Club Troppo

I should emphasize at the outset that my participation in this Inquiry is strictly in a personal capacity and that the views I express here should not be interpreted as being those of my employer or any of its executives.

In the last few months it has become increasingly apparent that, notwithstanding its resilience during the first year of the global financial crisis, the Australian economy faces a much bleaker outlook in 2009. The sharp downturn in the world economy, including in particular China and other Asian economies, in the second half of last year and the grim outlook for the major advanced economies in 2009 has greatly increased the risk that Australia, too, will experience a recession this year.

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An interesting debate has kicked off on executive remuneration in Economists View

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Today’s Column from the Fin:

In a stand-up routine, Woody Allen is about to be lynched by the Ku Klux Klan. His life passes before his eyes. The childhood in Kansas, swimming, fishing, eating cat-fish with gingham clad sister Mary-Lou. Does this sound like Woodys childhood to you? As he explains, They’re gonna hang me in two minutes, the wrong life is passing before my eyes.

Were having a Woody Allen economic crisis. Our debt is passing before our eyes. But its the wrong debt. (Continued)

Adam Smith had this idea that ‘commercial society’ made a lot of things better, particularly improving the politics and mores of earlier social structures.  As I outlined in a post long ago, he was particularly keen on the way in which the nascent capitalism of his day distributed economic power, and with it political power.

Here’s some research that would have been grist to his mill.

Shares, Coalition Formation and Political Development: Evidence from Seventeenth Century England
Date: 2008-08
By: Jha, Saumitra (Stanford U)
URL: http://d.repec.org/n?u=RePEc:ecl:stabus:2005&r=his
A key challenge for developing societies is to build coalitions across disparate interests in favour of beneficial policies. This paper documents the role of a financial innovation– shares–in aligning disparate interests in favour of representative government during England’s Civil War (1642-48). Using novel micro-data, the paper shows that shareholding was a major determinant of support for political reform by members of parliament. The paper suggests that shares allowed a broad spectrum of investors to benefit from new opportunities overseas. However, overseas rights belonged chiefly to the executive. Thus the introduction of shares aligned incentives in favour of political reforms and overseas policies crucial for growth.

A really first class post from John Quiggin.

Brad has a category ‘utter stupidity’ on his blog. If any of us were as smart as Brad, we might chance one ourselves on Troppo.  

Geraldine Doogue had an interesting interview yesterday with Walter Russell Mead ( a Fellow at the Council on Foreign Relations). He’s recently written an essay for the Foreign Affairs journal entitled: “Change They Can Believe In: To Make Israel Safe, Give Palestinians Their Due”.

He argues that both sides are trapped, almost powerless to fundamentally alter anything because of the fragmented nature of their societies. He also believes the rest of the world has an obligation to do everything it can to resolve matters since it was a combination of their direct interference and inaction that both created the Jewish state and then failed to provide security (for both sides) at the most critical time. That all this was done without taking the least bit of notice of the wishes of the existing inhabitants virtually guaranteed things would turn out badly.

All absolutely right, it seems to me.

I’d initially thought to tack this on to the thread that grew out of last week’s piece on Israel and Palestine but soon realised that would be a bit pointless. Lively though it was, there can’t be many who are still following it and Mead’s essay, in my view, looks at these matters in a creative enough fashion to deserve all the readers it can get. (Continued)

Lateral Economics is conducting a survey of bloggers and other sites that are trying to encourage debate in the oz-blogosphere and more generally. Im afraid I can’t tell you the client it’s confidential. However Im hoping that anyone who does or has run a blog, or been involved in the running of a blog might be prepared to give us 5 minutes of your time to do the survey.

The ‘point’ of the exercise is to provide advice on how to run a ‘good site’ one that generates worthwhile content and useful interaction between the provider of the facility and those ‘out there’ and interaction between commenters. Note that the deadline for the project means that we will need your answers as soon as you are able to provide them were hoping for them within 48 hours or so i.e. the end of the weekend. Many thanks in anticipation of your taking the time to complete it. And the most informative response (verified as yours by return email and from a visit to your blog) wins $50.

So what are you waiting for?  The survey is here.

” The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge.” Paul Krugman.  The rest of his impassioned column below the fold.  Of course Australia’s economy is not in the kind of dire straights the US one is in (at least not now, but we’ve got our foreign debt to think about if we think it’s going to be a walk in the park for us.)  But it still made me think of how much we might pay for business as usual from the Opposition. When was the last time the Liberals in national opposition were responsible?  Well the ALP aren’t paragons in Opposition either of course, but somehow , I can’t see them playing such an obviously spoiling role when the chips are down. No doubt some others will disagree.

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