Did Australia rocket out of the Depression?

Jim Rose made this false claim yesterday. He got mad when challenged on this point.
I wrote about this topic when I first started this blog here.
Please note  from the link what occurred.

Firstly Australia had negative growth before the Crash and then of course after it happened. There was a  miserly recovery in 1931 which was cut off straight away by the utterly stupid budget of 1931,
Secondly we get a recovery after that but only a tepid one. Some rocket!

Compare those rates to the USA. They had growth rates of 10.8, 8.9, 13.9 and 5.1 ( this is affected by the equally stupid budget of 1936).
so the weakest growth in the USA is the strongest we have here!

What about employment I hear you say. Well just remember employment is affected by various factors. real wage rates, exchange rate changes, etc.

The  major reason why growth spikes up in 1933 is the massive devaluation.  ( David Gruen is interesting on this topic). Unemployment was already high at over 8% before the Depression. It fell from  almost 30 %  at its height to 20 odd % by 1933 thanks to that massive devaluation. Remember manufacturing was way more important in those days.  The devaluation did as both Keynes and Hawtrey wanted and allowed inflation to rise and hence real wages fell.  ( few people realise that Keynes first priority was a large devaluation, public works spending came second.)

Now US unemployment if measured correctly as ironically Germany did in the 30s fell to just under 10%. Again much more impressive than Australia. If only Roosevelt had have curt real wages then possibly the USA like Germany would have been at full employment by 1936

Here in Australia unemployment fell to 8% at best which is the mark of a recession. It fell to under 4% after the war started showing just how bad fiscal policy was post Depression. Please not however 1931 was the only highly restrictive budget and it was somewhat obviated by the States who could not just stop infrastructure spending.

Finally let us visit New Zealand for a second. I cannot get many stats for this country but this article  shows male employment for the country.  Again notice the only time we see employment rocketing is after 1936 when there was a clear change of policy.

Alas Jim has been talking porkies on both Australia and New Zealand. during the depression. so sad however I still like him.

not quite an update:

If expansionary austerity works then it would work all the time right. We found out some time ago it did not. for example see HERE and HERE for example.

Every country that adopted austerity after the GFC gained themselves a depression. Estonia and Ireland come to mind. Greece was promised by the Troika it would lead to recovery. It lead Greece to face conditions worse than the great depression!

As has been stated numerous times Ireland has adopted austerity three times. It worked only once. Why did it work you ask? Because they reduced interest rates, the exchange rate fell markedly and its biggest market,  the  UK, was experiencing the 'Lawson' boom.

If you believe in austerity then you are simply like the 1950s communists. You put ideology over facts. 

The new Government package is on the right track

The government finally realised wage subsidies were the way to go if unemployment was not going to get to 1930s levels.  On analysis it looks more equitable than the UK policy and more encompassing than New Zealand.

It seems as the government realised some time this week if they did not do something along these lines it was depression here we come. Perhaps it was the very long lines outside Centrelink offices.
I don't care. I heartily approve of  the policy.

Some have argued that spending 15% of GDP is way too high. This is similar to a war and debt is simply not a problem at present.

The problem will be in when to stop. For example when are visitors allowed back into Australia. Will people have any trust in our politicians when they say the worse is behind us.both here and abroad.

Will people change their behaviour and say become more thrifty as occurred post great Depression. ( My mum and dad are examples of that.) This has enormous implications for consumer spending

Will only certain industries be affected early. tourism and travel come to mind whereas hotels, clubs, gyms do not.

I now suspect we will not reach a depression i.e. a reduction of 10% or more.

I forgot to add ensuring unemployment does not reach 20% is very important from a psychological point of view. People would be absolutely deflated and be bad for mental health. Unemployment wil get to double digits but hopefully now be well away from 20%.

The Foxification of news is killing people and wil kill more

One of the great tragedies of the polarisation in US and now other countries politics is some people have nno idea of what the truth is.

Fox news pioneered this in the US. someone realised there were a lot of angry originator white men who simply wish to hear what they believe in.
Trump played on this and coined the phrase fake news. his supporters think critical pieces on him are fake news Just cogitate on that for a moment.
Now let us look at what US people think on the coronavirus.. Zack Beauchamp has the story. It gets worse. Those who vote republican thanks Trump is the most trusted source when it comes to the virus.

So when stupid supporters take what they think he is saying can combat the virus they die. Now it depends on how you vote if you are taking the virus seriously .

This is the natural extension if you portray news which is inaccurate, it matters not id this is deliberate or because they are lazy. It is the natural extension if you portray scientists as not understanding or being biased in their presentation of anything.

Given all this it is no wonder Trump is attempting to destroy a devastating ad on his incompetence on this issue.


All in all it is a disgrace and morally disgraceful.

