Oz Politics

A couple of years ago, I had a go at analyzing politics in the English-speaking developed countries in terms of a three-party system. The three parties were neoliberalism (in hard and soft versions), leftism and what I then called tribalism, but can now be better described as Trumpism. Trumpism combines what might be called dominant identity politics (for the countries in question, the relevant identity is white, Christian, heterosexual and suburban/rural) with crony capitalism and “big man” authoritarianism.

When I described the Australian political system a year ago, I noted a profusion of Trumpist parties. The most important is the governing Liberal party, until recently (like the US Repubs) hard neoliberals, but now increasingly Trumpist, with the partial exception of Prime Minister Malcolm Turnbull,

Malcolm Turnbull, a wealthy businessman, and smooth neoliberal who was widely seen as reviving of the soft liberalism of the past on social questions. As it has turned out, however, Turnbull has acted as a puppet for the Trumpists who dominate the party

A few months ago, the Trumpists finally tired of Turnbull and dumped him in favor of Scott Morrison, a former PR executive, who has praised Trump and even taken to wearing baseball caps.

The results, happily have been catastrophic, that is for the Liberals. After being tossed out as PM, Turnbull resigned from Parliament and his ultra-safe seat was won by an independent. Then the Victorian Liberals, running on a Trumpist platform involving a racist fear campaign on crime, the revival of the drug war and support for anti-gay discrimination by publicly funded church schools, were comprehensively thrashed in a state election. With moderate members defecting and others in open revolt, the Liberals are now in a complete mess.

Where does this leave the three-party system?
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The Australian Parliament has just passed legislation establishing equal marriage. This was the outcome of a Byzantine process in which the bigots tried every possible trick to delay the inevitable, culminating in a non-binding postal ballot, which produced a 60 per cent majority for equality, following a nasty and bitter campaign. Having rolled the dice and lost, the religious right tried to negate the result with special protections for bigotry, but got nowhere. As a result, they have suddenly discovered a previously unobserved love for UN conventions on human rights.

At the same time, an election in my home state of Queensland has produced a win for the Labor party, which campaigned in support of public investment in renewable energy and belatedly announced its opposition to funding for a massive coal mine-rail-port project, proposed by the Indian Adani group. The opposition consisted of an alliance between the main conservative party, the LNP ,and the racist/Trumpist One Nation party. The LNP not only supported the Adani proposal but wanted to put public money into a new coal-fired power station. One Nation is hostile to greenies but also opposed Adani on xenophobic grounds. THe outcome supports my view that the right will face bigger problems than the left from the emerging three party system.

On Saturday, a state election was held in Western Australia, resulting in a big win for the Labor party, after two terms out of office. The election turned in part on declining economic conditions and in part on the incumbent government’s proposal to privatise the electricity industry, an idea that has almost invariably proved electoral poison (it keeps coming up because of the massive financial and career benefits to those who can push it through). But the biggest factor was a deal done between two Trumpist political parties (a guide to our many versions of Trumpism here), the governing Liberal party (selling a combination of Trumpism and neoliberalism in the manner of the US Republicans) and Pauline Hanson’s One Nation. (The Liberals cut out their current coalition partners, the National Party, which had only one representative).

The result has been a disaster for both Trumpist groups. After polling near 10 per cent, One Nation got less than 5 per cent of the vote, and Hanson repeatedly made a fool of herself. The Liberals dropped 16 per cent, the biggest swing in WA history.
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I’ve had this post in draft for a while, not entirely satisfied with it, but on the rare occasion of Australia making the front pages of US papers I thought I should post it ready or not.

After the cataclysm of Trump’s election, quite a few US-based friends asked me about moving to Australia. I had, as they say, good news and bad news. First, the bad news. Over the last few years, Australia has had no less than four Trumpist political parties, two of which currently form the government. We may yet get a fifth. The goods news is that, in most respects, they have been surprisingly ineffectual. That’s, partly because of constraints in our political system and partly because of the inherent limits of Trumpist politics.

