Twitter has had a great year-to-date stock market performance, going from around $28 to $43 over the past seven months. That’s a 53% gain. And it looks like it’s a stock that has momentum giving it the thumbs up. But I’m tired of Twitter because it’s not a forum for debate but more for hate.
I won’t be dumping Twitter because it is a source of information and its strength is its ability to alert you to news, unusual occurrences, smart peoples’ insights and discoveries and other people’s fantastically funny revelations.
However, Twitter’s ability to encourage debate reminds me of the lunchtime gathering of economists in my teaching days at the University of New South Wales. It was meant to be an opportunity for fellow academics to listen to and debate with colleagues but it always descended into hate sessions, name-calling and smart Alec insults, as political and social differences made it impossible for respectful controversy being translated into progress.
The poet William Blake argued that you don’t have progress without controversy, which is generally correct. But tolerating the intolerant and the insulting arguments of those who’ll never be willing to trade off their long-held views, simply creates frustration.
A case in point are those who are committed to the view that house prices will fall 40% in Australia. These people ‘know’ it’s going to happen, just like that investment newsletter that has been predicting a recession every year since 2013.
We’ve had continuous emails that have warned of:
• The recession of 2013
• The recession of 2014
• The recession of 2015
• The recession of 2016
• The recession of 2017
• The recession of 2018
• The recession of 2019.
I checked if the same mob that’s pushed a recession for six years is still up to their old tricks. And they are! I believe their database is huge because there are a lot of people who fear recessions, stock market collapses and property disasters. And hell, don’t these mobs cash in on fear!
Unlike my critics with the 40% price drop argument, I concede that they could be right. A global recession and a 40% smashing of Wall Street could easily create a property disaster for Australia. But as an economist, I put it as a lower order risk.
On the other hand, the property price experts, who have no real known qualifications apart from their research and reliance on experts who aren’t authorities, never, ever concede that they could be wrong.
If challenged, that’s when they descend to name calling and questioning anyone who disagrees with them, despite these poor, insulted souls having a lifetime of actually proving that having a brain is their long suit. It doesn’t matter, the critics are right and you’re wrong and time will ‘prove’ it.
It’s like arguing with a problem child, a Nazi or a Scientologist! There is only one possible outcome and they know it.
I’ve done my best trying to argue that the history of other economies’ experiences when it comes to house prices doesn’t have to result in a house price Armageddon here. Seriously, just about every well-qualified economist in the world, apart from my mate Steve Keen and a few other kindred spirits, agree with me. But still the tweeters rage on with their arguments that I’ll be proved a dope and “this time is not different”, despite the fact that it is different.
Why is it different?
• Interest rates have never been so low — never!
• There’s never been a US President like Donald Trump!
• The Fed has never been so bullied — never!
• China has never been so powerful — never!
I could go on and name differences that could prove me right or wrong on house prices, a recession and so on but anyone who thinks things aren’t different now, simply has no idea about the history of economies.
Lessons were learnt from The Great Depression, when things were different. And the lessons were learnt from the period of Keynesian economics after the Great Depression. And then from the period of Neo-Classical economics. And maybe there will be a housing debt lesson for Australia but there isn’t a lot of certainty when it comes to an economy.
Anyone who thinks there is has never really studied economics or understands it. Some of the best economists in this country agreed with Steve Keen that we were heading for a serious recession in 2008-09 but unemployment didn’t even go over 6%, which was one for me as it was a call I made — but I did so with a lot of uncertainty. I didn’t know if I’d be right but I argued it was possible, given the rescue plans from the Rudd and US governments.
History and 30-plus years of publicly commenting on the economy taught me not to be up myself.
Go the Australian economy!
Look out for the latest episode of Switzer TV where I interview economist Stephen Koukoulas, who’s bound to rile the 40% house price drop fraternity.