Energy Minister Delivers Killer-Blow to Australian Industry: Mass Power Cuts Now Formal Government Policy

STOP THESE THINGS

A few of SA’s ‘demand resources’ preparing for duty.

An obsession with the ‘unreliables’ – wind and solar – has destroyed Australia’s once reliable and affordable power supply. Consistent with that theme, Australia’s Energy Minister has just given the two fingered salute to Australian business.

Josh Frydenberg is pushing a National Energy Guarantee which (as pointed out in last night’s post) could have at least restored reliability to a grid on the brink of collapse. However, the NEG has been rewritten by eco-zealots and renewable energy rent-seekers, to their advantage.

In the document Frydenberg is using to promote it – Draft National Energy Guarantee – you’ll find plenty of babble about carbon dioxide emissions, but almost nothing about reliability or price.

One of the NEG’s key elements (as promoted by Frydenberg) is what’s called ‘demand resources’ aka ‘demand management’. These aren’t ‘resources’ in the sense of having some commodity…

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Elizabeth’s Age of Exploration

Perspectives on Tudor & Stuart History

Between the fifteenth and seventeenth centuries, kingdoms throughout Europe sponsored voyages to find new lands and faster trade routes. Spain and Portugal dominated exploration during during much of this period. In England, there was no significant progress in exploration during the reigns of Henry VIII, Edward VI, and Mary. It was only with the efforts of Elizabeth I that England became a new major player of exploration. While Elizabeth sponsored voyages, it was in fact Henry VIII’s naval reforms that launched the beginning of Elizabethan exploration.

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Scotland and the Jacobean Union of 1604-7

The History of Parliament

In the latest of our series on English-Scottish parliamentary relations throughout the centuries, guest blogger Dr Alan MacDonald (University of Dundee) discusses the Scottish parliament’s response to James VI and I’s attempt at union between England and Scotland in 1604-7

On 11 August 1604, a parliament at Perth passed the ‘Act anent the unioun of Scotland and England’, completing a process that began three years previously. In merely abolishing hostile laws, establishing cross-border legal arrangements and opening up commercial interaction between the two realms, it was a pale shadow of what the king had sought.

The nature of the Scottish parliamentary record makes it harder to discuss what the Scots thought of the union proposals than is possible for England. The official record is restricted to procedure and legislation, while narrative accounts are laconic and few. Yet it is clear that, while many Scottish politicians were keen supporters of…

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BBC continues to disregard developments in Gaza baby story

BBC Watch

Last month we noted that the BBC had completely ignored the fact that Hamas had removed from its list of May 14th ‘Great Return March’ casualties a baby girl whom BBC audiences were told on numerous platforms had died as a result of Israeli actions.

BBC ignores removal of Gaza baby from casualty list

Even after Hamas had removed – on May 25th – Layla al-Ghandour’s name from its list of Palestinian casualties, the BBC continued to promote a filmed report by Jeremy Bowen in which viewers were given to understand that Israel was responsible for her death.

Twelve days after the Hamas announcement, Bowen’s report was embedded into an article published on the BBC News website’s ‘UK politics’ page and that item – along with several others – continues to be available to the public.

Late last month a Palestinian from the Gaza Strip was apprehended while taking…

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Misrepresenting the Recovery from the Great Depression

Uneasy Money

In today’s Wall Street Journal, Harold Cole and Lee Ohanian try to teach us some lessons from the Great Depression.  According to Cole and Ohanian, those of us who believe that increasing aggregate demand had anything to do with recovery from the Great Depression are totally misguided.

[B]oosting aggregate demand did not end the Great Depression.  After the initial stock-market crash of 1929 and subsequent economic plunge, recovery began in the summer of 1932, well before the New Deal.  The Federal Reserve Board’s Index of Industrial Production rose nearly 50% between the Depression’s trough of July 1932 and June 1933.  This was a period of significant deflation.  Inflation began after June 1933, following the demise of the gold standard.  Despite higher aggregate demand, industrial production was flat over the following year.

Though not wrong in every detail, the version of events offered by Cole and Ohanian is still a…

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Neo-Fisherism and All That

Uneasy Money

A few weeks ago Michael Woodford and his Columbia colleague Mariana Garcia-Schmidt made an initial response to the Neo-Fisherian argument advanced by, among others, John Cochrane and Stephen Williamson that a central bank can achieve its inflation target by pegging its interest-rate instrument at a rate such that if the expected inflation rate is the inflation rate targeted by the central bank, the Fisher equation would be satisfied. In other words, if the central bank wants 2% inflation, it should set the interest rate instrument under its control at the Fisherian real rate of interest (aka the natural rate) plus 2% expected inflation. So if the Fisherian real rate is 2%, the central bank should set its interest-rate instrument (Fed Funds rate) at 4%, because, in equilibrium – and, under rational expectations, that is the only policy-relevant solution of the model – inflation expectations must satisfy the Fisher equation.

