Steven Hamilton
@SHamiltonian
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Assistant Professor of Economics @GWtweets | Columnist @FinancialReview | Visiting Fellow @Austaxpolicy | Author "Australia's Pandemic Exceptionalism" | 🇦🇺
Washington, DC
Joined January 2015
Here's a new version of our paper on Australia's pandemic pension withdrawals, our third revision (see 🧵s on earlier versions via the QT below). This revision brings a new title, a narrative reframing, and a major overhaul of our calibration exercise. 🧵. (Link at end of thread)
Pleased to release a revision of our paper on Australia's pandemic pension withdrawals. We've added a great coauthor (@JorgeMirandaPi5) and a heterogeneous-agent model validating quantitatively our intuition the response was driven by present bias. 1/12.
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To cripple a major country’s central bank is totally wild, and unprecedented. Particularly when that country is already facing a major economic and financial crisis. Perhaps difficult for those not versed in monetary and financial policy to comprehend just how significant it is.
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Fact of the day: Three Labor candidates are PhD economists (with degrees from Harvard, Yale, and Oxford).
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As for value judgments, the measures are far better than engaging Russia militarily. I am relieved the world so quickly coordinated on the most powerful measures it could short of military engagement. But it will inflict huge damage on the Russian people. So let’s hope it works.
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@SamRoggeveen A bank run. Hyperinflation. Production shut downs. Severe rationing. Widespread unemployment. Mass exodus. It will depend a lot on the value of their exports that they can maintain but even those might come under pressure. It’s hard to conceive of all the possible consequences.
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People who are extremely anti-lockdown should be extremely pro-vaccination. That is all.
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Just got my Pfizer booster. I booked the day ATAGI updated its advice. Pharmacist told me it’s now impossible to get an appointment, and he’s been told they’ll run out of booster stock in the next week or two. After all the failures of our vaccine rollout, did we learn nothing?.
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Quite shocked to see many people interpreted this tweet as support for Russia. I deliberately made no value judgments. It’s wild, unprecedented (Russia is very different to Iran, Afghanistan and Venezuela), and significant. That’s just my objective assessment of the measures.
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An Australian journalist should ask the Prime Minister and/or Foreign Minister why they have chosen not to sanction either Oleg Deripaska or Viktor Vekselberg, two Russian oligarchs sanctioned by the US with significant financial interests in the Australian resources sector.
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@MichaelRoddan The currency becomes worthless, with none of the normal automatic or policy stabilizers operating. The country is forced into autarky with no foreign trade or borrowing possible. You can still print rubles. But we know what that means. But we need more details to know the limits.
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Just a note to Australian journos: it was never AZ OR Pfizer OR Moderna OR J&J. It’s AND. We should have ordered them all. It would have been well worth overpaying. We could have sent any excess to our neighbours. And only AZ has been subject to export restrictions. #Insiders.
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The Prime Minister's repeated likening of masks to sunscreen quite explicitly encourages every Australian not to think of how their own behaviour affects others.
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Odd that people berate Albo for being a small-target opposition leader but everyone is totally fine with ScoMo being a small-target Prime Minister? After three terms and with all the might of the Australian Government, their election policy offering is more or less nothing?.
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This wave has set off a new round of tribal warfare between the “let it rip” and “COVID-zero” people. It’s been very annoying. I don’t see myself as in either camp. Pre-vaccine, zero-COVID was obviously right. Post-vaccine, the benefits of mitigation fell. Some thoughts. 1/15.
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Economists: Theory is mostly dead and don’t bother including a model in your paper. Also economists: To get into grad school, please take Calculus, Linear Algebra, Multivariable Calculus, Differential Equations, Real Analysis, Measure Theory, Topology and perhaps Lattice Theory.
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I’m no fanatic. I simply look ahead and consider how politicians will inevitably react. I’m angry we didn’t take out insurance. I’m filled with rage over our governments’ relentless incompetence, making all the same mistakes all over again. It didn’t need to be this way. 15/15.
