The persistent failure of economic theory

I see the RBA today froze at the thought of raising rates in the midst of an economy as stone cold dead as this one. They are, of course, clueless about why this is, just as Treasury is equally clueless. So let me take you to my article just published at Quadrant on The Dangerous Persistence of Keynesian Economics. Here’s how it starts.

OUTSIDE the United States, no economy has fully recovered from the downturn that followed the Global Financial Crisis in 2008-09. The crisis came and went in half a year, but just about every economy continues to have problems generating growth, increasing employment and raising real incomes. As I was writing my article on “The Dangerous Return to Keynesian Economics” in 2009, I commenced working on an economic textbook, now in its third edition, to explain why modern macroeconomic theory is utterly useless, why no one using these economic models as a guide to policy would ever succeed. And here we are, ten years later, and everything discussed in that earlier article, explained in far more detail in my text, has come to pass.

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Just as the causes of this downturn cannot be charted through a Keynesian demand deficiency model, neither can the solution. The world’s economies are not suffering from a lack of demand and the right policy response is not a demand stimulus. Increased public sector spending will only add to the market confusions that already exist.
What is potentially catastrophic would be to try to spend our way to recovery. The recession that will follow will be deep, prolonged and potentially take years to overcome.
—Steven Kates, Quadrant, March 2009

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Why have the IMF, the OECD, the ILO, the treasuries of every advanced economy, the Treasury in Australia, the business economists around the world, why have they got it so wrong and yet you in your ivory tower at RMIT have got it so right?
—Question to Steven Kates from Senator Doug Cameron, Senate Economic References Committee, September 21, 2009

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Why did I get it so right? Because nearly everyone else thinks economies are made to grow through increases in demand, while in reality, as was once universally understood, economies can only be made to grow through improvements in supply-side conditions. Demand has absolutely nothing to do with making an economy grow. Demand of course is crucial to how many units of any particular good or service will sell, but has nothing whatsoever to do with how fast an economy in total will grow, or how many workers will be employed.

Does being right count for anything? Not a bit. Still, you can go back to my original article from ten years ago, The Dangerous Return to Keynesian Economics, and see how well what I said then stacks up with how things now are.

Let me add that if you are not already a subscriber, you should be. Subscribe here.

The denuclearisation option

UPDATE: PDT’s post-meeting press conference: “sometimes you have to walk”.

You should wind the video back to the beginning of the press conference. The original post is below.
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PDT is in Hanoi trying to resolve the Korean War which began 69 years ago and to end the threat of nuclear escalation in North Korea and in a perfect world end all nuclear arms on the Korean Peninsula. This from here.

CHAIRMAN KIM: (As interpreted.) We had exchanged a very interesting dialogue with each other —

PRESIDENT TRUMP: We did.

CHAIRMAN KIM: (As interpreted.) — for about 30 minutes.

PRESIDENT TRUMP: Boy, if you could have heard that dialogue, what you would pay for that dialogue. It was good.

So we’re going to have a very busy day tomorrow, and we’ll probably have a pretty quick dinner and a lot of things are going to be solved, I hope. And I think it’ll lead to wonderful — it will lead to, really, a wonderful situation long term. And our relationship is a very special relationship.

Thank you very much everybody. Thank you. See you tomorrow.

Then there’s this at the other end of the spectrum: Pakistan shoots down 2 Indian warplanes, parades captured pilot on video.

Tensions between two of the world’s nuclear powers were raised dramatically Wednesday after Pakistan’s air force said it shot down two Indian warplanes that crossed the disputed Kashmir border and captured each of the aircraft’s pilots.

In America, of course, the media focuses on Michael Cohen’s testimony about nothing. The best comment comes via Powerline.

You would like to laugh at such dark stupidity, but they are a pathetic bunch of lying scum, with Michael Cohen a perfect representation of the way they think and the way they act.

ADDING WHAT SIMON SAYS: Roger Simon, that is: Dems Reelect Trump by Staging Partisan Cohen Hearing During Nuke Negotiations.

The day the Democrats decided to schedule the House Oversight Committee hearing with Michael Cohen to coincide with Trump’s negotiations with North Korean leader Kim Jong Un in Hanoi is the day the Democrats ensured the president’s reelection. It was one of those rare moments of clarity you can imagine in the history books.

