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Monday Message Board

April 22nd, 2013

Another Monday Message Board. Post comments on any topic. As usual, civilised discussion and no coarse language. Lengthy side discussions to the sandpits, please.

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  1. Pete Moran
    April 22nd, 2013 at 18:12 | #1

    My GP is two doors down from another and in-between is a dentist. Each practice has a receptionist, separate facilities/properties, and as far as I’m aware don’t co-operate.

    I wonder if the Productivity Commission shouldn’t be looking into this sort of overhead?

    Once I started looking, I noticed a number of instances of this sort of thing outside my suburb. I also wonder why a back-office type operation hasn’t popped up to support purely administrative functions of GPs/dentists etc. Having a large part of their income stream coming from Medicare, perhaps they should be forced to provide fully electronic booking, billing and follow-up via shared services rather than tying up multiple premises and underutilised personnel?

  2. April 22nd, 2013 at 18:28 | #2

    @Pete Moran

    Don’t know. But I’m pretty sure the dentist wouldn’t be making much, if anything, from medicare, and none of them would be collecting medicare just for having their receptionists/nurse there.

    I imagine they wouldn’t be paying those wages if they weren’t getting valuable assistance from those staff in operating their practices.

    There is probably nothing stopping someone starting the venture you suggest. If it works for the doctors and dentists, they’d probably sign up in droves.

  3. Jordan
    April 22nd, 2013 at 19:03 | #3

    @Pete Moran
    Does medicare changes the compensation based on practicioner’s overhead?

  4. Newtownian
    April 22nd, 2013 at 19:14 | #4

    Any thoughts on this story from the Guardian last Friday http://www.guardian.co.uk/environment/blog/2013/apr/19/pension-6-trillion-climate-gamble

    The introductory synopsis goes “How your pension is being used in a $6 trillion climate gamble – Fossil fuel companies’ bet that climate agreements won’t stop them from burning carbon puts pension funds at risk” which makes perfect disturbing sense even more in Australia than anywhere else.

    The implications are many. For example for any of us approaching the superannuation management period of our lives, after years of profiting (in theory) from the Australian mining boom, is it ethical to transfer all one’s assets to something more sustainable and laugh from the sidelines when the carbon based assets crash?

    Even a small stampede in the coming years could send repercussions through the Australian superannuation system. Or would it?

  5. quokka
  6. quokka
    April 22nd, 2013 at 19:20 | #6

    @quokka

    The link is a mess, but clicking on it does get you there.

  7. Jordan
    April 22nd, 2013 at 20:46 | #7

    quokka

    It allready has caused a stir, but not where it matters; in educating the public. Very Serious People (news pundits) as Krugman calls them, did not even notice it even tough every blog i read had mention this problem every day for the last two weeks.
    Reinhart and Rogoff should loose all credibility and all austerity advocates that base their conclusions on R-R.
    These are best analysis about it.

  8. Alphonse
  9. Salient Green
    April 23rd, 2013 at 08:40 | #9

    @Newtownian
    I had a good look at Ethical Super after reading your link. They still invest in some gas operations but no coal or oil that I could see. Their fees are hefty though and as my income is quite low atm they would swallow up most of my contributions.
    I expect my income to improve in a couple of years and will look at it again then. Thanks for the link.

  10. Paul Norton
    April 23rd, 2013 at 08:54 | #10

    My intuition tells me that there will be attempts, not least by the architects of Federal Labor’s current misfortunes and misadventures, to have the ALP reinvent itself as a party of climate change denialism and inaction after the Federal election.

  11. Paul Norton
  12. Newtownian
    April 23rd, 2013 at 09:18 | #12

    @Salient Green

    As gas will probably be an increasing transition fuel this may be ‘ethical’. The big question I’d have though is where are they getting the stuff from – coal seam gas?!!, many gas wells have to remove saline water another pollution hazard, and then there is the nightmare of methane hydrate mining, finally gas is our main source of Helium which is rapidly depleting because there is more money in burning it – short of delusional planetary mining. It might be worth considering if you can find something that slips in the cracks. The worry is that the ethical funds may be scientifically a bit constrained. A lot of environmental planners and managers these days are taught very little of the nuts and bolts science needed to really make an ethical decision and will likely be drawn in by fashion. Even the science trained may not have all the necessary skills – marine biology is great for assessing coral reef conservation issues but less useful when it comes to understanding pollutants and resources.

