Henry Ergas's nose is growing

Henry Ergas is in really bad form.
Firstly Ross Gittins was mostly right. The main culprits behind the structural deficit at present was the Howard Government and their removal of the petrol excise and the reductions in income tax in the expectation company tax would more than make up for it. (see here) The ALP have culpability as they did not criticise these stupid policy moves and then added to them when in Government.

Moreover you have to take into the circumstances of spending . Under Howard and a strongly growing economy it merely added to inflationary pressures as we saw and thus interest rates had to rise up significantly.

The ALP had to contend with the GFC. You do not remove a stimulus too quickly otherwise you get the economy slowing. Interest rates did not move up when the ALP was in power because of inflationary pressures or potential so the charge of profligate spending is without foundation

Moreover the last full Swan budget was the most austere budget this generation has ever seen.This was a budget Ergas has been calling out for all the time. did he applaud it or even acknowledge this. No! Maybe he thought it was expansionary like his two ignorant colleagues Davidson and Samuel J!!

It is amazing what information our Enry can leave out.. He doesn't want to know the facts. He just wants to distort information to fit in with his ideology.

Another person is well known for doing this in history. He went by the name of Goebbels.

No wonder his nose gets larger ever time he writes!

Around the Traps 27/12/13 Christmas Edition

It is time for Around the Traps. Smaller than usual because of Christmas.
Still those numbers men Andrew Gelman and that wily Canadian Dave Giles don't seem to notice.

As you might expect a bit smaller than usual but updates through the weekend as there is no cricket for me. Poms still
getting thrashed in the Ashes however!


Aussie,Aussie,Aussie,Oy,Oy,Oy

• Ross Gittins on blame-for-budget-worries-widely-shared
• Bill Mitchell on There is no umbilical cord between government debt and bond issuance
• Mumble on four_contests_on_the_way, five_out_of_five
• Mr Denmore on feijoa-awards-2013
• Mark Fletcher on immigration-detention-facilities-are-below-standard-but-which-standard
• Matt Cowgill on the-most-important-graphs-of-2013-part-1, the-most-important-graphs-of-2013-part-2
• Sinclair Davidson shows he has no idea of how politicians or academics work
• Harry Clarke on support-for-plain-packaging
• The Ashes  see yesterday's item to visit Tony and the boys discussing how England get thrashed again!!
• John Quiggin on mixed-thinking-about-markets
• Kevin Bonham on unpopular-state-premiers-have-dire-historical-fates

Northern America

• Calculated Risk on ten-economic-questions-for-2014, comments-on-new-home-sales
• Mark Thoma gives us paul-krugman-bits-and-barbarism, paul-krugman-fiscal-fever-breaks
• Menzie Chinn on reason_for_optimism
• Edward Lambert on preliminary-signs-of-a-coming-contraction
• Kruggers on the-plight-of-the-employed
• Barkely Rosser on losing-it-over-obamacare
• Mark Thoma gives us Tim Duy on fed-watch-on-challenging-the-fed, fed-watch-inflation-wages-and-policy

Europe

• Simon Wren-Lewis on some-notes-on-uk-recovery
• Katerina Lisenkova on long-term-economic-impacts-reducing-migration
• Stephen Kinsella on domestic-demand-in-historical-context ( Ireland)
• Menzie Chinn on british_economic_triumphalism_in _perspective
• James Hamilton on all_quiet_on_the_southern_front

Asia
nuttin again!
Wonk

• Noah Smith on noah-smackdown-watch-bayesian-updating, noah-smackdown-watch-minneapolis
• Nick Rowe on nominal-interest-rates-and-inflation, long-run-medium-run-and-short-run-fisher-curves , efficiency-wages-and-recessions, buyers-and-sellers-bargaining-power-and-recessions
• San Francisco Fed on labor-market-global-financial-crisis-okun-law Thanks Mark
• Mark Thoma gives us Joshua Gans on time-for-a-little-bitcoin-discussion
• Kruggers on why-corporations-might-not-mind-moderate-depression, on-the-asymmetry-of-booms-and-slumps-wonkish
• David Glasner on never-mistake-a-change-in-quantity-demanded-for-a-change-in-demand
• Simon Wren-Lewis on werning-on-liquidity-trap-policy

General

• Mark Thoma gives us money-and-inflation
• David Altig on goodwill-to-man
• Noah Smith on redistribute-wealth-no-redistribute-respect

Climate

• Scientific American on dark-money-funds-climate-change-denial-effort
• Benjamin Preston on adaptation-monitoring-evaluation
• Rabett Run on pielkes-all-way-down
• Brian Banisch on climate-clippings

Andrew Gelman( Stats man!)