The Democrats revealed themselves as partisan hacks while the president was halfway around the world trying to save the lives of millions. That’s not just bad timing, it’s atrocious. And it has little to do with the success or failure of the talks with Kim. No one knows how that will turn out, probably not even the principals themselves. It has do with the priorities of the human race like global survival — what a normal person should care about….

The test for Americans of all political parties, indeed of citizens of all countries, is whether they actually wish Trump well in this endeavor. If they don’t, they are truly evil.

Why were either of these stories national news?

The news judgment of the major media organisations in the United States is deeply impaired, indeed it is near enough mad and the people who report such stories along with those who believe them on no evidence at all are troublemakers with no good in mind that I can see.

Both of the graphics are taken from somewhere else.

In what normal universe could such insignificant stories be national news, even if they were true. Even if the events unfolded exactly as the media first reported, what difference would it make in a country of 350,000,000 if there were isolated individuals like the ones described. There are vile and disgusting people everywhere. But these events did not occur as reported. The media lied and distorted the truth and mis-stated the facts as they were actually known.

The abomination even beyond the negligence of those in the media who reported these stories is in the hunger among the left for examples of what are now almost non-existent kinds of people, especially among those who had voted for the American president. That is, there are no racists and no homophobes in any numbers, and wherever they may be, they have no political influence whatsoever. Yet the left needs them to exist so that they can show what superior people they are. But all that is shown is they are gullible fools, who will believe anything no matter how farfetched the stories might be.

But do you want to know what it’s really about. This is what it’s really about:

Filled with hate and nothing to contribute to a sane society.

“Illegal and treasonous”

This is no messing around nor are they vague accusations. Why is this not Front Page News day after day? Is it because the media and a large proportion of the Congress are co-conspirators. Here is more of the story but in an out of the way website: Trump accuses Sessions, Rosenstein, and McCabe of ‘illegal and treasonous’ plot to overthrow him. But the tweets are genuine and the President could not be more clear or direct. You really do need to wonder why this is not the first item in every newscast. If this were in any way a sign that PDT had gone off the deep end it would be. Since the evidence is now so overwhelming that this is actually what took place, why does everyone just seem to do their best to hide this attempted coup in the midst of the American democratic system from view. Does no one really care?

If this was illegal and treasonous, why aren’t these people being arrested? The icy calm in the midst of it, where this is said by the President but no one says or does anything, not even responding to what he said, is bizarre. And there’s nothing I can see at Drudge, Instapundit or Breitbart. It’s a mystery, a complete mystery.

No part of the mainstream media will tell you but this is the greatest political scandal in American history

Limbaugh claimed that the Mueller Russia probe is itself a cover-up of collusion between Russia-assisted Democrats and the Obama-era Justice Department to harm Trump in 2016

Not a “hoax” but actual treason. Obviously not from an American newspaper but from the Daily Mail in the UK: Trump quotes Rush Limbaugh’s claim that Mueller’s investigators ‘ought to be in jail’ for cover-up of ‘silent coup’ against the president

  • Rush Limbaugh cited the case of Andrew McCabe, the former deputy FBI director, in claiming some Justice Department officials should be locked up
  • McCabe says he knew of Justice Department discussions about using the 25th Amendment to the U.S. Constitution to remove Donald Trump from office. 
  • ‘The Mueller investigation, I believe, is a cover-up of all of that. It’s to distract everybody’s attention,’ Limbaugh claimed
  • President Trump tweeted a tweaked-for-space version of his comments
  • ‘These people are unelected. They took it upon themselves to overthrow the election results of 2016,’ the radio host said
  • He claimed the Obama DOJ ignored ‘potential real collusion and conspiracy between Democrats and Russians to undermine the Trump candidacy’

Meanwhile the story that is dominating the American media is an actual hoax from some B-Grade actor who tried to pretend that he had been attacked in sub-zero weather by two MAGA-hat-wearing racists, who turn out to be black African friends of his.

The American mainstream media is a conspiracy on its own and by itself.

Post-natal abortion (infanticide)

NORTHAM: If a mother is in labor, I can tell you exactly what would happen. The infant would be delivered, the infant would be kept comfortable, the infant would be resuscitated if that’s what the mother and the family desired, and then a discussion would ensue between the physicians and the mother.

Here’s the backstory and commentary via Rush Limbaugh. But the video of the Governor of Virginia interviewed on radio demonstrates beyond all doubt that this is exactly what he said. The subsequent wish to clarify and explain has arisen only because of the fire this has lit, but not even remotely within the mainstream media.

