Utopia, you are standing in it!

Inflation is colloquially defined as, “Too much money chasing too few goods (and services)”. Supply chain constraints get talked about, and these are widely blamed for the inflation we are seeing. Of course, supply limitations play into inflation, but to focus on them is to miss the elephant in room. The primary driver of this inflation is not “too few goods”, but “too much money.”

Such is the thesis of a widely circulated article by Ray Dalio’s investing firm Bridgewater Associates, “It’s Mostly a Demand Shock, Not a Supply Shock, and It’s Everywhere.” The point is summarized:

While the headlines tend to focus on the micro elements of the supply shock (the LA port, coal in China, natural gas in Europe, semiconductors globally, truckers in the UK, etc.), this perspective largely misses the macro cause that is likely to persist and for which there is no idiosyncratic solution.

After America’s big freeze and the blackouts that followed, wind and solar acolytes are struggling to explain away the hard numbers, yet again.

On 16-17 February – with hundreds of wind turbines frozen solid during breathless, freezing weather – Texan wind power output was a paltry 2% of installed capacity (see above and below).

Solar panels were buried under inches-deep blankets of snow and ice and, likewise, just as useless.

Millions of Texans were left freezing in the dark; no doubt, chuffed with the progress of their ‘inevitable transition’ to an all wind and sun powered future.

The only thing keeping the lights on, at all, were Texan nuclear and gas-fired power plants. But, if your insight into world affairs was left to the mainstream media, you’d think it was the other way round.

The debacle playing out in Germany – dealt with here: Coal Comfort – barely rates a…

Antarctica
The article says ‘The satellite measurements start in 1979’, but the USGS Landsat satellite project has been ‘imaging the Earth since 1972’. The researchers say in the abstract of their paper: ‘In stark contrast to the Arctic, there have been statistically significant positive trends in total Antarctic sea ice extent since 1979. However, the short and highly variable nature of observed Antarctic sea ice extent limits the ability to fully understand the historical context of these recent changes.’ The UK Met Office reported in October 2021: ‘Antarctic sea ice reached a maximum extent (to date) of 18.75 million sq km on 1st September 2021 (Figure 7), which is very close to the 1981-2010 average maximum extent of 18.70 million sq km.’
– – –
A study led by Ohio University researchers shows that the increase of sea ice surrounding Antarctica since 1979 is a unique feature of Antarctic…

I wrote in 2010 that Keynesian economics is like the Freddy Krueger movies. It refuses to die despite powerful evidence that you don’t help an economy by increasing the burden of government. In 2014, I wrote the theory was based on “fairy dust.” And in 2015, I said Keynesianism was akin to a perpetual motion machine.

What’s my proof? Well, during the period when Obama’s “stimulus” was in effect, unemployment got worse. And the best growth period under Obama was after the sequester, which Obama and others said was going to hurt the economy.

When I discuss these issues with Keynesians, they reflexively claim that Obama would have gotten good results if only he had increased spending even faster (which is also their knee-jerk response when you point out that Keynesianism didn’t work for Hoover, didn’t work for FDR, didn’t work…

At the risk of understatement, economists are not good forecasters.

And they are especially incompetent when they make forecasts based on bad policy, such as when the Obama White House projected that his so-called stimulus would quickly lead to falling unemployment.

In reality, the jobless rate immediately increased and then remained much higher than projected for the remainder of the five-year forecast.

The failure of Obama’s stimulus should have been a learning moment for Washington politicians.

But Joe Biden must have slept through that lesson because his first big move after taking office was to saddle the nation with a $1.9 trillion “stimulus” package.

The White House claimed this orgy of new spending would lead to four million additional jobs in 2021, on top of the six million new jobs that already were expected.

So what happened? Matt Weidinger of the American Enterprise Institute looked at…

In the post-WW2 era, by many different measures the US economy performed better before about 1970 than after. You can apparently see this in many different statistics. For example, the productivity slowdown is a well-known and well-studied phenomenon. And even given the productivity slowdown, median wages don’t seem to have kept pace with productivity growth.

I think there are good reasons to doubt these particular statistics. For example, on wages and productivity see this working paper by Stansbury and Summers.

But even considering all these criticisms of the statistics, we do observe that overall GDP growth has been slower since about 1970. Why might this be?

In an NBER summary of his research, Nicholas Muller argues that a big part of the GDP growth slowdown is because we aren’t including environmental damage in the calculation. This is not a new argument (Muller is an important contributor to…

Many diverse issues have been raised, and diverse perspectives aired, in the Australian and international public square, over the past week about the events concerning the cancellation of Novak Djoković’s visa by the Australian (federal) executive government (see here, here, here, here, here, and here). 

I will focus on an issue and a principle that sits comfortably above, and has always sat comfortably above, substantive political decisions, national pandemic responses, state capacity, moral stances about vaccination, commercial decisions by organisers of a tournament, and the emotions of sports fans. That principle is the rule of law.

To quote theAustralian Prime Minister: “Rules are rules…no one is above these rules”. Indeed, the rules bind the executive government, and it is not above the law. This principle has been confirmed in theoutcome of the judicial reviewbrought by Mr Djoković against the Australian…

The recent string of Government defeats in the House of Lords over amendments to the European Union (Withdrawal) Bill has reignited the debate over the role of the Lords in a modern democracy. The Daily Mail published a characteristically trenchant headline suggesting that we should “pull the plug” on the “traitors in ermine”.

The abolition of the House of Lords is still probably some way off, but the recent events have raised the question of what options a government has to deal with resistance by the Lords to its policies. The normal means of addressing this problem (if one sees it as a problem) is to invoke the Parliament Acts, which provide that the Commons can override the Lords by passing the same bill in two consecutive parliamentary sessions. But this remedy is not readily available in the context of the EU (Withdrawal) Bill, as the current parliamentary session will…

While hot air output shot up in Glasgow, Europe’s great wind drought continues unabated. Wind power output amounted to a trickle through most of September and into October. We dubbed it the ‘Big Calm’. Well, the Big Calm appears now to be less of an anomaly than the new normal.

In Britain, grid operators are scrambling for every watt they can find; pressing old coal-fired power plants back into action to keep the lights on. So much for Boris Johnson’s all-wind powered future!

The wholesale power market is, as to be expected, in a state of perfect pandemonium. And it’s all down to a lack of wind, as Dr John Constable reports.

Coal keeps lights on at COP26 as low wind strikes again
Net Zero Watch
John Constable
3 November 2021

The UK’s failing renewable strategy is a national embarrassment. Critically low wind power, for nearly the whole of yesterday…

Europe’s ongoing wind drought (and corresponding wind power output collapse) is a wake-up call for anyone vaguely concerned about energy supplies.

Starting in September last year and running for weeks on end, total collapses in wind power output across Western Europe and the UK, forced a wholesale rethink of the maniacal reliance upon wind and solar.

The French President announced that its 56 existing nuclear power will be kept running ad infinitum, rather than mothballed as planned, and determined to add 14 next-generation plants to be built ASAP.

Both the Germans and the Brits were forced to quietly fire up their ‘ageing’ coal-fired power plants to prevent total collapses of their power grids. Oh, the embarrassment!

But, with every perfectly predictable policy-driven disaster that comes the opportunity for considered reflection and, for the wise, the chance to recalibrate; to scrap the policies that delivered to disaster and replace…