Category Archives: Economic theory and policy

Speaking of the coronavirus

Posted on by
Reply

Selected comments from the I stand with Gigi thread

In Australia, influenza on average causes 1,500 to 3,000 deaths, about 18,000 hospitalisations and 300,000 GP consultations each year. Ro is around 0.1 to 0.2. Ro for Wuhan flu anywhere from 0.5 to 0.1 not a lot of difference.

Some more numbers. Italy has over 360,000 nurses and 240,000 doctors . As of end of March, 61 healthcare workers have died from Covid-19.

Let me give you a factual account, which is a definite marker on Gigi’s other side of the ledger: A few weeks ago, my brother in law passed very suddenly at the age of 63. Turns out it was a form of preventable heart failure. In the days leading up to this, he attempted to go to a local medical clinic who REFUSED him as they had closed their doors to new patients (he had only recently moved to the area). He was so concerned by media reports about the hospitals that he didn’t go to emergency where he WOULD have been treated successfully. Instead he died. Not of COVID, but of a preventable and treatable illness – which was denied him. He was the price that these politicians are prepared to pay for their handiwork. He is the cost on the other side of their ledger. He will be but one more name on the epitaph of this lunacy.

In Sweden, Will Voluntary Self-Isolation Work Better Than State-Enforced Lockdowns in the Long Run? Those who want to show how great Sweden is doing have produced charts comparing us to countries like Britain, Belgium, France, Spain, and Italy. Those who want to prove the opposite replace those countries with Norway, Denmark, and Finland, all of which have fewer deaths. If you want Sweden to look bad, compare it to the U.S. as a whole—120 deaths per million in Sweden vs. 94 in the U.S. according to Our World in Data’s April 16 numbers. If you want Sweden to look good, compare it to New York state, which is at a more similar stage to us in the virus’s spread—120 vs. 580. The truth is that Sweden is somewhere in the European middle when it comes to deaths per capita, which in itself is interesting. We are outliers in terms of policy, but not in terms of outcomes. There are also reasons to think that Sweden is doing better than these comparisons suggest. Many countries don’t count COVID-19 deaths outside of hospitals. When people die at home, in nursing homes, or in prisons, they don’t show up in the coronavirus death count. In the Stockholm region of Sweden, 42 percent of deaths took place in nursing homes for the elderly. In many countries, and some U.S. states, those deaths would not show up in the data. This has a major effect on where you are compared to other countries. According to Johns Hopkins University, Belgium has twice as many COVID-19 deaths per capita as the Netherlands. But in Belgium, almost half of those deaths are from nursing homes, while testing is more rare in Dutch nursing homes so fewer deaths there are attributed to the disease.

Health care workers have been stood down and people are not getting life saving surgery now. My mother is one of them. People are dying now and will be in future precisely because health care workers have been told to walk off the job. Bloody women and their core belief in government combined with hysteria, is a big part of the mess we are in. Judith, I ask you, why are you so happy for the other deaths to occur, in their thousands (and destroy the western world, knowing what will take it’s place), due to the draconian totalitarian jackboot of government, as long as they don’t die of Corona virus? You are proof an education is not a guarantee of intelligence, but in your case, what caused the lack of morality, if it isn’t hysteria?

Pretty soon there will no economy for economists to study Judith. This is already traversing back through supply chains. A recession on the scale of 1930 to 1935 will indeed lead to many deaths and ruined lives. As a respected economist, perhaps you would do some estimates and scenarios. Then we could compare the relative damage over 5 years say. We seem to already know that the infection and death rates are not as high as proposed by Imperial College. It looks like Italy and Spain are one end of the spectrum, Hong Kong and Taiwan the other. Sweden would be a control case precisely because there had been no lock down other than for at risk groups. Then select a few ‘average’ cases such as Germany and the UK, Mexico, and others. It’s likely that the weather has played a part, as someone said above. You’d also need to control for numbers of returning Chinese students and business people, certainly in Italy and Switzerland. That done, show the average infection and death rates grouped by weather, age profile, returning Chinese and date of lockdown. Thanks to Sweden we shall know the same figures where there is no lockdown. Similarly, there will be the second peak to take into account. We end up with average rates of infection and deaths by the filters set out above. Compare with deaths by economic slump.

Again, Judith is a classic example of the sex that never designed or fought for a civilisation, making decisions without understanding the true costs her idiotic hysteria will cause.