Around the Traps 27/3/20

It is time again for Around the Traps.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Croaking Cassandra on another-sobering-chart , self-imposed-constraints-the-latest-from-the-rb, coronavirus-policy-and-economics-24-march , coronavirus-economics-and-policy-25-march
• Ann Twomey on states-are-shutting-their-borders-to-stop-coronavirus-is-that-actually-allowed
• Frank Borgiono on how-australias-response-to-the-spanish-flu-of-1919-sounds-warnings-on-dealing-with-coronavirus
• Ross Gittins on for-this-to-work-we-must-really-be-all-in-this-together
• Kevin Bonham on coronavirus-and-australian-politicians
• Nick Gruen on targetting-and-the-stimulus-who-should-pay-the-rent
• The Kouk on australias-economic-rescue-package-is-a-step-in-the-right-direction-but-we-needed-a-leap
• Bruce Mountain on snowy-2-0-is-a-wolf-in-sheeps-clothing-it-will-push-carbon-emissions-up-not-down
• Stephen Kirchner on itd-be-a-mistake-to-shut-financial-markets-more-than-ever-we-need-them-to-work, rba-needs-to-follow-the-fed-and-go
• Greg Jericho on when-it-comes-to-unemployment-in-australia-definitions-have-been-broken
• Katherine Murphy on stuart-roberts-incompetence-on-mygov-should-accelerate-his-own-social-isolation
• renew economy on plans-to-direct-climate-funds-to-coal-plant-upgrades-rejected-by-panel , acciona-to-build-huge-1gw-wind-farm-in-queensland-after-landing-cleanco-deal
• Ken Henry on the-unemployment-rate-doesnt-go-back-to-normal-after-a-recession-there-are-long-term-effects
• Jeff Borland on which-jobs-are-most-at-risk-from-the-coronavirus-shutdown
• C Raina McIntyre on to-get-on-top-of-the-coronavirus-we-also-need-to-test-people-without-symptoms

Northern America

• Brad De Long on the-trump-administration-has-made-america-1-worst-in-the-world-at-coronavirus-response, /trump-covid19-testing-failure
• David Appell on us-that-hitch-is-gone
• Robert Waldmann on hydroxychloroquine-anthony-fauci-and-kevin-drum
• Sean Illing on coronavirus-covid-19-spanish-flu-pandemic-john-barry
• Daniel Politi on intelligence-agencies-warned-trump-likely-pandemic
• David Remnick on how-the-coronavirus-shattered-trumps-serene-confidence
• Zack Beauchamp on coronavirus-covid-19-trump-polarization-data
• Calculated Risk on a-few-comments-on-february-new-home-sales
• Uri Friedman on coronavirus-united-states-vulnerable-pandemic
• the conversable economist on does-us-tax-code-favor-automation-over-jobs
• Kevin Drum on trump-says-jump-wingers-ask-how-high  Thanks Brad
• Nouriel Roubini on coronavirus-greater-great-depression
• Sussan Glasser on letter-from-trumps-washington/the-trump-oclock-follies

Europe

• Alexasndre Dayant on covid-19-and-migration-europe-must-resist-populist-pill

Asia

• JJ Rose on coronavirus-and-hong-kong-protest-movement
• Greta Nabbs-Keller on covid-19-indonesia-s-crises-can-severely-reverberate-neighbours
• Sheila Coronel on philippines-covid-19-will-devastate-poor
• Alex Oliver and Richard McGregor on covidcast-episode-3-china-story
• Timothy Rich et al on public-judgment-south-korea-s-covid-19-response

Wonk

• Chris Mackie on thucydides-and-the-plague-of-athens-what-it-can-teach-us-now
• Cassandra's Legacy on coronavirus-for-nonm-italians-aka-your-government-is-not-taking-this-seriously-enough
• Sandwichman on the-hammer-and-dance
• Barkley Rosser on the-oil-price-war
• stumbling and mumbling on against-aggregate-demand
• the conversable economist on can-economy-just-be-put-on-hold-for-a-few-months
• James Empty blog on mitigation-vs-suppression
• Mainly Macro on the-economic-and-political-effects-of-this-coronavirus-pandemic
• Eric Kramer on thanks-milton-friedman
• Natasha Kassam on disinformation-and-coronavirus
• Menzie Chinn on guest-contribution-oceans-apart-china-and-other-systemically-important-economies, guest-contribution-charting-this-crisis , guest-contribution-macroeconomic-nowcasting-in-times-of-covid-19-crisis-on-the-usefulness-of-alternative-data
• John Edwards on after-coronavirus-where-world-economy-will-stand
• Tim Harford on why-the-crisis-is-a-test-of-our-capacity-to-adapt

General

• nuttin

Climate

• Real Climate on further-perspectives-on-pandemics-and-climate-change
• and Then Theres Physics on some-thoughts-about-science-advice
• skeptical Science on the pros and cons of planting trees to address global warming
• Metoffice on climate-change-to-bring-heavier-rainfall-events
• Graham Readfearn and Adam Morton on great-barrier-reef-suffers-third-mass-coral-bleaching-event-in-five-years
• Stoat on coronavirus-days-and-global-warming

Andrew Gelman ( mainly stats)

• as-a-girl-shed-been-very-gullible-but-she-had-always-learned-more-that-way
• new-dataset-coronavirus-tracking-using-data-from-smart-thermometers
• some-recommendations-for-design-and-analysis-of-clinical-trials-with-application-to-coronavirus
• what-is-the-probability-that-someone-you-know-will-die-from-covid-19
• why-we-sleep-a-tale-of-institutional-failure
• are-we-ready-to-move-to-the-post-p-0-05-world
• lessons-from-first-online-teaching-experience-after-covid-19-regulations
• corona-virus-presentation-by-the-dutch-cdc-also-some-thoughts-on-the-audience-for-these-sorts-of-presentations
• the-value-or-lack-of-value-of-preregistration-in-the-absence-of-scientific-theory
• lets-do-preregistered-replication-studies-of-the-cognitive-effects-of-air-pollution-not-because-we-think-existing-studies-are-bad-but-because-we-think-the-topic-is-important-and-we-want-to-unders
• for-the-cost-of-running-96-wells-you-can-test-960-people-and-accurate-assess-the-prevalence-in-the-population-to-within-about-1-do-this-at-100-locations-around-the-country-and-youd-have-a-spatial
• Free Range Statistics on covid19-cfr-demographics
• Statschat on another-reason-why-we-dont-know-the-covid-19-mortality-rate , chloroquine-and-covid
• James empty blog on a-few-more-thoughts-about-parameter-estimation-and-uncertainty-in-epidemic-modelling, fitting-covid-19-seir-model-to-data-part 2 , more-on-parameters-and-rates
• Kaiser Fung on how-to-act-like-a-data-scientist-8-dont-use-lagging-indicators-to-forecast, note-about-fitting-and-visualizing-exponential-models
• Mark the Graph on covid19-and-exponential-growth

