All posts by Richard A Snow

I studied Economics at La Trobe University (getting a BEcHons and MEc). I was writing for newspapers, mostly on personal finance, from 1997 to 2006, part-time, while working as an Economist at Victorian Department of Treasury and Finance, and later as an Associate Lecturer at La Trobe university. I have a stock of older, published newspaper articles at http://richardsnownewspaperarticles.wordpress.com

WHY AUSTRALIAN GUN CONTROL JUST WON’T WORK IN AMERICA. 

In 1996 a lone gunman killed 35 people at Port Arthur, a popular tourist site in the Southern-most state of Australia. A wave of national revulsion swept through the country, and shortly after, a conservative Prime Minister and the six Australian states (lead by both conservative and labor state premiers) agreed to massive restrictions on gun ownership, and commenced a taxpayer funded $500m buy back of guns from Australian residents.
Now to be clear, Australia did NOT ‘ban all guns’. If you see someone on Facebook claiming that, they have no clue what they are talking about. You can still buy a non-self reloading shotgun and go duck hunting in Australia. You can still buy single shot long barrel rifles and go rabbit, fox, kangaroo or pig shooting in the bush. You can still join a target shooting club and have a handgun of the sort used in competition target shooting (and that includes semiautomatics, although you have to use the club’s guns for the first six months.) Australia does send target shooters to the Commonwealth and Olympic games so we have to have such clubs, right? About five percent of Australian households possess a forearm, compared to about thirty percent in the US, and let me repeat, because this is the essential point.it won’t be a semiautomatic.
Yes, all gun owners need a permit and each individual gun is registered. The biggest change that Australia introduced was the banning of semiautomatic rifles by civilians with only a couple of  exceptions: farmers (who periodically need to destroy livestock after fires and floods) , and professional shooters (many of whom do feral animal culling). The rifle magazine sizes are limited to ten. There s a couple of other provisions for gun dealers and collectors but they affect few people . Semiautomatic rifles are what you normally need to carry a mass public killing. The important point is that the “average person” can’t just go down the street and buy a semi-automatic gun.) It’s natural that people in the US, on both sides of the debate, simplify and distort what we did.
Australia hasn’t had a mass public shooting (normally meaning four or more dead in total) since. So why can’t the US just be sensible and do the same? For several reasons.
Australia has only six states and there is relatively greater degree of social homogeneity and similarity between the states.  The greatest difference between states and major cities in Australia is nowhere near the difference between, say, San Diego and Louisiana or between Arizona and New York. (I’ve been in all four places as a tourist.) Being more homogeneous, Australia is a more cohesive society, and reaching consensus is easier here. One of my American friends once said, “The thing you have to understand is that America isn’t one country. It’s fifty different countries.” Australia has numerous migrant groups, but our immigration is predominantly skills based, and no one migrant group dominates. We don’t have a dominant non-Caucasian group in the way the US has Latinos and African Americans.
The power balance between the state and federal governments is also different. The state governments have less power relative to the feds compared to states in the US. Australia isn’t like Britain, where regional governments are the creation of the national government and really can’t resist it. . Australian states exist in their own right, but the list of powers reserved to the federal government by the constitution is more extensive than in the US. If we made a scale with Britain on 1 at the left hand end and the US on 10 at the other end, Australia is towards the US end of the spectrum, but not all the way there. Maybe it’s a 7 or an 8. American states regularly take the national government to the Supreme Court; Australian states do, but not so often.
Australians don’t have the mind frame that Americans have where the national government is seen as something that is going to oppress us, and that we might have to overthrow by violence. Another American friend once said, “We are a nation of extremists. We had to be, or we wouldn’t exist. We were born of a revolution in the wilderness.” The mind set that you need arms to potentially overthrow your own government is something Australians don’t understand, because Australia wasn’t born that way. In the 1890s, the Australian colonies said to Britain , Hey, we feel like making our own country,” and Britain said, “Oh yeah, alright, hold yourselves a conference and write a constitution.” So everybody had a nice cup of tea, and we did. The American attitude of loathing and distrust of the national government looks incomprehensible to Australians,
The Australian voting system (preferential voting (or ‘instant runoff’ as Wikipedia calls it) in the lower house and proportional representation in the senate and state upper houses) forces major parties to stay relatively close to the political centre, and forces major parties to negotiate with each other or with minor parties to get things through the senate, and compulsory voting means Australian major parties focus on persuading the middle twenty percent of the population. The American system forces parties to focus on getting their base to physically turn out and vote, and cater to the fringe, and this results in different strategies and postures. In a normal senate election, we elect six senators per state, and each party gets one senator for each 14.29 percent of the vote (a “quota”) in that state. Normally both the conservatives and labor get two whole quotas each and hence get 2 senators each. There will then be several minor parties and independents with fractions of a quotas each. There’s then a method to determine who gets the last two places where nobody has a quota in their own right. Currently a quarter of the senate seats are held by minor parties and independents. This makes cooperation between parties necessary.
I feel much happier living in a country where I have only one fifth the chance of being murdered than a similar person in the US. But telling Americans to do what Australia did just isn’t going to work.
And here are some links to articles that anyone should read if they are not familiar with this issue.   The first is the article “What it’s like to own guns in a country with strict gun controls” from Time magazine, here. which gives the best factual account I’ve seen of Australia’s gun laws. The second is “It took one massacre: how Australia embraced gun control after Port Arthur” here ,from the Guardian, which describes what happened in the six weeks after Port Arthur. The third is Wikipedia’s article on “instant runoff voting” here. The fourth is “The rate of all suicides and homicides in Australia has declined since the gun buyback” from the Sydney Morning Herald which gives accurate stats on homicide rates before and after 1996 here .The fifth is Wikipedia’s article on “list of countries by intentional homicide rates” here.  (A lot of inaccurate nonsense is talked about murder statistics in Australia, compared to other especially by non-Australians who don’t understand the stats, and are believing what they want to believe.)

