Friday, October 15, 2010

A politically correct Nobel prize in economics?

Comment below by German economist Dr Oliver Marc Hartwich

This year’s Nobel prizes started promisingly enough: The literature prize was awarded to Mario Vargas Llosa, who made the defence of individual liberty the theme of his work. Then the peace prize went to jailed Chinese dissident Liu Xiabao, who has had to pay a high personal price for his decades-long fight for political freedom in the one-party state.

The Nobel Prize in economics, however, left me somewhat puzzled. To be sure, the recipients Peter Diamond, Dale Mortensen, and Christopher Pissarides are all highly respected economists. Their contributions to labour market theory have become part of textbook economics. In this sense, the prize is well deserved.

Having said that, awarding the prize to the trio also looks a bit like a safe choice. If the Nobel committee had wanted to set an exclamation mark with their decision, they could have honoured branches of economics they had hitherto neglected. For example, research into entrepreneurship is long overdue in terms of Nobel recognition, and someone like Israel M. Kirzner would have been a worthy recipient. No one has more elegantly formulated why and how entrepreneurs are the key figures in driving the competitive market economy and thus economic growth.

In another sense, too, the choice of the three labour market specialists is hardly revolutionary. Though their models are elegant, what they are actually saying is very much common sense. For example, their model shows that ‘more generous unemployment benefits give rise to higher unemployment and longer search times,’ the Nobel committee inform us in their press release. But does it surprise anyone that a life on benefits makes it less urgent to look for a job?

Even stranger, the Nobel laureates are happy to claim responsibility for labour market reforms that are widely regarded as failed. Pissarides says the ‘New Deal for Young People,’ a British government initiative aimed at getting 18- to 24-year-olds back on the job market after long spells of unemployment, ‘is very much based on our work.’ But, as a report by former British welfare reform minister Frank Field for London-based think tank Reform shows, the program was costly without actually bringing young jobseekers back into work. ‘The results of the New Deal for Young People have however been modest, to put it mildly,’ Field concluded.

To round off the oddities about this year’s prize, one of the laureates, Peter Diamond, had been nominated by President Obama for a seat on the board of the Federal Reserve. His nomination has been blocked, however, because Republican opponents have doubts about his qualifications for the job.

It seems the main purpose of this year’s prize is to underline that markets often do not work, in this case because of search costs in labour markets. But that such costs exist is hardly disputed.

It would have been more appropriate if the Nobel committee had honoured an economist who had made contributions to showing how markets work. Like Liu Xiabao, who was widely pipped to win the Nobel last year, Israel M. Kirzner may have to wait one more year.

The above is a press release from the Centre for Independent Studies, dated 15 October. Enquiries to Snail mail: PO Box 92, St Leonards, NSW, Australia 1590.

As career criminals with 100 convictions are spared jail in Britain, MPs ask... What DOES get you locked up?

Thousands of career criminals are being spared jail despite having amassed at least 50 convictions. Almost 2,700 were handed a community sentence after being found guilty more than 50 times before. Incredibly, 315 offenders even received a non-custodial punishment after 100 or more previous offences.

The figures, seen by the Mail, also show more than 13,000 on at least their 30th offence received a community penalty – widely derided as ‘soft’ by critics. It means offenders who are convicted of 30 or more crimes are 1,000 times more likely to be given a community sentence or a fine than end up in prison.

MPs and experts said the alarming revelations showed why Kenneth Clarke should be imprisoning more convicts – not fewer. Criminologist Dr David Green, director of the Civitas think-tank, said even more prolific offenders could escape jail in future. ‘It’s all very well giving out community sentences for minor offences – but if you’re on your 101st conviction, then it’s evidence of being a career criminal,’ he added. ‘I would have thought a long custodial sentence would be appropriate for these people, who will have been committing crimes more or less every day for all their adult life. If they do allow career criminals to roam the streets, we can safely say there will be a rise in crime.’

Tory backbencher Philip Davies said: ‘These statistics show what a joke the criminal justice system has become. You have to work very hard to get into prison nowadays. ‘No wonder people have lost faith in the criminal justice system when we see people carrying out literally hundreds of crimes and getting off time and time again.’

But the Justice Secretary yesterday remained defiant over his plans to hand out community punishments rather than short jail terms. He said: ‘Simply banging up more and more people for longer without actively seeking to change them is not going to protect the public. I do not think prison is or should be a numbers game’.

The re-offending figures, which are for 2008, were revealed last week by Justice Minister Crispin Blunt following a parliamentary question. They show that the problem of repeat offending has been getting worse. In 2006, a total of 179 criminals were spared jail after 100 convictions – not much more than half of the 315 figure in 2008. And whereas in 2002 a total of 1,200 had 50 or more convictions, that had soared to 2,670 in 2008.

