Treasury busts some stimulus myths
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In a major speech yesterday, Treasury deputy secretary David Gruen reviewed the roles of fiscal and monetary stimulus in handling the recession, and in doing so demolished whatever is left of the coalition’s argument that the government spent too much in response to the global financial crisis. In a little-reported address to the Australian Business Economists Annual Forecasting Conference, Gruen started from the orthodox position that monetary rather than fiscal policy was the best tool to respond to economic slowdown, partly because fiscal measures take so long to implement, and partly because, in open economies, unilateral fiscal stimulus tended to drive up the exchange rate, neutering the stimulatory effect. Gruen doesn’t argue that orthodoxy has now been turned on its head. Instead, he explains that the GFC was unusual in being global and obvious. Unlike the early 1990s recession, it didn’t creep up on policymakers. Once Lehman Brothers had collapsed, the world knew it was in for a severe economic shock, enabling policymakers and central bankers to scramble. And the worldwide nature of fiscal stimulus packages, as country after country spent up big to offset the effects, meant there was no exchange rate impact. And in Australia, the government and the Reserve bank moved very rapidly. The government’s first fiscal response was rolling out by December — compared to the Keating government’s “One Nation” response to the early 1990s recession, which took years to roll out. Another reason for the relative success of the stimulus measures was their impact on consumer confidence. As a non-economist, it seems to me this is one of the key lessons of the response to the GFC — the importance of heading off big declines in consumer and business confidence that mean a vicious circle of reduced spending, job losses and economic contraction. Australia avoided that, particularly after we learnt from the March quarter accounts that the economy had avoided technical recession. Gruen’s words are worth quoting at length and should be borne in mind by future generations of policymakers.
The stimulus measures were also more successful than anticipated because Treasury modelled quite conservative assumptions about their multiplier effects. It assumed only 60% of the cash handouts would make it into the domestic economy — 30% would be saved, 10% spent on imports — and 85% of infrastructure spending (the other 15% would go on imports). The impact on economic growth, however, suggests Treasury’s assumptions were too conservative. Gruen also draws on academic work to suggests monetary stimulus is significantly less stimulatory — one-third of one per cent GDP impact for every one per cent drop in interest rates in the first two years and one-sixth of one per cent in the third year. Significantly, as Gruen notes, there are significant lags in monetary policy impacts. That means that, while the GDP impact of the fiscal stimulus measures will actually be contractionary from the first quarter next year, monetary policy, which has yet to return to normal settings, will continue to provide stimulus for years to come. So Joe Hockey and Malcolm Turnbull were right — monetary and fiscal policy are now moving in opposite directions. It’s just that it’s the government’s fiscal policy that is contractionary, and the RBA’s monetary policy that is expansionary — not, as they maintained, the other way around. Gruen also explained why the government targeted schools. We’ve all tended to assume it was primarily for political reasons — the government could spend money across the entire country, burnish its “Education Revolution” credentials and receive an electoral reward from grateful parents at the ballot box in 2010. That may have been part of it, but Gruen notes that targeting schools meant a faster stimulus: school have
Gruen also demolishes the line that the government “spent too much”. Economists such as Henry Ergas (Gruen doesn’t mention Warwick McKibbin, still on the RBA board despite his persistent attacks on the government) ignore the massive and long-lasting economic impact of high rates of unemployment, in terms of lost skills, productivity and income. Gruen pointed to a study showing university graduates entering the labour market in a recession “suffer sizeable initial earnings losses, losses that persist for a period estimated at between eight and 15 years”. Ultimately, Gruen says, Australia was able to head off the recession primarily because its financial system was intact and it had the fiscal capacity to respond, courtesy of the Budget policies of Labor and Liberal governments. The GFC might have been an unusual crisis compared to previous recessions, and monetary policy might be better suited to milder downturns, but fiscal stimulus is not as poor an option for such crises as we’ve been led to think. |
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58 Comments
Very interesting, thanks BK. I love hearing these uber-nerds talking about topics covered in the press. The debate around the stimulus has been hopelessly partisan by most people; hearing this from actual Treasury people sheds quite a lot of light on the topic.
