Hello Imajulianutter,

No, I don’t think I will chase down the dates of the US legislation. Two reasons.

First, it is your allegation that Prof Stiglitz supported abolishing the Glass-Steagall Act, and “obviously agreed that lending to people who couldn't repay debt was ok”. Not mine.

Second, I have nothing at stake. I have claimed Stiglitz to be one of many highly-acclaimed international economists who believe Australia’s dramatic Keynesian intervention – the strongest, fastest and best-directed in the world – gave Australia its unparalleled economic growth during the GFC.

I’m pretty sure Stiglitz opposed those US legislative changes in the 1990s. But it’s irrelevant to my position. He remains a highly-credentialed economist. His Nobel Prize – and several other accolades – were awarded well after that series of events. There are other economists too.

So the accusation is for you to substantiate, Im, not for me to disprove. I'll savour your response.

Regarding Australia’s debt, it hasn't ‘soared’. Relative to GDP it remains the lowest, or one of the lowest, in the developed world.

Reasons for the increase were outlined earlier, 3 February 7:51:56. Happy to restate, if you wish.

"Which European economies are following our fantastically managed economy?" All of them.

“Which economies had mining booms?” Several. Most countries which produce minerals have boomed recently. Not just Australia.

As for overall trade with China, in 2008 Japan sold five times as much to China as Australia. Suffered badly in the GFC with debt now 220% of GDP compared with Australia’s 20.5%.

The USA sold more than twice as much to China. Also suffered disastrously in the GFC with debt now 94.4% of GDP.

Germany sold almost twice as much to China. Also hit badly with debt now 84%. Other countries with greater sales to China include South Korea, Taiwan, Malaysia and Brazil.

There is no evidence that mining booms or sales to China had any effect in rescuing Australia from the ravages of the GFC.

All the evidence is that it was the Keynesian intervention by the Government on the advice of Treasury and the Reserve Bank.

Cheers, AA

AA,

"There is no evidence that mining booms or sales to China had any effect in rescuing Australia from the ravages of the GFC."

Absolute rubbish.

Company tax revenue from mining went from about 7% of total CT revenue in 2005/6 to about 23% in 2008/9, and that is excluding the mining royalties, GST, payroll tax, increased income tax etc that also flowed from the mining sector. (just the GST from mining was $4bn higher in 2008/9 than in 2007.)

Labor hit the jackpot in 2007/11 from mining and still managed to rack up record debt.

'All of them.'

Why are you telling the world all the Economies that were doing better than us, before the GFC are now increasing their borrowing and getting further into debt while their terms of trade are as fantastic as ours?

Absolute rubbish.

'Several.'

Then name them. Can't? Why not ... too difficult?

'There is no evidence that mining booms or sales to China had any effect in rescuing Australia from the ravages of the GFC.'

What was it the Shadow Minister said?

ditto.

'All the evidence is that it was the Keynesian intervention by the Government on the advice of Treasury and the Reserve Bank.'

That's what the socialist Stiglitz said too ... he was wrong as well.

Three questions for Alan Austin:

1)The total sales figures look impressive (as you no doubt intended them to). But surely a better measure would be, what percentage of exports were sold to China, by each country you cited, at the time of the GFC i.e. how dependent were they on the China market—do you have those figures?
[PS Japan had been in recession for decades –long before the GFC hit]

2)Are you telling us that of the countries you cherry picked *none* tried your Keynesian intervention.Only Wayne Swan was smart enough to think of it (or was it that, none of the other Govts had been bequeathed such a handsome surplus to play with)?

3)Is Alan Austin a nom de plume of Julia Gillard?

Hello again Mr Minister,

Yes, understand your argument. And it is attractive superficially.

But observing two things happening simultaneously doesn’t mean one causes the other, does it, Mr M?

The way economists ended up debunking your theory was by studying all countries in any way comparable. Plus they looked at outcomes in Australia over time.

They found several countries had much greater trade with China than Australia had during 2008-09. (See above chat with Im.) If high trade with China – and the associated high revenues from taxes and royalties – really did lead to a successful handling of the GFC, then those countries with even higher trade than Australia should have performed even better.

And those with low trade with China would have done badly. Logical, right? That is the way to test the hypothesis.

In fact they found no connection whatsoever. Just a coincidental occurrence in Australia.

They then looked at all other factors that could possibly explain Australia’s unique performance. And sure enough, Australia had a unique approach to stimulus in 2008-09.

This hypothesis was subjected to all the usual rigorous academic tests, as academics do. And now most economists are pretty much agreed on this. You can google them. Or I could give you a list.

So it’s not rubbish, after all, is it?

So you can cheer up, Mr M!

Hi again Im,

Just on your first question, above: No, that's not what I am saying, is it? Please read what I wrote again, carefully, Im.

Countries with recent minerals booms include Indonesia, Columbia, Ecuador, Nigeria, Libya, Canada, Chile, Australia and Netherlands. Hope that helps.

Im, how did you go confirming Prof Stiglitz’s involvement with those “that did away with the Glass-Steagall Act”? Could you please validate your accusation, or perhaps apologise?

Thanks, Im. Cheers, AA

Hello SPQR,

1) No. But if I were to get them, what would they prove? What would you like them to prove?

2) All of them tried stimulus. Only Australia went in hard, fast and well-targeted.

3) No. Economics is not really her forte, is it?

Cheers, SPQR.

Died in the wool Neo Liberals, Would not give an ounce of credit to Julia, in the face of facts and figures. Now doesn't that say something. Should sound good about election time, you can hear Tony stuttering from here. Not that he will be there ,it will be Turnbull. Tony has got too many pledges in blood.