Where not to invest in Europe: Greece econ.st/1TAd3CZ http://t.co/X9vtnz0uhQ—
The Economist (@EconBizFin) July 15, 2015
Where not to invest in Europe
18 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, economics of bureaucracy, economics of regulation, industrial organisation, law and economics, property rights, Public Choice, rentseeking, survivor principle Tags: doing business, Eurosclerosis, Greece
Latin American populism versus the East Asian Tigers
17 Jul 2015 Leave a comment
in comparative institutional analysis, constitutional political economy, development economics, economics of bureaucracy, growth disasters, growth miracles, income redistribution, Public Choice, rentseeking Tags: East Asian Tigers, Latin American populism
Growth paths of #LatAm & the Caribbean the South East Tigers: wrld.bg/NCtLt #RiseoftheSouth http://t.co/IFuUOWldox—
World Bank Pubs (@WBPubs) May 31, 2015
And the rich got richer, who cares
16 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, Austrian economics, comparative institutional analysis, constitutional political economy, development economics, economic history, economics of bureaucracy, economics of education, economics of regulation, economics of religion, energy economics, entrepreneurship, environmental economics, financial economics, growth disasters, growth miracles, income redistribution, industrial organisation, international economics, labour economics, labour supply, liberalism, poverty and inequality, Public Choice, rentseeking, survivor principle, transport economics, urban economics Tags: Deirdre McCloskey, entrepreneurial alertness, The Great Enrichment, The Great Escape, The Great Fact, top 1%
"The rich got richer, true. But…" —@DeirdreMcClosk buff.ly/1Imdv4o http://t.co/M3ERx3JTIn—
HumanProgress.org (@humanprogress) June 28, 2015
Should Majorities Decide Everything?
15 Jul 2015 Leave a comment
in comparative institutional analysis, constitutional political economy, economics of bureaucracy, income redistribution, liberalism, Public Choice, rentseeking Tags: constitutional law, expressive voting, median voter theorem, Mike Munger, rational ignorance, rational irrationality, tyranny of the majority
Global poverty is in free fall – what does Oxfam have to say about what caused this?
14 Jul 2015 Leave a comment
in applied welfare economics, comparative institutional analysis, constitutional political economy, development economics, economic history, economics of bureaucracy, growth disasters, growth miracles, liberalism, Marxist economics, Public Choice Tags: extreme poverty, global poverty, ODA, overseas aid, Oxfam, professional activists, professional do-gooders, The Great Escape, The Great Fact
The world is getting better all the time, in 11 maps and charts vox.com/2015/7/13/8908… http://t.co/cBbN4L0dqF—
Vox (@voxdotcom) July 13, 2015
Doing Business in the USA and Canada – World Bank rankings compared
10 Jul 2015 Leave a comment
in applied welfare economics, economics of bureaucracy, economics of regulation, law and economics, politics - USA, property rights, Public Choice Tags: Canada, doing business, rule of law, World Bank
Figure 1: Doing Business in the USA, Canada, World Bank rankings, 2014
Source: Doing Business – Measuring Business Regulations – World Bank Group.
It’s easier to do business in the USA and Canada because of the difficulties with construction permits and getting electricity and few more problems with enforcing contracts and registering property. It is easy to open a business in Canada.
Hopeless KiwiRail bailout reporting by Radio New Zealand
10 Jul 2015 Leave a comment
in applied welfare economics, economics of bureaucracy, economics of media and culture, politics - New Zealand, rentseeking, transport economics Tags: corporate welfare, KiwiRail, media bias, privatisation, public ownership, Radio New Zealand, state owned enterprises
This morning on 9 to noon on Radio New Zealand, Kathryn Ryan, the compere of the program, repeatedly claimed that the government pumped $1 billion into the KiwiRail Turnaround Plan between 2010 and 2014. I was so annoyed by this that I made a broadcasting standards complaint while the program was still being broadcast on my mobile as a one finger typist.
The report on 9 to Noon was in response to the government putting KiwiRail on notice, giving it two years to identify savings and reduce Crown funding required or risk the possibility of closure. Since KiwiRail was acquired in 2008 for $665 million as a commercial investment, Crown investments (taxpayers bailout) totalled $3.4 billion – see Figure 1.
Figure 1: State-owned enterprise welfare, Vote Transport and Vote Finance (KiwiRail), Budgets 08/09 to 15/16
Source: New Zealand budget papers, various years.
Table 1 shows that the KiwiRail Turnaround plan of $1.272 billion since the 2009-10 Budget is only a small part of the bailout of KiwiRail. 9 to Noon simply ignored the $210 million in the 2015 budget for KiwiRail for no explicable reason and instead talked about a $1 billion Turnaround plan rather than the $1.272 billion Turnaround plan.
