No need, no gain, no glory

Only nine years late, we are to have a Parliamentary debate about our involvement in the Afghan conflict! What has bought our leaders to consider, at last, owning up to their duty to explain their policies which have so far killed almost twenty Australians? They felt no such need during the election, so it can only be the confounding election results that have bought about this attack of transparency.

I agree with Brendan O'Neill: it really appears that both major political parties continue to endorse Australia's participation in the bloody Afghan war to save face.

The war is widely considered un-winnable including by experienced military leaders; it is unnecessary for our security, and; far from 'fighting terrorism', the former head of the UK security agency MI-5 believes that it is consolidating islamic disaffection and radicalism.

Doesn't everyone know (I'm sure Abbott and Gillard must know), after half a century of U.S.-led regional conflicts against ill-defined and even imaginary enemies, that just two or three years after we have withdrawn the only legacies of this war will be death, disability and the physical devastation of one of the poorest countries on earth?

It is intolerable that we should continue to send young Australians to be killed in such a pointless, ill-considered venture.

Let Gillard and Abbott in their statements to Parliament describe the better world that we and the the Afghans will enjoy after we limp from the field. Let them tell us why a probable triumph for the jihadism sustained by our invasion is a victory for peace and stability in Afghanistan or Australia. Let them explain why we should believe that, after raising the hundreds of millions of dollars (at least) needed to fund their guerilla on the back of bitter islamic resentment at the US/NATO/Australian attacks, the 'insurgency' will dissolve quietly, leaving us more secure.

Your thoughts?…

Academy of alarm

What does the Australian Academy of science think their role should be? To inform or to frighten? To elucidate public policy issues from a scientific viewpoint? Or to indulge themselves in scaremongering so unsupported by facts that it borders on irresponsible?

Their latest climate-alarm pamphlet contains appalling rubbish, including claims that the world will warm by up to 7° C in the next ninety years! This goes beyond marketing (for their research grants) and beyond beyond rational science.

"Climate models estimate that, by 2100, the average global temperature will be between 2°C and 7°C higher than pre- industrial temperatures, depending on future greenhouse gas emissions and on the ways that models represent the sensitivity of climate to small disturbances." Extract from The Science of Climate Change

The scientists of the Academy must be aware that, as forecasts, the IPCC models are bunkum: they are "scenario projections" not initialised to observations of the climate as Kenneth Trenberth, one of their chief defenders, acknowledges. In other words, they have a tenuous connection with reality; they are nothing more than policy 'what-ifs' not the basis for any realistic 'estimates' such as the Academy pretends.

The models exclude details of known key drivers of the climate such as clouds (!!), aerosols, albedo and (any mention of) the Pacific Decadal Oscillation that is known to have a significant effect on medium-term variability. For the Academy to base alarming 'estimates' of a 7° C increase in temperature on the IPCC models, as they have done would be nothing more than laughable spin if it were not for the fact that we are supporting these people with public funding. This pamphlet damages their authority and their credibility.

Even when they stick to the facts, the Academy can't resist breathless alarm Here's what they have to say about sea-levels

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Feather duster ambush

Of course, the Labor party would not have needed to "back down" if it hadn't inflated the issue with worse-than-WMD hysteria, religious zeal (cf. Ross Garnaut's invocation of Pascal's wager) and contempt for contrary evidence.

"Julia Gillard has put the pretty wrapping paper of conviction and consensus around Kevin Rudd's emissions trading backdown. But inside it's the same poll-driven backdown." Extract from Lenore Taylor | SMH —new policy same old delay on carbon price

Your thoughts?…

Led by lunatics

Mark Lawson's new book "A Guide to Climate Change Lunacy" (ConnorCourt Publishing, 2010) arrives with brilliant timing, just as Australia gets another chance to make a choice on climate change policies in the 2010 election. Based on his credentials as a respected journalist -- he's a leading science journalist and editor for the Australian Financial Review -- Lawson has a great opportunity to influence the uncommitted voter on a crucial point of difference between the parties and leaders.

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A climate ambush

When she took power, Julia Gillard said she wanted a national conversation and 'deep community consensus' about climate change. What she has given us, instead, is an election campaign that is, by its nature, guaranteed to produce neither.

“I was concerned that if you were going to do something as big to your economy as put a price on carbon, with the economic transfer that implies … you need a lasting and deep community consensus to do it,” she said.“I don’t believe we had that last and deep community consensus.” (Gillard on the Nine "Sunday" program on 27 June)

In place of the consultation Gillard promised, she has produced an ambush. Even if—as now seems likely—her policy will be to propose a future consultation leading to a carbon tax, there is no chance of a detailed debate over the next five weeks on the necessity or sufficiency of that policy as a response to the "greatest moral challenge of our generation". The 'deep community consensus' on substance will be at best postponed and at worst abandoned under cover of an indeterminable "mandate" on climate for whatever party wins government.

