Pearls and Irritations

A regular collection of links to writings and broadcasts in other media

ABC’s Saturday Extra with Geraldine Doogue (from 0730 to 0900 or on their website  in case you miss it).

Iran’s leaders vs Iran’s people: the recent protests in Iran and the violent response to them highlight the growing divide between an ageing leadership and the general population.

African leadership: that continent is being held back by some old-guard leaders. They need to be replaced by a new generation who understand the values and ways of the wider world, argues Kingsley Okeke, managing editor of African Leadership magazine. Continuing our occasional series on African politics.

Let’s talk about tech, baby: Financial Times‘ global business correspondent Rana Foroohar traces how Big Tech firms have become the new “too-big-to-fail” institutions. But this time it’s not just our economies that have been taken hostage; it’s our politics and our minds.

Father of lions: Louise Callaghan tells the incredible true story of Abu Laith, “the Father of Lions”, who saved the animals of Mosul Zoo when the city was occupied by ISIS.

The Pick, December: in our final edition of The Pick for 2019, guests Caitlin Byrne, director of Griffith’s Asia Institute, and Jonathan Pearlman, editor of Australian Foreign Affairs, tell you what to watch, read and listen to this summer.

Other commentary

How to win an election when you have no policies and a pathetic economic record

That would be a fitting sub-title for the Liberal Party’s Review of the 2019 Federal election Campaign.

In comparison with Labor’s  review of its 2019 election campaign, it differs in two key aspects.

First, it is almost completely devoid of mention of policy. It simply asserts that the Liberal Party was “the party with the strongest economic plan”, without any explanation or justification. It’s a statement by two men (one of whom is a foreigner) who simply know that Morrison and his colleagues are the right people to hold high office in Australia.

Second, although it bears the word “review” in its title, it’s really a tactical plan for the next election. Much of it is about technical administrative detail, which would be a good guide for any party. Fund-raising, grooming candidates to run in marginal seats and developing marketing plans for the next election should get underway early (nothing about policy) – although its authors don’t think the party needs to be in a hurry to nominate candidates for marginal seats.

It’s an acknowledgement that the Dutton-Morrison Government is in a perpetual political campaign mode, rather than in a governing mode. It sees Labor not as a rival but as an enemy, and independents as a threat to its plan to transform Australia from a parliamentary democracy to an elected executive dictatorship.

It fails to acknowledge the most successful aspect of the party’s overall strategy – its willingness to put aside policies that would secure the nation’s economic prosperity for the sake of winning an election. Winning for the sake of winning.

It lavishes praise on Scott Morrison, but shows no acknowledgement of or gratitude towards others who helped return it to office – Clive Palmer, the Murdoch media, and those ABC political journalists who let moral relativism, expressed as a concern for “balance”, override journalists’ obligation to expose ministers’ use of spin, selective data, illogical arguments, sophistry and lies.

Why is Morrison spending down his political capital?

In the last week of Parliament Morrison scored a “win” by persuading Senators Hansen and Lambie to support repeal of the Medevac bill. But why was be so determined, when public opinion has been strongly in support of this small departure from Dutton’s cruelty to asylum-seekers? Similarly, why has Morrison stood so solidly behind Angus Taylor?  Why is the Morrison Government, which started with very little political capital in the bank, spending it down so quickly?

Commenting on Morrison’s stubbornness Laura Tingle, writing on the ABC website, sees machismo at play: he must not be seen to give the slightest bit of ground to the other side.

(Maybe it’s just dumb machismo, but could it also be about Morrison’s contempt for Parliament – a demonstration that any attempt by Parliament to assert its authority is an assault on executive government, whose authority has been legitimised by Morrison’s “miraculous” re-election.)

Economic indicators

GDP – no longer in the slow lane: we’re in the breakdown lane

The September quarter national accounts were published on Wednesday. The quarter saw a three per cent jump in household disposable income, reflecting the impact of tax cuts.  But people didn’t go out shopping to spend their tax cuts as the Treasurer had hoped.

To bypass the political spin, see the GDP summary on the ABS website.  Net exports and government spending were the main drivers of economic growth, which limped in at 0.4 per cent for the quarter, seasonally adjusted.  Most worrying is a fall in private investment (private capital formation): this is probably one reason for our positive balance on current account, because our net export figure results not only from high iron ore prices, but also from a slowdown in imports of capital equipment.

It’s hard to see what anyone in the Morrison Government has to crow about. The graph below shows trend growth in GDP and in per-capita GDP, the difference being accounted for by population growth. There was no pickup in either series. In the September quarter 2018 our real GDP per capita was $18 694; in the September quarter this year it has risen by $19 to $18 713. That’s almost enough to buy a copy of The Telegraph each week to read Frydenberg’s account of how well the economy is travelling.

