Monthly Archives: February 2016

What’s the plan this time if the economy crashes?

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The latest from Drudge on the gathering economic storm.

FEARS OVER NEW FINANCIAL CRISIS HAUNTS MARKETS…
Selloff in European banks ‘ominous’…
Russia shuts two more…
CREDIT FEARS GROW…

They do not have a clue what to do or why what they have done doesn’t work, but I can give them a hint: the problem is not a deficiency of demand. Just cut spending and ease up on regulation. It’s not easy, specially since large proportions of the population have come to believe that being subsidised by the state is a human right. And the reason an increase in GST won’t work is because you would then be making the recipients of welfare pay for the welfare they receive every time they go into a shop. There may be an economic logic to it, but the political logic is by now completely impossible.

The study of the history of economic thought is a crucially important part of economics

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First there was a notice posted at the History of Economics online discussion thread advertising a conference to be held later this year on “The Relevance of Keynes to the Contemporary World”. So I wrote a note which read:

I would like to note a concern I have about this conference.. I will concede that I do not know all of the scholars who have been invited to speak, but what strikes me as a serious problem is that none of the invited speakers whose views I do know can be described as a critic of Keynesian theory. Whatever anyone might think about what makes Keynes “Keynesian”, and which has kept his name alive today, it is this:

“Keynes’s insights for the management of domestic economies in the times of a global recession and European crisis”

One would hope that after the universal failure of the Keynesian stimulus after 2009 that there might at least be some effort to examine the flaws in the Keynesian system. Not a single economy has returned to full employment and robust rates of growth, and we are now seven years since the stimulus packages were first introduced. Debt and deficits are the central problems every economy is now having to deal with. By all means examine Keynes’s work, but at the same time in looking at its relevance, there should surely also be some attempt to look at its irrelevance, indeed at the strong likelihood that Keynesian policies are harmful and destructive.

Later this year a volume I have edited will be published presenting the views of a series of modern critics of Keynesian economic theory and policy. The most astonishing aspect in editing this book was to find how few vocal critics of Keynesian economics there are. They exist, but are very rare. I would think that for this conference to be a proper evaluation of Keynesian ideas, at least some of its critics should be invited to speak as well.

After a brief flurry of discussion, there was a note put out by the moderator of the discussion thread.

I distributed a few messages on the fiscal stimulus and hoped the discussion would die a natural death, but I am now getting quite a few messages, pro and con.

I would like to remind everyone that this is a history of economics list, so I do not think it is appropriate for a discussion of current economic policy. In addition, a list such as this is a poor vehicle for such a conversation, which we all know will end badly, with much more heat than light.

If you wish, I would be happy to send everyone who is interested in this discussion a list of like-minded folks and you can continue this conversation in private. Judging from the replies, there is really is great interest in this question, but I repeat that it is not within the bounds of our list.

Yours in moderation

To which I have now replied.

I complete agree with our moderator that this list is not the place to debate the merits of Keynesian economic theory and policy. I did not seek to open such a debate, but only meant to comment on the nature of a conference that looks at only one side of the issue, which its organisers are perfectly entitled to do. It is noteworthy, all the same, that there is an interest in just such a debate, but more interesting is that there is nowhere that it can be held. I do, however, also believe that this kind of debate is part of the history of economic thought. I go further and argue that one of the most important purposes in studying the history of economic thought is that we economists have a forum in which such issues can be discussed. This does not mean that an examination of Keynesian theory is only part of the history of economic thought. What I take this to mean is that a study of the history of economic thought is a crucially important part of economics.

And there, for the moment, things now lie.

Can it really be against the law to say something that someone else says they have been offended by?

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According to 18C, as I understand it, it is contrary to the law to say something that someone else says they have been offended by. But how do we know they have been offended? Because they have said so. But how do we know they are telling the truth that they have been offended? Again, because they said so. As circular as this may seem, the nature of the law as it is now constructed is that it merely takes the word of someone to say they have been offended by something someone else has said and off to kangaroo court we go.

If being offended was all it took to start this process going, you would think these courts would be filled to the brim and their calendars would stretch into the future for years ahead. There are plenty of offensive statements being made all the time everywhere. There is, however, a catch. Only some groups are officially designated as potential offendees. Only they can get these kangaroo courts to act. So hidden away under lock and key is the list of people and groups who will set this process in motion by saying they have been offended, while with others they can offend to their heart’s content and no one will say boo to a goose.

