Club Troppo

In this post a while back I explored an idea as follows:

I was driving through the Burnley tunnel today. It has three lanes. As you go into it travelling east, the three lanes I was on had to become two to make way for another lane entering from the left. Normally what happens in such a situation is that the three main lanes become two and to remove the scope for ambiguity, the space previously taken up by the left most lane (before the new lane enters) becomes a traffic isle. The third lane then feeds in from the left.Its all pretty fail safe. You cant end up in the wrong (terminating) lane unless you dont notice the fact that youve driven onto a traffic island which is itself preceded by lots of white lines and things that would have you wondering if something was going wrong.

But in this case (I presume because this lane was doubling as an emergency lane until cars entered it from the new ramp), no such arrangement had been made here. I found it quite confusing and ended up in the emergency lane for a while before realising what was intended and making my exit into the two correct lanes to allow cars to enter into the lane I had vacated.

Given my confusion I thought that someone ought to do something about it. But I know government well enough not to bother. Id be asked to put the thing in writing – as sure a sign as any that someone isnt regarding your input as a potentially valuable resource. Then my communication would go into a queue and Id receive a polite letter.

Is there a better way? Well heres a fantasy. I get home and e-mail a government suggestion box mentioning the problem – and if I can think of one a solution. (I have one – which is that for the length during which the status of the lane becomes unclear there be at the very least striped white lines on the emergency lane and perhaps the writing emergency lane to explain to drivers whats going on. Its part of my brave new world that, wherever possible explanations for why things are being done are offered. That way people know why theyre doing what theyre doing. This has two great benefits. I expect it helps them learn what they should do and to remember it. And it also helps them respond if they have some objection to what is being done and/or if they have some improvement.) . . .

The Poms are now having a crack at something pretty similar – welcome to Fixmystreet.

A short column in the Age published today

Reduce the bugbears with some beta-tested policies

THERE’S a saying made famous by Eric S. Raymond, the author of the landmark book on Web 2.0, The Cathedral and the Bazaar. In computer geek speak, it’s this: “given a large enough beta-tester and co-developer base, almost every problem will be characterised quickly and the fix will be obvious to someone”.

Raymond went on to put it more memorably as Linus’ Law: “given enough eyeballs, all bugs are shallow”.

As it is putting what it hopes are the finishing touches to its next stimulus package, the Government would do well to remember Linus’ Law. (Continued)

Carmen M. Reinhart, Kenneth S. Rogoff

NBER Working Paper No. 14656
Issued in January 2009

This paper examines the depth and duration of the slump that invariably follows severe financial crises, which tend to be protracted affairs. We find that asset market collapses are deep and prolonged. On a peak-to-trough basis, real housing price declines average 35 percent stretched out over six years, while equity price collapses average 55 percent over a downturn of about three and a half years. Not surprisingly, banking crises are associated with profound declines in output and employment. The unemployment rate rises an average of 7 percentage points over the down phase of the cycle, which lasts on average over four years. Output falls an average of over 9 percent, although the duration of the downturn is considerably shorter than for unemployment. The real value of government debt tends to explode, rising an average of 86 percent in the major post-World War II episodes. The main cause of debt explosions is usually not the widely cited costs of bailing out and recapitalizing the banking system. The collapse in tax revenues in the wake of deep and prolonged economic contractions is a critical factor in explaining the large budget deficits and increases in debt that follow the crisis. Our estimates of the rise in government debt are likely to be conservative, as these do not include increases in government guarantees, which also expand briskly during these episodes.

One of Nicholas Gruen’s favorite people, William Easterly has joined the blogosphere to keep the Aid bastards honest.

Today, I foist a new blog called Aid Watch on the blogosphere. The objective is to be brutally honest when aid is not helping the poor, but also praising it when it is.

I sometimes like to try to get the feel of the prosperity of a US era from films and TV shows made at the time and about that time. Not the fantasy stuff, or things for kids generally or horror, but the consciously era-based ones that set out to create a feel.

This is not a science, just a bit of fun, and I am sure you could pick films to show the exact opposite if you preferred. But, if you are along for the ride, keep a log chart of the Dow handy and we can start with the rise of post-war America. (Continued)

A feed on US road accidents summer vs winter etc. A feed from Organizations and Markets.

Does the inclement weather have you worried about sliding off the road to an icy death? If so, Ive got some good news for you. On a per-mile driven basis (or per-trip or per-minute traveled), winter is actually the least likely time to get killed behind the wheel. Summer drivers have a risk of 1.24 fatalities per 100 million miles driven compared with 1.01 during the winter. For males behind the wheel of an SUV, those summer and winter numbers are 1.39 and 0.87, respectively.

Thats what we discovered when we teamed with the AAA Foundation for Traffic Safety to develop TrafficSTATS an interactive website that merges traffic fatality and personal travel information to generate risk estimates. The site generates risk estimates for combinations of age, day of week, month of the year, gender, hour of the day, drivers, passengers, and vehicle types. Did you know that a man behind the wheel is 80% more likely to get killed than a woman? Or that 16-20 year-old drivers have about the same fatality risk as 75-84 year-olds?

