Thursday, 30 June 2016

Around the Traps 1/7/16 Post-Brexit edition

It is time for Around the Traps again.  Great article on the Somme in General

Northern America
Andrew Gelman (mostly stats)
Genial Dave Giles ( econometrics)
Dianne Coyle ( quirky + book reviews)
Vox wonk

Wednesday, 29 June 2016

A good election result

I think the Government being returned with a small majority in the House of Representatives would be a good result for the country.

The Government's performance has been poor however the Opposition has not shown they are ready for Government.

(It is striking that there has been NO budget repair at all but more importantly no plan at all in future years.
Budget repair being a reduction in the structural deficit It being now all on the revenue side as both Treasury and the PBO has shown.
You could reduce the structural deficit over time. A gradual reduction could be done without causing the economy to slow as it did when Wayne Swan went overboard in the last budget he had responsibility for, Thus we should expect the structural deficit now to be say !.5% of GDP not still 2%)

I suspect such a result for be bad for Malcolm Turnbull as leader of the Liberal party.

Given the Upper House will be dominated by Non-government parties and the Government has shown they simply cannot negotiate it could well be not a lot gets done.

This would mean an early election if the polls favour the government or a poll in three years time if they do not.

Negotiation is part of the political process now. If you cannot negotiate you cannot govern. NO major party has woken up to this yet.

It is highly ironic that Julia Gillard who was a poor politician was a master negotiator. She had neither a majority in the lower or upper house. She was able to get policy through nevertheless.

Julia Gillard as a template for Prime Minister. Who would have thunked it!!

Mark the Ballot , again
Kevin Bonham
The Pollbludger

I  feel must make comment on Katesy's latest ravings. He believes Abbott would have easily won this election. The last poll with Abbott in charge was 53.6% for the ALP. That is why the Liberals ditched him. This has been confirmed in last weeks Galaxy poll.
A person who believes Abbott would have won is a raving idiot!

Tuesday, 28 June 2016

Government costings and Obeid

The Government claimed to have found some significant savings yesterday.
I am very cynical. The government claims finance signed off ion this.
Really. Why wasn't it in the budget then ? The government didn't just discover this could be done AFTER the budget was delivered.
Two reasons. too many hard questions to answer on how it works. Much easier if you release such rubbish a few days before an election.
See also Lenore Taylor and Saul Eslake's doubts. Peter Martin as well

If it was in the budget then it would have had to be signed off in PEFO.
Doing it this way completely avoids PEFO.

Most journalists will have forgot these policies by the time of  MYEFO. If you are lucky an improving economy will overshadow these policies as the cyclical deficit reduces.

Eddie Obeid was found guilty yesterday in a real win for ICAC. As I said previously it was ONLY ICAC which showed the public how corrupt he was. That is why it is so vitally needed in NSW. It is why we need one in Canberra

Monday, 27 June 2016

What if Brexit bites?

Only on the internet. Here I was about to argue about what Australia must do if Brexit bites internationally ( see David Beckworth for example) and thus affects us when I find the Kouk has beaten me to it.

I agree with most of what he has said however I do think I doubt we will face a GFC lite more like an Asian crisis situation where the currency would take the brunt of policy action.
Monetary policy can do little now given cash rates are at 1.75% and have a minimal impact.

Let us assume the present government are elected then if they have to use some fiscal stimulus could they politically?

Sunday, 26 June 2016

Brexit, Mediscare, costings etc

We go into the last week of the election campaign and little has changed.

Brexit has occurred but no economic catastrophe.( NO markets or polls picked this the betting markets in particular.) At this stage it appears to be a one day wonder.
Normally the incumbent Government would gain except when you have changed Leaders nine months ago you can hardly say you are a stable government.
A bit surprising to hear if problems did occur Scott Morrison would reduce the deficit faster not slower. Does he really think contractionary policies would fix things. Obviously hasn't examined Europe at all.

I heard the ALP costings meant the deficit had ballooned out. They would run a deficit of 2.3% rather than 2.2% of GDP the Government prefers. In all reality there is no difference between the parties at all. Why are journalists  so gullible on this subject?

Mediscare was al about getting the voters to focus on Medicare and realise the Present government would destroy it. Well destroy is not privatise and the polls show it has not made any difference at all. Dennis Shanahan right again I see. Mind you neither has 'protecting our borders'. Andrew Elder right about out Journos again.

