Monthly Archives: May 2008

An autumn afternoon in Melbourne

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Some snaps from a sunny autumn afternoon in Melbourne.

High food prices accelerate structural change in Europe

Thirty years on, the Common Agricultural Policy—or, rather, most of the CAP’s market intervention but not the payments to farmers—is being dismantled faster than planned due to high food prices that have seen both border barriers and ‘intervention’ buying dropped.

“The €45bn-a-year common agricultural policy has been blamed for dumping subsidised food on to poor country markets, displacing local produce and driving farmers off their fields. However, export subsidies should expire in 2013 and under reforms unveiled on Tuesday almost all payments would be linked to land area rather than production. The Danish commissioner said the reforms would free farmers to produce for the market. She proposed to abolish the requirement to leave 10 per cent of arable land fallow and scrap caps on milk production by 2015. State intervention buying of crops that farmers cannot sell, except for wheat for bread, would be abolished.”  extract from: Financial Times

Mariann Fischer Boel’s proposals, that she spins as a ‘health check for the CAP’, are described in a speech she gave last week at a Brussels planning conference.

The net benefit of emissions controls

English mathematican Freeman Dyson, has reviewed Wm. Nordhaus’ account of his economic models of emissions controls. Nordhaus claims that passive ‘backstop’ measures significantly outperform the catastrophists’ preference for strangling carbon emissions. But, as Dyson points out, Nordahus has not considered the scientific merit of any of the controls he models and has not provided much detail of the passive measures.

An encouraging Growth Report

Commission On Growth

I have had a chance only to skim the Introduction but I already like the Report from the Commission on Growth and Development. Its understanding of economic development testifies to the authors’ deep experience. Examine a developing economy sinking into poverty and you will usually find difficult circumstances (geography, demography, history) but also, in every case, government that is mediocre at best; often self-serving and unaccountable.

Successful cases share a further characteristic: an increasingly capable, credible, and committed government. Growth at such a quick pace, over such a long period, requires strong political leadership. Policy makers have to choose a growth strategy, communicate their goals to the public, and convince people that the future rewards are worth the effort, thrift, and economic upheaval. They will succeed only if their promises are credible and inclusive…

Another tricky dick

“In 1995, I went to Havana to try to interview [con-man Robert] Vesco in jail. I failed, but found his partner in the pharmaceutical enterprise, Donald M. Nixon, widely known as Don Don, who happened to be a nephew of the former US president. Proudly showing me a custom-made Havana cigar in the shape of a large penis, complete with testicles, Don Don told me: ‘Bob [Vesco] is the most brilliant man I’ve ever met’”  extract from: Financial Times Obituaries

Democrat trade policies would hurt low-income Americans

James Surowiecki makes a plausible case in a straightforward way. Although it’s difficult even for Paul Krugman to find solid evidence that trade with China, for example, has cut wages, it’s apparent that the deflation of consumer prices has helped average- and low-income Americans most.

“Obama and Clinton, in their desire to help working Americans—and gain their votes—are pushing for policies that will also hurt them”  extract from: The Free-Trade Paradox: James Surowiecki

David Brooks: The Farm Bill

“My colleagues on The Times’s editorial page called the bill ‘disgraceful.’ My former colleagues at The Wall Street Journal’s editorial page ripped it as a ‘scam.’ Yet such is the logic of collective action; the bill is certain to become law…”  extract from: Talking Versus Doing – David Brooks – New York Times