Here’s my AFR column for today

Making an exception

As Groucho Marx said to some unfortunate, I never forget a face, but in your case, Ill make an exception. In policy, as in life, it matters when and how you make exceptions.

If you want to free up trade, economic textbooks and our Treasury and Tariff Board (now Productivity Commission) tell us to either reduce tariffs across the board, or reduce them from the top down. And when our politicians finally bit that bullet in the late 1980s, we reaped the economic benefits.

But in Asia lots of trade reform was done by making exceptions. The Taiwanese and Koreans were highly protectionist but wanted their protected industries to export. So while they continued their efforts to keep imports out, in exporters case, they made an exception. They provided exporters with lavish access to duty drawback (tariff refunds on imports) and establishing export processing zones with completely open access to imports all to help exporters compete internationally.

As Taiwanese Minister Li observed decades later When the liberalisation efforts were made, no one had any inkling that a more prosperous growth epoch was in the making.

This pragmatic improvisation also had political implications. Channeling the rents from import liberalisation towards exporters meant that manufacturing exporters were a political counterweight to the inevitable opponents of liberalisation (for instance the less competitive manufacturers unable to export). And favouring exporters sent a message to all manufacturers dont expect too many favours if you dont learn to export.

Thus the politics of protection was gradually transformed creating a powerful organisational and political dynamic of continuing reform, not just in trade policy but elsewhere, for instance in tax and labour relations as barriers to export surfaced.

Economists were instinctively suspicious of all of this but prominent trade theorist Jagdish Bhagwati was one of several in the 1970s who hypothesised that the key to success for developing countries might be the speed and energy with which tariff protection was focused outward rather than the uniformity with which it was dismantled.

In Australia weve got a different tradition, perhaps best captured in Keatings enthusiasm for policy with long clean lines. Theres a lot to be said for it. If it had been given too free a rein in Australia, Asias higgledy-piggledy trade reform would have been transformed by our political system into piggledy reform a carnival of pork for vested interests. (Continued)

By reaching out to neoconservatives Obama could "fracture the opposition’s idea machine and help turn the Republicans back into the stupid party for years to come", writes Gabriel Schoenfeld.

This isn’t as far fetched as it sounds. The first wave of neoconservatives were disillusioned liberals — Democrats who’d been left behind when the party swung to the left on social and cultural issues. Early neocons like Daniel Patrick Moynihan and Nathan Glazer focused on social and cultural issues. They worried that the family was disintegrating and that social norms were breaking down. Schoenfeld argues that Obama can tap into these themes:

Personal responsibility is one purchase point for the neocons. It was, after all, alarm about the disintegration of black families in the 1960s that helped propel rightward the liberal pillar — and neoconservative founding father — Daniel Patrick Moynihan. Four decades later the same problem afflicts the urban underclass. Mr. Obama’s photogenic First Family serves as a more potent counter to the allure — such as it is — of the ghetto lifestyle than any policy initiative ever cooked up in a neoconservative think tank.

But the incoming president — himself the son of a single mother — not only walks the walk, he talks the talk. During the campaign he boldly told an African-American audience that "We need fathers to realize that responsibility doesn’t just end at conception. . . . What makes you a man is not the ability to have a child. Any fool can have a child. . . . It’s the courage to raise a child that makes you a father."

(Continued)

According to my lights this post is of no significance. All the hoopla surrounding Obama’s inauguration irritated me. All the reading of the tea leaves of what he would say, as if the words were more important than the deeds. All the pomp and circumstance – just like a British royal do.

I was slightly dreading the speech, because I thought that, like a melody is developed in a symphony rather than just repeated, oratory descends into bathos if the same tricks are tried too oftten.  If every speech is eloquent in the same way as the last the magician is risking showing us how he does his tricks. 

I’d also seen a you tube of Obama on the campaign whipping up the audience at the end of a speech like a bored rock star doing his schtik. After Iowa, the race speech, the nomination speech I was dreading an inaugural speech in the same register. 

I note that the commentariat has decided it wasn’t a great speech.  Well it was for me, precisely because it took the rhetoric down a notch.  It had no ‘grand theme’ or zinger – which seems just fine to me – other than ‘we have nothing to fear but fear itself’ and Lincoln’s appeal to ‘the better angels of our nature’ – single zinger inaugurals seem stupid to me.  Kennedy’s ‘ask not’ always seemed stupid to me but in an ultimately harmless way because of its meaninglessness and silliness.  Reagans ‘government is the problem’ was stupid too, but actively so – in a way that mattered, as we are now seeing. There are too many things to do, and they’re too complex for a single zinger. They are in these post-ideological times anyway. 

So Obama changed the register, and made his speech like his books.  Low key, resolute, perspicatious, requiring the auditor to pay attention and consider the phrases carefully, for if one did one found one insight after another.  An insightful president, rather than just a clever one.  What a lovely thing.  Who knows how it will all work out.  Acts matter more, but I couldn’t be more thrilled with Obama’s speech. And it’s ‘low keyness’ and its refusal to pander to what the audience expects shows that Obama wants to immitate the spirit of Lincoln, not just borrow his words.