No such thing as “the level of demand” at an aggregate level

Through the whole of the Costello years as Treasurer, I would say that everyone would live through these exceptionally good economic times, but no one would learn a thing. And it’s not just that we had balanced budgets, but had ZERO DEBT. Only country ever to do this and we floated on air. So then we elected Labor and then we had the GFC, and then we had the advice from Treasury to go early and go hard, and so here we are today, in a crumbling economy with living standards heading south. Which is a preamble to this: Peter Costello and later treasurers right to stress benefit of surpluses. Not so sure about those later treasurers, but Peter was the legitimate article, Australia’s greatest Treasurer.

In his book on Australian treasurers, Bowen describes Costello as the country’s first post-Keynesian treasurer, rejecting the idea that taxes and spending should be used to manage the level of demand in the economy, with that task left to the Reserve Bank. The pursuit of a budget surplus was seen as evidence of good economic management and became an end in itself. Costello was able to distil his political message into a simple message: “Surpluses are good and Liberals deliver surpluses,” Bowen writes.

Half way there. There is no such thing as “the level of demand” at an aggregate level. You cannot manage it. You cannot cause it to go up and down. Aggregate demand has no separate existence apart from aggregate supply. It is Keynesian junk theory whether it is spending or adjusting rates. It will not work and never has, ever. Modern macro is false from end to end. As John Stuart Mill put it, and found in my Free Market Economics where it is explained at great length: “demand for commodities is not demand for labour”. That was written 170 years ago. The idea that there is progress in economic theory is just plain wrong.

On veut vivre pas survivre!!

France today, and who knows who’s next:

• The French state has been bankrupt since 2004. A minister finally admitted it in 2013.

• French GDP hasn’t risen above 2% in 50 years. Yes – FIFTY. The average annual GDP growth rate between 1949-2018? 0.78%.

• In 2018, 14% of the population in France live below the poverty line (they earn less than 60% of the median income).

• Worse, more than 50% of French people have an annual income of less than €20,150 a year (about $1,900 US per month).

• The ‘official’ unemployment rate is 10% – about 3.5 million citizens (in reality, it’s much higher).

• The youth unemployment rate is 22%. Yes, you did read that right.

• Astonishing but true: the French government employs 25% of the entire French workforce…and it’s impossible to fire them.

• Because the citizens make such little money, they pay no tax. Less than 50% of French pay any income tax at all; only around 14% pay at the rate of 30%, and less than 1% pay at the rate of 45%.

• The government can’t deliver services without taxes, so it borrows money. France’s debt-GDP is now 100%.

The world of my youth is virtually gone. It’s a fantastic loss. What will replace it? What could replace it?

From Understanding the Gilets Jaunes Uprising which you should read through for some real insight.

Anti-Semitism and the Women’s March

From The Women’s March is Melting Down.

The development of the origins of the Women’s March and its transformation into a vehicle that promoted a small coterie of women—three of whom bizarrely professed their admiration for the openly anti-Semitic, homophobic, and misogynistic Nation of Islam preacher Louis Farrakhan—was a deliberate act, one that had nothing to do with the general spirit out of which the March was born….

According to several sources, it was there—in the first hours of the first meeting for what would become the Women’s March—that something happened that was so shameful to many of those who witnessed it, they chose to bury it like a family secret. Almost two years would pass before anyone present would speak about it.

It was there that, as the women were opening up about their backgrounds and personal investments in creating a resistance movement to Trump, Perez and Mallory allegedly first asserted that Jewish people bore a special collective responsibility as exploiters of black and brown people—and even, according to a close secondhand source, claimed that Jews were proven to have been leaders of the American slave trade. These are canards popularized by The Secret Relationship Between Blacks and Jewsa book published by Louis Farrakhan’s Nation of Islam—“the bible of the new anti-Semitism,” according to Henry Louis Gates Jr., who noted in 1992: “Among significant sectors of the black community, this brief has become a credo of a new philosophy of black self-affirmation.”

Liars, racists and anti-semitic.