I unfortunately saw some political ads It seems to me the ALP's is more hard hitting  but hardly vote changing.

Bring on Sunday please

Saturday, 25 June 2016

Thursday, 23 June 2016

Around the Traps 24/6/16 Brexit Edition

it is time for Around the Traps again.

Northern America
Andrew Gelman (mainly stats)
Genial Dave Giles (econometrics)
Dianne Coyle (quirky + book reviews)
Vox Wonk

Wednesday, 22 June 2016

The Myth of Austerity and Growth

Noah Smith has a great new article on the above title.

A few comments :

  • Why would Mankiw cite a 2002 paper and ignore all papers since then.
  • The paper he cites was co-written by Blanchard and Perotti. Both have now publicly recanted  their positions on this subject. No mention from Greg?
  • Blanchard and Leigh found fiscal multipliers much higher than previously thought.  Surely if expansionary austerity worked Europe would be in the midst of a boom!
  • THIS paper from long ago completely demolished Austerity. Ireland for example tried it THREE times yet it only worked once. It worked mainly because its main  export market the UK was in a boom, Their currency fell considerably and interest rates were cut a lot
  • Why is this witch doctoring still peddled?

Tuesday, 21 June 2016

Fake Tradie and all that

Okay I am late on this as I had never seen this ad but now I cannot miss this.

Elle Hunt has a great article on it.  There are so many things wrong in the ad I just wonder how it got past quality control.
Sinclair Davidson thinks this is an example of the ALP not knowing real people.

Hmm what is a tradie?  I would have thought a tradie is a person ,usually a man, who works as a tradie. i.e if he is an electrician he goes around and fixes electrical faults in houses or apartments or does the electrical work on buildings being built. This involves a lot of outside work. It means a man of 48 would have some sort of suntan and certainly would not have manicured nails for example.

The man in the ad obviously has not a clue about the numerous mistakes in it otherwise they would no be in it. so how can this be explained.

The man has tradie qualifications which he continual updates but he does little work as a tradie. A bit like a mate of mine who keeps up to date with his accountant qualifications but does not practice as an accountant.

Perhaps Sinclair has never met a tradie or perhaps he never noticed the numerous mistakes in the ad. nothing like knowing real people!


This raises  more questions than it answers. He certainly doesn't sound like a tradies working day in day out. This does as well. note he talks about his qualifications but not what he actually does. Why did he not pick up all the many faults? Why does he not know how to dress as a tradie?

Okay now I have had my fun I will have a rant.What in the hell does privatising medicare mean. If medicare doesn't make money who would buy it! How would it be privatised?

I have no problem in criticising policies that will get rid of bulk billing,  even wary of outsourcing services when patient information could be gotten by private sectors participants but privatisation.
It is a scare campaign based on nothing at all.
Stephen Duckett makes sense of all this?

Sydney Radio

A few weeks ago when I was sick I had time to watch TV and listen to the radio.

Well Julie Bishop put me off ABC 24 on the teeve.

I tried a few radio stations to see if any were interesting.

I gave up on Radio National. (the old 2FC) Sometimes interesting but mostly not.
ABC Local radio (The old 2BL) was like the curates egg. The World Today at midday was a must and Richard Glover in the afternoon was good but apart from that it was pretty boring. I did note they now have Wendy Harmer from 8.30. I simply could not take her seriously.

2GB was simply so biased ( the usual line here no such thing as climate change, the budget should have remained in surplus  nevermind the GFC or terms of trade etc ) that you listen to if you are part of that set but if not then it simply is not entertaining. 2UE was a 2GB lite station.
It was quite ironic that both stations regularly complained about ABC bias without EVER giving specific examples whilst going the full monty on their blast against the ALP. Greens and even Malcolm Turnbull. Yes Tony Abbott was always going to win this election. It is as the very bad polls never existed!

Luckily for me the Library was quite close so I could wander down there and borrow a few books to read.simply to remain sane.

A good way to identify bias is do people treat politician from different parties differently. Leigh Sales from 7.30 for example interviews Malcolm Turnbull or Bill Shorten the same way.
On the other hand when ever Scott Morrison or Peter Dutton are regularly 'interviewed on 2GB it is a love in.

Monday, 20 June 2016

Why do we persecute the persecuted?

I am staggered at how BOTH parties treat refugees/Asylum seekers.

