The Dunera: kicking off an exciting life

An excerpt from the Dunera News. (for those who don’t know, the Dunera was the prison ship on which my father was deported to Australia in 1940 with the Battle of Britain raging around them). The exerpt is an autobiographical sketch by Richard Sonnenfeldt (1923–2009)

I was brought up as a German boy but, being Jewish, was lucky enough to be sent to boarding school in England in 1938. I was deported on the Dunera, sent to Hay, but again lucky to be released along with six others, taken back to Sydney and on to the Dunera. The ship developed trouble, we were taken off at Bombay and freed – being left in the hands of the Jewish Relief Committee.
It took six months for the US Consul to verify my credentials and issue me with a US visa. I arrived in New York in April 1941 and joined my family who had caught one of the last boats out of Lisbon. I wanted to enlist but was not accepted due to being of German origin. But a further 18 months on in 1943, I was given US citizenship, drafted and served in the Infantry in Italy and France. Then with the third and seventh armies in Germany and Austria. I saw battle at the Bulge and was there at the liberation of Dachau concentration camp, something I never forgot. Continue reading

Libertarians and the privatisation of income management

Employers are prevented by law from subjecting workers to income management. What if they weren’t?

Libertarians favour freedom of contract. They believe the government’s role is to enforce contracts not tell people what should be in them. One way governments have interfered with freedom of contract is by insisting that employers pay workers in cash. Laws like the nineteenth century truck acts were designed to prevent employers from paying workers in goods or forcing them to spend their wages in company stores. This restriction on freedom of contract continues today through the Australian Fair Work Act 2009.

Recently Andrew Forrest has suggested that a Healthy Welfare Card could help welfare reliant families by preventing spending on alcohol, drugs and gambling. According to Forrest, the card could offer stability and "help the most vulnerable families manage the routines required to hold down a job."

Many people who make this argument seem to assume that once someone moves into paid work, their drinking, gambling and substance abuse problems disappear. Or alternatively, they believe that until a person manages to overcome these problems, no employer will offer them a job. But in reality there are plenty of people with full time jobs who abuse alcohol, take drugs and have gambling problems.

What if someone proposed a scheme that allowed employers to offer jobs to people on income managed welfare payments and pay them using something like Forrest’s Healthy Welfare Card? They could argue that employers would be more likely to take on someone with long standing alcohol or drug problem if they knew their wages would be spent paying off a car that they could use to drive to work rather than on beer. The card could allow more people to get jobs, stabilise their lives and become self sufficient.

Continue reading

Cash for clunkers

Cash for Corollas: When Stimulus Reduces Spending
by Mark Hoekstra, Steven L. Puller, Jeremy West – #20349 (EEE IO PE)

Abstract:

Cash for Clunkers was a 2009 economic stimulus program aimed at increasing new vehicle spending by subsidizing the replacement of older vehicles. Using a regression discontinuity design, we show the increase in sales during the two month program was completely offset during the following seven to nine months, consistent with previous
research. However, we also find the program’s fuel efficiency restrictions induced households to purchase more fuel efficient but less expensive vehicles, thereby reducing industry revenues by three billion dollars over the entire nine to eleven month period. This highlights the conflict between the stimulus and environmental objectives of the policy.

 

http://papers.nber.org/papers/W20349?utm_campaign=ntw&utm_medium=email&utm_source=ntw

Don’t isolate Russia | Tom Switzer

Putin currently graces the cover of Time, Newsweek, Der Spiegel and The Economist, together with a host of lesser publications. Always unfavourably of course, with the possible exception of Time where the headline is “Cold War II” and the subhead “The West is losing Putin’s dangerous game”.

In the midst of this stampede, it’s refreshing to find authors who take a longer view. Two popped up today, both writing in conservative publications and from a realist standpoint.

In “Don’t Isolate Russia” over at The American Conservative, Tom Switzer implores us to “think clearly and, if necessary, coldly, about the underlying cause of the Russia-Ukraine standoff, which sparked the military blunder.”

It [the West] has repudiated the implicit agreement between president George H.W. Bush and Mikhail Gorbachev in 1990-91 that the Atlantic alliance would not extend into Eastern Europe and the Baltics, a region that Russia has viewed as a necessary zone of protection long before Stalin appeared on the scene. In so doing, the West has taken no account at all for Russian susceptibilities and interests.

For Moscow, unlike Washington and Brussels, Ukraine is a matter of intense strategic importance: it covers a huge terrain that the French and Germans crossed to attack Russia in the 19th and 20th centuries: [ . . .]

Since the collapse of Soviet communism, Western liberals and neo-conservatives have declared the demise of power politics and triumph of self-determination. But Putin’s calculations are based on an old truth of geopolitics: great powers fight tooth and nail when vital strategic interests are at stake and doggedly guard what they deem as their spheres of influence.

