Tuesday, 30 April 2013

Brian Ferry

Following on from Roxy music this is Brian Ferry's possibly only decent song from a pretty good movie.

Mickey Rourke was awsome!

The Budget Again

The PM a few days ago announced that revenue would not even reach the levels predicted in the last MYEFO.
Let us now examine the most important economic parameter with regard to the budget

It is of course Nominal GDP growth. It was forecast to be 5.1 % in the budget. It was revised down to 4.2% in MYEFO and now CBA economic research expects it to be 3%. ( the figure for Real GDP are 3.5%,3% and 2.9% respectively.  ( Just as a matter of interest the forecasts for NZ for Nominal GDP are 3.6 and 5.9%. If that was to occur in Australia the budget bottom line would be in the black!!)

The budget will DETRACT about 0.75 % points from GDP this financial year. (Note how this is completely incompatible with the view the problem is all about excessive spending.)
Also cash rates are 3% and falling. Notice how compatible this is as well. 

If the government cut expenditures like some fiscal ignorami are demanding then this figure would be more. at least 1% on my back of envelope calculations and that is being very conservative.
This of course would make nominal GDP even weaker and therefore the budget deficit even larger!.

CBA are forecasting a deficit or around 0.7% of GDP which is a balanced budget. Ricardo Ambivalence thinks it could be over 1%.

The point is you do not undertake greater fiscal consolidation when the Nominal GDP is so weak. You wait until it is much stronger.

Greg Jericho of Grog's Gamut fame has a reasonable article on the budget. He however does not emphasise the role of Nominal GDP enough.

Monday, 29 April 2013

Roxy Music

Roxy music was one of the great bands.
I'm sure I saw them at the old hordern pavilion.

Flesh and Blood was one of the great albums.

These are the best two songs.

The title track
  and Oh Yeah


Sunday, 28 April 2013

The "Right" in Australia continued

Read this and weep.

Here is a person who had a intellectual reputation simply writing as a ideological spear thrower.

What is his point and more importantly what and where is his evidence?

His mate has no sense of humour.  ( Kruggers links to Noah Smith's article which was on Around the Traps but there was no acknowledgement of that. why?

Okay I am bored but now I read that tax being 21.7of  % of GDP is rivers of gold. It just happen that is lower than it ever was under the previous Government. The Previous estimate of 22.3% was about as low as it did get( okay it got to 22.2%).

In all these cases the readers are being taken for people who have little upstairs. Unfortunately this seems to be the case.

Thursday, 25 April 2013

Around the Traps 26/4/13

It is Friday and time for Around the Traps.  It is late but I have been busy. I do not actually support all the articles but they are all interesting.
Highlighted articles are on the R&R debate but are in several categories ( sorry)

I will update on Sunday.


Anzac day related   john quiggin on gallipoli-and-crimea  Judith sloan on lest-we-forget   Harry Clarke on anzac-day Ed Butler on anzac-football-and-political-shibboleths




Andrew Gelman well Actually Statistics really



Wednesday, 24 April 2013

Budgets in Australia, New Zealand and Canada

Some people are cheering on wildly because NZ may get a balanced budget soon. They then compare that to Australia.

The only people who would engage in such practices are the fiscal ignorami.

New Zealand are not experiencing below trend NOMINAL GDP growth. Tax revenue is growing steadily as a % of GDP again as opposed to Australia where it hasn't.  They haven't experienced a TOT shock like we have and their public sector is adding to growth as opposed to Australia where it is detracting from growth.

Canada is forecasting getting back into the black but on the back of strong revenue growth however some people see problems.

Put it another way if revenue grows in Australia as is forecast in either Canada or NZ then we would be in the black quite easily!

I should add two more points
1) Whilst Nominal GDP is so weak then no-one will put the budget into the black. Larger spending cuts/tax rises will only make it worse not better i.e Nominal GDP would get weaker. Indeed you might bring on a recession
2) The latest CPI confirms  the strong REAL GDP but weak NOMINAL GDP trend.

Tuesday, 23 April 2013

Bruce Hornsby

Bruce Hornsby is one of the greats on the piano and this song Valley Road highlights this.  The ending is superb.

Foe some reason I cannot fathom I liked this song the first time I heard it and have loved it every time since.

Another one on my ipod!!


