I’ve been having to go further and further in the world to get anyone to listen to me. But in any event, I enjoyed this breakfast radio interview in Regina Saskatchewan.
Government as impresario, the platform as impresario
Reply
Category Archives: Economics and public policy
Media managing all the way to oblivion
I’m doing a fortnightly column for the Age and the Sydney Morning Herald and here is the first column. Of course the thing that’s missing from the column is how I think they should have handled fiscal policy - which would have involved not just more straightforward and confidently assertive communications from them but would also have introduced some independent scrutiny of fiscal policy. Anyway, in writing it I realised how much I enjoy this genre. Like a blog post, but I often slave and sweat over each paragraph just to get the ideas across as briefly as possible, and to make it as much of a pleasure to read as one can.
EVEN as the contrast between left and right fades in mainstream politics, politicians continue ideological warfare like lions eat red meat. But somehow left-leaning politicians have become vegetarians. And they’re being eaten alive by the carnivores of the species.
Deep in the psyche of the electorate, the right is dad and the left is mum. Seriously! The electorate instinctively feels that the right is better with money while the left is better at ”caring” things such as health and education. The left’s desperation to avoid the right’s stereotype of them as feckless spendthrifts sees them continually hamstrung in articulating their case. Seeking to appease our economic anxieties they buy into the right’s way of framing the issues. In the name of managing the news cycle they give up more and more political and ideological ground.
Thus, for instance, to allay electoral fears about rising debt, US President Barack Obama suggested that, since American families and businesses were tightening their belts, the government should do the same. This is nonsense on stilts. By the very logic of his stimulus (and Bush’s cash handouts before him), the whole point of deficit spending was to reverse or counterbalance a temporary lack of private spending. As Paul Krugman argues, one can forgive Obama for compromising on the policy, but not on the truth; not, that is, for casually adopting his opponents’ framing of the issues that gainsaid the whole point of the stimulus in the first place.
Australia’s economic circumstances are different. Partly because our stimulus worked so well and also because of the surging resource sector, our central bank hasn’t needed to cut its cash rate to near zero. So it hasn’t run out of conventional monetary ammunition like the US Fed. So unwinding our fiscal stimulus makes sense.
Yet our left-leaning politicians can’t take credit for their greatest achievement because they’re forever thrusting their little vegetarian heads into the lion’s jaws of their opponents’ framing of the issues.
Exterminating the excluded middle
I just happened upon this story in which Mike Rann who served SA as Premier for about a decade has been given a driver, an office and staff in a policy which provides such things to Premiers who have served for longer than four years.
Other than the car – I don’t know what’s wrong with taxis – this seems OK to me. Indeed if the story is to be believed, it’s only for six months after he resigns – to handle correspondence etc (one needs a driver to handle correspondence for obvious reasons).
Anyway, though the reporting was neutral enough there’s a poll on whether this is OK or not. And of course they don’t just want you to vote ‘yes’ or ‘no’. They want you to run your own little story on A Current Affair. With a yawning and very dreary excluded middle, one gets this choice:
Is Mike Rann entitled to the extra perks?
- Yes, he served the state well
- No, this is outrageous
And of 2815 votes, 86.47% said it was outrageous. I’m generally down on perks – like outrageously generous superannuation or free business class travel for life, but these seem to me to be some of the least outrageous perks I’ve come across.
Translations of the Government 2.0 Taskforce
Having recently congratulated John Quiggin on his many translations of his Zombie book, I was informed by a Korean today that the Government 2.0 Taskforce was translated into Korean here. Which, since it was written with a wider set of circumstances than just those appertaining to Australia in mind, made me particularly pleased. I wonder if it made its way into any other languages (though I guess it is easier in the age of Google Translate. I’m unaware whether the Korean Translation is simply machine translated. I’m heading to Korea soon, so I’ll try to find out.
‘Julia’ and the denial of history
First it was David Brooks’ Harold and Erica. Now it’s the Obama campaign’s Julia. Harold, Erica and Julia are all fictitious characters born into a perpetual present. They live and grow old in a world that doesn’t change. As Michael Shear at the New York Times writes:
At age 3, Julia is enrolled in Head Start programs, thanks to Mr. Obama. By 22, she’s covered by her parents’ health care because of Mr. Obama’s health reforms. At 42, she’s getting a small-business loan from the government. When she reaches 67, she’s retired and drawing Social Security benefits.
