Why has everyone forgotten about taxation?

 When you study economics in the very first year you are taught you need to examine both expenditure and TAXATION if you want to see how fiscal policy is operating. ( I will ignore the structural effects just of now.)

The budget got into balance for two years , which is all important for where inflation is now, mainly because of a large increase in taxation. Without this the budget would have been significantly in deficit. The budget marginally reduced its structural deficit.

Thus  overall fiscal policy was marginally helping reduce output and thus helping reduce inflation even though we had cost push not excess deemed inflation.

As I have emphasised a lot previously  it is very hard to tighten fiscal policy once the RBA has started to tighten.

I am again repeating myself but GNE at 1% at an annual rate is not an economy at excess output  indeed the opposite.

Around the Traps 9/8/24

 It is time for Around the Traps again.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Doug Drury on what-is-slot-hoarding-and-is-it-locking-out-regional-airlines-like-rex
• Mick Ryan on what-australia-can-learn-ukraine-s-long-range-strike-weapons
• Kevin Bonham on safe-seats-falling-is-nothing-new
• Andrew Norton on australia-made-9-changes-to-student-migration-rules-over-the-past-year-we-dont-need-international-student-caps-as-well
• Ross Gittins on theres-good-case-for-cutting-interest-rates-ASAP , our-troubled-universities-have-become-the-politicians-playthings
• Helen Dickinson on tiered-ndis-provider-registration-and-a-say-on-supports-are-we-finally-listening-to-people-with-disability
• Michael Clarke on thinking-unthinkable-again
• Phillip Ivanov on australian-ceos-face-wave-geopolitical-risks
• Peter Martin on the-rba-says-dont-expect-interest-rate-cuts-for-6-months-heres-why-it-could-be-sooner
• Greg Jericho on a-reserve-bank-cut-is-on-the-cards-by-the-end-of-the-year-but-the-property-price-nightmare-is-set-to-worsen
• Dennis Muller on kim-williams-is-right-to-criticise-how-the-abc-covers-news-but-theres-a-change-he-needs-to-make-to-fix-it

OZ Climate

• big-renewables-need-big-support-local-energy-hubs-can-help-us-through-the-change
  
• back-on-the-solar-coaster-rooftop-pv-market-rebounds-from-june-lull-to-record-july
  
• wholesale-prices-surge-as-wind-and-solar-output-falls-to-zero-in-south-australia
  
• nsw-confirms-eraring-closure-delay-driven-by-fear-of-pre-election-price-shocks
  
• new-wind-farm-tops-charts-for-best-performance-in-july-queensland-slam-dunks-solar
  
• networks-make-pitch-to-soak-up-solar-share-pv-plug-in-more-evs-and-lower-cost-of-renewable-shift
  
• the-windfall-contract-that-will-underpin-the-cost-of-building-australias-biggest-battery-project
  
• tasmania-fast-tracks-bell-bay-wind-project-as-it-heads-for-federal-review
  
• Michelle Ward et al on more-than-half-of-nsws-forests-and-woodlands-are-gone-as-ongoing-logging-increases-extinction-risks-study-shows
• Graham Readfearn on great-barrier-reef-ocean-temperatures-hottest-record
• Petra Stock on repeating-climate-denial-claims-makes-them-seem-more-credible-australian-led-study-finds
• Ben Henley et al on wake-up-call-to-humanity-research-shows-the-great-barrier-reef-is-the-hottest-its-been-in-400-years
• Samantha Hepburn on huge-gas-fields-under-a-coral-reef-will-a-rejection-on-environmental-grounds-stop-woodsides-browse-project
• Anne Louise-Knight on pumped-hydro-proposals-could-see-taxpayers-financing-mine-rehabilitation

