@BernieSanders @HillaryClinton Who is below the poverty line in America? #fightfor15
18 Apr 2016 Leave a comment
in labour economics, politics - USA, poverty and inequality Tags: child poverty, family poverty, single mothers, single parents, social insurance, unemployment benefit, welfare state
@garethmorgannz is getting a little techie about debating optimal tax theory
17 Apr 2016 1 Comment
in politics - New Zealand, public economics Tags: optimal tax theory, taxation and entrepreneurship, taxation and investment, taxation and labour supply, taxation of capital
All I said was “optimal tax theory including that pioneered by Stiglitz and Merrlees, economists of impeccable left-wing credentials, show that taxes on the income from capital should be low because the deadweight social costs of taxes on capital are very high”.
@StatModeling @ryanmcmaken Europe sub-Reddit just can’t handle the truth about how poor they are!?
17 Apr 2016 Leave a comment
in applied welfare economics, economic history, economics of media and culture, politics - USA Tags: European Union, living standards, rational ignorance, rational irrationality, Reddit
@garethmorgannz gives optimal tax theory a pass once again @JordNZ
17 Apr 2016 Leave a comment
in applied price theory, entrepreneurship, fiscal policy, macroeconomics, politics - New Zealand, public economics Tags: company tax, Gareth Morgan, rational irrationality, taxation and entrepreneurship, taxation and investment, taxation and labour supply, taxation of capital income
The Morgan Foundation gave optimal tax theory a pass in yesterday’s publication about taxes on land and capital. Gareth Morgan is keen on a comprehensive capital tax.
Source: Taxing Wealth & Property – What Works? A Morgan Foundation Report.
This failure to refer to optimal tax theory is despite the Foundation’s strong commitment to evidence-based policy. Any discussion of tax policy that is evidence-based must refer optimal tax theory.
Source: Morgan Foundation, Public Policy Education.
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Americans used to be much more trusting of government
15 Apr 2016 Leave a comment
in constitutional political economy, economics of bureaucracy, income redistribution, politics - USA, Public Choice, rentseeking Tags: rational ignorance, rational irrationality, special interests, voter demographics
One in 3 @realdonaldtrump supporters actually believe he will build the wall
14 Apr 2016 Leave a comment
in politics - USA Tags: 2016 presidential election, economics of immigration, illegal immigration, Mexico, the economics of borders
How the “Daisy” Ad Changed Everything About Political Advertising
14 Apr 2016 Leave a comment
in politics - USA, Public Choice Tags: Attack Ads, economics of advertising, political advertising
I love attack ads. They actually tell you something and bring the contrasts between the candidates into sharp focus.
Put another way, the firm believed that viewers should not be given too much information to put their minds and emotions to work. And Daisy Girl’s DNA has continued to provide instructions for today’s political advertising: Ronald Reagan’s famous 1984 “Bear” spot used the animal to symbolize the Soviet Union without explicitly making the association. In 2004, Bush’s campaign skillfully employed the same technique with a spot that used wolves to symbolize al Qaeda.
Voting is not a purely rational act. As the late journalist Joe McGinnis observed, it’s a “psychological purchase” of a candidate. It’s often no less rational than buying a car or a house. DDB understood that arguing with voters would be a losing proposition. To persuade someone, especially in the political realm, a campaign must target emotions. Voters don’t oppose a candidate because they dislike his or her policies; they often oppose the policies because they dislike the candidate.
Reagan’s optimistic 1984 “Morning in America” spot was a good example of this kind of appeal. So was George H.W. Bush’s dark, fear-inducing “Revolving Door” spot in 1988 that exploited the controversy over a prison furlough program of his Democratic opponent, Michael Dukakis. Bernie Sanders’ “America” spot is a current example. They are all very different ads, but are aimed at generating a non-rational, emotional response.
DDB also believed that giving data and facts was less persuasive than telling a story. The best spots provide an experience. In addition to evoking emotions and not repeating what the viewer already knew, many of the DDB spots from 1964 had a narrative arc to them. A good example in 1964 was a Johnson spot reminding viewers of the many harsh attacks on Goldwater by his former GOP opponents. The gold standard for subsequent spots in this genre may be Bill Clinton’s 60-second “Journey” spot from 1992, in which he touted his small-town American values by recounting his childhood in Hope, Arkansas.
Source: How the “Daisy” Ad Changed Everything About Political Advertising | History | Smithsonian
Equal Pay Day explained
14 Apr 2016 Leave a comment
#EqualPayDay This coupon graphically represents the statistical fairly tale that is being spread today http://t.co/xwQXCrWE4d—
Mark J. Perry (@Mark_J_Perry) April 14, 2015
Picking winners and @stevenljoyce’s repayable grants to 11 more tech start-ups @JordNZ
13 Apr 2016 Leave a comment
in applied price theory, entrepreneurship, industrial organisation, politics - New Zealand, Public Choice, rentseeking, survivor principle Tags: corporate welfare, creative destruction, entrepreneurial alertness, Hollywood economics, industry policy, picking losers, picking winners
Minister for Science and Innovation Steven Joyce picked a few more winners today. Eleven more start-up technology companies are to be funded $450,000 each in repayable loans to commercialise their technology. The loans are from Callaghan Innovation’s incubator network.
