Left Outside

Is Cameron an idiot?

Some people ask: does the G8 still matter, when we have a G20? My answer is “Yes”. The G8 is a group of like-minded nations who share a belief in free enterprise as the best route to growth.

The G8 includes Russia. Russia! Corrupt, crony-capitalist and authoritarian Russia. Obviously, Cameron isn’t this stupid, but why does he think we are?

I couldn’t even finish the insipid article.

Filed under: Politics

Third time’s a charm

Like Ben and Jamie, its been a little while since I’ve endorsed any clicktivism, so sign this petition to free a Chinese tweeter.

Filed under: Foreign Affairs

The art of taxing carbon without taxing carbon

Before I talk about how the coalition have screwed up, I’ll talk about how the energy industry seems to be moving in the right direction. Despite there being limited progress in pricing carbon or achieving a low carbon economy. People in the energy industry seem to be acting as though there has been. I put this down to expectations.

The more and more closely with people in the energy sector, the more and more I begin to see expectations determining people’s behaviour. Every UK energy company has a smart metering team (that is mandated by law), but they are also dedicated to working out how to get people to use less energy (which isn’t).

Likewise, BP has invested in renewable energy research (although of course it hasn’t abandoned its profitable fossil fuel business). Other energy companies have made a move to low carbon generation and to reducing their customers’ energy consumption. The language executives use has even shifted. Find a speech from an energy company exec that doesn’t mention reducing emissions, you might be surprised how hard it is.

These actions won’t show up in policy discussions because the policies haven’t been implemented yet. So pessimism is to be expected. But when you look at what people are moving towards, it begins to look as though the expectations of more expensive carbon and cheaper renewables is affecting people’s behaviour. In an industry with such a long planning horizon I suppose this is to be expected, but I was surprised.

I suppose this is another of my hobby horses. Economics isn’t about choice. It is about expectations and contracts. Expecting higher prices, even if today’s prices are low, will impact your decisions. I think we can see some of this in the energy sector. I don’t want to be Panglossian, we are still probably screwed by climate change, but probably less screwed than people assume.

Filed under: Economics, , , ,

Sooner or later I’m going to blog on the coalition’s energy policy

The coalition are screwing up so much happening right now, that pretty much nobody I’ve been reading has mentioned how much they are screwing up energy policy. I think it is something to do with complexity. I work largely in the energy industry, and even with energy professionals, people still aren’t sure what the hell the coalition is doing.

So I will blog this…at some point.

Filed under: Blogging

We think torturing people isn’t too bad, but please, no vaginas.

Just after I hear some priest thinks torture ain’t such a big deal, they vote to reaffirm that women shouldn’t be allowed to be Bishops. Yey for Jesus! Honestly, they make atheism so easy these days.

When Voltaire said that if God didn’t exist we’d need to invent him, I don’t think he meant as comic relief.

Filed under: Society

Nope

No comments on Israel/Palestine here.

Nope.

Filed under: Foreign Affairs

Young Earth Creationism: I can’t believe some people believe this crap

Via Krugthulu, Marco Rubio’s isn’t sure how old the planet is:

GQ: How old do you think the Earth is?

Marco Rubio: I’m not a scientist, man. I can tell you what recorded history says, I can tell you what the Bible says, but I think that’s a dispute amongst theologians and I think it has nothing to do with the gross domestic product or economic growth of the United States. I think the age of the universe has zero to do with how our economy is going to grow. I’m not a scientist. I don’t think I’m qualified to answer a question like that. At the end of the day, I think there are multiple theories out there on how the universe was created and I think this is a country where people should have the opportunity to teach them all. I think parents should be able to teach their kids what their faith says, what science says. Whether the Earth was created in 7 days, or 7 actual eras, I’m not sure we’ll ever be able to answer that. It’s one of the great mysteries.

At one level, this shows the Republican’s anti-science at its worse. The Christian right doesn’t see science as a path to knowledge, merely as another hermetic cult with its own competing creation myths. This is the key to why this young eartherism is a problem.

