Quantitative easing 101

Some readers have written to me asking to explain what quantitative easing is. Some of them had heard an ABC 7.30 Report segment the other night which interviewed the Bank of England Governor who outlined the BOE’s plan to “print billions of pounds” as its latest strategy to stimulate lending and hence economic activity in the very dismally performing UK economy. Once again we need to de-brief and learn what quantititative easing actually is. We need to understand that it is not a very good strategy for a sovereign government to follow in times of depressed demand and rising unemployment. We also need to get this “printing money” mantra out of our heads.

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Oh dear, Lindsay needs sleep!

After yesterday’s shock admission that our Federal Finance Minister Lindsay Tanner was losing sleep because he was worried about the Federal debt buildup, there he was on the ABCs 7.30 Report last night giving us more cause for concern that his sleeplessness is having a negative effect on his ability to conduct reasonable dialogue on economic matters.

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Labour underutilisation now over 11 per cent

Today’s labour force data revealed the the world recession is starting to impact directly on jobs in Australia. Last month’s data surprised people because it suggested the labour market was resisting the global trends. At the time I indicated that the inaccuracy in the data due to the large sample errors was likely to be a factor. Today’s data also carries some surprises although the trends it is indicating are clear enough.

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An insomnia cure for Lindsay

Today I heard that our Federal Finance Minister Lindsay Tanner is suffering from insomnia because of the growing Government debt burden. Poor thing. Why is he worrying himself sick? Well I have the cure. If he reads this blog and understands it I think he will back in slumberland sooner rather than later.

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Labour market discrimination rising

One of the advantages of running the economy at “high pressure” – that is, with low unemployment is that some of the more malevolent aspects of human behaviour are suppressed. We know that when the economy goes into a downturn, firms increase their hiring standards because they have the upper hand – lots of workers are unemployed and so the firms can pick and choose more readily. One of the worst aspects of these adjustments is that pure prejudice begins to reveal itself more openly. The most recent data from the US suggests this is the case.

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The role of journalists …

Senior journalists often do more harm than good when they write about technical issues that they clearly do not understand. In many cases, they rely on the technical knowledge of their favourite economist or the flavour of the month economist and they are not skilled enough to know when their “economist” is also talking rubbish.

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RSS feed issues solution

My RSS feed came down with a problem recently and began returning the following xml error:

“XML parsing error: :1:1: xml declaration not at start of external entity”

How do you deal with this? This blog gives a short tutorial on how to proceed to fix it.

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Crimes of the past …

Yesterday, the Opposition leader published his reply to the Prime Minister’s grand attack on neo-liberalism. He claims that the apart from hypocrisy, the PM’s other failing is that he is mimicking a “corrupt police officer” because his essay attempted to blame the former Federal regime “for crimes it did not commit”. It is time that we understood just how bad the previous Federal government was.

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Privatisation … was yesterday’s joke

Australian governments have not yet understood that privatisation was yesterday’s strategy to abrogate their legitimate responsibilities. Today it has no place in a return to a viable sustainable and balanced mix of public and private activity. Privatisation was part of the swing to market-based allocations and a blurring of public interest with private profit. The two rarely go together if ever. While the NSW Government is still trying to push the sale of the electricity generators, the other major privatisation push is to extend the private ownership and operation of our prison system. There is no way that we should ever give monetary incentives to imprison people. Here is what happens …

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