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thorburn

10,404 Posts.

10/01/20

11:59

Post #: 42318068
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Originally posted by usc75: ↑

2020 Throw Economics & Economists Out With Bathwater!

It's time to ditch both as being next to useless...Examples:

1. Latest Trade Data-Nov 2019: Trade Surplus of 42% lauded by Josh as being "Bigger Than Ben Hur" & illumination of LNP Economic Policies is fundamentally flawed.

Why? The massive rise in Exports-gas, iron ore etc- was counter-balanced in massive cuts in Imports of Consumer Goods, e.g. cars.
Now, given that C = 60% of GDP, then this means that Aussie ain't buying a lot of new cars (given than now 100% are imported!)...

So, Imports tanked; C tanked.

Net Affect: Trade Surplus might look artificially good v GDP looks ??? (don't know yet)

2. Gov't Massive Tax Handouts: Keynesian Theory suggest that this will lead to major increases in C. Facts prove otherwise.

3. Monetary Policy-Interest Rates: Economists argue that RBA's slashing interest rates as it did 3 x times in 2019 will lead to major increase in C. Failed miserably.

4. Phillips Curve: NZ Economist A.W. Phillips's theory of "Inflation and unemployment have a stable and inverse relationship..." still relied upon & quoted by RBA plus sway of other economists, should be declared "DeaD"...

e.g. In OZ today, we have long period of low inflation (unacceptable by RBA) Plus high Unemployment coupled with massive under-employment-latter rising Plus declining quarterly GDP Plus sustained zero GDP per capita.

Conclusions:
(a) Only study Economists to know/realize what how useless it has become in 2020.
(b) Throw out Economics & Economists with the bathwater.
(c) Be wary of what Josh, ScoMo, RBA Governor sprout; in the end it masks economic reality at ground level.

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Really, that's old news.
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