I’m quite puzzled by the negative, disillusioned tone of much of the blogosphere and MSM commentariat coverage of the federal election campaign.  I’ve actually been quite heartened, almost inspired, by it.

The advent of 21st century versions of old-fashioned “town hall” participatory democracy with the ABC Q and A public grillings of both leaders and the Rooty Hill and Brisbane Broncos public fora have delivered unprecedented real public scrutiny of both leaders’ policies and personal qualities.  To my way of thinking these fora are much more useful and real than the previous tradition of staged TV debates and Press Club performance in the last week.

Moreover, both leaders emerged from the process with their reputations justifiably enhanced.  Australia is fortunate to have two personable, capable, highly intelligent and experienced leaders in Julia Gillard and Tony Abbott.  My own reaction to last night’s Broncos marathon was that I’m pretty relaxed and comfortable about Saturday’s election.  Whichever party wins we will have a competent, moderate democratic government with solid, prudent economic policies.  In fact there’s little to distinguish the Labor and Coalition macro-economic positions.  Barring a double dip world recession,  Australia’s short-medium term future is very positive and both parties can be trusted not to imperil it (despite the inevitable hyperbole of both sides’ negative advertising).

(Continued)

A media release that’s just been put out.

Over a quarter of the debt from the fiscal stimulus will be repaid from the taxes of those who would otherwise have been unemployed.

As our economy turned down in late 2008, Australians’ spending kept other Australians in work. And those kept in work repaid the favour – by continuing to pay their taxes.

So for every dollar the government spent, tax revenue to Australia’s governments rose by around 22.5 cents, leaving just 77.5 cents to be repaid. The total windfall to the budget – and to the community – of the additional tax revenue from the cash transfers is around $6.7 billion. This money and the production of all those people and all that capital kept in employment are the riches of good economic management – the only kind of free lunch we know of.

Results were even better for the infrastructure spending. Where some of the cash payments were saved, all of the infrastructure spending went straight into the Australian economy. And with larger ‘multipliers’ than consumer spending, every $1 of government infrastructure spending increased output by $1.20 generating 36 cents of government revenue.

So for each dollar of stimulus the Government spent on infrastructure, the debt incurred was only around 64 cents. Thus of the $26.5 billion dollars of infrastructure budgeted to be funded in the years 2008-9 and 2009-10 Australian taxpayers will need to service and/or repay only around $16.9 billion of debt via state and federal taxes.

Of course, being rushed, there were inefficiencies in building the infrastructure. The recent Interim Report of the Orgill Taskforce estimated those inefficiencies at around 5 to 6 cents per dollar spent. Those inefficiencies cost around $1.5 billion compared with the tax windfall of $9.5 billion from tax collected from who would not otherwise have been employed. The net result leaves Australians better off by around $8 billion.

Counting the effects of both the cash transfers and the infrastructure spending to the financial year just ending, tax revenue increased by $16.2 billion from additional employment. These economic benefits are in addition to any social benefits including improved physical and psychological health from lower unemployment. Dr Gruen said.

Inquiries and further comment
Nicholas Gruen 03 9646 0553, 0403 077 732

Repaying the fiscal stimulus - Full Report

I only recently became aware of the leasehold system on residential property in the Australian Capital Territory. This was an interesting attempt to create a city in which rent seekers and speculators would not prosper by allowing the increased value of land to accrue to the government (and by extension the common weal) instead of owners who had not contributed to rising prices. This account describes both the ideals behind the concept and attributes its failure to disinterest and miscomprehension on the part of administrators. Which is a pity, knowing the power of rent seekers, we probably won’t get another chance to experiment like this again.

