Grateful Dead

What a band. Here they are with Bruce Hornsby doing his song Valley Road after a jam!

Enjoy

Around the Traps 1/8/14

It is time for Around the Traps again.
Will update on the week-end.

Aussie,Aussie,Aussie,Oy,Oy,Oy

• Greg Jericho on un-scores-australia-high-for-quality-of-life-but-low-on-climate-change-progress , business-leaders-should-stop-whinging-about-australias-competitiveness
• Peter Martin on red-tape-you-aint-seen-nothing-yet
• Mumble on its_there_but_you_have_to_look_closely , newspoll_satisfaction_increases , and_largest_satisfaction_drops
• Kevin Bonham on poll-roundup-small-bounce-deeper-issues
• The Kouk on will-work-for-the-dole-increase-unemployment , credit-growth-zooms-to-six-year-high-as-the-terms-of-trade-slump
• Jim Rose on the-politics-of-ethnicity-based-research-in-new-zealand , how-flexible-is-the-new-zealand-labour-market
• Andrew Elder on capability-decency-and-abbott-government
• The Piping Shrike on disaster-politics
• Max Chalmers on dept-tried-cover-harm-against-children-detention-inquiry-hears 
• John Quiggin on job-search-yet-again

Northern America

• Maggie Mahar on border-crisis-fictions-v-facts-part-2-of-children-from-central-america
• Kruggers on inflation-ocd
• Mark Thoma gives us presidents-and-the-us-economy-an-econometric-exploration
• Menzie Chinn on new-classical-kansas , the-employment-and-gdp-releases
• Mark Thoma gives us Tim Duy on fed-watch-fomc-statement , fed-watch-on-that-eci-number , fed-watch-july-employment-report
• James Hamilton on finally-some-economic-growth 
• Peter Dorman on figuring-out-inflation-vigilantes
• Menzie Chinn gives us guest-contribution-how-janet-yellen-might-have-responded-to-the-policy-rules-legislation
• Noah Smith on paul-ryans-poverty-plan-signals-an-ideological-shift

Europe

• Chris Dillow on wages-profits , the-productivity-silence
• David Beckworth on the-other-important-legacy-of-world-war-one Thanks Brad
• Simon Wren-Lewis on uk-fiscal-policy-from-2015-with-shocks , how-to-muddy-waters-on-impact-of-austerity

Asia

• James Hamilton on chinas-financial-risk
• Edward Lambert on real-wages-weak-in-japan

Wonk

• Mark Thoma gives us Brad De Long on monetarist-keynesian-and-minskyite-depressions-once-again 
• John Quiggin on austrian-economics-and-flat-earth-geography
• Lord Keynes on john-quiggin-on-apriorism-in-austrian-economics
• David Glasner on how-to-think-about-own-rates-of-interest
• Simon Wren-Lewis on understanding-fiscal-stimulus-can-be-easy , if-minimum-wages-why-not-maximum-wages , methodological-seduction
• Chris Dillow on unobservables-in-economics
• Nick Rowe on when-is-helicopter-money-optimal
• Edward Lambert on profits-maximising-at-the-effective-demand-level

General

• Jim Rose on will-work-for-the-dole-work-in-australia , offsetting-behaviour-alert-school-breakfast-programmes , lessons-from-field-trials-with-work-mandates
• Nick Rowe on on-not-quite-getting-lloyd-metzler
• Tim Harford on what-tech-jerks-can-teach-us , why-tax-systems-are-trickier-than-martian-algebra
• Brad De Long on obedience-embracing-normalcy-and-failure-ariel-rubenstein-on-the-bombs-and-the-missiles-live-from-tel-aviv-university
• Corey Robin on the-higher-sociopathy
• Paul Rodgers on israel-vs-hamas-the-flawed-assumptions
• Noah Smith on holey-poverty-batman
• Stephen Gordon on minwage-youth
• Chris Dillow on the-economic-base-of-virtue
• Gerry Jackson on how-government-spending-levels-hurt-real-wages-and-the-standard-of-living
• Simon Wren-Lewis on what-are-academics-good-for 
• Menzie Chinn on anti-intellectualism-in-american-blogging
• John Quiggin on to-help-poor-people-give-them-money

