Compartmentising conflicting beliefs

In The Mind’s Compartments Create Conflicting Beliefs Michael Shermer looks at "how our modular brains lead us to deny and distort evidence".

If you have pondered how intelligent and educated people can, in the face of overwhelming contradictory evidence, believe that evolution is a myth, that global warming is a hoax, that vaccines cause autism and asthma, that 9/11 was orchestrated by the Bush administration, conjecture no more. The explanation is in what I call logic-tight compartments—modules in the brain analogous to watertight compartments in a ship.

Australia's recent heat wave

NASA has an interesting map of Land Surface Temperature Anomaly during Australia's recent heatwave.

A number of climatologists from the Australian Bureau of Meteorology have written What’s causing Australia’s heat wave?:

This warming has been strongly attributed to increasing greenhouse gases from human activities. While there are a number of influences on the climate system, such as changing solar radiation and changing atmospheric aerosols, it is very clear that warming has been dominated by increased carbon dioxide levels.

Perception of employment benefits by income level

Possum Comitatus posted this graph on Twitter. I think it's very informative.

BEST Study: Climate changed result of green house gases and volcanoes

In BEST Study Finds Temperature Changes Explained by GHG Emissions and Volcanoes Slashdot is reporting that:

"The Berkeley Earth Surface Temperature studies latest release finds that land surface temperature changes since 1750 are nearly completely explained by increases in greenhouse gases and large volcanic eruptions. They also said that including solar forcing did not significantly improve the fit. Unlike the other major temperature records BEST used nearly all available temperature records instead of just a representative sample. Yet to come is an analysis that includes ocean temperatures."

America's fascination with often flawed financial advice

In Saving on lattes will not make you rich the Economist interviews Helaine Olen, author of "Pound Foolish" on  the deeply flawed financial advice Americans receive.

On poverty

In This is Poverty Nikki McWatters describes the hardship of raising three kids on a single parent pension.

Ninety per cent of dole recipients live in a state of deprivation and poverty. It is a cruel maze, difficult to escape from and not one any parent would choose willingly. To blame the poor for their condition is to crawl back to post-industrial England.

Principles of Australia's welfare system

According to Matt Cowgill in Welfare reform: can we have it all?:

Three central principles in the Australian welfare system are:

• Payments should be sufficient to protect people from poverty.
• Payments should be means tested and targeted to people on low incomes.
• ‘Poverty traps’ should be avoided. It should be financially worthwhile for people to take a job, or to increase their hours of work.

 Matt shows, using some simple examples, that you can implement policies that can achieve two of these principles, but not all three:

If you want to argue that our welfare system, which already has less ‘middle class welfare’ than any other in the OECD, should be even more tightly targeted to low income earners then that’s fine. Just don’t pretend that by doing so you can also call for an adequate payment and one with low barriers to work. Pick any two out of three; you can’t have it all.

Worth reading.

The irrationality of religion

Jared Diamond has an interesting piece on why it's irrational to be religious.

Are high wages the driver for innovation

In What really powers innovation: high wages Tim Harford ponders the question "Why did the industrial revolution take off in the UK rather than in China?". His answer, the UK had higher wages and lower energy costs which acted as an economic incentive to increase automation. By contrast countries like India and China were the opposite.

According to Bob Allen’s calculations, had a French entrepreneur been presented with easy-assemble instructions for the spinning jenny in 1780, it would scarcely have been worth building it. In India, it would have been a definite loss-maker. But in the UK, the annual rate of return was almost 40 per cent. So much for the genius of British engineering: it wasn’t that nobody else could develop labour-saving machines, it was that nobody else needed them.
This is a persuasive explanation for the location of the industrial revolution, but it is also a solution to the puzzle with which this column began, because Bob Allen’s view of innovation points towards a self-reinforcing spiral. High wages lead to investment in labour-saving technology; that investment means that each worker will be operating more powerful equipment and producing more; this process in turn raises the productivity of labour and tends to raise wages. The incentive to innovate further only continues.

An interesting idea.