This is a betrayal of both sides of the aborted dialog. It will no-doubt disappoint the faithful that after a full term in government Labor's policy will be no more detailed and inspirational than the sort of non-committal mashup found in 'fiscally responsible' electoral platforms. It will certainly disappoint the sceptics (and taxpayers) that a jumble of slogans and half-explained ideas could be all the justification given for a radical and burdensome 'tax reform'.

Given that the Cabinet spent some time debating climate policy last week (with the coming election in mind), the failure to spell out a plan suggests that, contrary to her leadership mantra, Gillard has not restored a sense of direction (on climate, at least) to the party that had "lost it's way".

Your thoughts?…

Krugman’s take on protection

It seems Krugman will say anything to score a point. He wants to argue that insufficient demand (unemployment) is a problem and that redistribution (trade taxes) is not.

"…the attempt to place blame for the Depression on protectionism is a sort of Noble Lie, an attempt to scare people into trade policy that’s good for other reasons" Extract from Hayek, Trade Restrictions, And The Great Depression - Paul Krugman Blog - NYTimes.com

An attempt to scare people? I suppose he'd know.

But this is drivel. Opening (and maintaining open) markets is not "good for other reasons." It's good precisely because markets where there is competitive supply sustain surprising (innovative, bigger-than-you-expected) growth. The opposite of depression.

Your thoughts?…

Trade ‘imbalances’ are misleading

Alexandro Jara, the Deputy Director-General of WTO

"[R]elying on conventional trade statistics gives a distorted picture of trade imbalances between countries. As we saw when looking at the Chinese content of the iPad, what counts is not the imbalances as measured by gross values of exports and imports, but how much valued added is embedded in these flows.

The WTO estimate, based on IDE-Jetro data, estimates that 80 per cent of the value of the goods exported by the US had a domestic content. The comparable figure was 77 per cent in the case of Japan, 56 per cent for Korea. It was about 50 per cent for Malaysia and Chinese Taipei, meaning that half the value exported by these countries originated from other countries.

Using conventional trade statistics would overestimate the US bilateral deficit vis-à-vis China by around 30 per cent as compared to measuring in value added content based on input-out matrices. The official figures for the bilateral deficit would be cut by 50 per cent when the activity of export processing zones in China and Hong Kong, China, re-exports are fully taken into account. By the same token, measured in domestic value added content, the bilateral deficit of the US with Korea or Japan, the main providers of electronic parts in our iPad example, would increase in proportion to the reduction of the US — China deficit. " Extract from Address to the World Input Output Database conference, May 2010 [emphasis added]

Your thoughts?…

Why the Doha Round is failing

The usually well-informed ITSCD Bridges Newsletter tries to explain it with a bit of tabloid alliteration: 'Political Paralysis Poisons WTO Agriculture Talks'. Nah! It's a political choice to put the talks on life-support and it will be a political choice to pull the tubes. It's Doha that's in rigor, not the pollies.

The Doha Round fizzer is an embarrassment. The past sixty years of GATT and WTO negotiations have seen a lot of rocky moments but talks have never died. Governments dont't want to damage the brand, so they go on resurrecting their 'determination' in press releases from the G-8 or the G-20. But they've privately calculated the Doha plan doesn't warrant the political effort and attention required to get it done.

Guess what? They're right (yes, the politicians know their own business)! Doha has run out of demand.

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Revisiting the climate evidence

Julia Gillard's determination as Prime Minister to revisit the debate about an Australian response to the potential dangers of climate change calls for a review of the evidence to ensure that any response is proportionate and effective. In my view, the relevant data show less and less reason to attribute recent warming to human activities ('anthropogenic warming').

Although empiricism probably underdetermines the truth about climate—and as we know from Ross Garnaut's report, underdetermines climate policy—it is worth laying out the reasons seriously to doubt the 'man-made climate' claims once more because Gillard says she is seeking a national consensus. I think we should take no steps other than to seek a better understanding of climate; but I fear that a Labor party that is fond of condemning 'denialism' won't include such contrary views in the 'consensus' discovery processes.

Argument

The imposition of a tax (or administered price) on an element that is not only essential to current production but the very stuff of a big proportion of Australia's national product is an extraordinary measure requiring extraordinary reasons. But those reasons are not evident in the data; on the contrary:

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Forward to the past with the NBN

Although details are still sketchy, Henry Ergas points out that in one of his last acts, Rudd apparently saddled us with a return to a government-sanctioned oligopoly at the heart of our telecommunications market. Worse still, it will be taxpayer-funded.

