To me, the most interesting bit about the “crude joke” made about Tony Abbott’s Chief of Staff was to find out that his Chief of Staff is a woman. Did the Prime Minister not know this when she accused Abbott of being a misogynist? The hollowness of everything that comes out of the mouth of the likes of Gillard, Roxon and Plibisek is quite astonishing to behold. Abbott’s Chief of Staff, by the way, is named Peta Credlin which I also didn’t know. Unlike those Labor time servers, this is a real position that requires genuine talent and ability.

First the quote, and then I’ll tell you where it’s from:

2010 Australian economist Steven Kates defends Say’s Law, and calls Keynesian economics a ‘conceptual disease’.

But before I tell you where it’s from, I will tell you how I found it. I was wandering through the Hill of Content bookshop in Melbourne and looking through the political and economics books when I came across something I had not seen before titled, The Economics Book. Just like that, THE Economics Book, and published by one of my favourite publishers, DK, whose travel books I always get because they specialise in spaced out pages and big print. They also do great kids books but this one was about economic theory.

My first test for any book is to look up “Say’s Law” which wasn’t there but “Say, Jean-Baptiste” was with pages 74-75 darkened. So I popped over to have a look and here I found a section on “Supply Creates Its Own Demand”, Keynes’s dreaded words, but with a more promising subtitle, “Gluts in Markets”. And there to begin the explanation was a four box schematic with arrows, with the first box reading:

People produce commodities and sell them to earn money.

This was a sensationally accurate beginning, something I am not sure I have ever come across before. To understand Say’s Law you must understand that production comes first, then whatever has been produced has to be sold for money and then the money received is used to buy something else.

Incredible, I said to myself, and looked at the back for some bibliographic reference of which there was none. But I did then notice there was an entire section on “Free-Market Economics” under the sensationally accurate heading, “The Invisible Hand of the Market Brings Order” followed by a six page section (pgs 56-61) specifically on “Free-Market Economics”.

It was then that I did something I have never done with any other book before, and I looked at the index, and there, bless my soul, it said, “Kates, Steven 74”! So back to page 74 I went – the section on Say’s Law – and there it was, the words you see above, “Keynesian economics a ‘conceptual disease’”.

Did I really say those words? I must have and you may be sure that they express my view with an accuracy not less than 100%. But fancy someone coming across those words and immortalising them in this wonderful (and it is wonderful) publication. Not only does it delve into economic theory but has long discussions on the history of economics, my other great economic area of deepest interest. It moreover does a wonderful job on economic history which is also extremely important but which is not for me a personal area of expertise.

But having found my own brief mention what occurred to me is how difficult it must have been for the authors to find anyone to say anything negative about Keynes and Keynesian economics. I am editing another book which is a collection of articles criticising Keynesian economic theory and you have no idea how scarce, even now, such articles are. Given the disasters since the Global Financial Crisis, and the harm that Keynesian policies have done, you might think there would be endless papers on this question but the reality is that there are virtually none. Hence they had to come to me for a quote and there I am, so there you are.

These are a few considerations that have emerged in the quite interesting thread following my post on watching the Vice Presidential debate for the second time. First is something I wrote myself.

In my view the difference in the debate and which affected Paul Ryan is the difference between talking to an audience that knows the facts and the general public that does not. Ryan’s experience comes from discussion in the House where it is difficult to get away with untruths and misstatements for very long. The unemployment rate went down below eight percent for the first time in 43 months – hardly a worthy test of economic competence – and even then the number had the look of a fiddle as has been noted. Anyway, as the Washington Post further noted, the data also showed “the biggest increase in so-called underemployed Americans since February 2009, during the depths of the Great Recession.” Loved the “so-called” since it is a stat in the same league as the unemployment rate.

Meanwhile Iran really is moving closer to the bomb and whatever nonsense there may be about Iran being “more isolated” than ever, it will make hardly an ounce of difference since even North Korea has the bomb and no one is more isolated than they are. And if you’re not scared about that what does scare you? Romney often talks about a suitcase bomb in New York against which there would be no defence.

And the bit about tax cuts for the rich, it is necessary to understand the American system which means that to raise this rate will raise taxes on a multitude of small firms.

Ryan’s problem – a general problem for Republicans – is that they assume a higher level of knowledge and a better comprehension of the issues. The Democrats, like all the parties of the left, stick to the P.T. Barnum Principle, there’s a sucker born every minute. With population growth being what it is, we’re down to one every ten seconds and the numbers are growing.

