Wednesday, 28 February 2018

David Beckworth on paul krugman on temporary vs permanent monetary injections

David Beckworth of Macro Musings fame has written this fascinating and thought provoking article.
It isn't too large so you can read it , cogitate on it and enjoy it.

As an added bonus here on a related matter  is Jim Hamilton of Econbrowser fame  on a-skeptical-view-of-the-impact-of-the-feds-balance-sheet

Tuesday, 27 February 2018

The budget is improving, maybe

Via the Kouk it appears the budget bottom line is improving.
He thinks the deficit could fall to $15 B. Thus the deficit falls from 1.1% of GDP to 0.8% of GDP.  The deficit on an accruals base is around -  0.5% of GDP Most economists would say it is in balance  when it is + or - 0.5% of GDP so at present we are almost there.

A few points
  • All the improvement roughly has come from Receipts.
  • Al the improvement has come from the cyclical side of the budget not the structural side!
  • the budget was in balance on an accruals based system which IMHO is the only was to look at the budget which means it was in balance.
  • The projections will be healthier and thus look forward to some spending proposals  from a government likely to lose an election and from an opposition not wanting to lose at the wrong time in the business cycle!
You cut the Structural deficit as quick or as low as Nominal GDP is rising. Now is the time to start on reducing it without much affect on the overall economy.

Monday, 26 February 2018

Sunday, 25 February 2018

Giving teachers guns is madness

Typical of Donald Trump he made a statement after yet another gun,massacre that all is needed is for teachers to carry guns and use them against anyone who shoots at High Schools.

Okay I have asked some people who should know and believe teachers would have to practice weekly to be effective against anyone shooting anyone.
Teachers already have a large workload and when could they find the time for this.
Even if they found the time to be a 'crackshot' would they have the 'ticker' to go up against a man with an assault weapon. Clearly the person with this responsibility at the Florida high school lost his nerve, Why would he. A revolver against an assault weapon??

Clearly the USA should outlaw assault weapons. They are not used for hunting they are used to kill people.

The irony here is people die from guns mainly because people who suicide use them and rarely fail.


This is useful

Thursday, 22 February 2018

Around the Traps 23/2/18

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, 21 February 2018

A Few Things

SHETLAND just finished its 3rd season on the ABC. It was an absolute ripper. Take out the one obvious clanger in it the season was fantastic.

Billy Graham died. A wonderful Evangelist. A pity some journos did not know of him sharing platforms with Martin Luther King. His crusades allowed any people in . Colour, culture et al did not matter. all that mattered was that people got to hear how Jesus saved people! Yes he got wood-ducked by Nixon but he was not on his pat malone on that. THIS is very good

Tony Burke is being brought up by some in government as the 'Barnaby Joyce 'affair continues to linger.  I am no fan of burke as I have outlined previously however there are significant differences. Burke left his wife and began his affair with his now wife about TWO years after she left his office. So either he either different to joyce or a far better politician than joyce because there is no smoking gun to show he was lying to everyone like Joyce, He also did not uproot his family and move interstate only to leave them. He also was never a person who promoted 'traditional family values' or the 'institution of marriage'

Yet again Hamish McDonald has presented the Radio National breakfast program. He is simply so much better than Fran Kelly. He asks far better questions and appears to be better informed on most but not all subjects. Make him the permanent host.

Tony Abbott maybe right says Harry Clarke

Tuesday, 20 February 2018

The link between Productivity and Pay in the USA

IF Mark Thoma links this paper it must be good and as usual Mark is correct.

Ana Stansbury and Larry Summers are the authors of this thought provoking paper which Brad De Long has a few ( very few) comments on this as well.

Monday, 19 February 2018

Let us not get overly sentimental over the ALP Government led by Bob Hawke

Before I start this rant I should say Bob Hawke is possibly the best PM we have ever had and his cabinet the same.Sunday night was the last episode looking at Bob Hawke as PM.
I'm sorry but I was not impressed. I was around at the time.
When the ALP won they had no plan indeed no idea of the major problems affecting the Australian economy.
It was only after deregulating the banking sector and floating of the dollar that the Government started to do radical things the economy needed.
No-one at the time thought his cabinet was made up of outstanding individuals. Only Paul Keating  had it all over his government opponent however that was not the case once he was given Treasury. He took a long time to get on top of treasury matters ( probably about a year into government).
I can still remember reading Max Walsh in the AFR writing about how new Government looked overwhelmed and  unimpressive.
What made Hawke a great PM for someone who was almost ( I did say almost) Trump like in telling people about how much he knew about various things was he was a great chairman. HE had confidence in his cabinet ministers and that gave them confidence to do positive things.

