Monday, July 28, 2014

Pot calls out kettle

Judith Sloan, of all people, hates it when someone seems to have a one track mind on matters economic:
Thank God that Joe Stiglitz has left our fair shores: all that ill-informed, gratuitous advice was really getting out of hand.  And all complete tosh: Stiglitz has never come across a problem which is not solved by more government spending or regulation.
I assume it's a matter of great distress to her, then, that her fellow economic commentators at Catallaxy have never met a problem which is not solved by less government spending or regulation?

(To be fair - which is something she rarely is - there was that brief episode a few years ago where Sloan herself did promote the idea of increasing unemployment benefits.  I still don't think it was ever repeated at Catallaxy, as such a radical proposal would upset the small government luvvies no end.)

More significantly, Judith is promoting at that post some research that indicates income inequality in Australia is not increasing (at least if you look at the top 1%.)

Ha!  She says - take that in your pipe and smoke it, Joe.

Of course, what she fails to comment on is the rest of the graph indicating the trend is way different in most other countries, and the fact is, (if these numbers are right) it is something which the Abbott welfare changes look designed to change for the worse.

I don't see that citing this is any reason to ignore Stiglitz's warning that it is not a good idea to move in policy ideas towards the USA.


In the thread, I see that Sinclair Davidson comes on out and proud that income distribution counts for naught:

Can someone of more economic understanding than me explain why income inequality matters so much?
It doesn’t. Neoclassical theory has no view on income distribution. It will follow marginal productivity, so whenever you hear a neoclassical economist crapping about inequality they’re imposing their own preferences or a bolt-on to the theory.

Individuals with low marginal productivity impose costs on the economy through various other correlations with drug abuse and crime and so on. But it isn’t clear that inequality is the cause of those problems.
This is a case of devotion to economic ideology overwhelming common sense.

1 comment:

nottrampis said...

Judith problems always emanate from too much peroxide