"Central to those outcomes is the heads of agreement, which has two basic components. A first, valued at some $5bn, is a payment for NBN Co's use of Telstra's infrastructure. Fair enough. Given the decision, however questionable, to build the NBN, let it not duplicate facilities it could share. The remaining $6bn, however, is deeply problematic, for at its heart is an agreement to suppress competition." Extract from We'll pay dearly for this NBN folly | The Australian

Your thoughts?…

Why we should pull out of Afghanistan now

There can be no stronger argument for our withdrawal from combat (along with Netherlands and Canada) than this arrogant martial nonsense from Malcolm Turnbull on the ABC "Q&A" program on 21 June

"We are in a war, a global war against terror, and the battle in Afghanistan is the front line, so we have a vital interest in winning that battle, and the mission that Australia has and our allies have there, is to create the space that will enable the Afghan nation to put in place its own security forces and take over the job of managing the security and peace for that country, so that’s the exit strategy, Graham. The exit strategy is to ensure that the Afghan state is strong enough and secure enough to take over the job. That being done, then the foreign forces can leave."

The echoes here of the horrifying, pointless American/Australian war in Vietnam in the 1960s and 1970s are too loud and too precise to ignore.

Then we were fighting the chimeric threat of monolithic 'world communism'; now, the non-existent threat of global islamic terrorism. (How does Turnbull account for the funding of the Taliban's war? Does he see what we have created by meddling for four or five decades in Afghanistan and Pakistan only to turn against former allies-of-convenience in a form of anti-nationalist crusade? Inevitably an affront to muslims everywhere; by no means in Afghanistan alone).

Then, in the 1960s, we were told to fear that the 'dominoes' of South East Asia would collapse to crush our fragile Western outpost; now it's Pakistan, (for goodness sake) that we fear will be 'lost'. As if that mulit-ethnic crazy-quilt of energy, aspiration and incompetent government were some jewel of the Western crown (when, in reality, it is a paste-work long-ago shattered by US interference).

Then, through more than a decade we enthusiastically slaughtered Vietnamese of all ages and genders to create a space for "democracy"; now we're remotely rocketing villages, ploughing the desert with bombs and machine-gunning marriage processions to prop up an erratic, ineffective and thoroughly corrupted Karzai administration (read that NY Times portrait and try pretend that you want Australian kids to be smashed up and to die securing that man's power).

Today, we sit in front of our LED TVs', thirty years after our battle against the unstoppable forces of Vietnamese nationalism—maddened, ideological, vicious nationalism; call it any names you like— brought bitter and useless loss to that country and to ourselves, only to hear the identical blithering, come-what-may, pseudo-strategic idiocy from another generation of political patricians.

Your thoughts?…

ACTA is an attack on the WTO

India has complained in the recent TRIPS council that the ACTA provisions modify the balance of rights and obligations established by a multilateral agreement (TRIPS) covering the same domain. The secret negotiation of this plurilateral agreement by a cabal that included Australia is an attack on that balance and hence on one of the pillars of WTO.

"Countries excluded from the ACTA process have to come to recognize the serious threat it represents both substantively as well as for the future of multilateral organizations. " Extract from Michael Geist - India Comes Out Swinging Against ACTA at WTO

This agreement was not justified by the claims made on its behalf; the allegations of copyright losses were chimeras if not frauds. Joining the talks has been a shameful turn in Australia's trade policy which has, up to now, been marked by inclusiveness, a respect for evidence in the analysis of policy and for transparency in the representation of commercial interests.

Predictably, it seems that the proposed ACTA agreement will introduce new restrictions on trade—including an obligation to provide for seizure of goods in transit (i.e not in the commerce of the country authorizing the seizure) that are suspected of infringement of a private beneift in some other country. This commercial blagguardry will further undermine the miniscule (possibly non-existent) public benefits of TRIPS to developing countries.

India will not be alone in its objections.

Your thoughts?…

A whiff of luddism

Ken Rogoff—the Cassandra of the financial markets crisis—insinuates a moral lesson from a another technical disaster without, however, actually defining one.

"If ever there were a wake-up call for Western society to rethink its dependence on ever-accelerating technological innovation for ever-expanding fuel consumption, surely the BP oil spill should be it. Even China, with its ‘boom now, deal with the environment later’ strategy should be taking a hard look at the Gulf of Mexico." Extract from The BP Oil Spill’s Lessons for Regulation - Project Syndicate

That word "rethink" is the disappointment in Rogoff's article: it's placard-waving and handwringing, not analysis. It's a doorway for 'dread' rather than prudence to enter public policy, bringing innovation to a halt in the name of 'precaution'.

