Things Economists agree on
Paul Walker quotes Greg Mankiw with this list of things most economists agree on:
- A ceiling on rents reduces the quantity and quality of housing available. (93%)
- Tariffs and import quotas usually reduce general economic welfare. (93%)
- Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
- Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
- The United States should not restrict employers from outsourcing work to foreign countries. (90%)
- The United States should eliminate agricultural subsidies. (85%)
- Local and state governments should eliminate subsidies to professional sports franchises. (85%)
- If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
- The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
- Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
- A large federal budget deficit has an adverse effect on the economy. (83%)
- A minimum wage increases unemployment among young and unskilled workers. (79%)
- The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
- Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)
You want a better economy, with more wealth and jobs? Then take note of the above.
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Tags: economists
February 16th, 2009 at 2:06 pm
Interesting statistics; I am someone at a loss to see how/why 17% of economists believe a large federal budget deficit is a ‘good’ thing…(only 83% think it is bad)
February 16th, 2009 at 2:11 pm
So setting aside the US-specific items, pretty much the opposite of what card-carrying socialists have worked hard to implement here in NZ
February 16th, 2009 at 2:12 pm
To be fair, the 17% may believe it is neither a good thing nor a bad thing.
February 16th, 2009 at 2:17 pm
Just goes to proves the conventional wisdom (media generated view) in NZ that the vast majority of economists are to right of Genghis Khan
February 16th, 2009 at 2:21 pm
three things 95% of economists have in common with the other new pariahs..bankers..
1)..most of them are bought/venal/self-serving/greedy/over-paid bastards..
2)..they didn’t have a fucken clue about this meltdown..
3)..and they haven’t got a fucken clue..(save for their doomed ‘we must all consume again’..mantras..w.t.f..!..
..and that ain’t gonna happen..!..)
..about how to get through this mess..
..so..
..why should we pay them the slightest bit of attention..?
..when they have proven themselves to be such useless gits..?
..are we masochists..?
..or just stupid..?
..phil(whoar.co.nz)
February 16th, 2009 at 2:24 pm
phule, you dont know many economists do you?
I think it is reasonable to doubt that you know what an economist is.
Hint: Gordon Gecko was not an economist.
February 16th, 2009 at 2:27 pm
and do 87% of economists agree that f&p could be the first of our titans to fall..?
http://whoar.co.nz/2009/fisher-paykel-shares-plunge-40pc-after-profit-shock/
phil(whoar.co.nz)
..and no..i don’t ‘know’ many bankers either..
..your point..?
February 16th, 2009 at 2:29 pm
“..I think it is reasonable to doubt that you know what an economist is..”
wow..!..
..that’s a very ‘zen’ question..
..if an economist falls in the woods..and nobody hears..
..has it really happened..?
..think on..!
..little chickadee..!
phil(whoar.co.nz)
February 16th, 2009 at 2:34 pm
So in a discussion about economists, you bring up a single company whose price fell because they took a hit to earnings.
Well done. It is no longer simply “reasonable” to doubt that you know what an economist is, it would be downright foolish to think otherwise.
February 16th, 2009 at 2:44 pm
gee ‘kumble’..it’s kinda multi-faceted..eh..?
..your ‘not getting it’..
..a question for you..
..how many of those 87% of economists warned us about what we now face..?
..i repeat..
..why the fuck should we pay them the slightest heed.?
phil(whoar.co.nz)
February 16th, 2009 at 2:46 pm
this post is just more rightwing propaganda..
..from new zealands’ leading rightwing propagandist..
..eh..?
..nothing more..nothing less..
(and to be shelved in ‘the dustbin of history’..
..eh.?..)
..phil(whoar.co.nz)
[DPF: Wow I am now the leading rightwing propagandist - can I get a certificate with that]
February 16th, 2009 at 2:49 pm
“Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%) – Good God! They don’t mean some kind of FART TAX (only thicker) do they? Surely that wouldn’t work !!! Holy world-turned-upside-down, Taxman!
February 16th, 2009 at 2:51 pm
The ones that were interesting for me:
7. Only 85% thought that subsidies to professional sports franchises were a bad idea. I guess there is an argument that entertainment is a public good, but it seems to me that those franchises are a business, not a public good.
12. Minimum wage increases unemployment amongst the young and unskilled. I would have thought that was obvious – why hire someone young and unskilled when you can get someone old and skilled for the same price? Surprised that only 79% agreed with it. Perhaps a decent chunk of the remainder picked the option that said “we haven’t yet been able to measure that, so it isn’t known beyond reasonable doubt.”
