Saturday’s good reading and listening for the weekend

Jan 30, 2021

What people in other forums are saying about public policy


The Australian economy – limping along without a destination

Forget about zero emissions by 2050: we must hit zero by 2035

“To be consistent with the Paris Agreement goal of limiting global warming to 1.5°C, Australia’s 2030 emissions reduction target must be 74% below 2005 levels, with net-zero emissions reached by 2035.”

That’s the main finding of the report Australia’s Paris agreement pathways: updating the Climate Change Authority’s 2014 emissions reduction targets, prepared by the Climate Targets Panel, an independent group of Australia’s most senior climate scientists and policymakers. It has a star-studded cast of authors – John Hewson AM, Professor Will Steffen, Professor Lesley Hughes and A/Prof Malte Meinshausen.

The mounting cost of inaction on climate change

In comparison with the horror summer of 2019-20 this summer is turning out to be comparatively benign. So it is timely that the Climate Council has produced a report – Hitting home: the compounding costs of climate inaction – pointing out the costs Australia has incurred so far because of disasters caused or aggravated by climate change, and with warnings of future costs:

On a per capita basis, economic damages from extreme weather disasters in Australia were around seven times the global average. While slightly lower than those for the US, they were far greater than for other developed countries including New Zealand, Canada, the UK and the average across European Union countries.

Climate change is causing not only more aggressive droughts, heatwaves and bushfires, but also floods and downpours.

The report draws on well-documented research, illustrated with case studies from Australia and around the world. One telling finding is that within Australia, Queensland is the state most adversely affected by climate change. Yet Queensland is where Coalition politicians are most strident in their opposition to action on climate change.

Michael Mazengarb has a prepared a summary of the report on Renew Economy, which also outlines the political context of the venture: New climate panel says Australia needs to aim for net zero emissions by 2035.

The 2020 Boyer Lectures – an entrepreneur with a vision

Because of pandemic-induced delays, the 2020 Boyer lectures have been pushed into January-February of 2021. This year’s lectures – Rebooting Australia: How ethical entrepreneurs can help shape a better future –  are delivered by Dr Andrew Forrest – better known as “Twiggy” Forrest, former CEO and now non-executive chair of Fortescue Metals Ltd.

His first lecture, Oil vs Water — Confessions of a carbon emitter, was delivered last Sunday.  It’s largely about how Australia can develop a world-competitive steel industry using hydrogen generated from renewable resources. Instead of sending iron ore and metallurgical coal overseas for other countries to process, while contributing to CO2 emissions, we can do the value-adding here using green technologies. He goes into many other renewable projects as well.

There is a fair bit in his talk about Fortescue’s plans. Some cynics may see this lecture as public relations, and some may see it as a pitch to raise capital to raise funds for these schemes. Some may even see a little Western Australian exceptionalism: the big projects will be in the Pilbara, of course, and Forrest uses the program to remind us of his Western Australian roots.

But his message is worth considering at face value. It’s a reminder of what Australia can be with a little entrepreneurship and imagination (rather than Morrison’s model of an Australia as a quarry serving rent-seekers and property developers). Forrest puts some figures around his vision – 400,000 skilled jobs in construction and engineering “more than what’s required to replace every job in the coal industry”.

His lecture reminds us how meaningless it is when people talk about “the business community”, as if there is some cabal of cloned besuited businesspeople united in a desire to preserve Australia’s existing carbon-intensive industrial structure.

The lecture is 29 minutes. The ABC has a shortened transcript, but it leaves out some of the more engaging parts of his lecture.

The IMF’s economic outlook: Australia’s fiscal policy is on the wrong track

The mainstream media has reported on the IMF’s January update of its World Economic Outlook, which projects world growth to be 5.5 per cent this year and 4.2 per cent next year, but without any basis for comparison these figures are pretty meaningless. You need to dig into the report for some of the more noteworthy figures.

The 5.5 per cent projection for this year is an update to its 5.2 per cent projection made just three months ago. Projections for the US have been substantially lifted, while projections for Europe, particularly the UK and Italy, have been downgraded. The IMF also reports that China, the only country not to have gone backwards in 2020, should have growth of 8.1 per cent this year and 5.6 per cent next year.

The report makes no projection for Australia, but an Excel data file that can be downloaded from the site projects Australia’s growth to be 3.5 per cent this year (up 0.5 per cent on its October projection) and 2.9 per cent in 2022 (up 0.1 per cent).

There is a short version on a two-minute video, also accessible from the site. (Turn the sound off: it’s bloody annoying.)  It has four suggestions of where fiscal support should be directed. To quote:

    • invest in health care now;
    • support displaced workers and viable firms;
    • address inequality;
    • invest in green and digital infrastructure.

