A good article on American debt

Nobel laureate Robert M. Solow, emeritus professor of economics at the Massachusetts Institute of Technology,explains why US Government debt does and doesn't matter: Our Debt, Ourselves.

Why Christopher Pyne is wrong to claim the current education funding model works

In Why Christopher Pyne should go back to school Bernard Keane applies the blowtorch to Opposition Education Spokesman Christopher Pyne's claims that the current funding model works.

The entrenching of privilege

In The Ego Behind Anti-Welfarism Ed Butler has written an interesting article on they way "Australia is actively entrenching wealth and privilege, to its own long-term disadvantage":

This ego manifests itself in an archetype which no doubt we’re all familiar with. The successful child of privilege who ‘earned’ all of their success. Born into a probably white, reasonably comfortable family in a reasonably comfortable, perhaps even well-off, part of town.

Good school, stable family, probably a little socially conservative, almost certainly not a rebel. Good school led to good uni, and now they’re a solicitor, banker, accountant or management consultant.

It could be the kid born into privilege who is sent to the best schools, with a stable family, and has friends with equally happy households.

It could be the woman born into the family that owns the bulk of the Pilbara.

Of courseNo doubt they’ve worked hard to get where they are, but the ego arises in their belief that their success is entirely attributable to their hard work and smarts. It’s the logical fallacy made famous in The West Wing – ‘post hoc, ergo propter hoc’. In short, ‘A’ happened, then ‘B’ happened, hence ‘A’ must have caused ‘B’, ignoring the myriad ‘C’s’ that also contributed.

To quote a US President, they didn’t build it.

....

But once embedded, this mentality colours everything. Voters feel that those worse-off than them deserve minimal support, while any attempt to limit their own access to the public teat is merely tossing obstacles in the path of their hard-won successes.

It seems we need our sleep

In Sleeping less than six hours a night skews activity of hundreds of genes Ian Sample reports on new research indicating that "Genes affected by lack of sleep include those governing the immune system, metabolism and the body's response to stress".

Greg Barns on Julia Gillard

In Media should play fair with PM, former Liberal Party adviser and candidate Greg Barns writes:

JULIA Gillard is no Paul Keating, John Curtin or Ben Chifley to name three of the best prime ministers this country has had in the past 75 years.

But nor is she so poor a performer and leader that she deserves the daily excoriation to which she is subjected by many in the mainstream or traditional media, by which I mean newspapers and electronic broadcasters both public and commercial.

...

The media campaign against Ms Gillard and her government can have only two foundations -- a dislike of a woman as prime minister or a nasty conservatism that seeks to protect privilege. Either one is unacceptable. We should call on our mainstream media to play fair or not play at all. It is far from healthy for the media in a liberal democratic society to become so unbalanced on matters pertaining to politics.

It seems a Mediterranean diet is good for you

In Mediterranean Diet Shown to Ward Off Heart Attack and Stroke Gina Kolata reports on a study showing a 30% reduction in cardiovascular disease amongst a high risk group after they changed to a Mediterranean diet:

About 30 percent of heart attacks, strokes and deaths from heart disease can be prevented in people at high risk if they switch to a Mediterranean diet rich in olive oil, nuts, beans, fish, fruits and vegetables, and even drink wine with meals, a large and rigorous new study has found.

It seems the American media have also picked up on this study. Lizzie Crocker writes Eat Like a Greek: The Mediterranean Diet That Could Save Your Life.

How the RBA maintains the cash rate

In an address to the University of Adelaide Business School (In The Reserve Bank's Operations in Financial Markets) Guy Debelle, Assistant Governor (Financial Markets) of the Reserve Bank of Australia, explained how the RBA sets interest rates and deals with exchange rates:

I will talk about how the Reserve Bank actually implements the target interest rate set by the Reserve Bank Board at its monthly meetings. I will then describe how this interest rate, known as the cash rate, affects all the other interest rates in the economy, including mortgage rates, business borrowing rates and deposit rates. So that affects you one way or another.

I will also talk about the Reserve Bank's transactions in the foreign exchange market and finish with some thoughts about the exchange rate more generally.