Andrew Bolt discusses one such case, under the heading, Even Christ would be banned under our laws against speech that offends. Of course, the superfluous word there is the word “even”. The real point is that it is especially Christians who are banned from stating their beliefs, you know, the beliefs that have been the basis of our civilisation for the past 1500-2000 years. And if someone should find themselves offended by some anti-Christian rant, of which there are many from which to choose, is there a tribunal available to which they could take their complaint? You have only to ask to know the answer.

Then there is this story on Watchdog kept 18C respondent in the dark about QUT complaint which contains this scandalous detail:

The AHRC has a legal duty to inquire into all complaints which it accepts and to attempt to conciliate them. If the commission determines that the complaints cannot be resolved, they are given a green light to advance in the courts.

“I am not aware of anything done by the commission either to investigate Ms Prior’s complaint so far as it concerns myself or to ­attempt to conciliate Ms Prior’s complaint against me,’’ Mr Powell said in his February 3 affidavit. . . .

Ms Triggs said last night she could not comment on the individual case but “generally, the commission notifies all respondents about complaints made against them to gain their version of the facts and to invite participation in conciliation wherever appropriate”. “There will be times however when this is not possible,” she said.

Generally, is it, but not always. 18C has to go. It cannot be equitable to have a law that allows someone merely to say they were offended by what someone else had said and then be potentially in line to collect thousands of dollars in compensation while the person who has supposedly done the offending must endure the stigma from having been so accused while having to spend both time and money to see their case resolved.

Super Bowl Monday

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While the Americans are enjoying their Sunday afternoons, we are already back at work in Australia on a Monday. Which normally does’t much matter but does mean if you are to watch the Super Bowl here in Australia. It is Monday at 10:00 am (in Victoria and NSW I forgot to add). Denver v Carolina.

What has always been unacceptable, however, is that we don’t get the ads that are possibly the most important reason for watching the game. So as a public service, and to allow you to reach peak productivity on Monday morning, here are the ads that will run during the game. You can watch it on Fox, as well as in many of our finest pubs across Australia that will open early so you can view the game in a proper club atmosphere along with others of a like mind. Cold Play, I think, is the half time show, whoever they are.

Shall I add that, following the lead of our own Daniel Andrews in creating a holiday on the Friday before the Grand Final, there is a movement in the United States to have a national holiday on Super Bowl Monday, on the day after the game. None of my business, of course, but in my view the one day you should not have a holiday is the day after the Super Bowl. No one will be working anyway since they will all be talking about the game which they could not do if they were all sitting home on their own by themselves.

UPDATE – AND DOES THERE HAVE TO BE POLITICS EVERYWHERE? Apparently so:

A day ahead of her anticipated return to the Super Bowl halftime show stage, Beyonce has released new single “Formation” along with an accompanying music video.

Set in New Orleans, the clip features shots of Bey lying on top of a sinking New Orleans police cruiser as well as a graffiti’d wall that says, “Stop shooting us.” There’s also a scene of a black child in a hoodie dancing in front of a line of police officers in riot gear. At one point a man holds up a newspaper called “The Truth” with an image of Martin Luther King Jr. on the front page captioned, “More than a dreamer.” Blue Ivy Carter, Beyonce’s daughter, also appears in the video.

“I just might be a black Bill Gates in the making,” Beyonce sings on the track produced by Mike WiLL Made- It.

The song is available for download through streaming service Tidal, which Beyonce co-owns with husband Jay Z and a slew of other big-name artists.

Beyonce will join Coldplay and Bruno Mars in the Super Bowl 50 halftime show on Sunday afternoon on CBS, during which “Formation” will make its live debut, according to Entertainment Tonight. She also headlined the show in 2013. Last week, she and Coldplay released a video for their collaboration “Hymn for the Weekend,” which has since been accused of cultural misappropriation for its portrayal of India.

Here’s the vid which opens with the words, “parental advisory – explicit lyrics”. I’m sure it’s true but I haven’t watched it myself. Anyway, you’ve been warned.

