Mark Triffitt on the decline of the Welfare lobby's influence in Australia

From The Age article by Mark Triffitt
"Frankly, it  was hard to tell from the agenda – replete with terms such as "efficiency", "low compliance costs" and "a tax system that supports growth, investment and productivity" – if it reflected the sentiments of the welfare lobby, or a merchant banker.

The forum pointed to the real reason for the decline in the welfare lobby's policy clout in recent years – one which has occurred under governments of both political persuasions. This is the lobby's ceding of vital ground in policy debates from the outset. This, in turn, has been the result of a near obsession with partnerships and consensus.

Usually, this is done by employing "marketised" language to talk about social policy, and allowing  the policy agendas to be framed on someone else's terms – usually government and big business. Perhaps this obsession has occurred because, in recent years, governments and big business have become clearer in their expectations that welfare groups which receive government or business support will not bite the hand that feeds them. 

The welfare lobby is now adamant it won't seek consensus if there is none to be had on tax reform. But the potential trap remains this: The government and big business understand in the wake of last year's budget, they are poor garners of the trust needed to gain community support for their reform agendas. They now know they must try to align  themselves with groups that the community is more likely to trust if they are to get their way on budget and tax reform."

He also says "If a rise in the GST rate becomes inevitable to pay for corporate tax cuts, it should demand the rise is tied directly to making sure major corporations pay their fair share of tax."

But More Australians support hike in GST "It appears constant talk from Canberra of the need for a balanced budget has had an effect, with some voters saying they had not previously wanted the GST to rise but they now think it should be done."

Anand Giridhardas on the 1%

After a recent Ted Talk by Giridhardas, Adam Lashinsky talks to him and reports in this article in Fortune. An excerpt:

"First, he wanted to stress that he doesn’t view the way he posed his challenge as being about the vaunted 99% versus the 1%. The people who fit his description are “probably 20% to 30% of Americans,” he said. “This would include a secretary at GlaxoSmithKline, for example. If you’re a small business owner making $200,000 a year, America is working for you.”

Giridharadas is particularly focused on those who view their success and helping those in need as two completely separate topics. “The thing I was trying to get people to think about is how they invest their lives and their day jobs in addressing these issues. The dominant paradigm in this crowd,” he said, motioning to the scrum of overachievers walking around us at TED, “is business as usual in your day job: Sell them hamburgers and soft drinks, trade stocks, and take a small bit of that money and rescue abused amputee war refugees in Sierra Leone who have Ebola. Because of the sheer enormity of the issues, that covers up that what you do for a living adds to people’s suffering."

This reminds of a conversation with a relative in USA about ten years ago. Many people of Indian origin I know who live in Australia, USA are successful and invest a lot in their children who are also generally successful. But I was worried by a trend; many of them were going to studies like law (since they heard of possibilities in IP rights or investment bankin (one father boasted to me that his son was probably the highest paid indian in the southern hemisphere), or companies like Halliburton. Another explained that his daughter was working very hard to save money for a mining company in a eight hundred million dollar litigation. And so on. The relative did not see any problem and said "A job is a job". Anyway, Anand Giridhardas seemed to be touching on such issues and it seems to me that it is not just the one percent but larger percentage which help hold the structure together. There are also some similar hints from Gabriel Palma's work, for example Palma Ratio.
P.S. But Connor Kilpatrick at Jacobin does not like it.

A Telugu film song by Kalekuri Prasad

Apparently, Shiva Sagar (S.G.Satyamurthy) said  ‘Kalekuri Prasad (a young, fiery poet) is trying very hard to end his life as soon as possible, whereas I am trying to extend it as far as possible’. Here is a poem by Kalrkuri Prasad, probably based on his experiences. More about him in English here. Both dalit poets passed away in 2012, 2013 respectively.

The film video version here https://www.youtube.com/watch?v=WKAKXGwWB_k
Gaddar version https://www.youtube.com/watch?v=0R-pxFmmvPw

Dani Rodrik Interview

from Federal Reserve Bank of Richmond Econ Focus. Much common sense. Chris Blattman comments on the interview in The mistakes made by most development reformers.