Climate

• Menzie Chinn on the-costs-of-delaying-action-to-stem-climate-change
• Rabette run on the-kzinti-lesson
• the Science of Doom om natural-variability-and-chaos-two-lorenz-1963
• Rick Piltz on what-to-do-about-the-social-cost-of-carbon-metric-part , what-to-do-about-the-social-cost-of-carbon-metric-part-2
• Climate change national forum on how-hot-is-it-going-to-get-and-how-fast-a-chat-with-scott-denning-on-climate-sensitivity

Andrew Gelman ( Mostly Stats)

• a- linguist-has-a-question-about-sampling
• naive-statistical-analyses-send-innocent-man-jail
• statistics-and-data-science-again
• health-policy-innovation-center-best-move-pilot-studies-large-scale-practice
• scientific-surprise-two-step
• Kaiser Fung on the-unkind-fate-of-data-graphics-in-the-media , another-day-another-misuse-of-averages

Dave Giles (Econometrics)

• summer-reading-list but its winter in God's country!

Dianne Coyle (Quirky + Book Reviews)

• novelist-of-the-squeezed-middle , not-bowling-alone , mathematical-economics , well-being-and-development , inside-shipping

vox wonk

• financial-stability-and-monetary-policy
• research-quality-assessment-tools-lessons-italy
• trans-pacific-partnership-negotiations-and-rulemaking-regulate-state-owned-enterprises
• can-large-primary-surpluses-solve-europe-s-debt-problem

How is the Government travelling?

Here is:

• MUMBLE and 
• KEVIN BONHAM

writing about this topic. I do not intend the reinvent the wheel and they do it far better than I.

Kevin's is the longer and possibly better article.

Work for the dole is very very stupid

We heard yesterday plans for the government that people getting the dole ( to be accurate the dole doesn't exist anymore but you get the point) will need to not only 'work' for it but also show they have gone for 40 jobs during the month.

This is incredibly stupid policy. We already have evidence for this. One of the main reasons for this is that the programs do nothing about improving the skills of the person involved.
Getting a job is a very time consuming job in itself.
I have been lucky in that on the occasions I have been retrenched I have had outplacement facilties given to me.
When you get this the first and possibly only lesson you use is that it is only by using your network that you will gain a new job as the vast majority of jobs are not advertised.
You will drink a lot of coffees as you endeavour to achieve your goal.There are a lot of phone calls involved as well.
As you can see if you are 'working' for the dole then it must mean your chances of gaining that new job diminishes and indeed most studies of work for the dole show this.

In addition if you have to show evidence that you have applied ( and been rejected) for 40 jobs guess who has to do the paperwork. Yep, the business.

This idea is so stupid it could have only come about if Katesy or the Peroxide Princess advocated it!

Special Bonus by the Kouk on will-work-for-the-dole-increase-unemployment

Israel and Palestine

My eldest son asked me why there are problems with Israel and Palestine.
I replied each denies the humanity of the other. Thus when they murder people they feel no remorse indeed they wish to murder more.

The excuses of either side border on the pathetic.
Hamas fires rockets into Israel which in essence do nothing very much. For this hundreds perhaps thousands of their countrymen will dies if the existing situation is prolonged.

Israel acts as though the country is under threat. It isn't and never was. Yes a response to the firing of rockets must be found however it must be proportionate. Clearly the existing situation is anything but proportionate.

What is the solution?

Accept Hamas as the government and let them govern. This would mean they would have to change. Any increase in growth must come first through greater trade with Israel.
As Growth increases and people become materially better off they want a better standard of living, their own homes etc.

Firing rockets makes thus impossible hence it would stop. Hams would become more conservative and act like a government.
Just look at the IRA and Northern Ireland.

Around the Traps 26/7/14

It is time for Around the Traps. I will update on Sunday


Aussie,Aussie,Aussie,Oy,Oy,Oy

• Peter Martin on mh17-why-planes-and-financial-systems-crash , productivity-commission-childcare-is-worth-it-even-without-an- economic-payoff , abbotts-infrastructure-nation-building
• Ross Gittins on mining-boom-our-gift-to-rich-foreigners , why-were-still-not-free-of-gfc
• Greg Jericho on keeping-mining-tax-wont-kill-investment , childcare-verdict-beats-paid-parental-leave-says-productivity-commission
• Mumble on blame_the_greens ,oz_media , what_was_joe_thinking
• Andrew Elder on brand-positioning , the-human-interlude
• Nick Gruen on australian-economic-reform-the-next-generation
• David Walker on ben-hills-monument-to-newspaper-journalism, Iran flight 655: how did Australia react?
• The Kouk on in-the-groove-inflation-rate-means-rba-on-hold
• Ken Wolf on Do-you-know-a-con-artist-when-you-see-one 
• Kevin Bonham on poll-roundup-brief-history-of-disaster-bounces
• Sean Carney on are-voters-set-to-stop-giving-first-term-leaders-a-second-chance
• Robert Merton on superannuation-make-income-the-outcome
• Andrew Norton on scholarship-scepticism-confirmed
• Peter Wicks on gillard-accuser-deserts-michael-smith-over-kathy-jackson