Finally, Some will claim that most gun deaths in the US are from suicides (this is correct). But the figures I quoted above (one fifth the chance of being murdered in the US) are based on intentional homicides so the suicide data is irrelevant. Some claim that British and Australian statistics are complied such that to die from murder, you have to die at the scene, but if you die at the hospital later you died from the wound, so it doesn’t appear in murder stats. This is incorrect. British law used to say that a violent act was murder if the victim died from the effects of the attack within a year and a day after the attack, so obviously if they died a year later they didn’t die at the scene. The year and a day rule was abolished in 1996, so the victim might now die after two years in a coma, but it’s still counts a s murder. Attackers are routinely charged with murder in Australia when the family of the victim turn off life support in hospital, so obviously the victim didn’t die at the scene. It’s still a homicide. I don’t know why these false claims keep circulating on the internet, other than confirmation bias.

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Dear Economist Magazine, you are the ex-Girlfriend from Hell

the economistDear Economist Magazine, when I first met you in 2015, I thought you were the kind of woman I’d like to

date. You were smart, well presented, and had a broad general knowledge. These are the kind things I like in a woman. You even knew how to spell and punctuate correctly, which is a bit of a lost art these days. And I must confess, I do find brains a turn-on in a woman. And you had those big red banners on your website behind your signature. We all know about women in red. I started asking you out. I called you Eci-pooh. You called me Ricki-dick.

Then in November 2016, you told me your subscription rates were going up. I thought you were starting to be a bit of a high maintenance girlfriend, so I told you I wanted to break it off. You sent me a rather brief email back saying you’d got my message. That was OK. I didn’t expect you to be that happy. A couple of days later you sent me another email asking if I’d take you back. Well, I didn’t.

But since then you’ve been taking money out of my credit card. That’s just not fair. And when I ask you to stop, you ask ME to prove to YOU that YOU broke off our relationship in 2016. That’s a pretty strange response.  It seems you have a turn-me-on button, but not a turn-me-off button. My bank have told me that I’ll have to cancel my card here in Australia, and get a new card issued with a new number that you don’t know.

I know that you live in England and I live in Australia, but we are both from pretty similar cultures. You’re not supposed to stalk ex-lovers. It’s just not cricket, my dear.