• kluges-today-textbook-solutions-tomorrow
• i-hate-this-stuff
• An article which has a lot of words in it but is very interesting
• nyt-version-birthday-graph
• spam
• measuring-beauty
• statistical-evidence-revised-standards
• statistics-nobel-prize
• statistics-done-wrong
• Good Stats Bad Stats on virgin births
• Kaiser Fong on imprecise-machines-mess-with-history

Dave Giles( Econometrics)

• thomas-bayes-250-years-on
• a-simple-regression-problem
• thought-for-day
• solution-to-regression-problem
• unbiased-estimation-of-standard-deviation
• statistical-significance-again

Dianne Coyle ( quirky + Book Reviews)

• what-does-work-look-like, the-invisible-modern
• how-to-create-a-blockbuster

vox wonk

• has-china-s-new-labour-contract-law-worked
• understanding-regional-innovation-disparities
• evolution-of-global-fx-market
• growing-like-china
• nutritional-impact-india-s-food-subsidy-programme
• policymaking-crises-pick-your-poison
• minimalist-approach-fiscal-oversight
• ukraine-russia-deal

The Ashes. Why we won!

The Melbourne test has started and it is a sell-out.

Tony and the boys are already talking about it.

Why did we win the Ashes.

Easy peazy.

Batting.
 The Poms footwork have been all over the place. Cook is the prime example. Both Petersen and Bell did not pay enough respect to bowlers ( mainly Lyon) and paid the price. They the found it hard to regain their 'mojo'!
Also their strategy has changed. When they only played short wide balls outside the off stump and played him off the hip Johnson was hit all around the park. When you drive at him and he is slanting across the batsman you snick him!

Bowling
They have been bowling far too short. given the only weapon is swinging the ball it reduces the potency of your attack. Both Broad and Anderson are 10 wicket bowlers yet both have struggled because of their poor length.

Fielding

The Poms have dropped catches they previously took whilst we have done the opposite.


Indeed one might well say the teams are playing exactly opposite of what occurred last time the Ashes were fought for in Australia.

Why Satanists support Santa Claus

ah that got your attention.

One essence of Christmas is that is signifies the birth of Jesus the Christ. He came into this world to save people.
Everyone person sins. and the punishment for sin is death!
Jesus not only took our punishment on the cross, He proved by his resurrection he was without sin and thus could take our punishment.

Now let us examine Santa Claus. He apparently knows whether we are good or not. If we are good we get Christmas presents.If we are bad we do not!

Notice how the tale of sin is being twisted.

Now if only good people got Christmas presents then no-one but no-one would get Christmas presents. Only the unthinking  people believe differently!

That is why people who sin cannot stand Christianity. It means there is only one way for salvation and if you deny Jesus then he doesn't take your punishment!!

People love Santa Claus because he is the balance sheet man. If your good deeds outweigh your bad deeds you get presents. He is the get out Claus!  Notice the similarity to almost all religions!!
 That is why satanists love Santa Claus.  It is why the world embraces Santa Claus.
It is the antithesis of Christianity.

Merry Christmas

from the greatest oratorio ever written Handel's greatest song.

The man was a genius!

People have asked for my favourite. Perhaps this

Nazi Germany and Privatisation

the Nazi regime was an evil and very odious regime but in some aspects they very very innovative.

• Broken windows.  They were the very first to test the broken window theory much later promoted by James. Q. Wilson. It was highly successful in reducing crime which was pervasive until then.

• Education. The Nazis attempted student centred learning well before it became trendy in the West. However their attempts at using this within the RAD failed just as it did in the USA with the CCC. Incidentally a lot of people believe the RAD gained numbers because it was made compulsory. This is incorrect. The numbers did not change much at all from when it was voluntary to being compulsory.The reason for this is because by 1936 Germany was experiencing full employment. Hence there were numerous loopholes to get out of 'compulsory' service.

• Privatisation Almost alone amongst Western Countries the Nazis successfully implemented a large scale privatisation programme. As you might imagine it was highly nuanced.

Around the Traps 20/12/13

It is time for Around the Traps.

Matt Cowgill is on fire in the OZ section. In wonk there is an interesting discussion on the microfoundations by a few notables.Real Climate has a very good article on discussing the rise in world temperatures and what has occurred since 1998. (Sorry Katesy you won't understand). I have highlighted all in bold.

