From today’s news, via Instapundit: Scientists create incredible ice cream that won’t melt. Guess who thought of it first?
A man of ideas ahead of his time
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Author Archives: lawofmarkets
And then there’s that other leaked transcript
MT’s phenomenal lack of political judgement and wholly misplaced arrogant self-confidence is nicely displayed in the contrast with the other leaked transcript, where Donald Trump is speaking with the president of Mexico, Peña Nieto. This is from Ann Althouse, no friend of Trump, who asks Why is there so little talk about the leaked transcripts of Trump’s phone conversations with the leaders of Mexico and Australia? Her answer is that it’s because both transcripts show PDT in a very good light. If you go to the transcript at the link – highly recommended – you will see Trump has three things on his mind: who will be seen to pay for the wall, trying to find some means to stop the flow of drugs and criminal gangs coming across the border, and international trade between the two countries. Both he and the Mexican president think through and negotiate about what to do and how to do it. Here’s her conclusion:
Now, what if anything is there in all of that to use against Trump? Really, the only thing is that he cares about his personal political success and doesn’t mind referring to it directly, even when the other guy insists that it’s all only about the public good. There’s nothing in there about Trump perhaps not really wanting to build a physical wall. He seems dedicated to that. You can’t see him conceding that Mexico won’t pay for the wall. What you see is some complicated, political structuring of a way to get the wall paid for that will probably satisfy the people who heard that promise and wanted it kept. But what can his antagonists grab onto? They can’t very well oppose crushing the drug gangs or better trade deals. So it’s no wonder they went big with Oh! He insulted New Hampshire! And that’s it for the transcripts. Don’t encourage people to actually read them. They might think Trump did just fine.
The notion that PDT is out of his depth and his agenda is anything other than to make the US a better place – while in the meantime saving Western Civilisation from itself – you should read Ann’s column. It really is a revelation. A master class in international relations.
AS A BONUS TRUMP’S PLAYBOY INTERVIEW: WYSIWYG as they used to say. From the intro:
In 1990, Donald Trump sat alone preparing for the below interview with Playboy magazine. There was no team of advisors shaping the future of what they believed would be the next president of the United States of America. He hadn’t slept in 48 hours. At 6:00 AM, perched high in the bronze coated jewel of his empire, Trump Tower, he was bent over a mammoth Brazilian-rosewood desk, scrutinizing spreadsheets. No insomnia, no gnawing worries.
I’m going to have to find a better class of fish wrap
There I was wrapping the fish when this column by Greg Sheridan caught my eye: All credit to Turnbull for trying to seal deal with a troubled Trump. I gave you my view a couple of days ago but this is surreal. So let me take you to the end of the DT-MT transcript:
MT: You can certainly say that it was not a deal that you would have done, but you are going to stick with it.
DT: I have no choice to say that about it. Malcolm, I am going to say that I have no choice but to honour my predecessor’s deal. I think it is a horrible deal, a disgusting deal that I would have never made. It is an embarrassment to the United States of America and you can say it just the way I said it. I will say it just that way. As far as I am concerned that is enough Malcolm. I have had it. I have been making these calls all day and this is the most unpleasant call all day. Putin was a pleasant call. This is ridiculous.
So what does Sheridan say about the significance of this first-ever phone call between the PM and the new president:
A sensible prime minister goes into a conversation with a US president with two objectives in mind: to build a relationship and to secure one or more specific outcomes.
The fact of the matter is that the Australian-American alliance is crucial to both countries. But if you think MT came away with anything other than the most comprehensive disdain from PDT you are as out of the picture as Greg Sheridan himself seems to be.
Terrorists 1 Australia 0
This is the single most Islamophopbic event in Australian history. And it’s equally anti-semitic which is really saying something. Not to mention disgusting and cowardly as well. This is the story: Bondi synagogue ban over terrorism risk leaves Jewish community shocked and furious. And before I get into the detail, let me say that I think such an occurrence is wildly improbable, on the level of a gas main explosion or being hit by a falling rock.
