I had not made the connection between the loss of faith in long term policy through the political mechanism of 'core promises' and the modern throwing of dollars around election time.

The great majority of the economic commentariat cheered the repudiation of promises they regarded as obstructing the process of economic reform. Many of them simultaneously deplored the deterioration of the policy process in the later years of the Howard government. However, most failed to make the link between the two.

By the end of the Howard years, it was impossible to take any long-run policy commitment seriously. So the only credible promises Howard could make were those that involved lump-sum handouts (like the baby bonus) or immediate interventions to subvert long-term policy (like the Mersey hospital takeover).

I think there is an element of Schmittian governance that has crept into modern liberal democracy and contributes to this, however, Quiggin's is a good reading of the emergent properties of never admitting error in election buying policies and the negative effect they have on long term policy and democratism.

I think the University of Phoenix is a remarkable institution that tapped into an area of demand that was not being met. Katherine Mangu-Ward argues that much of the admonishment for it from American academia is because it is a commercial operation. I disagree with that. American tertiary institutions are for more responsive to their customers, ie students, than Australian Universities are. This may be because Australian Universities are micro-managed from Canberra.

John Quiggin recently argued that the University of Phoenix was more a niche for a trade school than a competitor for the state and high-end tertiary institutions:

It was obvious even at the time that U Phoenix was little more than a grandiosely titled trade school, occupying one of the relatively limited educational niches where for-profit firms have traditionally played a role. But even here it seems, there are pretty big problems, with a graduation rate of only 16 per cent for students without previous college experience. However hard you spin it, this is an unimpressive result.

Admittedly, though, once you accept the defence that Phoenix is not a real university, it's hard to make such comparisons. It's in a different business and can't be compared with community colleges, let alone state universities or high-end (non-profit) private institutions.

As John Quiggin notes tertiary institutions are often served by their reputation and follow-on from it with the old school tie. Think American Ivy-league schools or the Australian sandstone universities. One of the benefits of institutions like the University of Phoenix is that you can sign up and go. Getting into an Australian University of a US State College is a massive pain in the arse that is not customer (read student) driven.

I don't think tertiary education will become completely private, there is too much social utility in government policies to encourage its population to go into tertiary studies. In fact, as Mangu-Ward notes, Phoenix University is dependent on its students having federal loans:

Phoenix's business model relies on federal tax dollars. In 2004-05, its 300,000-plus students received a total of $1.8 billion in federally supported student loans, making it the biggest single recipient of student aid in the country. Because the school, unlike elite universities, receives zero government research grants, every one of those greenbacks from Uncle Sam comes attached to a student, usually in the form of a Pell grant.

This leads to a very simple equation: More students equals more money.

The school helps students apply for the maximum amount of aid they're eligible to receive and speeds the processing of the government money into their coffers. Phoenix has every incentive to be aggressive in its recruiting practices.

I have little issue with government involvement in tertiary education as principle, though I find the Nelsonian micro-management from Canberra a repugnant form of inefficient organization. I do believe that whatever mix best supplies the tertiary needs of society and the economy will end up in a mix of public and private. Personally I think the whole educational enterprise should be accelerated and the HSC become the educational equivalent of a Bachelor of Arts/Science.

Starbucks is contracting operations in Australia after closing 600+ stores in the US. Personally I like Starbucks coffee and get a medium sized regular black coffee every morning on the way to work. There are two nearby though not as close to the normal joke about Starbucks where they set up shop opposite each other. Though when I lived in North Scottsdale there was a Starbucks in the mall, and another Starbucks stand in the grocery store a mere 90 metres away.

Via Angela on flickr

Starbucks has managed to make themselves 'cool' in the United States and the self-proclaimed barista's seem to take delight in remembering your order from day to day. Consequently it makes it a pleasant consumer experience. As much as I love a long black [Americano in the US] while taking in the environment of Lygon Street, I enjoy a Starbucks coffee on the way to work too.

From others around the Australian blogosphere, Avocadia doesn't mind the odd Starbucks espresso;

I appreciated Starbucks when we were in the US earlier this year because while it was sub-par espresso-based coffee, at least it was espresso-based coffee. ... Why then will I miss Starbucks? Because where I live - Ingleburn - I'm basically in the same position. There's not a great deal of demand for quality espresso in Ingleburn; you can't mix it with Wild Turkey, you see.

