Someone give Fritz an op-ed column

orourkeI see PJ O’Rourke is in the country to strut his schtick for the Centre for Independent Studies.  He wrote an opinion piece in yesterday’s Oz along predictable lines: the keynesian socialists are squandering our money on all these GFC stimulus measures, when the best thing to do would be nothing at all.

PJ is spinning his propaganda off poor old Adam Smith these days, although he twists Smith’s arguments almost as egregiously as Kevin Rudd distorts Hayek.  Apparently PJ has written a book about Smith which I won’t be bothering to read, although I’ve read most of his earlier output.  PJ is a bit of a one-trick pony for my taste, although it was a trick I found quite entertaining for a long time.  He slags lefties in pretty much the same way Hunter S. Thompson used to do to righties, and I’ve got most of Hunter’s books too.

I was about to put fingers to keyboard for a post deconstructing PJ’s op-ed piece, when I discovered that someone named Fritz had already encapsulated my thoughts in the comment box to PJ’s own article.  It just shows you, Murdoch’s “blogs” aren’t absolutely filled with complete morons shouting past each other in the darkness.  Fritz said:

It seems to me that this present crisis was born out of a series of financial failures for which the left and right share equal responsibility. So from the Left we had disastrous interference in the market by pressuring Fannie May and Freddie Mac to lend money to people who could not afford to pay it back and from the Right we had the disastrous deregulation of investment banks. The first was based on an ideology of social inclusion; the second based on an ideology that individual companies are in the best position to act in their own self interest. Both were critical errors and led to a massive asset price bubble which encouraged further borrowing and spending beyond our means. Unfortunately for us one of these sides (Left or Right) is in power at any one time and is only willing to address the deficiencies of the other side. So right now we have a lot of discussion about “tough regulation” but nothing about disastrous government interference (did anyone say $43 billion infrastructure project without a business case?). What we need is a middle ground: appropriate levels of regulation which compel companies to be transparent and responsive to their shareholders and minimising government intervention to areas of natural monopoly and social welfare.

I’ve been meaning to mention for some time that I harbour severe doubts about the wisdom and economic viability of Kevy’s $43 billion Telstra Redux plan.  Surely they would have been better advised to split the existing Telstra into retail and monopoly landline infrastructure entities, and then regulate the monopoly entity to ensure it allowed access to its facilities to all competitors on a level playing field.

They could let it extract monopoly rents to fund creation of a “fibre to the node” or “fibre to the home” network to the extent that it made economic sense. It might make sense for Korea or Japan or even the US to deliver universal ultra-fast broadband to the entire population.  But for a sparsely populated, huge island nation like Australia I suspect there are large swathes of the country where the cost of installation vastly exceeds the benefit of rapid porn and feature movie downloads or high quality Skype videophone links (which is all 99% of users will employ it for).  Businesses,  research and scientific or medical isntitutions that can no doubt benefit significantly from ultra-fast broadband will continue to be located in major centres anyway, and ultra-fast broadband makes commercial sense in those places anyway.

As for the $900 stimulus payment, its only evident benefit where I live is that the local indigenous itinerants have temporarily upgraded their consumption patterns from the cheapest Coolabah casks to slabs of VB and six packs of Jim Beam and Coke.  I have faith that this is an enormous benefit in reducing the depth of the recession.

Oh yes, and then there’s my daughter Bec and her boyfriend Cian who are studying together in Melbourne. They’ve made Kevin and Wayne very happy and just blown their $1800 on a brand new plasma TV.  That must have injected at least, oh, three or four hundred dollars into the local economy as the rest got shipped back to the Korean supplier.  Who could question the economic sagacity of such a plan?

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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pedro
pedro
12 years ago

I don’t much read o’rourke any more, largely because I think his funny days are well in the past and all that is then left is not very special commentary. But to be fair to him, and having read a couple of columns in the last few months, I don’t think O’Rourke would really quibble with the comment you posted. Mind you the comment does not address your first criticism, which is the slagging of Keynsian stimulus.