Why Government debt isn't necessarily bad

In Avoiding the B word the Mainly Macro blog gives an imaginary interview explaining why Government debt can be good.

George Monbiot on Australia's heatwave and politics

In Heatwave: Australia's new weather demands a new politics George Monbiot writes:

As James Hansen and colleagues showed in a paper published last year in the Proceedings of the National Academy of Sciences, the occurrence of extremely hot events has risen by a factor of around 50 by comparison to the decades before 1980. Extreme summer heat, which afflicted between 0.1% and 0.2% of the world 40 years ago, now affects 10%. They warned that "an important change is the emergence of a category of summertime extremely hot outliers, more than three standard deviations (3σ) warmer than the climatology of the 1951–1980 base period". An extremely hot outlier is a good description of what is roasting Australia at the moment.

The Daily Telegraph manufacturing fear of refugees

Amy Corderoy in Fanning the flames of asylum seeker fear looks at how The Daily Telegraph consistently uses language to evoke fear of refugees within the community.

While this one found Australians were extremely reliant on media reporting when it comes to forming their views on asylum seekers. Only a quarter of people surveyed thought asylum seekers come to Australia to flee persecution, as opposed to for economic or other reasons.

People – educated or not – tend to be influenced by the media they consume, and when the media obsessively focuses on an issue such as immigration or refugees, political parties who take extreme positions on those issues tend to gain popularity.

So next time you wonder why boat arrivals are such as massive issue in Australia, or next time you feel anger or fear over asylum seekers, take another look at your local newspaper headline. It might not just be reflecting your fear, it could be shaping it.

Peer reviewed climate change articles - as rare as hen's teath

Phil Plait in Why Climate Change Denial Is Just Hot Air looks at a post by Lawrence Powell Why Climate Deniers Have No Scientific Credibility - In One Pie Chart. Basically, Powell search peer reviewed scientific literature for all papers on "global warming" and "global climate change" and counted the results. Of 13,650 peer-reviewed climate articles only 24 reject global warming, or argue that global warming is caused by something other than carbon emissions. Here's Powell's pie chart of the results:

Manufacturing and productivity improving in Australia

Michael Pascoe, in Manufacturing not dead, just dieting, looks at the latest RBA statistics and notes that there has been a small rise in productivity and in manufacturing jobs:

Here's a surprise: amid all the headlines about the demise of Australian manufacturing at the hands of our strong currency, militant unions, interfering governments, poor productivity and the solar eclipse, employment in the manufacturing sector actually grew in the year to the end of August.

What's more, productivity also has been improving and is now running at a bit above the average of recent years – admittedly faint praise. It still adds up to the standard liturgy chanted by the high priests of business being as dangerously outdated as the Catholic Church's celibacy and men-only rules.

Taxing the wealthy may create jobs, not destroy them

Mark Summer, in Conservative Exceptionalism, looks at some of the faulty economics of some conservatives, especially around the arguments against increasing taxes on the wealth.

But the biggest problem with O'Reilly's threat–and the threat of every conservative who ever longed to go Galt–is that they forgot one thing. A kind of surprising thing. They forgot how capitalism works. 

Markets are moved by a little thing called supply and demand. If the market supports yet another talk show, then someone will probably air the show. And that show will hire construction workers and cameramen, caterers and chauffeurs. If the demand isn't there, the show won't be there. Neither will the jobs.

...

The same market rules apply whenever someone hints that, because of increasing personal taxes, he might not choose to create a new job. That's fine. He doesn't have to. Because if the demand is there, someone will. A company that refuses to expand in the face of rising demand will be supplanted by one that will. In the real world, jobs are not created or destroyed out of spite. They are created because they fill a need to create something, whether it's objects or information, that the market demands.

He concludes with:

Instead of reducing jobs, higher taxes can actually stimulate the creation of jobs. They don't prevent the accumulation of great wealth, they just expand the base that's needed to support the narrow top of the pyramid. Without any direct "redistribution" in the form of the government taking dollars from one person and giving them to another, higher taxes still act to reduce the gap between rich and poor by providing incentive for real growth rather than simple concentration of wealth.

