Monday, June 11, 2012

Lorenzo on monetary policy, Winton on Laura Tingle, death of Helen Beh and some Sydney lights

It's very dark and wet here in Sydney. It's also the Queen's birthday holiday. Thank Queenie!

For the first time in over two weeks I have the time for a proper browse around the blogging traps, looking at some of my old favourites. It's been quite fun.

Over at skepticslawyers, Lorenzo's Easy Guide to Monetary Policy is a tightly argued pPhotoiece looking at money and monetary policy. Like much of Lorenzo's writing, it is a complex but lucid piece.

If I simplify, the main take home messages to me were first that Australia's Reserve Bank still had the dual objective of inflation control and maintenance of economic activity. Central Banks whose sole role is expressed in terms of inflation control may deliver, but at the risk of crushing economic activity.

In parallel, the way the inflation target is expressed in Australia is different in significant respects from that holding in many other countries. It is somewhat higher and expressed in terms of an inflation range rather than a single target. So long as inflation falls broadly within the range over the cycle, monetary policy can be adjusted to smooth fluctuations in economic activity. All this means that the RBA has more scope for action than many of its international counterparts.

I recognise that I am simplifying. In reading, I was reminded just how much both policy and institutional structures reflect the past in ways that we don't always recognise or at least remember. Specifically in this case, the stagflation experiences of the 1970s.

[me.jpg]While I was off-line, Laura Tingle's Quarterly Essay Great Expectations: Government, Entitlement and an Angry Nation was released. Winton Bates reviewed the piece in What are Australians angry about? I heard snippets of the discussion about the piece in those brief periods where I had access to a radio.

It would be unfair to comment on specifics when I haven't read the piece, but the surrounding discussion crystallised a concern I had in my mind about the use of the word "entitlements". The point to remember, I think, is that the Australian approach to policy making has always been pretty pragmatic coloured by a strong concern for the redress of social ills. To the degree that ideology played a role, the differences between the parties reflected differing weightings between the collective and the individual, between equality and equality of opportunity. The Labor and Country Parties were more collectivist, the Liberal Party and its various precursors more individualist.

Like monetary policy, today's political language actually dates to the 1970s. The very wording that I have used - equality vs equality of opportunity - really dates to the 1970s. As a then young radical in the Country Party, yes, the Party did have them!, I remember writing about this stuff, trying to craft new messages.

Looking back, the things that most stands out today is what I would describe simply as loss of imagination.

As a member of the Country Party and McEwen House reform groups, we were trying to craft new messages and initiatives at a time when this still seemed possible. To take a simple example, I pushed through a motion at the State Conference calling for an inquiry into the NSW Public Education system. At the time, the Country Party was in fact in coalition Government in NSW with a Country Party minister for education, so the motion created concern among Party managers.

Central to my argument at the time was the role that public schools might play as community centres, especially in country communities. Here we had all of these public assets used for part of the day, part of the year. Why not, I argued, make them proper community facilities, so that their playing fields where they had them became community fields, their libraries community libraries, their classrooms meeting rooms? This, I thought, would allow for greater investment in the schools themselves, so that pupils benefited. It would also give the public school system much greater leverage in a general sense through better integration into the community.

My motion may have passed, but finally went nowhere because of the nature of institutional barriers. Still, I think that the example makes the point. There is a huge difference between the type of systemic change I was advocating and today's focus on NAPLAN and performance pay. There is not much scope for imagination in today's mechanistic systems.

In Vale Helen Beh, 1941-2012, Paul Barratt reports on the death of Professor Helen Beh from breast cancer.  

Helen Charmaine Beh was born on the 31July 1941 in Singleton,  daughter of Florence (Simpson) and Frederick Charles Beh.

  She attended Singleton Public and High Schools and was awarded a BA (Hons) at the University of New England in 1963.  In 1969, she was the first woman to be awarded a PhD in Psychology at UNE.  In 1973, she became the first woman to be appointed Senior Lecturer in Psychology at the University of Sydney.  For her services to the Faculty of Science, she was awarded a Master of Science (ad eundem gradem) by the University of Sydney in 2000.

I selected this photo of Helen from Paul's reprinted obituary written by husband Cyril Latimer because it shows her in her country setting; she was a committed horsewomen.

Because of the age difference I have only a vague recollection of Helen, but I do remember being struck by her beauty.

On my shelves in the New England collection, I have the history of the UNE Psychology Department written by Paul's dad, Professor Paul Barratt. It's interesting for two reasons at least. It reminds me of just how small and equipment limited the university departments were then, and not just at UNE. It also reminds me of UNE's pioneering role in bringing university education to New England.   

In 1965, Helen Beh co-authored with Paul Barratt Snr the paper “Discrimination and Conditioning during Sleep as Indicated by the Electroencephalogram” in Science.  This landmark paper, demonstrating that changes in electroencephalograms indicate that subjects respond more frequently to significant or meaningful stimuli during sleep than to non-significant stimuli, and that conditioned reactions may be induced in sleeping subjects, is still regularly cited. Helen went on to become an internationally recognized expert in sleep research, psychophysiology, human performance and sports psychology.

It seems that I have run out of time for this morning's ramble. Therefore let me finish with marcellous, another of my long standing blogging favourites.

