Thursday, 16 August 2018

Around the Traps 17/8/18 ( Aretha Franklin edition)

It is time again for Around the Traps.
Tribute to the Queen of Soul in General

Aussie,Aussie,Aussie,Oy,Oy,Oy
Northern America
Europe
Asia
Wonk
General
Climate
Andrew Gelman ( mainly stats)
Genial Dave Giles ( econometrics)
  • nuttin
Dianne Coyle ( quirky + book reviews)
Vox Wonk

Wednesday, 15 August 2018

Interest rates Versus Fiscal Policy

The ever ecellent Simon Wren-Lewis of Mainly Macro fame writes a wonderfully educative article on interest-rate-vs-fiscal-policy.

Enjoy

Tuesday, 14 August 2018

A prediction on the US mid-term elections

Stats GURU and generally all round good guy Andrew Gelman who it must be said has the best blog for keeping up to date on your stats education which has wallowed since finishing University has had two posts on the above subject.

They are:

My thinking for what it is worth is we have already seen huge swings in special elections held thus far.
If any President needs party balancing it is the present one.
Trump was and is a minority voted  President.

Hence I think it is a pretty fair bet the House and/or the Senate will switch back to the Democrats. 
I think a fair amount of republicans would think this is a good thing.

You would think (hope?) this behaviour of trump might have an impact

Monday, 13 August 2018

Turkey's economic woes

Turkey is facing dire times.
See:
John Cochrane
Emre Tarim
Raul Meijer
OECD Observer
Richard Holden

I am sure there will be more and IF I find them I will add to the above.

From a foreign affairs perspective Trump is taking a large gamble that this will eventually mean the USA being demonised in Turkey and thus Turkey turning to China.  Another Trump success

Sunday, 12 August 2018

Electricity

Okay let us start at the beginning a very good place to start as Julie Andrews sung to us!

We learnt not too long ago the 4 major reasons why electricity prices have risen over the last 10 years from David Blowers of the Grattan Institute.This adds to that

  1. Gold plating of the network  42%
  2. Retail Margin                        26%  
  3. Wholesale market                 17%
  4. Environment                         16%
Thus the major reason for the higher prices is the privatisation of the industry by various State governments. It accounts for 84% for the price rises.
It is pointless in arguing for nationalisation of the industry although this would be the best thing for the country as no State government could do that for monetary reasons.

Just before we leave this we should remember we never asked about the reliability of coal powered stations. We must thank Peter Martin for informing us that particularly in summer the coal stations are very unreliable.

What then for the future? Unfortunately higher prices are here to stay
Why is this?  Take a look at why prices rose so much to start with.
You need a very good regulator and the gold plating fiasco shows that is not the case.
There is no way at all there will be a vast over supply when the market is now essentially in private hands. Thus as Grattan point out we will never go back to the 'good old days'.

Where to go to then. Well we have both the Grattan Institute and the Finkel report telling us the same thing.
Coal is possibly the highest cost alternative whereas renewables are cheap and getting cheaper!!
Add in a battery as recommended by Finkel like the Telsa battery and you have dispatchable power very easily.Moreover it appears wind power and solar energy are complementary

To be honest most of our problems would go away pretty easily if we had a price on carbon and let the market work it out.
The NEG is perhaps a fourth best solution but one I am prepared to live with despite Hugh Saddler's reservations as it is at least a starting point and we haven't even had that in ten years.

My guess is that if we get a change of government we will only get a genuine emission intensity scheme rather than the de-facto one that is in the NEG.
The reason is politics. It leads to emissions falling with the least cost in terms of prices.

Whoopsy. I have been asked do I think the 'Monash' group is serious. NO! If a publicly funded coal fired station was built it would need permanent subsidies to operate. The Libs would be political roadkill for sometime


Postscript:

Ken Baldwin makes good points

Timothy Taylor also has some interesting points.

I got this late. Robert Farrago on nuclear and other stuff

Thursday, 9 August 2018

Around the Traps 10/8/18

It is time again for Around the Traps.

Aussie,Aussie,Aussie,Oy,Oy,Oy
Northern America
Europe
Asia
Wonk
General

Climate
Andrew Gelman ( mainly stats)
Genial Dave Giles (econometrics)
Dianne Coyle ( quirky + book reviews)
Vox wonk