@NZGreens say something sensible on global warming @jamespeshaw @GreenpeaceNZ

It is a stretch to say that New Zealand Greens have accepted that adaptation is the only proper response to the threat of global warming.

Nonetheless, their call for a plan for adaptation is an acceptance that more must be done than hoping for the best that a massively expensive international public good will be provided through a climate change treaty.

It is time for the environmental movement to face up to the fact that there never will be an international treaty to restrain carbon emissions.

The practical way to respond to global warming is healthier is wealthier, richer is safer. Faster economic growth creates more resources for resilience and adaptation to a changing environment.

Source: Energy Policy & the Environment Report | Leading Nowhere: The Futility and Farce of Global Climate Negotiations.

Tom Schelling has been involved with the global warming debate since chairing a commission on the subject for President Carter in 1980.

Schelling is an economist who specialises in strategy so he focuses on climate change as a bargaining problem. Schelling drew in his experiences with the negotiation of the Marshall Plan and NATO.

International agreements rarely work if they talk in terms of results. They work better if signatories promise to supply specific inputs – to perform specific actions now. Individual NATO members did not promise to slow the Soviet invasion by 90 minutes if it happened after 1962. NATO members promised to raise and train troops, procure equipment and supplies, and deploy these assets geographically. All of these actions can be observed, estimated and compared quickly.

The Kyoto Protocol commitments were made not about actions but to results that were to be measured after more than a decade and several elections.

Climate treaties should promise to do certain actions now such as invest in R&D and develop carbon taxes that return the revenue as tax cuts. If the carbon tax revenue is fully refunded as tax cuts, less reliable countries, in particular, have an additional incentive to collect the carbon tax properly to keep their budget deficits under control.

As for the chances of a global treaty, Schelling has said:

The Chinese, Indonesians, or Bangladeshis are not going to divert resources from their own development to reduce the greenhouse effect, which is caused by the presence of carbon-based gases in the earth’s atmosphere. This is a prediction, but it is also sound advice. Their best defence against climate change and vulnerability to weather in general is their own development, reducing their reliance on agriculture and other such outdoor livelihoods. Furthermore, they have immediate environmental problems — air and water pollution, poor sanitation, disease — that demand earlier attention.

The costs of global warming to New Zealand are small. For developing countries, their best protection against global warming is rapid economic development through capitalism and freedom.

The latest report from the Intergovernmental Panel on Climate Change’s (IPCC) Working Group II has concluded that global warming of 2.5˚C would cost the equivalent to losing between 0.2-2.0% of annual income.

NZ mode of commuting

Bugger all people commute by bus or train outside of Wellington. Even in Wellington taking the bus or the train has trouble staying well ahead of walking to work.

Source: Ministry of Transport. (2015).  25 years of New Zealand travel: New Zealand household travel 1989–2014. Wellington: Ministry of Transport.

The truth behind NZ wind power @GreenpeaceNZ @GarethMP @RusselNorman

Productivity and the National Living Wage

A brilliant point by @FlipChartRick in the reblog. What sort of single year labour productivity increase is required to cover a UK living wage increase. Basic arithmetic kills.

A 6.6% annual productivity growth would be required to fund a living wage. This will be far above trend and would be required in sectors such as services that are not at all known for rapid productivity growth because of Baumol’s disease.

A subsequent Twitter exchange updated a key chart to include Australia and New Zealand.

Rick's avatarFlip Chart Fairy Tales

The CIPD and the Resolution Foundation are collaborating on a piece of research into the impact of the National Living Wage (NLW). According to their first study over half of the country’s employers expect to be affected by it. Around a third said they would meet the increased cost by improving productivity and 22 percent said they would take lower profits. Only 15 percent said they would lay off workers or slow down recruitment.

That all sounds promising but, as Matt Whittaker points out, the productivity increase needed to cover the cost of the NLW could be pretty steep. As you might expect, there is a strong relationship between rising minimum wages and rising productivity. Most countries in the OECD have not strayed very far from this line of best fit.