Interesting to see if there will be a streamlining of fiscal stimulus to get it happening quickly for future downturns. Obviously can’t rely on the opposition of the day to create legislative instruments to get stuff happening quickly…
Was any reason given as to why Treasury pulled back the housing insulation scheme?
So Treasurer Ken’s lad in Treasury thinks Ken is has beeen doing a slap-up job?
The lad also patted the puppet and his boss Kev wots-it.
How much more of Bernard’s brown nosing before they give him his first ever scoop?
Rudd is frequently attacked as a bureaucrat turned politician (or in Abbott’s more obnoxious formulation, a wimpy pen-pusher not fit for the alpha male game of politics). But, in his response to the GFC he showed the advantages of coming from a policy-bureaucrat background. It meant that he had full respect for what the Treasury econocrats were telling him and the nous and courage to act as quickly and decisively as they urged him to.
The technocratic approach to politics is often criticised, with some justification, but when it comes to macro-economic management it has proven its worth over the more ideological approach from both left and right. But particularly the right.
Its not just the Coalition that believes the stimulus package was excessive and poorly targeted. Members of the RBA board also have stated a similar position.
And we have the absurd situation presently where we have a stimulatory fiscal policy and the opposite monetary approach, with the RBA clearly of the view that the economy needs to be constrained, hence the interest rate rises seen to-date, and the likelihood there’s more to come.
To attack every interest rate rise, as John James does, regardless of the circumstances, is patently absurd.
After the latest rise interest rate settings are still stimulatory. They are rising because the downturn was not as bad as the Reserve Bank feared. If interest rates rise to a contractionary level then you may have cause to complain (although you will be enjoying a boom when the rest of the developed world is struggling) but until then you should refrain from kneejerk whinging.
@John James: “we have a stimulatory fiscal policy and the opposite monetary approach, with the RBA clearly of the view that the economy needs to be constrained, hence the interest rate rises seen to-date, and the likelihood there’s more to come.”
It may have escaped your attention that Australia’s cash rate has been at emergency low levels for some time, with the RBA Governor saying quite clearly that situation cannot prevail forever.
Ergo, emergency over or nearly over, as evidenced by the various measures and indicators used by the RBA, the cash rate rises to more normal levels.
This is very basic stuff, so nobody with a financial clue ought to be the least bit surprised.
Thanks Bernard, very informative.
Overly politicised Treasury. I start to see what Godwin felt he had to counterbalance. The justification of school spending is specious; a temporary reduction of business tax would have had the same advantages but even better.
Or if it had to be a targetted coordinated approach, why not allocate the spending to fast track repairs to infrastructure (roads etc) that were already identified as needed, at all levels of government. This would have just brought forward spending that was going to happen anyway in councils and state governments all over the country and was just waiting for sign-off and budget. The only net cost over the next few years would have been the interest on spending it earlier than expected.
The ingrained resistance to spending on schools, of which James McDonald is an example, seems to come mostly from grumpy old men who are whinging because they will not directly benefit. Road spending on the other hand, where they can fantasise about sensuously revelling in the smooth ride of newly asphalted roads, always seems to get their pulses racing.
A pretty churlish attitude to the younger generation but far from untypical among the oldies.
Repairs to roads, rail, railway stations, hospitals, yes and schools and school buildings, other government buildings, rubbish tips, parks and gardens, defence facilities, prisons, … IT equipment upgrades all round, and so on. Really, David? Just a matter of wanting a smooth ride on my fuel-guzzler? Grow up.
@James McDonald: “Overly politicised Treasury. I start to see what Godwin felt he had to counterbalance”
It’s treasury’s *job* to serve the government of the day. It is not an independent body like the Board of the Reserve bank.
When it does exactly what its role requires, you and Godwin Grech feel you need to “counterbalance”.
It’s the Opposition’s job to “counterbalance” the government, not some lunatic public servant.
To serve, yes. But to make political speeches about it?
Read the actual speech and tell me how it’s “political” as opposed to Bernard’s personal take on it.
James stop being a bitch, you are way behind on this one, you just enjoy nagging!!!Its no wonder the Libs appeal to you.
..If interest rate rises to a contractionary level..”
Any interest rate rise is contractionary, at least compared with that which preceded it. The RBA is concerned about a surge in inflationary pressure. You get inflationary pressure when demand outstrips supply.