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It’s absolutely wild that 1 in 5 people lined up for a PCR test in NSW has COVID.
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It's worth noting our net-zero plan is brought to you by the same people who designed our vaccine rollout: McKinsey and Co.
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The party of Reagan cheering on Russia as it invades Ukraine is just not something I expected to see in my lifetime.
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Making rapid tests free and widely available isn’t just about fairness. When you learn you have COVID, that benefits you but it also benefits many more others. Rapid tests are a common good that should be paid for by the Commonwealth.
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The emerging claims on this website—sometimes from *actual economists*—that economists haven't "thought through" the economic implications of tariffs are absolutely brain-exploding. What are you even talking about?! Were you born yesterday?.
good tariffs post, one level of analysis. im fairly conflicted about them myself. people who are very confident about likely impact in any direction probably havent thought this through, its just a highly complex system, nth order effects will probably be significant.
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Australia’s energy crisis tells us we need more renewables, not less.
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I wrote down some thoughts about the latest financial sanctions on Russia for @ConversationEDU. Interesting to note the run on Russia’s banks seems already to have started. All eyes will be on the ruble when foreign exchange markets reopen on Monday.
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The discussion of inflation, productivity, and wages on @InsidersABC this morning was embarrassingly bad.
"It is hard to think of a single measure for cost of living that doesn't make inflation worse.". Waleed Aly on the contradiction in the election campaign #Insiders #auspol
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And, anyway, if these things are fairly low cost (indoor mask mandates, RATs, indoor capacity limits, better public health messaging) then they are no-regrets measures. That they weren’t employed earlier is totally indefensible and simply due to hubris and pig-headedness. 10/15.
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The US ordered 100m Pfizer doses on July 22, 2020. Australia ordered 10m doses on November 5, 2020. Could Australia have ordered 50m in November? Probably. Could Australia have ordered 50m between July and November? Certainly. The government has never explained why they didn’t.
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I don’t want lock-downs. I don’t want schools closed. I don’t want borders closed. These are very damaging actions that we should do everything to avoid. But by being so meat-headed to this point, by doing our darnedest to encourage spread, we’ve made these all more likely. 13/15.
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Economists get paid more because they understand why they get paid more.
We are all doing the same job. We teach the same number of classes. I don't think my labor is worth $20,000 LESS than that of my econ colleagues. More money please.
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Here are some more fleshed out thoughts for those interested:.
I wrote down some thoughts about the latest financial sanctions on Russia for @ConversationEDU. Interesting to note the run on Russia’s banks seems already to have started. All eyes will be on the ruble when foreign exchange markets reopen on Monday.
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How often do wind turbines and solar arrays blow up, endangering workers and causing blackouts? How often do they poison the water table, and generate particulates that harm child development? Why do we continue to worship at the alter of coal-fired power, exactly? It sucks.
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My piece in tomorrow’s @FinancialReview on the government’s policy to cancel 20% of HELP debts. This policy is indefensible along all dimensions—it’s inequitable, both horizontally and vertically, and inefficient. A death rattle from a dying government.
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Australia’s vaccine failure is simple. The government decided only to purchase one candidate from each technology. So they picked AZ over J&J, and Pfizer over Moderna. They did it to save money, but they should have ordered them all. This is a false economy of epic proportions.
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Nobody ever said that, post-vaccines, no public health measures would be necessary. Indeed, the Doherty modelling was explicit that measures would be needed in an outbreak. Delaying those modest measures only makes things worse. This doesn’t make you a COVID-zero fanatic. 12/15.
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My piece in tomorrow’s @smh on the Government’s mooted changes to the Stage 3 tax cuts. As anyone who follows me may have observed, I like them. The key thing most commentators have missed is they don’t just address fairness but also economic efficiency.
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That he thinks this is something to be proud of says everything.
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Maybe it’s just me, but I would say a whole lot of poor people becoming a lot less poor is a big success even if we don’t like how they decided to spend the money.
