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John Quiggin 
@Andrew Reynolds
Name the damn page or Table number Andy. You post a link to the entire publication of multiple pages and you dont eveb ref what your talking about. The publication has multiple tables and you dont name the one you are referring to
Of course its mean income. How can you have one number for everyone in the range????? Im trying not to call you a fool Andy but its getting harder.
Alice,
Same table, same page I previously mentioned – as I said in the comment. Just to be helpful, here is the comment – it is on page 16 of the linked document.
The table is headed with the heading I gave before (and you mentioned before) “Income per week at top of selected percentiles”.
Alice, you have been rather in-your-face to me and others on this blog before. It seemed to peak around April. Some of those others went away, at least partly because of that. You seem to be getting back into that mode now, towards yet others. If you don’t cut it back it might get in the way of constructive dialogue again – for instance, it’s getting the dialogue narrowly focussed on statistical cut-offs and not on how best to deal with actual underlying problems like the increasing separation of haves and have-nots. I hope you don’t take this as that way towards you, because I haven’t addressed you lately. That is, with any luck you won’t take this as a personal affront but as constructive criticism.
If anyone does want to get back onto those underlying problems, I’d just like to remind them that the Professor Kim Swales approach I have often advocated engineers out churning by making funds stay with employers and employees rather than going via the government.
Alice,
…and as I said – it is “at top of selected percentiles” – not the mean.
Oh – and you did call me a fool. Who is the fool now?
Andy,
Ive had a good look at your table. The 90th percentile are all those between 80 and 90. The mean income for the top quintile is substantially higher than your highest income for P90. Now note it excludes the top 10% (there are only 9 groups there). That is why the mean income for the top quintile is substantially higher (1,646 v P90 top income of 1390 which is still higher than the number you quoted of 1079 for P80 ..which is people between).
OK Andy Ill concede I read part of it incorrectly but you have as well (with that figure you gave of 1079 being for the top 20% – it would be the very bottom (add $1).
Its easier to take the mean income of the top quintile Andy (1646)….and having said all this, the income distribution data is based on survey data that is then extrapolated.
According to taxation statistics for personal incomes (which I prefer because it has a much larger population and its real not extraoplated) – the top 6% earn in excess of 104,000 with the top 1% earning in excess of $233,000.
Now there are 93,060 people approximately in that top 1 percent of personal taxpayers. Yet they command 10% of total taxable income (a whopping $53,296,041,598 which makes their mean income $572,706 per annum ).
They can afford to pay higher income taxes Andy especially when you look at the proportion they get to keep after tax ie $32,369,175,881 or an average of $347,831 each.
So looking at their effective tax rate it turns out to be between 39 and 41%.
Way too generous…and this one is real and its after they have dodged the taxman with every known trick under the sun (family trusts, bonus shares, income in kind, benefits and every other sophisticated lawyer/accountants rabbit out of hat tax evasion technique).
Ill settle for higher income taxes on the top 10% Andy and even higher on the top 5% and above.
However dont think we will get higher income taxes on the rich any time soon. Most politicians would likely fall into the top 10% of taxpayers wouldnt they??? Of course.
PM – get knotted.
@Andrew Reynolds
Andy you can bet the wealthy actually have an effective rate of much less than that after the sophisticated accounting techniques are deployed (by those who can afford it). I wouldnt be surprised if they paid an effective rate of tax equal to or lower than a wage earner on about $30,000 per annum. And we wonder why inequality has been rising in this country?
Thanks, Alice – in amongst all that verbage you have conceded that my reading of the table was correct – that you are (if you earn over $70,720 – and a dollar), effectively, conceding that you are one of those that you regard as “out of control”.
Can you please retract the nasty language (“fool” for example, as, if anyone here is a fool on that it is you) and can we continue in a more moderate tone and discuss the issues?
Just this once Andy -and you can retract yours as well – only because we have had a number of discussions and agreed on 4 things (and disagreed on 24).
No Andy – you have got mixed up again!! I said the top decile were out of control (and you could throw in the 9th for higher taxes as well). Im going back now to see what the taxable income is for the 9th (we may let them off)…BUT the top decile is seriously out of control.