10% unemployment is a distressing turn of events. 15% is a bit terrifying. I think the lockdown has been too extensive for Australia and the National Cabinet and the media have terrorised people in their own homes and they don’t feel safe going out anymore. I think the real reason is that PM Morrison and the premiers can go to their respective next elections and say, without me 20,000 of you lot would have died so vote for me. Whether the 10% unemployment and misery with that makes people vote the other way, who knows right now.

Unfortunately our governments have delegated decision making to the chief medical officers and given them fall rein to wreak havoc. They went in without an exit plan and there is still isn’t one. Interestingly the slogans have morphed from “flattening the curve” to “no more lives lost”.

Judith, as an economist, I would have thought you of all people would know of the long-term damage a lockdown could do to the economy. Not to mention, the number of suicides now and into the future as a result could vastly outnumber Covid19 deaths.

I guess Judith must have missed the bit about hospitals being half empty and major CBD hospitals with Max 3 virus cases in their ICU. It is a hard balancing act I know but 6 new cases in Qld does not justify what is going on. I heard a caller to 2GB mention there had been 8 virus related suicides in Melbourne. I did read about one who had returned from overseas and was self isolating in hospital but did not say why suicided. No idea where he got the figure from but would guess the average age is much lower than virus deaths. I doubt Melbourne has even had 8 virus deaths. I heard on radio saying job keeper payments would go for 6 months. A week ago I heard Michaelia Cash, almost proudly, saying 800,000 businesses had applied for job seeker. Today I heard a figure of 500,000 mentioned. If they are businesses then there are obviously applying for more than one person. Where are the economists calculating the daily, weekly, monthly, 6 months of job seeker etc costs of what is happening to the economy. Whilst the Govt probably knew how many would be affected by the closure of the hospitality industry did they factor in what would happen when their actions scared off the visitors to retail shops. Look in an almost deserted Westfield shopping centre to see the impact of lost GST. Then how about an economist let us know how much of a budget hit the low petrol price and cars not on the road has caused. I guess it is easy who Gigi is but she is on the right track. If I recall Sally McManus was early on suggesting workers be paid 80% of their normal salaries whilst stood down. Unfortunately she was referring to private business and not civil servants many of whom are being fully paid not to work. How about Judith look into areas where the Government could make some savings in these times when they are being so generous with other people’s money.

As a boomer (tail end), I’m widowed, self-employed (so if I don’t work I don’t eat much), have a small amount of capital behind me, but nothing you’d get excited about, own my own very modest house and owe nobody anything (because we both had to access our superannuation early to pay for my husband’s care and costs and made sure we had no debts.) I’ve worked in private businesses; gave enough years of my life to the Army; gave a further bunch to high risk border patrol work; then the last decade of my working life to 12-hour day and night shifts in front-line state operations that actually facilitated the export of royalty-earning product. If you think I’m somehow spongeing off the rest of the economy, or stealing from younger generations, or withholding my “wealth” from the next generation or whatever your envious little soul thinks I’m doing, then F..k You! If you think you’re joking, then still F..k You! You’re a long way from funny.

“Only by acting collectively … will be be able to protect personal liberty”

Posted on by
Reply

This was a posting at the History of Economics discussion forum which I find both very revealing in the state of mind it displays but also in how he connects the reaction to the coronavirus with global warming. I intend to put up my own comment but thought I would see what the reaction of others here might be.

Of course, with the spread of the COVID virus, I have been thinking of the libertarian arguments of the constraints of government on liberty. But now the constraint on liberty is not from the government but from nature where one’s individual actions can harm others. I would assume that for a responsible libertarian, they would recognize their behavior affects the liberty (health) of another, and change their behavior. Besides having rights, liberty also means individual responsibility to protect the liberty of others from one’s actions.
But what if individuals don’t and add to the tragedy of the commons?

If one believes ecological economists, individual constraints are going to increase with global warming. It is only by acting collectively to control global warming that we will be able to protect personal liberty from the constraints that nature will force on us. The point I’m getting at is that besides demanding rights, individuals need to act responsibly. If not, then collective action needs to step in to protect the common good. The libertarian argument for me has only made sense if individuals besides demanding rights are also willing to respect and act to protect the rights of others. If not, you get too many tragedies of the commons.

I will only say this is to me a true example of the depths to which economic theory has fallen.