 

Almost every significant city in the eastern Mediterranean world was destroyed

Total collapse of civilisation in the 12th century BC.

One of the biggest mysteries in history is the late Bronze Age Collapse. There’s no good explanation for why an early globalized civilization should suddenly disappear at around 1177 BC. “Within a period of forty to fifty years at the end of the thirteenth and the beginning of the twelfth century almost every significant city in the eastern Mediterranean world was destroyed, many of them never to be occupied again.”

There is no explaining the inexplicable, but one may nevertheless still wonder. A story I have never come across before, told as if it is common knowledge.

“The people of this country don’t want …”

Full story: PELOSI, SCHUMER PLEAD TO TRUMP: ‘LET’S DEBATE’ BORDER FUNDS ‘IN PRIVATE’. Instead, very public with the best bits in the video above. Might also mention this as well: Pew Survey: Out Of 27 Nations Polled, Zero Want More Immigrants to Move to Their Country and that includes Australia. As for Trump and the Dems, here’s the transcript of the relevant bits on border protection:

TRUMP: “We need border security. People are pouring into our country including terrorists. We have terrorists — we caught 10 terrorists over the last very short period of time. Ten. These are very serious people. Our border agents, all of our law enforcement has been incredible, what they have done, but we caught 10 terrorists. These are people that were looking to do harm. We need the wall. We need — more important than anything, we need border security of which the wall is just a piece. It’s important. Chuck, did you want to say something?”

SCHUMER: “Yes. Here’s what I want to say. We have a lot of disagreements here. ‘The Washington Post’ today gave you a whole lot of Pinnocchios because they say you constantly misstate how much of the wall is built and how much is there, but that’s not the point. We have a disagreement about the wall, whether it’s effective or not —“

TRUMP: “’The Washington Post’ —“

SCHUMER: “— not on border security, but on the wall. We do not want to shut down the government. You were called 20 times to shut down the government. You said, ‘I want to shut down the government.’ We don’t. We want to come to an agreement. If we can’t come to an agreement, we have solutions that will pass the House and Senate right now and will not shut down the government. That’s what we are urging you to do. Not threaten to shut down the government.”

TRUMP: “If you don’t want to shut down the government —“

SCHUMER: “Let me just finish. Because you can’t get your way — let me say something, Mr. President. You just say, ‘My way or we shut down the government.’ We have a proposal that Democrats and Republicans will support to do a C.R. that will not shut down the government. We urge you to take it.”

TRUMP: “If it’s not good border security, I will not take it.”

SCHUMER: “It’s very good border security.”

TRUMP: “If it’s not good border security, I will not take it.”

SCHUMER: “ It’s what —“

TRUMP: “Because when you look at these numbers of the effectiveness of our border security and when you look at the job we are doing —”

SCHUMER: “You just said it is effective.”

TRUMP: “Can I tell you something?”

SCHUMER: “You just said it is effective.”

TRUMP: “These are only areas where you have the walls. Where you have walls, Chuck, it’s effective. Where you don’t have walls, it’s not effective.”

PELOSI: “Let’s call a halt to this. We have come in here with the first branch of government. Article One. The legislative branch. We are coming in in good faith to negotiate with you about how we can keep the government open.”

SCHUMER: “Open.”

TRUMP: “We are going to keep it open if we have border security. If we don’t have border security, Chuck, we are not going to keep it open.”

PELOSI: “We will have border security.”

SCHUMER: “You are bragging about what has been done. We want to do the same thing we did last year this year. That’s our proposal. If it’s good then, it’s good now and it won’t shut down the government.”

TRUMP: “We can build a much bigger section with more money.”

SCHUMER: “Let’s debate in private.”

TRUMP: “We need border security. I think we all agree that we need border security.”

SCHUMER: “Yes, we do.”

TRUMP: “See? We get along. Thank you, everybody.”

REPORTER: “You say border security and the wall. Can you have border security without the wall?”’

TRUMP: “You need the wall. The wall is a part of border security.”