    Also the non fly by night companies extracting gas are invariably the same ones extracting other fossil fuels so how you split these I would be curious.

    Another problem is even if you have money in cash this will likely be going into banks who in turn may loan money to ugly extractors so it may be difficult to disentangle ethical from non-ethical aka possibly resilient companies from the doomed. I’m seeing a superannuation advisor in about a fortnight. This will be an interesting issue to raise.

  13. Ken Fabian
    April 23rd, 2013 at 09:23 | #13

    Tony Abbott is being taken to court – but it’s barely got a mention in the Mainstream Media (and tends to be framed as ‘poor loser with no grounds, malicious suit’ type story, downplaying the seriousness of the allegations or the evidence where it has appeared).

    If it were Gillard or any prominent Labor figure would this get the MSM big shrug? I suspect quite the opposite; it would be wall to wall critical commentary and speculation.

    An unbiased MSM, informing and underpinning democracy? Although there’s been plenty of Labor shooting selves (and each other) in foot I think major players in the media have been consistent in their efforts to find and highlight every failing or problem of Labor whilst avoiding scrutiny of the ‘next PM’ and his team. I suspect enough consistent and persistent bias has been generated to distort those polls that are, themselves, considered so consistently newsworthy.

  14. Newtownian
    April 23rd, 2013 at 09:48 | #14

    @Jordan

    “After some correspondence, Reinhart and Rogoff provided Thomas with the actual working spreadsheet they’d used to obtain their results.”

    “Accidents do happen, and science progresses through the identification of previous mistakes. But was this a particularly expensive mistake?”

    Thanks also Quokka for the link.

    Regarding the quotes -

    1. Funny about spreadsheets isn’t it. The old computer maxim Garbage In Garbage Out still applies. Doh! The likely reasons the reviewers and others didn’t pick this up are interesting if well known. The reviewers were slack or didn’t have time to fully pick over the text, or the results supported their own prejudices (probably the reviewers were recommended by the Reinhart and Rogoff as is increasingly the norm.). Then there is the rest of the academic community – why didn’t they pick it up? more deeply embedded prejudice which makes a mockery to labelling Economometrics as a true science. Fascinating they were using spreadsheets for something this important without having some sorts of reality and data integrity checks. And no one checked or verified.

    2. Regarding his use of the term ‘science’ – also fascinating that even his teachers were still pushing this line to their students that economics is hard science rather than a curious mix of social studies, faith, paradigms (compromised severely by the forces under which the discipline operates) and relatively simple arithmetic shrouded in a sea of functions whose language served to obscure the game to outsiders – i.e. a proto-science like alchemy( v. chemistry), demonology (v. surveillance sciences) and astrology (v. astronomy) with their mix of powerful insights, nostrums and rubbish.

  15. Tim Macknay
    April 23rd, 2013 at 11:53 | #15

    Surprise, surprise: psychologists have discovered that dogmatic free market ideology predicts climate change denial, and climate change denial predicts belief in kooky conspiracies in general. Of course, we already knew that. ;)

  16. April 23rd, 2013 at 12:24 | #16

    I was wondering Professor Quiggin about your stance on endogenous and exogenous money (unit of account)?

    Thanks for any answer in advance.

  17. Will
    April 23rd, 2013 at 14:15 | #17

    Found a great analogy as to how the US economy works:

    A company earns a 12 pack of Twinkies as profits. The CEO takes 10 off the top and gives one each to the Left Wing Worker and one to the Right Wing Worker. On his way out the door, the CEO gives a Twinkie to the media to get them to run fabricated stories on how the Left Wing Worker is trying to steal the Right Wing Worker’s Twinkie.