UBI reduces labor supply, though not by that much. If this intervention had other big positive effects I would proclaim it a success, but .
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Note the sleight of hand. Jobs created by, for example, the NDIS are “private-sector” jobs. But if you want to know how many jobs are *paid for* by government, the data can be broken down further. In the last two years 87% of employment growth has been in the “non-market” sector.
Four in every five of the record 1.1 million jobs created under this @AlboMP @AustralianLabor Government have been in the private sector, and most of them full time. #auspol #ausecon
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Do the Australian journos asking political candidates to define a woman (and this wasn’t the first time) realise they’re parroting a GOP dog whistle or is that the point?.
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For weeks we’ve been told by public health people and politicians that “everything is fine”. 25,000 cases is a silly exaggeration. Hospitals will be alright. Now they appear to be on a war footing, with measures urgently and belatedly introduced. They were obviously wrong. 14/15.
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Cancelling the part of stage 3 that drops the 37% tax rate and using the proceeds to fund a decent increase in the dole (JS + rent assistance) in my view would not meaningfully harm economic efficiency and would substantially improve equity. Such opportunities don't emerge often.
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Do we think Albo is going to fare better than Kamala or worse than Kamala?
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I love that this is painted as outrageous when it’s actually confirmation of the government’s total incompetence on vaccine procurement. Yes we should have happily given them $240m no matter what and not even batted an eyelid—anything else would be sheer economic vandalism.
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Imagine how insanely self-destructive it would seem to read the headline “Iron ore exports capped at 700 million tonnes in blow for large mining companies”. A terrified government desperate to look like it’s “doing something” without any regard for the cost. I hope it is blocked.
Foreign students capped at 270,000 in blow for large universities.
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Some say “those things wouldn’t have made any difference”, but that is a patently absurd claim. The rate of spread is absolutely dependent on policy measures. If you slow the spread and lower peak daily cases even marginally, you will reduce the chance of breaching the line. 9/15.
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lol no we don’t.
Instead of relying on foreign supply chains, let’s make it in America. Economists call it “increasing the productive capacity of our economy.”. I call it building a better America.
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So it seems:.• The bill is intended to paint Labor as anti-religious-freedom. • Labor controls neither house. • Labor is moving amendments in both houses to bar discrimination against trans kids. • It’s Labor policy to overturn said discrimination. • Twitter is really angry.
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The fact that some people in Australia still need convincing that lockdowns save both lives and economic activity is completely fucking insane. It’s not like we’re short of examples!.
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We just conjured up 20 million doses of Pfizer out of nowhere, as @profholden and I have been calling for for 2 months, and countless people told us was "impossible"?.
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Twitter has been all about the wealth tax lately. Some have claimed that all capital taxes are bad. Others that Warren Buffett’s lower tax rate than his secretary is wrong. Underpinning it all is the theorem I think about more than any other: Atkinson-Stiglitz. A thread. 1/22.
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BTW, America can never be like Denmark because Denmark benefits massively from the technological spillovers bought by American capitalism.
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Being cavalier about the public health situation doesn’t actually help under this model. It makes things much worse. By raising the rate of spread it makes it *more* likely the line will be breached, so more likely that far harsher measures will inevitably be used later on. 11/15.
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The greatest implication for Australia of a Biden victory is the US will reenter the Paris agreement, and commit to net-zero by 2050. Even without the Senate, they’ll take meaningful actions via Executive Order. Now virtually alone, our refusal to commit to net-zero is untenable.
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There’s a lot of confusion about the economic response to coronavirus. This won’t be a normal Keynesian-style recession. The normal policy levers are impotent. Putting money into consumers’ pockets will not pump up the economy because consumers can’t spend. They’re staying home.
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Anyone arguing today for Australian nuclear power simply doesn’t understand the electricity market. I’ve never spoken to an energy expert who thinks it’s prudent or necessary. Not because of ideology—it just doesn’t make any sense. The Libs again with a flat-earth energy policy.