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The Guardian today [publishes a vast number of leaked reports from Nauru](https://www.theguardian.com/australia-news/2016/aug/10/the-nauru-files-2000-leaked-reports-reveal-scale-of-abuse-of-children-in-australian-offshore-detention), one of Australia’s offshore processing sites for asylum-seekers (in reality, a camp for the indefinite detention of asylum-seekers). The reports, or “unconfirmed allegations” as the Australian government would have it, are a harrowing catalogue of physical and sexual abuse, and of consequences for mental and bodily well-being, often suffered by children. These places exist to appease an Australian citizenry hostile to the arrival of “boat people” who believe that such people — even those determined to be refugees by Convention criteria — are not their problem. Though Nauru is a particularly vile example, it would be wrong to think that Australians are alone in their attitudes to refugees and asylum seekers. Other Western governments are happy to do deals with other states beyond their borders to ensure that the wretched of the earth are out of sight, where they can exist as an abstraction, not disturbing the conscience of their own citizens. Human rights, together with other liberal principles like the rule of law, have become, for many liberal democratic states, the exclusive right of the native-born citizen or, at best, someone else’s problem, somewhere else.

I’d be interested to learn from people in Australia now, how much traction this latest leak is getting in the Australian media. A surf to the websites of the Australian and the Sydney Morning Herald suggests not much.

The failure of talks in Maui last weeks to reach final agreement on the Trans Pacific Partnership Agreement raises new, if slim, hope that this corporate wishlist may not be delivered after all. Friday was the last chance to get a deal that could be pushed through the US Congress before 2016, when Presidential campaign politics might disrupt everything. If that happened, and the new President opposed the deal it might never happen.

Although there were a bunch of issues that prevented a final deal, the biggest one was the demand for new protection measures for US pharmaceuticals (typical of what are absurdly still called Free Trade Agreements), and the biggest single obstacle was the attitude of an obscure legislative chamber, the Australian Senate. This piece in Inside Story gives some of the background.

We had an interesting discussion in comments recently about the usefulness or otherwise of optimism in relation to problems like climate change. I’m a card-carrying optimist, as can be seen from this article for Australian magazine Inside Story arguing that the prospects are good for stabilising global greenhouse gas concentrations at 450 ppm.

On the whole, excessive pessimism is a bigger problem than over-optimism. As I’ve argued before, lots of people have locked themselves into positions (eg advocacy of geoengineering, or belief in the end of industrial civilisation) that are based on the assumption that stabilisation is impossible. Many of these people are not open to evidence that stabilization is feasible, and even likely.

There’s a strong case that we should do better than 450 ppm, with a common ‘safe’ figure being 350 ppm. Since we passed that level some time ago, that requires a long period of negative net emissions, which cannot easily be achieved with current technology. Still, if net emissions are reduced to zero in the second half of this century, and some technological advances are made over the next fifty years (a plausible assumption if we put in some effort), even 350 ppm might be feasible.

Since this was written we’ve seen the Dutch court decision mentioned by Ingrid. Also, the development of one of the biggest coal deposits in the world, in the Galilee Basin in Queensland, is looking a bit less likely. The main developer, Adani, has halted engineering work on the project. Adani didn’t announce this, but since it’s been reported, their spin is that it’s a tactical move to pressure governments to speed up regulatory approvals. My take from a while back is here.

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The New York Times has a piece about Obama’s push to gain “fast-track” authority for the proposed Trans-Pacific Partnership, which would preclude any amendments by Congress after the deal (still secret, except for what Wikileaks has revealed) is announced. The key para, buried a fair way down

To the president, the Trans-Pacific Partnership would counter the economic weight of China and set rules on labor, the environment, intellectual property and investor protections for the growing economies of the Pacific Rim. For members of Congress, it’s about jobs.

shows how differently the debate is playing out in the US compared to other countries involved, such as Australia, and how much leading papers like the New York Times are missing the point

In the Australian debate, it’s generally understood (based on both economic modelling and past experience) that there won’t be much effect on jobs either way, at least not through the direct effects on trade. For the critics (just about everyone on the left), it’s precisely the “rules on labor, the environment, intellectual property and investor protections” that represent the big concerns. All of these rules benefit corporations at the expense of workers, the environment, the free flow of information and national sovereignty. It’s the general strengthening of corporate power, and not the flow of goods, that will harm jobs, wages and working conditions Investor-State Dispute Settlement provisions, for example, have been used to challenge minimum wage laws.