One of the interesting arguments from the time is that since any rise in land prices in the Canberra region would be due to the building of the capital with taxpayer’s money, it was only fair that this be returned to the government. From the account above:

As King O’Malley (Labour, Tas) saw it, ‘Every dollar spent by the people of Australia in the erection of that capital will create an unearned increment in the property for miles around. The question is, are the people of Australia prepared to spend thousands, yea millions, and then lose the benefit of their expenditure? I say the unearned increment created by the expenditure of the people’s money belongs to the people…”:

This has strong resonance in public policy today, particularly at the state level. A great deal of the services provided by state governments are improved by proximity. People exhibit a strong preference to be close to schools, hospitals and public transport. The premium paid on housing close to transport (particularly rail) is very high[fn1]. This probably explains why CityRail (NSW) passengers have higher incomes that the rest of the state. They have to be to afford access. (Continued)

Immigration: America’s nineteenth century “law and order problem”?
by Howard Bodenhorn, Carolyn M. Moehling, Anne Morrison Piehl

Abstract:

Past studies of the empirical relationship between immigration and crime during the first major wave of immigration have focused on violent crime in cities and have relied on data with serious limitations regarding nativity information. We analyze administrative data from Pennsylvania prisons, with high quality information on nativity and demographic characteristics. The latter allow us to construct incarceration rates for detailed population groups using U.S. Census data. The raw gap in incarceration rates for the foreign and native born is large, in accord with the extremely high concern at the time about immigrant criminality. But adjusting for age and gender greatly narrows that observed gap. Particularly striking are the urban/rural differences. Immigrants were concentrated in large cities where reported crime rates were higher. However, within rural counties, the foreign born had much higher incarceration rates than the native born. The interaction of nativity with urban residence explains much of the observed aggregate differentials in incarceration rates. Finally, we find that the foreign born, especially the Irish, consistently have higher incarceration rates for violent crimes, but from 1850 to 1860 the natives largely closed the gap with the foreign born for property offenses.

http://papers.nber.org/papers/W16266

As you’ve never seen them seriously – here.

I thought I saw the fallacy of the excluded middle.  I did.  I did see the fallacy of the excluded middle, or perhaps I should say the fallacy of pre-prepared thinking iSnack processed food for thought 2.0.

In a story on Mark Latham’s call for us all to vote informal, we have the following choice.

So there you go: Proposition 1 – that an uninspiring campaign should lead to an informal vote or Proposition 2 – it’s ‘disgraceful’.

Oh, and John Howard says that Julia should give us a blow by blow description of what he said and what she said. Well he would say that wouldn’t he? So why is it news?

Yaaaawwwwwwnnnnnn!

Some great graphics from Tom Scott. I think the warning signs make most impact on their own, but Tom has annotated them on his site.  Below, your opportunity to win the coveted  Troppo Mercedes Sports and dinner with Nelson Mandela

(Continued)

I know how powerful internet and Web 2.0 technologies are, so I don’t need any convincing.  If this study had not confirmed my prejudices I would have retained the prejudices (Why? Because it’s obvious that sophisticated knowledge management capabilities have the capacity to greatly improve our performance at pretty much any activity involving the management of knowledge and it would be quite possible that some firms have spent unwisely on such things without vitiating the basic fact that they are capable of substantially improving our performance.) In any event, this study suggests that IT enabled knowledge management substantially improves firm performance – though I’ve not read it closely to work out whether it claims to establish causation – firms that are just the kind that would improve their performance anyway, might be those firms that go out and get themselves some knowledge management IT.

The Performance Effects of IT-Enabled Knowledge Management Practices by Peter Cappelli NBER #16248

The extensive literature on knowledge management spans several fields, but there are remarkably few studies that address the basic question as to whether knowledge management practices improve organizational performance. I examine that question using a national probability sample of establishments, clear measures of IT-driven knowledge management practices, and an experimental design that offers a unique approach for addressing concerns about endogeneity and omitted variables. The results indicate that the use of company intranets, data warehousing practices, performance support systems, and employee competency databases have significant and meaningful effects on a range of relevant business outcomes.

Oh, and while I’m about it, this post is quite good on the way in which KM is an agency ‘public good’ for which it is difficult to directly measure its contribution to ROI.

HMS Dunera carried about three thousand ‘Dunera Boys’ to Australia. I received this sad email today which I reproduce for anyone who’s interested below the fold.  The Dunera Boys, now mostly in their late eighties are down to around 80 with around 50 remaining in Australia.  (Continued)