It seems like a modest proposal

Posted on by
1

I saw this letter to the editor the other day and have now come to agree with how important the efforts being made to protect us are. Social isolation must be absolute, no exceptions, and must last until the Corona Virus is completely eradicated, not just here but across the world. This was the letter which I found completely compelling.

My partner and I are around 70 but due to recent health issues and underlying conditions we are in a very high risk category, to the extent that I am not prepared to risk experimenting with life as usual. Can I say that neither of us is a vegetable in a nursing home. We have lives and plans, are active with our friends, we travel and have children and grandchildren. We have many years to enjoy.

A look around the world highlights that Australia is better off than some mainly because of the tough measures we have taken, not in spite of them. To suggest the extent of the battle is to isolate the vulnerable while the rest of you go about your business is short-sighted. As a member of the vulnerable let me say I’m not prepared to take one for the team.

He describes my own situation perfectly and what else is there to say? We vulnerable members of the community are not prepared to accept such selfishness from the rest of you, from all of those younger people who wish to get on with their lives, earn an income, save for the future, pay off their mortgages and continue meeting up with their friends and relations. Do they not understand that this will put people such as myself at much greater risk? Already so many American having died from the Corona Virus. If present trends continue, this number might well rise to well over one million, but at least it won’t be the two million some have predicted.

With GDP in the US around $20 trillion, the loss of 10 percent of our economic growth for the coming year is a mere $2 trillion, although the actual number may, of course, be even higher. But sticking with the $2 trillion figure, the cost of preserving that additional 100,000 from an early death – we are up to around 25,000 at the moment – will come at a cost of only $20 million dollars for each life saved.

Of course, even to think of money saved at a time like this is an ethical abomination.

The country has made a moral commitment to preserve lives at all cost. With my own life in such danger, along with the lives of all of our friends who are in that same boat, it would be an eternal disgrace for the country to choose to abandon us to the possibility of an early demise, or if not exactly early, to a demise sooner than might otherwise have occurred.

Good for Dr Fausi and Dr Birx who have shown such leadership in ensuring that every life is seen as precious.

And just to be sure we are all on the same page, this is my own version of Swift’s A Modest Proposal which also wasn’t meant to be taken literally. The sad part of the times in which we live is that this even needs to be said. But what is not satirical are the numbers which are very real indeed.

Making the economy grow again

Posted on by
Reply

Jeffrey Tucker is the editor in chief at the American Institute for Economic Research where the article discussed below has been posted. A bit, actually quite a bit, more charitable about the New York Times than I would ever be, but let that go. He is discussing the miracle of the market economy that goes along without any serious appreciation of its role or any understanding of how it works. “Socialism” as it exists today is based on the market economy. He is also talking about role of the mainstream media as “we watch freedom going down the drain”.

I have meshed my classical understanding of the operation of an economy – what it means to be an actual liberal – with what needs to be done to get our economies moving forward in this post of mine at the AIER: This Economy Can be Revived. This comes at an opportune time: Trump to announce council for “opening our country” next week. This is how my article begins:

In my previous article, “A Classical Economic Response to the Coronavirus Recession,” my aim was to discuss why modern macroeconomics cannot explain the nature of an economy, and more importantly cannot provide a sound analytical basis for policy. If we follow modern macro in dealing with the coronavirus, we will leave our economies mired in slow growth, higher unemployment and even deeper in debt.

That, however, is not the full story, but you will have to read right to the end to find out how things could turn out well if we understand what needs to be done.

Here we are in the midst of a new kind of policy, something never experienced anywhere ever before, where the deliberate aim of government policy has been to slow the rate of growth, raise the level of unemployment, and rack up much higher levels of debt.

We are on the breathtaking edge of a global consensus on entering a socialist compact to manage the economy from the centre, or at least, for the time being from each nation’s own economic centre. Global government perhaps is now on the horizon if things continue as they are. It is a truly terrifying prospect, made all the worse because of how complacently it has all been accepted.

The ease with which all this has come about is in part because of the way the role of the dead hand of government has already been meshed into the prevailing theory of the economy as a whole, which is a direct descendant of the Keynesian theory brought to life with the publication of Keynes’s General Theory in 1936.

I will state the problem in a single sentence and then elaborate from there. Modern macroeconomic theory looks only at the money value of what is being bought and sold at the present time and virtually never looks at the economy as a whole in structural terms nor over the longer term.

If you are interested in the full explanation of the way our economies are structured as a pathway towards understanding how we can revive our economies from here, just go to the link.

