Thanks to everyone who has made comments on the drafts of the new chapter of Zombie Economics, on Expansionary Austerity, for the forthcoming paperback edition. I’m now editing in response, and adding a section on Further Reading. I’d welcome any suggestions for this chapter, as well as any useful references that weren’t in the hardback edition.
This is the final draft section of the new chapter of my Zombie Economics book, on Expansionary Austerity.
As before comments are welcome. That includes everything from typos and suggestions for better phrasing to substantive critiques of the argument. If I can get organized, I will try to post the edited version of the entire chapter and invite another round of comments.
As an aside, I just got an email link to the Journal of Economic Literature (behind a login screen), which contains Stephen Williamson’s review of my book, including his claims that both the Efficient Markets Hypothesis and DSGE macro are devoid of any implications. I bet that if I had submitted an article to any publication of the American Economic Association making such claims, it would have been shot down in flames by the referees. But, now it’s been published – anyone keen on a radical critique of mainstream economics can now cite the JEL to the effect that the whole enterprise (at least as applied to finance and macroeconomics) is irrelevant to reality.
Now that Obama has signalled that he will sign the National Defense Authorization Act, US citizens have no legal rights that can’t be over-ridden by miltary or presidential fiat. Anyone accused of being a terrorist linked to Al Qaeda can be arrested, shipped overseas and held indefinitely without trial, or alternatively tried by military commissions. And, if arrest isn’t feasible or convenient then (at least outside the US), they can be hunted down and assassinated, with or without warning.
On the face of it, that makes the US a scary place to live. But, as a matter of everyday reality, most Americans aren’t scared at all. Should they be?
John Howard’s endorsement of Ian Plimer’s children’s version of his absurd anti-science tract Heaven and Earth has at least one good feature. I can now cut the number of prominent Australian conservatives for whom I have any intellectual respect down from two to one. Howard’s acceptance of anti-science nonsense shows that, for all his ability as a politician, he is, in the end, just another tribalist incapable of thinking for himself. 
Although not all the tribal leaders are old men, an old, high-status man like Howard is certainly emblematic of Australian delusionism . Like a lot of old, high status men, he stopped thinking decades ago, but is even more confident of being right now than when he had to confront his prejudices with reality from time time. Like other delusionists, Howard has no scientific training, shows no sign of understanding statistics and almost certainly hasn’t read any real scientific literature, but nonetheless believes he can rank clowns like Plimer and Monckton ahead of the real scientists.
The situation in the US is similar but even more grimly amusing, with the sole truthteller in the entire Republican party, Jon Huntsman, recently reduced to waffling (in both US and UK/Oz senses of this term) because he briefly looked like having a chance to be the next non-Romney. This tribal mindlessness is reflected in the inability of the Republican Party, at a time when they ought to be unbackable favorites in 2012, to come up with a candidate who can convince the basis s/he is one of them, but who doesn’t rapidly reveal themselves as a fool, a knave or both.
And, as evidence of the utter intellectual shamelessness of delusionism, you can’t beat the campaign against wind power, driven by the kinds of absurd claims of risk that would be mocked, mercilessly and deservedly, if they came from the mainstream environmental movement.
The global left is in pretty bad shape in lots of ways. Still, I would really hate to be a conservative right now.
fn1. Now (2014) down to zero. Turnbull has proved he lacks any real substance.
fn2. I’m not saying that all Australian conservatives are mindless tribalists. There’s a large group, epitomized by Greg Hunt and now Malcolm Turnbull, who understand the issues quite well, but are unwilling to speak up. Then there is a group of postmodern conservatives of whom Andrew Bolt is probably the best example, who have passed the point where concepts of truth or falsehood have any meaning – truth is whatever suits the cause on any given day.
My plans for a full-length movie extravaganza based on my hit book Zombie Economics have gone nowhere. But, now, thanks to the wonders of Xtranormal, reader Paula D’Itallo has produced her own movie version, Zombie Mourning: Exploring the Lives of Dead Economic Theory. Watch and enjoy, as zombie financial theorists explore the risks and opportunities created by an apocalyptic zombie bubble.