Screen Shot 2015-11-20 at 16.17.15In the absence of any productivity growth, the proposed NLW would move some way from the line (the green circle) by 2016 and…

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How Scandinavian Countries Pay for Their Government Spending

@amyadamsMP Justice Michael Kirby on the battered woman’s defence

Source: Osland v R [1998] HCA 75; 197 CLR 316; 159 ALR 170; 73 ALJR 173 (10 December 1998).

@amyadamsMP Bias in the battered women’s syndrome as a defence for murder

Source: Osland v R [1998] HCA 75; 197 CLR 316; 159 ALR 170; 73 ALJR 173 (10 December 1998).

The essence of social justice warriors

Jihadists and the Nisei soldiers

Japanese Americans interned during World War II jumped at the chance to volunteer to fight. They saw it as their last chance to prove their undivided loyalty to their country.

One Japanese father, when saying goodbye to his son, stressed that showing his loyalty to his country, if necessary through the last full measure of devotion was far more important that his returning safely to his family.

The 442nd Combat Regiment Team was the most decorated unit in World War II. Its motto was “Go for Broke”. The 4,000 Nisei soldiers in April 1943 had to be replaced nearly 2.5 times. In total, about 14,000 men served, earning 9,486 Purple Hearts.

Migrants are a cut above regarding initiative and judgement. They pass many of these traits on to their children. These Japanese Americans, both migrants and native born knew that counter-signalling was required. They had to go out of their way to show their loyalty no matter how unfair any suspicions of disloyalty among Japanese Americans might have been at the time.

I am reminded of that counter-signalling by Japanese Americans during the darkest days of World War II when I read the remarks of Julie Anne Genter and Jeremy Corbyn. Both focused their pleas on the need to be inclusive and understanding why people join violent, radical groups. They and the rest of the Twitter Left had nothing to contribute regarding strategies to deter the next attack and disrupt those that are in the planning stage, but that is not new.

The notion that bad behaviour towards minority communities leads to more recruitment to the terrorists is overrated. There will be a few wind-bags who say harsh things after each terrorist attack, but if they cross the line, they will be dealt with by the police and courts in a democracy governed by the rule of law.

Acrimony towards your community following the latest terrorist attacks has little to do with the level of recruitment to these terrorist groups either now or in the past. As Alan Krueger explains:

One of the conclusions from the work of Laurence Iannaccone—whose paper, “The Market for Martyrs,” is supported by my own research—is that it is very difficult to effect change on the supply side. People who are willing to sacrifice themselves for a cause have diverse motivations. Some are motivated by nationalism, some by religious fanaticism, some by historical grievances, and so on. If we address one motivation and thus reduce one source on the supply side, there remain other motivations that will incite other people to terror.

Malcontents join the jihadists today for the same reasons they joined the Red Brigade, the Japanese Red Army Faction and Baader-Meinhof gang in the 1970s and 1980s.

Plenty of young people were attracted to communism in previous generations as a way of sticking it to the man. Now as then economic conditions were good as were political freedoms. Italy, Japan and Germany were all at the peak of recoveries from war. Japanese incomes are doubled in the previous decade. Germany and Italy were rich countries. As Alan Krueger explains:

Despite these pronouncements, however, the available evidence is nearly unanimous in rejecting either material deprivation or inadequate education as important causes of support for terrorism or participation in terrorist activities. Such explanations have been embraced almost entirely on faith, not scientific evidence.

Each generation has its defining oppositional identity. Radical Islam is the oppositional identity of choice for today’s angry young men and women. Mind you, they have to buy Islam for dummies to understand what they’re signing up for.

In previous generations, it was communism, weird Christian sects, eco-terrorism, animal liberationist terrorism and a variety of domestic terrorists of the left and right with conspiratorial motivations. Look at the level of diversity of the angry young men and women on the domestic terrorists list of the FBI. One jihadists when interviewed said that 30 years ago he would probably have become a Communist as his vehicle for venting his frustrations.

