From the monthly archives:

November 2010

Work for the Dole

by John Quiggin on November 8, 2010

Faced with a sharp rise in unemployment since 2008, the Con-Lib government in Britain has diagnosed an epidemic of laziness, and announced measures to push the “work-shy” back into jobs. In particular, they’ve announced that those deemed not to be looking hard enough for work will be forced to undertake unpaid part-time work for community organizations.

Stripped of the punitive rhetoric, this is a cut down job-creation scheme, partly paid for by the unpaid labor of the participants. It’s hard enough to make job creation work well as a counter to unemployment, without adding in this kind of thing.

Australia has been there and done that. Following the discovery in the late 1990s that it played well with focus groups, John Howard (conservative PM) introduced a program explicitly called Work for the Dole and targeted initially at the young unemployed. It was a political success, but didn’t have any evident effects on unemployment. This evaluation of Work for the Dole and other programs suggests that it performed much less well than the explicit job creation and wage subsidy programs it replaced. Strikingly, given that the UK government is supposed to be on an austerity drive, the cost in the late 1990s was $2000-3000 per participant (around 1000 stg), on top of the benefit payment for which they were working.

But at least Howard’s moves came quite a few years into an expansion when it could credibly be claimed that there were jobs available for people willing to look hard enough. For a government that is busy creating unemployment to start attacking the “work-shy” requires a truly impressive level of hypocrisy.

I am not a Communist

by Henry on November 8, 2010

Oh dear. “Nick Carr has a point:”:http://www.roughtype.com/archives/2010/11/the_unrevolutio.php

bq. “I am not a Communist,” declared the author-entrepreneur Steven Johnson in a recent column in the business section of the New York Times. Johnson made his disclaimer in the course of celebrating the creativity of “open networks,” the groups of volunteers who gather on the net to share ideas and produce digital goods of one stripe or another. Because they exist outside the marketplace and don’t operate in response to the profit motive, one might think that such collaboratives would represent a threat to traditional markets. After all, what could be more subversive to consumer capitalism than a mass movement of people working without pay to create free stuff for other people? But capitalists shouldn’t worry, says Johnson; they should rejoice. The innovations of the unpaid web-enabled masses may be “conceived in nonmarket environments,” but they ultimately create “new platforms” that “support commercial ventures.” What appears to excite Johnson is not the intrinsic value of volunteerism as an alternative to consumerism, but the way the net allows the efforts of volunteers to be turned into the raw material for profit-making ventures.

bq. Johnson’s view is typical of many of the web’s most enthusiastic promoters, the Corporate Communalists who feel compelled to distance themselves from, if not ignore entirely, the more radical implications of the trends they describe with starry-eyed avidity.

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40 Years of the Goodies

by Harry on November 8, 2010

I always liked the Goodies more than the Pythons. Sillier, far less intellectual, funnier, and almost never stumped by the lack a punchline. My children have seen all the episodes available on DVD at least 7 times, the girls know several episodes by heart, and yet they still fall about laughing whenever they watch them. Here’s the obligatory 30-minutes celebration. Well worth a listen. And, much to my relief, this coincides with the release of several new episodes including the one with the giant Dougal which should arrive in time for the 9 year old’s slumber party on Friday.

Swift versus Berlin on Positive Liberty

by Harry on November 7, 2010

This was made by some 15 year-old schoolkids in the UK. Having got the link I, mercifully, watched it before sending to my philosophy students. They get the philosophy pretty much right. PARENTAL ADVISORY though, it is very rude (I have not sent it to my students, though I suppose some of them probably read CT).

Yet more zombies

by John Quiggin on November 7, 2010

After finishing Zombie Economics, and confident that it would soar to the top of the best-seller lists, I had the idea of a franchise-style list of sequels – Vampire Econ (on the financial sector), Cyborg Econ (the market and the mixed economy) and so on. Now, though, I’m thinking I could spend a lifetime on the zombie ideas that dominate the political right.

One of the most tenacious has been the DDT myth, that the writings of Rachel Carson led to a global ban on the use of DDT[1], bringing to an end a program that was on the verge of eradicating malaria[2], and causing the death of millions[3]. I thought that Tim Lambert and I had finally administered the coup de grace with this piece in Prospect a while back, after which some of the leading promoters of the myth (such as Roger Bate and his Africa Fighting Malaria group) appeared to have given up and moved on to other projects.

