work for ALP in government - attacks that are for a large part made by those who fail to similarly disclose their affiliations with the Liberal Party. Sinclair Davidson joins in the Koukpile, which is de rigueur for mavens of the Institute of Public Affairs who have a history of funding by Big Tobacco.

Media Watch ran the theory on Monday that the real agenda from the tobacco lobby was not in Australia, where the battle has been lost, but in Britain and Ireland where plain packaging is still being debated. This argument is quoted from Mike Daube, who makes a habit of trolling Big Tobacco for justice.

I have a lot of time for News Corp Australia, and many people within it. They employ a lot of good people who do fine work on a daily basis, the nitty gritty of journalism which is a thankless and low-margin task. I get that the Australian prides itself on being a campaigning paper, and there is nothing wrong with that in principle. In practice, however, the mob mentality that is unleashed when people like Simons and Koukoulas are singled out for rough treatment undermines the credibility of not only News but all of journalism, and contributes to the distinct unpopularity of the journalism profession in the minds of a public who is largely ignored at times like this.

If you're going to campaign, do it on behalf of your readers please, not corporate interests.

UPDATE: Sinclair responds to the above graph:
There is a long-term downward trend in tobacco usage in Australia. We all know and understand this to be the case. But look at the impact policy has had on usage. Nothing. The downward trend doesn't seem to respond much to ever increasing regulation.
This is rank stupidity in the form of a logical fallacy, deliberately ignoring cause and effect. I have taken the liberty of preparing a graph from the ABS figures since 1959 on chain trend per capita in dollar terms, along with labels as to pre-1990 policy changes.

For Sinclair to say that policy has had no impact on usage is ludicrous. Usage had been flat for more than a decade before the policy changed, and usage changed with it.

Tuesday, June 17, 2014

Piketty populism and Clive Palmer

Just as economists seem to be talking about nothing else but Thomas Piketty and inequality these days, it seems to me in reading political blogs that little else is more important in politics right now than the ongoing debate between populism and elitism. Yes, even more important than discussion of war in Iraq, because arguably that debate is just another aspect of the ongoing backlash against the elites.

The reaction of the American left to the American right's utterly predictable hawkishness on Iraq is to tell those wrongheads to shut up, as summed up by Paul Waldman and quoted favourably across the left poliblogosphere over there last week. After 9/11, political elites in the west enjoyed the effects of populism as they were able to channel the public's unfocused anger into support for a war on an unrelated target. George W. Bush is now universally reviled as the worst president in that country's history, which means the hawk agenda of the elites who benefited from his largesse is now similarly repudiated in the electorate.

For its part, the right these days seems to be trying to turn "populist" into an insulting epithet, much the same way as they have tried to tarnish the word "liberal". (They lost that one, as opinions inexorably turned in favour of liberalism on issues like gay marriage and abortion.) This is a reversal from a few years ago when populism benefited Dubbya, or in Australia when it lifted Pauline Hanson from obscurity into flag-draped power. In the age of Piketty where elites have over-reached, the right now condemns populism because the people actually want liberalism.

In democracies, it is not sustainable for a major party to attack populism over the long term. Will the right rediscover a blend of populism and ideology that will rescue their terrible poll numbers? While there is always a stream low level stories of racism and other right-wing populist techniques which supply the US leftist blogs with fresh meat on a regular basis, there is no discernible Hansonism in Australia at the moment, and that is because Clive Palmer seems to be going down a different road, as in this op-ed in the Fairfax papers yesterday.
How long will it be until this country gets a government that cares about its people? To serve in Parliament and to serve your fellow citizens should be the highest calling in our society. But that's not how the nation views those in Canberra. Rightly so. 
Australia needs to project what we might become. The problems we have in this country have been made by Australians and they can be solved by Australians.
It is pure populism without much ideology, and none of the xenophobia of Hanson. The consequences of the actions he sets out here would variously disappoint both left and right - he talks a lot about raising benefits and investing in education as well as blocking direct action, but he sidesteps the question of whether he will block repeal of the carbon tax.

Palmer is still playing small ball, nevertheless. Worthy as are his stories of pensioners and war widows, there is no vision there. The ultimate implication of this approach will be that if Palmer succeeds in blocking the nastier elements of Abbott's agenda, he will lock in the Rudd/Gillard legislative legacy for a generation. Seeing as the Abbott administration passed only seven bills in its first seven months, signs are that he and his parliamentary team don't have the skills to accomplish much in the House.

The Palmer United Party is still struggling for life at the moment, and the urgency which this brings to their policy pronouncements is a stark contrast to the inertia caused by factional divisions in both major parties. Tony Abbott is playing the tired old game that John Howard played before him, but as with Bush the public have seen it all before and we're not getting fooled again. This time, we demand more adherence to reality from our political leaders, more attention paid to what is actually happening to real people in the community.