There is always an ample supply of troubled and angry people so trying to redress their grievances is overrated as Alan Krueger explains:

…it makes sense to focus on the demand side, such as by degrading terrorist organizations’ financial and technical capabilities, and by vigorously protecting and promoting peaceful means of protest, so there is less demand for pursuing grievances through violent means. Policies intended to dampen the flow of people willing to join terrorist organizations, by contrast, strike me as less likely to succeed.

The current appeal of radical Islam rests on what psychologists call personal significance. The quest for personal significance by these angry young men and women is the desire to matter, to be respected, to be somebody in one’s own eyes and in the eyes of others.

A person’s sense of significance may be lost for many reasons, including economic conditions. The anger can grow out of a sense of disparagement and discrimination; it can come from a sense that one’s brethren in faith are being humiliated and disgraced around the world.

Extremist ideologies, be they communism, fascism or extreme religions are effective in such circumstances because it offers a quick-fix to a perceived loss of significance and an assured way to regain it. It accomplishes this by exploiting primordial instincts for aggression, sex and revenge. MI5’s behavioural science unit found that

“far from being religious zealots, a large number of those involved in terrorism do not practise their faith regularly. Many lack religious literacy and could… be regarded as religious novices.” The analysts concluded that “a well-established religious identity actually protects against violent radicalisation”

Most evidence point to moral outrage, disaffection, peer pressure, the search for a new identity, for a sense of belonging and purpose as drivers of radicalisation. Anthropologist Scott Atran pointed out in testimony to the US Senate in March 2010:

“. . . what inspires the most lethal terrorists in the world today is not so much the Quran or religious teachings as a thrilling cause and call to action that promises glory and esteem in the eyes of friends, and through friends, eternal respect and remembrance in the wider world”. He described wannabe jihadists as “bored, underemployed, overqualified and underwhelmed” young men for whom “jihad is an egalitarian, equal-opportunity employer . . . thrilling, glorious and cool”.

Chris Morris, the writer and director of the 2010 black comedy Four Lions – which satirised the ignorance, incompetence and sheer banality of British Muslim jihadists – said “Terrorism is about ideology, but it’s also about berks”.

@JohnQuiggin on “How New Zealand fell further behind” @FairnessNZ

Leading Australian academic economist John Quiggin has just published an article arguing that New Zealand should not be a policy role model for anything. To quote Quiggin:

For most of the twentieth century, the New Zealand and Australian economies performed almost identically. New Zealand took a somewhat larger hit when Britain entered the European Common Market in the 1970s, but that impact has long since washed out. The real divergence came in the 1980s. Since then, New Zealand’s income per person has fallen 35 per cent behind Australia’s

He used Reserve Bank of New Zealand data going back to 1990, which is common starting point for most Reserve Bank data.

Source: John Quiggin “How New Zealand fell further behind”. Inside Story, 11 November 2015.

If he had taken that chart back to the 1970s and earlier using the Conference Board Total Database, Quiggin would have found that New Zealand economy diverged from Australia in the 1970s, not in the 1980s. His data from the Reserve Bank of New Zealand started at the low point in 1990 – at the end of that divergence that started in 1974. The New Zealand economy was depressed between 1974 and 1992. I label this Great Depression in New Zealand as New Zealand’s Lost Decades.

Source: Computed from OECD Stat Extract and The Conference Board. 2015. The Conference Board Total Economy Database™, May 2015, http://www.conference-board.org/data/economydatabase/

Real GDP PPP per working age New Zealander fell rapidly after 1974 (a 34% drop against trend) when that economy was a heavily regulated, highly taxed economy. This heavily regulated, highly taxed, economically stagnant New Zealand is the good old days in the eyes of the Twitter Left.

