OK, Nordic billionaire population sizes might be small, but plenty more billionaires make their own money in neoliberal USA than in Bernie Sanders’ Utopia
@BernieSanders how did Danish, Swedish, Finnish & Norwegian billionaires make their money?
25 Feb 2016 Leave a comment
in economic history, entrepreneurship, industrial organisation, politics - USA, survivor principle Tags: 2016 presidential election, billionaires, Denmark, entrepreneurial alertness, Finland, inherited wealth, Norway, superstar wages, superstars, Sweden
@GarethMP proves the case for privatisation when arguing against privatisation
24 Feb 2016 Leave a comment
in applied price theory, comparative institutional analysis, economics of bureaucracy, industrial organisation, politics - New Zealand, Public Choice, public economics Tags: anti-market bias, New Zealand Greens, privatisation, rational irrationality, state owned enterprises
Green MP Gareth Hughes today nailed the case as to why governments should never run businesses. Too many MPs simply do not understand what dividends represent and what the profits from asset sales represent.
Hughes was reported today saying that taxpayers lost nearly $1 billion in dividends since the recent privatisations of power companies. He is the Green party spokesman on state owned enterprises.
Source: Asset sales cost hits $1 billion | Green Party of Aotearoa New Zealand.
Does the Green Party understand that an asset sells for a price equal to its risk-adjusted discounted net present value of the stream of dividends. When you sell a financial asset, you cash out the net present value of the stream of dividends that might have come from those assets.
The Greens, who are prissy about government transparency and dishonesty of their opponents, did not mention the $4.7 billion in revenue from the asset sale. Taxpayers now receiving more in dividends as a part owner of the privatised power companies than they did as a full owner.
Hughes had the cheek to complain about the politicisation of those privatisations such as favourable terms for small share buyers. That inability of governments to even sell an asset competently is a strong reason why governments should never run businesses in the first place.
If an asset cannot be sold in the full light of day – a major issue in an election campaign and a referendum – without the sale price that is politicised, what is the chance of good management of any state-owned enterprise when it is not the central focus of opposition scrutiny?
It is been many years since dividends from the state-owned enterprise portfolio has been a net positive cash flow for the taxpayer, as the chart below shows.
Source: New Zealand Treasury – data released under the Official Information Act.
KiwiRail and Solid Energy gobbled up whatever dividends came out of the power companies. Aside from power companies, state-owned enterprises not really offer much in the way of dividends to the taxpayer as the chart again shows.
Megan McArdle’s iron law of commentary on refugee policy @GreenCatherine
24 Feb 2016 Leave a comment
in Economics of international refugee law, politics - Australia, politics - New Zealand, politics - USA Tags: asylum seekers, cognitive psychology, psychology of persuasion, refugee policy
More on honest @BernieSanders and his voodoo economics
24 Feb 2016 Leave a comment
in economic growth, economic history, macroeconomics, politics - USA Tags: 2016 presidential election, grates, left-wing populists, Paul Krugman, quackery, rational irrationality
Think Again: The Green Economy @janlogie @GarethMP
23 Feb 2016 Leave a comment
in applied welfare economics, energy economics, environmental economics, politics - New Zealand, politics - USA, Public Choice, resource economics Tags: climate alarmism, green economy, green rent seeking
Source: Matthew Kahn (2009) Think Again: The Green Economy | Foreign Policy
Edward Prescott and @BernieSanders compared
23 Feb 2016 Leave a comment
in applied price theory, economic growth, fiscal policy, macroeconomics, politics - USA
https://twitter.com/TheNewDeal/status/696864555658539008
As a contrast against the Bernie Sanders tax-and-spend high-growth plan, the Edward Prescott plan is:
- mandatory savings for retirement;
- Eliminate capital income taxes;
- Broaden tax base and lower the marginal tax rate;
- Phased-in reforms so all birth-year cohorts are made better off;
- Left welfare programs and local public good shares the same; and
- Savings not part of taxable income, saving withdrawals part of taxable income – with these changes U.S. income tax would be a consumption tax.
Source: Edward C. Prescott – Importance of Good Governance for Economic Prosperity.
The difference between the Prescott and Sanders plans is Prescott delivers high growth through massive supply-side reforms that include the abolition of taxes on income from capital, mandatory savings for retirement along with much lower marginal tax rates.
The Sanders plan argues that if you tax people a lot more, there is more growth, more investment, more innovation and entrepreneurship and greater labour supply. There is no historical precedent for that as an outcome from higher taxes.
In the case of Prescott, the disagreement is over how large are his growth dividends. In the case of the Sanders band, only one economist agrees that his plan will increase growth. Despite that, he is still voting for Hillary Clinton.