Some Indian families abroad

I do not know socially too many people here, only some Telugu couples mostly in their late fifties or sixties ans some with grandchildren. Children mostly settled in jobs some where or other. But an interesting (to me) in the phenomenon is during the last couple of years, women tend to gather among themselves, go shopping or lunches, or night outs and sleepovers and chat for long periods etc without husbands. Most of them seem happily married, though I think that they were mostly arranged marriages and worked hard throughout their lives for their families and are all in reasonably well off economically. As a husband, my thoughts go along the lines that even for good women, may be Indian husbands tend to take their wives for granted and that marriages have not been that interesting. With some economic freedom and with the traditional responsibilities essentially over, may be it is time for them to enjoy the time that is left in the ways they know. My nephew Jaykar, who grew up in USA, once put it rather harshly that there is no love in Indian marriages. I would not go that far, but may be old habits die hard. There has been a consistent pattern of men and women sitting separately in parties and similar segregated patterns which many of us really did not get rid of.
P.S. (via 3quarksdaily) "On the one hand, the half-century span of Vladimir’s love letters to Véra do follow the neurobiological progression of love, moving from the passionate attraction that defines the beginning of a romance to the deep, calmer attachment of longtime love. On the other, however, they suggest that the very act of writing love letters can help sustain the excitement and passion of a long-term relationship, countering what Stendhal called the “crystallization” that leads to disenchantment." from http://www.brainpickings.org/…/letters-to-vera-vladimir-na…/

Ava and Leila with parents Lalita and Gavin

Oops, Leila seems to have disappeared.

Ava is getting a sense of money

My granddaughter Ava seems to be getting a sense of money. We went for a walk this morning and saw a new house for sale. I told her that if she buys that, she can stay near us and walk to our house instead of waiting for her mom to give a lift. She said that she did not have enough money. We also saw an advertisement for a toy costing twenty two dollars. She wanted to buy it and said that she had enough money. Then, she brought out two two-dollar coins, put them side by side and said "See two two, twenty two".

'Foreigners' Isaac Newton, Pythagoras..

to be checked out of Rajasthan text books (via Chapati Mystery):
"Bizarre as Devnani's plans are however, they are hardly unique. The Gujarat government implemented a similar scheme in 2014, when it decided to introduce seven books by Dinanath Batra, a member of the executive committee of RSS education wing Vidya Bharti, as recommended reading for its primary and upper-primary students.

Batra himself has very strong opinions on the current education system in India, which he also feels gives much too much importance to 'foreigners'.

The Times of India quoted from one of his writings as follows:

Education in India is neither Indian nor a real education. Education has nothing to do with this country's land. It is result of mischiefs with words by Marx and Macaulay that today's young generation has become aimless, arrogant and stubborn and is in the race of being unemployed. A nationalistic education system has to be developed to address the requirements and through this we have to develop a young generation that is committed to Hindutva and nationalist.""

Pakistani Culture with lots of photographs

Pakistan Culture: Evolution, Transformation & mutation by Nadeem F. Paracha:
"As we have seen, cultural engineering to override Pakistan’s diversity and replace it with a singular ideological and social convolution will continue to spell disaster and undermine the more organic aspects of Pakistani nationhood."

Where is the money from off shore tax revenue?

Off and on, I have been wondering about how the off shore tax revenue is used since there are many reports in Australian news papers about the missing revenue. Here is fairly comprehensive report about the US situation. One passage:
"....these “trapped overseas” profits are neither overseas nor trapped. It is true that for accounting purposes, multinational corporations keep these dollars off of their U.S. books. But in the real world, the money is often deposited in U.S. banks, circulating in the U.S. economy, and available for a wide variety of domestic investments. For nearly all practical purposes, that money is already here, being put to work in the U.S. economy."
And much more.
A comment from Malcolm Maiden: "Treasury's report says by the way that the most efficient tax would be a new broadbased land tax. Unlike multinationals, land is immobile. It can't be moved to a tax haven the same way the profits from the sale of information technology and digital intellectual property can . It would be simple to administer, and it would be collected from both domestic and foreign landowners."
Malcolm Maiden also says "US Treasury Secretary Jack Lew has told his G20 colleagues that the US doesn't want to implement a plan that results in its multinational corporate  tax base being eroded." But the few comments I saw from last year by Jack Lew and Obama seem to be in the opposite direction, but they have no hopes of passing a legislation to counter it because of US senate and Congress (However, there are some questions about Jack Lew)

Lachto Drom

is available in ten parts, the first part here. This seems easier to watch than the full video