Source: Computed from OECD Stat Extract and The Conference Board. 2015. The Conference Board Total Economy Database™, May 2015, http://www.conference-board.org/data/economydatabase/

In the chart above, the base is 1974 which equals 100. A flat-line means annual growth equal to the trend rate of growth in the 20th century for the USA. A falling line means below trend growth; a rising line means above trend rate economic growth per working age Australian or New Zealander.

With the election of a National Party government in 1990 and a massive fiscal consolidation, New Zealand growth rate returned to the previous trend rate of 1.9% in 1992. Ruth Richardson’s horror budget of 1991 was so bad that the what became the Twitter Left called it the “Mother of All Budgets“.

What followed this massive fiscal consolidation where welfare benefits for cut severely was an economic boom that lasted until the GFC.

Source: Income Gap | New Zealand Council of Trade Unions – Te Kauae Kaimahi.

As shown in the chart conveniently compiled by the New Zealand Council of Trade Union, there was 20 years of real wage stagnation until the passage of the Employment Contracts Act in 1991.

Source: Income Gap | New Zealand Council of Trade Unions – Te Kauae Kaimahi with annotations.

What followed the passage of that Act was sustained real wages growth for the first time in two decades and the end of growing inequality under the previously highly taxed, heavy regulated economy that was good old days New Zealand if the Twitter Left is to be believed.

To do this, to paint pre-1984 New Zealand, pre-neoliberal New Zealand as a fairly egalitarian paradise, Max Rashbrooke is an example of that is had to ignore two thirds of the population and the inequalities they suffered:

“New Zealand up until the 1980s was fairly egalitarian, apart from Maori and women, our increasing income gap started in the late 1980s and early 1990s,” says Rashbrooke. “These young club members are the first generation to grow up in a New Zealand really starkly divided by income.”

Racism and patriarchy can sit comfortably with a fairly egalitarian society if you are to believe the vision of the Twitter Left as to their good old days. John Quiggin refers to the period in Australia known as the Menzies Era as part of his golden age of the mixed economy. The Menzies Era was most of the 23 years of uninterrupted conservative party rule between 1949 and 1972. The actual Menzies Era was the period up to 1966 when Liberal Party Prime Minister Sir Robert Menzies retired

The reforms of the 1980s known as Rogernomics stopped the long-term stagnation in real wages that started in about 1974. The reforms of the early 1990s under a National Party government including a massive fiscal consolidation and the passing of the Employment Contracts Act was followed by the resumption of sustained growth in real wages with little interruption since.

This boom after two decades of minimal real economic growth per working age New Zealander benefited everyone. The unemployment rate fell to a record low of 3.5% about 2005. Maori unemployment was at a 20-year low of 8% in 2008. Maori labour force participation rates increased from 45% in the late 1980s to about 62% by the eve of the Global Financial Crisis.

The increase in percentage terms of Maori and Pasifika real household income is much larger than for Pakeha since the economic reforms of the 1980s and 1990s. As Bryan Perry (2015, p. 67) explains when commenting on table D6 sourced by Closer Together Whakatata Mai:

From a longer-term perspective, all groups showed a strong rise from the low point in the mid 1990s through to 2010. In real terms, overall median household income rose 47% from 1994 to 2010: for Maori, the rise was even stronger at 68%, and for Pacific, 77%. These findings for longer- term trends are robust, even though some year on year changes may be less certain. For 2004 to 2010, the respective growth figures were 21%, 31% and 14%.

 

#GeorgeOrwell on @jeremycorbyn #pacifism and #Paris

Source: George Orwell: Pacifism and the War

The minimum wage and poverty

Employment status of sole parents in UK, USA, France, Italy, Australia, Ireland and New Zealand

Despite supposedly having stingy welfare states, both New Zealand and Australia have a lot of sole parents who do not work at all. There is no separate breakdown of full-time and part-time work status in the USA. About 72% of sole parents in the USA either work full-time or part-time.

Source: OECD Family Database.

@nzlabour @NZGreens what do @JohnKey #RonaldReagan have in common @AndrewLittleMP @metiria

Image

Social Security income replacement rates across the OECD

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