Northern America

• Matt Feeney on will-kamala-have-the-last-laugh Thanks Nick
• Claudia Sahm on sahm-thing-more-on-the-sahm-rule Thanks Brad
• Menzie Chinn on three-episodes-of-the-sahm-rule-triggered
• noahopinion on why-america-fell-behind-in-drones , the-us-economy-is-not-crashing
• new deal democrat on establishment-jobs-survey-weak-and-household-jobs-survey-almost-recessionary , the-democrats-new-sunny-vibes
• Tyler Cowen on what-to-think-about-ranked-choice-voting
• Joel Eissenberg on high-taxes-for-thee-but-not-for-me , what-difference-did-the-covid-vaccine-and-masking-make-in-the-us
• Brad De Long on well-that-escalated-quickly, the-bond-market-thinks-a-possible-return
• Eric Levitz on tim-walz-harris-vp-josh-shapiro
• Jared Mondschein on from-folksy-midwestern-teacher-to-cool-dad-meme-machine-who-is-tim-walz-kamala-harris-vp-running-mate
• Isabelle Zhu-Maguire on looking-back-biden-administration-s-pacific-strategy
• Katy Waldman on weird-is-a-rebuke-to-republican-dominance-politics
• Whizy Kim on elon-musk-x-lawsuit-advertisers-antitrust
• Claudia Sahm on the-sahm-rule-is-warning-of-recession-but-claudia-sahm-isn-t-sold
• Drezner's world on the-panic-of-the-techbros Thanks Brad
• Norman Eissen and Carol Anderson on georgia-election-board-trump-certification

Europe

• Tyler Cowen on england-and-wales-fact-of-the-day
• Mainly Macro on if-labour-is-serious-about-defeating-right-wing-populisn-then-it-needs-to-reform-large-parts-of-the-media
• Richard Fern on riots-in-the-uk-online-propagandists-know-how-to-work-their-audiences-this-is-what-we-are-missing
• Gordon Sander on ready-for-war-in-sweden
• Yuri Gorodnichenko and Ilona Sologoub on how-western-countries-could-benefit-from-ukraine-nato-membership Thanks Brad
• Menzie Chinn on kursk-in-2024

Asia

• Ali Mamouri on iran-has-vowed-harsh-punishment-for-ismail-haniyehs-killing-but-how-likely-is-all-out-war-with-israel
• Henry Storey on marcos-vs-duterte-domestic-politics-meets-grand-strategy
• renew economy on pivotal-moment-wind-and-solar-overtake-coal-in-china-in-historic-first
• Anthony Ware on with-bangladesh-on-a-knifes-edge-trapped-rohingya-refugees-are-forced-to-turn-to-people-smugglers-or-violent-gangs
• Hannah Mcnichol on what-china-s-role-achieving-un-s-2030-sustainable-development-goals
• Intifar Chowdury on young-people-brought-down-bangladeshs-repressive-leader-will-they-now-be-empowered-to-lead-real-change
• David Brewster on bangladesh-s-new-military-led-government-has-tough-job-ahead
• Adam Simpson on myanmars-junta-has-suffered-a-humiliating-military-defeat-could-it-be-a-turning-point-in-the-war
• Adam Simpson on china-s-high-stakes-diplomacy-managing-middle-eastern-turmoil
• Eliot Cohen on israel-iran
• Isaac Chotiner on the-radicalization-of-israels-military
• Aarti Betigeri on bangladesh-economist-turned-saviour
• Fred Kaplan on iran-israel-is-middle-east-about-to-explode
• Zongyuan Liu on chinas-real-economic-crisis Thanks Brad