And in getting an upturn in place, there should be no doubt that many have been very badly damaged by this programmed downturn and many may never recover from the losses they have sustained. But if we go about this in the right way, in about a year our economies will be trundling along as if nothing had ever happened. At the very height of what must not be done is to start from the premise that was is needed now is a stimulus of any kind.

I might add that the picture below is the one that accompanies my article and seems quite a appropriate for both Easter, and the theme of freedom which comes with Passover, which we are also celebrating at the moment. My best wishes for the holiday to you all in the hope that our present political disease will soon be passed and that our freedoms will be taken back with this knowledge of how they can be stolen almost in a fit of inattention.

Revive the economy

People on the right understand economics better than people on the left

Posted on by
Reply

The science is settled. This is the article, Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans, for which this is the abstract.

ABSTRACT We present results of a December 2008 Zogby International nationwide survey of American adults, with 4,835 respondents. We gauge economic enlightenment based on responses to eight economic questions. A number of controversial interpretive issues attend our measure, including: (1) our designation of enlightened answers; (2) an asymmetry in sometimes challenging leftist mentalities without ever specifically challenging conservative and libertarian mentalities; (3) our simple 8-question test is merely a baseline and does not gauge the heights of economic enlightenment; and (4) a concern about response bias—namely, that less intelligent people would be less likely to participate in the survey. Even with the caveats in mind, however, the results are important. They indicate that, for people inclined to take such a survey, basic economic enlightenment is not correlated with going to college. We also show economic enlightenment by ideological groups—the “conservatives” and “libertarians” do significantly better than the “liberals,” “progressives,” and “moderates”—and we show that the finding about education holds up when we look within each ideological group (with perhaps the exception of the “conservative” group). We discuss possible explanations for the finding that economic enlightenment is not correlated with going to college. We also report simple findings for the relation between economic enlightenment and each of the following variables: 2008 presidential vote, party affiliation, voting participation, race or ethnic group, urban vs. rural, religious affiliation, religious participation, union membership, marital status, membership in armed forces, NASCAR fandom, membership in the “investor class,” patronage at Wal-Mart, household income, and gender. We have opted to keep the reporting direct and simple—we have not applied any weights to the data. We do not report any regression results. We make the data available online as a linked appendix and invite others to explore the data for findings beyond those reported here.

This does not relate to my students – “Possible Explanations for the Lack of Correlation between Economic Enlightenment and Going to College – but it is easy enough to understand given what you find in a standard introductory text. This, from the conclusion, seems exactly right.

We advise students and parents to beware of economics-principles courses that either stress blackboard models divorced from judging important policy positions, or that are hostile to classical liberal thinking and values. Students and parents should understand that while academic economists are, relative to other faculty, more attuned to economic enlightened, a substantial majority vote Democratic and maintain an ideological character in line with that of most of the humanities and social-science faculty. In selecting schools and courses, students and parents need to drill down to the individual professor, and investigate his or her webpage and course syllabi. [My bolding]

The economics of wish-fulfilment will ruin any understanding of how an economy works. You can only become a top economic advisor if you can find a major politician to give you a job. That’s where the problem begins, but there is more to it. It is in some sense because no one can rise in an economic institution unless they preach Keynesian macro and marginal analysis in micro, both of which will prevent anyone from making sense of how an economy actually works.

Article found referenced here.

Containing viral inflation is a process that must begin right now

Posted on by
Reply

I am about to quote John Maynard Keynes with approval, from his 1919 Economic Consequences of the Peace.

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

I do not actually believe that Keynes ever resiled from that belief which is why towards the end of his life he is reported to have said, “I am not a Keynesian.” But whether he was or he wasn’t, it now seems everyone else today still is. The biggest mystery to me till now has been why these policy makers in Treasuries across the world have not tried to finance the huge increases in public deficits by cutting the public sector wages bill, at least for the “non-essential” workforce. It finally occurred to me today why governments have left public sector wages alone.

With their “stimulus” packages, immense gaping budgetary holes have been created through stopping dead a large part of the economy, in this way losing immense tax revenues while funding tremendous increases in their outlays. I believe they have left public sector wages alone because they believe it is important to maintain demand as the economy sinks into recession. They seem to believe their zero-productivity workforce can maintain the level of aggregate demand, while employees within the actually productive parts of the economy – the ones employed by the private sector – have lost their jobs and their incomes with a massive fall in their ability to spend as much as they previously did.