He and his Cabinet could change very quickly if circumstances demanded it and it did. When the Dollar looked as though it was in free fall His government produced policies that were good for the economy but were unpopular electorally. They tightened up the means tests for government payments, they reduced tariffs considerably, are just two good examples of this.
I am tired about hearing about Hawke's compassion. Do people not member what he said about Vietnamese refugees when Fraser and only Fraser allowed them to come to Australia?

Personally I found Hawke a very unimpressive individual. He was a very short man ,shorter than John Howard yet no-one ever said little Bobby Hawke.
If John Howard was a boring individual at least he allowed you to talk about various things, with Hawke it was all about Hawke.

Sunday, 18 February 2018

Barnaby Joyce's position is untenable

Barnaby Joyce is the leader of the National party formerly the Country party.

One of the main planks of the party is the upholding of traditional family values and thus the sanctity of marriage.

We now have the spectacle of the leader of the party showing scant regard in fact no regard at all for these values.

During the course of his adulterous affair he lied to  his wife, daughters, Prime Minister and of course his own electorate.

This means the National party owns his affair and his values ( or lack of them.) This is the great difference between him and the ALP's Tony Burke. Burke didn't stand for family values ( nor did he uproot his family and move them inter-state for selfish political reasons.)

The National party was always vulnerable to One Nation now this vulnerability is in spades.  One Nation can say they uphold family values whereas the Nationals patently do not given Joyce is still their leader.
Joyce is also quite vulnerable in his own electorate to an independent who upholds family values and says he won't lie to the electorate like Joyce did.

Moreover Joyce just does not get it that in a party of family values you cannot say things are personal. Social liberals can because adultery means nothing to them.
The patent allocation of his mistress to other offices once she was pregnant and then accepting rent free luxury accommodation shows just how bad his political instincts are. Last week also showed his understanding of his portfolio is not very high.

If Joyce is still leader at the next election the coalition will be decimated given what erupted over last week.


I find myself having to make three related points.

1) Anything Joyve said in the same sex marriage debate was shite
2)  I have listened to 2GB since this all occurred every so often. No blame on Joyce despite the obvious derailing of family values. Criticism of Turnbull unbelievably because he upholds said very values. It appears 'right wing ' people hate Turnbull more than they actually believe in the values they espouse.
3) Joyce will be 41 before bubby appears on god's earth. This means if she is a daughter and say marries at 25 then he will be 76 when walking down the aisle with her. Absurd. Will his four other daughters want him at their weddings???

Hat script:

I should have talked about Barnaby's hat. Why would a man wear such a hat in a suit in the shade?
I will write slowly for Soony. He is yet again trying to portray himself as a man of the land, a farmer, a cow cockie. He is in fact an accountant from a regional city in Queensland who was so pro-farmer that he had no farmers as clients.  He would have a great story to tell if he ran the books of various farmers. He would know their business inside out yet he has NEVER spoken so.

Thursday, 15 February 2018

Around the Traps 16/2/18

It is time for Around the Traps.

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

Wednesday, 14 February 2018

Is it possible to be this ignorant?

Our old mate Katesy was always a bit of a looney tunes but it seems he wants to go further. now the Trump is in charge of Chaos house!
Here he is
He wonders about  why there is no revolt against Keynesianism

Oh dear! where do we start?
Perhaps with Henry Farrell and John Quiggin's excellent piece on hard keynesianism.
Just read this
'Contrary to the beliefs of nearly all anti-Keynesians — and, regrettably, some Keynesians, too — Keynesianism demands more, not less, fiscal rectitude in normal times than does the orthodox theory of balanced budgets that underpins the EU.'

 They are writing in 2011.
 Kates thought because there were budget deficits in the euro-area they were expansionary when they were quite contractionary. If only he and other understood fiscal policy!
Herein lies the problem he is anti-keynesian but has no idea of what Keynesianism actually is.
No wonder he is a Trump apologist.
He still has no understanding there is a seasonal pattern to revenue receipts in the USA. the Budget goes in to surplus for a very short period. It did this under Obama but our Stevey does not know this.
Kruggers has a short snappy article on when deficits are needed and when they are not in the USA.

You would think he might put two and two together if the US public debt is rising but again not our Stevie.

I guess the other thing to say he also has no self awareness. Just like Trump he is showing ignorance on a large scale but does not know it.