The drummer looks like Jack Nicholson and the  bass guitarist Leo Sayer. don't you love those hairstyles

What they said

July 29 2011 here Sinclair Davidson says ( go to link)

In 2007 Kevin Rudd argued, 'this reckless spending must stop'. He was quite right then, he would be even more correct today. The Australian economy is in trouble – according to the Australian Bureau of Statistics (ABS), the first quarter of 2011 experienced negative growth. Second quarter figures will be published in early September. This week the ABS reported that inflation is well above the Reserve Bank's two to three per cent inflation target.
Normally an inflation result like that would see an increase in official interest rates. After all the previous inflation figures were also on the high side. But the economy is very sluggish at the moment. A second consecutive quarter of negative growth would mean that the economy is officially in a recession."

RBA underlying rate
Sep2011              2.8
Dec 2011             2.8
Mar2012             2.3
Jun2012              2.1
Sep2012             2.4                
Dec2012             2.3
Mar2013            2.4

The cash rate was 4.75% at the time. It is now 3%!!

Austerity is Crap

Kruggers  has interesting information on Alesina & Ardagna.

I have written about this previously. In Oz we have this from John Quiggin. And then this as well.

Have a read of the Catallaxy thread and see how people will avoid talking about the topic.

Classical economics has failed every nation that has tried it EXCEPT  in circumstances that Keynes specified.

Funnily enough Sinclair Davidson agrees with Keynes ( although he doesn't realise it). You can only have successful austerity programs when spending falls as a % of GDP.

That ONLY occurs when the economy s healthy not when it is weak.

This is just another example of people such as Davidson, Carling, Kirchner and of course Katesy avoiding the major question.

They are all dishonest charlatans!

The R&R paper, as distinct from the book, merely adding to this dishonesty.

Kruggers has it right about evidence-and-economic-policy.

Austerians, for wont of another word ,are just like old fashioned communists. Forget, ignore or deny any evidence and live only for the ideology.

Postscript 2
Austerity did not get Australia out of the Depression. We nailed that Julie Novak falsehood previously

Okay I have assumed too much here.

A&A  got demolished by the IMF study ( now a working paper). Their response was a non-response.
When Carling & Krichner's piece in the AFR got severe criticism from John Quiggin their response was a non-response.

Similarly when R&R  in the latest skirrmish got criticised their response was a non-response.

Monday, 22 April 2013

A - League Final

The A-League has had a tremendous season.

Most of this can be put down at the feet of the Western Sydney Wanderers fans.

They have been a breath of fresh air and a revelation to the A-League.

I have said previously one should go to a match of the Wanderers just to catch the atmosphere created by them.

Thus they did this in the final but alas their team lost the game to the Central Coast Mariners 0-2.

As a Referee I have to say I am still wondering how the Wanderers did not get two penalties. They did concede one and it was given but I am completely mystified on the two not given.

Finals are rarely great games because both teams simply want to win and invariably one team doesn't rise to the occasion.

I think it was so on Sunday.

Congratulations to the Mariners for finally winning a final but also a huge congratulations to the Wanderers on a wonderful first season.

I for one am looking forward to watching them in the Asian champions league.

Both the SMH and Telegraph have articles on the Wanderers fans. When a Rugby League  diehard like Phil Rothfield gets so worked up by the WSW fans he says the A-League final has it over any other sports final you know something special happened.

Saturday, 20 April 2013

The "Right" in Australia are a disgrace continued

The IPA put out a paper  on public sector employment.

The fact it was put out by the IPA immediately gives way to suspicion. They are rarely correct.

It was authored by Julie Novak whom we have caught out doctoring  unable to discern GDP figures during the Great Depression.

Thus it proves so.

Matt Cowgill looks behind the figures and finds some very strange ( highly euphemistic) data collection.

In short it is complete cobblers which appeals only to idiots who are too stupid or too lazy to find out the data is highly suspect.
I should have added they also have no shame at all.

Thursday, 18 April 2013

Around the Traps 19/4/13 Special Rogoff and Reinhart edition

It is Friday in Sydanee and so time for Around the Traps.
UPDATE. It is teeming down here today so no football . Thus I have added to Around the Traps

We have had much controversy concerning Rogoff and Reinhart thus I give them a special section with lots of views on their work.

Many thanks to Mark Thoma who must never sleep and puts up wonderful items on his great blog. We loves ya in OZ Mark!!

I will update when I can. however the great Western Sydanee Wanderers are in the A-League final so no promises.





Andrew Gelman(Statistics really)


Rogoff& Reinhardt Controversy


Wednesday, 17 April 2013

Beach Boys

The Beach boys were a feel good group.

Here are two of their songs
First their best. Do it again

and the Sloop John B.

Even with sad lyrics it felt good!!

Sunday, 14 April 2013

Know your Subject

Judy Sloan after being completely embarrassed by the Kouk on government debt has a go at examining the budget.