Dutton flags shift towards nuclear power
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My piece in today's @FinancialReview on the public sector's crowding out of the private sector. In the past two calendar years 87% of employment growth occurred in the non-market sector despite its accounting for just 30% of jobs. In September it was 91%!.
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We can solve secular stagnation by reallocating the talents of millions of lawyers and consultants to socially productive work.
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Even if you didn’t care about fairness, RATs should be free. It’s about health and economic capacity. If people go out when they’re sick, the bigger the hit. If people stay home when they’re not sick, the bigger the hit. RATs keep the sick people home and let the well people out.
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There's this weird thing in Australia where smart people think it's the smart-person position to be pro-nuclear. But these people are confused. It is the smart-person position to be *open* to nuclear for Australia, but then to conclude it makes absolutely no sense in practice.
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The federal government should have the in-house capability to run regressions using government data. Total madness that we pay consulting firms millions of dollars to produce what is often very mediocre analysis (I’ve seen it—can attest!). An Evaluator-General would do the trick.
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Holy shit.
This graph is amazing. It shows that measuring #SARSCoV2 levels in municipal sewage almost perfectly predicts forthcoming #COVID19 cases with a full week's notice (R=0.994). It's one of several discoveries in this new study from @Yale: C-19 is #InThePoop
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Totally normal levels of government spending. Nothing about this is concerning at all. It must be unambiguously good and have zero negative consequences. Nothing bad will come of this. Everything will be totally fine. Nothing needs to change.
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The fact we’re still not vaccinating 5-11s for another couple of weeks is bananas. This is especially true given childhood hospitalisations seem to be higher under Omicron. Good public policy is about hoping for the best but planning for the worst. We planned for the best.
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What is the selection process in hiring Chief Medical Officers and their deputies? Something seriously wrong there.
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Just a reminder of this statement by the Chief Medical Officer, Brendan Murphy, on March 17:. “We’re not in a hurry in Australia. We don’t have a burning platform, as I’ve said on many occasions. We can take our time to do this vaccination properly.”.
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Here is the print version of my piece with @heeney_luke in today's @smh explaining why nuclear is uneconomic in Australia, in case you couldn't access the online version.
My piece with @heeney_luke in tomorrow's @smh offers a clear explanation for why nuclear is uneconomic in Australia. It's clear nuclear is far more expensive than renewables. But it's also unable to "firm" renewables economically. And we don't need it.
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Zero intellectual engagement with the arguments in my piece, presumably because he is incapable of it. With a bit of nationalism at the end to go with it. I’m Australian, you clown.
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The government claims the new gas-fired power plant it’s building is:. 1) a commercial proposition, so won’t impact the budget;. and. 2) necessary because the private sector wasn’t willing to step in and build it. Anyone else see a contradiction here?.
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Today @chrisedmond, @profholden, @BruceJPreston and I are releasing an open letter—now signed by 134 Australian economists—urging against a premature easing of restrictions in the name of “the economy”. Sign at the link below. Thoughts over the fold. 1/7.
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To the many who said “no need to rush vaccinations, everything’s fine here”: if we’d started vaccinating hotel quarantine workers in December, everything happening in Melbourne (and the Perth and Brisbane lock-downs) would have been avoided. We are absolutely in an emergency.
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In case anyone is wondering why the PM is yet to call the election…. (PS. Get a load of that y axis…)
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The silly thing about this whole story is that whether Pfizer made the offer is completely irrelevant. Ultimately, if in mid-2020 we’d wanted to order enough Pfizer to cover our population in the first half of 2021, we could have had it. We chose not to.
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The other is hospital capacity. This is a hard line—politically it simply will not be breached. So no matter how indifferent you are to COVID, ultimately a sufficiently high number of infections will generate a sufficiently high number of hospitalisations to breach the line. 6/15.
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The trouble with this clip is that tax settings are *not* the root cause of the housing crisis. They are a rounding error. Every credible economist I know agrees: the root cause is supply. Any housing policy that doesn’t meaningfully boost supply isn’t a real housing policy.