14. Effluent taxes and marketable pollution permits. I wish somebody had asked them which of these two was the better choice.
PhilU – I dunno, should we listen to the consensus of scientists on global warming? I reckon something like 70%, maybe more, of them agree that it is happening and human caused. So when 90%+ of economists agree on something, you don’t think we should listen to them, and you attack them as all being idiots. I get it….
February 16th, 2009 at 2:58 pm
i repeat..paull..
..how many of those economists predicted the shit we are now in..?
..and if not..why the fuck not..?
..and we had may as well talk to these ignorant bastards about anything at all..eh..?
..cos’ they have proven they obviously know sweet fuck all about the/any outcomes of/from their ‘economic-musings’..
..eh..?
..phil(whoar.co.nz)
February 16th, 2009 at 3:01 pm
“..You want a better economy, with more wealth and jobs? Then take note of the above…”
and that’s a real fall-on-the-floor/knee-slapper..from ‘the propagandist’..
..eh..?
phil(whoar.co.nz)
February 16th, 2009 at 3:02 pm
Greenfly
What they mean is that it is better to use economic instruments (taxes or tradable permits) than command and control instruments.
Emmess: “Just goes to prove the conventional wisdom (media generated view) in NZ that the vast majority of economists are to right of Genghis Khan.”
It is undoubtedly the case that modern economics suggests that incentives matter and that left to themselves, most people can make a pretty good fist of life.
It is also undoubtedly true that this world-view is overwhelming supported by a vast body of evidence.
I could also comment there is a the conventional wisdom among economists that the vast majority of the media in New Zealand is to the left of Lenin!
Brad DeLong, who was Deputy Assistant Secretary for Economic Policy at the US Treasury during the Clinton years, proffered what I think is one of the best descriptions of the role of the modern economist:
“He or she at least explains why things are unlikely to get better and why steps to try to make them better will probably make them worse. Our specialty is telling unpleasant truths to powerful people who do not want to hear them. This is not called the Dismal Science for nothing.”
February 16th, 2009 at 3:05 pm
philu if you are such an economic genius and predicted the current situation did you short sell shares to cash in on your vast knowledge?
Further if you are so much more knowledgeable than all these economists why don’t you get a job putting all your expertiese to good use and save the country from itself? I’m sure with the huge talent you have an employer would be only too happy to give you flexi hours to fit around your son.
February 16th, 2009 at 3:13 pm
“..# Hagues (362) Vote: Add rating 0 Subtract rating 0 Says:
February 16th, 2009 at 3:05 pm
philu if you are such an economic genius and predicted the current situation did you short sell shares to cash in on your vast knowledge?
Further if you are so much more knowledgeable than all these economists why don’t you get a job putting all your expertiese to good use and save the country from itself? I’m sure with the huge talent you have an employer would be only too happy to give you flexi hours to fit around your son…”
had i shares/houses..i would have bailed out..
..and you can’t say i didn’t warn you..
..there are a lot of you righties deep in the shit right now..eh..?
..yet..if you had paid heed to my warnings..
..since august 2006..mind..(and repeatedly)..
..you’d have cashed-up..
..and be sweet now..
..and not in that shit..
..that you are now in..
..eh..?
..(and here’s the rub..
..that economic-advice ..that you (fatally?) failed to heed..
..came from that lefty vegan sole-dad..
..at whoar..
..eh..?
..irony’s a harsh fucken mistress..
..eh..?
..phil(whoar.co.nz)
February 16th, 2009 at 3:53 pm
Who cares what a vegan solo dad, who refuses to work even though he is more than capable of stocking shelves, has to say on the world economy? Or anything for that matter.
The reason everyone laughs at you, phule, is that you are a complete joke.
It doesnt matter what you said or when, because every other part of your life, and everything else you have ever said on anything leads people to fairly believe that though events occurred broadly as you repeated from another source, this was nothing but blind luck.
Someone who hasnt got a single good thing to say about capitalism is going to LOOK correct in every bear market, but still be massively wrong.
And Hagues still has a very good point. Even if you didnt have shares or property, you could still sell short with a little capital and a lot of leverage.
February 16th, 2009 at 3:59 pm
Actually lots of economists predicted we were going for a fall but one thing economists cannot do is predict when – they’re terrible at it – says one who bailed out of shares, bought bonds and gold at the right time
February 16th, 2009 at 4:05 pm
Philu “had i shares/houses..i would have bailed out..”