James K also found quite a quite interesting article which is more or less summarised in its heading:

Palin To O’Reilly: ‘My Buddy Joe Biden Has A Penchant For Making Shhh—Stuff Up’

Not only is that exactly so, but these lies are also being exposed. This time even the media will be somewhat less forgiving nor will they be able to cover up as much as they may have preferred. And as the falsehoods seep out, it will do more and more damage to the Obama campaign. Most importantly, as again JamesK points out, the lies about the Libyan ambassador are major issues, not just because they are lies but because they display a level of ineptitude that really ought to be unforgivable. This is from an article by Jennifer Rubin:

Vice President Joe Biden served up the worst gaffe of any of the 2012 debates, in a moment that will harm not only him but also his boss. Sure, the obnoxious grimacing and the mannerisms will be mocked relentlessly, but it was his egregious misstatement on Benghazi that will now plague the Obama-Biden ticket….

That’s about the size of it. The Post’s Glenn Kessler reamed Biden: “Biden’s bold statement was directly contradicted by State Department officials just this week, in testimony before a congressional panel and in unclassified cables released by a congressional committee.” NBC’s Andrea Mitchell likewise called out Biden

Biden’s flub illustrates why Obama deputy campaign manager Stephanie Cutter on Thursday said Benghazi was only about politics; apparently for the Obama-Biden team that’s about the size of it, thereby alleviating them of the need to figure out what happened and to speak truthfully to the American people.

Foreign policy has now become a liability for the Obama campaign. This will make it even more so.

And speaking of which, Token has now found the video of Mitt Romney which will no doubt be a major part of the final debate with Obama on foreign policy as well as in every speech Romney makes right up to 6 November. This is an issue from which they cannot hide and for which they can find no refuge. They may have been able to hide Fast and Furious in the shuffle but (i) the death on 911 (ii) of an ambassador who (iii) had asked for more protection (iv) for reasons unrelated to a trailer of a film released on Youtube (v) but which Biden and Obama have lied about, all this will be part of the campaign no matter how often Biden or his president choose to try to lie and deceive.

And lastly, there is this from Michael Medved

I watched the proceedings on a big screen together with 250 listeners from the Seattle flagship station for my radio show. In the discussion afterward, one of the women present said that Biden made her cringe by reminding her precisely of her abusive ex-husband. Another 23-year-old came up to me afterward and emphatically agreed, saying she had just left her own abusive relationship and that watching Biden’s antics gave her the creeps in the same way that her former boyfriend’s dismissive snickering always made her feel inadequate.

In these days of misogyny and all, there may have been no greater sin.

On Instapundit, two matters of local interest to have come up together one after the other. First this under the heading, “THAT’S NOT AN EXTREME SPORT, THIS IS AN EXTREME SPORT: New Extreme Sport Of Flyboarding Takes Off In Australia” which then links to this from The Telegraph in the UK:

Merely a day in the life of a typical Australian, as we would all know.

But then there’s this which came next (which means, as found on the page, it now comes before the above):

ANSWERING THE VITAL QUESTIONS: The Oxford English Dictionary wants to know whether Prince Philip is responsible for coining the phrase ‘blue-arsed fly’.

The text with the story:

Prince Philip is known for his blunt talk and colourful turns of phrase.

Now the Oxford English Dictionary wants to know whether the British royal consort is responsible for coining a memorable entomological term.

Editors say Philip uttered the first recorded usage of “blue-arsed fly” in 1970, telling a photographer he’d been “running around like a blue-arsed fly”.

The dictionary is appealing to readers to submit earlier uses of the term. It notes the variant ‘blue-assed fly’ was first recorded in 1932.

My Dinkum Dictionary naturally shows it (with the correct spelling) but was published in 1988. It is truly an Aussie phrase, but how far can we go back? We need to help out our Pommy friends at Oxford. Anyone have a citation before 1932?

When it comes to Obama, the truth depends on the needs of the narrative. Here is a set of facts summarised in the poster above that puts matters straight.

[Via Instapundit]

[Urgent Agenda via Instapundit]

There is an argument I have heard that I do not fully discount which is that Joe Biden understands very closely what Obama is on about and is attempting to undermine his presidency and lose him re-election. Biden is not the fool he has apparently become and this kind of statement is not an asset to the Obama campaign, that’s for sure.