Wonk

• institutional economics on burgenstock-the-anti-bretton-woods
• Peter Greste on the-us-russia-prisoner-swap-shows-how-journalists-risk-being-used-as-geopolitical-bargaining-chips
• Tamsin Paige and Danielle Ireland-Piper on former-sea-shepherd-captain-paul-watson-arrested-on-a-japanese-warrant-from-2012-what-next
• noahopinion on how-maduro-and-chavez-wrecked-venezuelas-economy , how-tariffs-on-china-could-help-the-world
• the conversable economist on summer-2024-journal-of-economic-perspective-free-online , growth-and-inequality-return-of-the-kuznets-curve , the-growth-and-risks-of-non-financial-banking-institutions , the-creation-of-ride-sharing-and-the-creativity-of-markets
• Mark Pierce on shots-around-world-influence-assassins-international-affairs
• Joshua Keating on miliband-ukraine-gaza-sudan
• Angry Bear on paul-davidson-1930-2024-and-the-founding-of-post-keynesian-economics
• Sheila Dow on Paul Davidson thanks Tyler
• Luke Hartigan on fear-gripped-global-markets-this-week-but-was-it-all-overblown
• Zena Assad on a-us-court-has-ruled-google-is-an-illegal-monopoly-and-the-internet-might-never-be-the-same
• Terry Hackett on dehumanisation-danger
• Brad De Long on note-the-limits-in-adam-smiths-wealth-of-nations
• Ved Shinde on reckoning-empire
• Nicole Narea on harris-trump-fundraising-donations-campaign-2024
• Tim Harford on counting-the-cost-of-my-major-keying-error

General

• Adam Brumm et al on tiny-fossil-arm-bone-sheds-light-on-evolution-of-ancient-indonesian-hobbits

Climate

• David Appell on h-t-volcano-had-slight-cooling-effect
• skeptical science on hottest-days-120k-years
• Moyhu on july-global-surface-templs-up-0001-from-june
• Mohd Yunus on without-money-global-biodiversity-target-just-empty-promise

Andrew Gelman ( mainly stats)

• kamala-harris-gets-coveted-xkcd-endorsement
  
• lucy-is-not-a-nickname
  
• adverse-adult-research-outcomes-increased-after-increased-willingness-of-public-health-journals-to-publish-absolute-crap
  
• unsolicited-feedback-on-your-research-from-the-llms-at-large
  
• a-welcome-rant-on-betting-knowledge-belief-and-the-foundations-of-probability
  
• free-book-of-stories-activities
  
• Freakometrics on probabilistic scores of classifiers calibration is not enough

Dianne Coyle ( quirky + book reviews)

• Tyler Cowen on tyler-cowen-world-music-playlist-for-rick-rubin

Vox Wonk

• softwares-impact-labours-income-share-new-evidence
  
• why-stock-market-has-risen-so-much
  
• heterogeneity-gender-differences-willingness-guess
  
• enhancing-mothers-employment-quality-through-longer-school-schedules-lessons-chile
  
• green-transition-and-public-finances-balancing-climate-mitigation-and-fiscal
  
• state-gender-inequality-latin-america
  
• speed-firm-response-inflation
  
• impact-road-connectivity-fertility-and-child-health-rural-india
  
• trust-intangible-assets-and-productivity
  
• managing-cope-natural-disasters
  

The decision to pick Tim Walz

 Kamala Harris picked Tim Walz as her running mate.

She did have a great group to pick from  ( unlike trump) but it was clear Shapiro wass the best of the bunch.

Walz brings a folksy charm and his criticism of trump is done with biting humour which he hates. Making Trump being Trump is a real advantage to Democrats.Two other things stood out. When asked he replied with a question. how can I help. The other was the chemistry which is all important.

The problem is he cannot 'deliver' a swing state like Shapiro could have.

Shapiro had two problems apparently. He was too ambitious, wanted a far greater role for the vice President and we have to admit he might just look better than Harris.

Shapiro is a traditional politician unlike Walz and would be very good at being an attack dog.

We shall see in Harris made a wise choice or not.

The RBA is mad

 Yesterday the RBA governor at her news conference said the board is worried about excess demand in the economy or words to that effect.

Huh. domestic demand is 1% and falling. Where is this excess demand. She appears to be worried about unemployment being so low. Well consumers aint spending. Any measure of prices in the market sector has them falling well into the RBA's preferred space.  Well yes a recession would affect prices there but at what cost? There are also other ways to bring down prices in the non-market sector is prices in the non-market sector.

As usual I agree with my old mate Peter Martin who says the-rba-says-dont-expect-interest-rate-cuts-for-6-months-heres-why-it-could-be-sooner

Post-Truth politics can have tragic consequences

 We have in recent days seen the tragic consequences of post truth in modern society.