Another section of the new chapter for the paperback edition of Zombie Economics. Comments much appreciated
A while ago, my stoush with US economist Stephen Williamson over his attack on Zombie Economics (in some blog posts and what was presented as a review, for the Journal of Economic Literature) attracted a fair bit of attention around the Intertubes. Now Williamson’s longer review, to which I briefly responded here, has turned up in Agenda, published by the ANU School of Economics.
There’s a history here. Way back before blogging was born, the current editor of Agenda, William Coleman co-authored a book, Exasperating Calculators, published by Keith Windschuttle’s MacLeay Press in which I got a brief but critical mention, along with lots of others. I wrote a fairly scathing review (over the fold, also with a review of a book by Wolfgang Kasper) and I think there may have been one or two more rounds.
So, I wasn’t all that surprised to see Williamson’s piece appearing in Agenda, although I do feel (given Williamson’s putdowns of me as an Aussie yokel, and member of the “farm team”) that they could have tried for an Australian, instead of an import on this occasion. I don’t have time for a full-length response at the moment, except to say that I don’t think Williamson really engages with my argument at any point.
That’s the headline for my piece in the Fin on Thursday, looking at the clown show that is the Republican primary campaign. It’s amusing in retrospect to look at Alan Moran’s letter (republished at Catallaxy) in response to my last piece on this topic, touting the merits of Herman Cain and Rick Perry
Understanding developments in the European crisis has become rather like Kremlinology, trying to figure out the meaning of subtle changes in wording, and rearrangements of the Politburo on the podium for May Day parades. In particular, Mario Draghi of the ECB goes back and forth, sometimes suggesting that the ECB will do what nearly everyone else can see is minimally necessary to the survival of the euro (namely, print lots of them, and use some to buy EU government debt, as was done by the Fed and the Bank of England). At other times, though, it’s as if Jean-Claude Trichet is doing a ventriloquist act.
In one respect, todays EU agreement was anything but subtle. The fact that the Eurozone countries and those aspiring to join them were prepared to go ahead without the UK (and a few others) suggests that they have something serious in mind. But what – the announcement is pretty much a restatement of the Growth and Stability pact, and under present circumstances, the deficit targets can only be seen as aspirational.
Applying one of the approaches that used to be standard in Kremlinology (not necessarily a reliable one, then or now) I’m going to assume that the EU leaders are acting with some sort of coherent goal in mind and work from there. In particular, I’m going to assume that everyone who matters now recognizes the need for a big monetary expansion and the use of newly created money to resolve, or at least stabilize, the debt crisis. Read more…
A new sandpit for long side discussions, idees fixes and so on.
Bismarck is supposed to have said that for the sake of digestion and peace of mind, one should never watch the process by which either sausages or legislation is made. Certainly that’s true of the Draft Basin Plan released by the Murray Darling Basin Authority a few days ago.
What was supposed to be an evidence-based analysis aimed at determining sustainable outcomes was derailed by poor communications and legalistic processes. The botched release of the Guide to the plan last year produced an outpouring of fear and outrage among irrigators who were repeatedly told that their water allocations would be “cut”. The Government rapidly abandoned the process and engaged in the political bargaining that has produced a new plan, of which the most prominent feature is a proposed environmental water allocation of 2750 gigalitres (or perhaps less) well below the 3000 to 4000 GL suggested in the Guide as the minimum necessary for a sustainable outcome.
The process by which this outcome was reached wasn’t pretty and, unsurprisingly, no one is happy about it (I had my dummy-spit a fair while ago). But, considered as a political compromise, the outcome isn’t all that bad. If the 2750 GL total holds, the environmental allocation will be around 25 per cent of the median flow – that’s comparable to what the Snowy got in the deal brokered by Craig Ingram in 2009. It’s a lot better than seemed possible even seven years ago, when politicians could barely agree on measures to return 500 GL, and a suggestion of 1500 was ruled out of court before it was even studied.
Thanks to the Water for the Future program, something like 1700 GL of average flow has already been (re)purchased from irrigators who have been happy to sell. If the government pursues this path, they could declare victory in a few years time and abandon the costly boondoggles involved in subsidising supposedly water-saving engineering projects.