Don’t expect incomes to rise any time soon: productivity is falling

“Productivity isn’t everything, but in the long-run it’s nearly everything” said Paul Krugman.  If productivity growth stalls there is no way to achieve a sustainable growth in incomes.

The ABS has produced estimates of labour productivity and of multifactor productivity  (Multifactor productivity brings both labour and capital productivity into account) over the last 22 years. On both measures productivity is in negative territory. The graph below, drawn from the ABS series, shows changes in labour productivity. The plunge started when the Coalition was elected in 2013.

“People are going to lose out big time if we don’t have tax reform”

It’s ten years since then Treasury Secretary Ken Henry presented the Rudd Government with his report Australia’s future tax system review. Since then hardly any of the review’s recommendations have been implemented. (Two of the reforms he recommended, a carbon tax and a resource rent tax, have actually been unwound.) On the ABC’s The Business program Henry is in an extended interview with Michael Janda. The essence of Henry’s message then, and now, is that we are collecting too little tax, and the way we collect tax holds back opportunities to improve our productivity. (35 minutes)

His interview covers the accumulating economic cost of our failure to reform our tax system. He covers our failure to collect a carbon tax, our over-reliance on personal income tax, our failure to implement road user charging, the economic distortions of state taxes (royalties, property transfer taxes), the distortions of our tax incentives that favour housing speculation over productive investment, the diminishing revenue from the GST, and the folly of introducing tax reform in piece-meal steps rather than as a package. He also discusses general structural deficiencies in the Australian economy, and how tax policy reform would boost productivity.

Towards the end of the interview there is a discussion of issues associated with banking (he was Chair of the NAB), and he finishes on general observations on Australia’s economic prospects: are our present economic problems cyclical or structural?

(On the ABC’s Breakfast program is a ten minute extract from the interview.)

A Liberal Party elder on Morrison’s public service “reforms”

On Friday’s ABC Breakfast program, in an interview with Geraldine Doogue, John Hewson provides his assessment of Morrison’s decision to amalgamate government departments – a decision based much more on “ideology and prejudice” than on anything to do with improving service delivery. Merging education with employment is “demeaning education to the point where it’s only relevant from the point of view of skills development, employment and jobs, not the broader dimensions of education”. Hewson sees the reforms in terms of Morrison’s particular approach to his job: “he’s a marketing guy; he’s not a person who’s interested in good government or evidence-based policy”.

He asks what sort of society we want to build – do we want education, the arts and care for our environment all to be subsidiary to a jobs and growth agenda? (10 minutes)

PISA – falling school education achievement

Our PISA report card

There was a great deal of media attention to Australia’s dismal results in the 2018 OECD Programme for International Student Assessment (PISA). It’s a triennial survey of 15-year-old students in 79 countries, testing their ability to apply reading, mathematical and science knowledge. Rote learning of the 3Rs won’t achieve a good score: PISA is about students’ capacity to think through and solve problems, drawing on what they have learned at school.

You can read the PISA Country Note for Australia. Its most significant finding is a steep fall in all three areas of assessment (reading, mathematics and science) since 2000 (p.4) It finds that Australia’s scores are generally “most similar to those of students in Germany, New Zealand, Sweden, the United Kingdom and the United States”.

One finding to have received little media coverage is that Australian students with an immigrant background achieve higher scores than non-immigrant students – the opposite to the general finding in OECD countries, where generally immigrant children perform more poorly. (p.7)

Our rankings in comparison with other countries can be found in the PISA Insights and Interpretations document. In all three areas of assessment students in China’s main cities Beijing, Shanghai, Jiangsu and Zhejiang) top the rankings, and other ethnic Chinese countries  also do well. Australia’s score in all three areas has even slipped behind the UK! Contrary to claims of the Commonwealth Government, the survey finds a positive relationship between education spending and performance – but at high levels of spending there are diminishing returns.

(Is it of any concern to Morrison that our education standards may be be slipping? Analysis of the May election results confirms that more educated Australians – those with a capacity for analysis and critical assessment of politicians’ spin – turned away from the Coalition.)

More detail on Australia

Writing in The Conversation, Sue Thompson of the Australian Council for Educational Research presents some more findings, including a plot of performance over time for various countries and a comparison between Australian states.

