Club Troppo

Occasionally I get so distracted by the way someone writes that I can’t concentrate on what they’re saying. Here’s John Howard in today’s Financial Review:

To adopt Shakespeare, Meryl Streep came to bury Margaret Thatcher, not to praise her. This was attempted — in the film The Iron Lady — by the simple, but telling, device of retailing Thatcher’s story through a series of retrospectives of the retired prime minister, clearly afflicted by dementia.

Howard made some good points in his review, but I had the blue pencil out after the second word. There are only a couple of things I thought were outright errors. Most of the distraction came from Howard’s writing style.

Is it just me?

A Twitter randomised trial: "I have a confession to make", writes Andrew Leigh, "I’m a twitter-sceptic." But in keeping with his evidence-based approach to decision making, Andrew Leigh MP is embarking on a one month randomised trial. @aleighmp

Why libertarians need to talk with the left and how to do it: "Between Left and Right, the reality remains that the Left is still closer to our ideals. They are more likely to agree with our social liberalism and foreign policy even though they are economic interventionists." James Peron, Moorfield Storey Blog.

Men who argue with goats: They love a good argument at Menzies House.

… or with Cory Bernardi: "Throughout history it has been demonstrated that any government that becomes too big eventually is forced to accrue a level of debt that cannot be sustained." Cory Bernardi.

The biggest government in the world? "The Congressional Budget Office report … says that annual deficits will remain in the $1 trillion range for the next several years if Bush-era tax cuts slated to expire in December are extended, as commonly assumed." NBC Politics.

So what about the Nordics? "If heavy taxation has harmful economic effects, why have Denmark and Sweden performed similarly to the United States during a period of several decades in which their taxes were much higher than America’s?" Lane Kenworthy.

In praise of private equity: "The difficult truth that virtually no politician is prepared to acknowledge is that the road to job creation runs through job destruction." Reihan Salam.

The introvert’s lament: Social butterflies are annoying. Overdressed Anarchist.

Op shopping: Justin Campbell finds a copy of Milton Friedman’s Free to Choose in an op shop. "I quickly grabbed hold of the book and guarded it in case someone else wanted to buy it", he writes. "The bewildered shopkeeper seemed surprised at my excitement."

The fate of Mrs Petrov’s lost shoe: Apparently Sir Les Paterson has it.

Katie’s Australia Day – Brazilian style! Food blogger Katie Quinn Davies’ Australia Day recipes.

Australia Day from afar: "One of the most surprising things for me to experience out of Australia was people saying–even in the American South!–Australia’s really racist, isn’t it?" Queen Emily, Hoyden About Town.

Drunks draped in flags: "the path that took us here is a complex one. Music festivals, drinking binges, the crystallisation of fears and resentments, the navel gazing over Identity, all that is part of the road, as well as politicians." Kim, Larvatus Prodeo.

The view from Menzies House: Tim Andrews celebrates Australia Day with a whinge about lefties and "self-appointed intellectual elites".

Be as Australian as you want to be: "Let us be frank: anti-racist prejudice is the worst kind of prejudice at all. It denies freedom of expression; it denies freedom of conscience; and most heinous of all, it denies courage." Ben Pobjie.

John Passant reports on the tent embassy protest: "Soon about 200 of the demonstrators moved from the Tent Embassy commemoration to the café to tell Abbott what they thought of him …" En Passant.

Steve Kates on the protests: "I must tell you my disgust is unbounded. We tend not to jail such people, but that is in the way of more fool us than anything." Catallaxy.

Missing the story: The press gallery "shine the light almost exclusively on the confected battle between tweedle dee and tweedle dum – the figureheads at the top of decaying political parties that everyone outside the inbred Canberra vortex can see are just shells of organisations pretending to believe in something beyond power itself." Mr Denmore, The Failed Estate.

Michael loves Heather: "She’s a saint. A princess. A fairy queen. A beautiful, kind, intelligent. imaginative, brave young woman with a wicked sense of humour and a shipload of empathy." Michael Stuchbery gets married.

One year on: "How do you grieve for someone who hurt you profoundly, repeatedly, and tore your family apart? Who was also deeply intelligent, cursed with mental illness, incredibly funny, and when he could be, loving?" Imogen, raw/roar.

What’s So Special about America’s 1%? "If we’re all embedded in a fundamentally unjust, exploitative global economic structure, it’s hard to see why the American 1% should be especially salient." Will Wilkinson, The Moral Sciences Club.

Social justice … Tea Party style: "A common trope for conservative policy intellectuals is that they want to ‘means test’ the welfare state – reduce its availability for those with high wealth and income and focus it on those with the least wealth and income. But the Tea Party base wants the opposite – they are opposed to a welfare state for the poor, young people, undocumented workers and other groups they think are undeserving." Mike Konczal, Rortybomb.

Dogs against Romney: Why is everyone talking about Mitt Romney’s dog?