Retired genial Dave Giles ( econometrics)

• Freakometrics on reinforcement in learning in  economics and finance

Dianne Coyle ( quirky + book reviews)

• Daniel Flitton on books-quarantine-hugh-white-suggests-plus-time-classics
• Ingris Robeyns on free-readings
• Tim Harford on book-of-the-week-12-the-misinformation-age-by-caitlin-oconnor-and-james-owen-weatherall
• Ezra Klein and Roge Karma on vox-coronavirus-covid-19-daily-reading-list-monday

Vox wonk

• coronavirus-perceptions-and-economic-anxiety
• proposal-covid-credit-line
• pandemics-and-social-capital
• stress-tests-banks-liquidity-insurers-time-covid
• supply-side-matters-guns-versus-butter-covid-style
• global-value-chains-and-trade-protection
• strengthening-automatic-stabilisers-could-help-combat-next-downturn
• saving-china-coronavirus-and-economic-meltdown-experiences-and-lessons
• coronavirus-impact-stock-prices-and-growth-expectations
• rapidly-identifying-workers-who-are-immune-covid-19-and-virus-free-priority-restarting-economy
• proposal-negative-sme-tax
• news-and-uncertainty-about-economic-fallout-covid-19
• covid-perpetual-eurobonds
• covid-19-crisis-calls-pre-emptive-monitoring-production-and-distribution-chains
• european-bank-regulators-aren-t-yet-doing-what-it-takes
• some-thoughts-covid-19-labour-mobility-perspective
• coronavirus-and-financial-stability-20-act-jointly-now-also-think-about-tomorrow
• memo-trade-ministers-how-trade-policy-can-help-fight-covid-19
• esm-must-help-against-pandemic-case-spain
• transition-steps-stop-covid-19-without-killing-world-economy
• covid-19-euro-area-safe-asset-and-fiscal-capacity-are-needed-now
• capital-investment-versus-labour-productivity
• political-economy-covid-motivated-helicopter-drops
• eu-solidarity-fighting-covid-19
• fault-lines-fiscal-monetary-policy-coordination
• testing-testing-times
• covid-19-pandemic-letter-g20-leaders
• coronavirus-crisis-no-2008

We are facing a depression and there will be no sharp recovery

There is too much of the econmy shut down for Australia ( and other countries) not to experience a depression i.e. a drop in output of 10% or more).

Just think over and above the industries shut down.
Who is going to go to the dentist, doctor etc when there is such uncertainty
Who is going to buy a takeaway.
Who is going to get a tradie to do anything unless it is essential like a toilet.

The very large elephant in the room is the highly indebted household sector. This has the potential to blow up the economy.

Once all this is mostly over the recovery will take time.
Supply chain problems have not gone away.
People will attempt to build up their savings to begin with. Again this means no gyms, few coffees, not very many restaurant meals etc.

Be scared, Be very scared.

In terms of politics the budget deficit looks rising to at least 10% of GDP. Yep even Sinclair Davidson might believe that is expansionary.
The nest election will be all about responsible fiscal consolidation which is something Sinclair Davidson knows nothing about.
As Wayne Swan found out if you try austerity too quickly it simply slows the econmy down.


Update:
As Ken Henry says the-unemployment-rate-doesnt-go-back-to-normal-after-a-recession-there-are-long-term-effects,

Just don't cover Trump's Press conferences

People always beat me on subjects.
James Fallows does it here.
Trump is again out of his depth. He ignorance on coronavirus simply oozes out.  Faucci always has an embarrassed look and tries unsuccessfully not to contradict what Trump has just said. ( compare that to what occurs here in OZ).

Trump is dangerous and his supports and acolytes will believe the lies he espouses and it will be deadly.
Just don't give the man oxygen to confuse people who do not know better!

Trump is very dangerous because he is so ignorant and quite ironically to the very people who support him.

Measuring mortality rates with Coronavirus

Statschat is a great blog. Deals with statistics as you might expect.
today there is a really interesting post which is called

another-reason-why-we-dont-know-the-covid-19-mortality-rate

A few musings on the Coronavirus and Australia

WHY is there such a large number of people getting the virus but so few people dying from
 it ? If the worse that occurs here us that a lot of people have to self isolate  for two weeks then I am all for that. .

I tend to think a depression is inevitable. Forget about modelling. Businesses shut down, people losing jobs, more and more people self isolating and do not forget community sport. Think about the bakeries and butchers who will not be selling all those rolls and sausages.
If schools are closed then this is a certainty. Grandparents can no longer look after their grandchildren

Do not ever say Australians are good people. They are as selfish as any and they have no confidence in their political class.  The behaviour I have seen in supermarkets has been nothing short of disgraceful. People using buses to go and raid supermarkets in small country towns is possibly the worst example of this.

Programs to help with depression will need to be high on the agenda. Few people will be able to cope with the inability to meet and socialise with people.

I forget to talk about the budget. The fiscal response is I believe 9.7% of GDP with more on the way. however just remember even if your business gets a revival because of this can you respond if your supply chain is still suspended. The answer is obvious. No!

The other thing is no country town which was decimated by bushfires will now get any boost from tourism. Country Australia is stuffed.

Update:

Can we please have clear messaging. Morrison says schools are not closed and send you kiddies there. Gladys says keep them at home. On this i am with Morrsion who has kids as opposed to Gladys who does not.