But zombies are hard to kill, especially for such reliable sources of misinformation as Britain’s Channel Four. C4 has just run a documentary by Stewart Brand, entitled What the Green Movement Got Wrong in which the DDT myth was repeated in its full glory. Amusingly, Brand made the plea ‘I want to see an environment movement that can admit when it’s wrong’. When challenged by George Monbiot on his glaring errors of fact, Brand exhibited the familiar pattern of weasel words and blame-shifting, followed by silence.

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Paying our taxes with a smile.

by Harry on November 6, 2010

A slightly mischievous piece by one Tim Brighouse makes a suggestion to members of the Browne commission which, I am sure, as members of the big society they will want to take up by making large donations, and to the government which, again, I’m sure they’ll be delighted to adopt as policy: a graduate tax on those of us who got our college education for free at a time when it produced a significant wage premium (oddly enough an age span that begins with my dad and ends with my sister). Here’s a taste:

When I first read the Browne report I was puzzled, as I am sure we all were, by the false logic. The cuts are governed by a general desire not to pass on our current debts to future generations, yet this report is apparently happy to load some of it on prospective young graduates. How can we explain that to our teenagers?

My second response when reading the report was to feel unusually guilty and ashamed. It should have the same effect on anybody aged between 45 and 70, for we are the “charmed generations”, as we often privately admit to one another.

We were showered with all manner of blessings: we missed the Second World War; we didn’t give up two years of our lives to national service; and we enjoyed the benefits of the newly created welfare state. If we own a house, for many years we enjoyed tax relief on mortgage interest payments. And to cap it all we either have or can expect reasonable, and in some cases generous, occupational pensions, which succeeding generations will not.

Most important of all – and this is where the Browne report comes in – the fortunate few in our charmed generations who attended college or university, unlike our successors, enjoyed free tuition and were given grants to live on as undergraduates.

In my case, in 1958 it was £300, which is equivalent to £12,000 today – more than half the starting salary of a teacher. In today’s money that is about £50,000 over the four years it took me to complete my degree and PGCE, and the state paid for the tuition at about the same cost, amounting to £100,000 in all. No wonder some of us felt we owed the state – and future generations – something in return.

Disclosure: in the traditional role of more tech-savvy offspring I found the online calculators that enabled him to do the inflation adjustment. (That I am more tech-savvy than him tells you a lot about how tech-unsavvy he is).

Eric McGhee has a “somewhat dispiriting post”:http://www.themonkeycage.org/2010/11/did_controversial_roll_call_vo.html at _The Monkey Cage._

Running a model on voting this Tuesday, he finds that Democrats’ votes for health care, TARP, cap and trade and the stimulus hurt their support. In some cases it hurt them quite a lot.

bq. What does this model tell us about roll call votes on these four bills? Simple answer: they mattered. A lot. A Democratic incumbent in the average district represented by Democratic incumbents actually lost about 2/3 of a percentage point for every yes vote. That doesn’t sound like a lot, but that’s for incumbents in districts that voted 63% for Obama.

bq. For Democrats in the least Democratic districts (Chet Edwards of TX or Gene Taylor of MS), the model suggests a loss of about 4% for every yes vote. Does that mean poor Chet lost 16 points on roll call votes alone? No, because he wasn’t a big supporter of Obama’s agenda. But he did vote for both TARP and the stimulus. In fact, virtually every Democratic incumbent on the ballot yesterday supported at least one of these four bills. That support was costly.

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QE2

by John Quiggin on November 4, 2010

The US Federal Reserve has announced its long-awaited renewal of quantitative easing (cutely labelled QE2). It’s $600 billion of new money to buy US Treasury notes with an average duration of five years, along with recycling of some money from the mortgage bailouts, also into T-note purchases. That sounds like a lot, but the reaction from Brad DeLong (endorsed by Paul Krugman) has been a big yawn. With the five-year bond rate at just over 1 per cent, the amount the private sector would demand to hold these bonds (that is, the annual interest payment) is about $7 billion, which is rounding error in the context of the current crisis.

I had been thinking that the Fed might take the much riskier (and politically trickier) step of buying corporate bonds. That would seem more likely to promote investment, but would obviously involve a good deal of winner-picking, with the associated potential for (real or perceived) corruption.

