Catallaxy Files

Some people might remember Steve Keen’s bold prediction about the collapse of the housing market. Now he is in a right pickle.   The Charles Sturt (property) newsletter reports.

Sixteen months ago Mr Keen made a bet with Macquarie Group interest rate strategist Rory Robertson after claiming that house prices would dive by 40% when the GFC was at its worst.
Fortunately his predictions didn’t eventuate, and now Mr Keen will deliver on his promise to walk 224km from Canberra to the top of Australia’s highest mountain, Mt Kosciuszko. It remains to be seen whether he will wear a t-shirt saying “I was hopelessly wrong on home prices! Ask me how.”
Dr Keen was way off the mark. Australian home prices bottomed out by 5.5% from their peak in late 2008. Read the rest of this entry »

Amazingly, the leftwing blog Daily Kos has posted a really helpful gloss on the Hayek vs Keynes rap!

This is prompted by Andrew Bolt’s alarm about teaching dreamtime stories and cognate mythology before exposing students to the periodic table.

Ron Horner turned up at Launceston Grammar from Manchester in 1960. He was appointed as Senior Science Master and also the Head of the Junior School.

On the side he started a Classical Music Club, a Science Library and a wandering Sunday cricket team that played village green matches around the country. This gave a handful of  lucky boarders the chance to get some decent tucker one day a week.

He administered a test to find out roughly where we were at in Chemistry as we started year 10. He was gobsmacked to find how little we had leaned in the previous three years in the hands of “Screw” Hampton, an Anglo-Indian who was full of tales of the war and the role that his Ghurkas played in it. Incidentally I am in debt to “Screw” for converting me into the breakthrough bowler with some coaching provided while he umpired the first game that I played in the First XI. I am not sure if coaching by the umpire is in the spirit of the game, still, it only consisted of three words, hissed through closed teeth “Pitch it up!”, and it worked.

Getting back to Chemistry, with an exam for the School Certificate at the end of the year, Ron Horner went into catchup  mode, including some lunchtime classes and an early return from the holidays at hte end of second term. He was a truly inspired teacher and this came through in his teaching of the periodic table.

“Good afternoon boys. Today we are doing the periodic table of elements. But first I want to tell you about a little place in Paris where bored businessmen go at lunchtime to watch young ladies dancing and showing off their legs and their underwear.”

Read the rest of this entry »

Someone put the question the other day “What is the purpose of the Obama visit?”

I don’t recall the answer but it will provide an opportunity to compare and contrast the way that two men who swept into power on the back of  landslide victories have visibly lost the plot in record time.

Of course it was apparent before they took office that they would be on the short list of the worst PMs/Presidents ever. This situation would be amusing except that people are being hurt and the fundamentals of good governance will remain under threat for some time to come (and that is an optimistic scenario).

The most disturbing aspect of the situation is the way that the mainstream media  in both the US and and Australia have played favorites and largely given up on the task of feeding straight news and commentary.

Progressive/left leaning intellectuals have done the same.

When the disastrous records of Obama and Rudd are written up by the historians the working media and the left-leaning intelligentsia will have to take large share of the blame.

WASHINGTON—The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.

The business section of The Onion brings this dramatic report from the US where POMO finally strikes at the heart of the economy.

A few other grabs from the same source.

George Soros has put some $50 million (probably small change from the floor of his car) into an Institute for New Economics

The Institute and conference were born when a group led by George Soros came together at the Bedford Summit to discuss the crisis in 2008. Concerns over a history of poor economic guidance revealed the need for continued conversations and a new forum. The conference will gather the world’s brightest economists and leaders to provoke innovative thinking and positive change.

Read the rest of this entry »

A bundle of books from Amazon, Mirowski More Heat than Light: Economics as social physics, Mirowski’s essays on science studies The Effortless Economy of Science and The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective, eds Mirowski and Plehwe., Harvard Uni Press, 2009.

You probably thought that Pete Boettke and Steve Howwitz and their colleagues are just some regular guys with an eccentric take on economics and politics but you need to be warned that they are a part of “the most important movement in political and economic thought in the second half of the twentieth century”. (426). In other words, they are IMPORTANT  and they are a worry!   The Mont Pelerin Society provides the thread to organise the mass of intricate historical detail that the authors have compiled on the activities of the “neoliberal thought collective” and precursors such as a group associated with Walter Lippmann in France.  