  18. Jordan
    April 23rd, 2013 at 14:26 | #18

    Ikonoclast
    By some economists, R-R did not release their ‘spreadshit’ data untill recently.
    Philip Pilkington gave a good complementary to your points.

    ” Pollin and Ash, being good Post-Keynesian economists who have likely read Keynes’ critiques of econometric and statistical studies, recognise well that simply throwing decades of heterogeneous historical data into a statistical blender and then proclaiming the mush that results as some sort of Grand Truth for the absurdity that it is. They are well aware that when it comes to history context is key; a severe one-year recession in New Zealand in the late-1950s is such a different historical constellation than demobilisation in the US after WWII that to compare them in simple statistical terms is patently absurd.

    The irritating thing is that most economists and media commentators will admit this as being true, yet they will continue to engage with such nonsense regardless. After all, it is so much easier to comment on single numbers – however mysteriously arrived at – than it is to discuss complex historical constellations….

    Keynes compared such statistical manipulation to black magic and alchemy in that he recognised what a powerful influence the idea of objective interpretations of manifestly subjective and context-dependent data could have over the minds of men. Today we would do well to keep this in mind as the dust settles on the Reinhart-Rogoff controversy and the whole edifice of the economic priesthood and its pseudo-scientific methods remain intact.”

  19. Ben
    April 23rd, 2013 at 15:51 | #19

    @Newtownian
    I read recently that the Uniting Church in NSW has divested itself completely from fossil fuels. Here’s some more details.

  20. Tim Macknay
    April 23rd, 2013 at 18:55 | #20

    @Paul Norton
    Paul Norton, I seem to have linked to the same article you did at #11, without noticing that you’d done it. Either you were in moderation for a while, or I don’t read well. Sorry about that.

  21. Jim Rose
    April 23rd, 2013 at 19:29 | #21

    @Paul Norton Many in the environmental movement, without blinking an eye, reject the science of GMO and hound from the temple anyone who defies the consensus they agree with on global warming.

    the precautionary principle was developed to avoid scientific facts and analysis, suspend judgment and demand ever more evidence. Who developed that principle?

    What about ethanol subsidies? The large carbon footprint of organic farming?

  22. rog
    April 23rd, 2013 at 19:57 | #22

    @Jim Rose Exactly how many is many? I was at a national organic conference which included speakers on both sides of the GM debate.

    This “hounding from the temple” stuff is just more ridiculous rhetoric.

  23. April 24th, 2013 at 00:02 | #23

    Great movie about the science of climate change called “Thin Ice” is available to watch for free online now:

    http://thiniceclimate.org/

    Just watched it. My 30 second review is:

    A great movie about science, scientists, climate change and the scientists studying climate change. As a warmist-believer-gaia-rationalist it is hard to watch a simple factual doco like this without immediately second guessing the chorus of lies and disinformation likely to well up from the likes of WUWT, News Ltd and, sadly, their ABC (only in the interests of balance of course).

    Nonetheless, watch it and show it to your friends and family. Or don’t, if you are not a “warmist” and wish to shield them from real science.

  24. Paul Norton
    April 24th, 2013 at 09:01 | #24

    Jim Rose @21:

    the precautionary principle was developed to avoid scientific facts and analysis, suspend judgment and demand ever more evidence. Who developed that principle?

    There are many formulations of the precautionary principle. Article 15 of the Rio Declaration (1992) states that:

    In order to protect the environment, the precautionary approach should be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation.

    In some form this is now an accepted part of Commonwealth and State legislation in Australia and in the laws of states around the world. How you can interpret it as an injunction to “avoid scientific facts and analysis” is best explained by yourself.

    According to Wikipedia:

    The formal concept evolved out of the German socio-legal tradition in the 1930s, centering on the concept of good household management.[3] In German the concept is Vorsorgeprinzip, which translates into English as precaution principle.

  25. Newtownian
    April 24th, 2013 at 10:36 | #25

    @Ben
    I heard that too. Its the sort of change that indicates people are educating themselves more deeply about climate change. Perhaps this is the sea change that was needed – low key but more robust. There was a survey released a few months back which showed a 20% drop in belief in climate change in a few years which suggested many peoples’ earlier opinions were surficial and not reflective of deeper seated values.