Some of the figures were published earlier this year, buried in an annex of a document of sentencing statistics. The Ministry of Justice document reveals that repeat offending is getting worse. The proportion of sentences given to offenders with 15 or more previous convictions or cautions has risen from 17 per cent in 2000 to 28 per cent in 2008.

Graham Jones, the Labour MP who asked the question, said: ‘These figures seem to show that the “prison doesn’t work” idea put forward by the Conservatives is wrong.’

Despite how hard it has become to earn a custodial sentence, Mr Clarke is still insisting there are too many convicts sent to jail for six months or less. He wants to replace these sentences – given to around 50,000 offenders each year – with ‘tougher community’ penalties.

Yesterday, he said: ‘The army of short term prisoners we have at the moment, who have a particularly bad record of re-offending within six months of being released, is too big and we’ve got to find some sensible community sentences.’

Governors say it will slash jail numbers by 7,000 at any one time – with some prisons closing because there are too few inmates.

The vast majority of those convicted of a range of offences are have been convicted of the same crime before.

Mr Clarke provoked anger among the Tory grassroots earlier this year by declaring that prison ‘doesn’t work’ – ripping up almost 20 years of party policy. But he has stuck doggedly to the position that short-jail sentences are ‘ineffective’ and ‘absurd’. He says that – with 60 per cent of jailed inmates re-offending on release – the system must be changed.

The government is carrying out a sentencing review, which is due to report back within weeks. It will rule out scrapping short sentences altogether. But community punishments are likely to be toughened by making offenders wear an electronic tag. Officials hope this will persuade magistrates to use the punishment instead of jail.

In yesterday’s speech to the Prison Governors Association, Mr Clarke reiterated his plan to encourage inmates to work a 40-hour week, in return for the minimum wage. He also said he wanted to modern versions of Victorian prisons with a new focus on hard work and discipline.

He also said he wanted an ‘intensive effort to start developing drug-free wings’ in prisons, getting inmates off drugs altogether, and wanted regimes which prepared prisoners for an ‘ordinary honest life outside’.

Only this week, we heard that judges and magistrates are being told to send fewer violent thugs to prison. Now those found guilty of actual, or even grievous, bodily harm will not be going to prison at all, particularly if they are young or express remorse.

Makes you wonder who we’ll be letting off next? Rapists? Murderers?

Ken Clarke, our new Justice Secretary, may have come to the highly convenient, money-saving conclusion that prison sentences do not reduce crime – which I don’t believe – but I’m more inclined to side with former Home Secretary Michael Howard and his famous ‘prison works’ speech.

It addressed the problems of criminals and criminality in a way that the latest milksop, so-called ‘community payback’, never will. A couple of weeks loafing around in high-visibility jackets? Oh yes, I’m quite sure that will get hardened criminals back on the straight and narrow, Mr Clarke.

At the grassroots level, the judicial system is a currently a mess, where something as serious as shoplifting can earn you an £80 fixed penalty fine, while dropping a cigarette butt can land you with a £1,000 fine.

It’s a world where the police keep telling us that crime is falling but only, I’m convinced, because they’re letting repeat young offenders off with warning after warning, caution after caution.

Sometimes I wonder why they don’t just raise the age of criminal responsibility to 20 and solve the whole problem of youth crime overnight.


Save us from red tape, beg British local councils: Labour issued 74,000 pages of rules in a decade

Local government bureaucrats have had to follow 74,000 pages of new rules and instructions handed down by Whitehall over the past decade, council chiefs complained yesterday. The forest of red tape was a product of 4,000 different laws and circulars covering everything from parish council election advice to carbon reduction targets.

The direct cost to taxpayers of demands sent down by ministers to town halls amounts to £900 million a year and the overall losses could be as high as £2.5 billion annually, the Local Government Association said. It demanded simplification of the rules that govern local councils and an end to central government guidelines that give detailed instructions on how town halls should carry out their duties.

According to a report published by the umbrella body for local councils, the burden has amounted to 40 pages of regulation for every day that Parliament has been sitting since 2000. The rules include 2,000 pages of planning guidance issued by John Prescott and other Labour ministers to try to impose national policies on housebuilding, development in green fields, and traveller sites.

There were 1,300 pages sent out last year in one manual from the Department of Work and Pensions instructing local officials how to pay out Housing Benefit.

And targets issued by the Communities Department in 2008 required town halls to increase the number of new businesses started in their area, cut the re-offending rates of local criminals, and get more people to stop smoking.

Even since May and the arrival of the Coalition government, councils have been given 1,355 pages of rules thanks to 67 new laws which have come into effect.

