Utopia, you are standing in it!

Driven by climate alarmists and rent seekers ready to profit from the wind and solar subsidy scam, net zero carbon dioxide emissions targets are just the latest woke wheeze to grip our political betters.

The idea that modern economies can function without the energy generated by fossil-fuels (whether consumed by motorcars or in power generation) is up there with living on Mars and perpetual motion machines.

In a move that first perplexed and then thoroughly alienated those who voted for him in May 2019, Australia’s PM, Scott Morrison signed Australia up to a net-zero carbon oxide gas emissions target to be reached by 2050.

At Australia’s polling booths today, the big winners from that move will be Pauline Hanson’s One Nation party and Big Clive’s United Australia Party who will attract plenty of disgruntled former Liberal voters.

The Liberals, once a notionally conservative party, have not only abandoned their base…

The Transit Costs Project adjusts all construction costs for purchasing power parities. This means that, for example, a Chinese subway is converted into dollars not at the exchange rate of $1 = 6.7¥, but at the PPP rate of $1 = 4.2¥; this means that present-day Chinese subways look 1.5 times more expensive in our analysis than in analyses that use exchange rate values, and projects from 10 years ago look twice as expensive. I believe our choice is correct, and would like to explain why, since it has gotten some criticism from serious people, who’s prefer exchange rates.

Local costs

I started this comparing mature developed countries. The US and Europe have largely separate markets for construction, and so American work is almost entirely done in dollars and European work in euros (or pounds, or kronor, etc.). Japan is likewise very local and so is China. In that…

I have written many postsaboutinternationaldifferencesin subwayconstructioncosts. They’ve gotten a lot of media attention, percolating even topoliticians and to a team of academics. Against this positive attention, there have been criticisms. Three come to mind: the numbers are incorrect, costs do not matter, and the comparisons are apples-and-oranges. The first criticism depends entirely on whether one disbelieves figures given in high-quality trade publications, government websites, and mass media. The second criticism I addressed at the beginning of the year, comparing the extent of subway construction in Sweden and the US. Today, after hearing people invoke the third criticism on social media to defend Ed Glaeser’s remark that it’s possible to cut US construction costs by 10% but not 75%, I want to explain why the comparisons I make do in fact involve similar projects. Some of the specific criticisms that I’m…

The most persistent criticism I have heard of my writingsonconstructioncosts, coming from YIMBY Princeton, is the importance of gradual expertise and experience. Against my claim that Americans build subways for higher costs than the rest of the world due to poor management practices, regulations, and procurement, and scope creep, YIMBY Princeton says that high costs are a result and not a cause of the rarity of American subway investment. I believe that high US costs are endogenous and therefore the US is reluctant to fund rail transit; he believes that disinterest in transit is endogenous and if the US were willing to build more rail lines, then construction costs would naturally go down through economies of scale and steady accumulation of project management expertise. I promised last year that I would go over his argument more carefully, and am going to do so in this post.

The prospect of a poll in Northern Ireland about Irish unification, provided for by the Good Friday Agreement and often termed a ‘border poll’, is now widely discussed. But the provisions and wider implications of the law and the Agreement are little explored. The Constitution Unit is considering a project to examine this, and Alan Whysall here gives an overview of the key questions.

Support for a united Ireland appears to be rising. There is little to suggest a majority for unity now, but in the context of Brexit provoking serious strains it might arise. This blog is mainly about process. But the real world risks are high. An early poll, particularly if it takes place in a political atmosphere that is strained following a hard Brexit, could seriously destabilise both parts of Ireland, and put at risk the political gains of recent decades.

Current outlook on border polls

Northern…

Alan Whysall, Honorary Senior Research Associate of the Constitution Unit, looks at the Northern Ireland Assembly elections held last week. He suggests that the foundations of the Belfast/Good Friday Agreement continue to weaken, and there is no sign of the government offering any response that might strengthen them; its proposals on the Northern Ireland Protocol risk making matters worse. Alan’s discussion paper on Northern Ireland’s political future: challenges after the Assembly elections was published last Friday, and is summarised in this blog, and discussed in this podcast.

The election results, though well forecast by polling, were reported in dramatic terms by media outside Northern Ireland, with coverage focusing on Sinn Féin displacing the Democratic Unionist Party (DUP) as the largest party.

They reflect the increasing polarisation of Northern Ireland politics, fuelled by unionist concerns over the Northern Ireland Protocol. So Traditional Unionist Voice, to the right…

I’m a knee-jerk supporter of free trade, which simply means I don’t think politicians and bureaucrats should be able to interfere with my freedom to buy good and services from people who happen to live in other nations.

But my support for free trade is not just based on ideology. I also cite data on how trade taxes and other restrictions make nations poorer.

Simply stated, trade barriers (like other forms of government intervention) make an economy less efficient.

And the negative effects go beyond overall economic output. Researchers also find job losses, lower productivity, and increased inequality.

Today, let’s look at some new research on this topic. The IMF earlier this year released a new working paper authored by Kim Beaton, Valerie Cerra, and Metodij Hadzi-Vaskov.

Here are the main results.

…firms in countries and industries experiencing greater competition from imports reduce employment slightly. …Even so, the…

From a macroeconomic point of view, that title for this post really sums things up nicely.

Take policy first. The government has brought down a Budget that projects an operating deficit (excluding gains and losses) of 1.7 per cent of GDP for the 2022/23 year that starts a few weeks from now. Perhaps that deficit might not sound much to the typical voter but operating deficits always need to be considered against the backdrop of the economy.

Over the last couple of years we had huge economic disruptions on account of Covid, lockdowns etc, and fiscal deficits were a sensible part of handling those disruptions (eg paying people to stay at home and reduce the societal spread of the virus). Whatever the merits of some individual items of spending over that period, hardly anyone is going to quibble with the fact of deficits.

But where are we now (or, more…