Naturally, those same public servants, the ones who are advising our governments, believe how important it is that they keep receiving their full salaries even though their own decisions have mutilated the livelihoods of millions across the world, both among business owners and their employees. It is disgusting and maddening. Were it not for the absolute junk theories their heads are filled with, this would be as obvious as the day is long.

Our governments have now done two things simultaneously. They have cut production (Q) while pouring money (M) out into the economy. So let me take you to a bit of ancient economics that has never been refuted since basically it is an identity, absolutely true because it cannot be otherwise. This is known as the Quantity Theory of Money. As an equation, it states that P = Mv/Q – the more rapid the amount of money in circulation (M) especially if the increase in the stock of money is coupled with a fall in output (Q) the more rapid the rate of inflation will be. There is also “v” which is an indication of how fast each unit of money passes from hand to hand, “v” standing for “velocity of circulation”. Which leads to this conclusion that no economist denies:

The price level increases with every increase in the amount of money in an economy relative to the amount of output being produced and bought. The faster the money supply grows while output is being cut back, the greater the rate of inflation must be.

And as a matter of policy, that is just exactly what we are doing. We are increasing the amount of money being spent while reducing the amount of goods and services available to buy. The outcome will be an inevitable large increase in the rate of inflation.

There is absolutely no reason, given the potential for runaway inflation following the policies we are now about to endure, to leave public sector wage rates untouched. They must be reduced as a matter of both equity and economic necessity.

The correct policy given our circumstances, a policy which I fully endorsed from the start, was to fill in the income losses for those who lose their jobs, but only for those who lost their jobs, so that they could continue to buy what they need. This is not a stimulus. We are obviously not trying to grow the economy. This is just to make sure people are still able to buy what they need and to pay their bills. The same necessity was to reduce business costs wherever possible. A business without revenue because the government has shut them down and deprived them of their customer base, should have its tax bills deferred along with assistance provided to cover their outgoing costs while they are in shut-down mode, such as taxes, interest payments and rent.

To hammer private sector employees while leaving public service wages untouched is an outrage. It defies explanation for governments to leave untouched the public service wages bill while forcing private sector employees out of their jobs. The only equitable policy is for every one of us to share the sacrifice. It is beyond explanation for the government to hammer private sector employees and leave the public sector earning the incomes they continue to earn.

There is then the inflation that is to come. This inflation will only be contained only if it is understood by one and all right now that when this emergency is over that interest rates will have to rise to stop inflation from rising by soaking up the excess liquidity that has now been unleashed. Unless, of course, the aim really is to destroy the capitalist system.

May you live in idiotic times

Posted on by
Reply

You want socialism we’ll give you socialism. This is the front page of The Oz this morning: DEPRESSION BUSTER with the headline all in caps just as you see. We are going to keep handing out money to people for not working and let them stay at home. Maybe this is what people really have always wanted. I wrote my own post last night but didn’t put it up and I, too, used caps, just like this. Here is my take on where we’re off to from last night. It was addressed to the Prime Minister.

WORSE THAN WHITLAM

If I hadn’t just listened to Steve Conroy present the Labor side of things on Andrew Bolt, I would not have known that they are even more absurd than you and your national cabinet. But I don’t really blame you since you are an economic simpleton. I blame those buffoons in Treasury who are giving you and your Treasurer this advice. They are your enemies. They are incompetent. Don’t you know that?

The important part of what first needed to happen was to ensure that no one runs out of purchasing power, which means that no one runs out of MONEY. This was not supposed to be an endless supply of cash unbacked by any productive activities. It was only supposed to be a stop-gap of a week or two and only for those who have been caught short of cash to spend.

If you think this kind of funding of unproductive activity can go on for even a couple of months, never mind six, you will go down in history as WORSE THAN WHITLAM.

I understand that such considerations have gone out of fashion, and are never mentioned in an economics text, but have you ever heard of this thing called the private sector? Do you understand the conception surrounding the notion of value added? If you do not do as much as possible to ensure that incomes are related to productivity, you are guaranteed to run the Australian economy off the rails. You will make the Liberal Party poison for a generation if not longer.

I am perfectly aware that governments skim billions that have been earned through actual value-adding work through taxation and other forms of revenue acquisition. I am just as aware that these tens of billions you gather in are spent on producing assets that never have a positive return on funds invested. The NBN, the train lines in Melbourne or the streetcars in Sydney are a sinkhole of loss that must be covered by actual value-adding projects in the private sector. The ratio of wages paid to value produced in the public sector is a massive negative. You guys have never managed a payroll in your lives which shows in almost every economic decision you make.