I have only gone back to this, which is from January 30, because I have met people who have never heard a word of this, and will not believe it could possibly be true. I suspect it would not undermine their support for the left and the Democrats since there are more important principles at stake – don’t ask me what. The only evidence that the left is perfectly aware how barbaric this is comes from the fact that this kind of information is already hard to find on the net. If the Governor of Virginia is mentioned at all, it is only because when he was 25 years old in the 1980s he appeared in a photo either in blackface or wearing a KKK bedsheet when he had just graduated from med school, since which time he has been a paediatrician.

As for the health of the baby, this was also discussed at the link:

A tweet here from an MD and MBA, Omar Hamada . “I want to clear something up so that there is absolutely no doubt. I’m a Board-Certified OB/GYN who has delivered over 2,500 babies. There’s not a single fetal or maternal condition that requires third-trimester abortion. Not one. Delivery, yes,” all kinds of conditions that might require delivery, but, “Abortion, no.”

The “consent” of two doctors is the kind of formality that is all pretence. How a baby can get to full term and only then at the ninth month discover some deformity is so improbable that it is just said to confuse the debate. At least till now, and possibly for a bit into the future, that there is something radically wrong with the child remains the cover story for murdering babies.

And if you are looking for another take on this same thing: Modern philosophy, untethered from morality, is just nihilism in fancy dress. There you find:

The reality is that, without a moral construct, philosophy is simply a way to intellectualize whatever outcomes one prefers. That’s why Peter Singer, an endowed philosophy chair at Princeton University, can argue that parents should have a 30 days period after their baby is born to decide whether or not to kill the baby, a position even more extreme than that espoused by the average abortion-obsessed Leftist….

When I raised Singer as an example of the selfish, morality-free nihilism that passes for modern philosophy, the other people involved in the conversation were quite sure that I was making things up in order to justify my arcane, impractical conservative views. Then, when I offered to send them links proving Singer’s viewpoints, they hastily declined that offer. They did not want to know.

The reality is they do not want to know. They think being on the left, and being able to self-identify as socialists or some such thing, makes them nice people. In actual fact, it turns them into monsters, but self-satisfied monsters.

WE DON’T EVEN KNOW THE HALF OF IT: AND HERE IS SOME OF IT.

Planned Parenthood kept aborted babies alive to harvest organs, ex-technician says

Pro-life group releases 7th undercover video

In an undercover video released Wednesday, a former technician for a tissue-harvesting company details how an aborted baby was kept alive so that its heart could be harvested at a California Planned Parenthood facility, raising more legal questions about the group’s practices.

Holly O’Donnell, a former blood and tissue procurement technician for the biotech startup StemExpress, also said she was asked to harvest an intact brain from the late-term, male fetus whose heart was still beating after the abortion.

StemExpress supervisor “gave me the scissors and told me that I had to cut down the middle of the face. And I can’t even describe what that feels like,” said Ms. O’Donnell, who has been featured in earlier videos by the Center for Medical Progress, a pro-life group that previously had released six undercover clips involving Planned Parenthoodpersonnel and practices.

David Daleiden, the video project leader, said the undercover footage and interviews show that fetuses are sometimes delivered “intact and alive” before their organs are harvested.

The federal Born-Alive Infants Protection Act of 2002 says that when a child is born alive, including having a beating heart, he or she is a legal person and has a right to lifesaving medical care.

More at the link if you can stand it.

The media is more dishonest than anyone can imagine

I received this note which really is astonishing:

Regarding SOTU: Did you notice at about the 1 hour 21 minute mark of USA Today’s SOTU broadcast they edited out the word “never” when Trump put down Socialism? USA Today used their 2 second delay privilege in “live” broadcasting to black out “never” so it sounded like Trump said “the US will … be a Socialist state”.

Watch, it’s just like he says – start at around 1:19:

It’s not a glitch. They really cannot bear the thought that the United States may not become a socialist country. They are not just dishonest, but evil.

I had put this version up since it was the first one available at Youtube. But they added afterwards the various so-called “fact checks” that attempt to counter the points the President made. They are the most vile liars imaginable, worse than the Soviet press who lied because of the threat of the gulag. These people do it because they are dishonest, and clearly wish to actually see the US, and the rest of us, become socialist tyrannies.