Blog readers survey: Peter Chen is conducting a survey of blog readers. You can find the survey here: Australian Blog Readers Study (via Andrew Norton).

British Leyland devoured billions pounds of taxpayer’s money before it was finally broken up and sold off. According to New York Times journalist Nelson Schwartz the Thatcher government’s bailout "remains the classic example of a futile government intervention."

Mrs Thatcher was unable to resist the car maker’s insatiable demands for cash. According to Schwartz, her government ended up handing over £3.6 billion (£11 billion adjusted for inflation) to keep the factories open. "On any rational commercial judgment, there were no good reasons for continuing to fund British Leyland", she concedes in her autobiography. The company was a high cost, low volume manufacturer in a world where low costs and high volumes were essential for success. So why did she do it? The "political realities had to be faced", she says, "BL had to be supported":

I knew that closure of the volume car business, with all that would mean for the West Midlands and the Oxford area, would not be politically acceptable to the Cabinet of the Party, at least in the short term. It would also be a huge cost to the Exchequer — perhaps not very different to the sort of sums BL was now seeking (p 120).

As political scientist Fiona McGillivray explains, no government could afford to allow British Leyland’s huge plant in Longbridge to close:

(Continued)

The Jericho amendments: At Grog’s Gamut Greg Jericho checks out the Australian Public Service Commission’s new guidelines for public servants engaging in public comment. Some of the principles are "so obvious or dumb as could only be written by a public servant", says Jericho, while another is "utterly stupid."

Left-wing Paulbots are go! Left-wingers, greens and progressives should be supporting Ron Paul‘s bid for the Republican nomination, writes Leichhardt Greens Councillor, Daniel Kogoy.

Ron Paul on the "whole global warming terrorism" thing: In 2009 Paul said that the Copenhagen treaty on climate change "can’t help the economy. It has to hurt the economy and it can’t possibly help the environment because they’re totally off track on that. It might turn out to be one of the biggest hoaxes of all history, this whole global warming terrorism that they’ve been using, but we’ll have to just wait and see, but it cannot be helpful. It’s going to hurt everybody.” He made similar comments in an interview with Fox Business (at 7:00).

Industry subsidies and political tribalism: At current levels, subsidies to the car industry are third-order, writes John Quiggin. So why all the fuss? "It’s taken for granted on the cultural right that some technologies and industries (nuclear power, oil, finance) are good and others (wind energy, electric cars, Hollywood) are evil – essentially a mirror image of what they think we on the left think. For people who are supposed to believe in the free market, this is a big problem."

There’s a margin in error: "Like advertising, journalism now is mostly about constructing a version of the truth that suits a chosen market. It’s about making an impact and attracting eyeballs and building a brand. And the greatest shame of it all is that a gullible public buys it." Mr Denmore, The Failed Estate.

Voting is about values not interests: "It isn’t rational to vote for your economic interests. It isn’t rational in the economist’s sense to vote at all. Why not, because your individual vote doesn’t count." The Philosopher’s Beard.

The Great Gatsby Curve: Alan Krueger calls it the ‘Great Gatsby curve’ — the finding that countries that have more inequality across households also have more persistence in income from one generation to the next. As Matthew Yglesias points out, that’s bad news for Republican claims that America doesn’t need to redistribute income because it’s the land of equal opportunity and upward mobility.

Hands up if you want downward mobility: "Someone in society is going to end up doing crappy jobs," writes Megan McArdle, "because trash needs to be hauled and Alzheimer’s patients need to have their diapers changed. The primary job of a middle class parent is to ensure that their children are not those people."

Technological change and economic growth : Steve Kates picks a fight with a ‘socialist’ blogger who claims that free markets drive technological change and generate wealth. “Gimme a break" he says, "It is free markets that drive tech change and generate wealth. But it is not ‘tech change’ as such, but entrepreneurs, those people, like Mitt Romney, who do the driving and if they succeed, end up very wealthy. To present it as ‘tech change’ means that rubbish like the NBN or batts in the belfry might get counted."

Mobile phones and the price of fish: Mobile phones are transforming the way people in countries like India do business. In a 2007 paper economist Robert Jensen explained how access to mobile telecommunications allowed fishermen in Kerala to get the best prices for their catch.

"My mother died in 1976. Is she all right?" Kerryn Goldsworthy visits the supermarket.

“Oh, my goodness, the John Birch Society! … Is that bad? I have a lot of friends in the John Birch Society" (Texas congressman Ron Paul).

In Tuesday’s Sydney Morning Herald, Tom Switzer describes presidential hopeful Ron Paul as a socially tolerant free-market crusader whose views on foreign policy are indistinguishable from the views of those on the radical left. Not everyone who knows Paul’s record would agree.

On Switzer’s account, Paul is a "true fiscal conservative" and "prophet" who wants to call an end to America’s costly military overreach:

Paul’s most endearing quality is that he has sincere beliefs – support for social tolerance, free-market capitalism, and a healthy scepticism of foreign military adventurism – and he is not afraid to yell them out. That sets him apart from the pack in this age of focus groups and media spin.