REPORTER: “Can you explain what it means to have border security?”

TRUMP: “Yeah. We need border security. The wall is a part of border security and you can’t have very good border security without the wall.”

PELOSI: “That’s not true. That’s a political promise. Border security is a way to effectively honor our responsibility.”

SCHUMER: “The experts say you can do border security without a wall, which is wasteful and doesn’t solve the problem.

TRUMP: “It totally solves the problem and it’s very important.”

PELOSI: “This spiraled downward from when we came at a place to say how do we meet the needs of American people, who have needs. The economy, people are losing jobs and the market is in a mood. Our members are already —“

TRUMP: “We have the lowest unemployment that we’ve had in 50 years.”

PELOSI: “People in the Republican Party are losing their offices now because of the transition. People are not —“

TRUMP: “And we gained in the Senate. Nancy, we gained in the Senate. Excuse me. Did we win the Senate? We won the Senate.”

SCHUMER: “When the President brags that he won North Dakota and Indiana, he is in real trouble.”

TRUMP: “I did. We did win North Dakota and Indiana.”

PELOSI: “We came in here in good faith and we’re entering into this kind of a discussion in the public view.”

TRUMP: “But it’s not bad, Nancy. It’s called transparency.”

PELOSI: “I know. It’s not transparency when we are not stipulating to a set of facts and we want to have a debate about you, confront some of these facts.”

TRUMP: “You know what? We need border security. That’s what we will be talking about. Border security. If we don’t have border security, we will shut down the government. This country needs border security. The wall is a part of border security. Let’s have a talk. We will get the wall built and we have done a lot of wall already. It’s a big part of it.”

Lost souls

The reason I have been up in Sydney was to go to a Wiggles concert along with my granddaughter. The place was packed to the rafters and for the under-sevens it was a sensation. But for me, it was how they ended the afternoon that truly astonished me. First they brought on Santa Claus which I thought was amazing enough. And then, wildly beyond any expectation I might have had, notwithstanding this being December, they then sang Silent Night, but in German. Still I thought, that was amazing since they could not have been more Christian in their presentation. And then they continued in English, and there is no more Christian Christmas carol than Silent Night. It was a perfect way to end for me, although I doubt there were many there who noticed or thought this was particularly remarkable, but it was.

Now tonight, more than a day later, I was reading this typical piece of dreck, title: America’s New Religions, in which the point being made by Andrew Sullivan was that one cannot live without some kind of faith in the transcendent, which I did agree with, but there towards the end was this:

Now look at our politics. We have the cult of Trump on the right, a demigod who, among his worshippers, can do no wrong. And we have the cult of social justice on the left, a religion whose followers show the same zeal as any born-again Evangelical. They are filling the void that Christianity once owned, without any of the wisdom and culture and restraint that Christianity once provided.

This equivalence was obviously false. Only on the left is politics a religion substitute. These are lost souls. I will say no more than the obvious, that atheism is not a feature of the right and whatever may be the reason for our support for PDT, we do not think of him as a “demigod” who can do no wrong. But what is revealed is the tragic spiritual loss in the empty lives of so many on the left. There is much more that could be said, but will only add this from another website:

Liberty wasn’t born out of the United States Congress but from the heart of God. It is an inalienable right – a God-given right – a right which belongs to all men everywhere and in every age. The government doesn’t grant inalienable rights. Its task is to protect them. No person, no group, no government, is authorized by our Creator God to infringe upon what is the absolute inherent privileges of being made in the image of God or might interfere with one’s duty to God. When we try to separate liberty from the spiritual, when we base it in human definitions and objectives alone, freedom is corrupted, counterfeited, and dies.

I cannot link to these posts because of the primitive machinery I am on, but finding both online today does give me some hope for the future, not to mention the Wiggles who did the same.

