Democracy and Political Ignorance: Why Smaller Government Is Smarter
11 Jun 2016 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, economics, economics of information, income redistribution, Public Choice, public economics, rentseeking Tags: rational ignorance, rational irrationality, voter demographics
US tax rates before and after government transfers
11 Jun 2016 Leave a comment
in fiscal policy, politics - USA, public economics
Child poverty, @jacindaardern and what higher wages cannot buy
10 Jun 2016 Leave a comment
in labour economics, labour supply, minimum wage, politics - New Zealand, poverty and inequality, public economics Tags: child poverty, family poverty, female labour force participation, living wage, New Zealand Labour Party, single mothers, single parents, social insurance
The Left thinks the solution to poverty is giving the poor more money because poverty is caused by the poor not having enough money.
Labour MP Jacinda Ardern introduced the exception in an op-ed in the Sunday Star Times. People are poor because they do not have enough money unless that is because of a lack of money because you are not married or not living with the father of the child.
Ardern was raging against a report by Lindsey Mitchell arguing that a major driver of child poverty is the breakdown of the family and the rise of single parent households. Ardern said that
I’ve spent the better part of six years reading and researching the issue of child poverty, and what we need to do to resolve this complex problem in New Zealand.
And yet here it was, the silver bullet we have all been looking for. Marriage. Getting hitched. Tying the knot. It turns out that we didn’t need an Expert Advisory Group on child poverty, or any OECD analysis for that matter – apparently all we really need is a pastor and a party
Ardern preferred to attribute the increase in child poverty to welfare benefit cuts in the early 1990s.
There is an exception within this exception for the living wage as Ardern says
But the other factors Family First was so quick to dismiss – low wages and staggering housing costs – mean we have 305,000 children in poverty. And this is the stuff that needs to change. It’s time we faced reality.
A living wage increase can solved family poverty. Actually getting a job and earning a wage does not reduce poverty among single-parent households but living wage increases do for families.
Source: Jacinda Ardern: Govt must improve the lot of our children – National – NZ Herald News.
You cannot have it both ways. That low wages cause family poverty but no wages does not.
The best solution to child poverty is to move their parents into a job. Simon Chapple is quite clear in his book last year with Jonathan Boston that.
Sustained full-time employment of sole parents and the fulltime and part-time employment of two parents, even at low wages, are sufficient to pull the majority of children above most poverty lines, given the various existing tax credits and family supports.
#feelthebern will raise your taxes
09 Jun 2016 Leave a comment
in applied price theory, applied welfare economics, economics, entrepreneurship, health economics, labour economics, minimum wage, politics - USA, public economics Tags: 2016 presidential election, antimarket bias, expressive voting, living wage, Old Left, pessimism bias, rational irrationality
#FeeltheBern? There’s a Cure.
09 Jun 2016 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, economic history, economics of education, economics of regulation, health economics, income redistribution, industrial organisation, international economics, politics - USA, Public Choice, public economics, rentseeking Tags: 2016 presidential election, antimarket bias, crony capitalism, living wage, pessimism bias, top 1%
why no protests against #UBI bureaucratic job losses but #TPPANoWay protests aplenty about jobs?
08 Jun 2016 Leave a comment
in fiscal policy, labour economics, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality, public economics Tags: expressive voting, growth of government, rational rationality, size of government, social insurance, universal basic income
The universal basic income is a rare bird for the left. It is the only time the usual suspects on the left are happy to cut government bureaucracy.
Furthermore, the left makes no inquiries as to how these redundant bureaucrats who administered the welfare state will find jobs. The market is left to work its magic for once. How convenient.
When a tariff cut is proposed, a trade deal signed, or job reduction in a bureaucracy suggested perhaps as the result of a privatisation, left-wing activists chain themselves to factory gates or government offices in solidarity. The social upheaval from the job losses among existing workers and their dim prospects of reemployment are paramount in their minds.
Why in the case of a universal basic income is the left so relaxed about job losses. Indeed, it celebrates as an advantage of a universal basic income that “Most of the bureaucracy of the welfare system [is] swept away” .
The universal basic income is the only time the left welcomes a reduction in bureaucracy and the role in the state. This switch from welfare payments to a universal basic income does not make those on the benefit any better off. Normally they are worse off under a universal basic income.
None of the the less well groups which of the concern of the left gain from a universal basic income. Despite this, they sell the jobs of their comrades in the public sector down the river.
I cannot believe the explanation is job losses are OK as long as they are the result of left-wing policies. Unless the labour market is liberalised, its ability to find new jobs for workers, for example, made redundant in the public sector after the introduction of a universal basic income is not any under greater than under a right-wing policy that costs jobs.