Table 1: State-Owned Enterprise welfare, Vote Transport and Vote Finance (KiwiRail), Budgets 2008/09 to 2015/16, $million
| 08/09 |
09/10 |
10/11 |
11/12 |
12/13 |
13/14 |
14/15 |
15/16 |
|
|
New Zealand Railways Corporation Loans |
405 |
55 |
250 |
108 |
11 |
|||
|
KiwiRail Turnaround Plan |
20 |
250 |
250 |
250 |
94 |
198 |
210 |
|
|
KiwiRail Equity Injection |
323 |
25 |
29 |
|||||
|
Rail Network and Rolling Stock Upgrade |
105 |
71 |
10 |
|||||
|
New Zealand Railways Corporation Loans |
55 |
|||||||
|
New Zealand Railways Corporation Increase in Capital for the Purchase of Crown Rail |
376 |
|||||||
|
Crown Rail Operator Loans |
140 |
|||||||
|
Crown Rail Operator Equity Injection |
7 |
|||||||
|
Total |
578 |
530 |
376 |
510 |
680 |
119 |
209 |
239 |
Source: New Zealand budget papers, various years.
Other parts of the bailout of KiwiRail include $405 million in loans to the New Zealand Railways Corporation in the 2009-10 budge – see table 1. There was a $323 million equity injection in the 2012-13 Budget – see table 1. KiwiRail has also caused write-downs in the Crown balance sheet of an incredible $9.8 billion since it was repurchased in 2008.
9 to Noon ignored at least two thirds of the cost to the taxpayer of bailing out KiwiRail by only limiting its reporting to part of the KiwiRail Turnaround Plan. It ignored the contribution in the most recent budget to that plan. That does not meet broadcasting standards of accuracy or professional responsibility.
Any reasonable listener will infer, as I did when listening, that the entire cost of the bailout of KiwiRail is represented by the Turnaround Plan of about $1 billion. If listeners were left with that impression, they were misled by 9 to Noon and Radio New Zealand.
It’s Time to Name a Price on KiwiRail – how much more in losses before committing to shutting it down?
09 Jul 2015 1 Comment
in economics of bureaucracy, politics - New Zealand, Public Choice, public economics, rentseeking, transport economics Tags: corporate welfare, hard budget constraints, KiwiRail, privatisation, public ownership, state owned enterprises, state-owned enterprise welfare
In the finest public service traditions of free and frank advice, the New Zealand Treasury in its budget advice this year advised ministers to contemplate shutting down KiwiRail.
Treasury recommended the Government fund KiwiRail for one more year and undertake a comprehensive public study to look into closing the company. The study is public so that people were informed of the costs of running the rail network compared with any benefits it provided. The Government rejected the idea.
Figure 1: State-owned enterprise welfare, Vote Transport and Vote Finance (KiwiRail), Budgets 08/09 to 15/16
Source: New Zealand budget papers, various years.
KiwiRail has been a constant thorn in the taxpayers’ side. Since this rail business was acquired in 2008 for $665 million as a commercial investment, Crown investments have totalled $3.4 billion – see Figure 1.
Fortunately in the 2015 budget, the Minister of Finance signalled that the government’s patience with the KiwiRail deficits is not unlimited. KiwiRail has a 10-year Turnaround Plan to make its freight business commercially viable. The current network of 4,000 km must be reduced to 2,300 km for the company to even breakeven. The Treasury advised, to no avail, that this massive and painful restructuring was required before KiwiRail was purchased. The purchase went through.
The latest developments where Treasury advised ministers to contemplate shutting the network down is an opportunity for ministers, and the opposition spokesmen on finance and transport both to say how much is too much in accumulated KiwiRail losses.
The Minister of Finance and his Cabinet colleagues must say after the public review that there is only so much more left in the cupboard to bailout KiwiRail losses. After that fiscal cap is reached, KiwiRail is on its own. If that means bankruptcy and network closure, so be it.
In the interim, on the side of every KiwiRail train there should be advertising billboards with the following disclosure statements:
- KiwiRail losses adds one percentage point to the company tax rate each year;
- KiwiRail losses takes deny sick taxpayers X number of elective surgeries per year; and
- X number of doctors, nurses, and teachers could have been hired but for last year’s KiwiRail losses!
Can NZ double migrant investors and entrepreneurs from $3.5 billion to $7 billion at no cost to taxpayers!?