Why has our PISA assessment fallen? Comment from Australian experts

Sue Thompson is also part of a panel on an ABC Breakfast discussion about the reasons our performance has fallen. Other panellists are Mark Scott of the NSW Department of Education and Steven Kolber, a literacy improvement teacher at Brunswick Secondary College. The panellists offer explanations for our particularly poor performance in mathematics, including relaxed university pre-requisites and a lack of specialised and adequately-prepared mathematics teachers. (Has the finance sector appropriated all our mathematical talent?) On funding, the government correctly claims that education spending has increased, but that does not necessarily mean we are providing more resources per student, and 80 per cent of that increased funding has gone to the most advantaged schools. (19 minutes)

Australia’s lost students

There are 50 000 young Australians of compulsory school age whose capacities in reading, mathematics and science have no bearing on our PISA scores because they’re not at school. Writing in Open Forum, Jim Watterston, Dean of the Graduate School of Education at the University of Melbourne, reminds us of this neglect – Rescuing Australia’s lost students. “Australia doesn’t effectively track students that disappear from the education system and, for the most part, it seems that nobody has been in a hurry to locate or reconnect them.”

A conservative’s guide to Modern Monetary Theory

On the ABC’s Future Tense Anthony Funnell talks with four leading economists, all enthusiasts for Modern Monetary Theory (29 minutes). Funnell also has an article explaining MMT on the ABC website.

It’s easy to misrepresent MMT as something way out from left field, or as the sort of irresponsible free-spending approach that brought hyperinflation to Venezuela and Zimbabwe. But as Peter Martin and other economists explain, it’s based on conservative economic theory: even Bob Menzies could be seen as one guided by the principles of MMT. Its emphasis is on keeping resources fully-employed, while avoiding the inflationary situation of spending exceeding the economy’s productive capacity.

Proponents of the theory do themselves and the public a disservice with the adjective “modern”, because in many ways MMT is simply a return to mainstream Keynesian macroeconomic theory that dominated from the 1930s until the emergence of neoliberalism in the 1980s. The forty-year experiment with neoliberalism, with its emphasis on “small-government”, balanced budgets, and a policy of leaving economic stabilisation to monetary authorities (the Reserve Bank in our case) has demonstrably failed.

In Australia the Morrison Government’s balanced budget obsession and its reliance on monetary levers has not only led to an “output gap” (meaning the economy is operating below its capacity), but also to hyperinflation in the housing market.

The economists point out that the impediment to breaking from neoliberalism’s straitjacket is political. Both main parties are obsessed with the fiscal balance, mainly because so-called fiscal responsibility is an easy message to sell to a public reliant on media that patronisingly cover economics in dumbed-down terms.

Without being quite so radical as to mention MMT, Ross Gittins has advice for Morrison in line with MMT: Lowe should rescue a PM lost in the Canberra bubble. That bubble holds a belief that achieving a budget surplus should be the Morrison Government’s prime economic and political aim. But he warns of previous governments’ austerity policies that have had high political costs, because of the economic damage resulting from austerity.

In words reflecting the concerns of Reserve Bank Governor Lowe, Gittins writes “Conventional monetary policy (interest-rate manipulation) has lost most of its power because household debt is at record levels, because the official interest rate is almost at zero, and because rates are already so low that another few cuts won’t make much difference”.

Is India dealing itself out of Asian prosperity?

Last month 15 Asia-Pacific countries agreed to sign the Regional Comprehensive Economic Partnership. India was not one of them. Writing in The Japan Times Ramesh Thakur of ANU (and a regular writer for Pearls and Irritations) describes how Prime Minister Narendra Modi, whose rhetoric is about supporting multilateral deals, got cold feet at the RCEP meeting. He has “effectively mortgaged India’s economic future and its rise as a comprehensive national power because, long-term gains notwithstanding, he took fright at the short-term economic pain and adjustment costs of integrating with the world’s most dynamic and fastest-growing region.”

Polls and surveys

BludgerTrack is back

After a discontinuity around the polling inaccuracies before the federal election, William Bowe has re-launched BludgerTrack. BludgerTrack plots all available poll results, and with appropriate weighting for sample size and recency, applies trend lines through the results, effectively removing the noise of sampling errors. It cannot remove biases common to all polls, such as the “shy conservative” bias, but BludgerTrack is an excellent exposure of trends: it certainly exposed the trend back to the Coalition in the months before the May election. So far Bowe has only about 50 post-election data points covering polls on Morrison-Albanese satisfaction and Morrison-Albanese preferred prime minister. A cautious interpretation of these trends is that Morrison may have peaked on these measures in September. Presumably Bowe will add voting intention when there are enough data points.

He has a page on the UK election: British election polling in five charts. Anyone who believes a commanding Tory majority is a laid-down misère could be surprised.

Bowe also summarises a report prepared by the Liberal party on the Victorian state election which the Coalition lost so badly in November 2018. One problem was that opposition leader Matthew Guy had little recognition in the community.  (It’s apparent that Morrison learned from Guy’s lack of recognition.) It also found that the tough-on-Afro-gangs scare campaign did not resonate with voters, who were more interested in government services.