Curiously, Rogoff sees this at the start of his article where he acknowledges that dread unnecessarily halted nuclear power development in the United States, and many other places, for thirty years after the Three Mile Islabnd disaster caused a 'rethink'.

The lesson that Governments should learn from disasters such as the Gulf of Mexico oil spill is only common sense: learn from this and try to prevent a repetition of the problem, probably by regulation (threat of sanction). In principle it would be possible to internalize some identified risks in the price of e.g. a license to drill but, as Rogoff acknowledges government advisors are not much good at striking the right price for a particular venture.

Indulging the rhetoric of blame ('witch hunts') after a disaster easily obscures the benefit we get from a risky enterprise such as off-shore oil/gas drilling. The forensic objective should be to iearn from the disaster—rather than simply to apportion blame—because learning is essential to growth (and welfare) while 'justice' is not, however much we might wish it were otherwise.

Your thoughts?…

Positions diverge on Doha negotiations

Another cold shower for WTO: last week's attempt in Geneva to sketch out some 'common ground' failed. National negotiating teams were said to be shocked (yes, 'shocked') by the size of the gaps between national positions.

"... nine years into the multilateral trade talks, it remains unclear whether the inviolable ‘red lines’ of prominent WTO members overlap enough to make a Doha Round agreement possible" Extract from ICTSD

Luckily, the stock market seems unfussed; it gave up not a jot in response.

Your thoughts?…

Failure of the ‘Third Way’

…[t]he economic role of government should be limited and confined to a short list of issues described as market failures. Redistributive market liberals believe, however, in a big role for the state in reviewing the distribution and redistribution of income.

The Third Way was a refuge, Kay says, of "socialists mugged by [the] reality…" of socialism's failures. But it is now, he argues, in just as much trouble as market fundamentalism was after the excesses of the late 1980s.

"The crisis of 2007-08 revealed starkly the limits of redistributive market liberalism. The range of market failures was a good deal wider than the limited list defined by market fundamentalists would allow. Both socialists and social democrats have re-emerged from the shadows. For socialists the crisis renewed hopes that Marx’s promise of the collapse of capitalism under the weight of its own internal contradictions would finally be fulfilled. For social democrats, forever in Utopian search of stability and harmony, salvation lay in the creation of a new global financial order, although no one seems to have much specific idea of the nature of that global financial order." Extract from The Financial Times

Your thoughts?…

Resources tax mess

Henry Ergas explains what's wrong with the Brownian 'Resources Super Profits Tax' (apart from the appalling, ideological sniping at foreign investors).

"Unfortunately, we have a long history in this country of interventions that, were they capable of perfect implementation, might increase welfare. Typically, when reality hits, they have the opposite effect. The scientific tariff, which helped ruin our economy for decades, is a striking case in point.

The RSPT, with all of its complexities, risks being deja vu, all over again." Extract from This tax won't win any respect | The Australian

I wonder how Chinalco now feels about it's agonized investments in Rio. According to The Australian

Shares in Australian mining companies shed more than $16bn this week, with heavy falls by BHP and Rio in London contributing to a plunge on global markets overnight.

Your thoughts?…

World Bank opens its data

This remarkable new web-resource from the World Bank is a big deal.

"The [Wordl Bank] Open Data Initiative marks a change in the way the Bank disseminates data. Previously, it relied on a network of private distributors to get the information to 1,000 sites and 25 million registered users worldwide.

'Now we’re changing course and we’re going to attempt a much different distribution process that relies much more on having people come to us rather than our going out to people and seeing what kind of use they make of the data…" Extract from News & Broadcast - World Bank Frees Up Development Data

Trade researchers everywhere should cheer!

Your thoughts?…

Cardiovascular risks factors ‘unknown’

For all the hyperbole about the impact of obesity and diabetes rates, the Australian Institute of Health and Welfare (an agency of the Australian Department of Health) notes in a recent report that we don't know how risk factors are contributing (or not) to the continuing decline in rates of heart and vascular disease.

"For the Australian population as a whole, there have been:

• favourable trends in smoking rates and blood pressure levels
• little evidence of national change in blood cholesterol levels
• unfavourable trends in physical inactivity, obesity, and diabetes prevalence.

It is not possible to say how these trends have combined to affect the overall risk of CVD for Australians." Extract from Cardiovascular disease mortality: trends at different ages (AIHW)

Your thoughts?…

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