But to take these stupidities and extend them even farther is gross negligence. To fund the economy’s wages bill while you have shut down productive activity all across the continent is nuts.

We have eighteen dead from the Corona Virus. People are getting sick, and anyone of us, particularly our older citizens, might end up with this disease and some may die. But to crash and burn an economy because there might eventually be a few thousand of us caught up in this medical firestorm is so bizarrely disproportionate as to defy belief. Have you no sense?

Say you are doing everything you can to overcome this virus, and then do everything you can. There are cures coming, vaccines being developed to prevent its spread, forms of isolation and treatment on the way that will limit how much further the disease continues. Common sense ought to be the prime prerequisite for a Prime Minister. That is why we elected you, to make difficult decisions. People will die from the Corona Virus, that is a certainty. They will also die from incompetent economic decisions.

You must open the economy up as much as possible and do it as soon as possible. Everyone now knows they need to be careful of what they do. Everyone is aware of what they must keep an eye out for. But if you do not let us get back to work, you may ultimately be held responsible for the greatest economic disaster in Australian history.

Anyway, we shall see. We have become the stationary state that John Stuart Mill used to discuss and even looked forward to. All that for a subsequent post.

Every government’s greatest wish: to spend like a drunken sailor

Posted on by
Reply

Next to my own article at Quadrant Online is a new one by Peter Smith, one of the few economists I think of as worth the time to read: This Can’t Go On Much Longer. His point is that you can print money from now until forever, but eventually you will cause enormous damage which will remain unrecognised until the after the deluge has struck.

I will go to economics and ask where is the money coming from and what are the implications of governments spending so much of it. I note that some commentators have referred to Modern Monetary Theory for guidance (watch for lefties coming out of the woodwork to promote it). Consult my article in the last July/August issue of Quadrant if you want to know about this theory; but, sufficient to say, it sheds more obscuration than it does light.

Governments are giving vast amounts of money to businesses and individuals to try and make up for their loss of revenue and income. Is it a good policy? Yes, it is. Governments have shut economies down and, thus, there is no option. Otherwise, people would starve and businesses across the board would collapse. At the same time, the character of giving matters. Some is sensible; some wasteful.

A formula being used in the US, and maybe elsewhere, seems by far the most sensible. Small and medium sized businesses are being given loans to cover their costs, including their wage costs, which will be forgiven if they keep all their employees on. Support to large businesses is also vital to ensure they do not collapse; and support to individuals thrown out of work.

Even on my own high street, there are all kinds of businesses in great difficulty, some even shutting down, never to return again, in many instances because landlords are not reducing their rents. Others will return, but many others won’t. Back luck to them, but also bad luck to you since your personal wealth is being depleted by these typical actions of governments, actions costless to them but not to us. This is how Peter ends:

So, what am I saying? I am saying that the normal implications of government overspending do not apply. This situation is unique. Think of it as an enforced sojourn, albeit on hard rations in solitary confinement. Most everything shuts, we sit on our hands, and the government gives those made destitute free money to pay bills and buy food and medicines. When the sojourn is over, we will have suffered a sharp loss of production but can make up for that over a period of time.

The trick is to ensure that business collapses are kept to a minimum; that most are in shape to start up again, and that individuals are kept whole. Every day will make it harder for some businesses and people to bounce back. This means the sojourn can’t go on much longer; only a few more weeks at most. Trump knows this, and could provide a lead for other countries, including Australia; if the hate-filled American media don’t deter him from acting as speedily as we need. And need it we do. Morrison, in the announcement I referred to, mentioned restrictions being in place for six months.

It’s every government’s greatest wish to throw around money at everyone and everything. Just think of Kevin Rudd and Barack Obama in the wake of the GFC. It then took near on a decade to return to where things had been in the US, and that only because of Donald Trump. Here we never got back to where we were in 2009. If you think this will be different, well good luck to you. We are being systematically robbed, and it will continue right up until the day the community at large finally says they have had enough.

EN PASSANT: From the comments thread at QoL:

Peter,

This is the economic destruction of the West (and Australia) that the globalists, climate Cultists, Fabians, Totalitarians (of every ilk) and Socialists have dreamed about since forever. Greta can now go back to skool as the capitalist world has deliberately suicided at the behest of our politicians.