To the Finland Station

Tryin to get some idea of the antecedents of Marx, I started reading "To the Finland Station" by Edmund Wilson which still draws attention. Another reason may be the story "Edmund Wilson in Benares" by Pankaj Mishra which seems available here. The first person discussed is the French historian Jules Michelet, apparently the first historian who insisted that history should concentrate on the people, and not only on its leaders and institutions. Going through the early parts of Wilson's book, as usual, I am drawn to contradictions. Here are two quotes:

"Another thing that History [History of Revolution, 1847] will establish and which holds true in every connection, is that people are more important than leaders......I have realized that it was quite wrong to take these brilliant and powerful talkers, who expressed the thought of the masses, for the sole actors of the drama....The principal actor is the people" 
Later:
 "The people, in the highest idea, is not the people itself, but some class, some partial form of the people, ephemeral and deformed. In its authentic form, at its highest power, it is seen only in the man of genius, in him the great soul resides."

"Oh, he was a delightful old chap."

says Ghani Khan about Gandhi. And "I used to talk to him about my shikaar [hunting], about girls. Once he said to Father[Khan Abdul Gaffar Khan, Frontier Gandhi] Have you been bloodthirsty like him when you were young? Father said no no, he told him a lie and said I have never shot a bird even. Because father used to go for shikaar. Every winter we used to go for shikaar."

"So he sent for me from Hazari Bagh jail [in Bihar, India], and he took my return ticket and put it into his pocket and he said go to Jawaharlal [Nehru], and he sent me to Jawaharlal. Jawaharlal had just come out of prison [ May 1941]. He told him that I had become Americanized and please teach him the simple life and everything. So Jawaharlal looked at me and said, you look simple enough, damn you. I was about 22.
I went there and he had only Indira, who later became Prime Minister. She was about 14. So I lived with them. He did not have any sons. So I sort of became his son. I lived there for nine months. Then he sent me and Indira to Tagores University, Shantiniketan [in Bengal]."

" I had had a fight with him[his father]. I did not agree with his program. I am a bit of a socialist. I begged him to make an economic program. I told him Sir, there are eighty steps between communism and conservatism. Stand anywhere, choose any mixture, either way, nearer communism nearer conservatism, wherever you like but stand somewhere for heavens sake, and say this is my stand on economics. All these boys, I mean all the fellows who went with him to jail, their grandsons have passed BA and MAs in economics and political science. They keep on asking what is your economic program? And he said nothing. "
P.S. More here (via Chapati Mystery) http://tns.thenews.com.pk/private-world-of-ghani-khan-son-of-bacha-khan/#.VSS78RjXeK3 and here https://orbala.wordpress.com/2014/11/02/pashtun-personality-of-the-week-ghani-khan-philosopher-poet-sculptor/

Getting cold but still getting some produce from the garden

About the American left

The rise of the wonky left by Conor P. Williams, April  25, 2012:
"But if the eclipse of the new progressive era has many causes, one stands out: the American Left has no coherent or compelling moral vision to justify its policy aims. It frequently can’t articulate why it is it believes what it does. Leftists are philosophically adrift. To a substantial degree, this is because American liberalism has become a haven for wonks. Many prominent leftists seem to believe that political debates are won and lost by econometric analysis. This undercuts their willingness (and their capacity) to justify their projects."
Programmed for prime time by Bhaskar Sunkara, January 18, 2013:
"Klein is the archetype for the bankruptcy of modern liberalism, so much so that he disavows being a liberal at all. He’s a technocrat, obsessed with policy details, bereft of politics, earnestly searching for solutions to the world’s problems through the dialectic of an Excel spreadsheet. He told The New Republic’s Alec MacGillis, “At this point in my life, I don’t really think of myself as a liberal. That’s not the project I’m part of, which is to let the facts take me where they do.” This statement isn’t unusual. It reflects a new center-left common sense—liberals against politics and democratic messiness. Liberals, in the interest of humanity, against humanity."
Conor Williams response Should left fear (or hate) its wonks?, January 19, 2013:
"So when Bhaskar Sunkara writes that wonky bloggers like Ezra Klein, Matthew Yglesias, and Dylan Matthews are obsessed with technical policy design over persuasive politics, my head starts involuntarily nodding. As I’ve written before (many, many, many times), the institutional left is unduly obsessed with policy wonkery—to its political detriment."