You also need to be circumspect with these stats…are they counting the unemployed??? Are they counting part timers. Average wages are not the same thing as the average income of all voters as noted by Leigh in the following paper which notes that the majority of Australians do not want tax cuts but more services (and by now I would suggest more want higher taxes on the rich, like me).
In fact the median annual income is found here by Leigh and others to be $27000 per annum (and Leigh contends the median is more meanigful anyway – I agree) meaning the vast majority of Australians would not be affected by higher income taxes on the rich (lets say Andy on those earning over 100K)…however politicians certainly would be which is why it is unlikely to happen any time soon even though it should.
Its in this link somewhere how the media manages to uses misleading data to run news stories where they say the mean income in Australia is 56,000K. Entirely misleading when the median in $27,000.
Click to access PoliticalEconomyTaxReformPP.pdf
@Andrew Reynolds
She is obviously not going to “retract the nasty language… and… continue in a more moderate tone and discuss the issues”. Observe how she lashed out at my own advice to her about that, when I went to some trouble to make it clear that is was meant as constructive criticism. Either she is maintaining a reserve of antagonism from months ago, or she is just like that towards anybody’s difference of view now. I’d suggest walking away from the dialogue, apart from rebutting any claims to winning a debate that might follow and could mislead casual readers.
JQ, any other suggestions?
Alice,
They are counting all income earners, as the table indicates – and the top decile (the “out of control” mob) does start at $70,720 – and a dollar – or at least it did in June 2008. The people you are looking to tax more (those from the top of P80 and up) are on the princely sum of $56,108 – and a dollar – or at least it did in June 2008.
As for retracting, I have nothing to retract. I did not call you a fool, merely pointed out that, if to get the tables wrong made you a fool, then I was not the fool here.
.
PML,
We can but try. This blog is PrQ’s property and it is up to him if he may or may not consider any sanctions. Compared to the abuse I put up with a Catallaxy, though, Alice is very moderate.
@Andrew Reynolds
Thankyou Andy. If you look closely at who is abusive Andy its actually PM. He thinks he is the sole arbiter of netiquette in here and Ive copped these long aggressive tirades from him before which is why I told him to get knotted.
I was debating with you Andy and we have debated before.
Get over yourself PM.
And PM lobs in to our argument out of the blue (with nothing to add on inequalityb or incomes or higher taxes on the wealthy) with a single pointed rude comment (now two) to me and an unexplained link to Swales and then appeals to JQ to throw me in the clink.
Sure PM.
@Alice
And Andy, compared to Catallaxy or whatever its called we are ALL more moderate in here. Thats why half of Catallyx blogs in here LOL!
No Alice – a lot of the commentors at the Cat are banned from here. With good reason, I ight add. Annoying your host is always bad manners.
@Andrew Reynolds
Ok Andy I wont call you a fool even though I know you dont take me seriously!!! Anyway Andy, my theory is, its simply no good arguing with your own kind all the time. It gets boring. You want to have vibrant discussions and that means arguing with the enemy. It makes life interesting and you might actually learn something. Now you Andy, even if I dont agree with your methodology for how to get there in the end (being one of those small govt de-reg lower taxes libertarians) can appreciate that you have good intentions as regards the outcome.
However, Im still irritated that they are unlikely to raise the income taxes on the rich Andy (because I truly believe this is a contributing factor to rising inequality in this country) because the pollies all earn in the highest income bracket mostly. Who, amongst the lot of them will initiate it OR will vote to pass it? Which then partially turns me towards the “damn the government” crowd. You see…not everything is black and white at all.
@Andrew Reynolds
Well Andy one lately called Sea Bass did come in here accusing us all of being drunk on the “Keynesian Koolaid” and I would drink it readily if I thought it still existed. But Im afraid the politicians have drunk it all and have left none for anyone else.
Instead of raising taxes on the rich, how about cutting them on the poor – like, entirely. All of them gone – no one on under (say) $70k pays any income tax at all?
how about doing both?
@Alice
Alice, you have accused me of all sorts of things before, and I defended myself. Finally you made a back handed apology that repeated the slurs you made against me, claiming that you had been provoked. When I pointed out that that was no apology at all, you agreed to calm down and back off. None of that is me casting aspersions on you but rather the other way about. It is not helpful to revive your old theme at this late stage when anybody can check that out.