Northern America

• Dave Altig and Pat Higgins on gdp-growth-will-we-find-a-higher-gear 
• Edward Lambert on labor-supply-is-the-effective-demand-limit , simon-wren-lewis-car-trouble
• Menzie Chinn on unanchored
• Calculated Risk on key-measures-show-inflation-mostly-at-or-below-fed's-target-in-June , a-few-comments-on-existing-home-sales, comments-on-new-home-sales-report 
• Livio De Matteo on not-slower-just-more-erratic-comparing-growth-in-canada-and-the-united-states
• Bruce Carman on recessionary signals
• Kruggers on hows-california-doing
• Mark Thoma gives us James Choi on one-of-the-most-vivid-arithmetic-failings-displayed-by-americans
• Noah Smith on national-unity-sure-is-helpful 
• Brad De Long on ms-market-reject-national-income-identities-afternoon-comment
• Robert Waldeman on more-on-consumers-inflation-forecasts
• Mark Thoma gives us Uwe Reinhardt on the-illogic-of-employer-sponsored-health-insurance

Europe

• Tim Harford on crime-prevention-wheres-the-evidence
• Chris Dillow on internalizing-constraints , blairs-legacy
• Jonathon Portes on welfare-reform-and-jobs-miracle
• Menzie Chinn on russia-raises-policy-rate
• Simon Wren-Lewis on  why-strong-uk-employment-growth-could-be-really-bad-news 
• Noah Smith on how-to-beat-russia

Asia
nuttin

Wonk

• John Quiggin on macrofoundations-of-micro , hazlitt-and-the-glaziers-fallacy
• James Hamilton on keeping-oil-production-from-falling , the-changing-face-of-world-oil-markets
• Kruggers on asymmetrical-doctrines-vaguely-wonkish
• David Glasner of monetarism-and-the-great-depression
• Jeremie Cohen-Setton on blogs-review-the-taylor-rule-legislation-debate
• The Growth economics blog on geography-matters-even-if-it-doesnt Thanks Mark
• Nick Rowe on new-keynesian-neo-fiscalists-for-increasing-austerity, the-growth-stages-of-the-new-keynesian-model
• Chris Dillow on crowding-out
• Menzie Chinn on forward-premia-and-the-carry-trade
• Simon Wren-Lewis on synthesis-david-beckworths-insurance-policy then Nick Rowe on the-soft-fade-from-monetary-to-fiscal
• Noah Smith on why-doesnt-finance-industry-use-dsge-models
• Kenneth Thomas on fun-and-games-with-transfer-pricing.
• Robert Waldeman on labor-market-flows-and-extended-unemployment-insurance-ii

General

• Calculated Risk on tanta-what-is-subprime  A classic
• Noah Smith on are-liberals-rescuing-marriage , youll-get-no-edge-with-zero-hedge
• Simon Wren-Lewis on is-economics-jargon-distortionary
• Chris Dillow on why-not-worker-control , see-no-evil , repressive-diversity
• Stormy on complicit-in-the-horror-that-is-gaza 
• Michael Brull on israel-and-art-war-spin-and-slaughter
• Sandwichman on supply-creates-its-own-demon-sciod
• Steve from Brisbane on voucher-wars-continued
• David Glasner on who-is-grammatically-challenged-john-taylor-or-the-wall-street-journal-editorial-page
• Andrew Gelman on meritocracy-wont-happen-the-problems-with-the-ocracy thanks Mark
• Menzie Chinn on on-perusing-the-comments-sections
• Doverbeach on the-form-of-the-argument-regarding-marriage