I will update on Sunday


Aussie,Aussie,Aussie,Oy,Oy,Oy

• Mumble on stranger_in_the_lodge, nice_one_george, on_coalition_leadership
• Sinclair Davidson on myefo-kicking-the-can-down-the-road
• Mr Denmore on doing-a-number
• Brian Banisch on if-a-tree-falls-in-the-forest
• Ross Gittins on why-kpis-are-dangerous-fad , hockeys-midyear-budget-forecasts-are-plausible
• Brian Banisch on analysing-the-polls
• The Kouk calls 2014
• John Quiggin on abbott-vs-science-the-case-of-the-murray-darling-basin
• Andrew Elder on no-surprises , on-journey
• Ed Butler on freedom-to-infuriate
• Damien Walker on never-mind-the-style-strategy-is-what-really-matters
• Matt Cowgill on new-guardian-piece-on-unsustainable-tax-cuts, the-effect-of-the-carbon-price-on-inflation, what-caused-the-structural-deficit

Northern America

• Mark Thoma gives us Tim Duy on fed-watch-fomc-meeting-something-of-a-nail-biterm fed-watch-the-beginning-of-the-end-for-quantitative-easing
• Edward Lambert on tapering-going-to-happen-good-decision
• Menzie Chinn on government_spending _to_GDP_ratio:_down_down_down
• Kruggers on the-obamacare-worm-continues-to-turn
• Beverly Mann on more-on-the-real-reason-healthcare-insurance-companies-are-now-encouraging-obamacare-enrollment
• Frances Woolley on so-we-work-harder-in-canada-eh
• Brad De Long on the-wall-street-journal-is-a-very-strange-concentrator-of-strangeness-indeed-the-view-from-the-roasterie-liv-december-13  both funny and sad at the same time
• James Hamilton on links_for_20131
• Pro-growth liberal on john-cochrane-on-1982-fiscal-restraint 
• Barkley Rosser on losing-it-over-obamacare

Europe

• Simon Wren-Lewis on osbornes-plan-b, the-conservatives-and-ghost-of=christmas-past
• Kruggers on the-three-stooges-do-westminster
• Nick Rowe on more-greek-barter-evidence-for-monetary-disequilibrium

Asia
nuttin
Wonk

• Edward Lambert on the-fed-policy-is-heading-toward-trouble
• Antonio Fatas on four-missing-ingredients-in-macro-economic-models Thanks Mark
• Robert Waldeman on antonio-fatas-has-4-excellent-criticisms-of-current-macroeconomic-research
• Simon Wren-Lewis on microfoundations-illusion-of-necessary-superiority
• Noah Smith on i-love-microfoundations-just-not-yours
• Nick Rowe on microfoundations-we-like-vs-microfoundations-we-can-solve , does-finance-need-moneymacrofoundations
• Simon Wren-Lewis on more-on-illusion-of-superiority
• Kruggers on uber-and-the-macro-wars  (Use link to read original article)
• David Glasner on  my-paper-on-hawtreys-good-and-bad-trade
• Noah Smith on risk-premia-or-behavioral-spazzing , whining-about-price-gouging
• Nick Rowe on getting-the-right-sign-on-the-nominal-interest-rate-signal
• Chris Dillow on profits-and-investment
• Menzie Chinn on phillips_curve_non-linearities_in _data
• David Glasner on milton-friedmans-dumb-rule

General

• Noah Smith on a-blow-to-prescott-theory-of-labor
• Tim Harford on the-gross-distortions-of-gdp 

Climate

• Benjamin Preston on chinas-adaptation-planning
• Brian Banisch on real-clothes-for-the-emperor
• Real Climate on the-global-temperature-jigsaw
• Open Mind on smooth

Andrew Gelman ( Statistics)

• whither-the-bet-on-sparsity-principle-in-a-nonsparse-world
• replication-backlash
• revised-evidence-statistical-standards
• happy-birthday
• discovered-new-fallacy-now-need-name
• chasing-noise
• Kaiser Fong on why-is-math-boring-or-why-should-no-pain-bring-any-gain
• good Stats Bad Stats on meaningless numbers on inheritance

Dave Giles ( Econometrics)

• dennis-lindley-passes-away
• the-history-of-econometrics-alternative-view
• maximum-likelihood-estimation-in-eviews
• what-is-econometric-model-objectivity  really interesting  fair dinkum!!