But what is really needed here is fiscal stimulus focused on job creation, combined with a long-term plan for fiscal consolidation (that is, higher taxes and/or lower expenditure). Instead, what the US appears likely to get is a permanent tax cut for the rich, partly offset by lots of job-destroying nickel-and-dime cuts in current expenditure. Many of these cuts will prove to be counterproductive or unsustainable in the long run.

Florida

by Harry on November 3, 2010

Well, that was depressing. My fellow Wisconsinites managed to replace the best Senator in the US senate with a ninny — I’d have been happy to have the Dems lose control of the Senate in return for keeping Feingold, personally. By contrast, at least the voters in Racine had the sense to retain our best State Assemblyperson in the face of a massive Republican effort to defeat him.

But, in the light of Daniel’s post below, I’m very curious what the the opponents of his argument (and there are many) are thinking about Florida. Cheers to the Democrats and their voters for throwing the race to Rubio! Well done, chaps! Update: when I checked the numbers Rubio was still polling slightly under 50%, but now I see he got just over 50%, so maybe it wasn’t thrown.

Shanti shanti shanti indeed

by Michael Bérubé on November 2, 2010

The roots of the debacle that will be Election Day 2010, for US Democrats, lie right here:

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Nothing, I think, can encapsulate Obama’s arrogance, or his profound alienation from ordinary Americans, so well as this chanting-and-smirking festival from last fall — complete with teleprompter and foreign-languagestan “translation” for all you “world citizens” out there.  The White House, realizing its colossal error in judgment (and noting with alarm that overnight, 16 percent of Americans suddenly came to believe that Obama is Hindu), tried desperately to cover its tracks by moving Diwali 2010 to just <i>after</i>  the midterm elections, to November 5.  But to no avail.  The damage has been done.

May our new Senators — especially Sharron Angle, Joe Miller, Pat Toomey, and Rand Paul — deliver us from Diwali and all it implies.

<b>Broder Version:</b>  He came in here and he chanted in the place — <i>and it’s not his place</i>.

On not being obliged to vote Democrat …

by Daniel on November 1, 2010

As the US goes to the polls, there is not exactly a shortage of commentary telling people how important it is that they vote, and so it’s been almost traditional (by which I mean, I did it at least once) for me to provide a small voice for the forces of apathy. This year, though, I want to address a particular and in my view rather pernicious species of electoral wowserism – the belief on the part of the Democratic Party that it has something approaching property rights over the vote of anyone to the left of, say, the New York Times opinion page.

The argument I want to establish here is that the decision about whether or not to vote Demcrat (versus the alternative of abstaining or voting for a minor party) is a serious one, which is up to the conscience of the individual voter to make, and which deserves respect from other people whether they agree with it or not. Obviously in making that argument, I’m going to have to venture into a number of unpalatable home truths about the Democrats as they are currently organised (abstract: ineffectual, cowardly, surprisingly warlike, soft-right, generally an obstacle to the development of social democratic politics), but let’s get this clear right up front – voting Democrat might often be the right thing to do in any given case, depending on local conditions; it might even usually be the right thing to do. What I’m not going to accept, however, is that it is always or definitionally the right thing to do.
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Crowding out the big society?

by Chris Bertram on November 1, 2010

Windsor and Maidenhead Council (UK) “is planning a reward scheme”:http://www.guardian.co.uk/politics/2010/oct/31/council-plans-big-society-reward (supermarket tokens and the like) for volunteers to help implement David Cameron’s “Big Society”:

bq. it is likely residents would get a loyalty card similar to those available in shops. Points would be added by organisers when cardholders had completed good works such as litter-picking or holding tea parties for isolated pensioners. The council says the idea is based on “nudge theory” – the thought that people don’t automatically do the right thing but will respond if the best option is highlighted. Points would be awarded according to the value given to each activity. Users could then trade in their points for vouchers giving discounts on the internet or high street.

Maybe the Council should have read more widely, since according to another body of literature (Bruno Frey, “Sam Bowles”:http://www.sciencemag.org/cgi/content/abstract/320/5883/1605 ), they risk sending out a signal that only a mug performs good works for no reward. An interesting natural experiment, to be sure, but not one that I’d wish on the residents of Windsor and Maidenhead.