Hard to work out which of our ex-PMs is the worst but here’s a contender

As a so-called student of history, he could not be more clueless about the actual and relevant history of the Cold War and Joe McCarthy than if he were a student in any Australian classroom today. Here’s the relevant text:

(Xinhua reporter): “You mentioned the possibility of a ‘new’ McCarthyism in the United States. Where could it emerge from? From the White House, from the Congress, form the Cabinet level, from the academy, or just from the local level?”

(Ex-Australian Prime Minister, Kevin Rudd (born 9/21/1957): “On the question of McCarthyism, I am quite passionate on this question, because not just am I a student of history, and seen what happened in the (19)50s in this country, when Joe McCarthy ran riot, and when you had a period where anyone who had once been in a room with a Communist, was automatically the subject to a series of frankly open persecutions judicially sanctioned in this country. …[W]e should be able to entertain a debate therefore in this country and in mine about our own national security interest, domestic and external, without inviting the demons of racism and ideological ‘witch trials’ into the public court”

Meanwhile from The Weekend Australian.

China’s Huawei has tabled a plan to build a massive undersea internet cable stretching from South America to China with a stop-off in Sydney, which experts warn could be an espionage risk.

Australia spent nearly $137 million to lock Huawei out of a major Pacific undersea cable project linking Sydney, the Solomon Islands and Papua New Guinea because of national security fears, as well as its new 5G network.

The move has ricocheted across the globe, with Australia’s Five Eyes partners Britain, Canada and New Zealand all moving to reconsider Huawei’s involvement in their telecommunications networks and reports yesterday that Japan would follow suit.

More economic incompetence coming our way

Modern economics is so incompetent to deal with the problems of our economy that it is simply breathtaking. This is the headline at The Oz: “Reserve Bank paves way for further cuts in official interest rates”.

His comments come against a backdrop of deteriorating economic data: house prices and building approvals are falling, while the national economic growth rate dropped from 3.4 per cent to 2.8 per cent, it emerged this week, surprising economists.

Speaking at the Australian Business Economists annual dinner, Dr Debelle said the federal government had room borrow and spend to stimulate the economy, if needed.

These people do not, of course, have any idea why the economy is floundering. They have kept rates low since the GFC and public spending has never been higher. Of course, a major part of the problem is that rates have been too low and public spending has been too high, but they would be the last people to know. Look at what he even said:

“Fiscal space is really important; we still have that in Australia,” he said, backing former Treasurer Wayne Swan’s controversial $52bn fiscal stimulus of late 2008 and early 2009, which saw $900 payments to households, help for first home buyers, discount roof insulation and a school hall building boom.

“Fiscal stimulus in Australia in my view was absolutely necessary and was a critical factor behind Australia’s good economic outcomes,” he said.

Unbelievable. No idea how an economy works but they will bludgeon it again until it finally responds to treatment. And there is not much doubt we are heading into an economic sinkhole that Treasury and the RBA have between them created.

The GFC is now a decade past and we, along with pretty much everyone else, have never had even an inkling of a robust recovery. Amazing.

Some people even now would have preferred Hillary!

It is one of the odder parts of my life running into people who make it a point to tell me how much they don’t like Trump. I seldom even mention the name, and even among people I would expect to think of him in a positive way, not so much. An outright idiocy to me.

My post the other day on “We Want Trump” might have been in England rather than France, but the point I was making, that Trump has become a metaphor representing a last ditch effort to save ourselves from a French-Swedish-German future, should have been obvious. We have a cultural and civilisation that has worked remarkably well and brought benefits not just to ourselves but to the entire planet. You might not think all that highly of electricity or the germ theory of disease, but they originated among ourselves and spread across the globe, and everyone would be a lot worse off without them.

Looking at the two previous Democrat presidents and the one almost-president in the company of the current President of the United States ought to make everyone grateful for this reprieve, but for some reason it doesn’t. We shall see, but in the meantime, for people such as myself, I can see that things might still go well.

My airplane book on the way up to Sydney where I am now located was a book I cannot recommend too highly. It is by Giles Auty, published by Connor Court and titled,Postmodernist Australia. As once said by another Canadian, “You don’t know what you’ve got till it’s gone”, but folks it’s going.