However the confusion is still evident.

She says
"no doubt, Swan will continue to drone on about how much revenue has been ‘written off’ since the GFC – complete tosh, by the way "
Please note the evidence she uses to support this claim.
Complete tosh? We have looked at this previously. In short if tax as a % of GDP are at levels last seen in Keating's time then the only person talking tosh is Ms Sloan.

We get a bit later this
"A revenue increase of over 7 per cent is actually very good, particularly given how low inflation is"
Again note the evidence to support this claim.

Let us make it easy for Ms Sloan. if nominal GDP is slowing and below trend ( because of a fall in the TOT and contractionary fiscal policy) then it is ludicrous to expect let alone support a proposal to have the budget balanced.

Ricardian Ambivalence examines this topic. Notice the HUGE difference in quality on the subject!

Thursday, 11 April 2013

Around the Traps 12/4/13 Maggie Thatcher Edition

It is Friday yet again down under and I have a special  Maggie Thatcher section.

I would appreciate if anyone has seen anymore pieces on Maggie Thatcher ,sympathetic ones in particular



Margaret Thatcher

Andrew Gelman(Statistics actually)



Monday, 8 April 2013

Dance Music I'm told

Rog has complained I do not  put up music that is contemporary so here is my sons' favourite track of late.

I have to say it does grow on you!

Sunday, 7 April 2013

The "Right" in Australia are a disgrace

Let us just to make it easy and  define the 'right' in Australia as the "Australian, Catallaxy/IPA" crowd.

I highlighted on Around the Traps on Friday a number of items by some of the people associated with the 'right wing' crowd where what was written was in a word pathetic.

Judith Sloan 'wrote' on the problems of government debt. Unfortunately for her the Kouk read her sloppy article and wrote a retort and subsequently wiped the floor with her. Moreover we read from Matt Cowgill today that her understanding of the labour market is completely incorrect. This is her only area of expertise and she doesn't even know the facts!
We know now her understanding of government debt is very poor and we have seen previously she makes up figures when 'examining' fiscal consolidation ( again courtesy of the Kouk.)
Perhaps the peroxide got to her or perhaps she is simply oblivious to facts. Whatever she patently shouldn't have a gig at the Oz.

Sinclair Davidson attempted to infer there had been a structural break in rising world temperatures. When asked to man up and say this he simply deleted the comment!  Thus he simply ignored a simple question.
He won't answer because he cannot. He can't because he knows there is no there is no structural break and would be taken to the statistical cleaners if he attempted that.  He won't say otherwise because his ignorant readers will continue to believe that has been a change. This is very goebellian!

In another piece he again attempts to say black is white with regard to Robyn Williams. We have examined this before in awarding the Forrest Gump award.

So what do they do?
They simply ignore facts, make stuff up in the hope people will fall for their blatant propaganda. Fortunately only the clueless accept this.
They are a disgrace however and appear to have no self respect nor embarrassment when caught out.

Thursday, 4 April 2013

Around the Traps 5/4/13

It is Friday again and we find joy of joys both David Glasner and Ricardian Ambivalence writing again. RA is on fire.

I do not get anything from Andrew Gelman and I have found a new blog on econometrics!!





Andrew Gelman (He is a MUST read each week)and some others ( Statistics) taste in art is suspect though


Stop the presses
The following are comments on US non-farm payrolls

Wednesday, 3 April 2013

Stevie Ray Vaughn

It is wet and miserable in Sydanee and I have things to do but in keeping with my superb musical taste here is one of the greats of the guitar.
I'm sure even Chris Shiel would agree to that however Jason Soon would still plump for johnny Cash!


Comments Policy

My comments policy follows John Quiggin's.

I really do not care if you think I am a hapless water buffalo or my writing is along those lines.

You can criticise me until the cows come home HOWEVER if your vocabulary is so poor you have the need to swear or use similar words I will delete the comments.

Go to Catallaxy where that is the norm.  Although do not tell them to pump up their heart and make a definitive statement. Then you will not be able to comment!
How lucky they are Libertarian!

e-mail is nottrampis@gmail.com if you do not want to go onto comments

Tuesday, 2 April 2013

Glen Campbell & James Taylor

It is wet today in Sydanee.

Two old songs.
The lyrics from Wichita lineman are magnificent. I need you more than want you BUT I want you fro for all time.

now James Taylor with the best version of up on the roof

Monday, 1 April 2013

801 live Tomorrow never knows

801 was a temporary band but this was one of the best ever live albums.
Brian Eno especially good