Club Troppo

The headlines all warn that core inflation “remains high” and that the futures market is predicting a 78% chance that the RBA will increase rates next week.

We need to keep things in perspective.

First, after three annual increases in interest rates and with the gradual easing off in fiscal policy, inflation poses no immediate concern. Underlying inflation is slightly below the Reserve Banks management bracket. The trimmed means percentage change of 1.4% in the December half-year can be represented as 2.8% on an annual basis. The figures are likely to go down further in subsequent quarters.

House prices, while excessive, are bound to slow down with the end of the stimulus package. Other asset prices are subdued.

And the Reserve Bank does not simply look at the unemployment rate: it looks equally at the overall under-utilisation rate (totals hours worked). In fact, hours worked per member of the labour force have declined by 4% relative to what it was when the recession hit in mid-2008. There is ample spare capacity.

Finally, there is no sign yet that real Gross Domestic Product is accelerating to more than 3% per annum, which is the threshold spending target used by the Rudd Government. The latest IMFs growth forecast for the Australian economy is under 1 per cent in 2009 and 2.5% growth in 2010 (compared with earlier over-optimistic forecasts by the RBA of 1.75% and 3.25%).

The RBA would be wise to keep interest rates on hold for the time being.

Google removes Aboriginal flag from winning Doodle 4 Google entry

Last year 11 year old Jessie Du won Google’s Doodle 4 Google competition with her entry ‘Australia Forever’. Displayed on Google’s homepage for Australia Day, the doodle features Australian animals formed into the letters g-o-o-g-l-e.

Attentive Google visitors soon noticed that something was missing. Jessie’s original entry included the Aboriginal flag but this has been removed from the image on Google’s homepage. But before readers start throwing around the ‘R’ word, here’s Google’s explanation:

You may have noticed that the Google Doodle on the homepage today is slightly different to Jessie’s original entry, because that one contained copyright imagery that we weren’t able to publish on the homepage today. However, I think you’ll agree it’s still absolutely beautiful, and inspires lots of wonderful ideas about the Australia of our future.

The Aboriginal flag is protected by copyright. In 1997 the Federal Court of Australia recognised Harold Thomas as the flag’s author. The flag may only be reproduced in accordance with the provisions of the Copyright Act 1968 or with the permission of Mr Harold Thomas.

Update: Asher Moses at the Sydney Morning Herald has the story including an interview with Thomas:

Thomas, who lives in Humpty Doo in the Northern Territory, said he refused only because Google did not approach him in a respectful way and had demanded to reproduce the flag without charge.

"I said well you can use it but there’s a fee component and the [Google] person said: ‘Oh we can’t do that, we can’t pay for it, we’ll have to ask the girl to change it [the logo] if we have to pay for it,’ " Thomas said.

"So ever since that time we’ve been argy bargying over how we should go about it and in the end it was a pittance offer so I decided why bother?"

Another update: Dogs like to dig holes.

Yet another update: Valeri at Typeboard has more, including a comment from Jessie.

But wait … there’s more: The BBC has picked up the story. But they’re a little confused about the origins of the Aboriginal flag:

Mr Howard designed the flag in the 1970s as a symbol of the indigenous land rights movement in Australia.

They mean Mr Thomas.

Two apparently unrelated articles by superstars of the 1980s and 90s in their respective fields which share a common theme – the market’s aversion to serious innovation, it’s tendency to move incrementally towards lower levels of innovation leaving really fundamental and speculative innovation to others.

Bill Gates points out that ‘efficiency’ as in improving insulation and lowering fuel consumption is not going to reduce CO2 emissions by 80% by 2050, only serious innovation can.  That’s a (possible) justification for regulation which targets breakthrough technologies like zero emissions cars (though just identifying the potential case for it, doesn’t mean you have that case, or that politicians and policy makers won’t screw up such policies).

One of the reasons I bring this up is that I hear a lot of climate change experts focus totally on 2025 or talk about how great it is that there is so much low hanging fruit that will make a difference.

This mostly focuses on saving a little bit of energy, which by itself is simply not enough. The need to get to zero emissions in key sectors almost never gets mentioned. The danger is people will think they just need to do a little bit and things will be fine.

If CO2 reduction is important, we need to make it clear to people what really matters – getting to zero.

With that kind of clarity, people will understand the need to get to zero and begin to grasp the scope and scale of innovation that is needed.

However all the talk about renewable portfolios, efficiency, and cap and trade tends to obscure the specific things that need to be done.

To achieve the kinds of innovations that will be required I think a distributed system of R&D with economic rewards for innovators and strong government encouragement is the key. There just isn’t enough work going on today to get us to where we need to go.

