Thursday, March 12, 2009

Jon Stewart, Jim Cramer, F U, Michael Costa, Confidence Multipliers and Economic Doom

video

As Jon Stewart keeps up his Jim Cramer "F U"routine, so the odd clip keeps getting dropped in here, as a way of celebrating the kind of satire Australia dismally lacks.

In the meantime, back to the local loon pond, and a profound conundrum that I think only the best minds in the business could solve.

Confidence, we're told, is everything when approaching the economy. Why even that feather duster Michael Costa, assures us  that it is vital:

Confidence building may turn out to be the only effective role for government in directly responding to today's economic conditions.

How then can we have any confidence when assorted loons, like feather duster Michael Costa, assure us the government is being run by a man with a tendency towards hubris, with an amateurish capacity as a thinker and a writer, with a misplaced, disturbing self confidence, a man only capable of talking in 'sound bites', a torturer of hapless business people forced to listen to him speaking while providing only a backdrop for his media management, a man who indeed sees other people's time as valueless, a man always on the back foot, a man who might or might not orchestrate swearing in public, a man who clearly "orchestrated feigned outrage at Malcolm Turnbull's purported attack on his wife", a man who will provide more orchestrated distractions in relation to the economy in the future, a man given to political vaudeville to fill up the media space, a man who - did I mention a tendency towards self-indulgence - keeps on digging political holes, a man who adopts absurd political positions, a man who trashes the system of which we're all beneficiaries ...

Yep, there's all that and more in Hubris and vaudeville but little sound policy.

Chicken little, you're so right, the sky is falling in, we're all doomed, it's all the fault of that evil Ruddster, we just love the capitalist system and the way its working right now, we can't wait for Australia to turn into Iceland, so many benefits on the dole, such a rich righteous lifestyle choice.

And here we are with a headless chook as our leader, all the chattering classes and the commentariet say it, between sips of chardonnay. How's that for instilling confidence? And barring an early election, he's going to keep on self indulgently, with a trace of hubris, putting on vaudeville acts while indulging his stupid theories and we all go to hell in a hand basket.

And you're helping Michael, really helping, by focussing all your hatred, hostility and bile on one man. Lordy, lordy, welcome to the chattering classes, feather duster.

But wait, what's this. I spoke too soon. Costa sees a confidence path that will take us forward, even if it involves the hapless, hopeless Rudd.

 ... it's not in the country's interest to have a Prime Minister with diminishing moral authority among the wealth creators who will be instrumental in restoring the private investment that the economy desperately needs. For the sake of the nation, Rudd needs to change his political rhetoric.

Sssh, that's right children. Don't mention the world wide recession, and don't mention the diminished moral authority amongst the wealth creators who've helped fuck over the global economy worldwide. For the sake of the nation, we need to accept that the wealth creators are facing major difficulties. Why only the other day I was reading how James Packer and a couple of other billionaires had lost billions. My chest began to heave, tears poured from my eyes, and I was wracked with an uncontrollable sobbing. Not James and his wonderful investment in legal gambling, such a major moral advance in western civilization. If we have to abandon the casinos, where in the world are we heading?

But then just as he offers up hope, Chicken Little snatches it away again. It's highly unlikely that Rudd will be able to distance himself from his stated ideological position - it'll be too difficult for someone with such a highly developed sense of "self-assurance" (in stark contrast to the humble, ego-less, unassured, unassertive, ever so polite and nice Michael Costa).

People we seem to have a problem here, and it's not in Houston. Well what to do.

How about we broach a theory largely ignored by mainstream economists. That's because the concept is very nebulous. And worse it was a concept developed by that economic anti-Christ John Maynard Keynes. In fact, if you look at it closely, it might well be a model, or another detour for economic theory - but relax that's not the immediate issue. You can always speak gobbledegook provided people love the gobble and the gook.

But what is this - gasp - Keynesian theory, as explained by two respected behavioural economists ... George Akerlof and Robert Shiller:

They define animal spirits as the "thought patterns that animate people's ideas and feelings. They argue that there are five different aspects to animal spirits that affect economies: confidence, fairness, corruption and antisocial behaviour, money illusions and stories.

The cornerstone of their theory is that confidence acts as a "feedback mechanism" in the economy "amplifying disturbances" and contrary to rational expectations theory "a money illusion" operates in the public's mind due to a lack of appreciation of inflation and deflation.

The solution? A "confidence multiplier" that works just like the economic multiplier used by fraudulent lobbyists to explain to government why they should throw a few dollars the way of their industry (I know, I've worked the voodoo of economic multipliers more than a few times to various state and federal departments. Sure, you have to wipe the spittle of laughter off the page every now and then, but if you get the government to tip a few million your industry's way it's worth it).

Yep, we have to have confidence in a Prime Minister who is entirely undeserving of confidence, who is in fact deserving of hostility verging on hatred. And we have to have confidence in his handling of the economy even though it's disastrous. And we have to have confidence in capitalism even though it's capitalist excess that's brought us to this low (though we can't have the confidence to mention that). And we have to have confidence in a confidence theory that might or might not be mumbo jumbo. And we have to have confidence in the economy even though it's tanked and clapped out like an old Holden FX because confidence is all we've got.

Well let's put the confidence multiplier to work: where Rudd equals the temperature in deep space, and Costa equals the infinite of hostility, and the economy equals the energy of a week old corpse, and capitalism is the sum of the bile of the right wing commentariet, we have a confidence projection factor of minus a few billionaires. Eek!

Oh dear, after all that inspirational talk of the need for confidence, and a little confidence multiplier number crunching, I'm feeling very unconfident. Can't we just let the aliens win Chicken Little? Do we have to get out of bed every day and ring the bell to warn the towns folk? Maybe they should just accept poverty as their just desserts for electing the most boring PM in the history of the universe (nominations for Malcolm Fraser and John Howard not accepted).

Well we do have comedians in the antipodes, but it's a pity Michael Costa's humor isn't intentional. He strikes me as being more Jim Cramer than Jon Stewart. Still, each time I'm reminded he was once Treasurer of New South Wales, and is no more, I burst out laughing. 

It's a hearty, therapeutic cackle. It disturbs people on the train. They think they're in company of a loonatic, but I suggest you try it ... Michael Costa ... no longer treasurer of New South Wales ... instead he's raging, bilious, impotent columnist for The Australian ... Now shout out Eat my socks! And cackle away.

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