The page count produced a plea for mercy from LGA chairman Baroness Margaret Eaton. She said: ‘An avalanche of paperwork has descended on town halls across the country in the past decade. ‘There is no justification for the amount of form-filling, data returns, reviews and micromanagement being foisted on local government.

Red tape of this kind wastes valuable time and resources which councils need to spend delivering services.’

The Association appealed for instructions to councils on how to carry out their legal duties to be scrapped, for consolidation of local government laws into a simplified codebook, and for an end to demands for statistics and information on whether targets have been reached.

Lady Eaton said: ‘Councils are well aware of their responsiblities towards their residents. What they need are the freedoms which will allow them to make the money go further and do more for everyone.’

Ministers yesterday announced one cutback on red-tape with the withdrawal of 4,700 Whitehall targets set under the regulations on ‘Local Area Agreements’.

Communities Secretary Eric Pickles also said central government demands for information would be simplified. He said: ‘National targets tend to mean that councils are constantly working on things which matter to Whitehall, regardless of what local residents think. I’d much rather councils were tackling local issues.

The money being spent on form fillers and bean counters could be far better spent helping elderly people to stay in their homes.’


'The Aim Is to Make Israel a Pariah'

Rupert Murdoch

Last night, Rupert Murdoch gave an extraordinary speech at an Anti-Defamation League dinner in which he revealed, yet again, that he is a true and selfless friend of the Jewish people and of Israel. Here is the text:

You [the ADL] were founded a century ago against the backdrop of something we cannot imagine in America today: the conviction and then lynching of an innocent Jew. In the century since then, you have fought anti-Semitism wherever you have found it. You have championed equal treatment for all races and creeds. And you have held America to her founding promise. So successful have you been, a few years ago some people were beginning to say, “maybe we don’t need an ADL anymore.” That is a much harder argument to make these days. Now, there’s not a single person in this room who needs a lecture on the evil of anti-Semitism. My own perspective is simple: We live in a world where there is an ongoing war against the Jews. For the first decades after Israel’s founding, this war was conventional in nature. The goal was straightforward: to use military force to overrun Israel. Well before the Berlin Wall came down, that approach had clearly failed.

Then came phase two: terrorism. Terrorists targeted Israelis both home and abroad – from the massacre of Israeli athletes at Munich to the second intifada. The terrorists continue to target Jews across the world. But they have not succeeded in bringing down the Israeli government – and they have not weakened Israeli resolve.

Now the war has entered a new phase. This is the soft war that seeks to isolate Israel by delegitimizing it. The battleground is everywhere: the media … multinational organizations … NGOs. In this war, the aim is to make Israel a pariah.

The result is the curious situation we have today: Israel becomes increasingly ostracized, while Iran – a nation that has made no secret of wishing Israel’s destruction – pursues nuclear weapons loudly, proudly, and without apparent fear of rebuke.

For me, this ongoing war is a fairly obvious fact of life. Every day, the citizens of the Jewish homeland defend themselves against armies of terrorists whose maps spell out the goal they have in mind: a Middle East without Israel. In Europe, Jewish populations increasingly find themselves targeted by people who share that goal. And in the United States, I fear that our foreign policy sometimes emboldens these extremists.

Tonight I’d like to speak about two things that worry me most. First is the disturbing new home that anti-Semitism has found in polite society – especially in Europe. Second is how violence and extremism are encouraged when the world sees Israel’s greatest ally distancing herself from the Jewish state.

When Americans think of anti-Semitism, we tend to think of the vulgar caricatures and attacks of the first part of the 20th century. Today it seems that the most virulent strains come from the left. Often this new anti-Semitism dresses itself up as legitimate disagreement with Israel.

Back in 2002 the president of Harvard, Larry Summers, put it this way: “Where anti-Semitism and views that are profoundly anti-Israeli have traditionally been the primary preserve of poorly educated right-wing populists, profoundly anti-Israel views are increasingly finding support in progressive intellectual communities. Serious and thoughtful people are advocating and taking actions that are anti-Semitic in their effect if not their intent.”

Mr. Summers was speaking mostly about our university campuses. Like me, however, he was also struck by alarming developments in Europe. Far from being dismissed out of hand, anti-Semitism today enjoys support at both the highest and lowest reaches of European society – from its most elite politicians to its largely Muslim ghettoes. European Jews find themselves caught in this pincer.

We saw a recent outbreak when a European Commissioner trade minister declared that peace in the Middle East is impossible because of the Jewish lobby in America. Here’s how he put it: “There is indeed a belief—it’s difficult to describe it otherwise—among most Jews that they are right. And it’s not so much whether these are religious Jews or not. Lay Jews also share the same belief that they are right. So it is not easy to have, even with moderate Jews, a rational discussion about what is actually happening in the Middle East.”