Treasurer Josh Frydenberg must surely be perplexed by the omission of “tax cuts for the already privileged”.

Consumer prices – weak demand all around

On Wednesday, the ABS released the Consumer Price Index for the December quarter, showing a quarterly rise of 0.9 per cent and an annual rise of 0.9 per cent. They equate by coincidence because the 1.9 per cent fall in the June quarter exactly offsets rises in other quarters.

We have done a rough calculation of what the CPI would be if we removed items subject to increased government charges or withdrawal of support – not to criticise these charges, but to see how much they have influenced the CPI in this quarter. Once we removed child care (where subsidies were withdrawn), tobacco, urban transport and pre-school fees, we calculated that there had been no change in the CPI. Basically this means that firms in the market sector have no capacity to raise prices. The only significant sector to show some price increase is domestic holiday travel and accommodation: that’s no doubt a seasonal effect and the result of increased demand from people travelling after long periods of lockdown.

Of course no government sees inflation as desirable, but when there is no rise in prices the most likely explanations are that firms have plenty of spare capacity and that demand is weak.  It’s not quite deflation, but it’s not the good news some media are reporting.


The rest of the world

From Trump to Biden

Every week on Late Night Live – usually on a Tuesday evening – Phillip Adams interviews Bruce Shapiro of Columbia University on what’s happening in the USA.  Always good listening.

This week he has made it into a three-way discussion by bringing in Fintan O’Toole, specifically about the transition. Although both are learned and liberal followers of the USA, one native, the other a sympathetic foreigner, with many shared perspectives, Shapiro seems to be a little more optimistic than O’Toole.

Shapiro is shocked by the attack on Congress, noting that many of the mob were well-off members of the middle-class, but he sees the strife as having precedents in US history. O’Toole sees the issue of the “stolen election” through the eyes of the demonstrators: it’s not about some fraudulent votes; rather it’s about fraudulent voters. The American polity belongs to real – i.e. “white” – Americans. This is the Republican base and they won’t abandon that base because without it they would be unelectable. (O’Toole leaves it to the listener to see the similarity with Hitler’s rise to power.)

Shapiro sees Biden’s task as akin to that faced by F D Roosevelt in 1933, while O’Toole sees the task as a struggle to preserve democracy. (34 minutes)

The making of an intellectual, articulate Trump

We may picture Missouri as a state that would elect to the Senate an older, hard-talking, firebrand conservative who wears anti-intellectualism as a mark of honour. Indeed it was a Missouri senator who promoted the conspiracy theory that the election was stolen and who was the first to say he would challenge Biden’s election victory.

But the stereotype doesn’t fit. We’re referring to Senator Josh Hawley, a 41-year-old graduate of Stanford University and Yale Law School, whose fellow students and teachers at Stanford remember him as a deeply engaged, idealistic, and clear-thinking scholar. They recall him as a conservative in the Burkean tradition – a tradition that respects the established institutions of government. They also recall him as an ambitious man intent on developing for himself a pathway to the presidency.

SBS News has a short biography of Hawley by Eden Gillespie, including a photograph of him waving in support of the mob about to storm the Capitol. It reports on how Republican elders, such as Mitt Romney, have rebuked him for his complicity in the insurrection, and suggests that his run for the 2024 Republican presidential nomination has come to an end.

Politico has an article by Ruairi Arrieta-Kenna and Emily Cadei,  The education of Josh Hawley, which draws on recollections from his classmates and teachers who are shocked and dismayed by the political path he has taken. They all acknowledge his political conservatism, and his openness in describing himself as a conservative Christian. They all throw some light on his intellectual formation, but are unable to explain his embrace of a Trumpian political path – the path of “a mindless follower” to use the words of his literature and culture professor, who recalls him as a principled conservative.

It is worthwhile following the link in the Politico article to a New Republic article Is Josh Hawley for real?. The author, Alexander Zaitchik, suggests that far from being a “mindless follower”, Hawley is a disciplined adherent to post-liberalism, a theocratic anti-Enlightenment philosophy that rejects reason as a basis for laws and government. Zaitchik writes: “The post-liberal project seeks to cage the furies loosed by Donald Trump and put them at the service of an intellectually coherent movement without the baggage of a leader accused by multiple women of rape.”

What’s that island you see below when you fly from New York to Paris?

