TAFKAS has long maintained that spreadsheets have been one of the most destructive human inventions of all time. They allow any idiot the authority to claim to predict the future based on some questionable analysis underpinned by specious mathematics and statistics.
Before spreadsheets, people who wanted to do this form of soothsaying had to either do the hard work of calculating and recording with a pencil or siting in a tent with a turban looking into a crystal ball.
With the advent of spreadsheets, however, any idiot can drag a column to the right and forecast ad infinitum without the actual hard work of doing the calculations. Spreadsheets have given many intellectually lazy and incurious people the confidence and certainty to engage in many idiotic adventures – often with other people’s money and resources.
It is this idiocy that has now infiltrated our political discourse with demands for and quotes of modelling, modelling and more modelling. And yet the people (yes you media industrial complex) who are the most responsive to false authority of modeling are the ones who would not know what a model is if you stumbled upon one and are usually the most innumerate of our population.
But the thing about predictive models is that, with over time, you can actually see whether they were right or wrong. Accountability is funny like that. But for some reason, the modelers and model quoters never seem to want to do this.
Covid death models. Climate catastrophe models. Green job models. Consistently wrong yet always used and never questioned. Yet the faceless people who develop, demand and quote these models have the same level of skin in the game as the turbaned crystal ball reader. About none.
Which brings TAFKAS to the latest fiscal adventure by the Commonwealth Government of Australia. Reported in the AFR this morning:
The federal government is working up a multibillion-dollar scheme to construct residential housing as part of its strategy to stimulate the economy and prop up the building industry as the nation emerges from the coronavirus crisis.
A billion here. A billion there. Pretty soon you might have real money. Even with the RBA printing presses running overtime. But the description of this proposed program as a scheme is probably more accurate than the reporter intended.
an organized plan for doing something, especially something dishonest or illegal that will bring a good result for you
But why is this scheme required you may ask? Well apparently according to the Prime Minister:
Mr Morrison again raised the issue of an extreme drop in migrant, estimated by Treasury at 85 per cent.
Is this the same Treasury whose forecast, using a model, of the cost of the Jobs-Seeker-Keeper-Reeper program was only $60 billion off. Oh. But wait. There’s more. So says Prime Minister Morrison:
“We’re looking at net overseas migration falling to 34,000-odd next year. When you think that – it was the great Professor McDonald who set a figure of between 160,000 and 210,000 as being what you need in this country to maintain GDP-per-capita growth – then there’s obviously a big gap there,”
Perhaps others have heard this elsewhere, but this is the first time that TAFKAS has heard a government official state that net overseas migration of between 160,000 and 210,000 as being what you need in this country to maintain GDP-per-capita growth. Is this not news? Where are the headlines?
But from where did these magic numbers come? Tada. From here a – a Department of Immigration and Citizenship (precursor to Home Affairs) piece of commissioned research.
And this is what the research says:
There is a range of NOM levels (160,000 to 210,000) which the modelling suggests would have the ‘best’ impact by 2050 on ageing of the population and the rate of growth of GDP per capita.
These findings are based on a demographic model MoDEM 2.0. The value of research that is based on models depends crucially on their quality.
So basically, this is a model using data spit out from a different model. A forecast on top of another forecast. Yeah. That was always going to end well.
And when was this forecast from a forecast done you ask? May 2010. TEN YEARS AGO.
Yes. The actual results, with respect to average GDP growth have subsequently shown that the model and its forecasts were WRONG. But the Prime Minister is not only quoting this WRONG analysis, but the government continues to base economic policy on it.
What’s next. Phrenology and leeches to treat WuFlu?
But here is another magic conclusion from the research the Prime Minister not only quotes but says comes from the great Professor McDonald:
Migration has a meaningful impact on the rate of growth of per capita GDP. From 2013 to 2020, the rate of growth of GDP per capita would be about 0.15 percentage points higher with migration of 180,000 than with zero migration.
So. For an extra 0.15 % (or 0.0015) of GDP growth, the states need to build expensive and questionable infrastructure, our schools, hospitals and public transport need to be over crowded.
Hows that for economic logic.
It’s no wonder that once your evidence in support of your questionable policy has been proved wrong, ignore the evidence and fall back on your rhetoric.
This is contemporary Australian political and economic leadership and why we are stuffed.