Monday, 28 August 2017

A similarity between NAIRU bashers and anti-racists.

NAIRU (Non Accelerating Inflation Rate of Unemployment) is basically the  entirely reasonable idea that there is a relationship between inflation and unemployment and in particular that given increasing demand, the point will come (roughly at the 5% unemployment level) at which further increases in demand, instead of bring more employment, will instead simply stoke inflation.

That’s an idea which is widely accepted in economics and in central bank circles. However, there is a vociferous bunch of people who object to NAIRU because it appears to make a finite amount of unemployment inevitable, and unemployment is wicked and evil. Ergo, so the argument runs, NAIRU must be wicked and evil, i.e. there can’t possibly be a relationship between inflation and unemployment.

As you may have noticed, that makes about as much sense as arguing that cancer causes death, ergo the whole cancer concept is wicked and evil.

Strangely enough, and even more hilarious, one of the main opponents of NAIRU is Bill Mitchell. But Bill cannot escape the fact that there is indeed a relationship between inflation and unemployment very much along the lines of NAIRU. So he gets round that by giving NAIRU a different name: he calls it the Inflation Barrier.


A similar form of false logic is popular with anti-racists. Racism is defined in dictionaries as something like the idea that some races are better than others, and/or hatred based on the latter idea. Hatred is obviously wrong. No argument about that. Though on about 99.99% of the occasions when some pompous leftie attributes hate to someone else or some group, there is not so much as the beginnings of an attempt to substantiate the “hate” accusation (which is not surprising, given that proving MOTIVE is not easy).

In contrast, and as regards the simple idea that some races are better than others, at least in some respects, that is a not unreasonable proposition. For example some psychologists claim there are IQ differences between different races. And some races can quite clearly run faster than others. Jews have got about twenty times as many Nobel prizes per head of population compared to Arabs and so on.

However, the whole idea that some races are better than others in some respect other is a bit uncomfortable: it’s at variance with the idea that “all people are equal” – quite obviously true in a sense.

However, reconciling those two apparently conflicting ideas is too difficult for the tiny minds that make up the anti-racist brigade. So they opt for the simpler “NAIRU / cancer” style logic, namely that if something is unpleasant on the face of it, then it can’t possibly be true. And you’re wicked and evil if you suggest it is true.

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