Charts to show that the world is getting better

by Dylan Matthews at Vox (via Ramarao Kanneganti) "The press — and humans in general — have a strong negativity bias. Bad economic news gets morecoverage than good news. Negative experiences affect people more, and for longer, than positive ones. So it's natural for things like Russia's incursion into Ukraine or the rise of ISIS or the Ebola outbreak to weigh on us more than, say, the fact that extreme poverty has fallen by half since 1990, or that life expectancy is increasing, especially in poor countries. But it's worth paying some attention to the latter factors. The world is getting much, much better on a whole variety of dimensions. Here are just a few."
My reactions on Ramarao's wall:
"I have wondered about such things. There are long term trends, short term trends etc and it is not clear whether improvements can be sustained without struggle. One can think of air quality in Delhi and who can afford some clean air or soup kitchens..... The wikipedia article on soup kitchen says "With the improved economic conditions that followed WWII, there was less need for soup kitchens in advanced economies.[15] However, with the scaling back of welfare provision in the 1980s under president Reagan's administration, there was a rapid rise in activity from grass roots hunger relief agencies such as soup kitchens. According to a comprehensive government survey completed in 2002, over 90% of food banks, about 80% of emergency kitchens, and all known food rescue organisations, were established in the US after 1981."

And 
"I think we have over capacity for production (US can produce enough food for the world), diminishing rate of profit (Marx and now Sumners). Growth paradigm worked for a few centuries and it is not clear such growth as before is either possible or desirable. In the scramble share the profits, the majority seem to be loosing which means that there is little growth in productive economy (because of lack of buying capacity of the majority) and profits increasingly depends on pushing up asset prizes. It seems to me that the problems are distributional and hence political. Palma estimates that for most countries, the middle fifty percent after the top ten percent take half the income, the rest shared by the top ten percent and bottom forty percent. Many of us are in this middle fifty percent, may be even higher. So, we probably do not really experience the scarcities."

A Matt Rognlie quote

Matthew Rognlie: "...in an industry where most of the output is produced by short-lived software, the gross capital share will be high, evincing the centrality of capital’s direct role in production. At the same time, the net capital share may be low, indicating that the returns from production ultimately go more to software engineers than capitalists—whose return from production is offset by a loss from capital that rapidly becomes obsolete." in (beginning of page 6)http://www.brookings.edu/…/bp…/spring-2015/2015a_rognlie.pdf

Peter Principle?

I seem to be rising to the level of my incompetence. My love of Hindi film songs drew me to site "Songs of Yore". Usually I get by in the discussions there by internet search even though I do not know Hindi and have seen very few Hindi films. The folk there are getting more serious and want me to be part of panel, they think that I know statistics. Even though I worked in Indian Statistical Institute Delhi Centre for four years (1982-86), I never worked in statistics or any applied mathematics. ISI had a freewheeling culture. The rumour was that when Mahalanobis met an Indian abroad and liked him, he started a new department for him; this I heard when I found they had a department of agriculture. One of the early stars was C.R. Rao. He started as a student there and some of his famous work was published in Bulletin of Calcutta Mathematical Society around 1944 before he got a Ph. D. later in UK. This includes Cramer-Rao, Rao-Blackwell. The later Blackwell published three years after Rao and Rao had to fight to get credit since he did not mention the main results in the introduction. Anyway, Rao followed similar methods with his students and would assign them new interesting areas for research in which he had no expertise. Some were essentially either pure mathematics or borderline areas (and one of the students shifted more towards pure mathematics and influenced others) and that is how pure mathematics started there and continued. A famous product is S.R.S. Varadhan who won the Abel prize. Rao left ISI but I met him during his visits to Delhi during my stay there. I was in the guest house for a while, he would visit around dinner time uninvited and stay on for dinner though he was a honoured gust there. We would get free trips in the car assigned to him. I gossiped with him about the development of the institute. I do not know why Rao was friendly to us. It might have been Telugu-Telugu interaction. Or he might have seen that I was already in trouble due to my anti-establishment attitude and wanted to provide some support. I barely survived my four years there though some of the friendships made there have survived. I do not think that I met Rao again.

Public Street Harassment

From The Age today The private struggle with public street harassment:
" A survey released last month by the Australia Institute found almost 50 per cent of women polled said they had been followed, while 40 per cent said they had had their paths blocked. 

More than 40 per cent had also experienced unwanted sexual touching by a stranger, while 36 per cent had been flashed. Almost 80 per cent had been honked at, 75 per cent had been leered at, while more than 60 per cent had experienced lewd or sexist comments. 

