Gordon Tullock on the organisation of enquiry and the growth of knowledge
23 Feb 2015 Leave a comment
The Great Enrichment since 1979 in the USA
22 Feb 2015 Leave a comment
in income redistribution, politics - USA, poverty and inequality, welfare reform Tags: capitalism and freedom, poverty and inequality, The Great Enrichment, top 1%
Over the past one-, two-, and three-decade periods, both middle class and poor households have experienced noticeable gains in living standards. Their gains are slower than those experienced by middle-income families in the earlier post-war era, but the gains are well above zero.
In 1980, in-kind benefits and employer and government spending on health insurance accounted for just 6% of the after-tax incomes of households in the middle one-fifth of the distribution. By 2010 these in-kind income sources represented 17% of middle class households’ after-tax income
…The broadest and most accurate measures of household income are published by the CBO. CBO’s newest estimates confirm the long-term trend toward greater inequality, driven mainly by turbo-charged gains in market income at the very top of the distribution. The market incomes of the top 1% are extraordinarily cyclical, however. They soar in economic expansions and plunge in recessions. Income changes since 2007 fit this pattern.
What many observers miss, however, is the success of the nation’s tax and transfer systems in protecting low- and middle-income Americans against the full effects of a depressed economy.
via Gary Burtless
Déjà vu all over again: Sovereign Funds, a History of Bad Timing Version
20 Feb 2015 Leave a comment
in economics of bureaucracy, fisheries economics, rentseeking Tags: New Zealand superannuation fund, sovereign wealth funds, state owned enterprises
Josh Lerner analysed about 2,600 sovereign fund investments over the last 25 years, to find that:
these funds are “trend chasers” rather than good market timers — they are likely to invest at home when domestic equity prices are higher, and invest abroad when foreign prices are higher. This tendency to shun assets when their prices are low has taken its toll on the returns at these funds…
sovereign fund investments made in a fund’s home country tend to do worse than foreign investments, at least in the short term. Industry price-to-earnings ratios of domestic investments tend to drop in the first year, while international investments have a positive change in the first year. Moreover, when politicians are involved in sovereign funds’ decision-making, more money is funnelled to poorly performing domestic deals
George Stigler and that peculiar requirement to dumb down economics for politicians and the public
20 Feb 2015 Leave a comment
I now know why incumbents are so keen on reforms that limit donations and campaign expenditure
20 Feb 2015 1 Comment
What were they thinking? NZ government super fund loses the lot on loan to already failing bank in one of the PIGS.
20 Feb 2015 Leave a comment
in economics of bureaucracy, entrepreneurship, financial economics, politics - New Zealand Tags: active investing, corruption, euro crisis, Index of Economic Freedom, junk bonds, passive investing, Portugal, risk diversification, state owned enterprises
A Portuguese bank on the verge of collapse – what were they thinking?
That would have been the response of many newspaper readers this morning upon learning the New Zealand Superannuation Fund has lost nearly $200 million in taxpayers’ cash on a "risk-free" loan it provided to Lisbon-based Banco Espirito Santo (BES) on July 3.
The loan – part of a US$784 million credit package US investment bank Goldman Sachs put together through its Oak Finance vehicle – was made exactly one month before Portugal’s central bank broke up BES and split the country’s biggest lender into two, with one part holding the good assets and the toxic assets placed in the other.
Unfortunately, the Oak Finance loan is now stranded in the so-called "bad bank" following a retrospective law change by the Bank of Portugal.
Christopher Adams: What were they thinking? – Business – NZ Herald News.
This is what the 2015 index of Economic Freedom has to say about Portugal on the rule of law:
In 2013, the OECD expressed concern over Portugal’s reluctance to crack down on foreign bribery, particularly in regard to its former colonies Brazil, Angola, and Mozambique.
Since 2001, Portugal had officially acknowledged only 15 bribery allegations, and there had been no prosecutions. The judiciary is constitutionally independent, but staff shortages and inefficiency contribute to a considerable backlog of pending trials.
Creative destruction versus the Guardian: A £2-a-month levy on broadband could save our newspapers
20 Feb 2015 Leave a comment
in economics of media and culture, entrepreneurship, rentseeking, survivor principle Tags: legacy media, The Guardian
A small levy on UK broadband providers – no more than £2 a month on each subscriber’s bill – could be distributed to news providers in proportion to their UK online readership. This would solve the financial problems of quality newspapers, whose readers are not disappearing, but simply migrating online.
via A £2-a-month levy on broadband could save our newspapers | Media | The Guardian.
Did The Guardian just come out in support of a poll tax? Most people have broadband, so it’s the same practical effect?
What happens when a metropolitan area has way too many governments – The Washington Post
20 Feb 2015 Leave a comment
in constitutional political economy, Federalism, politics - New Zealand, politics - USA, Public Choice Tags: local government
The OECD, in a report on the "Metropolitan Century" we’ve just entered, found across all of its member countries that when you double the number of municipalities per 100,000 residents within a single metropolitan area, regional labour productivity falls by 5 to 6 percent.
In short: the more little governments you have, the less productive the entire local economy is.
via What happens when a metropolitan area has way too many governments – The Washington Post.
The smart, green economy, not – electric cars version
20 Feb 2015 Leave a comment
in energy economics, environmental economics, global warming, rentseeking Tags: Big Green, Bjørn Lomborg, electric cars, green rent seeking
Utopia, you are standing in it! 
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