A LOCAL council has banned the construction of a synagogue in Bondi because it could be a terrorist target, in a shock move that religious leaders say has caved in to Islamic extremism and created a dangerous precedent.
The decision, which has rocked the longstanding Jewish community in the iconic suburb, was upheld in court this week as the nation reeled from the alleged airline terror threat and debate raged over increased security measures at airports and other public places.
The Land and Environment Court backed the decision by Waverley Council to prohibit the construction of the synagogue in Wellington St, Bondi — just a few hundred metres from Australia’s most famous beach — because it was too much of a security risk for users and local residents.
The people who made this decision are repulsive scum. If the Jews who attend this synagogue aren’t afraid who are they to be fearful on their behalf. ISIS blows up churches, and Buddhist statues too. If we are going to worry about that, should we also stop airplanes from flying, people going to sporting events or allowing pedestrians to wander through the Bourke Street Mall. Here is their “evidence”, bizarre as it no doubt is:
Its evidence, as summarised by the court decision, was:
“The PTRA concludes nothing more than stating:
• western countries face a security threat, currently primarily from ISIS;
• the threat level in Australia is “probable”;
• Jewish communities across the world are no stranger to the threat of violence and as such will generally take security measures into account when planning, constructing or renovating buildings;
• the CITED design considers “potential possible threats” that are relevant to Australia; and
• the design measures focus on the persons inside the buildings only“The PTRA does not raise concerns as to the safety and security of future particularly users of the synagogue, nearby residents, motorists; or pedestrians in Wellington Street.”
Australia is rapidly moving from a home of freedom and tolerance to a slavish craven stupidity as it appeases radical Islam in every opportunity it gets. You know that bit about “first they came for the Jews”? If this is what the members of Waverley Council think of our Muslim neighbours, there may yet be a role for the Human Rights Commission after all.
Falling real wages and the stimulus
If you are an economist who looks at things from the demand side, then this is a puzzle:
Most Australians have not had a pay rise in real terms in years in the face of an assault on wages which has policy makers, unions and business groups worried. The typical Australian family takes home less today than it did in 2009, according to the latest Household Income and Labour Dynamics survey released this week. Just on Friday the Reserve Bank cut its economic growth forecasts by half a percentage point for the rest of this year after confirming wages remain at their lowest share of total income in half a century.
I won’t dwell on the obvious – at least the obvious to those who look at these matters from the supply side – but the starting date for this bit of analysis should give you a clue. The GFC was the start but the stimulus was the actual cause. A stimulus that does not add to value-adding output will pull an economy backwards and ultimately slow real wages growth. What are we to do with this?
The mining boom and Rudd/Gillard government’s multi-billion-dollar stimulus spending may have helped shield the economy from the worst of the GFC.
But since 2012 and 2013, Australian workers have felt stuck in a holding pattern of slow wages growth. Wages for the whole economy increased by 1.9 per cent in the year to March just in line with inflation.
No idea of cause and effect. Come along on Tuesday for a different way of looking at these things. No classical economist would be surprised.
He says and does in private what he says and does in public
You may be sure the Administrative State is hunting through everything they can get their hands on – which includes pretty well everything that exists – to find something, anything, that will discredit Donald Trump. And the most remarkable result is that they cannot find a thing. If this is the best they can come up with, the transcript of PDT’s conversation with MT on exchanging the boat persons on Manus for some Central Americans the US won’t admit, they truly have nothing at all. This is from Andrew Bolt: TRANSCRIPT SHOCK: TURNBULL CONSPIRED WITH TRUMP ON REFUGEE CON. First Trump:
TRUMP: I am taking 2,000 people from Australia who are in prison and the day before I signed an Executive Order saying that we are not taking anybody in. We are not taking anybody in, those days are over…
The rest of the transcript is MT saying Trump doesn’t actually have to take any of them; he only has to agree to see if any of those in detention will pass the extreme vetting being imposed. This is certainly discrediting to Malcolm but not to Trump. For those who support Trump, he says and does in private what he says he will do in public. And now we have the American left revealing itself over Trump wishing to bring in only those migrants who can speak English and will be economically self-supporting. You would think that would at least be acceptable on the left, but if you think that, you don’t know the left.