To cut a long diatribe short, I find these sums of money rather piddling. I have encountered this corporate welfare program before at a presentation.
My reaction then as is now: by handing out such small grants, some will succeed, some will fail. Importantly, there will never be one big disaster to bring the whole show down. There is political safety in diversification.
This is not the case with, for example, film subsidies. If Sir Peter Jackson and others finally produce a box office bomb, it will be all too glaring that the taxpayers backed a Hollywood loser with hundreds of millions of dollars. $500 million in subsidies in the case of Avatar.
By peppering small sums of money across the economy, there is no similar risk from this repayable grant scheme for the commercialisation of products.
@FairnessNZ NZ leads world in closing the gender pay gap #equalpayday @greencatherine
13 Apr 2016 Leave a comment
in discrimination, economic history, gender, human capital, labour economics, labour supply, politics - Australia, politics - New Zealand, politics - USA, poverty and inequality Tags: Australia, British economy, gender wage gap
4 Lessons for Morgan Foundation on How to Sell the #UBI @JordNZ
13 Apr 2016 Leave a comment
in applied welfare economics, labour economics, labour supply, politics - New Zealand, welfare reform Tags: expressive voting, rational irrationality, universal basic income
![clip_image002[4]](https://utopiayouarestandinginit.com/wp-content/uploads/2016/04/clip_image0024.gif "clip_image002[4]")
Source: Morgan Foundation (12 April 2016) Four Lessons for Labour on How to Sell the UBI.
I will contract out to Geoff Simmons of the Morgan Foundation my reply to the claim yesterday by the Morgan Foundation’s Susan Guthrie that there are no negatives from a Universal Basic income. Simmons said:
With an unconditional basic income, most beneficiaries would be no better off than they are now (in fact sole parents would almost certainly receive a lower benefit).
Single parents are $150 a week worse off and retirees are $50 worse off per week if their current income support were replaced by a Universal Basic Income of $11,000 per adult.
Both were entitled to much more under the current welfare benefit system and New Zealand Superannuation respectively. Unemployment, sickness and invalid beneficiaries are about 5% better off under a Universal Basic Income.
Labour’s background paper described a Universal Basic Income of $11,000 as not enough. Guthrie is even franker yesterday about how inadequate a Universal Basic Income is for the poor:
A basic income policy would provide everyone aged 18 and over with an unconditional, tax free survival-level of income each and every year.
I will contract out to Gareth Morgan (2011) why a Universal Basic Income that provides a “survival-level of income” is not good enough:
Rather than decreeing a minimum wage and discovering the consequences for jobs and top-up payments, let’s agree on what is a minimum income every adult should have in order to live a dignified life and then see what flows from that.
We begin by specifying the income level below which we are not prepared to see anyone having to live.
A survival-level of income and a minimum income on which every adult can live a dignified life are not the same thing.
Gareth Morgan’s universal basic income of $11,000 for adults makes most better off except those for whom the modern welfare state was established to protect.
Most of the evidence against the Universal Basic Income comes from examining the numbers put forward by its proponents such as the Morgan Foundation and its excellent online tool. Brian Easton (2015) put it well when he said:
Many advocates put the UMI forward without doing the sums.
Those who do, find that the required tax rates are horrendous or the minimum income is so low that it is not a viable means of eliminating poverty. Among the latter are New Zealanders Douglas, Gareth Morgan and Keith Rankin.
How to tell if you are a modern progressive – a two-part test by Scott Sumner
13 Apr 2016 Leave a comment
in international economics, labour economics, minimum wage, politics - New Zealand, politics - USA Tags: antiforeign bias, antimarket bias, expressive voting, Leftover Left, living wage, makework bias, rational irrationality
What undergrads and @stevenljoyce need to know about trade @GreenCatherine
12 Apr 2016 Leave a comment
in applied price theory, applied welfare economics, development economics, international economics, job search and matching, labour economics, labour supply, macroeconomics, politics - New Zealand Tags: antiforeign bias, free trade, makework bias, Paul Krugman, protectionism, tariffs, trade policy
Minister for everything Stephen Joyce wrote some nonsense in the paper today about how trade agreements and more exports will mean more jobs:
I would like to make the point that trade access is hugely important for a small country like New Zealand.
Without fair and equal trade access we can’t sell as much of our goods and we get less for them. And that means fewer jobs.
This make-work bias is as bad as those who oppose trade agreements on the grounds of an anti-foreign bias. Trade affects the composition of employment, not the number of jobs. Paul Krugman spent a good part of the 1990s trying to explain that to the general public and public intellectuals.
Utopia, you are standing in it! 
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