Dianne Coyle ( Quirky + Book Reviews)

• j-k-galbraith-redux, 21st-century-inequality-blues

Voxwonk

• supply-chain-vulnerability-fukushima-evidence
• can-we-move-beyond-maastricht-orthodoxy
• basel-risk-weights-can-t-be-trusted
• hollowing-out-labour-market-new-evidence
• global-value-chains-interdependence-and-future-trade
• do-trade-agreements-increase-trade-evidence-zollverein
• fed-tapering-and-emerging-markets
• wage-moderation-spain
• obstacles-international-macro-policy-coordination
• regulation-supervision-and-role-central-banks
• banking-union-ecb-independence-risk
• trade-services-agreement

It is like watching a murder ( pun intended)

Just read from here. Steve C takes dot/Sheldon or in reality Mark Hill to pieces.

It is not pretty but it is very sad. If you are not used to such ignorance and pig headedness you have never visited Catallaxy.

This is what happens when you make a stupid remark which you claim to have expertise on try to use jargon but get found out!

Government appointments

The government has made a number of astonishing appointments in recent times.

Let us start with Ziggy Switkowksi a person who failed at not one telco but two!!
Naturally it makes eminent sense to appoint him chairman of the NBN board!

Then we have Sophie Mirrabella blessed with neither intelligence not good looks. She was so good at representing her electorate they got rid of her. It was a 'safe' seat!

Then we have Tim Wilson who is another IPA intellectual lightweight. He wanted the Human Rights Commision abolished. So he accepts an appointment as a Commissioner. We have not seen such rank and  unashamed hypocrisy since the Late Lord Paddy accepted his gong.
On this appointment see Steve from Brisbane's rant here and here. Mumble also comments in more measured terms here.
It seems George Brandis is not just a pompous prat but a person who lacks bad judgement.

I do not mind a government appointing people of their own philosophy to boards but at least pick some people who have a decent intellect. They are the people who can stir things up!

MYEFO

well the MYEFO was released yesterday.
The 'blow-out' in the deficit was mainly due to Government decisions and less so to changes in economic parameters.

No government can put the budget into balance whilst Nominal GDP is growing at 3.5%.

If the terms of trade continue to decline this will put more pressure nominal GDP. Clearly this is not the time to have fiscal consolidation as Wayne Swan found out.

Now if lower interest rates start to impact and the currency falls to sensible levels things would be different.

update

Sinclair Davidson says something sensible about MYEFO. Wonders will never cease however he still has no idea about when to undertake fiscal consolidation.

Oh and Joe Hockey is obviously a liar.
UPDATE:
I forgot all about the structural deficit. Matt Cowgill hasn't. And it wasn't due to spending it was due to tax cuts! Mostly but not all due to these tax cuts.

and each time Hockey talks about this his nose gets longer!!

Is Joe Hockey a liar or an incompetent fool?

We have said this before but let us say it again.

The only changes to PEFO and MYEFO are:

• Changes in Government policy
• Changes in economic parameters

See the  Kouk  as well.

Either Joe Hockey knows this and he is lying his head off at present or he doesn't and he is simply an incompetent fool.

A couple of things to realise before 12.30 today.

• Actual nominal outlays contracted in 2012/13. They fell by 1%.

• Underlying public demand subtracted 0.3 percentage points from growth in that year. ( This is the budget the Catallaxy clowns said was expansionary!!) It usually adds about 0.7 percentage points to GDP

( Research courtesy of CBA economics)

Carly Simon -How to end Castle?

To me this is THE song that Carly Simon made her own.

This live version is magnificent. Her vocals, the backing band and the backing vocals ( the blonde singer is amazing) just go together so well. And Carly makes the singing almost  hypnotic.

The end of Castle
Imagine the Very end of Castle and everyone is dressed up to the nines at the Johanna Beckett memorial fundraiser.

Beckett gets up in a slinky black dress and sings this to Castle.  (The team as backup vocals?)

There wouldn’t be a dry eye in the place!

What a way to end this fantastic series.

Please Marlowe do this!!

Update:

go here for a more fuller explanation

Further Update:

I have had amazing feedback on this.
Carly I believe was 60 when singing this and yes she looks good. The blonde back-up singer sings with so much emotion. amazing. Actually the back up vocals are crucial to this song

And if they do something like this for the end of Castle I may just have tears in my eyes as well!