@Alice
Alice, I am sorry if you found that rude, but I sincerely hoped only to suggest that you were overheating the dialogue and that it would help if you cooled it, as had happened in the past (both overheating and cooling off). Then I – separately – offered a comment related to an earlier stage of the dialogue, concerning churning, which I thought spoke for itself. I did not chip in on the angry back and forth because I did not want to inflame points that were already heated. It’s called changing the subject, but in this case it harked back to an earlier stage, so it was no mere wasteful digression. And I was not “appeal[ing] to JQ to throw [you] in the clink” but for him to step in and offer suggestions that might help calm things down. Clearly anything I put forward – even this, which is an apologia in the old technical sense – is bound to irritate you, so it must fall on others to take such steps as they think fit, if any.
@Alice
I call it the Keynesian Koolaid because it’s based on faulty assumptions that are nonetheless overlooked by otherwise intelligent people. I was a devout left-wing social democrat until I was taught the Keynesian model. Seriously, that more people don’t start getting suspicious as soon as they wheel out the Keynesian fiscal multiplier is a mystery to me.
This is before you get to Keynes’ confusion of savings with non-spending, his belief that the interest rate is set by liquidity preference (as opposed to the supply and demand of capital) and his bogus “refutation” of Say’s Law, where he states that the classical economists could not explain unemployment (they could, and they spent a lot of time and effort explaining how this could occur even in the absence of government interventions).
If you’re going to argue for greater wealth redistribution, higher taxes and more government, sorry, but you’re going to have to get a better model. Because this one broke a long time ago.
@P.M.Lawrence
Thats what you dont get PM – it wasnt”an angry back and forth”. Andy knows that. I know that. You made a wrong assumption and yes it is up to others to moderate this blog – not you, but thanks for your “constructive criticism” anyway. Ill keep it in mind.
Sea Bass – the Keynesian model broke after 30 years of surreptitious concessions in the form of lower taxes and concessions granted the wealthy, an inattention payed to incidiously rising unemployment and underemployment, an overemphasis on keeping interest rates lower than they should have been which all combined to fuel a bubble (a number of bubbles). The Keynesian model failed, not because it was faulty but because it was abandoned by increasingly vested interests exerting power over weak governments (and a self rewarding interaction between the latter two that should not exist).
@P.M.Lawrence
And PM – I know what you are like. If we were both in the army – youd probably have me out there doing three hours extra drill for the minor transgression of calling my sparring mate Andy a fool! If you were moderating this blog I would already be in solitary. It isnt because Im fonder of “Keynesian Koolaid” than Sea Bass or yourself (or even Andy) is it?
@P.M.Lawrence
But PML, aside from our noted differences (the retirement extension age thing), I can see one similarity between you and I (and correct me if I am wrong). You dont like the government because you dont think it should be doing the job, because you likely dont think it does the job properly. I dont like the government because I dont think its doing its job properly. In short, you are ready to sack them. Im ready to fix them.
Id love to know how the real growth in politicians incomes for the past 35 years compares to the real growth in all other incomes. Have they aligned themselves too closely with the interests of the top decile of income earners? What decile did politician’s incomes fall into in 1950 compared to today??
Keynesian model of ever-higher spending or tax cuts to stimulate demand failed. You can’t get passed that. The problem is that everyone wants a model to believe in. The left choose Keynes because it encapsulated their ideas about an ever-powerful state. If Keynesian economics worked then you fly in the face of history.
@SeanG I assume you’ve recently returned from a two-year holiday on Mars or at the bottom of the ocean. Perhaps you might want to catch up on the news before making such silly assertions.
Alternatively, you could approach the Australian government and explain that the Treasury and RBA have everything wrong and that their stimulus package was a pathetic failure. Then you could perhaps attend the next G20 meeting and give the IMF, World Bank, BIS and so on the same explanations.
Seriously, if you want to argue against Keynesian economics, claims that history proves you right are not going to cut it any more. The historic failure of New Classical Economics and the Efficient Markets Hypothesis is clear-cut and more recent.
The recent success of Keynesian stimulus implies the need for a serious reconsideration of what went wrong in the 1970s, and also of what went right from the 1940s to the 1960s.