Tony Blinken, Secretary of State in the Biden administration, “is a Francophile, multilateralist and believer in international institutions and American interventionism”, writes Paul Mason in Social Europe. Provided that far-right isolationist movements do not undermine Biden’s agenda, the strongest relationship to emerge over the next four years will be between the US and the EU, largely bypassing the UK.

His article, Unsplendid isolation: Britain after ‘Brexit’, is mainly about the foolishness of Boris Johnson’s idea that somehow the UK could become a world power on its own. “If Biden’s Democrats can ride out two terms in office, and if Paris, Rome, Madrid and Berlin can stay roughly on the same page on strengthening the European project, the neocolonial fantasy of the British right — in which the UK plays the geopolitical role of a footballing libero — is over”. He describes Britain outside the EU as “poor, isolated and destined to disintegrate”.

Deutsche Welle has an article reporting on phone calls and video hook-ups between Washington and European capitals – who has called whom and in what order.  The placegetters in the dating race, in order, are London, Paris and Berlin.


Public ideas

The moral causes and consequences of economic growth

That’s the title of Joe Walker’s latest Jolly Swagman podcast, an interview with Benjamin Friedman, former Chair of Harvard’s Department of Economics, and author of Religion and the rise of capitalism, released on Tuesday.

The interview is in two reasonably distinct parts.

The first part is about why economic growth matters, and in particular how the distribution of the benefits of economic growth matters. What is the reference point by which we judge our economic fortune – our own progress, or how we compare with others? Friedman challenges both the “rising tide lifts all boats” theory and established social comparison theory.

The second part is about the influence of religion on economic ideas, particularly mainstream Protestant moral theology. When Protestantism shook off the Calvinist idea of predestination, it allowed the idea of human agency and responsibility to flourish, influencing the ideas of Smith, Hume and other philosophers. Economics is still influenced by religious thinking, but that thinking is more akin to a Zeitgeist, shaping the moral ideas of believers and non-believers alike, rather than a specific body of doctrine.

Friedman is a devoted follower of Adam Smith, but he makes the point that Smith did not deal with technological change. Although he lived as the industrial revolution was getting under way, Smith’s focus was on specialisation and the division of labour rather than technological change as the driver of economic growth.

The interview is 85 minutes long, but Joe has provided a transcript.


Australian society and politics

What January 26 is about

The arguments about the meaning of January 26 continue. You can see a short video clip of Stan Grant, Wiradjuri man, at the vigil in Barangaroo on the evening of January 25, or read his article January 26 is a reminder that Australia still hasn’t reckoned with its original sin. (We suggest both.)

On Late Night Live Phillip Adams interviewed Marcia Langton on proposals for an indigenous voice to parliament. On the meaning of January 26, she notes that young Australians, of all backgrounds, are generally turned off by the “jingoistic mythologising” around the occasion. (23 minutes)

The question whether there should be a voice to parliament or to government is a moot point, Langton says. Whatever arrangement is adopted must have the confidence of all Australians, and it must be enduring. It should be primarily a policy body without responsibility for funding programs: that’s a role for other bodies.

Over the past year Marcia Langton and Tom Calma have coordinated the work of 52 people to prepare proposals for how an Indigenous voice might work, on both a national level and on regional levels. You can download their report from the National Indigenous Australians Agency. Langton stresses that in their report, with an aim to encourage widespread engagement, they have deliberately left many items open for further input: see the Agency’s have your say website.

What official awards are about

The award of Australia’s highest civilian honour, the Companion of the Order of Australia, to Margaret Court, has brought forth a great deal of criticism. Court is now a Pentecostal minister with her well-recognised tennis achievements behind her.

In response Alistair Macrae, a minister of Wesley Uniting Church and past president of the Uniting Church in Australia, is handing back his Order of Australia. Commenting on Court’s expressed views on LGBTI people he says: “As a minister and theologian, I am aware that bad theology kills people.” He goes on to remind us that “Jesus’ life was characterised by openness and welcome to all manner of people excluded from full participation in their communities, often on religious grounds”.

Frank Bongiorno, also a recipient of the Order of Australia, writes in Open Forum that public confidence in our national honours system has fallen to a low level. While our awards system, with its community nomination process, is far better than the imperial honours system it replaces, it still has flaws. The Council for the Order of Australia “has now, by its actions, effectively told the Australian people that it considers the public denigration of LGBTQ people to be within the field of legitimate behaviour by those receiving its very highest honour”, he writes.

Who’s funding election campaigns?

Over the twenty years from 2000 to 2019 Coalition parties collected $15 million in donations from the resources and energy industry, three times the amount the industry gave to Labor. These amounts have been dwarfed, however, by the $116 million from Clive Palmer’s Party to his United Australia Party.