The fiscal stimulus is precisely about stimulating demand, so that people have money in their pockets to spend.
It’s not a matter of “attacking” interest rate rises. My point is that the two major levers of economic control are pulling in opposite directions.
Ghost, most of the speech was a justification of fiscal measures under the circumstances, as opposed to monetary-only. I’ve got no argument with that either as a subject for Treasury to give presentations on, or (not being an economist) as a valid response to the shock.
My problem is with Treasury going on to justify the specifics of that fiscal response and to pretend the form that it took had administrative advantages. First, that’s the point where policy goes out of Treasury’s bailiwick. Second, there are some cute tricks slipped in.
For example: “Combined with lower interest rates, the introduction of the First Home Owners Boost in October 2008 saw a huge rise in finance commitments by first home buyers (Chart 6). The non-residential building sector also saw a huge lift in building approvals, because of the school infrastructure program from the Nation Building and Jobs Plan.”
A little bit of sleight of hand talking about the home-vendors’ bonus (in a market where new construction dipped sharply while existing land prices were forced upwards) in the same paragraph as a mention of the school building program which did in fact result in a building boost. Actually that building boost ran into some capacity constraints, further choking home construction, probably offsetting the new-home premium on the grant, and further raising the price of existing homes.
A big part of Rudd’s plan all along was the populist stroke of making people richer on paper by hyperinflating their home prices. At least half a dozen “emergency stimulus” measures actually had this as either their primary or secondary purpose.
Hyperinflation of home prices looks like money for nothing but is actually a way of making young people, and people not even born yet, pay for the lifestyle consumption of today. Those of you who bought homes under the stimulus have enabled retirees to buy themselves boats and holidays which you will spend the rest of your working lives paying off. That’s future earnings that should have been for your own families, not theirs.
And this Gruen character disingenuously goes outside of his economic area of expertise to suggest it was done in the most effective way to overcome implementation lag and exogenous import component. And you all cheer Rudd as if he’s a young people’s hero.
@John James: “My point is that the two major levers of economic control are pulling in opposite directions.”
A simple analogy: one is an accelerator and one is a brake. They have opposite functions but they are both integral to the control of the vehicle.
Bullmore, try putting downward pressure on both, at the same time.
Hope you’re not driving anything more expensive than a Hyundai!
James - “hyperinflation of housing prices” was put in motion by Howard and Costello via the first home owners’ grant.
I know. That’s why the opposition never drew attention to what I’ve pointed out above. Hyperinflation of home prices is a silent bipartisan policy. I never said I was a cheer squad for the false-liberal Tories.
John James, I was waiting for that response. I’ll credit you with sufficient intelligence to get the gist of the analogy.
If you are really serious about this stuff, you can always study a elementary economics.
@James McDonald, we seem to be reading the same report through a different lens.
I have never had any problem with Treasury, as a key arm — indeed partner — of government policy formation, presenting outcomes to its stakeholders. It does that whichever party is in government.
Bias, as with beauty, is in the eye of the beholder.
BK - I tend to agree that the stimulus has been relatively successful, not successful in all its glory although history will be the judge. It not as if everybody is in agreeance that the stimulus was a complete success, quite the opposite. As an inexperienced government, there were a number of prangs along the way which made things worse, namely:
(1) pushing consumer confidence levels to lower than where they should have been by being too scared to give the previous government credit for their fiscal management. The war time rhetoric used by Rudd and Swan was very very poor. After many ALP GFC scare campaigns via various mediums, obviously for political reasons, I never heard Rudd say “oh but let me tell you, we are well placed to hit this crisis head on because of A, B and C”.
(2) the unlimited guarantee which did not cover mortgage funds. A number of mortgage funds had massive redemption runs which lead to job losses and shrunk fund sizes by up to 50%. The exact opposite effect of what was intended.
(3) the poor level of rationale on why the fiscal stimulus was not revised after the intial projections were proven to be inaccurate.
(4) the cash handouts, an artifical and a low quality spend by the government. The handouts did nothing except produce false retail numbers and push up Westfield profits.
