Wednesday, 8 May 2013

Goebbelising Graphs

Greg Jericho did a very good job of of explaining graphs in a political context.

However Sinclair Davidson wants to argue black  is white as usual. Here he is apologising for a dodgy graph.

I am not going to go into the reasons why Davidson wishes to argue black is white in this graph.
Greg Jericho shows it all at Grog's Gamut.

For a person who makes his living as an academic Davidson apparently does not believe in showing any context behind a graph.
Moreover he is inferring ( he is good at this) that Treasury is lying about a structural problem in taxation revenue.

Two problems here though

1) look at the graph in the last link( Grog's Gamut) which shows tax as a % of GDP. Wow this Government is getting as much revenue as the government did under Paul Keating. Does Davidson explain that?
No he says this " Down as a percentage of GDP – probably, but still at about the long-term average."
He doesn't explain what he means by that but if this government merely got the average of the previous government ( 23.4%) the budget would be in balance easily!
Let us be very generous and merely say he has no idea of what he is talking about!

2) If the problem is structural then estimating revenue becomes highly problematic. As we have seen Treasury has had to continually downgrade their estimates of revenue.

If the problem is excessive spending then why isn't the public sector adding to graph instead of detracting 3/4 of a % point this financial year.? You know the budget Davidson called expansionary. OOPS!

As I said before Davidson should take note of what happened to Goebbels. He started out being so much smarter than the idiots in the SA he was successfully 'prophesied' too.However by 1938 he was believing his own bulldust and starting to live in his own fantasy world.
Has Davidson's 1938 already arrived?


I have been told I have been a bit tough on Davidson.
I do not think so. Unlike the catallaxy SA crowd he does know a dodgy graph and this was very dodgy.
He does have form. to give but one example he claimed After the GFC hit Ireland that Ireland had a spending problem on the basis that the Government spending over GDP ratio rose quite a bit.
A few problems here though
1) Over half the rise was due to GDP falling. goebbelising
2) The public sector took over 4.5 % points off GDP. Ignorance
3)Since Ireland does not have independent interest rates if spending was a problem then inflation would have soared because of capacity constraints. GDP fell and Ireland experienced deflation. Retarded economic theory