Thursday, 23 April 2015

Around the Traps 24//4/15 Anzac day Edition

Time for Around the Traps. No football this weekend but social activities on Saturday so updating on Sunday.

Aussie,Aussie,Aussie,Oy,Oy,Oy 
Northern America
Europe
Asia 
Wonk 
General 
Climate
Andrew Gelman ( Mainly Stats) 
Genial Dave Giles (Econometrics)



Dianne Coyle ( Quirky + Book Reviews) 
Vox wonk 



Wednesday, 22 April 2015

Sydney's weather and the ABC

Sydney copped a pasting over the past few days although other areas in the Hunter and the Central Coast had it worst.

I have to say apart from about 6 hours of no electricity and the same for the internet we got off scot free. A candle light dinner with some friends over was different.
Changes we made to the property  helped enormously with all the rainwater we got.

The ABC came to the fore again as it always does in emergencies. If there is one thing you always do it is to listen the the ABC under such circumstances.

 Most people trust the ABC way above any other media outlet much to the chagrin of the latte sipping reactionaries around. No commercial media outlet can match the ABC when an emergency occurs and it isn't hard to figure out why. They do not have to worry about ratings only help the people of the local area they are transmitting to. and that they did very very well.

Monday, 20 April 2015

Another nail in the coffin of classical ecoonmics

We have more research from the IMF on business investment. Kruggers makes comment and obviously will do it far better than I.

The research shows things that affect demand have had the most significant on business investment. Namely household deleveraging and fiscal consolidation.

The business confidence fairy is nowhere to be seen.

One of the authors is Daniel Leigh who was responsible for the demolishing of  the Alesina and Agdana hypothesis of expansionary austerity.

Those who champion classical economics have no evidence to support their ideology  if they ever had. Never mind those policies brought Hitler to power!

Sunday, 19 April 2015

World War 1 was much much different to World War 2

We are coming into the 'celebration' of Gallipoli.

I though I would make the quite obvious point World War 1 was so very different to World War 2.

Germany was a democracy. Indeed the Social Democrats had command of the lower house. they were more radical than the Liberals in the UK for example.
If we speculate on an ending of the war where the US did not enter then it would have been a draw.
Even if Germany won the world would not have changed all that much.
Austria.Hungary would have had to change and one suspects Turkey would have as well with the young turks acting anyway.


World War 2 was different in that Germany clearly was not a democracy. It was a one party state.

People might want to speculate about what would have happened to the world if the US did not enter the war in 1941 but they rarely recognise the fact Germany did not have the resources to win a world war. This is clearly shown in the Wages of Destruction by Adam Tooze.

A number of people advised Roosevelt to let Germany and the USSR fight a war of attrition that no country could win and then take over both counties but he unwisely did not take this advice.

Thursday, 16 April 2015

Around the Traps 17/4/15

It is time for Around the traps again.
Will attempt to update on Sunday

Aussie,Aussie,Aussie, Oy,Oy,Oy
Northern America
Europe
Asia


Wonk
General
Climate
Andrew Gelman ( Mostly stats)
Genial Dave Giles ( Econometrics)
Dianne Coyle ( Quirky + Book Reviews)
Vox wonk

Tuesday, 14 April 2015

Sinclair Davidson is at it again.

I came  to this via Steve from Brisbane,   Sinclair Davidson is again trying to show Revenue is strong for the Government.

One never looks at revenue from a nominal point of view. It always rises unless there is a long period of deflation.
You have to look at revenue as a percentage of GDP otherwise you have no understanding of how strong or weak it is.

We see from MYEFO  that tax as a % of GDP was 23.7% in the last financial year of the 'Howard' government.

Once the GFC hit Australia tax as a % of GDP has been:

  • 22.1%
  • 20.7%
  • 20.5%
  • 21.3%
  • 22.2%
  • 22.2%
  • 22.5% (Hockey)
For a person to say revenue hasn't been the problem they are either a complete idiot or a transparent liar.

Update.

The GFC hit the world in September 2008 via Lehman Bros. Before that we simply had a credit crunch which the RBA for one thought so much of they raised rates to combat increasing inflation.

Further Update.

A person e-mailed me to say I forgot to include the whys and wherefores of the structural budget deficit. 

The PBO said this "…trends in the SBB estimates can be explained by changes in the structural levels of government receipts and payments. From the SBB peak in 2002-03 to its trough in 2011-12, the structural level of receipts excluding GST fell by around 5 percentage points of GDP. The structural level of government payments excluding GST over this period rose by around 1 percentage point of GDP and hence the SBB fell into deficit. Over the period 2011-12 to 2016-17 the structural level of receipts is expected to increase by approximately 1¾ percentage points of GDP while the structural level of payments is expected to decline by around 1 percentage point of GDP leading to the expected reduction in the structural deficit over the period of the 2013-14 budget and forward estimates years. 
Over two thirds of the 5 percentage points of GDP decline in structural receipts over the period 2002-03 to 2011-12 was due to the cumulative effect of the successive personal income tax cuts granted between 2003-04 and 2008-09. A further quarter was the result of a decline in excise and customs duties as a proportion of GDP. Significant factors driving this trend included the abolition of petroleum fuels excise indexation in the 2001-02 Budget and the decline in the consumption of cigarettes and tobacco over the period."
Something that  Judith Sloan has obviously never read or could understand.
So spending is not the cause of the structural budget deficit and tax revenues are clearly down from Howard's era.
So the Catallaxy clowns fully supported policies that led to the structural  deficit and then they complain about it when it eventuates.
Amazing quite amazing. no wonder they do not comment at other blogs.

Monday, 13 April 2015

Two issues of note.

There appears two issues coming up on the radar.

WA are whining about the GST 'handout from the Grants commission. Greg Jericho has the best piece on this thus far.For WA to get more money the parliament would have to change the legislation for the Grants commission.

Peter Martin discusses that Hockey will eventually take aim at the worse decision of the 'Howard' Government on superannuation. About time. I find myself in complete agreement with Saul Eslake.
Super should only taxed at the benefit stage and as income.