(5) not doing enough for the engine room of the economy, small business. The liquidity crisis forced all banks to increase their pricing and their risk averse mood pushed gearing and appetite levels to uncommercial levels. SME’s faced reduced cashflows, forced redundancies and were unable to acquire funding. With double whammy of the phase out of work choices and the GFC, many businesses failed.
(6) Swan and Rudd having no influence over the banks, whatsoever.
for those that argue that the government are not responsible for the rate rises are partially correct. Whilst the cash rate was at an emergency level, the question needs to be asked whether the MASSIVE stimulus is fueling inflation at a quicker than anticipated rate. Rates were always going to move but there is a valid argument that the governments spending is pushing rates up faster than expected.
The real question at the end of the day is whether the ALP have learnt from previous lessons. For a political party that has never really grasped the relationship between taxes and spending, the next 10 years will be interesting in terms of our economic development.
@James McDonald. So Godwin is now a necessity .. possibly a zealous hero ! Is there no end to the conspiracy ? How many other Godwin ‘sleepers’ are out there waiting for their code word ? Or is that just the province of the Left ?
As for the ‘stimulus’ - I agree with the thrust of the article in that consumer confidence was maintained, not with pollyanna, but with handouts ( which clearly did ‘something’ ). That was the key - remember the ‘economic tsunami’ that Costello warned us of as he cleared his desk. The world is not out of the woods and debt levels are still massive, with US loan defaults teetering on the back of sustained unemployment. Considering the alternatives available at the time - and canvassed by all sides of politics - we have been well served by our economic leaders. To suggest other is churlish.
Paddlefoot - consumer confidence was not maintained. I work for a bank and it was pretty bleak and with our economic illiterate government continually sinking the boot in, consumer and business confidence hit records lows if you recall. The handouts provided artifical confidence although history will show that we were infact better placed than our government thought.
The thing with Costello was that atleast he understood the severity of the tsunami as compared to the reactive ALP. It was quite scary watching the ALP for a month or two. The only reason we got through the GFC better and quicker than comparable economies was due to the state of our economy prior. We did not escape the GFC unscathed, quite the contrary.
There is still a massive liquidity shortage in the global market and inter bank lending is still miles and miles behind where it needs to be.
I’d say the stimulus was a good idea although the size and quality of the stimulus will be debated for many years to come. Hopefully, long forgotten by the time I have grandkids or kids for that matter.
This talk of ‘monetary levers pulling i opposite directions’ makes sense to me from a perspective of PID controllers (proportional integral differential). They’re a digital controller for analog variables. My point is, if something is going up towards a goal value, there must be pressure downwards before it gets there, otherwise you overshoot. I suspect the RBA are doing a similar thing; the time frames regarding fiscal and monetary policies are different, so to land growth/inflation where they want it, there needs to be some complex interactions between the levers. I suggest that any analysis based on accelerators and brakes is too simple; unless there are rate of change of acceleration and brake pedals in there as well.
The Fiscal stimulus hasn’t increased inflation. It would have if the fiscal stimulus was done in isolation. However, at the same time the Government was doing it’s thing, the Reserve Bank was increasing the money supply….has the effect of cancelling out the inflationary pressures.
The reason why the Reserve is increasing its rates now is to put them back to their default settings (i.e non-emergency). Still low by historical measures.
As for the cash handouts…well, there are three ways of performing fiscal stimulus; tax cuts, government spending and transfer payments. I think you will find they did all three but the advantage of the transfer payments is that they are quick, easy to impliment and improve consumer confidence. Also the main aim of the stimulus was to ensure job losses were minimised…Punters spending in retail and hospitality industries still help to do this.
As I have mentioned numerous times, the proof is in the pudding and the guys at Treasury and the Reserve certainly earned their wages over the last couple of years.
I am not sure I agree with you Scott.
Fiscal stimulus is targeted at demand which has a direct correlation with inflation, as you would know. An argument can definitely be made that the stimulus has assisted with the cash rate rises.
The increase in money supply was taken up by the stimulus, the artificial demand, created by the government. I agree that the rates were always going to get back to their default setting, the argument is whether the stimulus accelerated the progression back to the default setting.
I dont think the pudding will be ready for consumption for atleast another 5 years.
