Daily Archives: February 7, 2009

Noted: major post by Jim Belshaw

This is not on his personal blog, so won’t appear in the Google Reader: More economics 101 – the economics of Malcolm Turnbull.

While my focus in this post is on the underlying economics, I should make my own views clear so that you understand where I am coming from.

There is some truth in Mr Turnbull’s comparison with the Whitlam Government. It has seemed to me that that Mr Rudd is in a rush for other reasons. I have suggested that we should take a deep breath – less haste, more speed. I have also pointed to what I see as specific weaknesses in Mr Rudd’s initiatives, weaknesses linked in part to current administrative and public policy systems that create delivery problems.

The international downturn has been faster and wider than I expected. The impact on domestic confidence has also been greater than expected, given the underlying strength of the Australian economy. For that reason, I have been inclined to support the Rudd measures.

I do not share Mr Turnbull’s stated concerns about the deficit so long as we do not create a structural deficit. I am also less worried about Government debt.

Overall, my view has been that the downturn provides an opportunity to do new things, to catch up on past neglects, thus laying the basis not just for future growth, but also for long term improvements in our social and physical infrastructure. Part of my argument for less haste, more speed i[s] to ensure that we get the best results.

Finally, I have argued that the various stimulus measures taken round the world will pull the world out of recession. As that happens, the Australian economy will boom again. However, I have also expressed the concern that the global stimulatory measures will overshoot, creating problems in the opposite direction to those we face as present.

Jim’s views are his own, as he makes clear in the disclaimer I have just quoted, but with his background in economics, history, and public administration they are certainly worth a look. See what you think. Clearly Jim has done a lot of work on this post, which seems to have caused him to set his personal site aside for the moment.

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Posted by on February 7, 2009 in Australia, Australia and Australian, current affairs, Jim Belshaw, Kevin Rudd, Malcolm Turnbull, Political, politics


What’s new Sunday 8 February to Saturday 14 February

05feb 005

For the previous week visit What’s new: Sunday 1 February to Saturday 7 February.

What’s new on my other blogs

More to come…

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Posted by on February 7, 2009 in site news


To market, to market, to buy a fat hen…

Yesterday while vegetating at M’s place I was browsing one of my old books – he has a few of them – Best Spiritual Writing 2000 ed Philip Zaleski. One of the essays is US theologian Harvey Cox’s ironic “The Market as God”, though I agree with the reviewer linked above:

Perhaps my personal favorite is William H. Gass’s "In Defense of the Book" where he writes: "In the ideal logotopia, every person would possess his own library and add at least weekly if not daily to it. The walls of each home would seem made of books; wherever one looked one would only see spines; because every real book (as opposed to dictionaries, almanacs, and other compilations) is a mind, an imagination, a consciousness. Together they compose a civilization, or even several." A perfect description of our loft and what it feels like to live in a library.

But to Harvey Cox, whose essay was published in Atlantic Monthly in March 1999, where you may still read it.

… At the apex of any theological system, of course, is its doctrine of God. In the new theology this celestial pinnacle is occupied by The Market, which I capitalize to signify both the mystery that enshrouds it and the reverence it inspires in business folk. Different faiths have, of course, different views of the divine attributes. In Christianity, God has sometimes been defined as omnipotent (possessing all power), omniscient (having all knowledge), and omnipresent (existing everywhere). Most Christian theologies, it is true, hedge a bit. They teach that these qualities of the divinity are indeed there, but are hidden from human eyes both by human sin and by the transcendence of the divine itself. In "light inaccessible" they are, as the old hymn puts it, "hid from our eyes." Likewise, although The Market, we are assured, possesses these divine attributes, they are not always completely evident to mortals but must be trusted and affirmed by faith. "Further along," as another old gospel song says, "we’ll understand why."

As I tried to follow the arguments and explanations of the economist-theologians who justify The Market’s ways to men, I spotted the same dialectics I have grown fond of in the many years I have pondered the Thomists, the Calvinists, and the various schools of modern religious thought. In particular, the econologians’ rhetoric resembles what is sometimes called "process theology," a relatively contemporary trend influenced by the philosophy of Alfred North Whitehead. In this school although God wills to possess the classic attributes, He does not yet possess them in full, but is definitely moving in that direction. This conjecture is of immense help to theologians for obvious reasons. It answers the bothersome puzzle of theodicy: why a lot of bad things happen that an omnipotent, omnipresent, and omniscient God — especially a benevolent one — would not countenance. Process theology also seems to offer considerable comfort to the theologians of The Market. It helps to explain the dislocation, pain, and disorientation that are the result of transitions from economic heterodoxy to free markets….

Ten years on, and Arts & Letters Daily offered on Friday Our Epistemological Depression by Jerry Z Muller.

The history of socialism is the history of failure—and so is the history of capitalism, but in a different sense. For the history of socialism is one of fundamental failure, a failure to provide incentives and an inability to coordinate information about supply and effective demand. The history of capitalism, by contrast, is the history of dialectical failure: it is a history of the creation of new institutions and practices that may be successful, even transformative for a while, but which eventually prove dysfunctional, either because their intrinsic weaknesses become more evident over time or because of a change in external circumstances. Historically, these institutional failures have led to two reactions. They lead to governmental attempts to reform corporate and financial institutions, through changes in law and regulation (such as limited liability laws, creation of the FDIC, the SEC, etc.). They also lead market institutions to reform themselves, as investors and managers learn what forms of organization and which practices are dysfunctional. The history of capitalism, then, is the history of success through dialectical failure.

History rarely repeats itself. There are some standard patterns in economic recessions, but major recessions are characterized by something novel. If only this were not the case: economists have devoted a great deal of attention to learning the lessons of the Great Depression that began in 1929, not least Ben Bernanke. As a result, we are unlikely to make the errors of monetary policy made by the Fed in that era (of tightening money when it should have been loosened); or the errors of fiscal policy made by the Treasury (such as raising taxes when they should have been lowered); or the errors of ideological tone made during the 1930s, when anticapitalist rhetoric frightened many potential investors from making new investments. In all of these respects, we have learned from the past.

Unfortunately, initial conditions are too different from case to case to simply apply some historical template that would permit us to fully understand what is currently happening, let alone how to deal with it. Instead of explaining why this recession (or depression) is just like the others, we should attend to what is new and especially problematic about the current downturn and why it may not respond to policies modeled on avoiding the errors of the past.

What is old and what is new in the current economic downturn?…

Do read on.

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Posted by on February 7, 2009 in awful warnings, book reviews, current affairs, globalisation/corporations, reading, USA


Saturday, Saturday…

Can’t photograph the smell, but that is the dominant note this morning on what promises to be a very hot day. The smell? Bushfire smoke. And as for heat – look at Davo’s account of South Australia on 1 February: Into the Kitchen: “for those who miss it .. the digital Temp reads 50.8C .. and fer those yankees who depend on "shock horror" numbers .. that’s 123.44 degree Fahrenheit in your part of the world.”

We’re expecting 100+F today in Sydney.

Meanwhile… The monthly stats will live over at Ninglun’s Specials, but each Saturday a quick run-down…

Blogs mainly visual

Blogs mainly verbal

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Posted by on February 7, 2009 in blogging, site news, site stats