ProfQ,
Maybe you can explain the failure of the stimuli packages in Japan during the 1990s.
Or the stimulus packages announced in the UK and the US.
Or you can explain to all of us how if stimuli packages would work why the US has been in recession since 2008 when the first series of stimuli were announced at the beginning of that year.
Or maybe you can explain to all of us how in the 1970s stimuli packages not only failed but they resulted in a swing away from Keynesian economic ideas.
Or you can explain to us how it can be that the Canadians cut government expenditure by 20% in the early 1990s and did not fall into a deep depression which economists like yourself would have forecasted?
How about why the Swedes cut government expenditure in the teeth of a vicious early 1990s recession yet did not fall into a deep depression?
Or how about continued reductions in the UK of government deficits after the ERM debacle did not result in deep recessions?
Or how about the fact that you can raise taxes and cut spending in the early-90s America and see the greatest period of prosperity and innovation for generations?
This is the problem with people like you. You are a true believer while I am a natural rationalist. If I was in government in Australia I would have had a stimulus package that was fairly large but I would have targeted it elsewhere. Whereas if I was in the UK, I would see that credit flows are more vital to maintain than demand-side management.
But you and Alice are different. You are like a broken clock. Right twice a day but broken. You do not show intellectual flexibility and adaptability to different circumstances. That is why you love to attack the EMH which I thought was a stupid theory since university (and still do) but have a heart-attack when it comes to criticising government spending because you automatically assume that it is right, just and will always work.
Sean, you appear to be under the impression that Keynesianism is the doctrine that budget deficits are invariably beneficial. This has been for some time the official view of the US Republican Party (at least until they lost office) but it’s not what Keynesians think. Rather than feeling so self-satisfied as in the post above, I suggest you:
(i) Read a textbook or two to get the issues straight
(ii) Think about why it is that people like Ken Henry and the G20 Finance Ministers (not reflexive lefties by any means) disagree with you. Hint: It’s not because they know less economic history than you do.
@jquiggin
Exactly JQ. I might have known Sean G would pop up on this discussion on Keynesianism. Ill await a couple of others and then we will have all the anti Keynesians corralled in the one thread. That doesnt scare me.
What went so wrong in economics faculties that Keynesian theory was “overturned” , “misportrayed and misinterpreted” ( “twisted” as evident in Sean’s interpretation) and “discredited systematically and deliberately” over a long period of time running into decades which included the deliberate sidelining of those economists who remained sensible enough to recognise its practical advantages, over some thoroughly questionable and almost laughable substitute models arising from Chicago Booth (including EMH and Black “Holes”).
I can suggest one reason. Vested interests outside Governments with considerable resources, power and influence to groom and promote certain individuals or groups within both academia, government departments and political parties…primarily to serve their narrow interests firstly, over the economic good.
There is only one way to correct the faulty biased political systems that govern us now and stymie important planning for the future at every turn.
That is to, as John Ralston Saul suggested 30 or more years ago, to see true democracy as a public good and to ensure the democratic election process is entirely publicly funded and that donations from private interest groups to political parties (let them donate their time of they are so interested) or governments are outlawed in the entirety with the exception of genuinely philanthropic donations to “genuine charities” or other socially useful institutions like universities.
We need to clean up corruption throughout the system or it will only get worse.
My second suggestion is to severely curtail political salaries and benefits such that they are not aligned to the top decile of income earners. This is essential. We need to move away from the model that incorrectly says market income determines a person’s level of talent. We have all seen recently how untrue this is, because executives incomes and bonuses are neither market nor results determined. They are determined by a small closed shop empire at the top of the corporate pyramid with feedback loops (mutual reward incentives). Likewise for politicians only the closed shop is slightly larger.
Political representatives should not be earning benefits (salary and non salary) that place them in the highest decile of income. They need to recognise where the great majority of Australians incomes lie and to place themselves at a respectable not excessive remuneration level.
If this doesnt happen, we as Australians will go on every few years alternating the governments from the poor choices we have and still wonder why party A is no different to party B and party B is no different to party C once in power. Rewards from government will continue to flow to large businesses and the wealthy.