Around the Traps 13/12/13

It is time again for Around the Traps.
Most people should be able to read any article and understand them. I put 'hard' articles in the wonk section.
The Stats and Econometrics section is for people who have done some subjects on it not for majors in that area!
I do not agree with every article cited. I merely put on articles which are easy to read and say something!

updates on Sunday.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• The Kouk on the-rba-poised-to-hike-interest-rates-in-2014 Brave Call Kouk! Here are his calls for this year a-stock-take-on-the-calls He is clearly highly superior to Sinclair Davidson but he is an economist!
• Mumble on three_month_slump,dollar_float_and_the_keating_myth
• Kevin Bonham on federal-2pp-aggregate-methods-44th Parliament, abbott-fastest-ever-to-lose-poll-lead
• Simon Copland on the-coalition-are-losing-it-not-the-alp-winning-it
• Bill Mitchell on The PBO-Humiliation all round
• John Quiggin on the-end-of-gmh
• David Walker on losing-manufacturing-is-what-rich-countries-do
• Mr Denmore on analysts-say
• Andrew Elder on disguise-fair-nature
• Mark the Graph on jobs
• Brian Banisch on the-general-goes
• Ross Gittins on multi-factor-productivity-not-what-its-cracked-up-to-be
• tony and the boys give you the Third Test in the Ashes

Northern America

• Noah Smith on america-is-separating-into-peasants-and-scholar gentry
• Stephen Gordon on How much revenue would be generated by a rise in corporate taxes
• Mark Thoma gives us Tim Duy and fed-watch-bullard-offers-up-the-tiny-taper
• FRBSF on Why do measures of inflation differ? Thanks Mark
• Calculated Risk on public-and-private-sector-payroll-jobs-under-different-Presidents, update-looking-for-stronger-economic-growth-in-2014, update-when-will-payroll-employment-exceed-the-pre-recession-peak
• Menzie Chinn on the_everexpanding_Government_meme
• Kevin Drum on war-over-austerity-over-republicans-won  Thanks Mark
• Mark Thoma gives us Michael Froomkin on hoovernomics-explains-the-economy
• Dan Crawford on who are these missing workers
• Econoclast on persistently-high-long-term-unemployment-rates
• Jared Bernstein on inequality-ezra-and-paul-and-the-unifying-theory-and-evidence
• James Hamilton on federal_reserve_control_of_the_short_term_interest_rate

Europe

• Chris Dillow on attracting-better-candidates
• Simon Wren-Lewis on the-uks-macroeconomic-battleground-to-come, the-uk-recovery-and-pessimists-refrain, inequality-and-left
• Chris Dillow on the-income-squeeze
• Jeremy Cohen-Setton on pres-vsps-and-the-ecb-a-response-to-paul-krugman Thanks Mark
• Anna Rosso on security-not-as-charity-but-as-a-right
• Jonathan Portes on not-even-wrong-misreading-statistics-benefit-cap
• Kruggers on if-only-it-were-the-1930s

Asia
nuttin

• Noah Smith on the-real-most-important-chart-of-2013

Wonk

• Kruggers on helicopters-dont-help-wonkish, the-neo-paleo-keynesian-counter-counter-counterrevolution-wonkish
• Noah Smith on the-great-labor-dump , freshwater-vs-saltwater-divides-macro-not-finance
• Edward Lambert on krugman-is-honest-noah-smith-is-insightful, potential-insights, 
• Edward Lambert on can-we-get-inflation-or-real-gdp-growth, the-journey-of-the-fed-rate-through-a-false-natural-level-of-real-gdp
• Jeremie Cohen-Setton on blogs-review-updating-the-phillips-curve Thanks Mark
• Antonio Fatas on debt-and-secular-stagnation Thanks Mark
• Jared Bernstein on structural-stagnation-bubbles-and-the-volcker-rule
• Steve Roth on shiller-on-fama-maybe-he-has-a-cognitive-dissonance
• Mark Thoma on the-eitc-versus-the-minimum-wage
• Simon Wren-Lewis on new-versus-traditional-phillips-curves-and-the-great recession
• Lord Keynes on debunking-austrian-economics-101-updated
• Menzie Chinn on using_chain_weighted-quantities
• Robert Waldeman on macroeconomic-dynamics-with-downward-nominal-rigidity, neo-paleo-keynesians-krugman-and-delong