What’s wrong with modern economics seminar on Tuesday
This is the notice that has just been sent out from the School about a seminar I am about to present on Tuesday. You are welcome to come along but please first email Sveta to say you are intending to come: sveta.angelopoulos@rmit.edu.au
Brown Bag Seminar – Associate Professor Steve Kates
You are warmly invited to attend the School of EFM Brown Bag Seminar Series presentation by Associate Professor Steve Kates
A Classical Critique of Modern Economic Theory
This may be the nicest thing that has ever been said about me in print and it has just been said in a major economic journal:
Steven Kates is probably the best-known present-day proponent of the old “classical” macroeconomics of Jean-Baptiste Say, James Mill, David Ricardo, and John Stuart Mill. He affirms his belief in Say’s Law—a theorem that was “accepted by every economist for more than a hundred years up until 1936, [but has] apparently [become] an impassable obstacle in the modern world,” thus blocking present-day theorists’ access to earlier understanding (Kates 2014, p. 9). Kates has “written books and papers, monographs and articles” (ibid.) in a long-sustained effort to persuade the economics profession to see its way around that “obstacle.” Most recently, in this journal (“Mill’s Fourth Proposition on Capital: A Paradox Explained” [Kates 2015]), he has focused on Mill’s puzzling “fourth fundamental proposition on capital.” The proposition states notoriously (in the modern reader’s view) that “demand for commodities is not demand for labour.” Kates evidently means to settle, once and for all, the status of that contentious proposition by providing an explanation and defence of it.
Kates makes much of the fact that economists writing after Mill—eminent theorists such as Alfred Marshall, Friedrich von Hayek, Allyn Young, and Samuel Hollander— cannot make sense of Mill’s fourth proposition.1 Their difficulty he attributes to a theoretical “discontinuity” separating their vision of the functioning of the economy from that of Mill and his contemporaries. There may indeed be a discontinuity, but that is not the point. The point is that Kates apparently does not even think of the possibility that modern theorists cannot make sense of Mill’s “paradoxical” proposition for the reason that its basic premise is no longer deemed acceptable: the fourth proposition is simply wrong.
With so many economic failures at every turn, who is to say who is right or wrong? Every one of the following is wrong if where you start is with classical theory which is what the presentation is about.
A national economy is driven from the demand side
Classical economists did not accept the existence of involuntary unemployment
Classical economists had no theory to explain recessions
Recessions can be caused by demand deficiency
Thinking of national saving as a flow of money makes sense
Lowering interest rates will increase economic growth
Unproductive public spending can make an economy grow
Profits are maximised where Marginal Revenue equals Marginal Cost
Supply and demand explains what businesses do and how markets work
You can discuss economics without discussing the role of the entrepreneur in detailVenue: 445 Swanston Street (Between A’Beckett and Franklin), Level 10 Room 44 & 45
Date: Tuesday 8 August
Time: 1.00 – 2.00 pm
The postmodern world in which we live
This is so accurate that it quite spooks me. I can only think that most of us feel so insulated from all possible harm that we think the bubble will surround us forever. Our descendants will know better, but at least they will have mobile phones even if we are returning to a theocratic civilisation of barons and serfs. As for the leaders of the warring theocracies that will be fighting it out for dominance, I will merely suggest they are unlikely to be anyone from a Judeo-Christian background.