Nothing will change, inequality will continue to rise, conditions for ordinary Australians will continue to deteriorate; public services will continue to degrade; planning for future economic and infrastructure needs in an orderly and systematic manner is unlikely to occur and the required expenditures on the same, will be blocked by most in power likely in favour of tax cuts to spend on imported plasma TVs. Australia – a nation that lazily and dishonestly squanders its future potential (she’ll be right mate?) as many now witness with a growing sense of unease.
Not Saul above but John Rawls.
Alice,
You have, in your last paragraph, nicely encapsulated why I do not favour Keynesianism – or any strongly active economic theory.
I know that no economic theory will ever be impartially administered to the full rigours of whatever the theory dictates is the ideal. There will always be vested interests both outside (and inside) government seeking to to gain advantage for themselves or their favoured causes or people in a way that violates the central tenets to the economic theory. This then gives the proponents of that theory a good excuse to say “the reason it did not work is because a and b were not done correctly and c was not done at all”. Therefore it was not done correctly and that is why we have this huge boom / moderate recession / incredibly big depression. It happens every single time.
Additionally, the rent seeking behaviour imposes its own costs in addition to the violations of the theory – examples of this abound, from import tariffs, legislated monopolies and many, many other costs.
To me, the problem with Keynesian (as with other centralising theory) is that its central tenet is a receipe for rent seeking. It calls for, at times, widespread intervention in the freely chosen activities of it citizens. It provides an excuse for large amounts of taxation and directed spending. It allows those “vested interests” the scope to influence, even strongly influence, where that directed spending goes.
I find it is too much to hope that any government, no matter how structured, will be able to avoid this in any major way. Even if Keynes himself were a demi-god of perfection, even if he was completely and utterly correct in all he said (which, BTW, I do not think he was) his theories are still going to have to be implemented by the less perfect people we keep electing to parliaments around the world – or elect themselves by the power of the barrel of the gun.
One of my favourite parts of The Hitchhiker’s Guide to the Galaxy was when Douglas Adams wrote (to paraphrase) that those who seek power are by their nature the least fit to hold it. He put it better than that, but you get the idea.
To me, the solution is fairly simple – shrink the Government as far as is consistent with maintaing a functional justice system (to, inter alia reduce the scope for rent seeking by non-government forces) and allowing the provision of welfare to those who will make systematic mistakes or cannot provide for themselves – children, the intellectually disabled and (to an extent) the physically disabled. Where possible all powers should be as dispersed and decentralised as possible, again to have the power held, as far as is sensible and possible, by the largest number of individuals as possible – with the best situation being to give the power to spend money or make decisions to the individuals directly affected.
After long experience I am deeply suspicious of any call to centralise power – on almost every occasion I have seen the results as being worse than the problem that was being sought to be fixed by the centralising process.
In short, if you can show me that there exists a group of people that can be completely and utterly trusted to decide on the correct economic theory and then to implement it without fear or favour (or at least get pretty close to that – perfection is generally unobtainable) then I may be in a position to change my mind on this. Failing that, I will stick with decentralisation and my faith that an individual is normally capable of making a fairly good decision about their own interests.
Seb – We have just seen probably the best example of an increase in liquidity preference on market interest rates you could ever hope for. It was called the GFC. I am quite frankly astounded an economics student is not aware of this. You are a prime example of the problem with classical economics, that being that it appears to be totally oblivious to the role of the financial markets in the modern economy.
SeanG – We’ve have already been through this. When did Keynesian economics fail? Why do you think the alternative, which appears to be to do nothing, is any better given it was tried in the early 1930’s with disastrous results.
Sorry, there should have been a question mark at the end of the last sentence.
Andrew,
“I will stick with decentralisation and my faith that an individual is normally capable of making a fairly good decision about their own interests”…except when it comes to choosing what s/he should use for money. Then it’s a case of the current prevailing fiat toilet paper or a bullet in the head.
Could you also (please) take my stuff off moderation on your own website? You’re a busy boy here but neglect other duties elsewhere.
Andrew,
“I will stick with decentralisation and my faith that an individual is normally capable of making a fairly good decision about their own interests”…except when it comes to choosing what s/he should use for money. Then it’s a case of the current prevailing fiat toilet paper or a bullet in the head.
Could you also (please) take my stuff off moderation on your own website? You’re a busy boy here but neglect other duties elsewhere.