General

• Chris Dillow on growth-levels-frames, gift-vouchers-mispredicting-markets, gift-vouchers-mispredicting-markets, universities-as-bullies
• Lord Keynes on murphy-on-us-and-canadian-unemployment, us-and-canadian-private-investment
• Nicholas Gruen on evidence-based-public-good-provision
• Nick Rowe on i-do-not-understand-recovery-from-recessions, we-know-the-economy-needs-a-bubble-but-how-big, natural-rate-trend
• David Glasner on does-macroeconomics-need-financial-foundations 

Climate

• Real Climate on a-failure-in-communicating-the-impact-of-new-findings
• Rabette Run on lewandosky-helps-kahan-look-little-better
• Joanna Foster on australia-hottest-spring-recorded
• Gareth Renowden on tdb-today-tomorrow-is-being-written-in-new-zealands-mountains
• Brian Banisch on assessing-dangerous-climate-change

Andrew Gelman ( Statistics!)

• never-ending-productive-race-theory-practice
• model-distributions-outliers-one-direction
• cross-validation-bayesian-estimation-tuning-parameters
• multilevel-marketing-way-liquidating-participantss-social-networks
• my-talk-at-leuven-sat-14-dec
• flexibility-is-good
• now-heres-something-make-ed-tufte-spin-ummm-tuftes-still-around-actually-lets-just-say-wouldnt-like
• oswald-evidence
• the-un-plot-to-force-bayesianism-on-unsuspecting-americans-penalized-b-spline-edition
• Good Stats Bad Stats on Metro fare comparison- graphics that don't work
• Kaiser Fong on harvard-gives-new-meaning-to-meritocracy, why-is-math-boring-or-why-should-no-pain-bring-any-gain

Dave Giles ( Econometrics)

• random-variable  as Mr Spock would say fascinating!
• when-everything-old-is-new-again
• data-do-not-imply-science
• time-for-some-more-reading
• on-staying-awake-in-class
• proxy-variables-and-biased-estimation

Dianne Coyle (Quirky + Book Reviews)

• Dianne on hollow-economy, economics-public-policy, dancing-nimbly, myths-and-realities-of-declinem back-to-the-future-in-economics, a-not-so-dismal-science
• Tim Harford on amazons-drones-arent-coming-soon-but-what-will-the-world-look-like-when-they-do 

Voxwonk

• libor-scandal-and-reform
• guns-and-votes
• fdi-africa
• sustainability-factor-spanish-pensions
• sovereign-default-and-state-contingent-debt
• wto-agreement-bali-ribbon
• eurozone-if-only-it-were-1930s
• combining-hard-and-soft-global-governance

Hapless fiscal fools

read This.

Just note on what these fools believe.
The increase in the debt ceiling was due to 'irresponsible government, in other words over spending.
no word of nominal GDP growth being well under the trend . no explanation for this which was of course the terms of trade falling.
No mention that the budget concerned was quite contractionary.Indeed the most contractionary we have seen since 1971 but of course Sinclair Davidson wouldn't know this he thought it was expansionary!!

No explanation of how interest rates were falling not rising if spending was the problem.

Finally he doesn't even recognize he is advocating greater structural deficits under Costello thus the fiscal position would be much worse now!

Need I say one 'works' with Steve Kates and another heads up the IPA .

What is worse that they parade their own ignorance as a virtue or simply refuse to recognize reality?

Amazing

I can't work out Joe Hockey part 2

Yesterday in question time Joe hockey was asked an ( unusually ) good question by Adam Bandt of the Greens.
Paraphrasing the question it was whether this was the right time to cut spending and/or raising taxes  in an attempt to get the budget back into the black.

Unfortunately Joe Hockey did nit even attempt to answer the question.  He sought to try and show the ALP has deliberately left the cupboard bare.
Now if he actually believes that then he is an idiot. As we saw previously that would mean he doesn't understand the difference between figures in PEFO and then later in MYEFO.

Moreover it would be nice to hear from Joe if he thinks it is the right time to be into fiscal consolidation. The last National Accounts had nominal GDP growth at a mere 3.6%. The AVERAGE up to 2011 was 7%!

If Joe introduced austerity measures now he would find out what happened in Europe. You would have the negative of contracting the economy BUT also the negative of the deficit ballooning!!

The question no-one knows as yet is does he believe in austerity measures now or not.
We will find out when MYEFO is released!

Poll blues continue for the government

The Newspoll is out and it confirms the trend of previous polls  for the new Government. ( Update. The linked article shows the new Essential poll which is slowly following the other polls.)

I wish I had said this before. Gosh I did. 
Reasons? Try these.