    It will be interesting to see how the denial/PR industry responds if there is a deeper change happening. What they cant address in the end is that environmental protection doesn’t arise from green Trotskyite conspiracies but in response to real environmental degradation and impacts. And science is a messenger of the details, not a priest of some ideology. The appalling environment extant in China current illustrates how GDP is at times a lousy indicator of wealth. I guess they’ll learn too when short term air conditions create hell on earth during a Politburo meeting in Beijing.

  26. April 24th, 2013 at 10:47 | #26

    @Newtownian

    The thing is, many economists (including New Keynesians such as Dean Baker, Paul Krugman to MMTers such as Bill Mitchell) never bought the results of the R & R paper and have questioned the casuality. Many researchers tried to replicate the results but failed and many requested (Dean Baker and Bill Mitchell etc.) to obtain the data wasn’t responded to. So its difficult to say that the economists profession endorsed the paper.

    The R & R paper was used as a support evidence for austerity proponents without even examining the research itself, otherwise they would also run into troubles such as unable to reproduce the same result with the same data set. R & R’s problem other than not sharing the data they were using, is that they did not deny the austerity proponents’ interpretation of the paper and looked like they simply ‘went with the flow’ with the austerity proponents’ and their claims.

  27. Newtownian
    April 24th, 2013 at 11:14 | #27

    @Jim Rose

    “@Paul Norton Many in the environmental movement, without blinking an eye, reject the science of GMO and hound from the temple anyone who defies the consensus they agree with on global warming. the precautionary principle was developed to avoid scientific facts and analysis, suspend judgment and demand ever more evidence. Who developed that principle?
    What about ethanol subsidies? The large carbon footprint of organic farming?”

    Hi Jim the way you mixed good points with dodgy ones just begs some qualification.

    - Re GMOs you are part right and part wrong. Green groups have often distorted things without fully understanding the science and they come from a four legs good two legs bad starting position – and as a result have these weird Damascus moments where they flip positions. The problem is seeing things in Manicheans terms for what they are. And yes there are some pretty innocuous GMOs around. My favorites are fluorescently labelled protein organisms like fluorescent mice – brilliant simple and extremely unlikely to ever be noxious.

    But there are darker sides. We don’t really have such a complete understanding of ecology as to be able to predict what will go feral – GMO Cane Toads. Then there is synthetic life – real Frankenstein stuff – and of course cloning – resurrecting fluffy the cat is probably innocuous but do we really need a string of Rupert Murdochs or Kerry Packer into the infinite future?

    - Re the history of the Precautionary Principle – its got problems but origins are not malicious. Rather than dismissing it out of hand you do a hunt for considered reviews and put links here to ones you have problems with pointing out their strengths and limitations. I would be interested to see comments on specific problems. Go on Googlescholar. There are plenty around you can probably download without having university library access which we could all share. The top two here look accessible http://scholar.google.com.au/scholar?q=review+precautionary+principle&btnG=&hl=en&as_sdt=2005&sciodt=0%2C5&cites=3812226524799655417&scipsc=

    - Ethanol/biodiesel – yes this is a problem unless you are talking small islands needing to import diesel or processing of plant residues (within reason as these add to soil organic matter).

    - Organic farm carbon footprints – I agree absolutely these need something like Life Cycle Assessment and production is often less. That said how sustainable long term is current big scale farming based on hidden subsidies like for diesel and water? A current fashionable elephant is phosphorus and the problem is very real. Even though P is pretty abundant in the earth’s crust its extraction from low grade deposits once Morocco is spent will be prohibitive. The trouble with all this is short term economics is distorting full comparisons.

  28. Newtownian
    April 24th, 2013 at 11:48 | #28

    @Tom
    Thanks Tom. That was my impression to.