Think about it. Grandparents will not be able to look after children so it will have to be parents. It guarantees a depression ( a drop in Output of 10% or more.) and tell me again how many people have died?

Around the Traps 20/3/20

It is time for Around the Traps.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Croaking Cassandra on games-up, a-radical-macro-framework-for-the-next-year-or-two, the-curates-egg, retail-interest-rates-fall-substantially-in-recessions, reserve-bank-still-behind-the-game, a-sobering-chart
• Jennifer Boddy et al on cabin-fever-australia-must-prepare-for-the-social-and-psychological-impacts-of-a-coronavirus-lockdown
• Mark Kenny on viral-spiral-the-federal-government-is-playing-a-risky-game-with-mixed-messages-on-coronavirus
• Siouxie Wiles on nzs-decision-to-close-its-borders-will-hurt-tourism-but-its-the-right-thing-to-do
• Sen Sendjaya et al on morrison-compassion-and-coronavirus-when-crisis-refines-leadership
• Ross Gittins on avoiding-r-word-wont-be-as-easy-as-boosting-the-june-quarter, at-last-weve-been-shown-virus-game-plan-boring
• renew economy on nsw-unveils-two-new-renewable-energy-zones-in-11-billion-net-zero-strategy, nsw-clears-path-for-17gw-wind-solar-and-storage-capacity-with-new-renewable-zones , aemc-backs-off-on-cogati-rule-change-relief-for-solar-and-wind-sector, two-solar-farms-one-wind-farm-in-queensland-hit-by-system-strength-issues , covid-and-climate-can-morrison-listen-to-experts-to-flatten-that-other-curve
• Ben Butler on the-rba-is-trying-to-un-stick-a-market-gummed-up-by-coronavirus-fear-but-theres-only-so-much-it-can-do
• Nigel Stapledon on how-will-coronavirus-affect-property-prices
• Peter Martin on reserve-bank-and-government-prepare-fresh-emergency-measures-as-markets-tumble , more-than-a-rate-cut-behind-the-reserve-banks-three-point-plan
• Gary Mortimer and Jane Bowden on how-a-time-of-panic-buying-could-yet-bring-us-together
• Greg Penney on ive-spent-14-years-on-bushfire-front-lines-and-seen-courage-in-the-face-of-death
• Issac Gross on yield-curve-control-the-reserve-banks-plan-for-when-cash-rate-cuts-no-longer-work
• Mark Gregory on telcos-are-picking-up-where-the-nbn-is-failing-heres-what-it-means-for-you
• C Raina McIntyre on the-dreaded-duo-australia-will-likely-hit-a-peak-in-coronavirus-cases-around-flu-season
• Flavio Macau on desperately-seeking-toilet-paper-pasta-or-hand-sanitiser-some-relief-is-just-weeks-away
• Stephen Kirchner on rba-leaves-the-bazooka-on-the-table
• John Daley on the-case-for-endgame-c-stop-almost-everything-restart-when-coronavirus-is-gone

Northern America

• Menzie Chinn on cdc-estimates-of-covid-19-toll
• German Lopez on coronavirus-trump-covid-19-pandemic-response
• Zeesham Aleem on coronavirus-poll-democrats-republicans-trump
• the conversable economist on sick-pay-benefits, federal-debt-in-time-of-pandemic
• Linda Beale on trump-administration-continues-to-attack-the-environmental-projections-first-put-into-place-by-the-nixon-administration
• Tony Walker on lack-of-confidence-in-us-leadership-adds-to-coronavirus-panic
• New Deal Democrat on the-coronavirus-recession-probably-begins
• Brendan O'Connor and Daniel Cooper on coronavirus-may-end-up-being-a-major-player-in-the-us-presidential-election
• Peter Nicholas on trumps-instincts-undermine-us-response-to-covid
• Masha Gessen on the-coronavirus-and-the-kursk-submarine-disaster
• Barkley Rosser on the-coming-fiscal-crisis-of-state-and-local-governments
• The grumpy economist on implementing-federal-lending
• Calculated Risk on comments-on-february-existing-home-sales

Europe

• long and variable on nudging-and-banning
• Mainly Macro on coronavirus-and-consequences-of-a-compliant-media
• Progrowth Liberal on europes-response-to-coronavirus-and-the-implications-for-the-u-s

Asia

• Rodger Shanahan on iran-sanctions-vs-sympathy
• Kirsten Han on singapore-feeling-safe-enough-go-polls
• Ethan Brunner on american-jews-israel-stuck

Wonk

• Stephen Grenville on imf-ponders-international-capital-flows
• Nick Gruen on hierarchy-and-generative-orders-theorising-the-generative-order-part-one
• Peter Dorman on benefit-cost-analysis-and-coronavirus
• Barkley Rosser on to-slow-spread-of-coronovirus-end-iran-sanctions
• the conversable economist on some-ruminations-from-mars , us-and-international-stock-market-premiums-in-the-long-run , the-spanish-flu-of-1918-20, can-the-economy-just-be-put-on-hold-for-a-few-months
• Xueyin Zha on uncertain-fate-org
• Brian Resnik on coronavirus-covid-19-lockdowns-end-how-long-months-years
• Tyler Cowen on the-best-economic-plan-against-the-coronavirus
• stumbling and mumbling on against-one-trick-ponies
• Tim Harford on will-economists-ever-be-as-good-at-forecasting-at-meteorologists
• Oliver Hahl et al on The Authentic appeal of the lying demagogue 
• Uneasy Money on the-idleness-of-each-is-the-result-of-the-idleness-of-all