I’d rather not involve lawyers, that really should be a tactic of last resort. So why don’t you just return my money and leave me alone? I’ve emailed you enough, and it’s just become a drag. . You’re not my girlfriend any more, OK?  Just accept it and move on.

Best wishes,

Richard Snow

28 September 2017

Immediately after I published this blog article I went to the economist magazine (not the subscriptions area, but in the editorial area) and went to a feedback form on the contents of the magazine. I gave the magazine 1 out of 10 for how happy I was with them, and in the explanation box I put a link to this article. 24 hours later I got an email telling me they were processing a refund. Miracles happen.

Do arguments about religion need to be censored?

It’s a pity this question even needs to be asked. Last week, Jacqui Lambie, an independent Australian Senator, had a fiery exchange on ‘Q and A’, a panel discussion program, with Yassmin Abdel-Magied, a Somali-born Australian engineer turned TV presenter (who has lived in Australia since she was 18 months old) over Lambie’s call to ban Sharia law in Australia.

abdul-magied-and-lambieAbdel-Magied was making an effort to show some self-restraint under difficult circumstances, apologizing at one point for shouting. For a twenty-five year old being attacked by a federal senator twenty years older,  in front of an audience, it can’t have been easy. A video extract from the program is here.

Now I’ll state my prejudices here:  Lambie’s views on most things seem a confusing mixture of left (on welfare issues) right (on foreign affairs and immigration) and , and all over the place, and are often quite incoherent. She, like Pauline Hanson from the ‘One Nation’ party, seems exceptionally uninformed. When it comes to Islam, they’re opposed to it, but they appear to know nothing about it.  Abdul-Magied is a twenty-five-year old, while Lambie is a second term federal senator. I’m inclined to cut Abdul-Magied more slack than Lambie about the shouting match.

In the full program, (link below), at 38 minutes, Lambie is asked whether she would ever consider joining One Nation, a far right party which has four senators (in a chamber of 76). Lambie gives an answer that implies ‘no,’ without actually saying ‘no’.  She wants a halt on migration for two years, while money (presumably, money spent on migrants) is redirected to welfare of existing residents. A questioner in the audience then asks a question about migration, apparently in Europe, affecting the status of women, democracy and free speech. He then asks if migration should be controlled so that it ‘doesn’t disturb the peace and harmony of the community.’  The question sounds like a set-up. At this point, the panel moderator, Tony Jones, asks Lambie whether she has said to a newspaper that we (meaning Australia) should “deport all Muslims who support Sharia law.” Lambie says yes, that’s what she said.  She then repeats, “Anybody who supports sharia should be deported.” That’s when the fight begins.  Abdel-Magied strikes at this in the video clip: “My frustration is that people talk about Islam without knowing anything about it.”

The next day, Muslim groups were calling for The ABC TV management to apologize for having broadcast the segment. Their petition includes a description of the debate, and among other things, states that the exchange would have been unacceptable in any workplace. That’s right. If somebody talked to a Muslim fellow employee the way Lambie spoke to Abdul-Magied, there’d be a rapid trip to the personnel department.

But that’s not the situation they were in. Everybody knows that QandA is designed to bring together a group of people who will not agree on whatever is being discussed (and there are usually a dozen topics that come up in any one program, and the audience questions are pre-vetted and apparently selected for that specific purpose.) Many of the panelists talk over the top of each other. Everybody in Australia with a TV set knows this, and as a presenter on the same channel, Abdul-Magied no doubt knows it. Earlier in the program, she’d attempted (unsuccessfully) to interrupt and talk over a Liberal Party senator. It’s “let’s all get together and talk over the top of each other.” If the program changed this, it wouldn’t be QandA anymore. Perhaps that might be a good thing, but that’s another issue.

In their petition, the Muslim groups say: “If QandA wants to invite Muslim individuals to its forum, it should be able to guarantee a safe environment for them based on trustworthiness and comfort to speak in a platform that is rarely afforded to them, especially on issues concerning them.” I’m not sure what ‘trustworthyness’ is being referred to here. But guaranteeing a ‘safe environment … and comfort to speak…’ is precisely what the ABC should not be doing in a panel discussion. Since no-one was in any physical danger that night, the only ‘safety’ that could be meant here is emotional safety.  The demand for a safe environment sounds like code for ‘don’t criticize me or my beliefs.’

