@James_ARobins yet another @MaxRashbrooke #inequality fact check

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Source: Do inequality and poverty matter? | Pundit – Brian Easton (2016) .

I will outsource to Brian Easton, the CTU, the CTU’s Bill Rosenberg and Closer Together Whakatata Mai – reducing inequalities because the continual correction of Max Rashbrooke on poverty and inequality is becoming tiring.

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Source: Love in the time of crisis, James Robins, Wednesday, 16 March 2016, Newstalk NZ.

Inequality has not risen for at least 20 years as Bill Rosenberg tweeted. The rise in inequality in the late 1980s and early 1990s was followed by an employment boom that lasted to 2009.

Unemployment was as low as 3 1/2% for several years despite a large increase in labour force participation. Furthermore, the gender wage gap in New Zealand fell rapidly to now be the smallest in any industrialised country.

As the Facebook photos show, there has been strong income and wage growth despite the grizzling of the left. The return of income growth and wages growth after 20 years of real wage stagnation followed the economic reforms of the 1980s and the passage of the Employment Contracts Act in 1991.

As the CTU shows below, the economic reforms in the 1980s put an end to a sharp decline in the relative economic performance of the New Zealand economy.

 

The impact of the 1986 GST on the New Zealand tax mix since 1965

The introduction of the GST in 1986 led to a major change in the New Zealand tax mix. There was no offsetting income tax cuts.

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Source: Tax – Tax on goods and services – OECD Data and Tax – Tax on personal income – OECD Data.

New Zealand physical and human capital (by a skill level), 1986 – 2001

New Zealand working class is wealthier than the entire capitalist class. Their human capital, shown in the chart below as the human capital of the unskilled and non-degree workers, far exceeds the value of the physical capital stock of New Zealand.

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Source: Lˆe Thi. Vˆan Tr`ınh, Estimating the monetary value of the stock of human capital for New Zealand, University of Canterbury PhD thesis (September 2006).

Only part of this physical capital stock is owned by the capitalist class given we live in the era of pension fund socialism. About a 3rd of that physical capital stock is owner occupied homes.

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Source: Lˆe Thi. Vˆan Tr`ınh, Estimating the monetary value of the stock of human capital for New Zealand, University of Canterbury PhD thesis (September 2006).

The only reason that the share of unskilled and non-degree workers is in any way declining is the withering away of the proletariat. More and more people are joining the middle-class and going on to higher education.

 .

An economic history of the last century — told through New York’s skyscrapers

https://twitter.com/emilymbadger/status/685471754991628288

The value of New Zealand owner occupied homes, net capital stock and human capital stock since 1987

Tring Le found that the human capital stock was consistently 2.6 times the value of the physical capital stock of New Zealand.

I decided to apply that ratio to the net capital stock of New Zealand estimates of Statistics New Zealand back to 1987 to see what we get. It is pretty standard for the value of human capital to be two to two and one-half times the value of physical capital.

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Source: National Accounts (Industry Benchmarks): Year ended March 2013 and Lˆe Thi. Vˆan Tr`ınh, Estimating the monetary value of the stock of human capital for New Zealand, University of Canterbury PhD thesis (September 2006), Table 4.8: Human and physical capital stocks.

All the above chart says it is most wealth in New Zealand is held by ordinary people either as their human capital or the value of their homes.

% of New Zealand mortgages that were fixed and floating since 2004

Despite the best efforts of the libertarian paternalists to sell the other people are stupid fallacy, ordinary New Zealanders are quite nimble at moving between fixed and floating rates depending upon their forecasts of the future of interest rates. Price controls on floating rate mortgages, as suggested by the New Zealand Labour Party, would make this more difficult, not easier.

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Source: S8 Banks: Mortgage lending ($m) – Reserve Bank of New Zealand.

Creative destruction in world’s most valuable company

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US union membership in public and private sectors and federal, state and local governments since 1983

Unions are dead on their feet in the private sector in the USA but going strong as ever in the public sector, especially in local government.

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Source: Bureau of Labour Statistics Table 3. Union affiliation of employed wage and salary workers by occupation and industry

Brian Easton on whether inequality has risen in the past 20 years in New Zealand

Source: Brian Easton (14 March 2016) Do inequality and poverty matter? | Pundit

Creative destruction in Internet usage

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@BernieSanders defence of #Castro did not help spread democracy

Hours worked per working age American, British and French since 1950

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Data extracted on 10 Mar 2016 22:02 UTC (GMT) from OECD.Stat and The Conference Board. 2015. The Conference Board Total Economy Database™, May 2015, http://www.conference-board.org/data/economydatabase/

General government expenditure and general government revenue as a % of Australian and New Zealand GDP since 1970

I do not trust the numbers for New Zealand prior to the early 1990s released by the OECD. New Zealand simply did not have a tax structure including a GST in the double digits back then to support estate of that size. Nonetheless, the size of government in New Zealand is systematically larger than in Australia, a richer country which can afford a large government and generous welfare state.

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Source: General government – General government revenue – OECD Data and Data extracted on 12 Feb 2016 08:45 UTC (GMT) from OECD.Stat from OECD Economic Outlook November 2015.

The discovery void in antibiotic drugs

No new classes of antibiotics has been discovered since 1987. They are looked upon as a poor investment by pharmaceutical entrepreneurs because there are so many generic competitors. To make it even more complicated, any new antibiotic that might be invented would have to be held in reserve for a major case of an antibiotic resistant infection.

Source: Global Risks 2013 – Reports – World Economic Forum.

Wealth and Health of Nations

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