General

• Lotti Tajouri on what-is-a-virus-how-do-they-spread-how-do-they-make-us-sick
• Allen Cheng on how-does-coronavirus-kill
• Hassan Vally on why-are-older-people-more-at-risk-of-coronavirus
• Mike Lee and Sebastian Duchene on the-coronavirus-looks-less-deadly-than-first-reported-but-its-definitely-not-just-a-flu
• Dale Fisher on why-singapores-coronavirus-response-worked-and-what-we-can-all-learn

Climate

• and Then Theres Physics on andrew-dessler-rebuts-roy-spencer
• Real Climate on coronavirus-and-climate

Andrew Gelman ( mainly stats)

• the-road-back
• are-relational-inferences-from-crowdsourced-and-opt-in-samples-generalizable-comparing-criminal-justice-attitudes-in-the-gss-and-five-online-samples
• older-americans-are-more-worried-about-coronavirus-unless-theyre-republican
• breaking-the-feedback-loop-when-people-dont-correct-their-errors
• prior-predictive-posterior-predictive-and-cross-validation-as-graphical-models
• do-these-data-suggest-that-ups-amazon-etc-should-be-quarantining-packages
• estimates-of-the-severity-of-covid-19-disease-another-bayesian-model-with-poststratification
• just-some-numbers-from-canada
• hilda-bastian-and-john-ioannidis-on-coronavirus-decision-making-jon-zelner-on-virus-progression-models
• another-bayesian-model-of-coronavirus-progression
• the-new-yorker-fiction-podcast-how-its-great-and-how-it-could-be-improved
• we-need-to-practice-our-best-science-hygiene
• my-best-thoughts-on-priors
• hes-annoyed-that-pnas-desk-rejected-his-article
• estimating-covid-19-prevalence-using-singapore-and-taiwan
• statschat on stimulating-the-economy
• Kaiser Fung on two-types-of-lockdowns-why-us-must-rethink-its-testing-policy, how-to-act-like-a-data-scientist-7-recognizing-and-correcting-biases-in-surveys-and-polls, triage-testing-is-a-terrible-idea

Retired genial Dave Giles ( econometrics)

• nuttin
• Freakometrics on modelling pandemics

Dianne Coyle ( quirky + book reviews)

• all-that-we-dont-know
• chaos-tools-and-thoughts
• Daniel Flitton on readers-respond-books-collect-covid-19-quarantine
• Scott Robinson on books-self-isolation-revisiting-why-nations-fail
• Tim Harford on book-of-the-week-11-uncharted-by-margaret-heffernan

Vox Wonk

• covid-19-governments-must-avoid-creating-additional-uncertainty
• economic-impact-pandemic-igm-forum-survey
• occupational-licensing-has-sizeable-impact-job-mobility-us
• inequality-and-pandemic-make-explosive-mix
• capital-market-integration-can-reduce-misallocation-evidence-india
• radar-rise-shadow-banking-europe
• debt-and-financial-crises-will-history-repeat-itself
• european-union-and-democracy-must-deliver
• citizenship-trade-inside-eu-sovereignty-rights-need-be-realigned
• helicopter-money-time-now
• impact-china-us-trade-agreement-developing-countries
• adoption-digital-technologies-firms-europe-and-us
• anticipating-financial-crisis-evidence-insider-trading-banks
• case-coordinated-covid-19-response-no-country-island
• export-restraints-medical-supplies-during-pandemic
• lack-preparation-rare-events-and-policy-implications-time-covid-19

More Eastwood tales

Well the local junior and senior cricket finals were called off.
The local football season has been postponed and in reality will not go ahead.
I took my oldest son's car to be serviced at West Ryde yesterday and at 8.15 there 5 yes 5 people on the West Ryde railway station.

I went shopping yesterday and the butchers had very little. Lots of people in Eastwood this morning around 7.30. One Butcher was putting up its prices as people were ordering!! Got most of our fruit and Veges ( gosh we are lucky in Eastwood for fresh fruit and veg).
Woolworths has no meat although we rarely buy meat from there.

It is scary

coronavirus and Eastwood

I have two weeks off.

Eastwood is interesting. Plenty of carspaces in the streets. Fewer people are using the train.

At the Shopping Centre it is unusual to see a person who is chines or of chines origin not wearing a mask.
Little rice . pasta, sugar, flour or canned vegetables  or of spaghetti and baked beans despite the limits  put on. Perhaps the limits are similar to those on A2 milk however I do not know.

Times are interesting.

The Coronavirus has hit sport for six

Sport has been affected bigtime by the coronavirus.

At present we have had few players getting the virus however most countries have essentially banned crowds at any games.
This affects the sports directly but also indirectly all the people and organisations that sell tickets, food, refreshments, parking, transport etc.

There is a huge economic affect. Moreover there is also the problem of players playing in empty stadiums. Players will not play well with no atmosphere and viewing on TV will be boring as well.
My guess is a lot of competitions will not go on.

HOWEVER this is easy here downunder as we have very few promotion and relegation sports. A competition such as the EPL will have to play out their premiership to ensure who is relegation without litigation.