Free speech really does mean that you have to put up with some people who views are offensive to you. You also have to put up with idiots. I’ve had fundamentalist Christians tell me that without a God I have no basis for claiming to say anything about right and wrong. I think that view is incredibly stupid. Buddhism doesn’t have a God. Do Buddhists have no idea about right and wrong?

For the ABC to apologize would imply that it ‘won’t happen again’. The only way this could be done is to pre-tape the program, and then edit out the segments that might offend the petitioners.  That’s asking the ABC to internalize religious censorship. To even call for this shows a severe misunderstanding by the petitioners of the society they are living in. Apart from some matters relating to sex and violence Australia does not have a censorship system regarding what can be shown on TV. Some programs carry advice that the program is only suitable for certain ages, and some things have to be shown late in the evening, but that’s it. We don’t do religious censorship in Australia. Sadly, the Muslim petition has been signed by a large number of very well educated people who should know better. If the Muslim community wants to explain its faith to the broader Australian community, calling for censorship isn’t going to do it.

After writing most of the above, I became aware of a counter-petition by a right-wing news site, calling for the sacking of Abdul-Magied (link below). This is, in my view, equally stupid. Everybody ought to stop the “this is very offensive, that’s all offensive, sack him, sack her,” garbage. We are starting to sound like first-year American college students, and that is not a complement.

LINKS: Debate described here.

Muslim leaders demand apology in petition here.

Stephen Chavura’s article here.

Right-wing counter petition here .

Is free trade good? A plain English Explanation

There’s been a lot of discussion since the US election about whether free trade agreements are actually a good or a bad thing. Do they lead to cheaper consumer goods being available in western countries? Do they destroy jobs? Should we have any more?

rust-belt-states
The rust belt states

Some (including myself) have questioned whether the job losses caused by the North American Free Trade Agreement (NAFTA, the trade agreement between Mexico the US and Canada) helped Donald Trump win the US Presidency. Trump certainly campaigned to that effect in the rust belt states (the five or six states of the US in the north-east, where jobs have disappeared as industries relocated to Mexico.) One of the factors which seems to have cost Hillary the election is that the Democrats thought they had those states “in the bag”, and apart from Pennsylvania, she failed to campaign very much in them. The Democrats underestimated the depths of anger and resentment caused by those job losses.e trade agreements remove import taxes and quotas on imported goods. That means consumers in the country A  which removes the barriers get cheaper goods, and employment is boosted in that sector in country B. So when Australia removed barriers on clothing and textiles and footwear in the 1970s and 80s, Australians got cheaper clothing, and somebody in China or Vietnam got a job. Australian clothing workers lost jobs.

So if our own workers are going to lose jobs, why enter into an agreement? The two countries will maximise their joint production if they each specialise in what they do relatively more efficiently. I’ll borrow an example from David Ricardo, one of the first economists to white about this in the early 1800s.  If country A can produce ten blocks of cheese OR ten shirts, and country B can produce ten blocks of cheese OR twenty shirts, what happens?

Without trade, country A might devote half its resources to each task. It might produce five blocks of cheese and five shirts. Country B might do the same and produce five block of cheese and ten shirts.

Panel 1: TOTAL PRODUCTION IF COUNTRIES TRY TO PRODUCE BOTH GOODS

Country Cheese Shirts
A 5 5
B 5 10
Total 10 15

One the other hand, if country A produces all the cheese and country B produces all the shirts, total production will be ten blocks of cheese and twenty shirts.

Panel 2: TOTAL PRODUCTION IF EACH COUNTRY SPECIALISES

Country Cheese Shirts
A 10
B 20
Total 10 20

The theory is that the countries should specialise, and then trade approximately 5 block of cheese for 7 shirts.  Country A will end up with 5 cheeses and 7 shirts, B will end up with 5 cheeses and 13 shirts. Everyone is better off compared to Panel 1. That’s the theory. The situation will look like this:

Panel 3: TOTAL PRODUCTION IF THE COUNTRIES SPECIALISE AND TRADE

Country Cheese Shirts
A 10-5=5 0+7=7
B 0+5=5 20-7=13
Total 10 20

But notice that this treats each country as if its industries were the country. The model tells you that GDP (total production) will increase. The model tells you nothing about how employment is distributed, or whether a geographical area is better or worse off,  what happens to wages, or what happens to profits.