People such as the innumerates at Catallaxy who said the Neilsen poll was an outlier simply do not understand basic statistics. We saw in the US Presidential election!
However it is very early days.Do not put to greater store on these figures as Mumbles explains 

 I should add all pollsters now have 2013 preferences. add this as well three_month_slump

Guitar perfection

Just savour this. Magnificent

Around The Traps 6/12/13

It is time for Around the Traps again.

Nick Rowe is in roaring form and there is a bit of a debate on QE and deflation.

Voxwonk is always interesting.

Updating on Sunday.



Aussie,Aussie,Aussie,Oy,Oy,Oy

• Mumble on dazzle_them_with_numbers, the_last_laugh
• David Walker on Graincorp and Joe Hockey
• Brian Banisch on hockeys-graincorp-decision
• Ken Parish on the-unbearable-automaticity-of-being
• Matt Cowgill on progressive-australia-presentation
• Mark the Graph on credit-aggregates, selected-charts-from-national-accounts,growth-in-unemployment-benefits-since-the-GFC
• The Kouk on bye-bye-debt-ceiling-joe-hockey-laughing-all-the-way-to-the-bank
• Andrew Leigh on Honouring Steve Dowrick and Paul Miller
• Andrew Elder on the-teachable-moment
• Mr Denmore on drama-in-pyjamas
• The Piping Shrike on the-new-regionalism-an-update
• Tony and the boys give you the Second test in the ASHES

Northern America

• Angry Bear on was-the-nov-30-deadline-the-make-or-break-moment-for-obamacare-no
• Yichuan Wang on why-fed-should-do-more-look-at-monetary-offset
• Mark Thoma gives us Tim Duy fed-watch-ahead-of-the-employment-report
• Menzie Chinn on the_output_gap
• James Hamilton on current_economic_conditions

Asia

• Menzie Chinn on observations_on_the-efficacy-of -fiscal-and -monetary-policy-Japanese Edition

Europe

• Simon Wren-Lewis on here-we-go-again, two-observations-on-autumn-statement
• Monique Ebelle on scottish-independence-and-uks-debt-burden
• Kruggers on pres-vsps-and-the-ecb
• Mark Thoma gives us John Cassidy who says by-george-britains-austerity-experiment-didnt-work

Wonk

• Kruggers on immaculate-stability-wonkish
• Noah Smith on does-qe-cause-deflation
• Nick Rowe on why-inflation-will-not-fall-off-a-bottomless-cliff , the-effects-of-nominal-interest-rates-on-inflation , a-simple-story-about-reversibility-of-causation, helicopter-money-does-not-cause-deflation, tability-and-counterfactual-conditionals
• Robert Waldeman on dreadful-plumbing-with-downward-nominal-rigidity 
• Antonio Fatas on where-did-saving-glut-go  Thanks Mark
• Edward Lambert on why-is-inflation-low-and-steady, by-faith-mr-krugman-seeing-the-light-more-evidence-labor-share-critical-to-trade-deficits, /relax-delong-krugman-productivity-advances-will-respond-to-demand-space
• David Glasner on stephen-williamson-gets-stuck-at-the-zero-lower-bound

General

• Simon Wren-Lewis on could-aggregate-fiscal-decisions-ever-be-delegated
• Chris Dillow on profits-and-tail-risk. debt-deficits-the-maths
• Steve Roth on wealth-concentration-and-secular-stagnation
• Noah Smith on when-teaching-econ-start-with-parts-that-work , wage-subsidies
• Nick Rowe on on-intro-micro-first-and-splitting-micro-and-macro, does-house-building-cause-house-price-inflation-the-sokal-hoax

Climate

• Real Climate on arctic-and-american-methane-in-context
• Deep Climate on 2012-arctic-sea-ice-minimum-part-3-arctic-sea-ice-death-spiral-continues
• Science of doom on ghosts-of-climates-past-part-seven-gcm-i, ghosts-of-climates-past-part-seven-and-a-half-mindmap
• Brian Banisch on climate-clippings
• Serendipity on what-does-the-new-ipcc-report-say-about-climate-change

Andrew Gelman ( The King of p Values)

• personal-genetic-testing-regulated-battle-blogroll
• professors-intervention-online-discussions-effect-prolonging-discussion-or-cutting-it-off
• objects-class-lawrence-summers-arne-duncan-edition
• tesla-fires
• What-predicts-whether-school-district-will-participate-large-scale-evaluation
• comments-on-improving-the-dependability-of-research-in-personality-and-social-psychology-recommendations-for-research-and-educational-practice-the-report-of-the-spsp-task-force-on-publication-and-research-practices  ( must be the longest title surely!)
• Kaiser Fong on more-confusing-statements-of-probability-due-to-no-controls,story-time-on-aspirin
• Good Stats Bad Stats on The Marine Corps Marathon-Cleaning the data