Many of marcellous' posts deal with music, some with law. I am not a music person, but I do read m's music posts because they provide a picture into another Sydney world. Concert was good is an example. The post begins:

Last night to hear the SSO play Brahms’ second piano concerto and Shostakovich’s sixth symphony with Philippe Bianconi and Oleg Caetani.

There was some excitement abroad in the city owing the the Vivid Festival.  I have rarely seen so many people in town other than on new year’s eve or for Australia Day.  I’ve rarely even seen this since for many years I have avoided such crowded public celebrations.  The crowds and the traffic delayed the concert start by a bit over ten minutes and latecomers were admitted.

The photo is an example of the light display.

The house move I have just made took me only a few blocks away from the previous place, but into a different world. Walking through the light rain yesterday to the nearby Eastgardens' shopping centre to buy food for the first lunch cooked for friends since I moved into my new house, I thought just how interesting and different my new neighbourhood is.

I didn't think to bring my camera, but I will take it out and get some shots on my next walk. 


Evan said...

Hi Jim, Helen Beh lectured me in psych at Sydney Uni. I too was struck by her beauty.

I'll be interested to see what you make of Laura's essay. I think the interesting question is the one she leaves - where to from here?

The failure of nerve by the political class is an interesting one. Is it just youthful baby boomers getting older and more realistic/cynical? Why was the whole neo-liberal ideology so triumphant? An instance of the 'British disease'and decline of influence by the churches? I would be interested in your views.

Jim Belshaw said...

Interesting, Evan, that you found her beautiful too.

Will try to work out my views, Evan. A fair bit of what I write addresses what I see as problems. By implication, change the process and approaches and you will improve things. But it's just so much harder to clearly articulate new approaches.

How do we capture the power of targeted imagination?

Rod said...

Your comments on community use of schools is an interesting one. Every public school in my town now has horrible looking 8ft big black fences all around them to keep people out (inclosed space according to the notices). It makes me sad because as a child I used to play in the school playgrounds on holidays and weekends. I notice now that the big concrete roundabout nearby gets children playing on it (and dodging cars) on weekends and holidays.

Winton Bates said...

Thanks for drawing attention to Lorenzo's article, Jim. In my view the market monetarists know what they are talking about.

Regarding entitlements, I think the problem is the growth of a sense of entitlement to be looked after by governments. The best example in Australia would be industry assistance, where people in some highly assisted industries seemed to expect assistance from consumers and taxpayers would last for ever. In the end, many of them had to make a difficult psychological adjustment as well as an economic adjustment.

In the case of social welfare benefits it seems to me that people have a reasonable sense of entitlement to benefits at current levels if they qualify under means tests. However, the outcry over the recent limitation of superannuation concessions enjoyed by middle and upper income people seems to me to involve an unwarranted sense of entitlement to government assistance that could not be justified on either efficiency or equity grounds.

Anonymous said...

Rod's comment re 'community use of schools' (which picks up on your own) is a good one. I seem to remember there was a push towards multiple use of the asset (school buildings) some years back? The thought was that school became after-hours kid care, became (maybe) tech courses, or U3A - or is it U4A, can't remember.

Point being that one physical asset had a useful life beyond 9-3. I thought that could have been a sensible use, but I've no idea now what the opposing views were. A pity, because they obviously "won" the debate.

Anyway - was that you? If so, well done to have tried.

Thoughtful article Jim. And how sad it was to read of that quite valuable member of our society struck down by cancer. What a brightly burning spark.


Jim Belshaw said...

Winton, I disagree with you quite profoundly. I think that your mental structures are a bit skewed! Dear me, that's a strong statement isn't it? I probably need to try to explain as best I can in a post. Not to attack your views, but to expose my own perceptions to scrutiny.

Rod and kvd. One of the difficulties when you are involved in political debate especially as a machine person is that you don't push things as hard as you should. I am sure that I was right, but I didn't follow up with the passion that I should have.

I had no idea at the time that schools would become single use ghettos. That's what they are now. If I had known, would I have pushed harder? I might have.

Winton Bates said...

I have been thinking that it might be useful to compare our ideas about an appropriate a ranking of the legitimacy of different 'entitlements'. You would presumably agree with me that property rights and contractual obligations should be at the top of the ranking and (non-core)election promises should be at the bottom of the ranking.

Jim Belshaw said...

IHi Winton. I don't think of any of those things as entitlements, although I note that you put entitlements in inverted commas.

Leaving that aside, I would agree in broad terms. Property rights - ownership -are recognised by law or custom are are central to functioning societies. Contracts are a way of defining and enforcing relationships in a legal system. At the other end, Governments indicate what they are planning to do, what they stand for, and we vote on that, but its bot a contract nor any form of right.

Winton Bates said...

Jim, it seems to me that issue of whether a sense of entitlement is warranted revolves around what it is reasonable to expect.

It seems reasonable for Australian pensioners to expect that future Australian governments will continue to pay their pensions. It seems less reasonable for Australians who do not qualify under pensions means tests to expect government to subsidize their retirement incomes (except insofar as there are contractual obligations e.g. under superannuation schemes for former employees - like me!).

Jim Belshaw said...

Sorry for the long delay in responding to this one. Surely an expectation is not the same as an entitlement?