As I have said previously, a criticism of Labor Governments has always been their interpretation of the tax and spending relationships. Lets wait for another 5 years to see whether the stimulus and ALP economic policies have worked.
We have a dud treasurer that was more concerned with politics and following the IMF verbatim rather than backing his own judgement, which he doesn’t have. If he did, he would have known that Australia was in a very unique pre disposition compared to the rest of the western world.
I know that there are many PHD thesis’s being written at the moment criticising the size of the ALP stimulus which will become more mainstream over the next 6 or so months.
“I know that there are many PHD thesis’s being written at the moment criticising the size of the ALP stimulus which will become more mainstream over the next 6 or so months.”
The whiff of bullshit emanating from this statement is very strong. Would you care to spell-out the detail old boy?
Paddlefoot - “So Godwin is now a necessity .. possibly a zealous hero!”
Don’t put words in my mouth. I said “I start to see what Godwin felt he had to counterbalance.” I did not say that committing something akin to treason was a proper way to counterbalance it.
Duke - “As I have said previously, a criticism of Labor Governments has always been their interpretation of the tax and spending relationships.”
Exactly. High tax, high debt, high spending. Rudd could have used much more “invisible hand” methods to apply fiscal stimulus, but then he wouldn’t get to look like Father Christmas. And as I’m coming to learn, when it comes to Rudd, Australians do believe in Father Christmas.
clearly what I am saying old mate is that there is no where near 100% agreeance, as the ALP or other lefties would have you think, that the stimulus has worked effectively.
No Duke, clearly what you are saying is “that there are many PHD thesis’s being written at the moment criticising the size of the ALP stimulus”.
Do you have any evidence for this? Or is it just a convenient lie?
whilst I am a graduate of a high calibre university in Melbourne albeit residing in London, I supervise students undertaking their thesis at an honours and doctorate level.
Will I name the university? no, would you?
and it is not normal to pre-empt the content of a thesis before it has been published although I am sure you would know this!
Duke, do you expect anyone to believe your fantasies given your pompous and pretentious posts here. No-one with any economics training would produce a ridiculous statement like this: “The handouts did nothing except produce false retail numbers and push up Westfield profits”. False in what sense?
In an earlier post here you claimed to work for a bank and now you claim to be an academic supervising post-graduate students. You must be so busy it is a wonder you have any time to post so much twaddle on Crikey.
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As you are “residing in London” why are your students there interested in writing a PhD (an academic would never use “PHD”) on Rudd’s stimulus? You will not name the university as that would be a fact capable of being verified - or not.
I don’t think we have to worry about the stimulus being inflationary. Got to the RBA site and check the CPI stats…year end inflation rate still at extremely low levels (1.3%), and has been dropping since September 08. Even the trimmed mean (the RBA’s preferred measure) has been decreasing since September 08 (though still above the preferred 2-3%..its currently at 3.2%)
http://www.rba.gov.au/Statistics/measures_of_cpi.html
we are talking December 2008 David and if you recall, it was a pretty dire time from a confidence point of view at that time. Are you saying that without the cash handouts, the retail numbers would have been the same? its called sensitising data David.
yes David I do work for a bank, infact, a top 5 global Investment Bank in an advisory capacity. Born in Adelaide, started my career Melbourne, later moved to Sydney, then New York and now London. Hopefully back to Melbourne mid 2010.
Is it such a foreign thought to also have extra curricular interests which in my case, happens to be in academia as a paid alumni for an Australian University? you may be stuck in your public service 9 till 5 job, but some people do have extra curricular interests which may or may not involve sport.
you are so far to the left it is predictable because anyone with a balanced view would not simply agree that the stimulus was 100% successful. I am also happy to say that I voted for the Greens at the last election although I do have a particular slant to the Coalition rather than the ALP if push came to shove.
Did you know that not even half the stimulus has even been used thus far? additionally, even though the original treasury projections have proven to be incorrect, are you fully aware that the government has not altered their stimulus in line with the revised treasury projections?
At the end of the day David, if you think I am trying to impress you or other crikey subscribers, you are sadly and magnificently wrong.
Duke, when you claim that “retail numbers” are false you are claiming that the numbers are falsified in some way - not the bleeding obvious fact the stimulus was designed to boost retail spending.
