David Uren needs to get out more

David Uren had this statement in the Australian yesterday.

NOBODY predicted the slowdown in consumer spending as Australia bounced back from the global financial crisis and no one has great confidence in forecasting how long it will endure.

That can’t possibly be true – nobody Uren was speaking to was talking about the slow down. But what does intertemporal smoothing mean? Resources were transferred from the future to the present where (apparently) they were needed more – that means less in future. Of course if that transfer had been invested in productive capacity it might have led to an increased growth rate and what not, but it wasn’t; it was either consumed or invested in low value-add areas.

David Uren is co-author of Shitstorm – an important account of the incompetence of the Rudd government (I refer to my copy so often its falling apart) – this is what I said in my review of that book.

What is missing from the Taylor and Uren account is any of the economic debate that occurred within Australia. They discuss the government and Treasury views and much about the opposition, yet there is no mention of economists outside those circles. The fact of the matter is that the government was unwilling to listen to any opinions it didn’t like.

If you don’t ask the tough questions you don’t the tough answers and if you only talk to Treasury and government supporters you don’t get to hear the costs of intervention.

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7 Responses to David Uren needs to get out more

  1. Abu Chowdah

    And the echo-chamber consensus reality that is promulgated by the brown-collar media surprises you how, Sinkers?

  2. Norbert

    Slightly off topic: I was examining the new university mouthpiece, theconversation.edu.au, and marvelling at more tax dollars going toward a site that allows agenda-driven academia to push its barrow when, much to my delight, I discovered that the Bunyip is already having fun with it. Comment #4 at

    http://theconversation.edu.au/articles/a-better-formula-for-science-communication-307

    Now that Alene is in green heaven and Sparkles is nestling with peppers and mini sweetcorns, I’m hoping he has found a new hobby.

  3. sdfc

    I don’t know why the pull back in consumer spending is a surprise.

    It seems to me to simply be a case of a highly indebted household sector pulling back on spending following a shock.

  4. JC

    don’t know why the pull back in consumer spending is a surprise.

    Yea.

    It seems to me to simply be a case of a highly indebted household sector pulling back on spending following a shock.

    The “shock” was several years ago.

    Perhaps it’s terrible conditions outside of the mining sector.

  5. sdfc

    JC

    The deep shock was only a couple of years ago. People aren’t goldfish you know.

    As for conditions being terrible, unemployment is 5% and household income growth is robust. Household debt is at 160% of GDP.

    The increase in household saving and pullback in credit growth is a positive.

  6. JC

    The deep shock was only a couple of years ago. People aren’t goldfish you know.

    Dude, the shock was 3 years ago. To suggest people are reacting to 2008 is laughable.

    Overheard a conversation…

    ” I’m not buying that plasma TV because of the GFC from 3 years ago”.

    As for conditions being terrible, unemployment is 5% and household income growth is robust. Household debt is at 160% of GDP.

    It’s higher than that as a result of hidden unemployment and the fact that part time jobs have increased to the re-regulation of the labor market. It’s not a great economy outside of the mining sector

    The increase in household saving and pullback in credit growth is a positive.

    So.

  7. sdfc

    No it was two years JC. Aussie national income started sliding badly in DQ 08, the market bottomed in March 2009.

    Employment growth was ~4% late 2010. It’s still running at well over 2%. The long-term average. Once again you ignore income and debt.

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