But you didn’t short sell did you? All talk no action.
“..yet..if you had paid heed to my warnings..
..since august 2006..mind..(and repeatedly)..”
You mean like your warnings of a L/MP/G/Jimbo/UF coalition that failed to materialise (and would have plunged the economy into even deeper shit)
“..you’d have cashed-up..
..and be sweet now..
..and not in that shit..
..that you are now in..”
Wasn’t aware that I was in any shit. In fact I followed my own economic advice and had a fixed mortgage that expired just the other day, so now am on a much lower rate with it about to come down even further. No whinging about bank fees from me, too smart for that.
“..eh..?”
eh what?
February 16th, 2009 at 4:09 pm
No one would hire philu. That’s why he smokes dope all day, claiming the benefit while writing shit here.
February 16th, 2009 at 4:34 pm
but for all that, PhilU has been harping on about the present situation for some time now… beginners luck?
February 16th, 2009 at 4:35 pm
Sorry PhilU:
1. Most economists did predict the current “shit” that we’re in. There were plenty of warnings about lending to poor credit risks, the historical high that house prices were at, and what one particular economist called “irrational exuberence.” Hell, I’m not an economist, and I predicted it.
2. I’m not in the shit – I have a regular income, my investments haven’t lost value (other than one speculative investment for a smallish amount of money), my loans were all on a variable rate, and the property I own in general hasn’t lost value (as yet). In fact, I think those who are in the “shit” are those, by and large, on the left. Those in a job that doesn’t create as much value as they cost (thank the minimum wage and failing education system for that), those in a government funded job, those who provide the marginal product in the market.
3. Your predictions are usually crap. Getting on here and pontificating about the one thing you got right in the last three years, and completely misattributing the causes, is about as useful as my local pagan priest telling me that he predicted that the sun would come up tomorrow, and therefore I should start sacrificing goats to his pagan god that brings the sun up every morning. Predicting the obvious doesn’t give any particular credit.
4. As for your lack of investments – basically the problem here is that you have no balls. That’s why you still live on a benefit. If you’d backed your conviction on the crash, you’d be rich already. Of course, if you’d backed your conviction on the election you’d be even poorer than you are, so I guess if I had your success rate on predictions I wouldn’t back myself either.
February 16th, 2009 at 4:41 pm
Philu, the more I research the issue of scientists on Global Warming, the more I find that are against the idea that Humans are causing catastrophic global warming; in fact I believe that an outright majority are what you call “deniers”. It is just that the bloody Leftwing media ignores them and smears them as propagandists for “big oil”, and the politicians ignore them.
It is the same with the economic meltdown. The more I research the issue of Economists on the mounting crisis over the years, the more I find that did get it right; in fact I believe that an outright majority at least had a pretty good idea. It is just that the bloody Leftwing media ignored them and smeared them as Right Wing stooges of “the rich”, and the politicians ignored them, and are still ignoring them.
February 16th, 2009 at 4:43 pm
PaulL (2365) Vote: 2 0 Says:
February 16th, 2009 at 4:35 pm
“Sorry, PhilU:
Most economists did predict the current “shit” that we’re in. There were plenty of warnings about lending to poor credit risks, the historical high that house prices were at, and what one particular economist called “irrational exuberence.”….”
Thank you PaulL, great minds think alike and all that, eh?
February 16th, 2009 at 4:47 pm
Look, the main reason Don Brash left a top-paid job as governor of the NZ Reserve Bank, and went into politics, was that he wanted to do something about the looming crisis based around property values bubbling, and the perverse fiscal incentives that were feeding it, along with the obstructions to development that were creating the artificial scarcity in supply of property that allowed the bubble in the first place. Had he ended up as PM, NZ would be in a very much better state today.
February 16th, 2009 at 4:59 pm
In terms of the current meltdown, then there have been plenty of warnings from economists in Central Banks about the housing asset bubbles, and certainly, the over-valued dollar and warnings about NZ current account deficits have repeatedly come out in OECD, Reserve Bank and independent bank economic analyses.
What has been lacking is the political cajones to deflate it.
The key difference is that PhilU has attributed the cause of the crisis to inherent defects of capitalism, while economic commentators have been pointing out the large macro-economic imbalances are the root problem.
Economic theory of banking has informed NZ’s banking structure for years, and this has emphsised close monitoring of balance sheets, high capital requirements and diversification of loans. Thankfully, we have a robust and relatively sound banking system as a result.