In Julia’s world, demographic, technological and environmental change are on pause. She doesn’t need to worry about waiting for the new Intel chip to come out before she buys a new laptop. The new chip never comes. And in the same way, the government doesn’t need to worry about the effect of unforeseen new medical technologies on the cost of health care. The policies that work today will work equally well tomorrow.
There’s no ageing population problem. There’s no demographic bulge threatening Social Security or Medicare. The labour market goes on as it does now with undisrupted by technological or trade induced change. And while climate change is a constant source of anxiety, it remains lodged in a future that never comes.
Are Americans in denial about history? And if they are, how would that warp their decision making?
Corporate Sovereignty
At the Lowy Interpreter Sam Roggeveen speculates about the possibility of a company (particularly Apple) buying a country.
There has been at least on fictional treatment of a corporation taking over a country in John Brunner’s wonderful 1968 novel Stand on Zanzibar. It is based in 2010 and the corporation is transparently based on General Electric, and the country based on what would become Benin. Like much science fiction, it tends to tell us a great deal from what change it didn’t anticipate. In particular it didn’t anticipate how corporations (at least in the US) would change, and why the idea of a corporation taking over a country is less plausible than it once was.
It made sense in the 1960s to think of Corporations as great sprawling organisations that could possibly marshall the array of skills involved in running a country. Companies did have wide ranges of businesses and were more relaxed. But attitudes changed in the 1980s – maximizing return on capital meant that companies would shrink down to core products with the greatest returns, and jettisoning or spinning off other projects. In many ways I suspect this had alot to do with the movement from internally fostered management to a floating class of specialists in exploiting the principal agent problem in corporate governance. Shuffling projects between companies and identities meant an apparent increase in return on capital became the basis for bonuses – even though in aggregate there was no improvement.
Nowadays only a few companies still dominated by the shareholdings of a few (like Microsoft, News Ltd or Google) are prepared to fritter away money on unprofitable side projects. Even zaibatsu are less keen to expand the range of what they do now, and the chaebol were forcibly shrunk in the late 90s.
So we end up with a company like Apple, with a handful of very successful products that make a great deal of money it can’t do anything with. It has no other divisions to cross subsidize subsidize, or research to undertake (the company’s success has always been in packaging end products and not developing technology. They either cop the tax when they repatriate the money and pay larger dividends, or they let it sit in a bank account. They certainly wouldn’t pursue something outside their core – unless there was a tax dodge in it.
To be sure, owning a country would free the company from tax obligations were they to incorporate there and pay dividends there. But do they pay them in Apple dollars, get another country to let them use their currency or make sure the country they buy already has an easily currency? Think about what would be needed to support a new currency. They’d either start taxing, issuing debt, or make Apple dollars backable by Apple products – all of which seem foolish and still unlikely to make it a tradable currency (assuming shareholders want to buy things other than consumer electronics). But whom would let them use their currency, and countries that already have hard currencies are likely to be too large.
And of course, if shareholders remain in other countries, they’d be reliant on their resident states continuing to recognise Appledonia as a sovereign state in a way that prevents them taxing those same dividends. Maybe they’d also pay to join the WTO?
Consumer medicine information: a short course of parody
A while back I blogged about the spate of mandated product information when one buys medicine. I just got a scrip from the chemist with a new format consumer information in it and I’m afraid I’m pretty pissed off with what an organised piece of stupidity it really is.
Previously I wrote this.
What depresses me is that this is not hard. All it takes is to try seriously to be useful, rather than to follow a procedure. If governments can’t do this kind of thing – or rather bugger this kind of thing up – it is depressing to think of how much more limited their usefulness is than it might otherwise be.
This one reads as a kind of send up of usefulness. Virtually everything it says is a kind of joke. Some of my favourite passages.
Do not take NAPROSYN if you have
an allergy to:
• NAPROSYN or any ingredients
listed at the end of this leaflet . . .
Ask your doctor if you have any
questions why NAPROSYN has
been prescribed for you. [Now there's an idea!]
If you take this medicine after the
expiry date has passed, it may not
work as well.
If you are not sure if you should
start taking NAPROSYN, talk to
your doctor.
Follow all directions given to you by
your doctor or pharmacist carefully.