Thursday, 30 May 2013

Around the Traps 31/5/13

okay time again for Around the Traps.

I again make the point I do not necessarily agree with all the articles.
The James Hamilton article on R&R  is one I have actually written against here on this blog. However it is still an article worthy to read as are the comments, well some of them anyway!

Aussie,Aussie,Aussie, Oy,Oy,Oy

US(including Canada)




Environment( Mainly  only Brian Banisch)

Andrew Gelman ( Statistics really)

David Giles ( Econometrics)



Wednesday, 29 May 2013

Ian Hunter

Ian Hunter was part of Mott the Hoople. He made a number of albums when they split up.

The best one was All America alien Boy which Mick Ronson ( guitarist from Mott the Hoople) did not play on and consequently most critics thought the album wouldn't be much good. how wrong they were!

The best song is You nearly did me in.  Yes Freddie Mercury and Brian May did backing vocals.

The title song is a real rocker

Ian Hunter is apparently one real rocker live. I believe he is around 73-75 now.



Tuesday, 28 May 2013

The Public Sector under Obama

Courtesy of Bill McBride's Calculated Risk ( see the whole article) here is a graph of public sector jobs under a number of different Presidents.
Obama clearly stands out.

The point has been made here before but I make it again. If the public sector payrolls had have grown as much as under Reagan or Bush then the Fed would be now raising rates!

The public sector has hindered recovery in the US this time around !

Monday, 27 May 2013

What is it about Paul Krugman?

A short time ago Noah Smith wrote a perceptive piece called krugtron-the-invincible.

It reasonably accurately summed up why Paul Krugman is so influential. He gets it right so often. Noah then examined why he is/was so accurate.
(Please note how many 'fights' Krugman has won in Smith's piece as well.)

Naturally people who call themselves conservatives would have none of this. In Australia we have people who clearly do not understand what he says nor his self-deprecation.( the last linked article deliberately avoided this)
However we can ignore them. They are people of limited intellectual development or writing for said people.

It then becomes a little distressing when a person of the esteem of Jim Hamilton accuses Krugman of 'careless mudslinging' . As it happens Jim's arguments are demolished in the comments section. Ironically he has been careless of mudslinging with regard to Krugman

I still find it strange he was not across the whole subject.

For those interested the following are the complete links involving the latest episode of the Rogoff-Reinhart 'affair'.
I have been a bit lazy and simply cut and pasted my links from Friday's Around the Traps but they are all related.

My major point is you can criticise Paul Krugman but do it properly. David Glasner for example has criticised Krugman on a few occasions and come out the victor. He did so by sticking to facts and knowing his subject.

Jim please do not write such dross again. It devalues your reputation which is quite high ( and I expect to remain high).  

Sunday, 26 May 2013

Political Fact checking

Last week as is my wont I was perusing Mark the Ballot when I came across  the Polifact -truth-o-meter ( on his sidebar.)
Mark the Ballot is essential reading fr any political junkie

I have to say I like it.
( I notice it will be used by Channel 7 from now on).

I like it because I know exactly what they are doing and how they are doing it.

I have only thought one of their falses is incorrect.

  • Gillard introduced an ETS with a fixed price to start with. This is what Howard proposed and what was agreed between both partied when Rudd and Turnbull lead their respective parties.No-one but no-one said on either occasion the government was proposing to start with a carbon tax and then proceed with an ETS.
Apart from that what has been put out is quite logical and makes sense.

It is a welcome addition to Australian polity

Friday, 24 May 2013

Billie Joel

I remember a time long ago when a mate rang me up.
He has just bought an album from an import shop.He couldn't get over how good it was.
so I went out and bought it too.

Piano Man was a superb Album. Billy Joel stood on the verge of greatness but unfortunately went downhill very quickly after this.

For me the best two songs are these.

Travelling Prayer. I saw him do this live on a Helen Reddy TV show. here it is.
On reflection using a guitar instead of a fiddle didn't work.

The other song is the Ballad of Billy the Kid. Great song but dreadfully inaccurate from the same show.
( As Nick Gruen comments it was meant to be inaccurate. He couldn't write words to make it 'right'. I don't really care It is a great song!)