On another level, it shows the chutzpah of the Republicans. Of course being scientifically illiterate has an impact on the economy! The economy is more or less science in action, or at least the application of things that haven’t failed yet, which is more or less what science is.

This should be worrying for everyone involved (which sadly is everyone) because we’re already 13 days into the 2016 campaign, and this guy is in the front of the Republican pack.

Filed under: Politics, Society, ,

Corruption and the last rites of the technocrats

Airing one of my more unfashionable views for no other reason than because Chris Blattman echoes me.

The reasons that corruption should hurt growth are so persuasive that economists have been pretty surprised not to find much evidence.  One team reviewed 41 different cross-country studies of corruption and development. Two-thirds of the studies don’t even find a negative correlation. Cross-country studies have mostly bad data and empirics, so we should not rest here. But Jacob Svensson has a nice overview of the broader evidence and draws the same conclusion: there’s not much to show that corruption reduces growth on net.

I think Acemoglu and Robinson put it best…

Here is a conjecture: corruption is a way for many economists and policymakers to talk about bad political outcomes without talking about politics… Corruption is an attractive talking point for both politicians and many economists because it is fundamentally viewed as apolitical. But poverty, alas, is not.

This fear of politics ties into the technocratisation of policy making. Following the 1980s people began to think that economics was best left to economists. That they would work out clever answers to complicated questions and that clever people would implement them. Even if the electorate was stupid and didn’t want them, technocrats could win the battle of ideas.

The last fifteen years or so, at least since the Asian Financial Crisis, reality has been punching technocrats in the face again and again and again. Of course, most of the punches came from the developing world and could be safely ignored. Finally, in the face of massive suffering in the Eurozone and the US technocrats like Brad DeLong began to think again about politics and political economy.

Its the institutions, stupid. And it is stupid people who build institutions. They’re built by the stupid because we are all stupid. Everyday the worlds stock of knowledge expands more rapidly than you can learn. We are all progressively getting more stupid. If you want long term positive change then you have to force people towards your idea of it. The best organised and most convincing win because it is only in groups that we can overcome our innate ignorance.

Over a long enough time frame, humanity will return to the stone age or die trying. For a long time, people have accepted that ideas matter, but the old idea that putting lots and lots of people behind those ideas is coming back into fashion.

Filed under: Economics, , , , , ,

What would Jesus do?

Priest thinks gay marriage is bad but that torture isn’t a big deal. Also doesn’t like human rights legislations generally. Yey, feel the compassion!

Filed under: Society

Mervyn King on the “mismatch recovery”

Some time ago Chris Dillow argued that it was possible that economic recovery was sluggish because of a mismatch. It seems that Mervyn King is coming round to this view (via).

What is limiting our ability to do more is not on the monetary side, it’s on the real side that the economy has to adjust to a new equilibrium. That is what I think is going to pose the constraint.

What we need now – it’s very clear if you look at the numbers – what the UK economy needs is more demand in the rest of the world to buy goods from the United Kingdom. And that is the key bit that’s missing from our attempt to rebalance and that’s why the challenge is so great.

The Bank of England hasn’t released the model it uses (much to Simon Wren-Lewis’s chagrin), but given the above this is how the model Mervyn is working with must look.

Imagine there are only two firms. One firm gives haircuts and the other firm makes hats. Haircuts can’t be exported, but hats can. Theoretically if people in the UK decided to wear hats less and get more haircuts workers at the one could shift to the other firm to avoid unemployment. However, if there are non-negligible costs to retraining these people and matching them to new jobs a shift in the competition of demand could result in high inflation and high unemployment.

Now because haircuts cannot be exported but hats can we end up in the odd situation where domestic demand as delivered by the central bank through interest rate cuts or quantitative easing or whatever won’t work. External demand will boost employment by helping people find work in the hat industry, but domestic demand will not because people would rather spend the money on haircuts. Domestic demand causes inflation not job growth but external demand (say from China) causes job growth but not inflation.