So as the clouds of Taxmageddon gather on the horizon, don't worry. Increasing taxes are sure to reduce the deficit and slow the widening gap in incomes. They won't reduce jobs. If they do end up cutting into Bill O's salary, or even convincing him to put down his microphone, just take that as a bonus.

There's one aspect that the author has missed I believe. One of the problems in the USA is that Governments have not been spending enough money maintaining critical infrastructure (think roads, bridges, etc.). This is largely because they have not had the revenue. That is the price paid for decades worth of tax cuts. If taxes were higher, especially on the wealthy, Governments would have the funds to spend on infrastructure. Of course it takes people to maintain that infrastructure, which means more jobs (note this does not necessarily mean "Big Government" as the work can be contracted out).

On privisation and public policy

In Trains of thought on power and politics Laura Tingle has excerpts from a Quarterly Essay by former Queensland Transport Minister Rachel Nolan. It's well worth a read.

Edit 2/12:  John Quiggin's response: Rachel Nolan on the case for privatisation.

Conservatism and patriarchy

In All About the Patriarchy Paul Krugman has an interesting take on conservatism:

There’s a strand of thought — I identify it especially with Corey Robin, although he’s not alone — that says that conservatism isn’t really about the things it claims to be about. It isn’t really about free markets and moral values; it’s about authority — the authority of bosses over workers, of men over women, of whites over Those People.

The rise of the expert blogger

In Nate Silver and the Ascendance of Expertise Bora Zivkovic writes about the rise of the expert blogger.

A few more companies who don't seem to need to pay tax

Mike Seccombe in Google: Don’t Be Evil, Don’t Pay Tax describes how Google uses a Double Irish Dutch Sandwich so it doesn't need to pay tax in Australia (and many other countries).

A couple of weeks ago, Google Australia's spokesman went straight to script when media reports began appearing about Google's latest filing with the Australian Securities and Investments Commission, which showed the company had paid just $74,176 in tax in Australia on last year's estimated revenue of more than $900 million.

In Tax fury: Google, Amazon, Starbucks admit: 'we hardly pay anything' AP report that Starbucks in the UK has come in for some questioning by a UK Parliamentary committee:

In sometimes bitter exchanges, MPs said they could not accept that Starbucks had reported losses for all but one of the 15 years it has operated in the UK, suspecting the firm was attempting to minimise the taxes it pays in Britain.

"You have run the business for 15 years and are losing money and you are carrying on investing here. It just doesn't ring true," said Margaret Hodge, head of Parliament's Public Accounts Committee on Monday.

Troy Alstead, Starbucks global chief financial officer, acknowledged to the panel that its taxable profits in the UK are calculated after royalties paid to its European headquarters in the Netherlands have been deducted. Alstead acknowledged that it has a special tax arrangement with the Dutch government covering its headquarters.

Companies operating in Europe can base themselves in any of the 27 EU nations, allowing them to take advantage of a particular country's low tax rates.

Alstead insisted that Starbucks was not seeking to mislead investors or tax authorities about its performance in Britain.

"We are not at all pleased about our financial performance here. It is fundamentally true everything we are saying and everything we have said historically," he told the committee

I wonder if Mr Alstead had a straight face when he expressed his company's displeasure with their financial performance.

More on the Parliamentary inquiry, including video of an Amazon executive being questioned. At least Google admits that it is trying to reduce its taxes - Starbucks, Google and Amazon grilled over tax avoidance:

He further freely accepted that until recently, the Ireland company was paying a fee to a separate Dutch company within Google, purely for the purpose of reducing its taxes.

Australia doesn't have an economy wide carbon price

Andrew Leigh writes in Climate Change Mythbusters: An Economy-Wide Carbon Price that claims that Australia has the world's only economy wide carbon price are wrong:

In fact, Australia’s carbon price excludes agriculture, smaller emitters and household transport (although some businesses will face an effective carbon price via changes to the present fuel tax regime). Overall, it captures about 60 per cent of total carbon emissions.