Utopia, you are standing in it!

Our Reserve Bank has been all over the place on monetary policy going back to last year.

There was the totally out-of-the-blue 50 basis point OCR cut last year.  It may or may not have been substantively justified, but they never had a compelling rationale at the time and were reduced to dreaming up (quite reasonable) stories after the event.    The concern about minimising the risk of falling expectations was one of those stories –  good, but clearly an ex post rationalisation (since all the contemporary statements made little or no mention of the issue).

In the wake of that cut, the Governor gave quite a few interviews.  One of the most substantial was with Newsroom’s Bernard Hickey (there is a full transcript at the link).   In that interview – barely eight months ago –  we learned that the Governor had no particular qualms about a negative OCR…

Governor General Lord Aberdeen

Introduction  

On 8 July 1896, Governor General Lord Aberdeen forced Prime Minister Sir Charles Tupper from office by refusing to promulgate his constitutional advice and sign off on Orders-in-Council to summon senators and make other appointments. Tupper sought to fill up vacancies knowing full well that the Liberals had just won a parliamentary majority for the first time since 1874 in the general election held on 23 June 1896. When Aberdeen refused to sign the Orders-in-Council, Tupper wrote back that he had no choice but to resign the premiership, because the prime minister cannot remain in office after a governor general has rejected his constitutional advice and withdrawn his confidence from him. Lord Aberdeen then appointed Sir Wilfrid Laurier as Prime Minister, and Laurier would stand astride Canadian politics like a colossus for the next fifteen years. At Tupper’s insistence and at Aberdeen’s acquiescence, their written…

The latest blog for the Georgian Lords considers the topical issue of quarantine. In the 1720s the government was forced to update its quarantine legislation, but as Dr Charles Littleton of our Lords 1715-1790 project shows, it received spirited opposition from members of the House of Lords...

In the face of pressure from opposition parties and its own back-benchers, the Johnson government substantially amended the recently-passed Coronavirus Act (2020) enabling Parliament to scrutinize and renew the bill every six months. This was not the first time Parliament has tried to modify the power of the executive in the face of a national emergency. In earlier centuries the great fear was an even more indiscriminate killer, bubonic plague. London in particular had suffered from outbreaks of ‘the plague’ throughout the 17th century, the most famous being the Great Plague of 1665. The question of quarantine, of enforcing an involuntary 40-day…

COVID-19 has spread its share of misery, made all the worse by the doomsday cult that cry ‘apocalypse’ at every challenge humanity faces. This is the same class of character who, barely weeks ago, were dressing up like goblins and gluing themselves to the roads in order to save us from, you guessed it, the apocalypse. Except the looming doom predicted by those pasty-faced hysterics was all about changes in the weather.

Those with sufficient memory will recall that the world was being urged, in pretty strident terms, to destroy our energy supplies, and with it our way of living, by throwing everything at chaotically intermittent wind and solar.

As every good self-interested panic merchant well-knows, it pays to have a (very profitable) non-solution to a never-ending, non-problem.

Keep complaining about the weather (dressed up as the portents of doom) and the subsidies to wind and solar would just keep…

This was almost inevitable, and my first thought is, “Will his supporters vote for Biden, or will they stay home?” If the latter, we’re screwed come November. Oh, and will Sanders endorse Biden? I suspect so.

Click on the screenshot to read the CNN report:

And discuss below if you wish.

UPDATE:  Here’s an article that’s no longer relevant, since it argues that Bernie should drop his candidacy because he appeals to only one of three factions of Democrats, according to a division proposed not by Edsall, but by Shom Mazumder, a political scientist at Harvard,:

An excerpt:

On 25 March, the UK passed the Coronavirus Act 2020 as part of its attempt to manage the coronavirus outbreak. The Act introduces a wave of temporary measures designed to either amend existing legislative provisions or introduce new statutory powers in order to mitigate the effects of the COVID-19 (See Nicholas Clapham’s Conversation post here on the content of Bill). As countries around the world enact similar laws, there are notable concerns regarding not only the impact of emergency provisions on human rights, but also the potential of emergency powers to become normalised. One response is to utilise sunset clauses. This piece argues that while sunset clauses are both welcome and necessary, they should nevertheless be approached with a degree of caution.