The US mortgage industry is built up around narrowing lending portfolios, low capital requirements, and the supply of loans to people ‘regular banks won’t lend to’. In such circumstances, the US mortagage lending industry has lurched from crisis to crisis. The only way to survive by lending money to people ‘regular banks won’t touch’, is to get the Federal Government to absorb that risk.
February 16th, 2009 at 5:00 pm
PhilU, another thing that gives the lie to your idea that no economists saw the crash coming, is this. One of the things that has been bringing those big US merchant banks down, is the derivatives they sold based on the various securities they were also dealing in. The people who BOUGHT those derivatives stood to gain HUGE in the event of those securities crashing. And those derivatives were being lapped up by SOMEONE, that is how the traders earned such massive fees.
I suggest that most of the people who saw the crash coming were keeping mum about it and busily setting themselves up to profit thereby. But of course, NOBODY in politics, at least, nobody who gets elected by the socialism-dumbed-down electorate; and NOBODY employed by the State, including thousands of regulatory body staff, saw it coming; and any who did, were politely ignored or mocked or moved on. Those politicians, especially in this country, were too busy basking in the glory of the temporary high standard of living granted by a completely false consumption-and-debt based economy and inflation of the money supply.
Here is the reality stated by an economist that political circles virtually to a man regard as a pariah:
Ludwig Von Mises:
“There is no means of avoiding the final collapse of a boom brought on by credit expansion.
The question is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”
February 16th, 2009 at 5:03 pm
I’d say those most in the shi*t today Phil are the minimum wage, low skill workers in the F & P factory in South Auckland who are probably going to lose their job in a few months with no chance of re-employment and who have 4WD’s on tick along with plasma TV’s and everything else through ‘Easy Finance Limited’.
They’re your constituents Phil. The well-off will take a hit over the next few years but generally most will come out stronger and wiser. That’s why we need a wealthier country Phil and that’s why with your lot in control we would all be stuffed!
February 16th, 2009 at 5:05 pm
>>but for all that, PhilU has been harping on about the present situation for some time now… beginners luck?
Fact is leftists always bleat on about a Crisis of Capitalism (Hmmm where have I heard that before).
Turns out sometimes shit happens when the most of the time it doesn’t, and then they keep bragging ‘told you so’
It like claiming people are arseholes, then abusing hundreds of them who mostly ignore you until when one smacks you in the nose then going around saying ‘told you so’
February 16th, 2009 at 5:25 pm
A little aside to the current discussion, what do people reckon are safe currencies that are going to hold up in the medium to long term? I’m about to reset rates and currencies, and my thoughts are;
Asia: SGD
ANZ: AUD
Rest of World: EUR
Anybody else got any thoughts on these currencies? I have to minimise the number of different currencies for strategic reasons and need to be paid in some form of currency, so these are my picks for now.
February 16th, 2009 at 6:12 pm
I think the USD will stay strong for a while. They are, for better or worse, still the world’s reserve currency. Although the current issues started in the US, the first response was for the USD to rise.
Sing dollar is OK, and easily convertible. Isn’t it pegged to USD though?
Personally, I’d chose to be paid in the currency of a country I’d be prepared to live in. That way, even if their currency goes to crap, you can still head over there and live in local dollars for a while. So EUR, AUD and SGD are a pretty good choice on that benchmark.
February 16th, 2009 at 7:08 pm
PaulL – yes, but remember many of these scientists have a vested and very direct interest in rationalising the religion of human induced climate change. Their incomes depend on advising me to cleanse my guilt-ridden conscience by opening my wallet.
One could argue that economists advising the way forward are also potential beneficiaries of that advice… but it’s probably rather future-dated and indirect.
February 16th, 2009 at 11:15 pm
philu
I’m just puzzled why a ‘lefty vegan sole-dad’ supports tariffs and import quotas (2), US agricultural subsidies (6), local government subsidies for professional sports franchises (7), and welfare in the form of food stamps rather than cash (10).
It takes all sorts, I guess.
February 17th, 2009 at 5:19 am
MattyRoo, as someone living in Hong Kong right now reading the local financial news, I’d pick RMB. The SGD is in for a very tough ride in the next few years. The HKD will suffer too as the USD inevitably devalues, unless they re-peg at a lower rate.
The RMB has only one way to go, and that’s up…..even if the Chinese do continue bailing the Yanks out buying US treasuries by the truck load.