He could have been a contender and been up there with Bruce Hornsby but decided to go commercial.

We all lost with that decision!

Thursday, 23 May 2013

Around the Traps 24/5/13

Time for Around the Traps again. Great weekend reading.

Why am I the only one writing about the most important topic: Castle!!

What goes in General and what goes in Wonk is problematic but both worth reading

Football likely to be called off in Sydanee so updates on the weekend . My games have been called off but the round goes on so I will get other games. I may have to wait until Sunday to update. Ricardo Ambivalence will have written about three more articles by then!


US (including Canada)





The Statistically Significant Andrew Gelman ( Statistics of course)

David Giles(econometrics)



Wednesday, 22 May 2013

The Structural balance of the budget

Yesterday was a momentous day.

First the Parliamentary Budget Office ( which is independent) issued a paper on Estimates of the Structural budget balance of the  Australian Government 2001-02 to 2016-17. It is here. It was peer reviewed. ( Ricardian Ambivalence reviews it here. It is of course high class stuff )

Treasury also released a paper on the same topic here. Treasury is not independent and this was not peer reviewed.  My internet mate Ricardian Ambivalence writes about this here and very well too!

The PBO paper can be understood by laypeople whereas you do need a reasonable understanding of economics to understand the treasury paper.

However they both tell a similar story.

Why is the structural balance important? If there is a structural deficit when the economy is at full employment then we will see crowding out. This means interest rates will be higher than they would otherwise be. However if inflation is low ( as in either the Reagan or Bush years in the USA ) then this effect will be minimal.

The Structural budget balance started to deteriorate around 2002. It cannot be precise because it is an estimate. (It is not temporary as the stimulus was. It will stay around unless you take actions to rid yourself of it.)
It got into deficit just before the change of government .

The main reason but not the only reason for this was the reduction of personal income taxation which was based on the assumption of ever higher company tax revenues from the mining boom.

When should we attempt to rid ourselves of the structural deficit.
My answer to that is when nominal GDP is around trend rates alah Keynes. This way GDP rates are not negatively affected and so we d not get an unnecessary rise in unemployment.

Ricardian Ambivalence says we have to start on fiscal consolidation now. I do not agree for the reasons I have already outlined. I should add assumptions made when times seems dark sometimes turn out to be to pessimistic!

This  is very pertinent!

Read about Ireland and their problem of structural deficits after the GFC hit them. Very interesting!

I should have also added it will be interesting to see if the fiscal incompetents at Catallaxy now admit they got everything wrong on the structural  budget balance in the Howard era and the reasons why.
I won't hold my breath.  I could say I told you so on the topic however

Tuesday, 21 May 2013

Austerity again

Kruggers weighs in here on Austerity. He is responding somewhat to Jeffrey Frankel's piece ( which he kindly links.) ( please note both pieces will be in  Around The Traps on Friday).

As Kruggers says Frankel essentially attempts to dampen criticism of Reinhart and Rogoff ( see the Brad De Long link where he retorts Frankel on this) and says the real villain is Alesina.Now we have walked down this path before relating to Alesina and Ardgana.
They were blown out of the water by the IMF and in particular this  IMF working paper.

Neither A&A nor their Australian supporters have ever gone close to responding to these criticisms. Indeed last time I wrote of this the australian supporters clearly did not know about either  the IMF criticisms or those from the Roosevelt Institute led by Mike Konzal.

Frankel also links Perrotti recent papers in these area.
As I have noted before and Frankel now repeats Perotti was a co-author with Alesina in believing in expansionary austerity. He now has fully recanted and shows how it is wrong in theory and practice.
Frankel has a number of his papers linked for those interested.

In the end what do we know?
Keynes has been proven correct again when he said in 1936 Austerity is the correct policy only when times are good (or word to that effect.)

Let us go to Ireland to show this.

They have adopted Austerity three times (see IMF paper). It has succeeded only once.
It did for three reasons.
1) The Punt depreciated significantly
2) Their leading trading partner ( the UK) was in the midst of the "Lawson" boom
3) Interest rates were able to be cut a lot

If Austerity worked all the time then it would have worked all three times in Ireland. The fact it only worked when Keynes stated it would work says it all!