These are some of the figures in the Centre for Public Integrity’s case study on donations from the resources and energy industry. The Centre calls for what should be uncontentious reforms to laws around political donations: dollar caps on donors, parties and candidates, real-time disclosure of donations, stricter definitions of donations to cover means of laundering donations through third parties, prohibitions on splitting donations to get under present caps, and more public resources devoted to compliance.

The report pays special attention to donations in 2019. Second to Clive Palmer’s $83 million the next largest donor was the Minerals Council of Australia, which split its $33 million donations strongly in favour of Labor, as did some smaller donors – a useful hedge when Labor was ahead in the polls.

The Minerals Council spells out what it expects from government – lower taxes and a raft of public expenditure on research, surveys and exploration to benefit the industry. It doesn’t specify where the offsetting fiscal cuts should be made.

There is a brief summary of the Centre’s case in a press report, originally published in The Age.

Should Google and Facebook be forced to support News and Fairfax?

In the discussion on last week’s roundup, comments were exchanged on proposed legislation relating to Google and Facebook. We had not raised the issue but Ken Dyer led the discussion in the comments.

The legislation seeks to see that traditional media organisations are paid for news revealed in Facebook’s news feed and in Google’s search function, and is in response to the ACCC’s suggested News media bargaining code – a code developed at the government’s request.  The Treasurer, in the bill’s second reading speech, said “we are seeking to create a level playing field where market power is not misused and there is appropriate compensation for the production of original news content”.

Ken Dyer commented that “the proposed impost has no merit other than to provide Newscorp and other media organisations with additional revenue”. (That view is held by many others who are concerned about the legislation.) If, in response, the companies withdrew those services from Australia, News Corporation would be left with “a virtual monopoly on dissemination of information”, and we would lose the convenience of Google.

Andrew McRae made the point that when one does a Google search on a news item, all that one sees most of the time are a few “links and snippets” – those links taking the searcher to a headline on a paywalled page: “if you follow a Google link to The Australian or The Hun or Tele you end up being blocked by Rupert’s paywall”. (It’s truly annoying when one is searching for a document to have to go through scores of those identical snippets.)

Kim Wingerei, writing on Pearls and Irritations and on Michael West Media, sees “no good business case for the changes”, and points out that Tim Berners-Lee, the inventor of the world wide web, in his submission to the Senate inquiry said that the ability of web users to link to other sites was “fundamental to the web” and that the proposed media code could break that ability because the changes risk setting a precedent that “could make the web unworkable around the world”.

Tim Dwyer of the University of Sydney, writing in The Conversation, draws attention to the financial self-interest Google and Facebook have in the present arrangements: Is news worth a lot or a little? Google and Facebook want to have it both ways. Their threat to withdraw from Australia puts them in a strong bargaining position.

The fight is not about fair compensation for journalism; it’s about who gets what slice of money spent on advertising. Wingerei gets to the heart of the problem when he points to the collapse of the old model of advertising paying for news: “It was always a flawed model where advertisers and other vested interests directly and indirectly influence what gets published and how.”

News, particularly when it is liberated from the confines of physical print, is what economists call a “non-rival good”, meaning that once produced its cost of dissemination is zero. Conventional markets do not provide such goods efficiently; if these goods are to benefit all there must be creative ways of funding them. In recognition of the public good nature of news, one solution is public broadcasting. Then there are annual subscriptions used by quality journals, magazines and newspapers: we might notice that some of the best such media have very little advertising but reasonably high subscription charges, while, at the other end of the spectrum is news.com.au, which squeezes a few snippets of cut-down news in between a roiling sea of gaudy advertisements.

The proposed legislation does nothing to diminish the market power of Google and Facebook. All it would do is to channel some of these firms’ massive profits into the Coalition’s pet media: Wingerei sees News Ltd as “effectively a propaganda arm of the LNP Government”. So long as the tech giants have such market power they will be making high profits, which are channelled back to the US after being laundered in a few tax havens. Australia should be lending support to governments in EU countries that are trying to extract a fair share of taxes from these firms, in the face of trade retaliation from the US.

Also not addressed is the very nature of social media and search engines. These too have public good characteristics; why should they be funded by advertising? Search engines in particular use established generic technology, made complex only by their algorithms that try to match searchers with advertising. They could be funded in the same way as Wikipedia, or by a body such as the EU, as a shared public good.

More on social media – we want them reined in

The Australia Institute has published polling on The public’s expectations of social media companies. A large majority (75 per cent or more) believe they should be transparent about how their algorithms influence content in users’ feeds, take steps to stop the spread of misinformation, be more active in blocking people who breach codes of conduct, be held accountable for content on their platforms, and ban anonymous accounts.