Tuesday, 13 February 2018

Cryptocurrencies do not make sense

At least some one has written down most of what I had thought about cryptocurrencies.
Jon Danielsson does so at Vox Wonk as I call it.
Easy to read and understnd.

Sunday, 11 February 2018

Barnaby Joyce has a big problem

The leader of the National party and Deputy Prime Minister has a big problem.

The Nationals has been ever since its birth been a party that supports agrarian socialism ( the Government pays for their losses and the farmers keeps their profits) and social conservatism. In other words they a big supporter of the traditional family values.

Joyce has actually shown himself to be worse than Tony Burke. At least when he separated it wasn't to a woman who is some 20 years younger then he.
Can the National party have a leader that has infidelity problems and has a child out of wedlock?

I think not.
This whole situation shows Joyce has no appreciation of the institution of marriage.

What the hell does he stand for???


We now are in the mess that his lover was transferred from Joyce's office ( why?) onto other jobs which in effect paid better than her original job. I can imagine how Centrelink would react if a person argued a woman who is pregnant by me is not my partner!!
It does not pass the pub test!

Thursday, 8 February 2018

Around the Traps 9/2/18

It is time yet again for Around the Traps.

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

Wednesday, 7 February 2018

Academic knowledge of about economic policy is not just another opinion

This is the title of the latest missive from Simon Wren-Lewis of Mainly Macro fame.

It is an interesting and typical thoughtful piece.

In it he argues economists did argue for the right policies to counter the GFC.

One part was his writing about the 364 economist who warned Thatcher. They were CORRECT. The Tight 1981 budget put off recovery!

Tuesday, 6 February 2018

The Labour Share of Income

Timothy Taylor who is The Conversable Economist writes about the declining share of labour income.
Although it is primarily US targeted the study also examined other countries.
It appears the two major reasons are:

  • substitution of cheaper technology for labour
  • larger economic profits.

Monday, 5 February 2018

The dual citizenship saga again

We again see the parties bickering about dual citizenship.

However we should emphasise there is a grest difference between the ALP MPs and other MPs who have caught up in the saga.

All the ALP MPs took steps before nomination to relinquish the dual citizenships. This is in direct contrast to previous MPs. Take Barnaby Joyce for example. He didn't think to inquire whether he was a NZ citizen because his father was one.
The ONLY reason why we are in a bother about this is because the Court of Disputed Returns have not as yet given us a quite clear direction on what taking reasonable steps are. Hence why the ALP and the Liberal parties have dueling QC opinions on what it MAY mean.

We should get this when they rule on whether the ALP senator for the ACT is in fact still a Senator.

If she is okay then all the ALP MPs will be okay. On the other hand if she is not neither will the other ALP MPs.

Sunday, 4 February 2018

The A-League and the New Socceroos coach

There is a lot of heartburn in the football community over the A-League. Crowds and TV audiences are down.

Should we be worried?   Well yes however part of the answer is the form of the two best supported teams ,Western Sydney Wanderers and Melbourne victory. both started the season very badly and neither looks like they can actually make the fair dinkum semi-finals!
Also the product has improved each season. for example I watched the Wanderers V Adelaide game at Homebush late last year. It was end to end stuff. Totally gripping and exciting.

What are the answers then?
You can always improve the product so here are some suggestions.

  1. Get more youngsters into the teams. There are far too many players in A-League teams who should not be there.  Robert Cornthwaite at the Wanderers is a classic. Afterall you cannot cal yourself a coach if you cannot change the potential of a youngster into solid good skill and regular player.
  2. Choose your coach wisely. There are some coaches in the A-League who just are not up to it. We have to ensure that the football played is what the fans want to see.
  3. examine the prices. The big Bash is getting very high attendances . One of the reasons is the low price. the womens AFL price is nothing!!  
  4. We need some marketing. I have yet to see anything about the A-League.
  5. Clubs need to 'work' their fans. Sydney FC should be getting at least 20,000 to watch them do their stuff but they are not. Why?
We have a new Socceroos coach. My eldest son thinks it means we should get through to the second round. I will wait until I can see what players he is selecting and what formations he is laying.
I am hoping he is not like Veerbeck or Osiek who had no confidence in the players they selected. We have had a very competent world cup display last World Cup, we won the Asian cup and then performed quite competently again in the confederations cup.
There is no evidence to think we will get thrashed in our group. No evidence at all.

Given this is a short-term appointment it surely must mean Arnold will take over after the World Cup is over and the A-League season is too.

Thursday, 1 February 2018

Around the Traps 2/2/18

It is time again for Around the Traps.

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