The selling of Marco Rubio

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We don’t vote in American elections so it is all academic in a way. But it is worth having some sense of who’s doing what and where things are heading. A Malcolm-led Liberal Party may be the best there is across the world, so think about that. This is Mickey Kaus on The Rubio Menace which more or less says the same as I did in my post yesterday on Rubio Would be a Disaster. This might bring out the extent to which the American election cycle is a charade which, given the unstoppable success of Hillary, we knew already. This is Rubio who has taken up the mantle that was supposed to fall to Jeb Bush.

Bush is explicit about his support for mass immigration and amnesty. Rubio has now effectively wormed his way into a position where championing mass immigration and amnesty would involve breaking what seems to be an explicit policy pledge. But anyone who has followed Rubio knows that’s exactly what he’ll do. a) He’s done it before, having opposed amnesty when seeking his Senate seat only to become its front man on arriving in Washington; b) He dissembled when necessary to push the Gang of 8 bill, why not dissemble now? c) The GOP establishment thinks that’s exaclty what he’ll do; d) His retreat from the Gang of 8 has been grudging and weaselly, always giving as little ground as he thinks he can get away with until he discovers he has to give a little more; e) He still hasn’t repudiated the bill, let alone apologized for it; and most important, f) actually achieving an Enforcement First solution would mean standing up to the Democrats, who will demand quick legalization, and the bulk of the GOP Congressional caucus, who will be happy to settle for a fig-leaf of enforcement they can try to sell their voters (not unlike the fig leaf added to the Gang of 8 by the for-show-only Corker-Hoeven “double the border patrol” amendment). The current flash mob of GOP representatives streaming into Rubio’s camp suggests they recognize him as someone who won’t make their lives difficult — when that’s exactly what is required.

Rubio’s not going to drive Jeff Sessions from the capital. But you can count on the combination of President Rubio and Speaker Ryan to quickly pass an amnesty bill that (like the Gang of 8) contains only the most chimerical guarantees of new enforcement measures. You can also expect them to promote and defend trade, including “trade in services” that involves foreign workers performing those services on American soil. And what about the Sessionsesque suggestion that immigration levels actually be lowered? As one Senate immigration advisor said, “We have a better chance of discovering time travel than getting Rubio-Ryan to take up immigration-reduction bill.”

And on the off chance you are of the opinion that Rubio has that spontaneous human touch, you might like to look at this.

Marco Rubio is running a presidential campaign marked by precision, caution and discipline — so much so that the Florida senator delivers the exact same speech, jokes, quips and one-liners wherever he goes.

When he addresses the media, his aides select the reporters who can ask questions, often shutting down follow-ups. During media interviews and presidential debates, Rubio is quick to fall back on the same script that he often delivers before GOP audiences in New Hampshire and Iowa.

His campaign makes sure every room is packed. Lately, that’s because an overflow audience is interested in hearing from the surging candidate. But other times his aides have cut the room in half with drapes, ensuring it’s a standing-room-only crowd.

It’s great theatre, but is it politics?

Merkel’s strategy

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It was in listening to Mark Steyn above when it finally hit me that Angela Merket may not be as insane as I have up until now thought. What I am now beginning to consider is that she perfectly well understands the demographics, that Europe has voluntarily stopped breeding so that there will be a population decline over the next decades that will be filled by someone. Europe with half the number of Europeans as today will be unable to defend itself against invasion, and they will be coming from all sides. Although a massive longshot, the only hope is that these Muslim migrants can become Europeanised, even Germanised, before the demographics completely wipes out any possibility of this occurring at all. I don’t think it will work out that way, but at least in this instance I can see that it is at least a strategy. What is Germany without Germans is the question Mark asks. It may well end up being Turkey and Syria, given the way population numbers are going. I don’t know that is how she is thinking, but at least it makes some kind of sense, because these 20-30 years are going to go by, the current generation is going to retire and die off, and who then will be left? It’s a bleak and uninviting future, but if this is what’s in her mind, at least I can see the point.

isis trojan horse

The cartoon unfortunately contains the truth of it. Given the low state of education nowadays, even the phrase “Trojan horse” will have only limited meaning. But if you go back to your Iliad, you will find out what ultimately befell the defenders of Troy – in this case Europe – when the Greeks were finally able to breach the walls. Does anyone remember the personal fate of Cassandra? You may find modern parallels in Sweden or Cologne. There seems to be such grossly ignorant stupidity about the fate of those who lose wars. Not every conqueror is like the Americans or Israelis. See the Mughal invasion of India for a useful contrast. In the meantime, if the Germans would like to preserver German culture, it is just a suggestion but they should open their borders to free Chinese immigration. See below for an example of the kind of meshing of cultures that would work out very well on both sides.