Monday, 20 May 2013

Castle A Grandiose reflection of the Series thus far

The last episode of Castle has been shown so it is appropriate to review the whole series thus far.

However before we start. if you need to understand the whole series reasonably briefly then read this.

This is huge if you wish detailed commentary on EACH episode and what the fans are thinking as well.

Now let's get into it.


The Series is about two things. solving homicides and the relationship between Castle and Beckett.
Castle instrumentally helps Beckett attain a new level as a detective. He is her partner and together they solve crimes extremely well ( as well as saving each other's lives)
He is effervescent, loving  life to the fullest whilst she is by the book and straight laced. however opposites do attract.
There is chemistry oozing between Castle and Beckett. More on that later.
I think I should have added as a writer he is very good on detail and writes very realistic stories. this what Lanie tells him in the first episode and what Beckett implies to Esposito on why she reads Castle's novels.


Strangely enough we know little about Castle and his relationships. He has had three.
The first one was a sweetheart he wanted to marry at university. However due to poor communication instead of marrying they parted. ( We meet her in the second series when a murder occurs at her wedding.)
Castle was deeply hurt by this.
He then marries an actress. We can only assume it was on the rebound and because in his formative years he thought great sex led to fulfilment. It doesn't and she proves unfaithful and seemingly lies all the time to get her way. She is not attractive either.

Inexplicably he marries a second time. We are not told why. She is an attractive blond who is also his publisher. We are told by Castle the relationship was almost sexless.
The reason was probably because of the time pressures of being a publisher. By the time she got to bed it was very late and she just needed to sleep.It is also implied by Castle when he re-united with her she is stable but boring.

We learn of three relationships of Beckett. The first one ended when he joined the FBI and wanted her to go with him. Ironically in view of the very last episode thus far she was pretty cheesed off with this although her father implies this may have been an excuse simply to end it.

She briefly goes out with another detective (Deming) but this appears a bit contrived. She never appears affectionate towards him as she is towards Castle. Although the relationship is moving fast as they plan a week-end together Beckett breaks it off here ( dumps him) as she realises she has distinct feelings for Castle.

She has a longish relationship with Josh a doctor but  she never tells him the whole truth as we learn in the 1st episode of series 4. Josh is seen as an insecure and jealous boyfriend and again she never appears to have feelings for him she has for Castle. There is a poignant scene after The day is over and Castle defused the dirty bomb. She is hugging josh but looking at Castle depart.

The end of each series

At the end of series 1 Castle tells Beckett of new information he has gotten about her mother's murder. He has done this despite Beckett telling him it would be over if he did this. She thinks he does this for selfish reasons ( book) but he hasn't. After a crestfallen apology she forgives him and the relationship for the first time involves romantic tension between the two.
At the end of series 2 Beckett is about to tell Castle of her feelings towards him but Castle is back with his second ex-wife. ( this makes little sense.) The whole unit is shown as very sad the two haven't hooked up.

At the end of Series 3 Castle has warned Beckett if she goes after her mother's killer she herself will end up dead. A number of significant events occur. Both Montgomery and Beckett's father attempt to get Castle to change Beckett's mind.When Castle  confronts Beckett about this she goads him about their relationship.
It is here we find out Castle is very perceptive. She gets into relationships with men she doesn't love.
Beckett then tells Castle they are finished. Presumably because Castle was right.
However at the funeral the strong implication is that Beckett realises most of Castle's reasoning was correct and he is very loyal to her.
At the end of series 4 we almost get a repeat. Beckett is going after the sniper who shot her and who is indirectly involved in her mother's murder. Castle again tells her to back off but she refuses and now HE says it is all over.
We end up seeing them kissing at at his apartment when Beckett realises Castle is more important to her than catching the killer

At the end of Series 5 Beckett is deciding whether to move to Washington and a new job. Castle is provoked into thinking deeply about their future and thus proposes.

There is a trend. The relationship gets stronger after each series ending Will this continue?

One interesting thing is that most of the time it is Beckett who leads. ( This amusingly comes out in the Handcuffs episode) But there are times when Castle leads and she accepts ( first kiss and at times it appears she would like it more.This is good for the proposal therefore.)