Most people who attempt to come here by boat  are found to be genuine asylum seekers. They are fleeing persecution in other words. There is NO such thing as an illegal asylum seeker.

There people should NEVER be put into detention which is gaol. This is simply persecuting the persecuted. It cannot be surprising there that THIS has occurred.

I have no problem in putting people into detention who are not genuine asylum seekers but the bi-partisan policy of putting genuine refugees into detention centres is a disgrace. It should be changed quickly

Sunday, 19 June 2016

Internal party polls

Parties do both qualitative ( this just focus groups) and quantitative polling ( this is just like public polls like newspoll). Quite a lot of the time one is good but the other is awful. Way back in 1993 Paul Keating made public with this . The ALP 's polling was terrific on focus groups and which Keating used to perfection but very poor on the polling overall which had it losing bigtime to the Coalition.
In am election campaign both parties do each each weekly.

They NEVER simply poll ONE marginal seat as it costs way too much. They will poll say 4 marginal seats. Take for example 250 for each electorate and then hope the swing is the same in all four seats. The margin of error is far too large in the individual seats to take it seriously.

Both parties will lie their guts out to journalists about their internal polling which will be always at odds with published polls but the journalists never query. We also have quite a few interest groups who will  commission polls by the polling agencies  in individual seats so in theory it should be harder to do this never underestimate the gullibility of journalists,

The only caveat to this would be if say a multi-millionaire was the leader of a party and was in a very tight election and then spent bigtime to get a better picture but in this case it would be he not the party paying for it.

Just for the gullible, punters do not have any inside information except for the fact they might know people who feel confident.

Thursday, 16 June 2016

Around The Traps 17/6/16

It is time for Around the Traps again.

Northern America
Andrew Gelman ( mainly stats)
Genial Dave Giles (econometrics)

Dianne Coyle ( quirky + book reviews)
Vox Wonk

Wednesday, 15 June 2016

DSGE models

DSGE models are used by a lot of institutions in their work Most Central Banks use them. So THIS article by the very cool David Andolfatto is very good if you wish to understand the theory behind them.

Thank you David

Tuesday, 14 June 2016

The ALP is joking

The Government had looked like used car salesmen after their pathetic attempt at showing a whopping big ALP fiscal blackhole.

The ALP then came out with a ten year plan but the plan had no meat. We learnt they will not have the same fiscal consolidation as the Government but we were given no figures, Will the deficit rise to 2.5% of GDP , 3% of GDP or just 2.3% of GDP.
We do not know and the ALP will not tell us.
Why not?
The Present Government is adding about half what most budgets ad to annual GDP i.e. 0.9 percentage points. What will their budgets do?

This is not hard to do. Will the structural deficit be eliminated in four years time?

The time to do this was in the last week of the campaign when all their costings are consolidated. given the parliamentary budget office have done them no-one in their right mind would query them.

Given the present budget deficit is above 2% of GDP ( as this is the structural deficit) we know that the economy has weakened. Given interest rates are at 1.5% we know the economy has weakened. We are lucky the labour market is so flexible and de-regulated hence employment growth is much stronger and unemployment much lower than it would normally be.

The ALP needs to build on this and treat the electorate as intelligent people not as mugs! It would seem they still have the political tin ear they had in Government.

At least in the NBN they have done some work.
See Rod Tucker  , Mark Gregory


Monday, 13 June 2016

The United States only has itself to blame for gun massacres

Yet again we have a massacre in the United States.
This time we had a lunatic who had been persuaded by satanic verses.

Why in the hell ( pun intended) can anyone buy a semi-automatic rifle in the United States  pray tell.
you do not use a semi-automatic rifle if you go shooting. you do not need one if you are a farmer , you do not need one if you are a member of a gun club.

A semi-automatic rifle is manufactured to kill people. If you allow its sale then you are allowing massacres to occur. The gun lobby in the United States has blood on its hands. A lot of blood. However so do voters. They have not supported any form of gun control.

Thank the Lord I live in Australia!

Thanks to Brad De Long for this excellent article from Josh Barro ( son of Robert) on the Orlando massacre.

two bonus articles

Roger Shanahan
Ann Marie Balbi

Thursday, 9 June 2016

Around the Traps 10/6/16

It is time for Around the Traps again.

Northern America
Andrew Gelman (mainly stats)
Genial Dave Giles (econometrics)
Dianne Coyle ( quirky + book reviews)
Vox wonk