Leading US critics like Elizabeth Warren and the AFL-CIO have raised some of these points, noting (for the benefit of Republicans in particular) that the ISDS provisions will enable unaccountable arbitrators to override US federal and state laws.

The use of trade deals as an instrument of geopolitics is also unwelcome for a country like Australia that needs to balance itself between the US and China. Despite its enthusiastic support for the US and the TPP deal, the conservative government here signed up to join China’s regional infrastructure bank, developed largely in response to China’s exclusion from the TPP.

But US news coverage can’t seem to get out of a frame set by the trade deals of last century, such as NAFTA.

It didn’t get a lot of attention in the US Press, but it’s front page news on Oz that the Court of Military Commission Review has just overturned the conviction of David Hicks, one of two Australians tortured and held at Guantanamo Bay, and one of only six people convicted through the Military Commissions process (this is the third successful appeal). The NY Times ran a story (interestingly, in its “US” section), which covers the main points.

We just had an election in my home state of Queensland, and the outcomes will be of some broader interest, I hope. The governing Liberal National (= conservative) Party has (almost certainly) gone down to a surprise defeat, going from 78 of 89 seats at the last election to a probable 40 or 41 this time. The key issues were broken promises (particularly regarding job cuts) and government proposals for privatisation.

This can be seen either as a reversal or a repeat of the last election when the governing Labor Party went from 51 seats to 7. That election was also fought on broken promises and privatisation, but with the roles of the parties reversed (Labor had won an election opposing privatisation, then immediately announced it would go ahead).

Among the actual or potential ramifications

* The first instance of a woman Opposition Leader defeating an incumbent government at state or national level in Australia (there have been examples in the much smaller territory governments, but I think this is the first case at State level. The more common pattern has been for a woman to get a “hospital pass” when it is clear that the government is on the way out.
* At the national level, the replacement of the current conservative prime minister Tony Abbott
* The abandonment of the biggest coal mine project in Australia

Looking internationally, the outcome can be seen as a defeat for the politics of austerity and maybe as an example to suggest that Pasokification can be reversed, under the right circumstances.

Finally, I’ll link to my analysis of the asset sales, which got a reasonably prominent run during the campaign. It probably didn’t change many minds, but it helped to counter the barrage of pro-privatisation propaganda.

Gough Whitlam, Prime Minister of Australia from 1972 to 1975, died on Tuesday. More than any other Australian political leader, and as much as any political figure anywhere, Gough Whitlam embodied social democracy in its ascendancy after World War II, its high water mark around 1970 and its defeat by what became known as neoliberalism in the wake of the crises of the 1970s.
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Until I got the boot a couple of years ago, I had a regular column in the Australian Financial Review. Since then, I’ve been freelancing, with mixed success. Friday was a good day, with two pieces appearing within a few hours of each other. This one, at the Guardian is on the obsolescence of the late 19th and 20th century idea of the Press (or the media) as an institution with special rights and responsibilities.

The other was a reply to an editorial in the local Murdoch paper, pushing the case for privatisation. They printed it, which is more than the national Murdoch rag (The Australian) has done in similar cases. It’s over the fold
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I got lots of very helpful responses to my recent post on the search theory of unemployment, here and at Crooked Timber. But it has occurred to me that I haven’t seen any answer to one crucial question: How many offers do unemployed workers receive and decline before taking a new job, or leaving the labour market? This is crucial, both in simple versions of search theory and in more sophisticated directed search and matching models. If workers don’t get any offers, it doesn’t matter what their reservation wage is, or what their judgement of the state of the market. Casual observation and my very limited experience, combined with my understanding of the unemployment benefit rules, is that very few unemployed workers receive and decline job offers, except perhaps for temporary work where the loss of benefits outweighs potential earnings. Presumably someone must have studied this, but my Google skills aren’t up to finding anything useful.

And, on a morbidly humorous note, it’s a sad day for conservative politicians when efforts to bash the unemployed actually cost them support. But that seems to be the case for the LNP government in Australia with their latest plans, both expanded work for the dole and the requirement for 40 job applications a month. I’ll leave it to Andrew Leigh to take out the trash on work for the dole (BTW, his new book, The Economics of Almost Everything is out now).