La Trobe University sexual violence researcher Bianca Fileborn calls street harassment one of the "most pervasive forms of sexualised violence". As with rape and domestic violence, it is likely that the figures are even higher than suggested by surveys. Many women do not report their experiences. Some don't even tell their friends or family.

It's simply part of being a lady in 2015 in Australia. Or the United States, Britain or Canada, where similar figures are recorded. 

.......

There is not much research about the perpetrators of street harassment, but overwhelmingly they are understood to be men, who are more likely to harass strangers when in a group. This is not to suggest that most men drive around in cars scaring the bejesus out of women. The point is, enough of them do it to enough women – and the result is a culture that is unnervingly everyday in its violence against females. 

There is also an unnerving lack of action to stop it.

.....

What happens to women on the streets is not seen as a critical issue – it is certainly not taken with the same level of seriousness as the safety of young men at risk of coward punches (where laws were changed, new terms coined). "Street harassment" is not even specifically referred to in the federal government's much trumpeted national plan to reduce violence against women. 

Perhaps this is why many of the responses have been informal ones: encouraging bystanders and friends to intervene if it's safe, as well as websites like Hollaback that collect and publicise examples. 

But until street harassment is seen as a mainstream issue, worthy of tackling rather than ignoring or tolerating, the onus will remain on individual women to handle it. Women, who like Rachel are not only scared by what is happening, but in her own words, "pissed off". 

"I'm just so angry. You should be able to walk in your local area at night." "

Another round on Piketty

around Deciphering the fall and raise in net capital share by Matt Rognlie. I will just mention one response from a Marxist(?) Michael Roberts. More links and discussion in the article.

Piketty Update from Michael Roberts:

"So what are the great revelations of this economics prodigy? Well, Piketty argues that inequality of wealth has risen in the last 30 years because the returns to capital were increasing or at least rising faster than national income.  However, Rognlie found the trend to be almost entirely isolated to the housing sector. Yes, some investments with a high level of intellectual property, like computer software, had become extremely valuable in the hands of the wealthy. But some of those assets were unlikely to remain valuable for very long, like a software program that needs to be replaced in a few years with a new version. When adjusting for that depreciation, most of the rest of the increase in capital came in housing, a single sector that, while important, might not shape the entire future of inequality as Piketty assumed.
The second finding was that Piketty overestimates how high the returns to capital would be in the future. For his fears to come true, wealthy people who amass more and more capital would need to keep earning a high return on that capital. But Rognlie’s research suggests that the returns to capital will decline over. “Piketty’s story has multiple steps to it. I’m sort of showing that one of the steps does the reverse of what he says it does,” Rognlie said in an interview. Those findings, he added, suggest “there doesn’t seem to be a big need for panic” over Piketty’s predictions.  In other words, forget worsening inequality – it ain’t going to happen. This conclusion is music to the ears of mainstream economics, especially its neoclassical wing.
......
By reducing corporate profits by the amount of depreciation of capital, it appears that capital is not really extracting any value from labour.

But that is putting the cart before horse. The first process in the capitalist mode of production is the extraction of surplus value from labour. The second process is the investment of that surplus value in the stock of fixed assets to compete and raise or maintain profitability. As Marx explained, this is where an important contradiction arises; between a rising rate of surplus value and a falling rate of profit. Both Piketty and Rognlie ignore or deny this contradiction. For Piketty, there is a rising share of income going to capital (a rising rate of surplus value) and so no falling rate of profit. For Rognlie, there is no rising rate of surplus value, so there is a falling rate of profit). Both are wrong.

Actually, whether net of depreciation or not, the share of income going to capital (the rate of surplus value if you like) in the G7 economies has been rising, if you include housing. On a net basis it has risen since the mid-1970s, even if the share is not much higher than in the mid-1960s. And yet the rate of profit on productive capital has fallen in G7 economies since 1950.

So the Rognlie papers have not really brought up anything new in the debate about Piketty’s work and his conclusions. There is no dispute that the inequality of wealth and income in the main capitalist economies had risen to 19th century heights by the end of the 20th century. Rognlie merely follows previous work by heterodox and Marxist economists to show that this is mainly due to the explosion in the value of housing in the last 30 years. So Piketty’s ‘fundamental laws of capitalism’ that Piketty contrasts to that of Marx, namely that the rate of return on capital is and will be higher than the growth of income; and that savings rates will rise to benefit the owners of ‘wealth’, are not correct explanations of rising inequality."