This is unfortunate, but it is the way the world works, and always has. Imagine how Washington would respond if Russia had signed up Panama in a military pact, put rockets and missiles in Cuba, or helped bring down a democratically elected, pro-U.S. government in Mexico.

In The National Interest, Dmitri Trenin considers Russia’s likely security strategy now that the West appears to have definitively turned against it. Continue reading

Iran Air Flight 655: How did Australia react?

A question for Troppodillians: does anyone have a record of the Australian Government’s response to 1988′s accidental US shootdown of Iran Air Flight 655?

I ask because the parallels with the MH17 shootdown are so clear.

At a political level the government’s response has so far been well-judged. There are few negatives in getting upset about the deaths of Australians overseas, particularly at the hands of a group aligned with a nation whose policies we rightly dislike, whose statements we quite sensibly distrust, and with whom we have few important links.

But at a moral level, it seems to me difficult to judge this episode more reprehensible than the Flight 655 shootdown. MH17 was shot down by untrained yahoos informally but closely connected to the Russsian government, probably by mistake. Flight 655 was shot down by the USS Vincennes on the orders of a formally trained US warship commander, fairly certainly by mistake.

The US, remarkably, never apologised to Iran or anyone else over the shootdown.

And my dim recollection is that the Australian Government responded that it was all a regrettable accident. Hansard’s online search doesn’t return anything from 1988. Does anyone have more detail?

A reminder of the response to Flight 655, from the careful-with-the-facts for Age journo Tim Colebatch (who was a foreign correspondent in Washington at the time): Continue reading

Ben Hills’ monument to newspaper journalism

Ben Hills has a new book out – Stop the Presses! How Greed, Incompetence (and the Internet) Wrecked Fairfax. It’s published by (surprise!) News Corp’s HarperCollins. Its essential thesis is that the Fairfax media group, owner of The Sydney Morning Herald and The Age, is in trouble because it has been run by nongs. Boards and managements have been too dumb to exploit the opportunities of the Internet, Hills reckons. He thinks Fairfax should have bought Seek and carsales.com.au and realestate.com.au. Fairfax also needs to be run by “people who know about media”, he complains.

Hils has done some great journalism over the years, notably on the asbestos industry and medical scams. But this book looks like a mis-step.

Since Hills is making a virtue of plain language, I’ll copy him: Hills’ theory is tripe, and I’m surprised more people aren’t calling him on it. In the media, most people seems to be treating him very politely.

But Stop the Presses! also has its lessons – though perhaps not the ones Hills draws.

Continue reading

Australian economic reform: The next generation

As published on the Lowy Interpreter on 14 July 2014.

Growth in HALE index, Intangible GDP, net national income and GDP, 2005-2014.

John Edwards’ Beyond the Boom tilts effectively against Australia’s congenitalHanrahanism. It points out the extent to which we managed to finance the wild ride of the boom (the massive surge in mining investment, from 2% to 7% of GDP) without blowing out our current account deficit and foreign debt or setting off an inflationary spiral as we’ve done in the past.

We did it with a floating exchange rate, superior macro-economic policy and higher savings. How many people are aware of these facts as recited by Edwards?

By 2013, Australia’s rate of workforce participation was higher than the US, once cited as a country far ahead of Australia in respect of that indicator. Australia’s rate of investment was far higher than Japan or Germany, to which Australia had usually been unfavourably compared in this respect. Its rate of saving was also far higher than Japan or Germany, recognised as saving paragons.

Edwards is strangely muted on the role of compulsory superannuation in lifting savings, perhaps because he’s aware of its huge and inequitable cost to the budget. (Naïve question: If we want to lift household savings, we can use compulsion or incentives. Why do we use both?)

What’s more, as Edwards points out, much of our investment occurred not in physical structures — buildings, plant and equipment — but in human capital, in the skills of our people. The Herald/Age Lateral Economics (HALE) index of well-being takes GDP and adjusts it for some of the major inadequacies of GDP in measuring well-being. And our measure (see graph above) corroborates Edwards’ story, with human capital rising faster than GDP.

For instance, consistent with the figures Edwards cites, the proportion of the workforce with Certificate III qualifications or above has risen from 40.7% in 2003 to 52.3% in 2013. These changes scored a squillionth of the column inches devoted to the mining boom, but they matter more. From mid-2005 to the latest quarter reported, real GDP has grown by 28%. Net national income (NNI) captures the rise in the terms of trade and so lifts our measured economic growth to 33%. The HALE index takes NNI as a better starting point for measuring welfare than GDP and, even with rising obesity and mental illness weighing it down, human capital increases our measured increase in well-being another ten percentage points to 43%.

Does this mean we’re out of the woods? Well, yes and no! Continue reading