07 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, economics of bureaucracy, entrepreneurship, income redistribution, industrial organisation, managerial economics, organisational economics, politics - New Zealand, Public Choice, public economics, rentseeking, survivor principle Tags: corporate welfare, entrepreneurial alertness, industry policy, industry targeting, The fatal conceit, The pretence to knowledge
I didn’t notice any discussion in the Cabinet paper of a government doing this before and whether their investment promotion efforts succeeded or not. This latest policy proposal cannot even count as evidence-based policy dreaming, much less a serious contribution to public policy.
Hoping to double incoming foreign investor and entrepreneur migration from $3.5 billion to $7 billion inside three years without spending any extra public money is breathless public policy making. I am sure lots of governments previously tried to get something for nothing.
It will be helpful if ministers pointed to where overseas governments have been successful in doubling foreign investment by simply reprioritising existing investment promotion efforts.
There are at least 2,500 national, provincial and city investment promotion agencies out. Some of them must have been subject to some sort of evaluation as to their success.
This overseas literature review would be in addition to the recent findings of the Ministry of Economic Development about the poor performance and perhaps futility of the foreign direct investment promotion by New Zealand Trade and Enterprise.
Imagine how much bigger a boost in foreign investor and entrepreneur migration lays before us if actual real new money was put on the table.
via beehive.govt.nz – Strategy targets international investors and Evaluation of NZTE investment support activities [929 KB PDF]
.
The political bias of psychologists
05 Jul 2015 Leave a comment
in economics of bureaucracy, economics of education, economics of media and culture, politics - Australia, politics - New Zealand, politics - USA, Public Choice, rentseeking Tags: academic bias, bureaucratic bias, expressive voting, Leftover Left, media bias, occupational choice, political bias, rational ignorance, rational irrationality, social psychology, Twitter left
Why is it that the economics profession is the only profession questioned on the grounds of its political diversity?
1) Academic psychology once had considerable political diversity, but has lost nearly all of it in the last 50 years;
2) This lack of political diversity can undermine the validity of social psychological science via mechanisms such as the embedding of liberal values into research questions and methods, steering researchers away from important but politically unpalatable research topics, and producing conclusions that mischaracterize liberals and conservatives alike;
3) Increased political diversity would improve social psychological science by reducing the impact of bias mechanisms such as confirmation bias, and by empowering dissenting minorities to improve the quality of the majority’s thinking; and
4) The underrepresentation of non-liberals in social psychology is most likely due to a combination of self-selection, hostile climate, and discrimination.
via Psychology’s Political Diversity Problem | Psychology Today.
Doing business in the PIGS (Portugal, Italy, Greece and Spain) – World Bank rankings
03 Jul 2015 Leave a comment
in applied price theory, applied welfare economics, currency unions, economic growth, economics of bureaucracy, economics of regulation, Euro crisis, health and safety, income redistribution, industrial organisation, labour economics, law and economics, minimum wage, occupational regulation, property rights, Public Choice, rentseeking, survivor principle, unions, welfare reform Tags: cost of doing business, Eurosclerosis, Greece, Italy, PIGS, Portugal, Spain
Figure 1: Doing Business rankings, PIGS, 2014
Source: World Bank Doing Business 2015.
All in all, Italy and Greece are a dog of a place to enforce a contract. The long-suffering taxpayer is better off paying taxes in Greece than in Italy! Not surprisingly, trading across borders is the greatest strength in doing business in the PIGS. The European Union does have some benefits.
Figure 2: Doing Business rankings, Greece and Italy, 2014
Source: World Bank Doing Business 2015.
All in all, Italy and Greece are equally bad places to do business and Italy is much worse when it comes to taxes. About the only saving graces of Italy is the registration of property and the protection of minority interests in companies.
Figure 3: Doing Business rankings, Spain and Portugal, 2014
Source: World Bank Doing Business 2015.
Spain and in particular Portugal are much better places to do business than Italy and Greece.
The evolution of the scientific method in climate science
03 Jul 2015 Leave a comment
in economics of bureaucracy, economics of education, environmental economics, global warming, rentseeking Tags: academic bias, climate alarmism, global warming, green rent seeking, philosophy of science, publish or perish, scientific fraud
Political donors back winners just before they start winning
01 Jul 2015 Leave a comment
in constitutional political economy, economics of bureaucracy, politics - USA, Public Choice, rentseeking Tags: campaign finance reform, campaign finance regulation, political lobbyists, pressure groups, voter demographics
Several major industries have shifted their political donations to Republicans from Democrats: nytimes.com/interactive/20… http://t.co/qYgOdbeZAp—
NYT Graphics (@nytgraphics) June 29, 2015
Utopia, you are standing in it! 
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