Steve Kates Mad , Bad and unable to tell the truth

Steve Kates is at it again.

In this ignorant rant he says this.
'The European economies, and Australia as well, emerged from the Great Depression faster than we have today because they used classical theory and policy to work things out. The UK famously balanced its budget in 1933, at the very trough of the Great Depression. We cut spending here in 1931 and was the first economy to come out of the Great Depression with the Australian trough being reached in 1932 from which time things continually improved.'

Okay , let us examine the US under Roosevelt. When the New Deal was implemented the US experienced growth of nearly double digits. The US then went into recession when Roosevellt adopted classical economics and performed the largest fiscal change in his administration. Yeah that's right the largest change in fiscal policy by Roosevelt was not deficit spending but getting the budget into the black.

Now Australia we examined here.  Please note what happens to the economy after the balanced budget of 1931. 
After GROWING at 1.7% it then reduces GDP by 2.6%.

Thus Steve joins fellow Catallaxy writer Julie Novak as a complete liar about Australia in the Depression.

Please note the reasons for the recovery. nothing to do with classical economics indeed quite the opposite!

Australia's unemployment rate never got below 8%. sound like full employment to you. no not to anyone literate in economics actually.

Steve actually doesn't mention Germany. The ONLY country to get to FULL employment following the Depression. I wonder why?
Poor old Bruning. He followed those classical economics policies advocated by Hayek and it brought disaster and worse. Hitler.
so the ONLY advertisement for classical economics is that it gave us Hitler.
It is no wonder Steve is mad!
just as an added bonus. 
The official costs of Austerity in europe!

Really is there any further evidence people at Catallaxy are brain dead.  ( Thanks Steve from Brisbane)

Carly Simon Again

I know it has been a long time for some music but I have been busy.
A fantastic reaction to the last Carly Simon song so here is another one most would not have heard of.

I am willing to bet Carly never had a problem either!

Around the Traps 24/1/14

It is time for Around the Traps.
no cricket at all this week so updating will be easy.
Noah Smith obviously had no Christmas, there are quite a few econometric articles besides Our Dave writing and David Glasner has a great article.
Interesting article on various guises of Keynesianism by OZ's own John Quiggin.
voxwonk always interesting.


Aussie,Aussie,Aussie,Oy,Oy,Oy

• The Kouk on heres-why-italian-bond-yields-are-lower-than-australia , all-pumped-up-about-inflation
• Harry Clarke on housing-prices-and-migration, getting-towards-a-sound-asylum-seeker-policy 
• Joshua Gans on the supply side effects of direct action 
• Peter Martin on how-australian-dollar-floated-30-years, clipping-peaks-why-we-should-allow-to-turn-off-our-air-conditioners
• Mumble on whats_at_stake_in_griffith
• John Quiggin on putting-their-worst-foot-forward
• Andrew Elder on on-a-different-plane, scott-morrison-should-be-sacked
• m0nty is cheesed off with Sinclair Davidson's hypocrisy, this is good too
• Kevin Bonham on andrews-phantom-welfare-spending-crisis

Northern America

• Noah Smith on does-americas-survival-mean-that-its-a-resilient-country, a-henry-george-tax-for-san-francisco
• Mark Thoma gives us Tim Duy on fed-watch-the-week-that-was 
• Stephen Gordon on statistics-canadas-attention-deficit-disorder
• Livio Di Matteo on a-lower-dollar-wont-reverse-dutch-disease

Europe

• Chris Dillow on market-trade-offs, who-needs-productivity, abuses-of-statistics
• Kruggers on running-economies-into-the-sand
• Francesco Saraceno on fiscal-expansion-or-what Thanks Mark 
• Kevin O'Rourke on deflation
• Simon Wren-Lewis on adapting-forward-guidance
• CEPR on greece-will-likely-begin-recovery-this-year-is-austerity-working  Thanks Mark

Asia
nuttin
Wonk

• Robert Waldeman on is-the-permanent-income-hypothesis-glass-half-full
• Nick Rowe on is-the-macroeconomic-importance-of-finance-an-artefact-of-monetary-policy, another-weird-monetary-world
• Simon Wren-Lewis on ordoliberalism-neoliberalism-and-economics
• John Quiggin on new-old-keynesianism and Kruggers on everything-new-is-old-again and then Robert Waldeman on john-quiggin-is-as-usual-brilliant
• David Glasner on g-l-s-shackle-and-the-indeterminacy-of-economics  really good, barro-and-krugman-yet-again-on-regular-economics-vs-keynesian-economics
• Noah Smith on robert-barros-famous-polemic-against-NewKeynesians, Kruggers needed here none-so-blind-macroeconomics-division  chris-house-sticks-up-for-macro
• Sandwichman on fallacy-vs-fallacy