Your claim that you work for “a top 5 global Investment Bank in an advisory capacity” is laughably deceitful. The idea that anyone would pay fort the kind of twaddle you write here is patently ridiculous.
There is no such thing as a “paid alumni” and your statement that “some people do have extra curricular interests which may or may not involve sport” is an extraordinary non-sequitur.
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To paraphrase a famous cartoon, on the internet nobody knows your a dog
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fair point Scott, the figures don’t lie.
Its the lag effect of the stimulus which the RBA may be concerned about perhaps?
there is no doubt that the cash rate would float back to the default rate in due course but do you think that Stevens primary concern is that with the massive stimulus in addition to the emergency cash rate may infact fuel inflation hence the recent and quicker than expected movements?
David - Should I have been more careful and referred to the retail numbers as artificial? how about, you start adding some rationale as to why you think I am so off the mark? or are you so left of centre, its not even worth adding any rationale? refer to the IMF?
No such thing as a paid alumni, what are you on about? are you a graduate? wannabe graduate? pre 90’s graduate? pre 60’s graduate? high school graduate? high school dropout?
it is common practice for a university to employ the services of alumni, usually on an hourly basis, to assist students undertaking various forms of study. Why? because they are usually industry professionals of which I presume, you are not.
If you really think somebody is going to divulge personal pieces of information online, to service people like you, you are clearly delusional.
In the most recent comment on Monetary Policy (1/12/09), Stevens does refer to the fiscal spending…
“The effects of the early stages of the fiscal stimulus on consumer demand are fading, but public infrastructure spending is starting to provide more impetus to demand”
He also mentions global economic growth, improved domestic employment conditions and the recovery of household wealth due to property prices. I think all these factors have encouraged the Reserve to increase rates gradually.
Stevens says
“With the risk of serious economic contraction in Australia having passed, the Board has moved at recent meetings to lessen gradually the degree of monetary stimulus that was put in place when the outlook appeared to be much weaker”
David Sanderson, you’ve made your point you don’t believe a word he says or anyone else who doesn’t have a portrait of Rudd in their living room. Now you’re just spamming. Give it a rest.
fair point Scott, I had yet to read the most recent minutes.
“Business credit has fallen, as companies have reduced leverage in an environment of tighter lending standards, and as some lenders have scaled back their balance sheets. The decline in credit has been concentrated among large firms, which generally have had good access to equity capital and, more recently, to debt markets.”
What is happening in Europe is that the large cap companies are now undertaking massive capital raisings to reduce debt levels to <35% whereas pre GFC they were maintaining debt levels to anywhere between 50% and 70%.
Shareholders are now demanding lower gearing levels so it will be interesting to see whether the global retail banks can maintain growth rates at the same level pre GFC in the absence of institutional and corporate debt levels they are accustomed to.
Let’s stick to the lies and not muddy the waters with a policy debate. I repeat there is no such thing as a “paid alumni”. There are alumni but ‘paid alumni’ is a nonsense term of your own devising and certainly not a term that an academic would ever use.
You have not adequately responded to any of the points I have made about your fantasy life. I’ll make one final point: you claim to be working in London, for an Australian university, supervising post-graduate students. How does that work? Do the students fly from Australia to London to see you? Or do you supervise them exclusively over the telephone? Or do Australian students move long-term to the UK in order to avail themselves of your unique services? Or is all this just a pile of steaming bullshit?
Australia’s economic growth and employment levels are solid, our financial system is healthy, inflation is within acceptable margins, and both the IMF & OECD have given the government’s fiscal response to the GFC a thumbs up.
How is this treasury address controversial?
Problem is some go looking for fault and will find it regardless. Just as most of the so called experts were predicting an increase in todays unemployment figures, buthow sad, they went down. Let us wait for the so called financial whiz kids, Joyce and Hockey and the workplace nong Abetz find fault there.
Jeebus - because (a) some of the fiscal measures did more harm than good, (b) the good done has not been in proportion to the price, which has yet to be paid. It looks like wealth just rained out of the sky, but it doesn’t work that way.