Yesterday I wrote about how an Algerian boxer was deemed a transgender person fighting in the Olympic games. This was totally incorrect and as yet I have yet to see or hear an apology from those people who accused her of being transgender. Indeed some have doubled down despite no evide for their accusation. This was entirely disgraceful but that is as far as it got.

In the UK we saw it get a lot worse. A young man killed several young girls. It was claimed he was a muslim and killed them in the name of allah. When that was shown to be incorrect they rioted because he was an asylum seeker. Well no he was actually born in the UK. The facts did not matter as people did not believe them. They knew in their hearts what was truth so they rioted in very violent ways.

I am not sure how you can combat such lies when people will not accept the truth.

It does show however that post-truth and its closed cousin post-moderism is incompatible with a liberal democracy.

She is not Transgender

 It is always the case on the internet you want to write about a subject but someone beats you to it and writes better than you.

Here is Kevin Drum on the-strange-tale-of-imane-khelif. More HERE

Just to reiterate.

She was born a woman. For those wackies she has a vagina and not a penis. Her passport says she is a woman.

She actually fought in the last Olympics and was seen nowhere in the medals.

She has won less that 10% of your bouts by knockout.

We are talking about women in the alleged sport of boxing which is a joke in itself. If god has given her better 'assets' to box than other women how is that different to women who win at athletics.

She is a woman not transgender!! If she was I would not support her.

Around the Traps 2/8/24

 It is time again for Around the Traps.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Ian Musgrave on federal-court-finds-insufficient-evidence-roundup-weedkiller-causes-cancer-what-does-the-science-say
• Michelle Grattan on albanese-appoints-tony-burke-to-neutralise-immigration-issues-and-sends-clare-oneil-to-grapple-with-housing-crisis
• Paul Blacklow on what-is-competition-and-why-is-it-so-important-for-prices
• Abul Rizvi on liberal-coalition-department-of-home-affairs-tony-burke-peter-dutton-mike-pezzullo
• Peter Martin on why-the-rba-is-highly-unlikely-to-lift-interest-rates-next-week-even-if-inflation-climbs
• Justin Wastnage on rex-airlines-future-up-in-the-air-amid-questions-about-viability-of-small-airlines-in-australia
• Cynthia Mehboob on australia-s-big-tech-defence-cloud-too-big-fail
• John Hawkins on australias-3-8-inflation-rate-is-concerning-but-not-enough-to-trigger-a-rate-rise
• Michelle Grattan on indigenous-suicide-and-incarceration-are-increasing-according-to-latest-closing-the-gap-report
• Eileen Baldry on new-closing-the-gap-data-shows-more-first-nations-australians-are-in-prison-why
• Susan Hutchinson on yazidi-still-wait-justice
• Ross Gittins on one-reason-for-our-inflation-problem-weak-merger-law
• Andrew Gorringe on australias-coal-export-market-shifting-trade-dynamics-asia

OZ Climate

• origin-to-double-size-of-eraring-battery-to-soak-up-solar-next-to-countrys-biggest-coal-generator
  
• you-have-to-be-creative-why-australias-most-successful-grid-scale-battery-developer-reinvents-itself
  
• new-england-wind-project-shelved-as-local-mp-barnaby-joyce-takes-anti-renewable-vitriol-to-new-low
  
• australians-blame-wind-solar-for-high-power-bills-as-media-campaigns-take-hold
  
• coalitions-wind-turbine-ban-lives-on-as-vicgrid-takes-first-steps-to-map-new-renewable-zones
  
• ai-wont-use-as-much-electricity-as-we-are-told-and-its-not-a-reason-to-slow-transition-to-renewables
  
• generators-fill-their-pockets-again-pushing-grid-prices-to-new-highs-and-leaving-renewables-to-cop-the-blame
  
• a-deep-dive-into-wind-economics-and-why-nine-landowners-said-no-to-50-million-in-hosting-fees
  