Although right-wing parties have benefited greatly from fake news and anonymous accounts, Coalition supporters are even more in support of the strong regulations covered in the survey than other voters.

Party loyalty is overriding national interest

Barnaby Joyce has been on again about coal, and even more recently he has attributed power outages in parts of Sydney to electricity supply shortages (obviously because greenies have been impeding the construction of coal-fired power stations.)

No, that’s not the cause of the outages, writes Sophie Vorrath on Renew Economy. The outages resulted from cable faults: there was plenty of supply capacity on the days of the outages – a fact Joyce could have easily checked.

It’s an example of the ease of spreading false news through use of a plausible but wrong explanation of events.

Quite apart from the Trumpian fake news aspect, her article Barnaby Joyce shows why a Coalition government may never embrace climate action illustrates how, even if a majority of the Coalition sought to take responsible action on climate change, just a handful of members could block any proposal by threatening to dissent.

Labor has its own Barnaby Joyce in Joel Fitzgibbon, who has succeeded in having Mark Butler removed from the climate portfolio. (Fitzgibbon’s sole concern is with employment in the Hunter, according to independent media reports.)

This isn’t the way parliamentary democracy is meant to work, allowing a handful of recalcitrants to thwart policy that’s in the national interest when in all probability, a clear majority of our elected representatives would be in favour of a responsible policy on climate change. It’s a sickness of the particular form of parliamentary democracy we have inherited from Britain, even though there is nothing in our constitution binding us to that dysfunctional model.


The pandemic’s progress

Australia

By now (Friday 29 January) we’ve gone 12 days since the last detected case of community transmission, as shown on the graph below. Although some of the cases over the past four weeks have been detected in Victoria and Queensland, all stem from the December outbreaks in New South Wales, which in turn result from failures in external border controls. In spite of the presence of much more contagious strains of the virus, we still haven’t improved our quarantine measures. New Zealand’s outbreak is a reminder of the risk of using hotels for quarantine.

One figure we don’t often mention is the number of deaths from Covid-19.  The last reported death in Australia was on December 27 and the previous reported death was on October 27. As at Thursday there were only 21 Covid-19 patients in hospital, none of whom were being ventilated or were in intensive care units.

The rest of the world

The Lowy Institute has produced a Covid Performance Index, an interactive website designed to throw light on the question “what impact have geography, political systems, population size and economic development had on Covid-19 outcomes around the world?”.  Smaller countries have generally coped better than larger countries, but there are exceptions. Whether countries have democratic or authoritarian governments seems to make little difference, but the level of trust people have in government may be a factor explaining countries’ performance.

It has ranked the 98 countries surveyed, with New Zealand the top. The USA is at position 94, ahead of Iran, Colombia, Mexico and Brazil.

On Norman Swan’s Coronacasthe interviews Herve Lemahieu of the Lowy Institute about the project.

We have updated our regular chart on Europe and the US. In both the US and the UK cases have peaked, but in the UK deaths are still rising: its death rate per million population, just on 1500, is close to the highest of any country for which reliable data is recorded.  Given the normal lags we may see some reduction in the UK’s death rate in the coming weeks.

In the rest of Europe there is considerable variation between countries, as shown in his chart of case rates in the 27 EU countries.

Covid-19 is spreading inequality

“The virus has exposed, fed off and increased existing inequalities of wealth, gender and race. Over two million people have died, and hundreds of millions of people are being forced into poverty while many of the richest – individuals and corporations – are thriving. Billionaire fortunes returned to their pre-pandemic highs in just nine months, while recovery for the world’s poorest people could take over a decade.”

That’s how Oxfam summarises its work The inequality virus, released on Monday. Existing inequalities have been exacerbated through government policies protecting the interests of the well-off while leaving the poor exposed, and through the legacy of health care systems impoverished by the neoliberal dogma of fiscal austerity.

Sources

Sources of generally reliable information and analysis about Covid-19 are on a separate web page. Norman Swan’s Coronacast has a session “What’s the hold-up with the Pfizer vaccine” explaining the challenges in ramping up production. The Economist has two articles and one video on vaccination, including an article on vaccination passports. (Older Australians will remember the need to carry yellow vaccination certificates when they travelled: they may be coming back.) The Harvard Gazette has an article on vaccines, including a statement by Barry Bloom who says that even as the virus mutates, vaccines can be modified within a few weeks to catch up with the mutations.


January 26 – getting the facts right

We need to be clear about the meaning of January 26. Robbo Johnson sets us straight.


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

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