Catallaxy Files

The Rudd government is claiming to have created jobs. Not saved jobs, mind you, but to have created jobs.

“In the past year we have created 112,000 jobs.

“As we look around at the rest of the world’s data, in America in the same period of time, 5.8 million jobs were lost.”

Mr Rudd was marking the first anniversary of Labor’s $42 billion stimulus program.

When you look at the ABS data and the stock on employed people between December 2008 and December 2009 there is an increase of about 114,000 people so on that basis the statement may be correct. But the problem is that the unemployment rate has increased and the numbers are in the context of the stimulus package.

What I have done is graph the size of stimulus pacakges releative to 2008 GDP and the increase in unemployment for several OECD economies. All data are from the OECD and the increase in unemployment is calculated as the difference between June 2009 and the 2007 unemployment rate. Australia is the red dot.

Notice that our increase in unemployment is much less than the size of our stimulus package would suggest. One interpretation, that the government would like, is that this just proves how successful the package was. Another suggestion is that our package was far too large (bearing in mind that even now a lot of the money is yet to be spent). There are a number of economies that also had low increases in unemployment but also had smaller stimulus packages.

Unfortunately the amount of data I have right now is limited – as more becomes available hopefully it will be possible to update the analysis with more economies.

Yesterday was the first anniversary of the annoucement of the second stimulus package. In total $42 billion was allocated to be spent in order to stave off the greatest recession since the great depression. Yesterday the Commonwealth Co-ordinator General released a report into the progress of that spending as at December 2009. Very glossy, nice photos, long of claims but short on evidence.

The stimulus package was sold as being Timely, Targeted and Temporary. By definition it would be temporary because the government didn’t intend to continue spending money forever, but as the report clearly indicates the spending has not been Timely or Temporary – certainly not timely and temporary enough.

Stimulus funds paid
Of the $30.1 billion available under the Plan for infrastructure components, $11.5 billion has been paid. Of this:
• $5.2 billion had been paid across the Building the Education Revolution;
• $793 million has been paid under Other Education programs;
• $1.6 billion has been paid under the Defence and Social Housing programs;
• $500 million of Community Infrastructure Program funding has been paid;
• $2 billion has been paid under the Road and Rail infrastructure programs; and
• $1.4 billion has been paid under the Energy Efficient Homes program.
In addition, $11.9 billion has been paid directly to individuals as cash payments and $2.4 billion in deductions have been claimed to date under the Small Business and General Business Tax Break. In total, $25.8 billion has been paid across the Plan.

So that’s about 61 percent of the money spent – the remaining 39 percent will continue to be spent as the economy continues to grow and the danger of recession is long past.

The New Scientist is reporting that Michael Mann has ‘been virtually cleared of professional misconduct by an internal university enquiry.’ The Penn State report is here.

The Penn State panel investigated four allegations against Mann, summarised as follows:

1. Did you engage in, or participate in, directly or indirectly, any actions with the intent to suppress or falsify data?
2. Did you engage in, or participate in, directly or indirectly, any actions with the intent to delete, conceal or otherwise destroy emails, information and/or data, related to AR4, as suggested by Phil Jones?
3. Did you engage in, or participate in, directly or indirectly, any misuse of privileged or confidential information available to you in your capacity as an academic scholar?
4. Did you engage in, or participate in, directly or indirectly, any actions that seriously deviated from accepted practices within the academic community for proposing, conducting, or reporting research or other scholarly activities?

It then goes on to explain the process they followed and Mann’s cooperation and participation. By all accounts he cooperated fully with the inquiry. In sum they find no credible evidence to support the first three allegations. But they have an open finding on the fourth allegation.

The allegation inquires about whether Dr. Mann seriously deviated from accepted practices within the academic community for proposing, conducting, or reporting research or other scholarly activities. In 2006, similar questions were asked about Dr. Mann and these questions motivated the National Academy of Sciences to undertake an in depth investigation of his research. The committee that wrote the report on surface temperature reconstructions found that Dr. Mann’s science did fall well within the bounds of accepted practice. What has changed since that time is that private emails have come to our attention and that of the public at large, and these give us a glimpse into the behind the scenes workings of Dr. Mann and many of his colleagues in the conduct of their science.

The Penn State panel seem to have some reservations in this area (emphasis original).

In sum, the overriding sentiment of this committee, which is composed of University administrators, is that allegation #4 revolves around the question of accepted faculty conduct surrounding scientific discourse and thus merits a review by a committee of faculty scientists. Only with such a review will the academic community and other interested parties likely feel that Penn State has discharged it responsibility on this matter.

So there will be an additional inquiry into that matter. So he is not yet entirely off the hook, but Mann is confident.

“This is very much the vindication I expected since I am confident I have done nothing wrong,” Mann told New Scientist. “I fully support the additional inquiry which may be the best way to remove any lingering doubts.”

I have seen some commentary that suggests that a bunch of tenured profs have just vindicated another tenured prof. That sort of commentary doesn’t take us very far. Within the university a series of allegations have been made and within the processes available to Penn State they have been investigated. That doesn’t mean that Mann is now ‘innocent’ but it does mean that he is not guilty of the misconduct allegations made against him (well 3 of them anyway) under the university rules.

John Quiggin Australian Financial Review February 3, 2010

… I received an invitation from the Brisbane Institute on 12 January. I responded, seeking to determine conditions under which this debate could focus on Monckton’s conspiracy-theoretic claims, rather on scientific questions on which neither of us have any expertise.

John Quiggin January 22, 2010

…(I delayed in responding to my invitation, and it was pulled).

In a comment to my post on the intergenerational report/, Butters wrote

you regularly claim the labour market is re-regulated but produce no evidence.
It would be nice to see some.

Labour productivity figures are not the ones to look at.
Perhaps you should read Ross Gittins before commenting again.

I replied

Butters – the use of labour productivity growth is pretty standard and used in Treasury, the OECD and elsewhere. Sure, multi-factor productivity (or total-factor productivity as some term it) would encompass other sources of productivity growth (and decline). But there are problems with the measurement of MFP. That said, the use of labour productivity is entirely consistent with measuring the impact of labour market regulation. As to the effect of re-regulating the labour market (and you’d have to be hiding your head in the sand to not realise that Fair Work Australia and “simplified awards” are not re-regulating the labour market), this is a standard result and well accepted in the economics profession. That is, increasing employment protection legislation is likely to reduce labour productivity growth (other things equal). You can check numerous OECD studies on this, and take the word of Ken Henry. Check out his speech here here among others.

Well look at this example of labour market re-regulation. Fair Work Australia looks like it is out of control.

I went to the well attended presentation by Lord Monckton (and Ian Plimer) in Canberra yesterday. Both gave very polished performances – although I wish that Monckton would resist the temptation to play the man (his presentation did not need that part).

One interesting statement he made – which I haven’t separately verified – was that even if one took all of the IPCC estimates and projections at face value, and then one stopped the entire world economy for 41 years, then the temperature would be one degree Celsius below what it would otherwise be.

If true, surely this is a telling reason to oppose emissions trading schemes and rely on adaptation (and scientific research)? No one can seriously assert that we can stop all man-made emissions for 41 years.

Today’s article by Gary Johns is excellent and relevant.