    In fairness to them though, at the heart is the way all academic disciplines seem to work – for centuries – and including science. While we all try/claim to be objective, any one study is loaded with author baggage and prejudices of them and their discipline and tries to fit into accepted paradigms if you want to get published. Ultimately the only thing that keeps disciplines honest is a mixture of hard and soft hypothesis testing and periodic paradigm shifts.

    At a personal level this arises when a swag of dead-end ideas makes the high priests look stupid not only to outsiders but to themselves.

    Hard science is lucky in that it had developed a culture which encourages exploitation of this mechanism. Though this may be under threat with the increasing demand to know the answer to a problem before you do the research.

    I would like to think that economics is about to undergo its own great paradigm shift and such instances as this dodgy paper maybe are portents of change. But its hard to tell. This history of religion shows that nonsense memes are very robust once you move into the social world while psychology shows massive cognitive dissonance (multiple utter different competing theories) is no barrier to making a buck.

    On the downside I haven’t yet seen evidence yet of what feels an ‘atomic theory’ of economics. Maybe you have?

    On the other hand if anyone could they should be able to clean up financially so maybe incentive for genuine change exists. And the movement away from Keynes and Marx hopefully shows its sympathizers its time to go back to the drawing board.

  29. April 24th, 2013 at 12:39 | #29

    @Newtownian

    “On the downside I haven’t yet seen evidence yet of what feels an ‘atomic theory’ of economics. Maybe you have?”

    Strictly speaking, no, but that also depend on how ‘atomic theory’ of economics is defined.

    No economists have predicted the exact timing of the GFC, predicted the exact damage of GFC, and/or predicted the exact effects of a policy with the confidence level that exists in ‘hard science’. There are, however, economists that warned about the GFC, what may happen if the GFC came (e.g. J. Stiglitz, S Keen, W Godley, N Roubini, the list goes on). There are also those who predicted the movements of economic indicators when the economy is in the recent crisis and got everything right(interest rate, inflation, unemployment, effects of quantitative easing and austerity etc.) such as P Krugman and B Mitchell etc. What’s more important is that Krugman based all his predictions in the recent crisis using economic theories that are being taught in undergrad economics.

    So in my opinion, economics isn’t exactly a dismal science as those who claim it is depending on which economic theory you use. Those in the hedge funds and the ‘experts’ who never accept Keynesian theories, are predicting hyper-inflation, expansionary austerity and soaring interest rates ever since 2008 may well perceive economics as dismal science.

  30. Pete Moran
    April 24th, 2013 at 12:54 | #30

    @Newtownian

    With regards GMO, I think you missed a very key element in Green objections; GMO is a business model for the evil-doers in Monsanto and Bayer. They don’t much care that weed resistance is an unanswerable problem. We should also be aware that many believe we don’t have a food production problem, but a food distribution problem, especially as it appears the US (for example) possibly wastes ~50% of purchase food.

    With regards the precautionary principle; I think this from Christopher Hitchens is a particularly eloquant explanation http://youtu.be/BDj6WechLhw (1m26s for those impatient viewers).

  31. Troy Prideaux
    April 24th, 2013 at 13:43 | #31

    On another site a commenter has posted “In Australia, Murdoch (via Abbot and co) has been fighting a losing battle trying to save Fox by nobbling the NBN.”
    Anyone care to speculate if there’s any truth to any type of conspiracy there?

  32. Troy Prideaux
    April 24th, 2013 at 13:48 | #32

    Apologies if that last post breaches any rules or protocols – I pushed the send button before considering that.

  33. Pete Moran
    April 24th, 2013 at 15:34 | #33

    @Troy Prideaux

    I can certainly understand why Ltd News would NOT want fast internet access. I’m sure Ltd News motivation is to dramatic slow or at least terminally confuse NBN efforts – I don’t think they’re succeeding.

    I watch The Daily Show and Colbert Report over the internet via VPN. I would buy those shows as Podcasts if they would let me. I watched the tennis from Wimbledon via the internet ($22 for 2 weeks access, no ads) and the America’s Cup Series sailing is free*, live and HD from YouTube.