Rubio would be a disaster

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The Republican establishment is now backing Marco Rubio to the hilt against Donald Trump and Ted Cruz. I actually saw Rubio speak in Las Vegas the day before Trump and I could not believe how weak and ineffectual he came across. The words were all right, but the lack of conviction was palpable. No one came away fired up about his prospects, unlike my experience when I had listened to Rand Paul (the year before) or Donald Trump. Hillary will eat Rubio for lunch.

But what makes Rubio likely poison is his lack of creds on border protection. This was published just two months ago, in December, The Ugly Truth About Marco Rubio And His Gang-of-Eight Amnesty Bill and represents a very strong attitude among Republicans:

Rubio was a Jeb Bush acolyte who embraced the Tea Party and ran for senator in Florida against Charlie Crist. Crist was the popular sitting governor in the state and Rubio was thought to be a huge underdog. However, the grassroots embraced Rubio. Just to give you an example, very early on I organized a coalition that endorsed Rubio and encouraged people not to give money to the NRSC over its endorsement of Crist. I even called for NRSC chairman John Cornyn to RESIGN over his decision to get involved in the race on Crist’s behalf.

Back then, Rubio was talking very tough on immigration by necessity. Although Rubio is significantly more conservative than Crist, the conservative base would have never rallied to his side if he had supported amnesty; he would have lost in a landslide. In other words, Rubio’s anti-amnesty position was one of the central promises of his campaign. In fact, Rubio slammed Charlie Crist for being pro-amnesty and very specifically said he opposed giving illegal aliens citizenship. Back then, Marco Rubio sounded like Jeff Sessions on immigration. . . .

Unfortunately, even though Marco Rubio is only in the Senate today because he claimed to be in favor of securing the border and stopping amnesty, his position shifted 180 degrees and he became the front man for the Gang-of-Eight amnesty bill. . . .

Getting beyond the Gang-of-Eight bill, as late as June of this year, Marco Rubio was openly saying that he wanted to make illegal aliens citizens. However, today he tries to muddy the waters about the subject by merely saying he thinks illegal aliens should eventually be able to get green cards. Of course, people who have green cards are allowed to apply for citizenship; so it’s the same difference over the long haul.

I don’t think Rubio can win – he is no JFK – but really what difference would it make if he did. As noted in the article:

If Rubio’s lying, it doesn’t really make much of a difference over the long haul whether you elect him or Hillary because his immigration policies would permanently cement liberals in power without securing the border or doing anything of significance to stop illegal immigration.

If Marco Rubio becomes the President of the United States, the future of our republic depends on Rubio telling the truth this time after he already lied about the same thing to people who walked over broken glass to get him elected.

So now, are you ready to walk over broken glass to get Marco Rubio elected? Choose wisely because if Rubio becomes President and he’s lying about immigration again, it will be the end of the road for conservatism in America.

All you need to know is that Rubio is the choice of the Republican establishment who have been trying to get amnesty passed over the massed opposition of the people who actually vote for Republicans. Rubio would be a disaster as president but why worry? He would anyway almost certainly lose to Hillary if he became the nominee. It is either Trump or Cruz. Rubio is no answer, which is why the media is now doing everything it can to help him along.

MORE ALONG THE SAME LINES: This time from Phyllis Schlafly, as iconic a conservative as there is to be found anywhere: Schlafly unloads on Rubio: ‘He betrayed us all’ with the sub-head, “Conservative icon calls media favorite ‘lackey for the establishment'”. She writes:

“When Marco Rubio ran for the Senate in Florida, I think I was the first one to endorse him,” said Phyllis Schlafly. “I made a trip down to Florida in 2009 just for the purpose of helping him.”