Some shirt workers in country A will become unemployed, and some cheese workers in country B will become unemployed. Will the unemployed people in both countries find jobs in another industry? In the US, the example would be that the US now exports corn to Mexico while Mexico exports cars to the US. Will the unemployed car workers in Michigan find jobs in the corn industry in Iowa? Perhaps not. Perhaps they can’t afford to sell their houses in depressed Michigan and move to Iowa. Will former corn farmers in Mexico gain employment in the car industry? Maybe. Maybe not.

Wages in the higher wage country (the US) may be held down by the threat of more job losses in manufacturing if the workers push for higher wages. The results may be wage stagnation and lingering regional unemployment. That’s what seems to have happened in the US.

If governments are to persuade their citizens to enter further free trade agreements, they need to be honest about the likely job losses, because jobs will be lost somewhere. This can be remedied somewhat if governments provide incentives to industries to relocate in the geographic areas of the job losses and provide retraining to workers who lost their jobs.

I suspect that the days of just putting a free trade agreement in place and then leaving displaced workers to fend for themselves may be over, and that may be a good thing. The question needs to shift from “will it increase GDP” to “who is going to lose from this, and what are we going to do for them?”

*   *   *

Did Hillary neglect the rust belt states here .

NAFTA failed to deliver benefits here, here, possible mixed benefits here.

Is a government just like a business? Not really.

3 July 2016

A day before Australia’s recent election, I replied to someone on Facebook who thought that a country is just like a business, and so you should elect a business person as Prime Minister. I don’t believe this is true, for several reasons. Let’s remember that countries act though their governments.

(i) A business has its main (not ‘only’ but ‘main’) responsibility to make a profit for its govt 2shareholders, which may be a few family members or perhaps thousands of shareholders. A country – and its federal government, which is the main agent through which it acts, has responsibilities to the aged, to younger people who are too young to be involved in its management or its decision making processes, or to the chronically sick or disabled. A business doesn’t have a general obligation to look after these people. A business may use disabled-accessible buildings, and may employ people with disabilities, but it’s not responsible for the general welfare of those groups at large.

(ii) A business doesn’t have to think about inter-generational equity. Governments do. Governments have obligations not to burden one generation at the expense of another.

(iii) If a business goes bankrupt, it normally ceases to exist (at least in Australia). The owners and the ex-employees go somewhere and do something else. Governments can go bankrupt (default on their bonds), but their populations continue to exist, perhaps in dire circumstances (e.g., Greece at present.)

(iv) It’s mostly governments that create infrastructure, and mostly businesses and residents that use the infrastructure created by governments. There are a few exceptions, but who built the roads we drive on, the airport in your city, or most of the ports around the country?

(v) Governments create the legal framework in which trade and business are carried on: misleading advertising laws, mechanisms to enforce contracts (the courts), etc. Business then operate inside the framework the government created.

(vi) Governments determine rules in which international trade takes place. You can buy a cheap lamp made in China (and a farmer can sell a bag of wheat to china) tariff free because a  government made a free trade agreement for you / the farmer so that could happen.

(vii) If countries or governments are a business, what sense do we make of activities which are inherently unprofitable – e.g. the operation of a police force? If you get bashed up tonight, do the police bill you on a user pays basis per hour to investigate your complaint? No.

(viii) Business usually operate on a one share one vote principle when electing office bearers. If I have 20 times as many share as someone I get twenty times their vote at the AGM. Could we do this in a democracy? Would
entitle me to twenty votes for someone else’s one vote? Not likely.

There are major difference between national government and a business. We should not confuse them.

Tales from a retired spy.

You learn some fascinating things about the world of espionage by reading the memoirs of retired spies. This year is the thirtieth anniversary of Margaret Thatcher’s attempt to have the publication of Peter Wright’s book Spycatcher stopped. Thatcher lost the court case, and the book was published in ’87.