Meanwhile, in a marvellous and heartfelt article the great Gary Kasparov reviews Chess Metaphors: Artificial Intelligence and the Human Mind by Diego Rasskin-Gutman. He tells some great stories – can anyone find the game he talks about with Topolov, I couldn’t find it on Chessgames and the Chess Database was down. Anyway Kasparov’s theme is the same.

ith the supremacy of the chess machines now apparent and the contest of “Man vs. Machine” a thing of the past, perhaps it is time to return to the goals that made computer chess so attractive to many of the finest minds of the twentieth century. Playing better chess was a problem they wanted to solve, yes, and it has been solved. But there were other goals as well: to develop a program that played chess by thinking like a human, perhaps even by learning the game as a human does. Surely this would be a far more fruitful avenue of investigation than creating, as we are doing, ever-faster algorithms to run on ever-faster hardware.

This is our last chess metaphor, thena metaphor for how we have discarded innovation and creativity in exchange for a steady supply of marketable products. The dreams of creating an artificial intelligence that would engage in an ancient game symbolic of human thought have been abandoned. Instead, every year we have new chess programs, and new versions of old ones, that are all based on the same basic programming concepts for picking a move by searching through millions of possibilities that were developed in the 1960s and 1970s.

Like so much else in our technology-rich and innovation-poor modern world, chess computing has fallen prey to incrementalism and the demands of the market. Brute-force programs play the best chess, so why bother with anything else? Why waste time and money experimenting with new and innovative ideas when we already know what works? Such thinking should horrify anyone worthy of the name of scientist, but it seems, tragically, to be the norm. Our best minds have gone into financial engineering instead of real engineering, with catastrophic results for both sectors.

One thing I’ve been at pains to stress is that Web 2.0 platforms – like Wikipedia, Blogger, Google Search, Google Calendar, Facebook – are public goods. Further, although a core function of government is to build public goods, none of these public goods were built by governments.  To avoid misunderstanding, my point is not that governments should have built them or any other web 2.0 platforms, but to highlight this important new phenomenon of privately built public goods.  (And to pose a question which is what role – if any – government agencies might evolve for themselves to help the growth of such public assets.  In this regard I’m not really thinking of capital G government agencies like the Treasury, but rather agencies like the National Library or the ABC).

In any event, I have one main point I want to make in this post – and a question to ask. The point is that it seems to me on reflection that what we’re looking at is not just an issue with governments, but also with large established organisations.  For if one looks over the panoply of Web 2.0 platforms, not only are government agencies thin on the ground but so are any long established large agencies.  I think that’s true of large established IT companies – not one of them established a Web 2.0 platform (except for those like Google which got big by establishing such platforms and those like Microsoft that imitated or bought Web 2.0 ventures).

I wonder how true this is even of philanthropic enterprises. In any event, I’d be grateful for people’s reflections and any counter-examples.

As we lurch from one disaster to another, I think Mark Thoma quoting Chris Blattman, hopping into David Brooks gets it exactly right.

Chris Blattman:

David Brooks saves the world in 1000 words, by Chris Blattman:

Haiti, like most of the worlds poorest nations, suffers from a complex web of progress-resistant cultural influences. There is the influence of the voodoo religion, which spreads the message that life is capricious and planning futile. There are high levels of social mistrust

Were all supposed to politely respect each others cultures. But some cultures are more progress-resistant than others, and a horrible tragedy was just exacerbated by one of them.

its time to promote locally led paternalism. In this country, we first tried to tackle poverty by throwing money at it, just as we did abroad. Then we tried microcommunity efforts, just as we did abroad. But the programs that really work involve intrusive paternalism.

These programs, like the Harlem Childrens Zone and the No Excuses schools, are led by people who figure they dont understand all the factors that have contributed to poverty, but they dont care. They are going to replace parts of the local culture with a highly demanding, highly intensive culture of achievement involving everything from new child-rearing practices to stricter schools to better job performance.

That is David Brooks selectively quoting the development literature.

His confidence makes me uncomfortable. To paraphrase, unkindly: These Haitians need to be more like hardworking, thrifty Americans. Weve spent five decades learning that everything we thought would work in aid did not. Clearly its time to get tough. I read about some people who made this work in Harlem, so its obviously the answer for Haitians, whom through newspaper reading, I have deduced are also resistant to progress.

Dont misunderstand me: Brooks could be right. In fact, Im starting one randomized control trial to test the idea. Im a little further from propounding it as Gods honest truth on the pages of the Times.

Sometimes the  problem with big development solutions is they spring from hubris and certitude rather than caution and humility. …

Im slightly terrified now that Bill Clinton, special envoy to Haiti, has said David Brooks is his leading intellectual light.

Intrusive Paternalism worked so well in Iraq and other places, especially when combined with forced free market solutions introduced with no supporting institutional structure, and without consideration of local culture, history, or social relationships, that I guess conservatives like Brooks just can’t wait to try it again.

A lot of folks on Facebook have been sending me links for a new website called “Menzies House”. According to the blurb, it’s the “leading Australian blog for conservative, centre-right and libertarian thinkers and activists”, which must come as news to the mob at Catallaxy (which is still in technical exile).