Here is how the story starts:

Joe Biden on Tuesday said the middle class ‘has been buried the last four years,’ words Republicans trumpeted as evidence that even President Obama’s veep doesn’t believe the incumbent administration has been good for the country.

There was plenty of advice to Obama to replace Biden with Hillary which he did not do, possibly because of the fear he had of what Biden might say if actually free to do so.

There is a video brought to light by The Daily Caller that would be explosive if it were possible for anything to be explosive when Barack Obama is involved. Explosive means that the media are all over it, running with it 24/7 and punishing to the fullest extent the politician involved (cf. Alan Jones). It’s not going to happen with Obama. But the video is useful if you would like to confirm things you already knew. To see the video you must go here.

Even the Keynesian version of Say’s Law, that “supply creates its own demand”, gets you at least towards the core idea. More accurately, and using the language of the classics, it is “demand is constituted by supply”. To buy something you must first produce and sell something. The selling is what gets you the money, but the production of value adding output is what first allows you to sell. Without value adding activity, there is nothing to sell and therefore there is no basis for demand.

As for Keynes, he argued you could leave out the middle part of the process, that you could raise demand without having first produced something that added value. Just spend and the value adding production will follow. What we are finding at the moment, however, and in every country in the world, is that this is infinitely not the case. There has been plenty of stimulus money spent, but almost none of it has been value adding. The results are massive deficits in every economy that attempted a serious stimulus but with no revenue streams to repay any of the debts incurred. This is just what anyone who understood Say’s Law would have forecast with perfect clarity.

Paul Krugman has written an article for The New York Times in which he discusses how the production of the iPhone 5 will now bring a boost to GDP of something like half a percent. It may or it might not, but that’s not my issue. It is that he uses the production and sale of a very much value adding item of technology to prove that Keynes was right when what he is really doing is proving that Keynes was wrong and that Say’s Law is right. This is what Krugman says:

So is the new phone as insanely great as Apple says? Hey, I’ll leave stuff like that to David Pogue. What I’m interested in, instead, are suggestions that the unveiling of the iPhone 5 might provide a significant boost to the U.S. economy, adding measurably to economic growth over the next quarter or two.

Do you find this plausible? If so, I have news for you: you are, whether you know it or not, a Keynesian — and you have implicitly accepted the case that the government should spend more, not less, in a depressed economy.

Well, I have news for Paul Krugman. Whether he knows it or not, he’s a classical economist. He has argued that when a private sector firm produces a value adding good or service that it adds to economic growth. This is not Keynes, this is classical economics which always looked at economics from the supply side. Keynes’s “innovation”, a disaster of the highest order, was to argue that you could stimulate an economy from the demand side by simply buying things without having had value adding production first.

Krugman should pay close attention to this example, one he invokes himself, to understand what classical economic theory, and Say’s Law in particular, actually said. My Free Market Economics: an Introduction for the General Reader would be just the place for him to start.

Where to get the book: I am happy to see there is some interest in the book but unless you are library, don’t buy the hardback edition. There is a paperback edition and you can can find it on the Edward Elgar website. If you do a search, eventually you come to this:

Kates, S. Free Market Economics

‘A refreshing theoretical counterattack to the established Keynesian world view that has left the West financially overpromised, disastrously broke, and vulnerable to crank ideas. Professor Kates has … read more…

Hardback £95.00 on-line price £85.50
Paperback £29.95 on-line price £23.96

£24 is about $36. I have now been through it for the eighth time with my students since I wrote it in the first semester in 2009 and for the third time since it was published in 2011. And while there were a few gremlins that crept in that have now been fixed, and there are a few bits I might have wished to explain a bit better, it still says what I think needs saying.

I’ve also mentioned this before but I do find its uniqueness the most remarkable part of all. I thought the book would be one of many anti-Keynesian introductory tracts that would be published after the failure of the stimulus but to my knowledge it remains the only one of its kind. As an extra bonus, it is the only book written since 1937 that explains at an introductory level the classical theory of the cycle. If any of you do read it, suggestions for improvements or changes would be very welcome.

What makes this more than usually noteworthy is that the speaker, Pat Caddell, was a Democrat pollster. I don’t think he is exaggerating.

I think we’re at the most dangerous time in our political history in terms of the balance of power in the role that the media plays in whether or not we maintain a free democracy.

[Via Instapundit]