The distractors are complaining about the distractions they have caused
This story is almost beyond parody coming from the media, The Wall Street Journal in this case: Donald Trump: as Washington churns, world gets more dangerous. Listen to this loon:
When folks here in Washington end a summer filled with White House hijinks and an epic but inconclusive healthcare debate, they will look up and discover something unsettling: The world has become a more dangerous place while everybody has been distracted.
That’s most obviously true in North Korea, where its rogue weapons program has leapt so far forward that the nation now has a missile with the range to reach much of the US Pyongyang’s capabilities are advancing so quickly that the Defense Intelligence Agency has had to ratchet forward, to as early as next year, its estimate of when it will have an intercontinental ballistic missile capable of carrying a nuclear warhead.
And etc. So let’s go to the comments at The Oz, from the top rated on down a bit with nothing left out.
The world is a more dangerous place than it was eight years ago primarily because of Obama, not Trump. Obama was a weak and indecisive leader who allowed all of America’s enemies to grow stronger.
You forgot to mention SSM in Australia, Gerald
But hey, we are getting (unaffordable) light rail in Canberra, (unaffordable) green energy in SA, (unaffordable) public service growth and increased debt in Qld and federally 99.9% of the population wont get a say on SSM. But hey, lets blame it all in Trump. Waaaaaaaaaaaaaaaaaaaait a minute!!! Better add Abbott in there too.
“The world has become a more dangerous place while everybody has been distracted.” Who is “everybody”? The media badly needs an education away from their “Latte buddies”.
I’m not really sure what this journalist is concerned about, doesn’t he realise same sex marriage will be passed “sooner then we think?” Our politicians understand the importance of freeing us from cultural restraints, so never mind about North Korea/china/Russia/Iran. None of them are progressive enough to have ssm.
The most urgent problem is to resolve disputes with Russia. With the US and Russia on the same side, all the other problems can be solved. With the US and Russia throwing mud at each other, all the other problems will just keep accumulating until something goes bang. Russia under the Putin government is far from perfect but anyone who expects perfect partners needs to stay away from international politics.
The main danger is not in Washington but in New York in the fantasy mind of Gerald Seib at the Wall Street Journal who wrote this tosh.
The interesting thing is how little Trump pays attention to these flea bites and tries to get on with the main game.
FME3
This is from the Elgar mailout for Free Market Economics, Third Edition, An Introduction for the General Reader, just released.
Free Market Economics, Third Edition
An Introduction for the General Reader
If you are genuinely interested in what is wrong with modern economics, this is where you can find out. If you would like to understand the flaws in Keynesian macro, this is the book you must read. If you are interested in marginal analysis properly explained, you again need to read this book. Based on the classical principles of John Stuart Mill, it is what is missing today; a text based on explaining how an economy works from a supply-side perspective.
In this thoroughly updated third edition of Free Market Economics, Steven Kates assesses economic principles based on classical economic theory. Rejecting mainstream Keynesian and neoclassical approaches even though they are thoroughly covered in the text, Kates instead looks at economics from the perspective of an entrepreneur making decisions in a world where the future is unknown, innovation is a continuous process and the future is being created before it can be understood.
Key Features include:
• analysis derived from the theories of pre-Keynesian classical economists, as this is the only source available today that explains the classical pre-Keynesian theory of the business cycle
• a focus on the entrepreneur as the driving force in economic activity rather than on anonymous ‘forces’ as found in most economic theory today
• introduces a powerful though simplified model to explain the difference between modern theory of recession and classical theory of the business cycle
• great emphasis is placed on the consequences of decision making under uncertainty
• offers an introductory understanding, accessible to the non-specialist reader.
The aim of this book is to redirect the attention of economists and policy makers towards the economic theories that prevailed in earlier times. Their problems were little different from ours but their way of understanding the operation of an economy and dealing with those problems was completely different.
Free Market Economics, Third Edition will help students and general readers understand classical economic theory, written by someone who believes that this now-discarded approach to economic thought was superior to what is found in most of our textbooks today.
Law of Markets 