My point last night at 6:05pm has been buried under the ad hominem attacks on Duke, but I was saying that Rudd achieved much of his fiscal stimulus by hyperinflating house prices, and that’s another drawdown on future productivity along with the more visible debt. Wealth comes from either producing goods or services somebody wants or pulling something out of the ground. It doesn’t just accrete by driving up the scarcity value of land, that’s just a redistribution from the future to today’s retirees, people borrowing against their houses, and the banks.
thanks James….
David - am I telling you or, are you telling me? I am sitting here laughing whilst typing and also wondering who is paying what into my account. Perhaps I am a renumerated alumni? I am employed on an hourly basis and I claim circa 20 hours a month. Want my TFN?
It is getting tiresome now David, what points have you raised? why not divulge your background to substantiate some of your comments? or is it purely one sided? surely you don’t expect me to divulge all personal information to satisfy an argument do you?
No David, I repeat. I work for a top 5 global Investment Bank in what is usually referred to as the Banking and Financial Services sector. I work in advisory, mergers and acquisitions to be precise. I am based in London, the United Kingdom. I clearly don’t classify myself as an academic in the true sense of the word.
Yes David, all the students (3, by the way) fly over here first class to visit me once a month or earlier. They are all put up in the Hilton and wait for me to finish work. Or, if they want to move here, we can put them up in a nice 4 bedroom townhouse in Belgravia. What the hell do you think? there are various mediums available these days including phone, mobile phone, internet, skype et al… I am not sure how old you are, by the way.
The more I think about it, the more I think you are either retired or probably a well read blogger sitting at his public service cubicle (probably the local council chambers) waiting until the clock hits 12 so you can grab your 1 hour lunch.
Why has what I have written required so much thought on your behalf?
Raymond - where is the job growth coming from? clearly not the banking sector because I know of alot of people in London that have returned home and still without jobs!
“there are various mediums available these days including phone, mobile phone, internet, skype et al… I am not sure how old you are, by the way.”
Old enough to know bullshit when I smell it.
“divulge your background to substantiate some of your comments?” This is what it is all about - making up credentials in order to give your hackneyed cliches more credibility.
We will just have to await the “many PHD thesis’s being written at the moment criticising the size of the ALP stimulus which will become more mainstream over the next 6 or so months.”. Yes, those PhDs that this charlatan was forced to admit don’t exist.
the comment stands, I don’t know how old you are or when or IF you have ever walked through the doors of an Australian University as a student. Sounds like it was a long time ago, if you did. No offence, it just does.
before I get some overdue shut eye, perhaps i was overly flippant by suggesting that the thesis was solely on the effectiveness of the ALP stimulus. It is of course, a more highly developed and more complex argument. Is this why you are clearly so upset?!?!?!?
Thanks, I did really mean PhD rather than PHD. Or, is this why you are clearly so upset?!?!?!?!
whatever it is, you need to take a load off somehow.
Charlatans are always annoying. They add a completely unwelcome fraudulence to debates and, yes, they certainly deserve to be exposed.
and, what was your contribution to the debate old mate….. other than your perceived higher ground and refusal to not debate anything based on topic? nor, your refusal to provide rationale to any component of your argument? you, my old mate, have been exposed as a one sided cretin more interested in attacking someone that is likely, alot more successful in life than you have ever been.
Well, we shall just have to take that on completely undeserved trust won’t we Duke? Because your fantasy biography reveals only a charlatan.
You’re a bore, David. You also called John James “absurd” and me “grumpy old men who are whinging because they will not directly benefit”. No one even remembers what we were talking about because it’s become all about your astrologer-like insights on anyone who disagrees with you. You’ve learned the Rudd method method of argument well. Or was it you who taught it to him?
That JamesMc was a boring post, move on for all our sanity. Its been done to death.
Fair enough Saint.
I don’t really see a problem with fiscal and monetary policy sometimes being at odds, as the time lags are different. If anything that provides stabilisation in case one or the other overcorrects.
But I have got a problem with the method of fiscal stimulus, which all along has looked far more like grandstanding than anything scientific. It would be hard to spend that much money and not support employment, so the fact that it did doesn’t say much. But did we get good value for the cost, subject to the time constraints? I don’t think so. The time argument isn’t a justification for better central planning, it’s a justification for little or no central planning at all - which is the whole point of the free economy, after all.