General

• Noah Smith on toss-out-falsifiability, thoughts-on-the-neoreactionaries, wealth-inequality-slightly-exaggerated
• Liveo Di Matteo on foreign-remittances-immigration-and-economic-development
• Chris Dillow on democracy-dissonanceC

Climate

• Rabette run on curry-vs-curry
• open mind on one-of-the-problems-with-judith-curry
• John Neilsen-Gammon on your-logic-escapes-me
• James empry blog on recognising-pattern
• Science of doom on ghosts-of-climates-past-twelve-gcm-v-ice-age-termination
• William Connelly on peer-review
• Jeff Spross on world-climate-cataclysm
• Climate Science Watch on assault-on-knowledge-anti-science-policymaking-in-canada
• Ryan Koronoswki on noaa-nasa-2013-temperature
• John Neilsen-Gammon on the-basics-of-extreme-weather-and-global-warming, the-weather-trap Thanks Steve from Brisbane

Andrew Gelman (Stats)

• aaa-tranche-subprime-science
• mailing-list-degree-of-difficulty-difficulty
• commissar-traffic-presents-latest-five-year-plan
• everything-need-know-bayesian-statistics-learned-eight-schools
• spell-checking-example
• discussion-preregistration-research-studies
• parables-vs-data
• sparsity-density
• Good Stats Bad Stats on biased selection methods 
• Kaiser Fong on  numbersense-on-mailchimps-gmail-study

Dave Giles (Econometrics)

• six-word-peer-review
• an-ardl-add-in-for-eviews
• testing-up-or-testing-down
• Frances Diebold on causality-and-t-consistency-vs.correlation-and-p-consistency
• Arindrajit Dube on casual-versus-causal-inference-time-series-edition
• James Hamilton on on_rsquared_and-economic-prediction

Dianne Coyle (Quirky + Book Reviews)

• economics-of-shelfies, complementarity-serendipity, introducing-game-theory, history-retweeting

Voxwonk

• market-mechanisms-in-retreat
• multilateralising-21st-century-regionalism
• tapering-and-emerging-market-capital-flows
• why-japan-s-debt-hasn-t-wreaked-havoc-yet
• minimum-wages-and-jobs-new-evidence
• china-s-one-child-policy-and-saving-puzzle
• simple-formula-climate-linked-economic-damage
• efficient-retail-payments-and-growth-europe
• why-asian-firms-hold-cash
• russia-against-eu-s-eastern-partnership
• european-merger-policy-reform

Interest rates will be rising.

The Kouk examines the CPI  and doesn't like it. and for good reason.on a six month annualised basis the RBA preferred measure is now running at 3%. Moreover as the Kouk says the-rba-inflation-forecasts-hit-for-six . 
This means the RBA will have no option but to increase interest rates.

I might say my sympathies are with the forecasters here. Given that wage growth is minimal one would not have expected such large increases in the September and December quarters.

Joe Hockey has blamed the carbon tax. This means he doesn't know what was in the MYEFO!

How to price Bonds

The Kouk has a great article on heres-why-italian-bond-yields-are-lower-than-australia.

It is all about how to price bonds.

The Kouk was in the fixed income market for quite a long time with TD securities ( The Australian offshoot of Toronto Dominion Bank).
He therefore knows quite a lot about the market.

It is an informative article for those who do not know how bonds are priced.

You cannot price shares without first pricing Government bonds!

Why cannot Sinclair Davidson simply admit he was wrong?

Sometime ago Sinclair Davidson made a very silly prediction that Australia would experience Stagflation.

Now just read the article and then take a time to ponder did he get anything right?

Well no.
 Instead of stagflation we in fact got deflation when the terms of trade fell quite a bit. Indeed there were times Real GDP was larger than Nominal GDP in some quarters.
No sign of nominal GDP falling below trend in this article. No sign that this is the reason why unemployment would rise.

Thus when M0nty provokes Davidson into asking why his prediction was  so wrong here   it was interesting to note Davidson's reaction.

He essentially says he got it right.  If we are to take him at his word then that would mean he is patently mad like Kastesy however given his history I think we can merely note he is incapable of saying he got it wrong,badly wrong.

Fortunately those of us that can read know how badly he got it wrong and why he got it so badly wrong!

How ironic the site that gives me more ( many more in fact) pageviews than any other site is Catallaxy

Around the Traps 17/1/14

It is time for Around the Traps.

Boys are away so plenty of time to update on the weekend.