There’s something wrong with the processing of messages. It’s delayed. Then you try again and find the messages duplicated. Ugly. May be a server issue.
Let’s not forget the other legacy of Keynesianism, which is the widely-held but fallacious notion that wars are good for the economy, since they stimulate demand. Likewise, the belief that natural disasters are good for the economy, and that earthquakes, bushfires etc stimulate demand and consumer spending. In other words, Bastiat’s Parable of the Broken Window.
Sure, Keynesians will argue that they would like the money spent in other ways, but nontheless the Keynesian doctrine explicitly supports spending for spending’s sake. A good example is Keynes’ example of how the government can bury bottles of notes and have the private sector dig them up as a means of stimulating the economy.
Likewise, William Spence wrote in 1807 that “the prosperity of the country would be as much promoted, if an owner of an estate of 10,000l a year, were to expend this sum in employing 500 men to blow glass bubbles, to be broken as soon as made…”
It is essentially the mercantilism of old dressed up in 20th century clothing. And it has furthermore smeared capitalism by associating it with the idea that wars are profitable, when in reality this idea has leftwing origins.
@Sea-bass
Oh for goodness sake Sea Bass – your underwear is showing. Tell me which governments tend to initiate and extend wars…..is it social democrats or the republicans in the US? Is it liberals in this country or labor? Your argument is nonsense as usual. Go check history and tell me. Republicans have been the greatest critics of your Keynesian Koolaid (as you so disrespectfully label it) and now you want to blame WW2, Korea, Vietnam, the Cold War and the build up of a nuclear arsenal, Gulf 1 and Gulf2, Iraq and Afghanistan on democratic governments and Keynesianism?
Utterly, profoundly, insanely wrong. A miserable post Sea Bass.
@jquiggin
I am glad you brought this up ProfQ.
I wrote somewhere about the differences between Keynesian economics and Keynesian economists. I cannot remember which thread I posted in. Keynes was a speculator, he was a Liberal, he believed in running surpluses during good years etc while Keynesian economists tend to be left-wing social democrats, believe in the power of persistent deficits and in Australia are Labor.
But let’s stick to the economics.
If you look at Keynesian economists during the 1990s they were advocates of continued deficit spending in the US despite what Keynes said about running surpluses during good years. They labelled themselves as Keynesians because it gives them an intellectual umbrella in which to advocate continued government expenditure irrespective of whether it is warranted or not.
I like Keynes, I find him a fascinating character and I like his blend of speculator, academic and public policy advocate.
But Keynesians in their current form are far more extreme than Keynes was regarding fiscal policy. That is why Alice continues to bleat on about Government acting as a permanent employer. What we have today are Keynesian economists who are far more pro-government than Keynes ever was not because it is empirically sound, but because they are politically left-wing and use Keynes to protect their ideas.
@Alice
Oh come on, I thought you guys were into the whole “WWII ended the Great Depression” thing…
http://agonist.org/brian_downing/20090316/keynesian_economics_by_other_means
Needless to say, I don’t buy into this junk.
And just because the evil Republicans said that the military spending would have a stimulus effect does not make the idea any less Keynesian. Indeed, Krugman himself states (in my International Economics textbook no less) that the increase in military spending after 9/11 boosted aggregate demand.
The point is not that Keynesians favour war – it’s just that while the likes of Krugman may prefer spending be spent on health care, they see military expenditure as having basically the same result i.e. boosting aggregate demand.
Alice, I’m sure you would like to see the money spent on sunshine and flowers for sick puppies, but Keynesian doctrine just wants to see the money spent. Somewhere. Anywhere.
@SeanG
Oh Sean – thats absolute nonsense but seeing as you want to go on about nonsense Ill continue your thread against you.
In this country we have no become “extreme Keynesians”. Whatb we have been doing for at least the past two and half decades is inulging in an orgy of worhipping “privatisation” and the sale of govt run services. So far we have had disasters with PPS roads, the immoral sell off of the last of Australia’s wool surplus to a few wealthy private sector investors, AWB paying bribes to a corrupt under the freedom of being a “private organisation”, then there is the “firepower” fuel pill mess, the list just goes on of privatisation disasters.
