TL;DR version: no, it has not.
TL;DR version: no, it has not.
John Howard’s biographer, David Barnett, has a piece in the Drum today arguing against the use of fiscal stimulus in recessions and against Keynesianism in general. Setting aside the philosophical and theoretical arguments he makes, I’d like to examine his empirical claim, namely that fiscal stimulus has not worked, and the somewhat peculiar methodology by which he comes to this conclusion.
“It hasn’t worked…. In Australia, unemployment has just gone up, instead of down. At 5.4 per cent it is more than a percentage point higher than it was when the Howard-Costello government went out of office. That is around another 130,000 people without jobs.”
He knows, or should know, that the appropriate comparison isn’t between what was and what is, but rather between what is and what otherwise would have been. To assess the efficacy of a particular course of action we need to know the counterfactual: what would unemployment be today if the government had not implemented its fiscal stimulus? Economists can and do differ about the answer to that question, but to evade it entirely by making a comparison between 2007 and 2010 and thereby imply that all other things remain equal is disingenuous at best.
Interestingly, though, Barnett seeks to establish a counterfactual of sorts by drawing a comparison with Canada. He praises the Canadian Government, saying “Canada did not stimulate. The Canadian government responded to the GFC by cutting back on its expenditure. Canadian exports rose”. Notice how he shifts the goal posts, using exports rather than unemployment as the metric to evaluate the efficacy of macroeconomic policy.
Nevertheless, his argument about Canada provides us with the opportunity to follow Barnett’s own chosen methodology by comparing 2007 (pre-crisis) unemployment with present unemployment and imputing the difference to a failing of public policy. To be clear, I think this approach is not particularly useful, but Barnett seems to be of the view that it is appropriate, so we will follow it.
If we follow this approach, we see that unemployment increased by a greater amount in Canada than in Australia, off a higher base, both in absolute terms and as a proportion of the labour force.
|Unemployment rate – November 2007||Unemployment rate – October 2010||Number of additional unemployed people|
So, on that measure, it certainly seems odd to suggest that a simple comparison of pre-crisis and post-crisis macroeconomic aggregates in Canada and Australia demonstrates the folly of fiscal stimulus.
But what if we accept Barnett’s suggestion that it is international trade that should be the barometer of policy success or failure? Well, our balance on goods and services (our exports less imports) looks pretty healthy to me:
I am easily enraged by bullshit.
The form of bullshit that I find most frustrating is management speak, the brand of gobbledygook so effectively skewered by Don Watson. Management speak is that gangly amalgam of pop psychology, needless jargon and weasel words that is used to dress up empty, verbless sludge to sound as if it means something. It’s soul-deadeningly ubiquitous, and it sometimes seems as if there’s no escape.
The ABC has been a haven from the ever-encroaching scourge of dead language. No longer.
Today, the Drum published a dense slab of management consultant jargon, an outstanding example of the genre. It was about “sustainability”, a word which apparently posseses a radically different meaning than the word “sustainable”. This could have come from the pages of Watson’s Weasel Words:
If sustainability is fully planned and implemented, it drives a bottom-line strategy to save costs and a top-line strategy to reach new consumers while creating employment. It also drives a talent strategy to get, keep, and develop both employees and network partnerships with the community and stakeholders. It protects nature, without compromising people’s welfare. Combining the SEEC principles can lead any situation positively, because it looks at the whole picture.
The author is apparently the head of a “a strategic advisory that helps businesses create value through sustainability management”. This involves, among other things, informing businesses that sustainability “means operating profitably”, a message I’m sure they’re pleased to hear. I don’t want to be too harsh on the author; she may well have some genuine insights behind that smokescreen of corporate babble, and I’m sure she means well, but I can’t take it anymore.
It occurred to me that “sustainability” has reached the limits of its usefulness as a term, now that it simultaneously seems to mean everything and nothing. This led me to ponder the cycle of ideas and terms, the process by which new concepts or phrases come to rise and fall in our public language.
I think it goes something like this:
That’s not to say that these terms don’t retain some important meaning. ‘Web 2.0′, for example, still means something. The move to a more interactive, real-time internet is an important social change with wide-ranging implications. But the considered, important discussions of the concept risk being buried amongst the vapid talk of “leveraging social media to enact corporate missions” and the like.
‘Social exclusion’ (and its corollary, ‘social inclusion’) is another concept that I think is quite useful, despite others’ cynicism. It refers to a broader conception of relative poverty, one that includes material deprivation, but also other kinds of deprivation and exclusion. Again, the concept’s usefulness is in danger of being slowly poisoned by a tendency to stretch its definition and use it serve any political or rhetorical purpose . It is reaching stage 5 of the process of decay.
We’re drowning in bullshit, and I don’t know how to make it stop.