A perfunctory investigation reveals that the domain name is registered to one Henry Marsh on behalf of the Dallan Investment Trust. Who they are, Google doesn’t know. The Australian Business Register says they’re in SA.

I don’t want to sound like I’m putting down a good initiative, but nevertheless I will wait to see how it pans out. I dislike inorganic ventures, website-wise, and pre-emptively declaring yourself “the leading” anything before you even launch is suspiciously marketer-esque. Not my favourite profession.

Update: Tim Andrew spills the beans.

Google’s announced that they were the subject of a precise and sophisticated attack, apparently aimed at getting access to the GMail accounts of pro-democracy critics of the Chinese Communist regime, both living in China and abroad.

Google don’t think that the accounts were compromised but can’t be sure.

In response Google have said that they are considering pulling out of China entirely — shutting down the self-censored Google.cn website and closing their China office.

It’s about bloody time they realised they’re dealing with gangsters and thugs.

Update: Google arch-rival Microsoft have said that the attack may have exploited a hitherto unknown flaw in Internet Explorer. They’ve been working with Google on the whole situation. It’s heartening.

In the first post in this series I talked about recent empirical work on institutions and development and the problems I had with the use of constructed indices for measuring institutions. In the second post I talked about a particular paper I decided to retest and the alternative ways people had tried to test institutional hypotheses empirically.

In this one I will talk about an institutional measure I attempted and the results I found.

This measure is based on a very fundamental institution in all human societies: Language. Following on from the promising results about colonial institutions I had found, I decided to use the extent of a colonial languages spread as a proxy.
(Continued)

Down here in Victoria (well I’m not there right now but will return in late Jan) things have turned nasty as the Indian Government keeps pointing out when we kill another Indian.

I’m not as concerned as some other people as to whether it’s racially based violence.  It’s violence.  We need to act.  Most readers will have had experiences similar to the one that Tim Watts has just broadcast on Facebook. It infuriates me when a whole tram full of people sit quietly by while some nutter intimidates us all – mixing it with bold racism makes it even worse. Anyway, since I’ve been part of the cowed masses, what to do?  Well Tim’s proposing something after he gets his story off his chest.

On the Train to Camberwell Yesterday

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Today at 2:54pm

My fiancée and I took a train to Camberwell together yesterday. We were on our way to finalise the plans for our Wedding ceremony with our celebrant. I suppose it wasnt a particularly significant or meaningful meeting just another one of the dozens of administrative steps you need to take in order to get married. However, what happened on the way to this meeting has been gnawing at me ever since. In fact Ive been getting more and more angry about it.

What Happened?

About half way from the CBD to Camberwell, a man entered our carriage and proceeded to ask each of
the dozen or so people in the carriage for money. He was reasonably dishevelled, but judging by the quality of his clothes it didnt look particularly like he was living rough who knows I know you cant really judge these things by appearances. He was however fairly articulate and engaged in good natured banter with anyone who helped him out.

After working his way through each of the passengers he sat himself down around the middle of the carriage in a set of seats backing on to a group of three young Asians (I assume that they were students but who knows). A short time after sitting down, the man proceeded to quite loudly and aggressively berate the Asians who were sitting behind him for speaking in another language: Do you know youre in Australia? Either speak English or go back where you came from. Its so rude to speak Chinese or whatever youre speaking. Its annoying.

Being half his size and having no idea what to do the group of Asians sat in silence. As did the rest of the carriage; except for another tattooed and unshaven man towards the back of the carriage who loudly said Hes right. People look at me like Im crazy when I say that but hes right.

The first man then became convinced that the Asians had taken his photo on their mobile phone and started physically threatening them You had better not have taken my photo. If you have you had better delete it. Im not joking. If you know whats good for you youd better delete it. You wont be living if you dont delete that photo. Again the carriage sat uncomfortably silent except for one of the girls in the group of Asians who had started to cry. (Continued)

Today Artworks is replaying a program from May on Erwin Fabian – possibly the oldest surviving Dunera boy who continues to sculpt every day in his studio in North Melbourne.  I have posted on him a few times before. I teed up an oral history project to record Erwin’s recollections of his life – I think it was the National Library.  Anyway it would have been a fantastic to get his recollections because apart from their inherent interest – he’s a very thoughtful man – it would also have helped add to the record of Australia’s intellectual and artistic history – Erwin was not quite a father figure, but someone to whom Australia’s greatest artists of the 1950s – particularly Boyd and Perceval looked up to as a little older than them (I think) and exotic having turned up from Europe.

In any event as you may have guessed from my tone, the project didn’t go ahead.  Erwin refused as he thought it too vainglorious.  I tried quite hard but he wasn’t interested.  So it’s good that he agreed to do this program which remains downloadable – the ABC seems to be quietly ditching the silly policy it once had of removing podcasts from its site as they became more than four programs old.