Thursday, 21 August 2014

Around the Traps 22/8/14

It is time for Around the Traps.
No cricket for three weeks so plenty of time to update on the weekend.

Northern America


Andrew Gelman (Mainly Stats)
Dave Giles (Econometrics)
Dianne Coyle (Quirky + Book Reviews)
Vox wonk

Tuesday, 19 August 2014

What can we say about Joe Hockey

Joe Hockey has had a pretty poor week indeed fortnight.
John Quiggin was early on his case. Greg Jericho was there as well. Ross Gittins is around there too.

Andrew Elder also bought in. Mumble thought Joe needed a break. He remembered Paul Keating and Peter Costello very early as treasurers and how unimpressive they were.( Indeed there were calls to remove Keating as he was thought a 'captive' of Treasury!!)

I tend to think Mumble has a point BUT Keating had less time as shadow treasurer to prepare for Government and he had the worst Treasury Secretary to help him in John Stone.

I have said previously Hockey has good staff so I do not know how Hockey mixed up absolute and relative revenue of income earners.He appears not to understand what is a progressive and a regressive tax is!

He also needs a plan B as plan A plainly has failed.
It doesn't matter how many times you say Labor's deficit and debt disaster if it hasn't resonated with the public you need to move on. You also cannot argue the budget was fair when all the evidence points to it be quite unfair.

It seems the Present government is as bad as the Government they replaced at basic politics.

Monday, 18 August 2014

Wayne Swan

Wayne Swan should go down as one of the better performing treasurers we have had.

Faced with a looming GFC he eventually listened to both Glenn  Stevens and Ken Henry and brought down two stimulus measures that helped Australia avoid recession ( although nominal GDP did fall ).

He did not try to engage in reckless fiscal consolidation until the last budge had had total responsibility for. In this budget he cut NOMINAL spending and detracted 0.7 percentage points from GDP. This is easily the tightest budget we have ever seen or have figures for. Unfortunately it weakened the economy!

The stimulus measures were entirely appropriate. If they were too large we would have seen rising interest rates and inflation with wages on the increase as well. We saw nothing along these lines.

If monetary policy was the reason for Australia recovered then people must explain how the lag was so short back then and so long now.
Some people such as Tony Makin said we could have relied on net exports for our recovery however net exports were only positive because the negative contribution from exports was lower than that for imports!

For those people who suggest we needed no stimulus measures then they might try to explain why every country that adopted austerity measures had a depression ( a 10% drop in GDP).

We should also realise those critics of 'excessive spending' said the same thing about Ireland and Europe but we only saw those economies go backwards not forward so those critics cannot read GDP figures!

Where people go badly on Swan is conflating his performance as treasurer and his performance as a politician. If people thought interest rates were lower under the Liberals under John Howard than under Labor then it can only because he failed to explain this properly. If people thought Labor had excessive spending then again it goes back to Swan. I agree with Mumble in that Swan never portrayed any confidence at all as Treasurer. I never understood this and perhaps it can only be explained by Swan paying far too much attention to focus group research.

However in the final run a Treasurer is a politician as well as policy induced Treasurer and in this respect he was poor.
Indeed he brought down a very severe contractionary budget in the expectation the lower interest rates which would occur would bring the ALP political plaudits.This didn't happen and again as Treasurer he must take the blame. Here he forgot we all live in the nominal economy not the real economy. Skeptikoi shows this.

Wayne Swan is truly a mixed character.

Saturday, 16 August 2014

Tom Petty

Here is tom Petty doing learning to fly. Just a pity there is no electric in it.

Thursday, 14 August 2014

Around the Traps 15/8/14

It is time again for Around the Traps.
It is Grand final week in football so I will try and update on Sunday.
A great new E-bool on Secular Stagnation in Vox Wonk

Northern America
  • Milken Institute on Abenomics  Thanks Mark



Andrew Gelman (Mainly Stats)
Dave Giles (Econometrics)
Dianne Coyle (Quirky + Book Reviews)
Vox Wonk

Wednesday, 13 August 2014

There is a wages break out!

Yesterday the ABS released the Wage Price Index. The annual rise is 2.6%. This is the lowest rise since the series started!

We have a wages break out. Stagflation is looming. the NAIRU has risen.Industrial disputes are going through the roof!

What you say that is all incorrect! Wages are behaving as they would in a deregulated economy. Unbelievable. Why would people argue otherwise? Why indeed?

They are either liars or mad or both!

Tuesday, 12 August 2014

Robin Williams was a coward

Robin Williams committed suicide yesterday.
He had a wife and three children. He had close friends.
When he committed suicide he thought nothing of them only himself.

Until they die all their days will be filled with grief as they remember William's suicide. some might even have guilty feelings that they did not do enough to stop him.
They will all miss him some very badly.

If only he thought of this before his very selfish act!