It appears to be relatively easy to prophesise our future, so here are some of mine in this Orwellian Brave New World:
a. The Chinese are already buying stocks in key American (and Australian) companies.
b. They are offering big loans and support to those supporting their Belt & road initiative – like Victoria. All you have to do is bow and kneel. How easy is it to just bow and scrape in order to be saved?
c. The ‘Oz stimulus package’ will turn out to be a massive ‘hot shot’ heroin overdose that will economically ruin Oz.
d. The Oz $$ will become valueless
e. The Chinese will call in their markers and will take key assets as payment (Ports, Communications, Infrastructure, and whatever else they want that destroys our sovereignty). The Greens, the Left and the ABC will cheer this on as a ‘good thing’.
f. Emergency ‘Social Control’ measures will become more draconian and possibly permanent
g. Pollie pensions and benefits will NOT be cut …

Welcome to the future …

As usual, my solution requires ‘risk-taking’, which my children condemn as cavalier. When their arguments have no effect on me, they then (justifiably) ask, ‘But what about Mum?”
Anyway, I think that applying a harsh Triage approach has statistical merit and would contribute to achieving the prime practical objective of decreasing the ‘Rate of Increase in Infection’ through the period of Peak Hospitalisation Demand. This would maximise the number remaining at work and minimise the permanent damage to business and industry.

However, as we import so much from China our industries will probably collapse anyway as materials are already in short supply. The owner-builder next door has stopped as he cannot get – wait for it – roofing screws.We have destroyed the Australia I knew because 1,800 people are known to be infected and 16 have died.

The look of self-satisfaction on ScoMo’s face at the destruction he and Parliament have wrought on Oz beggars belief. Why not add a super-tax to our last productive industry and finish the job? Kill off mining and we will have destroyed Oz to save the planet.

At long last a practical suggestion to deal with the economic consequences of the CV

Posted on by
Reply

From The Onion, of course.

This, however, not from The Onion, but seems related. It is a story you will see today, if you see it at all, and never again after: Former Senate Staffer Who Opposes Trump Accuses Biden of Sexual Assault.

Why anyone thinks this is newsworthy is completely beyond me.

John Stuart Mill on Laissez-faire

Posted on by
3

This is John Stuart Mill in his Principles of Political Economy, Book V, Chapter XI, Para 7 [Ashley edition p 950]:

Laissez-faire, in short, should be the general practice: every departure from it, unless required by some great good, is a certain evil.

This is William D. Grampp in his Economic Liberalism: , Volume II: The Classical View, Chapter 3, titled “Liberalism in the Great Century” [New York: Random House 1965]. The chapter begins:

The nineteenth century usually is thought to have been the greatest age of economic liberalism, greater than any other, from its origins in Stoicism down to the present time. Economists think of the century as the long afternoon of the ideology. They believe it then meant laissez-faire and that laissez-faire was the policy of Great Britain, the major economy of the world. In fact, the century was not like that, and historians have tried to tell us so. They have reported the many ways in which the British government intervened in the market. The historians also have said the intervention was inconsistent with liberalism. In this, they are in my opinion, mistaken. (Grampp 1965: 73)

From the introduction to the chapter he continues with his first section on “The Importance of the Nineteenth Century”. He lists six reasons, this is the fourth:

“(4) The first effort to make a comprehensive statement on its principles was in 1848.” (Grampp 1965: 74)

1848 was the date of publication of the first edition of Mill’s Principles. He makes what he means absolutely clear on the following page:

“John Stuart Mill was the first to do this – to enunciate a theory of policy – and he did it in his Principles, which was published in 1848.” (Grampp 1965: 75)

He makes clear its significance in the very first para in which he discusses the notion of laissez-faire.

“1. The idea of economic liberalism, which had been gathering force for centuries, came to their full power in the nineteenth century…. Liberalism had many different meanings to these people. But one generalization can be made. To almost all who believed in it and to some who did not, liberalism did not mean laissez faire – that is, it did not mean a policy of non-intervention by the government and of allowing the major economic decisions to be made on unregulated markets. The rejection of laissez faire was one of the few ideas on which there was nearly complete agreement among the economists and between them and the political leaders.” (Grampp 1965: 74)

In that quote from Mill, the most important word is “unless”, “unless required by some great good”. His Book V is “On the Role of Government”, and in the 185 pages that follow he makes clear just how extensive he believed that role is.