Time for a new tailor

John Quiggin19 Comments

It’s rare to take on Paul Krugman in an argument and win, and I agree with him most of the time anyway (these two facts are correlated!). So, this is the first time, and will probably be the last, when I can claim a win in such an argument.

Krugman has long criticised the eurozone on the grounds that it is not an optimal currency area and that the European Central Bank must therefore pursue an unsatisfactory “one size fits all” policy, too contractionary for economies that are doing badly and too expansionary for those that are doing well. Back in February, I argued that in fact ECB policy was “One size fits nobody” and that even Germany was vulnerable to its contractionary effects.

The latest statistics suggest that German growth was already stalling then. Today, Krugman is also pointing to a “one size fits none” policy.

At this point, it’s time for a suit of clothes, and that means a new tailor. And, in that respect, the bad news may have a silver lining.

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Oz meltdown continues

John Quiggin42 Comments

After Michael Stutchbury’s full-length hit piece, and at least two Cut&Paste snark items in the last week, I would have thought the Oz would have had enough of sliming me for a while. But no, it’s back with yet more.

This time, it has delved into the primordial and come up with Graham Young, last seen scoring a double Godwin with pike, making both Nazi and Communist analogies in a single post.Young pushes the now-standard Oz “help, I’m being oppressed line”, naming me and Clive Hamilton as the enforcers of orthodoxy.

I’m starting feel guilty turning the full power of my blog against a mere national newspaper, backed only by a multi-billion dollar corporation. I’ll talk it over with Clive at the next meeting of the central committee.

My evidence on the carbon price

John Quiggin44 Comments

Last week I appeared, by videolink, before the Senate Committee on New Taxes, to talk about the government’s carbon price and compensation package. I made some dot points, over the fold.

The inquiry was interesting, with one Senator insisting that the carbon price was different from the GST because, under the GST, businesses could claim their inputs and therefore didn’t have to pay anything. I tried to suggest that this was only true for businesses that didn’t add any value (it is, after all, a value added tax), but to no avail.

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Murdochracy vs Quiggin: One last snark

John Quiggin39 Comments

In citing Steve Williamson’s negative but content-free review of my book, the Oz Cut and Paste section decided to puff Williamson’s credentials as an expert (an interesting move in the light of Paul Krugman’s evisceration of this kind of rank-pulling argument from authority).

Sad to say, the Oz proved as unreliable as ever on this topic. It described Williamson as “the doyen of modern monetary policy”. “Modern monetary policy” (and, even more, “modern monetary theory”) is a term most closely associated with the post-Keynesian chartalist school.[1] Williamson’s actual claim to fame is something called “New Monetarism”, which is about as strongly opposed to Keynesianism as you can get (at least while still doing DSGE-style macro). But such subtle distinctions are lost on the knee-cappers at News Limited.

fn1. I guess the Oz could be claiming that the term “modern’ here just means contemporary, and that Williamson is the dominant figure in guiding monetary policy today. It’s hard to know whether this more insulting to Ben Bernanke or to Williamson himself, who isn’t exactly a fan of actually existing modern monetary policy.

Inequality is bad for (almost) everyone

John Quiggin30 Comments

Yves Smith, whose Naked Capitalism blog is essential reading, is guestblogging for Glenn Greenwald this week. Her latest post sums up a lot of evidence on the adverse effects of inequality, and includes a reference to a post of mine. In summary, the huge growth of inequality in the US has harmed everyone below the 90th percentile of the income distribution in the obvious way – they get a smaller share of a cake that isn’t growing very fast, and has been shrinking since the crisis began

But even people above that level, but outside the top 1 per cent are worse off in important ways. They’ve maintained or increased their share of national income, but they aren’t rich enough to insulate themselves fully from the adverse consequences of living in a highly unequal society. Yves sums up a bunch of the evidence on thsi.

Finally, there are those in the top 1 per cent of the income distribution, now pulling in 25 per cent of all income. Members of this group can, if they choose, ignore the collapse of the society outside their gated communities, and focus on enjoying the wealth they extract from it. On recent evidence, that’s what they (or at least their political representatives) are doing, while also managing a very effective set of divide and rule tactics for the rest of the population.