• sluggish-slow-and-anaemic-bloombergnefs-sad-take-on-australias-green-energy-transition
  
• quit-the-quarry-mentality-or-miss-the-green-iron-opportunity-report-warns
  
• back-on-the-solar-coaster-rooftop-pv-market-rebounds-from-june-lull-to-record-july
  
• John Rose and Andrea Pelligrini on want-to-buy-an-electric-car-but-unsure-you-can-justify-it-heres-how-the-arguments-against-evs-stack-up
• Robert Streit et al on coral-restoration-is-a-speculative-feel-good-science-that-wont-save-our-reefs
• Graham Readfearn on peter-dutton-nuclear-power-plan-cost-price-canada-ontario
• Sourash Basirat and Simon Nicholas on hydrogen-holds-great-potential-australias-onshore-green-iron-production
• Grant Hauber on asia-pacific-renewable-supply-chain-opportunity

Northern America

• Franklin Foer on bidens-greatest-strengths-proved-his-undoing Thanks Nick
• eight by seven on the-fall-of-the-house-of-us-conclusion Thanks Nick
• Steve Waldmann on trump-v-united-states-greatest-hits Thanks Nick
• noahopinion on why-trump-or-harris-might-fail-to-stand-up-to-china , why-did-the-us-miss-the-battery-revolution , whos-weird
• institutional economics on fading-the-trump-trade
• Menzie Chinn on guest-contribution-why-have-us-shares-gold-and-the-dollar-been-soaring
• Joel Eissenberg on dr-fauci-is-a-hero
• Brad De Long on inflation-wise-the-us-economy-achieved-a-soft-landing-a-year-ago , the-feds-balancing-act-does-not-seem-to-be-balanced
• Jack Goldsmith on made-usa-america-s-gambit-reclaim-industrial-primacy
• Liz Zhou on kamala-harris-maga-racism-sexism
• the conversable economist on top-five-us-commercial-partners
• Tyler Cowen on what-are-republican-analysts-getting-wrong-about-free-trade
• Lisa Rubin on trump-legal-cases-where-they-stand
• Sam Baker on supreme-court-abortion-trump-public-approval
• Laurence Lessig on kamala-harris-overturn-supreme-court-immunity-ruling
• Heather Richardson on scotus-term-limits-immunity-and-ethical-behavior , trumps-melt-down
• Abdallah Fayyad on kamala-harris-prosecutor-record-tough-crime
• Daniel Shlozman and Sam Rosenfeld on late-to-the-party-democrats-biden
• David Graham on trump-nabj-kamala-harris
• Christian Paz on trump-nabj-black-voter-journalist-racist-kamala-harris-indian-american
• Jeet Heer on trump-republican-personality-cult , jd-vance-cat-lady
• silver bulletin on harris-trump-electoral-college Thanks Brad
• Ava Kalinauskas on trump-is-plain-weird-how-kamala-harris-meme-fied-campaign-is-leveraging-social-media-and-gen-z-culture
• Eric Levitz on trump-kamala-not-black-indian-vance-childless-cat-ladies
• Fred Kaplan on evan-gershkovich-release-vladimir-putin-trump-harris
• Joyce Vance on hes-a-racist
• Dennis Wamstead on us-hydrogen-not-solution-gas-fired-turbines
• Menzie Chinn on employment-different-measures

Europe

• Tim Harford on how-to-fix-the-uk-let-me-count-the-ways
• renew economy on germany-achieves-stunning-increase-in-solar-installations-and-output
• Mainly Macro on was-yesterdays-announcement-austerity
• Nina Khaze on charging-europe-s-bid-renewable-energy-independence
• Fred Kaplan on hamas-leader-ismail-haniyeh-killed-in-iran-hezbollah-israel-what-does-it-mean
• Gordon Sander on ready-for-war-in-sweden