Now my latest complaint about the stupidity of the “private sector does it better school” like yourself Sean is the problem if childcare in this country.
When my son was small I had no problems accessing affordable childcare. I could go private at not too great an expense, or community at lower expense or uni childcare at even lower expense. Crosss out the last two now, make the decision to subsidise not mothers but the Chindcare centre owners – (and how does that help your free choice ideals Sean) and we create a situation where some con man like Eddy Groves makes a living from ripping off the subsidy system builging childcare cenrtres in places where there were only two kids living …but hey who cares? The govt pays him and he pays the builders.
Now when the Govt needs to mull over where it went so badly wrong I decide I need early entry the heaven after reading this little piece in small column in the news this week.
Micheal Milken has decided he is a contender to buy out some of Eddy’s childcare centres.
Yeah Sean – no one is extreme left wing here. What we are facing is the stupidity of taking the extreme right wing view that private is better. The only tyhing I can say about the Govt thinking that Michael Milken is a good idea is that they have gone so far to the right they wouldnt have a clue what works and what doesnt anymore. Still following the hard right “private sector does it best view” of people like you.
Plus, perhaps the government now has more in common with people like Michel Milken and Eddy Groves than they care to acknowledge. All criminals.
Try telling that to the women of this country and see how far you get. We have slid down the equality rankings to be on the same level as Thailand and Indonesia. 1,000,000 behind men in our super and if you ever sat down to think what it costs women in this country for childcare now you woulodnt wonder why their careers arent advancing as fast as mens and why they dont have enough super.
You Sean, are likely some young man who has never given a thought to the incompetence that permitted this siutation to happen (from a once good system that was partailly publicly provided).
Get over the name calling (“extreme Keynesianism” “Alice bleats on” “politicallty left wing”) and move over and alllow me to call you idiots a few names. Blind irrational and extreme right wing nuts (causing REAL damage).
Yes its time Keynes came back. Your days are over Sean. You are finished. Its not me talking. Its the entire voting population. We have the majority and the mandate for less of the madness you and your kind started prescribing 30 years ago…and whats more important we have had enough of the lies.
@Alice
Oh, and my absolute favourite from Paul Krugman:
“Ghastly as it may seem to say this, the terror attack—like the original “day of infamy” which brought an end to the Great Depression—could even do some economic good. […] the driving force behind the economic slowdown has been a plunge in business investment. Now, all of a sudden, we need some new office buildings. As I’ve already indicated, the destruction isn’t big compared with the economy, but rebuilding will generate at least some increase in business spending”
By the way, look up military Keynesianism on Wikipedia.
@Sea-bass
Sea Bass – look up delusionism. Miliatary Keynesianism has about as much credibility (and was likely publiched by the same lunatics that support climate change denialism). You people dont investigate very far do you? Who wrote it? What was their agenda? Sea Bass – Ive noticed you dont read in depth. You just come up with this cheap “catchphrases” like an advertsing agency and one liners (Keynesian Koolaid, Military keynesianism).
There is a purpose to that but I think your timing is all wrong. Its kind of passe now.
Well you know I have heard it said that the right thinks of itself as an empire where it can create its own realities…ie we lie and and we create what we want others to believe (perhaps one liners help?)…. and after that I wondered if this same disease was what happened to the Roman empire…where they so busy thinking the world was perfect and making their own lies up about their own glories, they didnt notice the barbarians at the gate??
Whatever it was it was weakness within Sean….and if you dont want to be a weak civilisation you need to notice what real. Not whats not. You cannot create an artificial construct of unreality that people will follow for long. Iraq and terrorism in Australia is my example. The electorate tired of JH’s playing on these fears with lies – the tank ran dry.
I dont know why you think it works now (or will work). I think that approach has had its day. The conservatives need a new approach right now (the Grech phenomen – Ill call it).
There was never any military Keynesianism. Keynes said “if you can build an economy for war you can build it in a time of peace” in reference to the Great depression. He was right. No one had thought of it. He was ahead of his time and you are trying to pull us all back to the past before his time. I almost feel sorry for you Sea Bass.
@Alice
The article I linked to was favourable to Keynes, as far as I could tell – which is why I used it, since if it was anti-Keynes you would’ve dismissed it out of hand.