    * Free to view – someone else is paying via the hidden product tax of advertising.

  34. April 24th, 2013 at 16:03 | #34

    @Troy Prideaux

    I’d say it’s quite possible.

    I recommend “Murdoch’s Pirates” by Neil Chenoweth. The amounts of money involved for Murdoch in monopolising what people can watch and making them pay for it are huge. The lengths his operatives go to (legal and illegal) to ensure that power are simply scary and the muscle he has access to is terrifying.

    Great book with hackers, spies, corporate espionage/sabotage, Shin Beit killers, suspicious ‘suicide’ and a lot of very helpful law enforcers.

  35. Troy Prideaux
    April 24th, 2013 at 16:20 | #35

    @Megan
    …and it’s my understanding that it’s the *entertainment* arm of News Corp that is currently bringing in all the profits (to state what is probably obvious).

  36. Jim Rose
    April 25th, 2013 at 09:51 | #36

    I want to ban bicyclists at night.

    Nearly ran one over when stopped at an intersection the other night.

    Come out of nowhere at speed on my immediate right near the side of the road with a tiny flickering front light. On me before I had much time to do anything. He rode out in front of my car assuming I saw him in the darkness.

    It is generally agreed that pedestrians do not belong on the road! Why have other equally small objects in your peripheral vision and rear view mirror!

  37. Paul Norton
    April 25th, 2013 at 13:57 | #37

    David Brin makes a lot of sense on attitudes to climate change.

  38. April 25th, 2013 at 14:57 | #38

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  39. Newtownian
    April 26th, 2013 at 11:24 | #39
  40. Newtownian
    April 26th, 2013 at 11:44 | #40

    @Tom

    Thanks Tom – I agree Economics is not a dismal science in that it is certainly not dismal for me but quite fascinating. Nor is it a science yet.

    Regarding an ‘Atomic Theory’ I think what I’m looking for is a theory of complex systems and concepts and how you construct models based on a genuine understanding rather than dress empirical equations up in jargon which seems what they are now. This has much wider ramifications of course to.

    That said there are traps. Take spread-sheets (which I love as analytical tools) They are so central to economics and are all in essence models. Fascinatingly there is the recent austerity modelling fiasco uncovered by an undergrad/post grad. This may explain by analogy this interesting item from the Journal of Environmental Quality author instructions about modelling papers:

    ” Policy for Environmental Modeling Papers The editorial policy for the consideration of environmental modelling papers is very explicit. Modeling papers are only considered if
    they provide measured data to validate the model. However, there are exceptions to this rule. If obtaining measured validation data is an “undue burden” for the authors, then an uncertainty analysis using Monte Carlo simulations or first order uncertainty analysis must be provided in
    place of the measured data. An “undue burden” is defined as an onerous financial or safety burden. For example, providing measured data to validate a regional-scale non-point source pollutant model would pose an onerous financial burden because of the tremendous number of samples required. Another example is obtaining measured data for a contaminant that poses an extreme danger, such as plutonium or dioxin. This is regarded as an onerous health and safety burden. Ideally, a modeling paper should provide measured data for validation and should also provide an uncertainty analysis to establish the reliability of the measurements, except in those cases where measured data poses an undue burden, in which case an uncertainty analysis is sufficient.”

    I wonder? How well does economics cope with the validation of its models more generally? Are such policies in place?? In asking this I am not trying to be nasty as I face the same challenges too.

  41. Newtownian
    April 26th, 2013 at 11:56 | #41

    @Pete Moran

    No question I left much out. Unfortunately with GMOs people seem to either take too much liberty or be over-condemnatory.

    Personally I am wary as a result of knowing a lot of molecular biologists and the hubris they displayed – and the way their field gutted many equally important biological sub-disciplines. And there are the problems of commercialisation you refer to.

    On the other hand they have achieved many wonders and insight which still isn’t appreciated well outside of biology. Perhaps the best thing is to view it cautiously like all technologies and bear in mind we don’t know its full ramifications.