But Schlafly, a legendary conservative activist, author and WND columnist, now says she is bitterly disappointed by Rubio’s record.

“Once he got elected, he betrayed us all,” she told WND. “He said he was against amnesty and against the establishment. And once he got in, right away, he became an agent of the establishment. And now, of course, he’s big for amnesty and letting all the illegal immigrants in. He betrayed us a number of times on that issue.”

Schlafly said she was startled at the magnitude of Rubio’s “betrayal” on amnesty.

“It was so public,” she said.

“He’s a lackey for the establishment now,” she said. “There’s no question they’re picking up as Plan B – or maybe Plan C in this election cycle, or whatever we’re on now – but he certainly is an establishment agent.”

You do have to ask why this doesn’t happen in Western Europe

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Russians will not in future describe this incident as The Murmansk Riots:

A group of 51 refugees were brutally assaulted outside a night club in Murmansk, Russia, after they groped and molested women at a night club Saturday.

The refugees had previously been ordered to leave Norway for “bad behavior” and tried their luck in Russia. What they didn’t realize when they went out clubbing in Murmansk is that Russians have less tolerance when it comes to sexual assault on local women than other European countries.

The refugees allegedly groped and harassed women in a similar manner as the assaults in Cologne on New Year’s Eve. A group of male Russian took them aside to “educate” them that “Cologne is 2,500 kilometers south of here.”

The refugees tried to flee but were quickly captured by the Russians. They then took them out to the street and gave them a beating they will remember. Police arrived to break up the fight but locals report that they threw a few punches at the refugees before arresting 33 of them. Eighteen refugees were in such bad condition they had to be take to the hospital.

Police decided to let the beatings slide and didn’t file a report. The only thing they could confirm was that there was “a mass brawl involving refugees.”

Certainly a different response from the one you find in Finland.

Europe is Finnished

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This is from Finland advising women on what to do if they are attacked in the street, as if it would be in broad daylight in the middle of the road. First at Tim Blair there was this:

And then Andrew Bolt added this from Sam I Am:

Both are equally idiotic although the second at least is not intended to be a genuine response to a serious problem. To bring in large numbers of people who do not speak the language, who have few marketable skills and are products of a different social culture seems to have been asking for trouble. What I do not get is why these governments are not being thrown from office and Tony Abbott brought in to run the country. A debilitating sentimentality seems to have replaced common sense across the Western world.

“We know what to do but we don’t know how to get re-elected after we do it”

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I used to say often during the great Peter Costello years that everyone would see what was happening but never understand why it worked. Public spending would come down – even in the midst of the Asian Financial Crisis – and the economy would simply go from success to success. Falling unemployment and falling taxes just followed year on year. Not just a zero deficit but ZERO public debt. And on we would roll. Why it would work you cannot find in a single modern economics text (well, there is one). What you saw before your eyes was specifically ruled out by the economic theory everyone, including everyone at Treasury, is taught. Peter Costello did what he did in the face of Treasury opposition and set a standard for performance that no one is ever again likely to match.

So we have this from the paper today: on the Government trying to think through what to do on the economy.

As Coalition MPs speak out against a GST increase, Malcolm Turnbull and Scott Morrison are examining other ways to pay for an ambitious agenda centred on tax cuts designed to encourage workers and lift economic growth. . . .

“The only realistic option for very significant income tax cuts is by changing the tax mix, and that is why a number of people have advocated increasing the GST for the purpose,” Mr Turnbull told parliament.

The strategy is to increase the goods and services tax to pay for a fall in personal tax. The Peter Costello option, of cuts to spending, is off the table, not even being considered. How this change in the tax mix would create growth seems incomprehensible to me, since no matter how you slice it, no cuts to public spending are involved so no additional space for the private sector is opened up. But there was also this I found quite interesting.

The Prime Minister insisted yesterday that he had not made up his mind on a GST increase”.

Is this to be a captain’s pick? Is it not a cabinet decision? Are we to understand that an increase in the GST rate is up to Malcolm alone and the rest must merely fall into line?

I was given a great quote yesterday apparently from some European Prime Minister:

“We know what to do but we don’t know how to get re-elected after we do it.”

The problem here is I don’t think these guys even know what they need to do. If they think raising the GST is the answer, they have lost the plot.