Asia

• Catherine Wilson on unheard-potential-moderate-voices-new-caledonia-s-crisis
• Ian Parmeter on hamas-leaders-killing-in-tehran-likely-to-further-escalate-violence-in-middle-east
• Danielle Ireland-Piper on long-arm-law-china-s-extraterritorial-reach
• Shankaran Nambiar on will-malaysia-build-asean-brics

Wonk

• Nicholas Gruen on why-economists-should-embrace-forecasting-tournaments
• Ben Scott on martin-indyk-peacemaker
• Paul Haskett-Dowland and Bogdan Ghita on data-centres-are-guzzling-up-too-much-electricity-can-we-make-them-more-efficient
• noahopinion on the-new-progressive-economics-some-constructive-criticism
• Nicolas Forsans on venezuela-maduros-declaration-of-victory-isnt-fooling-anyone
• Alex Tabbarok on venezuela-under-brutal-capitalism
• the conversable economist on olympic-records-in-cost-overruns
• Katherine Fitzgerald on how-elon-musk-allowed-x-to-become-a-stalwart-platform-for-trump-supporters
• Anne Applebaum on venezuela-stolen-election-interview-leopoldo-lopez
• Tyler Cowen on cowens-third-law-illustrated
• William Butler on 7-nation-prisoner-swap-shows-how-diplomacy-not-law-governs-exchanges
• Andrew Dodd on rupert-murdochs-succession-plan-reveals-a-lot-about-his-empire-and-most-of-it-is-not-pretty
• Alex Tabbarok on uk-health-security-agency-raises-pandemic-threat-level

General

• Catherine Frieman and Caroline Schuster on what-did-bronze-age-people-do-with-all-that-bronze-new-research-revives-old-arguments-about-the-nature-of-money
• Hayley Green on what-happens-in-an-autopsy-a-forensics-expert-explains

Climate

• skeptical science on fact-brief-are-polar-bears-endangered , ClimateAdam-beyond-tomorrow
• Tyler Cowen on which-are-the-most-effective-subsidies-for-green-energy
• Shannon Hobbs and Fiona David on critical-minerals-critical-decisions
• Tyler Cowen on global-warming-and-rate-effects-vs-level-effects
• Geoff Demdicki on the-growing-conservative-backlash-against-carbon-capture-and-storage-canada-proud-pierre-poilievre
• David Zetland on climate-chaos-will-halve-our-wealth
• renew economy on nuclear-plant-trips-due-to-fire-and-battery-storage-steps-in-to-stabilises-the-grid
• Alex Tabarrok on the-unseen-fallout-chernobyls-deadly-air-pollution-legacy

Andrew Gelman ( mostly stats)

• background-on-fail-fast
  
• unusual-betting-patterns-with-several-temple-games-its-martingale-time-baby
  
• design-analysis-is-not-just-about-statistical-significance-and-power-its-relevant-for-bayesian-inference-too
  
• free-textbook-on-applied-regression-and-causal-inference
  
• statistical-factuality-versus-practicality-versus-poetry
  
• age-gap-between-spouses
  
• suspicious-data-pattern-in-recent-venezuelan-election
  
• the-active-seating-zone-an-educational-experiment
  
• Kaiser Fung on statistical-reasoning-in-sports

Dianne Coyle ( quirky + book reviews)

• unevenly combined thoughts on printing-time Thanks Brad
• The Economist on packing-for-your-summer-holiday-take-these-books-published-in-2024

Vox Wonk

• us-fiscal-mess-some-unpleasant-fiscal-simulations
  
• import-competition-and-us-sentiment-toward-china
  
• price-housing-us-1890-2006
  
• how-financial-authorities-can-respond-ai-threats-financial-stability
  
• russian-sanctions-and-dollar-foreign-exchange-reserves
  
• geopolitical-risk-oil-production-not-major-driver-economy
  
• political-expression-academics-social-media
  
• voluntary-emission-restraints-developing-economies-limited-role-trade-policy
  
• censorship-to-defend-democracy
  
• right-work-part-time-increases-mothers-labour-income
  
• household-inflation-expectations-taking-stock-recent-research-insights-monetary