Spy Cather
Spy Cather

Wright began as a Naval scientist, and was recruited to work for MI5, Britain’s counter intelligence agency. Most of the book occurs in the 1950s, 60s, and 70s, but some things don’t change with time. Readers might recall the very recent furor about how how the US was spying on German Chancellor Angela Merkel, and how Australia tried to hack the phone of  the wife of the Indonesian Prime Minister. Well, it turns out that counties have been spying on their own “friends”for decades. When Britain was trying to join the “Common Market” (as they called the European Union back then), Britain’s spying efforts were mostly directed at the USSR (no surprises here), the Egyptians (because of the Suez canal) and then France, its supposed ally because France opposed Britain joining. This was spying over what was then a purely economic matter. Great resources were devoted to breaking French encryption, at the French embassy, and for three years the British read all of the cables between the French embassy and Paris. However it didn’t help them join at the time.

Wright tells all the stories you would expect of break-ins, buggings, attempts to ensnare soviet agents into traps, and teams of followers trailing diplomats and suspected spies. Many of them are fascinating for someone reading for the first time how spies work.

Wright was obsessed with the idea that the head of MI5, Peter Hollis was a Soviet spy: that MI5 had been ‘penetrated’ by the Russians. A large portion of the later chapters is devoted to this issue, which has never really been proved one way or the other.

The book is now out of print, but available second hand on the usual websites. For those who might want to know how things worked during the cold war, it’s a good eye-opener. It would be useful for novel writers setting political thrillers in the cold war period.

A strange book: how lawyers helped justify torture.

John Rizzo was the second-highest lawyer in the CIA for much of the 1990s and early 200os. On several occasions he was acting chief counsel, when the top job was unfilled. Rizzo’s book Company Man (published by Scribe) describes how the CIA came to use “enhanced interrogation techniques” after the 9/11 attacks.

company-man-book coverThe first really important capture of an Al Qaeda member after 9/11 was a man named Abu Zubaydah, the head of logistics for future operations against the US. The CIA feared another attack on the US might be immanent, and they needed to get any information out of him. His interrogators found him an “arrogant,… twisted, smug little creep,” (p.182-183) who told them lots of old news, mixed with outright lies.  When using standard legal interrogation methods, and ‘playing by the book,’ Zubaydah’s interrogators were getting nowhere, they sought permission to use a series of nine harsher interrogation steps, from slaps to the face, and escalating measures up to water boarding.

Because the CIA had been stung by previous accusations of illegal activities, those in charge of the interrogations wanted to ‘cover their asses’ by getting a CIA lawyer to tell them their proposed methods were legal. That request came to Rizzo, who in turn sought the opinions of the Department of Justice. every proposed action was described in sometimes ludicrous detail. A slap to the face had to be with an open hand, the fingers splayed and hit below the ear.  If he was shoved against a wall, they had to have a fake,  flexible wall installed, so that Zubaydah wouldn’t get bone fractures. Further down the list, he might be placed in a small box that forced him to curl up, and then harmless insects would be dropped into the box. “Why?” asked the lawyer  “Zubaydah hates bugs,” a CIA official replied. “It will be something harmless, but he won’t know that.” (p.184-185) And so it began.

Lawyers in the DOJ managed to somehow convince themselves that something wasn’t torture unless it resulted in  pain associated with “death, organ failure, or serious impairment of body functions.” When the CIA needed to brief the congressional leadership, former POW Senator John Mc Cain sat stony faced and silent, and made a one-sentence comment at the end. “It’s all torture.”

I’ve described above what I consider, from a public interest view, one of the most controversial parts of the book. But much of the book gives an insight into the operational culture of the CIA, and how it changed over time. Covert actions, almost non-existent under President Carter, rose dramatically up under Reagan, and lawyers had to draft a Presidential “Finding” authorizing every last one.  People in the field wanted endless memos from lawyers telling them whether they could legally do various things. Even buying mules to give to the mujaheddin in Afghanistan needed a lawyers approval! It’s an interesting book, and I’d recommend it to anyone who has an interest in Guantanamo Bay, how the secret prison system came into existence or the general culture of intelligence organizations.

It’s a five-star book.