I suspect all this have made a recession inevitable

Around the Traps 13/6/20

It is time again for Around the Traps

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Alfredo Paloyo on a-toilet-paper-run-is-like-a-bank-run-the-economic-fixes-are-about-the-same
• Rachel Nolan et al on entire-hillsides-of-trees-turned-brown-this-summer-is-it-the-start-of-ecosystem-collapse
• Ian Wright and Jason REynolds on a-city-by-city-guide-to-how-water-supplies-fared-in-australias-summer-of-extremes
• Debbie Willis on next-time-weve-got-to-handle-emergency-donations-better
• Gerard Fitzgerald on fever-clinics-are-opening-in-australia-for-people-who-think-theyre-infected-with-the-coronavirus-why
• Croaking Cassandra on a-few-coronavirus-economic-policy-points , jami-lee-rosss-speech, coronavirus-economics-10-march, the-unseriousness-and-unfitness-of-the-governor, why-should-the-ocr-should-be-cut-substantially
• Ross Gittins on back-in-black-one-minute-loose-talk-of-recession
• Raja Junankar on this-is-more-than-a-health-crisis-heres-a-10-point-plan-for-avoiding-recession
• Nicky Wright et al on a-rare-natural-phenomenon-brings-severe-drought-to-australia-climate-change-is-making-it-more-common
• renew economy on gaslighting-on-emissions-ieefa-says-burning-lng-worse-than-coal-for-climate , aemc-set-to-approve-demand-response-energy-trading-but-households-left-out
• Nicky Wright on a-rare-natural-phenomenon-brings-severe-drought-to-australia-climate-change-is-making-it-more-common
• John Quiggin on how-coronavirus-will-wallop-australias-economy-and-what-the-government-must-do, the-coronavirus-stimulus-program-is-labors-in-disguise-as-it-should-be
• Ross Gittins on it-will-take-time-to-get-used-to-living-with-the-virus, morrisons-trickle-down-stimulus-may-not-be-enough
• Peter Martin on morrisons-coronavirus-package-is-a-good-start-but-hell-probably-have-to-spend-more

Northern America

• Erin Hurley on elizabeth-warren-far-finished , what-difference-six-weeks-and-viral-outbreak-make-donald-trump
• David Applell on his-ignorant-narcissism-poses-risk-to-the-country
• the conversable economist on american-mobility-from-westward-ho-to-home-attachment
• Alex Tabarrok on the-lasting-effects-of-the-1918-influenza-pandemic
• Tyler Cowen on how-big-a-hit-will-the-u-s-economy-take-two-scenarios
• Calculated Risk on cleveland-fed-key-measures-show-inflation-above-2%
• Richard Maude on democrats-and-america-s-place-world-rescue-mission
• Lili Loofbourow on coronavirus-crisis-trump-spin-fail
• Macro Musings on the-decline-of-10-year-treasury
• Mathew Yglesias on trump-coronavirus-response-disaster
• Sussan Glasser on lletter-from-trumps-washington/a-president-unequal-to-the-moment 
• Barkley Rosser on are-us-treasuries-really-facing-a-liquidity-crunch
• A;ex Tabbarok on massive-us-government-failure

Europe

• stumbling and mumbling on on-centrist-decline , winning-the-argument
• Mainly Macro on fiscal-rules-primer-for-budget
• Alexy Muraview on putin-for-life-many-russians-may-desire-leadership-change-but-dont-see-a-viable-alternative
• Marcus Colla on thuringian-eruption-germany

Asia

• Akimoto Kaisuke and David Walton on coping-covid-19-tokyo-olympics-loom
• Milton Osborne on mekong-khon-pi-rapids-saved-least-now
• Khang Vu on covid-19-will-kill-moon-jae-s-korea-d-tente
• Nora Schenzig on belt-and-rebranding-initiative

Wonk

• Menzie Chinn on forecasts-and-output-gaps-in-the-wake-of-covid-19-as-of-early-march
• long and variable on new-statesman-post-on-monetary-policy-and-the-virus
• the conversable economist on women-in-economics-early-stage-problem , some-coronavirus-economics
• Barkley Rosser on ranking-health-care-systems-by-country
• Croaking Cassandra on coronavirus-economics-and-policy
• Nick Gruen on the-ghost-of-descartes-economics-purposes-perspectives-and-practical-problem-solving-part-one
• stumbling and mumbling on on-unpredictability
• Tim Harford on why-moonshots-matter
• Frances Woolley on postmodern-economic-measurement-there-is-no-number-only-numbers
• Mark the Graph on covid-19-doubling-times-by-country

General

• Dennis Muller on coronavirus-is-a-huge-story-so-journalists-must-apply-the-highest-ethical-standards-in-how-they-tell-it
• David Appell on how-virus-progresses-by-country

Climate

• Moyhu on usa-temperatures-comparison-of-moyhu-and NOAA, giss-february-global-up-by-009-from-january
• and Then Theres Physics on a-couple-of-highlights
• Real Climate on why-not-use-a-clever-mathematical-trick
• David Appell on gistemp-second-warmest-february

Andrew Gelman ( mainly stats)

• estimating-the-mortality-rate-from-corona
• coronavirus-age-specific-fatality-ratio-estimated-using-stan
• non-disclosure-is-not-just-an-unfortunate-but-unfixable-accident-a-methodology-can-be-disclosed-at-any-time
• coronavirus-age-specific-fatality-ratio-estimated-using-stan
• non-disclosure-is-not-just-an-unfortunate-but-unfixable-accident-a-methodology-can-be-disclosed-at-any-time
• woof-for-descriptive-statistics
• bernie-electability-update
• coronavirus-model-update-background-assumptions-and-room-for-improvement
• a-factor-of-40-speed-improvement-thats-not-something-that-happens-the-other-day
• computer-generated-writing-that-looks-real-real-writing-that-looks-computer-generated
• naming-conventions-for-variables-functions-etc
• 100-things-to-know-from-lane-kenworthy
• statschat on stabbing-stats

Retired genial Dave Giles ( econometrics)

• Marc Bellamare on Peter Kennedy, Judea Pearl or both

Dianne Coyle ( quirky + book reviews)

• counting-people
• Tim Harford on book-of-the-week-10-the-rules-of-contagion-by-adam-kucharski
• Ric Smith on book-review-contest-indo-pacific

Vox Wonk

• artificial-intelligence-central-banker
• economics-time-covid-19-new-ebook
• information-channel-monetary-policy-has-disappeared-us
• causal-effect-education-chronic-health-evidence-uk
• measuring-impact-malfunctioning-credit-markets-productivity
• procurement-regimes-and-medical-innovation
• coronavirus-and-macroeconomic-policy
• oil-price-wars-time-covid-19
• public-spending-effective-lower-bound
• uk-productivity-puzzle-cfm-survey
• covid-19-europe-needs-catastrophe-relief-plan
• declining-son-preference-us
• what-stock-market-tells-us-about-consequences-covid-19
• it-s-not-exponential-economist-s-view-epidemiological-curve

NRL in a bind

THE NRL will suspend two Canterbury players for having sex with schoolgirls.
Herein this looks very strange.