Dieter Plehwe wrote the introduction.   Keith Tribe – the movement in Britain from 1930 to 1980.   Ralf Ptak – the ordoliberal foundations of the social market economy.   Rob Van Horn and Philip Mirowski – the rise of the Chicago School of Economics.   Yves Steiner – confronting the trade unions.   Rob van Horn – on the Chicago attack on the law and economics of trust-busting.   Dieter Plehwe on the origins of the neoliberal economic development discourse.   Kim Phillips-Fein on the role of business conservatives.   Karin Fischer on the influence of the neolibs in Chile before, during and after Pinochet.   Jennifer Bair on the new international order.   Timothy Mitchell on urban property rights in Peru.   Postface, Mirowski defining neoliberalism.  

Read the rest of this entry »

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The Keynes vs Hayek rap. I like the bit where Hayek finds the General Principles in the drawer in his hotel room.

A nice series of recent posts from Organisations and Markets. BTW this site and its authors polled very well in a recent survey on the credibility and/or popularity of economics blogs

Calls for industry policy in the US.

The transformation of many Israeli kibbutzim into partially privatized, profit-seeking, professionally managed entities that act in capital, product, and factor markets just like private firms.

Problems with cap and trade schemes in Europe.

Happy Schumpeter day!

Missouri Economics Conference (meet Peter Klein).

From Conservative Teacher, an aid for students, the declaration of independence set to music, maybe a bit long but worth a look.

Andrew Norton on the incoherent student loan scheme.

From Michael Warby, Climate Links, “How many global warming sceptics does it take to change a light bulb? None, because it is far too early to say whether it needs changing. (Viscount Monckton) What the IPCC would call a spade pretty funny too.  

Economics Links

European Links including a map on the different “alcohol zones”.  This map shows Europe dominated by three so-called ‘alcohol belts’, the northernmost one for distilled spirits, a middle one for beer and the southernmost one for wine. Each one’s existence and extension is determined by a mix of culture and agriculture.

The Centre for Independent Studies has a program of events includind presentations on research in progress.

The first event of the year was a report by Elise Parham on the proposed Bill of Rights. The report “Behind the Moral Curtain” is on line here and there is also an audio on the same page.

Of course everyone is in favour of rights but the question is whether rights can be engineered in a political process that has proved around the world to be a vehicle for special interests. The title of the report hints at the “trojan horse” nature of this kind of legislation that looks so good and turns out to be poisonous. Discussion on the night raised a number of horror stories of  rights gone mad.

The conclusion of the paper:

Charters of rights are another tool in the political game. A national charter of rights would represent  a variety of interests and ideologies, like any other law. It would inhibit the rights of some in favour of the rights of others, like any other law. The profoundly important difference to other laws is that a charter would be a legal trump so that its contents would be potent in effect.
The manipulability of a statutory charter makes it a dangerous political tool, particularly in the long run. There is already evidence that a range of interest groups, legal intellectuals, and others are attempting to have their interests and causes preserved by such a law. Once a charter becomes subject  to  that kind of manipulation,  it  allows  the  infuence of  those  few who get  their  rights suffcient protection to dominate the rights of everyone else.
Although a human rights charter has an  important and  luring moral undertone,  in practice it is not clear that a charter would preserve those moral imperatives as it continues to grow and change through the lobbying of various groups. In a foretelling of the potential for this change,   AHRC President Catherine Branson QC told a human rights gala dinner in July 2009:
“[W]e  should  remember  that  ensuring  the  best  protection  of  human  rights  is  an ongoing process …” Australia is at an interesting stage in what I believe is a journey towards better rights protection. Tonight there is much to celebrate, but we should also remember that we have a long way to travel yet.
When this journey gets under way, what onglomeration of interests will be dictating the way government, judges and eventually the Australian community will live?
We can only imagine.

Someone, actually Leonard Read, wrote an essay called “I, Pencil”  to illustrate the network of impersonal, voluntary exchanges that result in the production of a simple human artefact through the agency of the market system. Peter Klein noted that many students these days have not seen a simple wooden pencil and he was pleased to promote an alternative – “I, Beer”.

As you would expect, to make the thing easier for the dumbest generation ever, the Beer version is much shorter.