Dave Giles (The genial bespectacled Econometric Genius)

• the-international-association-for-applied-econometrics
• econometrics-and-big-data

Dianne Coyle ( Quirky)

• what-does-cleveland-ohio-have-that-london-doesnt, poverty-fear-and-loathing, globalisation-and-legitimacy
• Tim Harford on the-perils-of-public-speaking,the-death-of-nelson-mandela-has-prompted-several-lefties-to-point-out-that-on-apartheid-the-tories-were-on-the-wrong-side-of-politics
• Brian Banisch on is-the-pope-a-communist

Voxwonk

• first-look-structure-and-dynamics-uk-credit-default-swap-cds-market
• new-measure-us-gdp
• agglomeration-and-exports
• high-quality-exports-macro-implications
• ict-benefits-some-and-hurts-others
• scrapping-subsidies-during-crisis
• why-do-bans-increase-child-labour
• our-uneconomic-methods-measuring-economic-research
• dollar-s-international-status
• asset-price-booms-and-composition-capital-inflows
• trade-protectionism-since-crisis
• are-towns-stuck-in-wrong-places

I can't work out joe hockey

I cannot work out Joe Hockey.

Does he know his stuff but simply a very bad politician i.e. he couldn't sell a beer in a pub! A bit like Wayne Swan.
Most evidence would suggest this. He has the best department to advise him. He has chosen his personal staff quite well.
However his attempts to sell a larger gross debt figure, his decision on Graincorp and his attempts to talk about both the recent CPI and national accounts were nothing short of appalling.

It was like listening to Steve Kates ( example) and Sinclair Davidson ( example) talk about them. Yes it was that bad.

The problem is does he really believe the claptrap he is espousing on these subjects. If he does Australia has a real problem.
If he doesn't and he is merely a Liberal example of Wayne Swan then we can ignore his public utterances and simply concentrate on what he does.

I will wait for MYEFO to make a full decision. It will be interesting. After-all the only changes to PEFO and MYEFO are:

• Changes in Government policy
• Changes in economic parameters.

He has responsibility for the first one and the second one is influenced by nominal GDP ( which in itself is influenced by the terms of trade). He can hardly take the previous government to task when he has been advocating more austerity!

Why the New government did not have a Honeymoon

The present government really has not had a honeymoon.

There are a number of reasons for this

• the-indonesian-fiasco is the main short term problem. It was the INEPT reaction of Tony Abbott that made it a problem
• The Graincorp decision. David outlines the lack of any effort by Hockey to tell us of the reasons for this
• The Gonski debacle

BUT I think deep down the main problem has been the contradiction between how the Government is reacting  ( so slow it is boring) and what they were saying before the election.

We only needed a change of government and it would all change and everything would go back to normal.

This implies a short but very hectic period where the new Government gets everything right and then it is all plain sailing.
(The budget being the main game here. It is quite clear now the problem was NEVER a problem of spending. If it were interest rates would be high and rising not low and possibly falling or at least not rising. This has lead to a lot of confusion in voter land)

Not only did the new government do bugger all , all the problems remained.

No wonder the punters are puzzled by the New Government's behaviour and showing they are not all impressed.

This is also showing up in Parliament.A new Government lords it all over the Opposition but they haven't at all. This merely tells me the confidence of the new Government is not high.

However it is early days.  

Austerity doesn't work example Number....

Simon Wren-Lewis writes about the Netherlands and their appalling fiscal policy.

This country did not need to impose austerity and had easy to capital markets.

This is what happened.

1) Government embarks on austerity, to try and maintain the confidence of the bond markets. We must preserve the AAA rating for our government’s debt, says the finance minister.

2) Austerity reduces demand, helping create flat or negative growth.

3) As a result, deficit targets keep being missed. Additional austerity is imposed, and growth declines again.

3) Country loses its AAA rating, and the credit rating agency gives concerns about poor growth as an important factor for the downgrade.

4) This confirms our fears, says the finance minister. We must redouble our efforts to reduce our debt.

 All of this was entirely predictable. The evidence has been in for a long time now

Only liars and imbeciles argue that austerity works other than when Keynes said it would.

How many countries were able to avoid the GFC through austerity? None!