Pracs doesn't mind the convenience of Starbucks from when he was in Los Angeles:

Actually, I have to say I didn't mind Starbucks though. A nice big mug of filtered coffee outside while you watched the world go by wasn't a bad way to have a break.

John Quiggin is dismissive though he notes the competitive advantage Gloria Jeans got from organising as a franchise:

A letter in the Fin Review makes the point that Starbucks suffered in competition with Gloria Jeans (for non-Oz readers, a truly horrible food court coffee chain, closely associated with one of our less appealing churches), because GJ is a franchise operation, with most franchisees being small enough to avoid payroll tax, while Starbucks were company-owned and had to pay.

While Tim Dunlop dislikes Starbucks coffee from news of the US contractions of stores:

As much as I loved living in the US, the coffee was (generally) dreadful and Starbucks was a major contributor to that state of affairs. I don't know why it was, though I think the tendency to make the drinks just too big was probably part of the problem. Never underestimate how good Australian coffee is and note how Starbucks has never really taken off here

Gary Sauer-Thompson believes it is a failure of globalisation to take into account regionalist tastes:

Starbucks, maybe an icon of globalization, but it is the downside of globalization in that it failed to adjust to the local culture of European style coffee houses with good coffee. It just dumped what worked in America into Australia and so failed to adjust to the local Australian culture of European style coffee houses with good coffee. They took the ideas from Italian cafes and implemented them in America. But, as we already had Italian style cafes in Australia, Starbucks offered little in the way of innovation.

Starbucks has obviously hit a market and helped propel coffee into a mass store phenomenon. American love of coffee stems back to Civil War times when it was part of a soldiers ration, and desperate soldiers, unable to light campfires to boil water, would eat the beans directly. Starbucks suits the highway and car culture of the US exceptionally well. It was hard to see how they could maintain expansion given that their product is largely a luxury item - $5.00 USD for a coffee is excessive.

Excellent article by John Quiggin in support of his new book. It is a great summation of the issues in a short article. Economic policy since the 80s has been dominated by neoliberalism which also colloquilly known as Thatcherism, Reaganism, Economic Rationalism, the Washington Consensus etc. Several aspects of that economic policy have taken a hit with the recent financial crisis.

While it hasn't completely discredited neoliberalism; free markets in conjunction with liberal democracy still produce the best outcomes,it has forced economists to look in their belly buttons and explain what worked and why, what didn't work and why; and how policy led us to the great financial crisis that rivals the great depression in its social and economic effects.

Quiggin describes the main edifices of neoliberalism as; The Great Moderation, the Efficient Market Hypothesis, Dynamic Stochastic General Equilibrium, Trickle-Down Hypothesis and Privatization. Quiggin argues that the Great Moderation and the Efficient Market Hypothesis are the most easily falsifiable.

The Great Moderation is that only monetary policy is needed for stability however with the crash countries that did Keynesian stimulus seemed to have survived the bump better. The Efficient Market was that markets provide the best mechanism of real value. In truth banks hid the toxicity of assets until a crash was inevitable.

The problem Quiggin argues, is what to replace those with such that it can inform government and economic policy.

John Quiggin's book is largely about how the Great Financial Crisis [GFC] had discredited neoliberalism's excesses yet those policies are persisting despite the empirical evidence of the GFC and the ineffectiveness of neoliberalism's policies to foresee it as well as deal with it.

The book goes through each of the economic theories supporting the policies of The Great Moderation, the Efficient Market Hypothesis, Dynamic Stochastic General Equilibrium, Trickle-Down Hypothesis and Privatization. I got kind of a bit dull toward the final third as the theories were repetitive. That isn't Quiggin's fault more the dry nature of the subject in creating a consistent thesis.

The book isn't against the social organization technologies of liberal democracy and free markets. The policy prescriptions are quite mild in reality and can probably be adopted without the need for public debate on them. Where that might hit a brick wall is in the United States the Republican Party is increasingly demagogic and not really interested in good governance in my opinion. Then again that is where the zombie part of his thesis appears - something that isn't unique to the American Republican Party, nor America.

Well worth the read and an excellent attempt to inform the political interested but economically dull average reader about the economic theories that have informed economic policy since the 1980s.

Would read again.