Gough Whitlam was a giant among men who changed Australia forever - and
did it in just three years. No argument. The question is whether the
benefits of his many reforms exceeded their considerable economic costs.
The
answers we've had this week have veered from one extreme to the other.
To Whitlam's legion of adoring fans - many of whom, like many members of
his ministry, have never managed to generate much understanding...
Saturday, October 25, 2014
Wednesday, October 22, 2014
Health spending is quite sustainable
Oh dear, what an embarrassment. Thank heavens so few journalists
noticed. Last month, one of the federal government's official
bean-counters, the Australian Institute of Health and Welfare, issued
its report on total spending on health in 2012-13. It didn't exactly fit with what the government has been telling us.
As
you recall, Health Minister Peter Dutton got an early start this year,
warning that health spending was...
Monday, October 20, 2014
Abbott's choice: competition v cronies
It's still too soon to tell whether Tony Abbott's government is
pro-market or pro-business, but so far the evidence for the latter
stacks higher than that for the former.
The difference turns on
whether the pollies want markets where effective competition ensures
benefits to consumers are maximised and excessive profits minimised, or
markets where government intervenes to limit competition - often under
the cover of claiming...
Saturday, October 18, 2014
Re-writing the re-write of the GFC fiscal stimulus
Economists may be bad at forecasting - even at foreseeing something as
momentous as the global financial crisis - but that doesn't stop them
arguing about events long after the rest of us have moved on.
That's
good. Economists need to be sure they understand why disasters occurred
so we can avoid repeating mistakes. They need to check the usefulness of
their various models and whether they need modifying.
One thing
that...
Wednesday, October 15, 2014
Competition is a wonderful thing - up to a point
The older I get the more sceptical I become. Goes with being a journo, I
guess. I've become ever-more aware that no one and nothing is perfect.
Not political leaders, not parties, not any -isms, not even motherhood.
Take
competition. Economists portray it as the magic answer to almost
everything, but the more I see of it, the more conscious I become of its
drawbacks and limitations.
Which is not to say I don't believe...
Monday, October 13, 2014
Interest rates to stay low, but lending curbs loom
With the Reserve Bank worried by fast-rising house prices, but the
dollar coming down and the unemployment rate now said to be steady, can a
rise in the official interest rate be far off? Yes it can.
On the
face of it, last week's revised jobs figures have clarified the picture
of how the economy is travelling. The national accounts for the March
and June quarters show the economy growing at about its trend rate of 3
per...
Saturday, October 11, 2014
At present GDP is more misleading that usual
I could attempt to explain to you why the Bureau of Statistics is having
such embarrassing trouble with its monthly estimate of employment, but I
won't bother. It's horribly complicated and at a level of statistical
intricacy no normal person needs to worry about.
What this week's
labour force figures now tell us is that, though the rate of
unemployment has been slowly drifting up since mid-2011 - when it was 5
per cent...
Wednesday, October 8, 2014
TALK TO NOBEL NIGHT
Economic Society, Sydney, Wednesday, October 8, 2014Economists - and economic journalists like me - are used to being reminded by science-types that the Nobel prize in “economic sciences” is not a real Nobel. It’s true. Alfred Nobel, said to have had a low opinion of economists, did not include provision for an economics price in his will. Rather, almost 70 years after the real prizes began, a Swedish bank decided to sponsor...
Why we care about morality - apparently
The good thing about holidays is getting time to read books. I' ll look
at all the museos, oratorios, cappellas and duomos in Italy provided I
can go back to my book when day is done. On this trip one book I read
was Moral Tribes, by Joshua Greene, a young professor of psychology at
Harvard.
One of the hottest areas of psychology these days is moral
psychology - the science of moral cognition - which seeks to explain
...
Monday, October 6, 2014
Science runs ahead of economists' model
The failings of economists - the bum forecasts and less-than-wise advice
they give us about the choices we face - can usually be traced back to
the limitations of the basic model that tends to dominate the way they
think, the neo-classical model.
The thinking of economists began to
ossify in the second half of the 19th century, at a time when the
science of psychology was in its infancy. The model was thus
consolidated...
Saturday, October 4, 2014
How mental biases expose us to exploitation
So, you're a regular reader of the business pages and you reckon you're
smarter than the average bear when it comes to financial matters. Well,
here are some common "biases" to which people fall victim when making
decisions about financial products. See if you can put hand on heart and
swear you've never made any of these mistakes. If you can, you're a lot
smarter than me.
Have you ever overspent on your credit card, or...
Wednesday, October 1, 2014
THE ECONOMIC CASE FOR A MORE EQUITABLE AUSTRALIA
October, 2014I want to talk about the economic case for a more equitable Australia. But before I do I want to enter a major caveat. Why should we seek a more equitable Australia in which income and wealth and opportunity are shared more fairly between the top and the bottom? For no better reason than that it’s the ethical, moral, right thing to do. If it’s the moral thing to do - the thing that Christians and most other religions...
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