But in the New Republic, Will Wilkinson expresses a strikingly different view: "If you were an evil genius determined to promote the idea that libertarianism is a morally dubious ideology of privilege poorly disguised as a doctrine of liberation, you’d be hard pressed to improve on Ron Paul."

(Continued)

When New York Times public editor Arthur Brisbane asked whether Times reporters should challenge the ‘facts’ asserted by the newsmakers they write about a large majority of readers responded: "yes, you moron, The Times should check facts and print the truth." That’s pretty much how John Quiggin responded too. But it’s actually a more difficult question than it seems.

(Continued)

"Capitalism made America great – free markets, innovation, hard work – the building blocks of the American Dream. But in the wrong hands some of those dreams can turn into nightmares."

‘When Mitt Romney Came to Town’

Promoted by Winning Our Future, a pro-Gingrich super PAC, ‘When Mitt Romney Came to Town‘ features a series of poignant interviews with workers who lost their jobs, houses and health insurance coverage when the businesses they worked for were restructured or went under.

This misleading video illustrates what’s wrong with American conservatism today — an unwillingness to talk honestly about how free markets drive technological change and generate wealth. The economist Joseph Schumpeter called it ‘creative destruction’. Economies grow as new technologies replace older ones and industries and jobs move to where work can be done most efficiently. As W. Michael Cox and Richard Alm write:

(Continued)

Mitt Romney takes a tough line on welfare. In 2008 Republicans cheered when he said that America’s culture was threatened by welfare payments to poor people. Asked how tax reform plan would help Americans on low incomes he said his plan was "primarily based on trying to create jobs, not handing out cash to individuals."

But while Romney opposes cash handouts to individuals, he seems relaxed about cash handouts to business. In the early 1990s his private equity firm Bain Capital helped finance a company called Steel Dynamics. According to a report in the Los Angeles Times:

Bain Capital began looking at investing in the steel start-up in late 1993. At the time, Steel Dynamics was weighing where to locate its first plant, based in part on which region offered the best tax incentives. In June 1994, Bain put $18.2 million into Steel Dynamics, making it the largest domestic equity holder. It sold its stake five years later for $104 million, a return of more than $85 million.

As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. The county also levied a new income tax to finance infrastructure improvements to benefit the steel mill over the heated objections of some county residents.

"I’m very pro-business, but I’m not pro-business-welfare," said DeKalb County resident Suzanne Beaman, 58, who fought the incentives. Steel Dynamics "would have done fine without our tax dollars, I have no doubt."

Another steel company in which Bain invested, GS Industries, went bankrupt in 2001, causing more than 700 workers to lose their jobs, health insurance and a part of their pensions. Before going under, the company paid large dividends to Bain partners and expanded its Kansas City plant with the help of tax subsidies. It also sought a $50-million federal loan guarantee.

Is this what Romney meant when he spoke about providing "incentives to help companies to be creating new jobs"?

(Continued)

The missing liberals: Why is there no liberal party? Because there are so few people who support both economic and social liberal causes, says Andrew Norton. Andrew cites data from the 2010 Australian Election Survey.

Dr Watson vs Dr Ludd: With access to huge databases, expert systems will soon be able to diagnose illness better than doctors, says Alex Tabarrok. Not everyone is convinced.

Penalty rate claims hard to swallow: "To believe that Mr Calombaris would open his restaurants on Sundays only to have them run at a loss is to believe that he’s running some sort of altruistic quasi-charity, an impression he attempts to give by suggesting that he opens on Sundays for reasons of ‘tourism’." Matt Cowgill.

Game of thrones: Greg Jericho is tired of reading about leadership challenges.

Adult content? "I can never understand how it’s ok to see images of a woman with breasts larger than her head, but a tasteful picture of something so natural as breastfeeding is ‘offensive’ to those same people." The Happy Sorceress on the Dave Dorman controversy (via Blue Milk).

Why Boardwalk Empire is more like cinema than tv: "In recent years, television shows have increasingly adopted cinematic tropes. Some of these can be found in current television series, nevertheless Boardwalk Empire is the pinnacle of this trend." I Heart the Talkies.

Equality means never having to drink warm beer: LG’s new ‘blast chiller’ compartment can cool a can of beer in five minutes. But to get this feature you have to buy a fridge that costs more that $2,500. Even super-rich people don’t buy refrigerators by the dozen so according to Matthew Yglesias that means "the incentive to invest money in developing even better appliances is relatively muted." He suggests that rising middle class incomes would encourage appliance makers to introduce more of these kinds of features.

Fairness on a budget: Britain’s Attlee government of 1945-51 built the modern welfare state and delivered greater income equality even though it inherited a debt to GDP ratio three times today’s level, writes Chris Dillow. So why is it so hard to implement egalitarian policies today?