Murdochracy vs Quiggin: another round

John Quiggin59 Comments

A couple of very minor updates on my stoush with News Limited, and particularly the Oz. In my response to Michael Stutchbury I raised two main complaints. First, Stutchbury was being precious in complaining about vigorous language on my part, given that the Oz editorial team (writing under cover of anonymity) had accused me of having a totalitarian mindset, but didn’t have the guts to name me, referring instead to an opinion writer in a financial tabloid. My second complaint was that Stutchbury was being disingenuous in claiming that the Oz supported carbon prices.

The other day, my Facebook news feed included a link to a Stutchbury piece from July referring to Abbott “mounting a powerful case against Gillard’s carbon tax”. Not exactly consistent with the supposed Oz line! As you would expect from someone who opposes a per tonne tax on something he believes to be weightless, Abbott’s arguments were in fact lame. The points that most impressed Stutchbury relied on Bjorn Lomborg’s Copenhagen Consensus exercise, something that even people on the right saw through years ago.

Trying to locate the piece again, I stumbled on this piece of snark (scroll to the end) in the “Cut and Paste” section, where the anonymous troll who runs the piece thought it clever to repeat the “opinion writer in a financial tabloid” jibe. Totally gutless. And these guys look down on bloggers.

Meanwhile, the Australian’s War on Science continues. Tim Lambert has instalment #67.

Update And, what do you know? Twitter tells me that today’s Cut and Paste has cited the Williamson review of Zombie Economics, without, of course, mentioning the fact that it has been comprehensively trashed in the blogosphere. I wonder if Williamson would be happy about being quoted approvingly by the gutter press. As for me, any publicity is good publicity. If the Oz opinion page weren’t so unreadable, I could expect a bit of a bump in book sales from this free plug.

Does digital data disappear?

John Quiggin11 Comments

I’ve seen this kind of article many times but is it correct? I’d say that I’ve generated several million words in papers, newspaper articles, blog posts and so on since I got my first Mac in 1984 (a bit over 100kw/yr for 25+ years, for something like 3 million), and also attracted maybe 10 million more in blog comments (over 100k of non-spam comments. Of that, I’ve lost
* a fair bit of material I produced before 1990, when hard disk space was v expensive, and stuff had to be stored in various external disk formats. Sadly that includes my first econ theory book and a book of satirical songs I turned out in the 198s0
* The first year or so of comments on my blog in the now-obsolete Haloscan system.
* The blog has also suffered a lot of linkrot, including internal links to its older incarnations
* A lot of my older text is in formats that can now only be read by extracting a text-only format, and some old stuff (eg pre .qif financial records) is in formats that are no longer readable in any way. But again, that’s mostly a problem with pre-1990 stuff.

Compared to my slightly obsessive desire to preserve every revision of every piece I’ve ever written, those are substantial losses. But compared to my paper records, my digital stuff is almost perfectly complete, not to mention instantly accessible and searchable.

What to do about the ratings agencies

John Quiggin66 Comments

S&P’s decision to downgrade US Treasury bonds from AAA to AA+ has elicited various reactions, some of which I’ll doubtless repeat here. Obviously, S&P has no particular expertise (apparently it couldn’t even get the arithmetic right) and based on its historical and continuing performance, its opinions ought to carry no particular weight with anybody (they say so themselves, when under pressure over obvious cases of misrating, asserting that they are merely offering an opinion).

On the other hand, it’s also pretty obvious (and even more so after the Repubs successful use of the debt ceiling to force Obama to abandon any call for tax increases along with the cuts they both wanted) that the US has some fairly intractable problems in dealing with its (technically quite manageable, but still substantial) public debt. Finally, as I said last time I discussed this, a decision of this kind (including a decision to maintain AAA ratings) is inherently political

There are two reasons why S&P’s choice of rating matters more than, say, my own opinions on the matter
* First, a lot of investors still pay attention to ratings agencies, for whatever reason
* Much more importantly, agency ratings are embedded in global regulations concerning prudent management of investment. If a second major agency were to join S&P in downgrading, large numbers of institutions would be debarred, under existing rules, from investing in Treasury bonds

That’s clearly unsustainable, so what will happen?

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