Keynes may have said that you could build an economy for war or for peace. Libertarians explicitly deny that war “boosts the economy” and state that building an economy for war is a waste of resources and can only ever be justified as a matter of existential necessity.
The crime lies not in supporting war, but in believing that war can actually have a stimulus effect. Keynesians are thus guilty by association.
Sebastian you might not believe in the multiplier effect but all you have offered so far in the way of disproving it seems to be an “argument from personal incredulity”.
Now I can understand the point you are making that it seems insane that war and natural disaster would be good for economic growth – but what you are complaining about is actually a shortcoming of how GDP is measured and used an index of economic well-being. Military expenditure does increase GDP – it may not increase well-being, but it shows up in the national accounts, therefore it increases GDP.
“Military Keynesianism” is a relevant point because it proves the “death” of Keynesianism was greatly exaggerated. Reagan is considered the beginning of a post-Keynesian era, however he was just about the biggest Keynesian ever. He never reduced government spending as a proportion of GDP – he increased it, however it was simply funneled into the military and away from the poor. Bush II simply took this to the ultimate extreme. It proves that the Right*, for all the noise they make, are as Keynesian as anyone else, just that they only want the spending to go toward wealthy death-merchants and away from anything that would actually help anyone.
*yes, I know you’ll assert that Reagan was a left-winger just like Hitler
Many people here who argue for the multiplier effect of higher government expenditure and fiscal stimulus are also the same folks who pooh-pooh the trickle-down theory.
So if I get this correct, if the government spends more money or redistributes more from the more affluent to the less affluent this generates a miraculous ‘multiplier effect’ – i.e. it generates benefits many times greater than the cost. On the other hand, if a wealthy person makes more money this generates no external benefit. The money gets kept in a watertight compartment where not even a trickle flows to anyone else. How anyone can believe in multipliers but then scoff at trickles is a mystery.
It reminds me of the old biblical saying ‘gulping down a camel and straining on a gnat’.
Such arguments make no sense, other than in terms of a kind of stubborn churlishness.
Alice, as I understand it all society’s problems are due to extreme right-wingers hijacking public policy. I guess that John Howard was one of those extreme right-wingers.
During his time in office Howard introduced national gun control laws, a European-style Value Added Tax, heavily increased welfare spending, and pledged to maintain taxpayer-funded abortions in the face of Tony Abbott’s troublesome moralising. Well, I wonder which far-right organisations have been advocating such policies? The League of Rights?
It seems that some people are simply not interested in dealing with facts, and instead prefer to deal solely with hostile straw man arguments and fixed ideological narratives.
@gerard
Regarding the multiplier, I did not offer a formal proof, but you can nonetheless find them. I first noticed that as the MPC approaches unity, the multiplier approaches infinity, and although I’m sure that Keynesians are aware of this and have “explained” this in terms of “leakages” and “frictions”, it seems to be pretty silly. It also doesn’t say much about savings, which I’ve always assumed to be pretty important to an economy. Hazlitt of course dealt with this in much more detail, and Ahiakpor wrote a paper called “On the Mythology of the Keynesian Multiplier” where he goes through this in a lot more detail. Typing “Keynesian multiplier fallacy” into Google also comes up with heaps of results.
On the subject of military Keynesianism, I actually entirely agree with you, although no doubt for completely different reasons. Despite the “death” of Keynesianism in the 1970s, and the subsequent lip service paid to free markets, there have not been any substantial reductions in the size of government, and Keynesian style stimulus packages have still been wheeled out every now and then, despite Alice’s claims that the world turned into a libertarian Brutopia at the start of the 80s. It also looks kind of silly from my point of view when everybody starts blaming laissez-faire capitalism for all our problems when what we’ve really had for the past 30 years has been “Stealth Keynesianism”
At any rate, you are right to criticise the pouring of money into the military as a form of stimulus – I too would much rather see it spent in other ways (although not at all would be opitmal). If government is going to spend money (which it shouldn’t but oh well) it should be in areas that enhance production and efficiency. But while Keynesians might agree on this, they agree that this should be the case so pretty much for the sake of spending and stimulating demand (in the form of cash splashes etc). But wealth stems from production, and if there is any multiplier effect, it is based on production, not consumption.