Climate

• Tamino on global-warming-climate-change
• Science of Doom on does-the-surface-temperature-change-with-back-radiation-kramm-vs-gerlich , natural-variability-and-chaos-one-introduction
• Jonathon Koomey on deep-decarbonization-truly-facing-the-climate-challenge
• Rick Piltz on what-to-do-about-the-social-cost-of-carbon-metric-part-1
• Joe Romm on antarctic-sea-ice-trend
• Mark Thomas gives us Robert Rubin on ignoring-climate-change-could-sink-the-us-economy
• John Quiggin on ccs-awol

Andrew Gelman ( Mainly but not only Statistics)

• skepticism-published-claim-regarding-income-inequality-happiness
• statistical-stand-comedy-alan-bennett-stewart-lee-david-owen
• world-without-statistics
• nfl-players-keep-getting-bigger-bigger
• good-enough-martin-luther-king-laurence-tribe
• experience-registered-replication-project
• Noah Smith on bayesian-superman , why-i-like-frequentism
• Kaiser Fung on digital-journalism-has-an-archiving-challenge , general-statistical-education-is-an-utter-failure

Dave Giles (Econometrics)

• promoting-econometrics-through-econometrica
• more-on-step-unwise-regression-and-pretesting

Dianne Coyle ( Quirky + Book reviews)

• life-leaving-and-existentialism , calling-young-economists-who-want-to-write , a-dangerous-place , advice-for-madmen
• Frances Woolley on learning-about-theory-does-not-teach-people-how-to-theorize

Vox Wonk

• agglomeration-and-product-innovation-china
• corporate-governance-banks-and-financial-stability
• partial-corporate-tax-harmonisation-eu
• long-term-damage-us-court-s-argentinian-debt-ruling
• crowding-out-theory-eurozone-crisis
• rethinking-african-solar-power-europe
• inequality-big-cities
• employee-satisfaction-and-firm-value
• smes-lending-relationship-lending-vs-arm-s-length
• sticky-prices-and-behavioural-indifference-curves
• new-thinking-reserve-currency-status

Sinclair Davidson will never change

Sinclair Davidson having gotten badly bruised and battered by the Kouk in the tobacco wars returns to his absurd stagflation prediction today.
First THIS is reasonably okay on the definition and history of stagflation.

Please note there is nothing at present that remotely looks  like the 1970s at present. Also note that one key ingredient of stagflation is the level of wage increases. This both leads to the price and unemployment levels being much higher than  would otherwise be the case.
I let us examine the figures as the RBA views them.in terms of inflation.

In six monthly annualised terms, the path for underlying inflation over the past two years has been: 
H1 2014: 2.5% H2 2013: 3.1% H1 2013: 2.1% H2 2012: 2.7%  ( courtesy of the Kouk).

According to the RBA a rise is rates in unlikely.They said this about the labour market

"Labour market conditions had improved a little since late in the preceding year. The level of employment was around 0.9 per cent higher since then. The unemployment rate had been steady at 5.8 per cent for the third consecutive month, although the participation rate had declined over that period. Employment growth in household services continued to be strong over the past six months, while employment in business services had also picked up. Members observed, however, that total hours worked had not increased for a considerable time. Forward-looking indicators of employment had recently been mixed and while these indicators were higher than at the low points of the previous year, they remained at levels consistent with only moderate growth in employment in the months ahead.

The recent national accounts data indicated that unit labour costs were little changed over the past year, reflecting low growth of wages and above-average growth of productivity. Members noted that while labour productivity had been boosted by a sharp improvement in the mining sector, productivity growth had improved across a wide range of industries in recent years. Business surveys and liaison suggested that wage growth was likely to remain subdued for some time, consistent with the modest improvement in the labour market to date."
how we can have both falling real wages and stagflation is something Davidson talks about!

The market is expecting a rate decrease not an increase. 

So according to Davidson inflation near 3% and unemployment around 6% is stagflation. wow that is some re-writing of the definition.

It is amusing to see Davidson asserting growth in Government spending is the main reason for Stagflation.

If this was the case then how come there wasn't a boom in Wayne Swan's last budget where NOMINAL spending fell not Real spending. This was easily the tightest budget we have ever seen. It decreased GDP whereas for example Hockey's budget was adding to GDP! Remember also Davidson absurdly argued this budget ( Swan's) was expansionary!

Ooops.

On a final note this would be easy to point out on Catallaxy but unfortunately Davidson does not believe in free speech. You rarely if ever get different points of view over there.

So add hypocrite to being ignorant on Budgets, National accounts, CPI figures etal