Down and Out of Saigon
Down and Out of Saigon
12 years ago

It seems to me that this present crisis was born out of a series of financial failures for which the left and right share equal responsibility. So from the Left we had disastrous interference in the market by pressuring Fannie May and Freddie Mac to lend money to people who could not afford to pay it back and from the Right we had the disastrous deregulation of investment banks. The first was based on an ideology of social inclusion; the second based on an ideology that individual companies are in the best position to act in their own self interest.

Fritz is engaging is false equivalency if he believes “the left and right share equal responsibility” for the crisis. He appears to believe the “Community Reinvestment Act caused the global financial crisis by forcing people to lending to shifty minorities” theory – a theory that has been repeatedly debunked. I’ll quote Matthew Yglesias:

Ive linked to Robert Gordons debunking of this point several times, but now let me add this other debunking from Ellen Seidman that I hadnt seen before. And, again, recall that not only is it false to say that CRA caused the bad lending, but completely irrespective of who or what caused the bad lending absolutely nobody forced financial firms to make large, highly leveraged bets on the loans. It was conservatives who blocked regulation of credit default swaps. It was conservatives who watched as the housing bubble developed and it was conservatives who blocked any action to try to ensure a soft landing once the bubble popped. It was conservatives who said we had to make the taxes of the ultra-rich individuals who brought this problem upon us as low as possible. It was conservatives who blocked efforts to curb predatory lending and it was conservatives who blocked efforts to investigate fraud more robustly.

John Greenfield
John Greenfield
12 years ago

KP, I love O’Rourke, and his – clearly excruciatingly researched and revised – books, but his offering Down Under is just collecting rent on his shabbier properties. ;)

TimT
TimT
12 years ago

I’ve read P J’s book on Adam Smith and he’s definitely slumming it in that book (and ‘Peace Kills’, his proceeding book). But he still has the ability to turn out a brilliant comic article… such as this piece in the Weekly Standard.

thewetmale
thewetmale
12 years ago

PJ was at the press club today if anybody cares to stay up for the early morning replay. I enjoyed his gags, he had a go at both the right and the left. Having not been exposed to his work before, i enjoyed it but i couldn’t say if it was par for he course.

Nicholas Gruen
Admin
Nicholas Gruen(@nicholas-gruen)
12 years ago

I heard PJ O’Rourke on LNL discussing Adam Smith and was surprised to discover that he didn’t do too bad a job of it. It was a noticeably’right’ interpretation, but it didn’t seem to hopelessly misunderstand Smith in an orgy of anachronism which is what I was expecting. He really did try to understand the man in his milieu and I thought he did quite a good job.

jimparker
jimparker(@jimparker)
12 years ago

I echo Saigon in pointing out that the “left/progressive” political players left far less fingerprints on the current GFC mess than the “right/conservatives”.

Home owning as social inclusion was a pet cause of Dubya as well:
http://www.nytimes.com/2008/12/21/business/21admin.html?_r=4&hp=&pagewanted=all

Which makes sense. People servicing mortgages and/or with property assets tend be more conservative about pushing socio-economic-political-cultural changes than those without.

And speaking of PJ O’Rourke. He was a marvelously fresh and funny voice when he first emerged. Republican Party Reptile is a classic of distinctively American humour – up there with Mark Twain and Ambrose Bierce.

But we all end up like cheese in the end. Stale, stinky and hard on the tooth. As did Hunter S. Thompson. Who incidentally was a drinking buddy of O’Rourkes.

The 20th anniversary edition of Rolling Stone (about the time PJ replaced Hunter as their National Affairs Correspondent) contains a wonderful interview/drinking session transcript between the two of ’em where they end up cheerfully and roundly damning everyone and everything. The only thing missing was a former Dean of St Patricks in Dublin emerging from the cellar to join them with more bottles.

Also fun to read PJ’s ‘Parliament Of Whores” to watch him reluctantly coming to the conclusion that the nanny state arose because so many grownups behave like children.

jimparker
jimparker(@jimparker)
12 years ago

Also, what’s with the Social Democrat hair PJ?

These days, he looks like a EU Parliamentarian from Hamburg.