@NZGreens @nzlabour @uklabour @berniesanders bite a gift horse in the mouth when complaining about the ignorance of the average voter
23 Feb 2016 Leave a comment
in applied price theory, economic history, economics of information, politics - New Zealand, Public Choice Tags: anti-foreign bias, anti-market bias, Bryan Caplan, Deirdre McCloskey, make-work bias, New Zealand Greens, New Zealand Labour, pessimism bias, rational ignorance, rational irrationality, votor demographics
Fascinating. Yawning chasm between why Labour members think they lost and why voters think they did. From @thetimes http://t.co/MvhZYI2CTr—
Joe Watts (@JoeWatts_) July 23, 2015
Left-wingers do whinge about voters not understanding; about how if only the voters understood better their arguments than they do now. The Left thinks voters just keep getting it wrong.
They do not know how lucky they are. Rational ignorance and rational irrationality are a rich harvest for the policies of Labour and the Greens.
Most of the policies of Labour and the Greens are premised on cultivating the rational irrationalities of voters. These lead to Bryan Caplan’s pessimism bias, an anti-market bias, an anti-foreign bias and make-work bias:
The evidence—most notably, the results of the 1996 Survey of Americans and Economists on the Economy—shows that the general public’s views on economics not only are different from those of professional economists but are less accurate, and in predictable ways.
The public really does generally hold, for starters, that prices are not governed by supply and demand, that protectionism helps the economy, that saving labour is a bad idea, and that living standards are falling.
Politicians mindful of re-election must pander to these four biases.
Fortunately, for the New Zealand Labour Party and the Green Party of Aotearoa New Zealand, voters have no rational reason to correct these four biases. Voters are rationally irrational. As each individual counts so little, why spend any time correcting biased political beliefs?
Anti-market bias: The tendency to underestimate the benefits of the market mechanism. The typical voter equates market phenomena such as profitability and interest as examples of unbridled monetary confiscations by ‘greedy’ businesses. This biased against the market, despite all its successes, is a rich field to till for both Labour and the Greens
Anti-foreign bias: The tendency to underestimate the economic benefits of interaction with foreigners. This antagonism towards such trends as outsourcing employment overseas, or selling raw materials to faraway traders, is reminiscent of the mercantilism Adam Smith so brilliantly demolished but it still lives on today in the hearts of the voting citizenry. Labour and the Greens play to that bias shamelessly.
Make-work bias: The tendency to underestimate the economic benefits from conserving labour. Those who look to the visible face of job losses overlook the job gains (often by those who lost their jobs) to be made tomorrow in emerging industries. The Greens and Labour are sure-fire enemies of creative destruction.
Pessimistic bias: The tendency to overestimate the severity of economic problems, and to underestimate the recent past, present and future performance of the economy. In The Progress Paradox (2003), Gregg Easterbrook ridicules abundance denial:
Our forebears, who worked and sacrificed tirelessly in the hopes their descendants would someday be free, comfortable, healthy, and educated, might be dismayed to observe how acidly we deny we now are these things.
Many average voters seem to feel that Malthus was correct in diagnosing the allegedly poor prospects for the market economy.
Where would the voting base of the Greens be without a pessimism bias? They are professional pessimists and doomsday prophets from their earliest days. Labour assumes working class Tories are dupes of what is left of fading media barons such as Rupert Murdoch.
Tax receipts by source as % of US GDP since 1934
23 Feb 2016 Leave a comment
in economic history, politics - USA, public economics Tags: company taxes, taxation and entrepreneurship, taxation and investment, taxation and labour supply, World War II
Quiz question: spot the Reagan revolution?
Source: The President’s Budget for Fiscal Year 2017, Historical Tables | The White House, table 2.3.
Charges following fatal and serious injury New Zealand police crashes, 2003 – 2008
23 Feb 2016 Leave a comment
in economics of crime, law and economics, politics - New Zealand Tags: criminal deterrence, law and order, police chases, police killings, road safety
Source: Rodney Hide, “Pursuit culture skews police priorities”, National Business Review, 19 February 2016, p.28.
The distributional impact of alternative energy incentives
23 Feb 2016 Leave a comment
in energy economics, environmental economics, fiscal policy, politics - USA, public economics, rentseeking
Note from @paulkrugman to @BernieSanders @JeremyCorbyn and their supporters
23 Feb 2016 Leave a comment
in applied price theory, comparative institutional analysis, constitutional political economy, economic history, economics of media and culture, economics of regulation, labour economics, macroeconomics, Marxist economics, politics - USA Tags: 2016 presidential election, antiforeign bias, antimarket bias, British politics, Leftover Left, make-work bias, rational ignorance, rational irrationality, renegade Left, Twitter left
@berniesanders If Denmark were your home instead of US you would
22 Feb 2016 Leave a comment
in applied welfare economics, politics - USA
Source: Compare The United States To Denmark.
If New Zealand were your home instead of The US you would
22 Feb 2016 Leave a comment
in applied welfare economics, politics - New Zealand
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