Homeless means living rough or in a car @DavidReiMiller @greencatherine @secondzeit
06 Jun 2016 Leave a comment
in politics - New Zealand, poverty and inequality, public economics, urban economics Tags: economics of housing, homelessness, social insurance, welfare state
Statistics New Zealand spent 21 pages trying to define the term homeless. How Orwellian.
When I first moved to Canberra and when I moved back, I stayed with friends. Some regard that as being homeless under the Statistics New Zealand definition, much to my own surprise.
I qualify because I shared accommodation . Having shared or short-term accommodation is not homeless. The descriptions shared and short-term accommodation quite adequate to the task.
People living in temporary accommodation including with friends are not homeless. Their situation is unsatisfactory but describing it does not justify butchering the English language by conflating their inconveniences with the few hundred people who live rough each night.
Source: New Zealand Parliament – Homelessness in New Zealand.
Those that conflate having a roof over your head tonight with living rough take advantage of the great sympathy people have for those living rough for people in far less dire situations.
#MiltonFriedman v. @berniesanders
05 Jun 2016 Leave a comment
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, development economics, economic history, economics, economics of regulation, entrepreneurship, growth disasters, growth miracles, income redistribution, industrial organisation, labour economics, macroeconomics, Milton Friedman, minimum wage, occupational choice, politics - USA, Public Choice, public economics Tags: 2016 presidential election, Leftover Left
#MorganFoundation wants frontal attack on NIMBYs
03 Jun 2016 Leave a comment
in economics, economics of bureaucracy, economics of regulation, income redistribution, law and economics, property rights, Public Choice, public economics, rentseeking Tags: congestion charges, housing affordability, land supply, NIMBYs, RMA, road pricing, zoning
Morgan Foundation wants the National party-led government to take on NIMBYs not only with more high-rises and urban intensification but congestion charges too! There is only so much courage you can expect in one term of government. Relaxing the Auckland urban limit, which will hopefully cause housing prices to stop rising in Auckland was not enough.
No softly softly catchy monkey here. No concept of winning the battles you can win.
The effects of cutting the Australian company tax by one percentage point
02 Jun 2016 Leave a comment
in applied price theory, politics - Australia, politics - New Zealand, public economics Tags: Australia, company tax, international tax competition, tax incidents, taxation and entrepreneurship, taxation and investment
Gap in GDP per Australian, Canadian, French, German, Japanese, New Zealander and British hour worked with the USA
28 May 2016 Leave a comment
in economic growth, economic history, labour economics, labour supply, macroeconomics, politics - Australia, politics - New Zealand, politics - USA, public economics Tags: Australia, British economy, Canada, Eurosclerosis, France, Germany, Japan, labour productivity, measurement error, taxation and labour supply
This data tells more of a story than I expected. Firstly, New Zealand has not been catching up with the USA. Japan stopped catching up with the USA in 1990. Canada has been drifting away from the USA for a good 30 years now in labour productivity.
Data extracted on 28 May 2016 05:15 UTC (GMT) from OECD.Stat from OECD Compendium of Productivity Indicators 2016 – en – OECD.
Australia has not been catching up with the USA much at all since 1970. It has maintained a pretty consistent gap with New Zealand despite all the talk of a resource boom in the Australia; you cannot spot it in this date are here.
Germany and France caught up pretty much with the USA by 1990. Oddly, Eurosclerosis applied from then on terms of growth in income per capita.
European labour productivity data is hard to assess because their high taxes lead to a smaller services sector where the services can be do-it-yourself. This pumps up European labour productivity because of smaller sectors with low productivity growth.
@PikettyLeMonde pension fund socialism has finished taking over #capitalism #Piketty
28 May 2016 Leave a comment
in economic history, financial economics, politics - USA, public economics Tags: company tax, Leftover Left, pension fund socialism, Peter Drucker, tax havens, taxation and entrepreneurship, taxation and investment, Twitter left
Peter Drucker first pointed out in the 70s that the retirement savings of ordinary workers will end up opening the majority of public listed companies. That day has come much to the disappointment of the Leftover Left ranging from Thomas Piketty to Max Rashbrooke.
Source: CONVERSABLE ECONOMIST: US Corporate Stock: The Transition in Who Owns It.
Any call for higher taxes on investment incomes and capital and even tax havens is an attack on the retirement savings of ordinary workers.
Tax bracket creep in Australia
24 May 2016 Leave a comment
in politics - Australia, politics - New Zealand, public economics Tags: bracket creep, growth of government, size of government, taxation and inflation
Money makes people right-wing and inegalitarian
21 May 2016 Leave a comment
in applied price theory, applied welfare economics, public economics Tags: taxation and investment, taxation and labour supply
Figure 1. Evidence on switchers: The percentage of people who switched right (conservative), and previously did not vote conservative, after a lottery win
Source: Money makes people right-wing and inegalitarian | VOX, CEPR’s Policy Portal.
Utopia, you are standing in it! 
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