Caskett relationship
In series 1 the relationship is more about development of the friendship as respect by Beckett for Castle's detective skills is shown.
By Series 2 we have clear romantic tension ( not sexual tension there is a big difference) between the two.

Why does nothing happen? Castle, we learn in Series 4, is waiting for her to react. This surely must be a reaction to his first love.
He is also a man of high principles. He will not reveal his feelings towards Beckett whilst she is in a relationship with another man. He skilfully avoids this in series three in the knockdown episode by deflecting Beckett's question.It is avoided in the last episode by the anger between the two.
He only tells he he loves her when she is shot and mightn't survive.
He is remarkably forgiving of Beckett. In the first episode of Series 3 when in hospital she tells Castle she will call him when she wants to see him. It takes her a full 3 months! Although angry he does accept it.
His perceptive questions about Josh to Beckett leads him to believe this relationship has no future thus he only needs to wait. notice the difference to Deming.

Beckett realises after Castle's apology in the first episode of series 2 he is completely different to what she thought. She then is hoping he will ask her out.
Both are interested in each other but deny this so subconsciously they believe they are not attracted. This allows both to have feelings towards each other without having to do much about it.
( I am at a loss why anyone would bother to take Beckett out when it is apparent this  handsome multi-millionaire writer is working closely with her EACH day!)

Castle's problems emanate from his first love. Beckett's we are told are not wanting to get hurt again like she was when her mother died. however we know from food to die for She and her best friend had a falling out over a 'hot' boy because Beckett didn't tell her friend the full story. This is a familiar tale to me

Other characters

Castle's mother
She appears to be an airhead BUT is very wise when it comes to Beckett who she clearly likes. The only time she appears lacking wisdom is when Castle finds out Beckett actually remembers everything about her shooting including Castle telling her of his love for her. He absurdly believes She is embarrassed by it ignoring all other evidence as she does.

Beckett's Dad
We don't see enough of him. For a man who for four years was on the grog because of his wife's murder he doesn't  go near Beckett's emotional problems very much at all. He makes a remark in the very last episode that about this time with Castle she is getting out of relationships. This cannot be true .It is highly doubtful she had any relationships like this  before 19 and she hasn't since!

Roy Montgomery
for a crackerjack detective Beckett never asks about Montgomery's relationship with Castle prior to him helping out the 12th. He regularly played poker with him ( with the mayor and the judge who allowed Beckett's warrants.) Castle beat them all the time yet he is  still a good friend. This means Castle is something else and it is no wonder Montgomery wanted to see what would happen when he teamed up with her.

It is clear Gates doesn't want Castle around however this doesn't add up. Anyone can see how he helps out homicide and is an equal. Moreover he is one more body but NO cost to the department. She should be happy he is around! Has she softened (she must) or not?

Last episode

Beckett is approached for a new job in Washington BUT this goes against everything we learnt about her in the very first episode. On why she is a homicide detective. No-one but no-one talks about what she has at present and what she may lose. The 12th is her home. Esposito is her younger brother. She has Castle around  as a partner. Her father and best friend ( Lanie) are in NY. Talking to the on the phone isn't the same particularly when it is something very important to talk about.

He is a highly successful multi-millionaire writer she is a detective. I know of no relationship where the vastly higher income earner follows the lesser income earner.

Possible endings

  • Beckett dumps Castle. There is no chance of this. She has already told us this in her conversations. However if she did she would have to leave the 12th and NY because of Castle's presence. She wouldn't do this at the swings otherwise she wouldn't have agreed to Castle's request to meet he there.
  • Beckett goes to Washington but stays with Castle. Possible. The beauty here is Beckett would come back to NY and we get another' I'm so sorry Castle' scene. If she goes to Washington then there will be no little baby Castles. (think about it)
  • Beckett stays and realises what she has at the 12th and in NY is more important. She grows as a person, the wall comes tumbling down and we see a little Castle in the last ever episode

Sunday, 19 May 2013

Folk Rock at its Best

Fairport Convention and Steeleye Span were the best two groups of folk rock.