This is a neat story for Mervyn, because as a story it completely lets him off the hook! Imagine that. A central banker who manages to create a model where he is not responsible for the catastrophic screw up which happened on his watch.

However, there are a number of weaknesses with this model. Firstly, if Mervyn wants more external demand he can create that by weakening the pound. In fact, I’m not even sure how Mervyn could ease monetary policy without weakening sterling and increasing external demand. Secondly, it is a very pessimistic view of the economy. I thought the deal was that markets could sort this stuff out? Five years is a long time to wait for a rebalancing.

Mervyn King is still well respected and it seems he is creating “just so” stories to justified this continued respect. Unfortunately the stories just don’t add up.

Filed under: Economics, , ,

Pro-life, pro-death, pro-poverty

This is a Catholic country” doesn’t seem like a good reason to kill someone, but then if you’re pro-life perhaps you will disagree.

Savita Halappanavar (31), a dentist, presented with back pain at the hospital on October 21st, was found to be miscarrying, and died of septicaemia a week later.

Her husband, Praveen Halappanavar… asked for a medical termination.

This was refused, he says, because the foetal heartbeat was still present and they were told, “this is a Catholic country”.

She spent a further 2½ days “in agony” until the foetal heartbeat stopped.

In perhaps related news that pro-life people are only pro-life until you are born:

Researchers from the University of California, San Francisco launched a Global Turnaway Study this year to explore the potential social and economic implications of denying women access to legal abortion. And after documenting the experiences of the women who seek to terminate a pregnancy but are turned away from abortion services, the UCSF researchers found that those women were three times more likely than the women who successfully obtained abortions to fall below the poverty line within the subsequent two years.

Perhaps I’m being unfair about the pro-life movement, but I doubt it. If this sort of thing worries you that is good. The pro-life movement are adopting tactic used in the US to intimidate people, for example protesting outside abortion clinics. Their success would mean the exportation of this suffering. The stakes are high, be worried.

(Via, and via, and others too)

Filed under: Politics, Society, , ,

Ugandan Kill the Gays Bill to become law as a “Christmas gift”

I think it has been about a year since I last wrote about homophobia in Africa. Despite a long history of man on man loving (as with everywhere else) many Ugandans still see homosexuality as immoral and un-African. For some time now a law has been discussed which would make homosexual acts capital offences. Gay Star News report that this process is about to reach fruition:

The law will broaden the criminalization of same-sex relationships by dividing homosexuality into two categories; aggravated homosexuality and the offense of homosexuality.

‘Aggravated homosexuality’ is defined as gay acts committed by parents or authority figures, HIV-positive people, pedophiles and repeat offenders. If convicted, they will face the death penalty.

The ‘offense of homosexuality’ includes same-sex sexual acts or being in a gay relationship, and will be prosecuted by life imprisonment.

Last year I wrote about a campaign to save Robert Segwanyi from deportation. The campaign was ultimately successful and Robert was saved. Unfortunately, it does not appear that Uganda will be saved from this law.

A google search turns up few active campaigns. Certainly when this was last in the news in 2011 there were many petitions, marches and campaigns. Perhaps all repressive regimes need to learn to suppress their people while America’s liberal campaigners are trying to get someone elected. Although I don’t want to belittle the efforts of African campaigners, it seems the most successful pressure on Ugandan politicians has been external.

If you’re spare and have time to spare, a polite email to Alitwala Rebecca Kadaga or Atim Ogwal Cecilia Barbara could be in order. They are two women representatives actively promoting the Bill. You can also write to your own MP asking them to lobby similarly.

The Bill has been stopped once, it can be stopped again, and again if necessary. However, it does require that these missives are backed up with material threats. That implies the possibility of cutting aid if this Bill is passed, piling misery upon misery. Uganda is clearly in need of aid, it remains very poor, and the tying of aid to particular policy stances has a chequered history to say the least, but I think it is worth threatening its withdrawal – this is a matter of life and death after all.

Filed under: Foreign Affairs, Science, , , ,

When NGDP is Depressed, Employment is Depressed

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