Aussie,Aussie,Aussie,Oy,Oy,Oy

• The Kouk on the-budget-deficit-remains-well-contained, crappy-jobs-data-but-it-is-a-lagging-indicator, housing-affordability-lattes-and-great-expectations
• Peter Martin on secret-fees-why-war-on-red-tape-is-war-on-us, health-economics-what-would-charging-for-a previously-free-visit-to-the-doctor-achieve
• Harry Clarke on pricing-heavy-vehicle-use, privatising-australia-post
• Mumble on so_so_shorten
• Mark the Graph on employment
• Grog's Gamut on Australias-unemployment-rate-in-December
• John Quiggin on a-few-more-observations-on-nuclear-power

Northern  America

• Mark Thoma gives us Tim Duy on fed-watch-employment-report-keeps-policymakers-on-their-toes, fed-watch-lockhart-greenlights-tapering
• Calculated Risk on key-measures-shows-low-inflation-in-December
• Menzie Chinn on friday_fiscal_lookback
• David Beckworth on has-natural-interest-rate-has-been-negative  Thanks Mark

Europe

• Kruggers on success-european-style,the-glittering-crises
• James Hamilton on european_monetary_policy_&_the_yield_curve
• Kevin O'Rourke on loffre-cree-meme-la-demande
• Mark Thoma on france-by-the-numbers
• Simon Wren-Lewis on was-uk-governments-use-of-north-sea-oil-a-scandal, how-ecb-could-be-radical-by-being-old-fashioned
• Monique Ebell on scottish-independence-and-uks-debt-burden-update

Asia
nuttin again

• Noah Smith on myths-and-misconceptions-about-japans-economy

Wonk

• Steve Roth on the-economy-is-a-ponzi-scheme
• Arindrajit Dube on separating-signal-from-noise-a-review-of-12-major-studies-on-minimum-wages-and-poverty  Thanks Mark
• Menzie Chinn on reserve_accumulation_ in_the_wake_of_the_great_recession
• Econbrowser on guest_contribution_on _Understnding_the _potential_effects_of_QE
• Noah Smith on the-equation-at-core-of-modern-macro
• Edward Lambert on attack-on-euler-equation-implies-financial-repression-is-alive-and-well
• Carola Binder on on-euler-equations  Thanks Mark
• Edward Lambert on comparing-methods-to-determine-the-output-gap
• Brad DeLong on The risks from expansionary monetary policy
• Simon Wren-Lewis on will-financial-crisis-lead-to-another-revolution-in-macro-economics

General

• Noah Smith on how-will-conservatives-save-poor, new-week-article-economists-get-bad-rap, against-ideological-turing-test
• Rob Bray on national-minimum-wage-role-and-rationales
• Tim Harford on what-price-supply-and-demand
• Chris Dillow on bonuses-arms-races, inherently-biased-journalism, paul-krugman-the-nature-of-economics and then Kruggers on ui-the-nairu-and-the-zlb
• David Glasner on did-raising-interest-rates-under-the-gold-standard-really-increase-aggregate-demand
• James Hamilton on links_for_2014 

Climate

• Tamino on smooth-3, southern-discomfort
• Rojer Jones on mclean-follow-up 
• Real Climate on thames-barrier-raised-again
• The Science of Doom on ghosts-of-climates-past-twelve-gcm-v-ice-age-termination

Andrew Gelman ( Stats Guru)

• risk-deviating-standards-close-reading-requires-context
• things-like-almost-nobody-else-interested
• judea-pearl-overview-causal-inference-general-thoughts-reexpression-existing-methods-considering-implicit-assumptions
• postdoc-liz-stuart-propensity-score-methods-covariates-measured-error
• advice-on-writing-research-articles
• postdoc-involving-pathbreaking-work-mrp-stan-2014-election
• Aggressive definitions
• course-sample-surveys-political-science
• transformations-for-non-normal-data
• british-amateur-debunked-mathematics-of-happiness
• Good Stats Bad Stats on the polar vortex and the media hype of cold weather
• Kaiser Fong on in-which-i-ghost-write-part-2-of-avinashs-post,real-scientists-make-their-own-data

Dave Giles ( Econometrics)

• thanks-for-honour  Well Done Dave richly deserved
• estimating-generalized-pareto
• an-interesting-new-book
• Noah Smith on time-series-econometrics-no-giod-p.

Dianne Coyle ( Quirky + Book Reviews)

• life-satisfaction-gdp-and-sense, picturing-economic-complexity, reasons-to-be-cheerful-even-if-american,pursuits-grand-and-lesser,progress-and-the-greatest-irony, top-reading
• Liveo Di Matteo on fleet-gdp-and-1914

Voxwonk

• real-wage-productivity-nexus
• win-win-eliminating-corporate-income-taxes
• first-steps-banking-union-implementation
• quality-goods-and-pass-through-puzzle
• costing-secrecy
• fixing-japan-s-labour-market
• roots-of-shadow-banking
• video-gaming-and-studying-evidence-japan
• what-asset-quality-review-likely-find-independent-evidence
• generalisability-experimental-results-economics
• immigration-romania-and-bulgaria-fiscal-impact
• firearm-background-checks-and-suicide
• global-crisis-and-east-asian-currency-misalignment