Unfortunately Sandy Denny is no longer with us. ( She sang in the Battle of evermore a Led Zeppelin song from LZ3 I think.) Maddy Prior from Steeleye span is I think

first Fairport Convention

and Steeleye Span


Thursday, 16 May 2013

Around the Traps 17/5/13

It is time once again for Around the Traps.
Certainly the highlight of the week was the last episode of Castle. Who could have thought there were so many Caskett Shippers out there!

I have added a Japanese section this week. I might add an environment section next week.
updates this afternoon and on Saturday and now Sunday!  All updated






Andrew Gelman, Statistics of course

David Giles and econometrics


Vox wonk

Wednesday, 15 May 2013


I could write more on pursuing austerity at the wrong time is always bad for the economy.
 but why bother.

Paul Krugman has an excellent article in the the New York Review of Books  how-case-austerity-has-crumbled.

And then Noah Smith has a very thoughtful piece on why-do-people-support-austerity.

Both highly worth reading.

As for something different Steve Kates shows he is mad again.
Just to help out Steve's therapist:

  • Getting the budget back into balance when the economy is quite healthy is a Keynesian notion and was sold by Treasury as such.
  • Growth started in Australia well before there was a change of Government 
  • Growth slowed a tad after the first budget but then went back to where it was going after that.
  • Angel Merkel's prescription has really worked in Europe hasn't it!!
Finally perhaps Katesy can tell us why only one case of austerity succeeded in Ireland and why two failed dismally

Tuesday, 14 May 2013

Daddy Cool

in the early to Mid 70s Caddy Cool were as good as any overseas band live.

This is them at their best.

come back again . enjoy.

Monday, 13 May 2013

Castle's last episode of the season. Some Reactions

Paul Krugman said Their relationship was never a long term one. Castle was more interested in super models in the past than in simple ISLM models.

Brad De Long has his Department of Huh! If Beckett is not in a depression the multilpier for their relationship is near zero

David Glasner says Neither Castle nor Beckett paid enough attention to relationships during the 30s. Castle has an inflation problem and this can only be overcome by planting a Haw tree.

 David Giles stated he had done an equation on the last episode of Castle, the Mentalist, Jag and Bones and got a R2 of .98

Frances Woolley survey of university students found Captain Gates was the hottest female.

Andrew Gelman asserted both these studies suffered from poor P values as they were affected by Castle's prostate

Simon Wren-Lewis believed the reason for people only drinking red wine on Castle  was because the series suffered from a liquidity trap

Kevin o'Rourke said the series should be renamed Kevin Ryan Boyo

Ricardian Ambivalence said the reason for problems between Castle and Beckett was that the real and nominal partsof their relationship were diverging.

Andrew Bolt stated Beckett was no longer hot and this proved that AGW was a hoax!

Sinclair Davidson said Castle should dump Beckett and marry a female cop from the private sector.

Mark Banisch stated Beckett should dump Castle as he was attempting to impose a neo-liberal relationship upon her

Steve Kates said the problem was that  all the writers were Keynesians and were trying to stimulate Castle too much

Judith Sloan said Beckett should have used peroxide

and here is what all Caskett shippers have been waiting for

Sunday, 12 May 2013

Steve Kates is Mad

Here is Steve Kates rabbiting on about Austerity in Europe.

Note this.
'Government budget deficits in Europe are still up to twice as large as they were before the GFC – when no one described them as austere – and are contributing to already vast public debt burdens. Far from the ‘savage cuts’ of Wayne Swan’s imagination, European governments have reduced only the rate of growth of public spending. Even in Greece, a country with little population or economic growth in recent years, spending is still greater than it was five years ago.'


Underlying Primary Budget Balance, OECD Economic Outlook  2013


Note how all the 'problem' countries have adopted contractionary policies Kates advocates not the expansionary policies a Keynesian would have.

Europe has/is experiencing a recession. Even though structural deficits have improved overall deficits have not as yet because of the recession Kates's recommendations brought on.

The public sector has detracted from growth in Europe. Contractionary fiscal policies has brought on an economic contraction. This was totally expected given that interest rates couldn't be lowered much more and the exchange rate was never going to depreciate enough to make up growth elsewhere.

A person expecting austerity to promote growth under these conditions is mad. A person who believes European countries underwent fiscal expansion is mad.

Steve Kates is such a man.

He is several sandwiches short of a picnic!