Friday, August 02, 2013

If only Treasury had been worrying about the right things, like stagflation....

Well, the ABC collective (the Australian, Bolt and Catallaxy, for those who have forgotten) gets a boost today by Sinclair Davidson doing a summary of about 2 years of Catallaxy posts (well, except for the ones mentioning what will be mentioned below) in a long column at the Australian which, of course, is also extracted at some length at Andrew Bolt's blog.

Davidson is very big on "holding people to account".   He's forever making shock jock style calls for judges, parole boards, economists, politicians to be sacked or somehow publicly pilloried for matters about which he appears to have no particular experience or knowledge of how decisions were made.   (Mind you, it would not be surprising if the Victorian parole board is about the get a legitimate bollocking by someone - Callinan - who has a better idea of how the system works.)   His libertarian inspired views on economics contain the embarrassing and poisonous stain of Randian thought (he put up a video of a long talk to small government types he gave in New Zealand recently where, in response to a question at the end about use of language in economic debate, he confessed to personally thinking in terms of "moochers and looters".)    

Yet despite his fondness for punishment, he's the economist who, two years ago, started a column with this:
High inflation combined with a sluggish, or stagnant, economy is described as 'stagflation'. The last time the world saw anything like this was in the 1970s.

It is the consequence of pursuing Keynesian economic policy. It should come as no surprise that the return of Keynesianism during and after the Global Financial Crisis could see the return of stagflation.
 He turned up on (surprise!) Andrew Bolt with the same warning.

Look, I know its tough medicine, but Paul Krugman on inflation and the anti-Keynesians seems to have been right for, what, a decade or more now? 

Well, Sinclair should take his punishment and given himself a severe sacking.   

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