Legislation in times of emergency

Following agreement by both Houses of Parliament, the Coronavirus Bill received Royal Assent on 25 March transposing the Bill into primary legislation in…

My last two articles have highlighted the failures of risk management in the ten weeks leading up to the Western COVID-19 lockdowns where over-reliance on the precautionary principle has left our authorities with limited options leading to a massive denial of social benefits with unfathomable consequences. I want to turn to a more detailed assessment of how risk managers failed with the hope that, once COVID-19 becomes part of history, we will have learnt something. While the horrors of the devastation is still raw, we need to prepare a blueprint for tomorrow. This first section looks at how the precautionary principle failed to function as a credible risk management tool. Part 2 will look at how we can become risk resilient even when our risk managers fail us (how we can perform a “Docilian Detox”). Part 3 will lay down the groundwork for a robust risk management strategy post-COVID-19 to…

The High Court of Australia, in a unanimous verdict of a 7-member bench, has acquitted Cardinal George Pell of the charges of child sexual abuse for which he has been serving time in prison: see Pell v The Queen[2020] HCA 12 (7 April 2020). He was immediately released.

In March, the Constitution Unit co-published a new report, Parliament and Brexit, in which some of the UK’s leading academics examine how parliament has managed Brexit to date, and how it might seek to handle the issue in future. Here, Nicola McEwen discusses how the Sewel convention, which regulates the relationship between the UK Parliament and its devolved counterparts, was put under strain by Brexit.

There are four legislatures in the UK, but only one of these is sovereign. The sovereignty of the Westminster parliament remains one of the most important principles of the UK constitution. Each of the devolution statutes made clear that conferral of law-making powers on the devolved institutions ‘does not affect the power of the Parliament of the United Kingdom to make laws’ for Scotland, Northern Ireland and Wales – including in areas of devolved competence. But Westminster’s parliamentary sovereignty is offset by the constitutional convention…

It is understandable that people are on the lookout for villains to blame in this time of national crisis – and who better than City ‘fat cats’ who are ‘profiting from the misery of others’? Usually it only takes a moment of serious thought to realise that these attacks are ludicrous. As Tom Bailey explains here, and I discussed here, it is plain daft to criticise investment managers for taking advantage of lower prices to buy shares. But when funds are engaged in ‘short selling’ it may take a little more effort to see the bigger picture.

Short selling is essentially a bet that the price of a financial asset will fall. It traditionally involves the short seller borrowing a parcel of shares or bonds from another investor and then selling them on. The original holder will charge a fee for this, which can be substantial.

At…

Along with Peter Leeson, I have a new working paper. In this paper, we empirically revisit the 1979 seminal paper of David Friedman in the Journal of Legal Studies regarding the law and economics of Iceland between 900 and 1262. The case is important because Iceland constitutes the first example in the literature on the economics of anarchy of how governance is a good that can privately be produced and with competition between providers. For nearly three centuries, Iceland was without a formal state (with a monopoly on violence) even though it was home to nearly one hundred thousands individuals. However, sustained private provision does not mean that the outcomes are superior than under formal governance. We decided to see whether Icelanders enjoyed living standards above the rest of Medieval Europe. The paper is available here on my website and the abstract is below:

Medieval Iceland was governed privately. Other…

(English Prime Minister Winston Churchill, August 27, 1941)

If you are looking for a personal, breezy hagiography of Winston Churchill then Boris Johnson’s THE CHURCHILL FACTOR: HOW ONE MAN MADE HISTORY will be of interest.  Johnson’s effort is not a traditional biography of the former occupant of 10 Downing Street, but a manifesto imploring the reader to consider the genius and greatness of Churchill.  Johnson is concerned that as time has passed fewer and fewer of the non-World War II generation have forgotten or are not aware of Churchill’s accomplishments as he states at the outset “we are losing those who can remember the sound of his voice, and I worry that we are in danger….of forgetting the scale of what he did.”  For the author, World War II would have been lost, if not for Churchill, and he further argues that the resident of Chartwell House and Blenheim Palace…