    That said you have to ask why it gets more flack than say neurophysiology when the latter is just as scary if it ever yields its secrets fully. Philosophically neurophysiology it may challenge the concept of the self and the soul and hence all received religion which could be a good thing. On the other hand medically it may allow selected people to become superhuman and control the rest of us for fun and profit. Now that is scary and I never see it discussed mainstream though I have no doubt there are articles waiting to be discovered via Google.

    ps thanks for the Hitchens link.

  42. Newtownian
    April 26th, 2013 at 12:05 | #42

    @Jim Rose

    I don’t often empathize with your position but this one time I definitely do. My wife and I refer to them as kamikaze cyclists – no helmets or lights and bat out of hell between slowed cars with opening doors. A relative is the motor scooter which may have lights but is faster and gives no reaction time.

    I would have thought lights ablaze (they are cheap), reflecting vests, helmets and defensive riding would be the norm if only to publicise “cyclist around” unless you wanted to win a Darwin Award. Yet in the UK there seems to be a movement covering 80% of cyclists that demands the freedom to be a safety moron. Explanations please.

    As a motorbike rider (once) and cyclist I am even more puzzled.

    And since this is an economics blog site I have to ask – is this the end result of neoliberal freedom philosophy gone mad or the result of mass cyclist alienation and a response to over regulation?

  43. April 26th, 2013 at 12:48 | #43

    @Newtownian

    “How well does economics cope with the validation of its models more generally?”

    In my opinion, not very well.

    One reason is the lack of data, for example the chart at the end of this article that showed Bank Asset as a % of nominal GDP:
    http://www.propertyobserver.com.au/economy/australia-s-small-banking-sector-protects-it-from-risk-of-bubble-corrections-rba/2013032460032

    The chart is presented by the RBA. I subsequently searched for bank asset as a % of GDP annual data to eliminate some optical illusions associate with that graph, but was unable to find any statistics in major statistics websites for economics (IMF, World Bank, ABS and Australian Treasury). I subsequently emailed a request to the RBA for the annual data but they responded saying that they can not disclose the data underlying that graph due to contractual obligations to data providers. This sort of problem is not rare for economic research.

    The second reason which creates a problem that is also associated with the first reason is the difference in the definition of the data across different regions. For example, Bank Asset as a % of GDP data is hugely influenced by accounting standards thus distorting the data. So to adjust the data can sometimes involve a large amount of knowledge in other fields, not only that but the even if the Bank Asset data was fully adjusted, it may have little implication and significance for creating, validating or falsifying economic theories.

    The third reason is “time problem” (I don’t know how to describe it). If we use the recent crisis as an example, the school of thoughts that uses the Quantity Theory of Money (mostly those that argued for austerity) have predicted hyperinflation and soaring interest rates should be the result of quantitative easing. However, since I mentioned in the above post that no economic theory gives a precise timing when the consequence will arise; it is also “hard” to falsify their theory even when we have waited for more than two decades for Japan’s hyperinflation (which still hasn’t occurred; and Japan is currently in a deflation).

  44. Troy Prideaux
    April 26th, 2013 at 13:55 | #44

    @Tom
    re: that “Time Problem”: There appears to be an ever increasing magnitude of entropy too – powered by human greed via financial innovation; technology advances; increasing credit, debt and money supply; lesser trust; faster changing economies; faster turnovers and greater magnitude of state controlled manipulations of currencies and markets … and well… just about all seriously sizable financial institutions enthusiastically willing to try their hand in unprecedented activity; oh, and (of course) that healthy appetite to invest in the casino we better know as financial markets.

  45. Troy Prideaux
    April 28th, 2013 at 17:33 | #45

    For those interested in general inspiration from a really really clever guy (Elon Musk):

    http://www.ted.com/talks/elon_musk_the_ … rcity.html

    Talks about his electric cars, solar city projects and SpaceX.

  46. Troy Prideaux
    April 28th, 2013 at 17:34 | #46
  47. rog
    April 29th, 2013 at 03:46 | #47

    Zombie economics gets a mention, indirectly.

    http://jacobinmag.com/2013/04/after-austerity/

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