Rules for running an economy

Greg Jericho, as usual, has some excellent advice in Listen up, Swan: five rules for running the economy.

Australia's increasingly inefficient and costly superannuation system

Mike Steketee has taken a detailed look at superannuation tax concessions in Unfair, inefficient and expensive: what went wrong with Australia’s superannuation system.

Why the R&D tax break needed reform

John Kehoe in Rent seekers ride the R&D gravy train explains how many businesses were exploiting the R&G tax break to claim deductions that were not really research and development (e.g. banks claiming on IT upgrades, mining companies claiming new roads and mines) and that would have gone ahead regardless of the tax break.

Change from below in North Korea

The Economist has an interesting article looking at how change is bubbling up in North Korea: Rumblings from below.

Governments need to prioritise spending commitments

In Step right up to a budget sensation Stephen Koukoulas has written an interesting article highlighting the need for Governments to prioritise spending commitments (as most people do not want to pay more tax):

So many demands for worthy projects, so few people willing to pay for them.

Having spent some time recently working in the Prime Minister’s Office, I got to see the difficulties and inevitable trade-offs involved in making these decisions. The decisions are not difficult because there is much wrong with most ideas, but rather the dilemma is how each initiative will be funded and whether there is another item on the agenda that has greater importance. Priorities, in other words.

Questions like, do we spend a few billion dollars on a fighter jets for the air force now or do we spend a few billion dollars on education? Should we raise the tax free threshold to boost workforce participation or spend money on private health insurance subsidies for those earning more than $150,000 a year?

Almost always, you can’t have both – or if you do, the funding offset takes money from someone or somewhere else in the budget. Much of the commentary about government spending, cuts and taxation cherry picks at only one side of this dilemma.

Articles analysing Gillard and Abbott speeches at the NPC

In January Prime Minister Julia Gillard and Opposition Leader Tony Abbott each gave speeches at the National Press Club. Someone following the news might have been under the impression the only item of note in the speeches was the announcement of the date for the next election.

In actual fact the Prime Minister had much more to say. Unfortunately, I have only come across three articles that offer any in-depth analysis of either speech:

Bernard Keane: Gillard’s speech — the other 3500 words
Ross Gittins: Gillard talks tough in election year
Greg Jericho: Easy solutions and complex realities

Recent articles on taxing superannuation

Peter Martin: Skewed. Why Labor is finally rounding on super tax breaks

Ben Eltham: Canberra's Would-be Super Heroes
Ben Eltham: No Country For Young Voters

The beige dictatorship

Charles Stross has written an interesting post on his blog: Political failure modes and the beige dictatorship. He basically argues that political parties will naturally transform into oligarchies. He concludes with:

So the future isn't a boot stamping on a human face, forever. It's a person in a beige business outfit advocating beige policies that nobody wants (but nobody can quite articulate a coherent alternative to) with a false mandate obtained by performing rituals of representative democracy that offer as much actual choice as a Stalinist one-party state. And resistance is futile, because if you succeed in overthrowing the beige dictatorship, you will become that which you opposed.

Stross also briefly covers why we end up with parties dominated by political apparatchiks and why many parties have similar policies ("did this policy get some poor bastard kicked in the nuts at the last election? If so, it's off the table").

One of the points he makes is:

The news cycle is dominated by large media organizations and the interests of the corporate sector. While moral panics serve a useful function in alienating or enraging the public against a representative or party who have become inconveniently uncooperative, for the most part a climate of apathetic disengagement is preferred — why get involved when trustworthy, reassuringly beige nobodies can do a safe job of looking after us?

I wonder if News Limited views the Gillard Government as "inconveniently uncooperative"?

Well worth a read.

Stross cites Michels's iron law of oligarchy in his post. That's also worth reading up on.

Gittins on baby boomers, demographics and work force participation rates

In Employment numbers game is not so simple Ross Gittins explains how the demographics of the baby boomer bulge is affecting the work place participation rate.

One thing Ross did not comment on in his article is the effect an aging work force will have on productivity (I have a feeling older workers may not be as productive as their younger colleagues).