Tuesday, June 3, 2014

Zombie Reaganomics at the Cat

Regular Catallaxy Files commenter Fisky - a combative chap who is nonetheless prone to sudden brain farts like his panicked Malcolm Turnbull spruik - posts today in praise of Reagan and in criticism of Thatcher, re their economic legacies.
The politics of austerity, where conservative governments risk short-to-medium term recessions in order to clean up the fiscal mess of their Left-wing predecessors, should be abandoned. Labor never take responsibility for their irresponsible spending and it is maddening that the Liberals always get suckered into bearing the political costs of being the “mean party”, the tax-hikers and the penny-pinchers. What is needed instead is an unapologetically belt-loosening pro-growth agenda of the kind that carried Reagan to the biggest electoral landslide since WWII, the supply-side economic policies to match, and a simple slogan to knit the whole thing together – such as “Legalise Growth!” or, better still, a resounding “No to Austerity!”
Translated, Fisky is calling for deficits to blow out like they did under Reagan, fuelled in an engineered bubble of Keynesian pump priming to magic up jobs in the public sector regardless of cost benefit analyses, and "worry about fiscal retrenchment later". US government debt as a share of GDP increased from 26.2% in 1980 to 40.9% in 1988, with deficits of a proportional size not seen since WW2.  In Reagan's case, the deficit paid for military build up that did very little for the regular domestic economy. In the case of Australia, where public-debt-to-GDP is still below 15%... well, there are plans for a true NBN lying around, but maybe Fisky wants to cover the Arafura Sea with brand new additions to the OPSOB fleet to enforce Rudd's wildly successful PNG solution?

Joe Hockey is already doing what Fisky wants (and what Reagan did) on the spending side as part of the Australian bipartisan commitment to Keynesianism. Many, many billions of dollars are being poured into roads and medical research, not to mention many hundreds of millions for fighter planes. Hockey maintains some level of decorum on the revenue side, though, and he's not likely to make the same mistakes that Reagan did in kickstarting a generational change in inequality by cutting taxes on those who can most afford it. Hockey will wait it out for bracket creep to inexorably shore up the structural revenue shortfall that happened under Labor, as a responsible Treasurer should.

Fisky is the sort of cheerfully dumb character whom it would be fun to have a beer with and talk a load of old toot, but you'd be seriously worried if he came home with your daughter. Hilarious that he is what passes for an intellectual over at the Cat, because the usual suspects in the comments over there don't even twig that he's calling for a Keynesian spending blowout and have been cheering loudly for leftist policies that even Krugman would think fiscally irresponsible.

If there's any inheritor of the Reagan legacy in Australian federal politics at the moment, it seems to be Clive Palmer with his populist, responsibility-free calls for lower taxes and higher spending. Perhaps Fisky has jumped ship yet again?

Monday, June 2, 2014

Randsformers versus Establicons

It seems everybody hates Tony Abbott these days... well, almost everybody. Mike Seccombe makes the case in the Saturday Paper for the Institute of Public Affairs being Abbott's only friend, with some quotes from the IPA's John Roskam. Yet Seccombe's argument falls down at the first hurdle, as he has to acknowledge that Abbott has not been doing the IPA's bidding on (to them) key policies like repeal of s18C of the Racial Discrimination Act.
The repeal of section 18C of the RDA became number four on the IPA’s policy wish list, and before you knew it, Attorney-General George Brandis had personally drafted changes to protect, as he memorably put it, the right to be a bigot. Alas, the public debate has run overwhelmingly against them. Roskam fears “we’ll lose that one”.
Similarly, Quadrant calls Abbott and Brandis cowards and quislings for failing to stand up for the rights of old white guys like Andrew Bolt to be racist. The paleoconservatives at the Sydney Traditionalist Forum, who at least are open and honest about their nationalist strain of white power politics, characterise this as "establicons" turning away from the Coalition.

Meanwhile, the Ayn Rand acolytes of the libertarian movement are in even more disarray. David Leyonhjelm got smashed from pillar to post on a recent proposal to sell Australian citizenship for $50,000 a pop by the Establicons, with the Randsformers powerless to defend the silliness of the LDP's egghead Pollyannaism. Open the front door, says David? Shut the front door, say the Cat's resident tories.

So, libertarians hate him for failing to defend freedom or lower taxes, while conservatives hate him for reindexing pensions and disrespecting diggers... is there anyone left on Tony Abbott's side? One has to turn to the News Limited papers to find them - some of whom are connected to the IPA, to be sure. Murdoch's continued support is not about ideology, though, but about media ownership laws. As Jason Clare said yesterday:
“Media reform is a well-trodden minefield and Malcolm Turnbull is welcome to it.”
Turnbull can't even have lunch without causing a national incident, so if Murdoch thinks the Liberals are going to be able to finesse a bill through the Senate past Clive Palmer to enable him to take over the Ten Network for which he has been angling for years, he's going to be sorely disappointed.