The…

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“Bashing Cole & Ohanian” from another angle

Cole and Ohanian replied as Stephen Williamson’s blog as follows:

Paul Krugman claims our economic history is in “incredibly bad faith” by showing that industrial output is positively correlated with the wholesale price index. The main point of our op-ed, as well as our earlier work, is that most of the increase in per-capita output that occurred after 1933 was due to higher productivity – not higher labor input. The figure shows total hours worked per adult for the 1930s. There is little recovery in labor, as hours are about 27 percent down in 1933 relative to 1929, and remain about 21 percent down in 1939. But increasing aggregate demand is supposed to increase output by increasing labor, not by increasing productivity, which is typically considered to be outside the scope of short-run spending/monetary policies.

The facts that labor doesn’t recover very much, and that wages in some sectors of the economy are well above trend, is why we have analyzed the impact of New Deal cartelization policies. And the slow recovery from the Depression has been known for decades, including work by Armen Alchian, Milton Friedman and Anna Schwartz, and Robert Lucas, all of whom point to New Deal policies that depressed competition in labor and product markets.

In terms of the relationship between changes in prices and changes in industrial production, our piece examined the 1932-34 period because that was a period cited by Bernanke for strong growth related to eliminating deflation. And the growth that occurred in industrial production during that period occurred while the CPI was falling (1932-1933). Between 1933-34, the CPI rose, but industrial production didn’t.

In any case, growth during the New Deal was due primarily to productivity – not labor.

Historinhas

Several “Market Monetarists” have had a go at Cole & Ohanian (C&O). David Glasner did it in elegant and convincing fashion. Scott Sumner was glad Glasner “demolished” it, Bill Woolsey was “circumspect” and Krugman (a “closet MM”), temporarily forgetting about “peddling” fiscal stimulus, summed it up in strong words:

This goes beyond holding views I disagree with (as does much of what happens in this debate). This is a deliberate attempt to fool readers, demonstrating that there is no good faith here.

The highly misleading paragraph of the C&O article was highlighted and discussed in great detail by David Glasner:

But boosting aggregate demand did not end the Great Depression. After the initial stock market crash of 1929 and subsequent economic plunge, a recovery began in the summer of 1932, well before the New Deal. The Federal Reserve Board’s Index of Industrial production rose nearly 50% between the Depression’s trough…

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Lee Ohanian remains in denial

the industrial decline began before monetary contraction or banking panics – the conventional culprits – took hold. But Hoover and the federal government Just would not be enough back then do play some sort of cartel ringmaster to keep wages up in manufacturing industry for several more years. But the question he asks is yet to be answered about the sector divergences in hours worked and the rapid decline in hours worked in manufacturing industry well before any monetary contraction had a chance to take effect.

Historinhas

A few days ago I had the opportunity to comment on an old VoxEu piece by Ohanian. Now he´s made a presentation at the Hoover Fed Conference – Monetary Policy in the Midst of Big Shocks – that is dismaying in its conclusions. From the abstract:

This paper studies the impact of the largest deviations from price stability during the Fed´s first 100 years, with a focus on understanding the Fed´s role in impacting the economy during the post-World War I period, the Great Depression, World War II, and the Staglfation of the 1970s. I find that deflation was very depressing in the 1930s, but because of cartel and wage setting policies, and that there is no presumption that deflation is as destructive as commonly believed. In particular, the similar deflation in the early 1920s did not depress the economy nearly as much as in the 1930s. I find…

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Perverse Green Capitalists

Science Matters


Politicians and media pundits like to say that Climate Change is the biggest threat to modern society. I am coming around to agree, but not in the way they are thinking. I mean there is fresh evidence that we can defeat radical Islam, but we are already losing to radical climatism.  I refer to climate alarm and activism, which has come to dominate the environmental movement and impose an agenda for social re-engineering.  And now we have fresh evidence that even capitalists are working to undermine the infrastructure supporting modern civilization.

As we approach the year 2020, we confront the spectacle of financiers raiding shareholder wealth in order to cripple the Energy Industry, seen as threatening the climate.  2020 used to indicate perfect eyesight, so that perceptions could be trusted.  This is the opposite:  People who should know better have drunk climatist koolaid and are now running the asylum.

Dan…

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