This minister did not suggest the problem was any specific Israeli policy. The problem, as he defined it, is the nature of the Jews. Adding to the absurdity, this man then responded to his critics this way: Anti-Semitism, he asserted, “has no place in today’s world and is fundamentally against our European values.” Of course, he has kept his job.

Unfortunately, we see examples like this one all across Europe. Sweden, for example, has long been a synonym for liberal tolerance. Yet in one of Sweden’s largest cities, Jews report increasing examples of harassment. When an Israeli tennis team visited for a competition, it was greeted with riots. So how did the mayor respond? By equating Zionism with anti-Semitism – and suggesting that Swedish Jews would be safer in his town if they distanced themselves from Israeli actions in Gaza. You don’t have to look far for other danger signs:

The Norwegian government forbids a Norwegian-based, German shipbuilder from using its waters to test a submarine being built for the Israeli navy.

Britain and Spain are boycotting an OECD tourism meeting in Jerusalem.

In the Netherlands, police report a 50% increase in the number of anti-Semitic incidents.

Maybe we shouldn’t be surprised by these things. According to one infamous European poll a few years back, Europeans listed Israel ahead of Iran and North Korea as the greatest threat to world peace.

In Europe today, some of the most egregious attacks on Jewish people, Jewish symbols, and Jewish houses of worship have come from the Muslim population.

Unfortunately, far from making clear that such behavior will not be tolerated, too often the official response is what we’ve seen from the Swedish mayor – who suggested Jews and Israel were partly to blame themselves.

When Europe’s political leaders do not stand up to the thugs, they lend credence to the idea that Israel is the source of all the world’s problems – and they guarantee more ugliness. If that is not anti-Semitism, I don’t know what is.

That brings me to my second point: the importance of good relations between Israel and the United States. Some believe that if America wants to gain credibility in the Muslim world and advance the cause of peace, Washington needs to put some distance between itself and Israel. My view is the opposite. Far from making peace more possible, we are making hostilities more certain. Far from making things better for the Palestinian people, sour relations between the United States and Israel guarantees that ordinary Palestinians will continue to suffer.

The peace we all want will come when Israel feels secure – not when Washington feels distant.

Right now we have war. There are many people waging this war. Some blow up cafes. Some fire rockets into civilian areas. Some are pursuing nuclear arms. Some are fighting the soft war, through international boycotts and resolutions condemning Israel. All these people are watching the U.S.-Israeli relationship closely.

In this regard, I was pleased to hear the State Department’s spokesman clarify America’s position yesterday. He said that the United States recognizes “the special nature of the Israeli state. It is a state for the Jewish people.” This is an important message to send to the Middle East. When people see, for example, a Jewish prime minister treated badly by an American president, they see a more isolated Jewish state. That only encourages those who favor the gun over those who favor negotiation.

Ladies and gentlemen, back in 1937, a man named Vladimir Jabotinsky urged Britain to open up an escape route for Jews fleeing Europe. Only a Jewish homeland, he said, could protect European Jews from the coming calamity. In prophetic words, he described the problem this way: “It is not the anti-Semitism of men,” he said. “It is, above all, the anti-Semitism of things, the inherent xenophobia of the body social or the body economic under which we suffer.”

The world of 2010 is not the world of the 1930s. The threats Jews face today are different. But these threats are real. These threats are soaked in an ugly language familiar to anyone old enough to remember World War II. And these threats cannot be addressed until we see them for what they are: part of an ongoing war against the Jews.



Political correctness is most pervasive in universities and colleges but I rarely report the incidents concerned here as I have a separate blog for educational matters.

American "liberals" often deny being Leftists and say that they are very different from the Communist rulers of other countries. The only real difference, however, is how much power they have. In America, their power is limited by democracy. To see what they WOULD be like with more power, look at where they ARE already very powerful: in America's educational system -- particularly in the universities and colleges. They show there the same respect for free-speech and political diversity that Stalin did: None. So look to the colleges to see what the whole country would be like if "liberals" had their way. It would be a dictatorship.

For more postings from me, see TONGUE-TIED, GREENIE WATCH, EDUCATION WATCH INTERNATIONAL, FOOD & HEALTH SKEPTIC, GUN WATCH, AUSTRALIAN POLITICS, DISSECTING LEFTISM, IMMIGRATION WATCH INTERNATIONAL and EYE ON BRITAIN (Note that EYE ON BRITAIN has regular posts on the reality of socialized medicine). My Home Pages are here or here or here or Email me (John Ray) here. For readers in China or for times when is playing up, there is a mirror of this site here.


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