We believe in respect for religion, but we don’t like religious discrimination in employment

Monica Wilkie and Robert Forsyth have written a report Respect and division: How Australians view religion, published by the Centre for Independent Studies. Close to 80 per cent of Australians agree that “respecting religious traditions and beliefs should be an important part of a multicultural society”, and a small majority (54 per cent) believe that “all Australians should be free to express a religious perspective alongside other views when participating in public debates, even when others find that view offensive.”  But almost two thirds of us believe that “no organisations should be allowed to refuse employment on religious grounds”.

Islamophobia is still strong in Australia

A group of researchers at Charles Sturt University has compiled the second report of Islamophobia in Australia, analysing incident reports to the Islamophobia Register Australia.  Most victims (72 per cent) were women, while most perpetrators (73 per cent) were men. Almost all of the women subject to attack were wearing clothing generally associated with Islam. By state, victimisation was generally proportional to each state’s population, except for Queensland, where victimisation was disproportionately high. Most worrying is that in those cases where bystanders were present, half of those people passed by without paying attention to the incident.

Australians believe multiculturalism has been good for our country

That’s one of the findings of the 2019 Scanlon Foundation survey Mapping Social Cohesion. Significant majorities believe that “accepting immigrants from many different countries makes Australia stronger” (68 per cent) and that “Multiculturalism has been good for Australia” (85 per cent). Over the last six years this support has strengthened, with more people being in “strong agreement”. But there is a degree of polarisation, with a steady growth in those who “strongly disagree”.

Older people and those with limited education are more likely than younger and more educated people to be somewhat negative towards immigration. But a significant proportion of people across all demographics are concerned about the impact of immigration on the environment and on house prices.

Contrary to the belief that there is a strong backlash against globalisation, 70 per cent of Australians believe “growing economic ties between Australia and other countries, sometimes called globalisation” is “fairly good” or “very good” for Australia.

The survey finds that while few Australians express a negative attitude to Christians, Buddhists and Hindus (generally less than 5 per cent), around 40 per cent have a negative attitude towards Muslims.

It also asks more general questions on attitudes and concerns. While “economy/unemployment/poverty” remains people’s major concern, over the last six years there has been growing concern over “environmental issues”. (So why has Morrison decided that the environment Department will be absorbed into the Agriculture Department?) There is a declining concern over “quality of government”: concern peaked in 2014, when Tony Abbott was elected. But there remains a low level of trust in the Commonwealth Government. The Rudd Government in 2007 had the best score.

The Economist releases the mother of all US polls

The Economist has provided a link to 255 recent YouGov polls on different aspects of US federal politics. Take your pick. You can see in poll #37 that Democrats and people with high incomes are paying more attention to the 2020 election than Republicans and people with low incomes. Poll #40A reveals that 45 per cent of voters believe Trump will not win the election while 39 percent believe otherwise. Poll #61A finds that 69 per cent of Americans have a favourable opinion of Britain’s Queen Elizabeth …

Why is neoliberalism associated with authoritarianism?

We tend to assume that governments pursuing neoliberal policies are also authoritarian on social issues and antidemocratic. This may be so, but is there any reason to believe this connection is inevitable? After all, neoliberalism rests on an ideology of minimum interference in people’s economic decisions.

Addressing that question, the Institute for New Economic Thinking has a transcript of the Institute’s Lynne Parramore’s discussion with political theorist Wendy Brown. How Neoliberal Thinkers Spawned Monsters They Never Imagined. Brown is author of In the ruins of neoliberalism: the rise of antidemocratic politics in the west.

Remembering the Cold War – Nukes for Australiia

Social Scientist Sue Rabbitt Roff has been digging through the UK government archives and has found a file of correspondence between Prime Minister Robert Menzies and his UK counterpart Harold Macmillan, begging for the British to provide Australia with the technology to make nuclear weapons, or failing that, to supply us with “ready made” nukes. Forefront on his mind was supposed Soviet influence in our region. Her article How Menzies Begged Macmillan For The Bomb is in the current edition of Meanjin.

News from the grammar wars

John Richards, founder of the Apostrophe Protection Society, announces that its closing it’s doors. The apostrophes’ rules are just too hard for mere mortals to follow – its better to go with the flow than to worry about those annoying old teachers rules. He says that ignorance and laziness’ have won the war.

Saturday’s Good Reading and Listening  is compiled by Ian McAuley

Watch out tomorrow, Sunday, for Peter Sainsbury’s Sunday environment round up.

Share and Enjoy !

SHARE TWEET SHARE COPY EMAIL PRINT