The NRL does not embrace Christianity indeed they lied about what Folau said when they said he could not play in the competition.
Yet here they are essentially saying you cannot have sex with willing people in certain circumstances.

The players themselves have not broken any laws.

Is it a bad look. Well of course I would say yes however how can it be a bad look to the secular world?  You can have sex with anyone you wish ,if they agree,. Yet it isn't in this case!!

The fiscal responce to coronavirus.

Apparently the government is announcing their fiscal response to the coronavirus today.

There wil be a lot of comparisons to the ALP's response to the GFC. This should not occur. It was entirely possible to have a depression without a fiscal response back then. A number of countries did indeed have a depression. All adopted austerity instead of fiscal expansion.

Australia in fact avoided a recession although none of the critics who proved badly wrong ever fessed yup to being wrong in their analysis.

It is different this time.

Supply chains are affected. You cannot sell anything if you do not have supplies.
Only certain people can work from home if affected. Nurses, people who work in supermarkets,, doctors, dentists etc all cannot work from home.

The government should aim to spend big not small. Since monetary policy is clearly not working fiscal policy needs to step up. It won't if the government tries to portray itself different to the ALP in 2008. This is why the RBA has been urging the Government to spend big on infrastructure. The government has been deaf.

Back then we knew it was the December quarter which would be critical to avoiding a recession hence the cash splash was targeted then. It worked. This time around it is the June quarter that is all important. as the March quarter will undoubtedly be negative.

I suspect the government will spend to little and unlike the ALP will not avoid a recession. This of course would have consequences for the budget.

If so they will hoisted on their own petard!!

Whoopsy.

I should have added the similarities between a bank run and a toilet paper run.
Some people need to understand economics! Know your subject.

Around the Traps 6/3/20

It is time again for Around the Traps.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Phillip Laird on transport-is-letting-australia-down-in-the-race-to-cut-emissions
• David Lindenmayer and Doug Robinson on logging-is-due-to-start-in-fire-ravaged-forests-this-week-its-the-last-thing-our-wildlife-needs
• Brendan Coates forget-more-compulsory-super-here-are-5-ways-to-actually-boost-retirement-incomes
• Greg Jericho on the-truth-about-budget-surpluses-its-revenue-not-spending-that-counts, coronavirus-is-the-coalitions-gfc-but-will-morrison-respond-as-rudd-did
• Croaking Cassandra on on-reading-the-official-pandemic-plan, why-economic-policymakers-need-to-respond-aggressively , yield-curve-indicators-monetary-policy-and-the-case-for-action ,take-a-macro-approach
• Ross Gittins on productivity-problem-start-at-bottom-not-at-the-top, eat-drink-and-be-merry-for-tomorrow-the-virus-wont-get-you
• Mark the Ballot on is-non-probability-sampling-problem
• renew economy on how-the-tesla-big-battery-has-smoothed-the-transition-to-zero-emissions-grid, solar-projects-some-wind-farms-hit-by-more-transmission-downgrades
• Warren Hogan on were-staring-down-the-barrel-of-a-technical-recession-as-the-coronavirus-enters-a-new-and-dangerous-phase
• Peter Martin on one-word-repeated-9-times-explains-why-the-reserve-bank-cut-its-coronavirus , economic-growth-near-an-end-as-treasury-talks-of-prolonged-coronavirus-downturn
• Alexandra Wake on the-closure-of-aap-is-yet-another-blow-to-public-interest-journalism-in-australia
• BOM on the-201920-summer-australias-summer-of-extremes
• Michael Lucy on why-are-people-stockpiling-toilet-paper-we-asked-four-experts
• Richard Holden on vital-signs-australian-and-us-rate-cuts-underline-seriousness-of-the-coronavirus-crisis
• Nick Gruen on car-manufacturing-and-australia-nothing-ventured-nothing-gained

Northern America

• Sean Illing on liberals-conservatives-american-politics-eitan-hersh
• the conversable economist on us-poverty-over-time-how-to-compare , unemployment-transition-patterns-in-and-out , time-to-end-single-house-zoning
• the grumpy economist on corona-virus-monetary-policy
• Menzie Chinn on forward-looking-components-of-economic-activity
• Alex Ward on coronavirus-covid-trump-response-fox-news

Europe

• Mehmat Ozalp on turkey-and-russia-lock-horns-in-syria-as-fear-of-outright-war-escalates
• Daniel Woker on europe-under-threat
• Tom McTague on boris-johnson-britain-dominic-cummings

Asia

• Menzie Chinn on high-frequency-economic-indicators-in-china
• Rahul Samubaju and Suryapratim Roy on indian-citizenship-has-now-been-reduced-to-us-versus-them
• Rodger Shanahan on syria-battlefield-rules
• Edmond Roy on india-s-reckless-rush-ruin
• Priya Chacko and Ruchira Talukdar on why-modis-india-has-become-a-dangerous-place-for-muslims
• Niamtullah Ibrahami on lasting-peace-in-afghanistan-now-relies-on-the-taliban-standing-by-its-word-this-has-many-afghans-concerned
• Tony Walker on netanyahu-set-to-survive-another-knife-edge-israeli-election
• James Chinn on malaysia-takes-a-turn-to-the-right-and-many-of-its-people-are-worried
• Amy Chew on malaysia-now-uncharted-waters

