06 November 2011

Funny how things come together #nlpoli

First, there’s a new post at the Monkey Cage that notes a discussion in economist circles about public discussions of economic subjects:

… economics lost communication with policymakers and practitioners leaving room for all sorts of “charlatans and cranks” to fill the void. In doing so, academics ceded important ground to think tanks aligned with one party or the other, to self-appointed economic experts, to business economists maximizing profit rather than public knowledge, and to a media that doesn’t always comprehend the economics that underlie a particular issue.

Second, there’s a short piece in the Telegram that torques the latest Statistics Canada labour force stats:

Newfoundland and Labrador is bucking the national trend, adding jobs in October, even after the rest of the country faces higher unemployment.

The bucking of the trend thing is zero point nine percent year-over-year.  Not necessarily something to write home about, especially considering the national decline the story runs with is actually an increase in employment of 1.2% year of year as well.

One month decline nationally but a year over year gain.  Growth provincially month-to-month and year-over-year.

Unfortunately that doesn’t fit with the accepted narrative of the economic miracle that is Newfoundland and Labrador these days, supposedly.

Third, as if to confirm the generally poor understanding of things economical, there’s the text of a speech Premier Kathy Dunderdale gave to an energy forum in the United States.  It includes copious references to the economic miracle thingy, along with a raft of other completely  - and demonstrably - false claims about Muskrat Falls.

Fourth, there’s a piece in the Atlantic Institute for Market Studies blog that  - purely by coincidence - takes up the economics ignorance theme and relates it to a politician who thinks a remittance economy is a good thing.

Fifth and for those who don’t know, that economic miracle thingy in Newfoundland and Labrador has been built in large measure on shipping workers outside the province and having them ship their paycheques back home. You can get a sense of that, and some of the previous discussions of this from a post at SRBP back in December 2008.

There are parts of the province that are almost entirely dependent on migrant labour and remittance workers.

In others - like Stephenville - the economic disaster of losing a pulp and paper mill on the Premier's watch didn't materialize solely because the workers there could find jobs in Alberta.

But yes, you say, there has been more people coming back to the province since 2007, you say.

At the time, they were coming back in advance of the huge recession.  Just as surely they started heading out again as the economy picked up again in other parts of the country.

Sixth, flip back to that first post on economists and public commentary.  Follow the link back to the original article.  There’s a fascinating discussion about the use and misuse of economic arguments and models. 

Just for the fun of it, then, consider:

  • the amount of media coverage the most recent pronouncement by a certain economist on the Hebron project even though it was nothing more than an update of previous assumptions using new assumptions and that they are all – wait for it – assumptions.
  • Note, in particular, the references to the relatively better prospects for Hebron  - heavy sour crude in a highly fractured structure - compared to Hibernia, lots of light sweet crude and a fair bit of natural gas. Despite the fact that Hibernia will generate more than double the economic benefit to the province in terms of royalties over its lifespan than Hebron – even using the most recent assumptions – the lesser of the two is apparently worth more.
  • Of course that sort of conclusion has nothing to do with the fact that the same economist criticised Hibernia when it occurred and that his old predictions of horror never showed up, in practice.  In no way could his previous, dubious predictions or any other non-economic consideration have in any way influenced his most recent assessment of relative gloriosity for Hebron.
  • It’s not like the guy has made some boner projections based on knowledge he acquired from his consulting work for the provincial government and its agencies. Sure he’s talked about debt problems that the provincial government folks might not like but he avoided a discussion of Muskrat because he’s been doing some consulting on the project.
  • And it’s not like his public comments for different audiences haven’t sometimes crossed each other much to his embarrassment.
  • The one guy has a colleague who has also been known to produce some ideologically tainted bits of commentary.

The media’s relationship to economists is almost as bad as their attachment to the equally dismal science of the pollsters.

But what is truly remarkable here is the way a whole bunch of economist related stuff wound up appearing in different places for different reasons in the same week.

And it all ties together.

- srbp -