Govts need to start addressing the root causes of the cost of living crisis. More tinkering around the edges isn't going to cut it. Let's actually tackle housing affordability and the lack of competition in 🇦🇺.
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There is no way to avoid recession. This is a pandemic. As a matter of public health, we *want* a recession. Any fiscal support should be judged not by its propensity to boost activity but by its ability to plug the hole in the budgets of vulnerable households and businesses.
"We have to get used to the fact that we are going into a global recession. Hopefully it will be short lived, but I can't see how we will avoid a global recession," says @elerianm.
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Starting a new Green Party but where green is the glow of enriched uranium.
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But there are two more things to consider. The first is exponential spread. We’ve known about this for 2 years but people still forget. Exponential spread means small costs rapidly turn into big costs. It generates very large risks. Things that pass a CBA might quickly fail. 5/15.
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My piece in the @FinancialReview reacting to the government’s “plan” to achieve net-zero by 2050. I guess we shouldn’t be surprised, but we should be infuriated.
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Excited to announce that tomorrow I’ll start part-time as Chief Economist of @BlueprintInsti1, a new Australian think tank combining progressive environmental and social policy with hard-headed economics. The Australian think tank space could use more voices—pleased to add mine.
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After posting my affogato, people had questions about my coffee-making process. So I thought I’d document it here for those interested. Everything I know about how to make espresso I learnt from @jimseven and @realsprometheus, who have great YouTube channels. #EconCookingTwitter
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In fact you do need an economics degree to appreciate why the RBA is doing what it’s doing, and the fact that the commentators and politicians criticizing it don’t have one speaks volumes. The question among most actual experts in economics is whether they have gone far enough.
About time the RBA gets called out. You don’t need an economics degree to appreciate that middle/low income Australians are not causing inflation. You don’t need an economics degree that forcing these middle/low income Australians to rely on food banks, will not address.
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I don’t know who needs to hear this but we should be doing everything we reasonably can to avoid alienating China at this time.
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So if you consider that when push comes to shove politicians will do whatever it takes to prevent that happening, you must then work your way back given exponential spread to consider how to behave early on so that those harder, later, inevitable measures won’t be necessary. 7/15.
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Ultimately, we should be weighing the costs and benefits to society of all the measures we take. In the first wave, hospitalisations and deaths were so high that fairly aggressive measures were justified to snuff out fires that started. Some of these were obviously costly. 2/15.
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A sensible person believes, simultaneously:.• Nuclear power is generally good and underutilised.• Germany is extremely dumb for phasing out nuclear power.• It would be extremely dumb for Australia to develop a nuclear power industry now to achieve its emissions-reduction goals.
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Michigan just canceled all first-year and field prelims this year. Everyone passes. Incredible.
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This is where most of my criticism has focused. Because things are becoming increasingly dire, politicians are resorting to increasingly costly measures. School is being delayed. Indoor capacity severely curtailed. What measures will they take next in order to hold the line? 8/15.
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This is total rubbish. 1) The TGA authorised Pfizer 2 months after the US FDA, for no good reason. It didn’t need to be that way!. 2) There was no reason we couldn’t have ordered 50m rather than 10m, which would have radically sped up the rollout even with a February approval.
"It actually might not have made that much difference in the end anyway.". WATCH: Waleed Aly unpacks whether Australia was doomed from the start with its vaccine supply #Insiders #auspol
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Why are the ABC’s economics writers so enamored of attacking mainstream economics? It seems almost cult-like. Imagine if their environment writers spent every day attacking mainstream climate science. It’s unique among media outlets and seriously strange.
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The worst version of Australian politics is the unthinking importation of American political fads. The right and left are equally guilty of it. Lefties talking about abolishing student debt. Right-wingers talking about voter ID laws. Totally brain dead. Incredibly cringe.
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Doctors don’t have some kind of magical training that makes them uniquely able to assess risk-return trade-offs. In fact, economists are far better trained to do so. Controversial, but true!.
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