Wonk

• Tomn Ascott on media-literacy-magic-bullet-fake-news
• Tim Harford on why-we-need-to-disagree
• the conversable economist on warren-buffett-ruminations-on-board , thought-on-sumptuary-laws-adam-smith-to-plastic-bags
• Mainly Macro on the-economic-effects-of-pandemic
• Warwick McKibbin on the-first-economic-modelling-of-coronavirus-scenarios-is-grim-for-australia-the-world
• Rebecca Barber on syria-what-un-can-do-and-must-do
• JJ Rose on modern-slavery-reports-year-one-what-can-we-expect
• stumbling and mumbling on on-capitalist-stagnation
• Roger Farmer on contagion

General

• Jack Anderson on sun-yang-ban-shows-world-swimming-body-must-establish-an-integrity-commission
• Tom Stephenson on guide-to-the-classics-petroniuss-satyricon-sex-satire-and-naughty-boys
• Joanne McDonald on how-do-we-detect-if-coronavirus-is-spreading-in-the-community

Climate

• Variable Variability on trend-errors-raw-temperature-station-inhomogeneities
• John Church on the-world-may-lose-half-its-sandy-beaches-by-2100-its-not-too-late-to-save-most-of-them
• Moyhu on ncepncar-reanalysis-monthly-surface-unchanged-in-february , february-global-surface-templs-up-0053-from-january
• Real Climate on why-are-so-many-solar-climate-papers-flawed
• and Then Theres Physics on zharkova-et-al-retracted

Andrew Gelman ( mainly stats)

• different-challenges-in-replication-in-biomedical-vs-social-sciences
• the-paterno-defence-gladwells-tipping-point
• conditioning-on-a-statistical-method-as-a-meta-version-of-conditioning-on-a-statistical-model
• so-what-about-that-claim-that-probabilistic-election-forecasts-depress-voter-turnout
• as-usual-i-agree-with-paul-meehl-it-is-not-a-reform-of-significance-testing-as-currently-practiced-in-soft-psych-we-are-making-a-more-heretical-point-than-any-of-these-we-are-attacking-t
• coronavirus-panic-news
• what-is-the-conclusion-of-a-clinical-trial-where-p0-6
• is-data-science-a-discipline
• you-dont-want-a-criminal-journal-you-want-a-criminal-journal
• statschat on viral-misinformation-misinformation
• Kaiser Fung on eight-unanswered-questions-about-the-coronavirus
• Tim Harford on the-statistics-behind-the-spread-of-ideas

Retired genial Dave Giles ( econometrics)

• freakometrics on gini index, poverty and yop shares
• Marc Bellamare on assessing the the extent of SUTVA violations

Dianne Coyle ( quirky + book reviews)

• deaths-of-despair
• whats-wrong-and-right-with-economics
• Tim Harford on book-of-the-week-9-loonshots-by-safi-bahcall

Vox Wonk

• why-east-germans-are-not-taking-advantage-large-wage-gap-between-east-and-west-germany
• networking-frictions-venture-capital-and-gender-gap-entrepreneurship
• article/gdpr-and-internet-interconnection
• fundamentals-safe-assets
• consequences-brexit-uk-inflation-and-living-standards-first-evidence
• effect-bank-capital-requirements-real-economy-and-their-interaction-monetary-policy
• are-financial-crises-demand-or-supply-shocks
• public-interventions-banking-sector
• mergers-and-merger-policy-digital-markets
• public-interventions-banking-sector
• biological-clocks-import-competition-and-gender-gap-earnings
• women-economics-profession-new-ebook

A very good example of Australians lacking trust in politicians

Last night I was at a woolworths supermarket.
No rise, No flour, No toilet paper, little cans of tomatoes, lentils chick peas etc, few cans of spaghetti, baked beans etc.

When some Woolworths toilet papers came out, you know the cheap stuff, there was almost a riot when it was said they were limiting people to taking four each.

Apart from being extremely stupid this shows a complete lack of trust in our political leadership.

Pot Pouri

Lots of interesting stuff around the place.

Here is a few.

• Mainly Macro on the-economic-effects-of-pandemic
• Mark the Ballot on is-non-probability-sampling-problem
• Andrew Gelman on so-what-about-that-claim-that-probabilistic-election-forecasts-depress-voter-turnout
• Greg Jericho on coronavirus-is-the-coalitions-gfc-but-will-morrison-respond-as-rudd-did
• Rodger Shanahan on syria-battlefield-rules
• renew economy on tesla-big-batterys-stunning-interventions-smooths-transition-to-zero-carbon-grid
• Warwick McKibbin on the-first-economic-modelling-of-coronavirus-scenarios-is-grim-for-australia-the-world

Enjoy

It is revenue that produced budget Surpluses

Greg Jericho writes a good article on the above.
We have been through this umpteen times. If your revenue is weak so the is the budget bottom line.

The last time the ALP were in government revenue was very weak. Indeed so weak it was back at 'Keating' levels as a % of GDP despite what Sinclair Davidson and the rest of the goebbels group attempted to say. Remember revenue was roaring.It just didn't get to very high levels. Despite this we should have had a surplus. The reasoning was extremely specious. and easily shown to be false. A derivation was commodity prices were strong so we should have a budget surplus. the innumerate JC used to say this. He could not read budget papers. If he could he would have seen company tax was weak. There was no link between commodity prices and tax revenues. This was mainly the result of tax losses .

Despite immediately promising to deliver a surplus the coalition did not. They wil only do it if revenues are strong.