The 40 applications requirement has already been the subject of some amusing calculations. I want to take a slightly different tack. Suppose (to make the math simple) that the average job vacancy lasts a month. There are roughly five unemployed workers for every vacancy, so meeting the target will require an average of 200 applications per vacancy. The government will be checking for spam, so lets suppose that all (or a substantial proportion) of the applicants take some time to talk about how they would be a good fit with the employer and so on. Dealing with all these applications would be a mammoth task. One option would be to pick a short list at random. But, there’s a simpler option. In addition to the 200 required applications from unemployed people, most job vacancies will attract applications from people in jobs. A few of them may be looking for an outside offer to improve their bargaining position with their current employer (this is a big deal for academics), but most can be assumed to be serious about taking the job and in the judgement that they have a reasonable chance of getting it. So, the obvious strategy is to discard all the applications except for those from people who already have jobs. What if there aren’t any of these? Given that formal applications are going to be uninformative, employers may pick interviewees at random or may resort to the informal networks through which many jobs are filled already.

Trying to relate this back to theory, the effect of a requirement like this is to negate the benefits of improved matching that ought to arise from Internet search. By providing strong incentives to provide a convincing appearance of looking for jobs for which workers are actually poorly suited, the policy harms both employers and unemployed workers who would be well suited to a given job.

Update I found the following quote widely reproduced on the web

On average, 1,000 individuals will see a job post, 200 will begin the application process, 100 will complete the application,

75 of those 100 resumes will be screened out by the Applicant Tracking System (ATS) software the company uses,

25 resumes will be seen by the hiring manager, 4 to 6 will be invited for an interview, 1 to 3 of them will be invited back for final interview, 1 will be offered that job and 80 percent of those receiving an offer will accept it.

Data courtesy of Talent Function Group LLC

Visiting the TFG website, I couldn’t find any obvious source. The numbers sound plausible to me, and obviously to those who have cited them. But, if the final number (80 per cent acceptance) is correct, then it seems as if the search theory of unemployment is utterly baseless. Assuming independence, the proportion of searchers who reject even three offers must be minuscule (less than 1 per cent).

After some farcical manoeuvres, the Australian Senate has passed the Abbott governments legislation repealing the carbon price/tax/trading scheme (it’s a bit complicated). I hope and believe that this outcome will be reversed in due course, but those who brought it about will stand condemned by history.

It’s not merely that this is a bad policy, which will impose large and increasing costs (depending on how long it takes us to get back on track) on Australia and the world into the future. Even more damning is the fact that this action is entirely based on conscious lies, embraced or condoned by everyone who has actively supported it.

First, and most obvious, no one (least of all Tony Abbott) believes that the government’s “Direct Action” policy is a superior alternative to the carbon price, one that will deliver emissions reductions more rapidly and at lower costs. It is, as everyone knows, a cynical ploy put forward simply to allow the government to say that it has a policy.

In reality, Abbott and the rest want to do nothing, and the motives for this desire are entirely base. For a minority of the do-nothing group, it is simply a matter of financial self-interest associated with the fossil fuel industry. For the majority, however, it is the pursuit of a tribal and ideological vendetta. Their position is driven by Culture War animosity towards greens, scientists, do-gooders and so on, or by ideological commitment to a conservative/libertarian position that would be undermined by the recognition of a global problem that can only be fixed by changes to existing structures of property rights.

Most of these people would describe themselves as climate “sceptics”. There is no such thing. That is, there is no one, anywhere in the world, who has honestly examined the evidence, without wishful thinking based on ideological or cultural preconceptions, and concluded that mainstream science is wrong. Most “sceptics”, including the majority of supporters of the conservative parties, are simply credulous believers in what their opinion leaders are telling them. Those opinion leaders are engaged, not in an attempt to determine the truth, but in a cultural vendetta against their enemies, or in an ideologically-driven attempt to justify a predetermined do-nothing position[^1].

This is a sad day, but one that will come back to haunt those who have brought it about.

[^1]: That covers the vast majority in Australia. There are also some professional deniers who are just in it for the money and some driven by personal pathologies like (for example, the reflexive contrarianism of Richard Lindzen).