The ultimate policy?

If there was a way that the government could:

  1. Reduce government debt levels,
  2. Cut income taxes,
  3. Destroy the Green party and eat up sections of Labour support.

Would it want to do it?  I suspect so.

As a result, why aren’t they legalising and taxing drugs?

Note:  None of these provide particularly good reasons for legalisation in my book – I am more pro-legalisation on choice grounds.  However, better to do the right thing for the wrong reason then keep doing the wrong thing right!

Ridiculous statement

So Chris Barton in the Herald stated:

Those who call for a cost-benefit analysis of the (broadband) plan don’t understand the internet

O.o

It is obvious from this statement that Chris Barton doesn’t understand what a cost-benefit analysis is, and just wants fast internet so badly that he is willing to ignore any points against such a scheme.

His implicit point is that there are benefits in the future, and there is uncertainty around how these benefit will pan out – while this is true, it makes a proper cost-benefit analysis more important, not less.  Bleh.

Competition for Ecstasy

Via Dim Post there is an article from the Herald discussing competition in the illicit drug market.  The main point is:

Ecstasy dealers are competing “like Pepsi and Coke” to sell their drug

Now, after reading this statement my first reaction was “good!”

Why?  Well, if their is competition in the industry it will improve quality – ensuring that the current information problem in the market, that leads to a lower quality and possibly more damaging product, are being circumvented by the competitive process!

Of course, the article doesn’t take this tack.  It says something about blah blah blah, people are taking drugs, blah blah blah, drugs are bad, blah blah blah, talking about drugs is immoral, blah – I don’t know, I sort of got bored of the article once I realised it was talking a load of sh*t.

So, in conclusion, competition for the provision of drugs is good – long live sites where people can compare experiences and provide information for future potential drug takers, so that they are fully informed and can make a sensible decision.  Furthermore, long live competition in the industry – ensuring that we get a more efficient allocation of drugs in society.

Housing and “production”

So, a while back a post on housing and production got criticised, but I didn’t notice.  I shall respond now, as I need something to post on. (I would also note that there are 1 million brilliant comments in the initial post – good stuff guys.)

In a strict sense building a house doesn’t increase measured productivity – however, when making my statement that was never my claim.  My claim was that housing was productive – my intent was to show that a house could be seen as investment as it creates a stream of value.

Now, I was obviously far too unclear, and I’ll admit that for sure – so slap me down and take a point off me.

However, I was so loose with my terminology because I’m lazy … but also because I see the “focus on productivity” as inherently silly.  We don’t value the “productivity”, we don’t go around doing things with “productivity” per see – I would love higher productivity, as it means I get more stuff for the same inputs.  But I would love it because I get more stuff, not because I get more productivity statistic.

And this is the essential issue that is missed when looking at housing.

Read more

Compulsory taxi cameras: Crampton translates

Eric Crampton translates a NBR article on the introduction of compulsory cameras in taxis.  My favourite bit:

“In-vehicle cameras are widely supported among the industry as a way of preventing competition by new rivals, and while drivers can never be 100 percent safe, these measures will make a significant reduction to the risks competition that drivers face.”

I cannot understand how the government convinced itself this was good regulation – I suspect the industry told them that it would “look like” they were saving lives, a political win, and so they just went for it.  Fail.

A note on GDP

Anti-Dismal points out the fact that Colin James seems to have run into a little confusion around the GDP statistics.  Now, I can understand this confusion AND I agree that we need to think more sensibly about what income is before we run around making comparisons.  In this sense, all I want to point out is how the confusion came about.

Now it is true, Australia releases production, expenditure, and income measures of GDP.  However, I would note that they set the chain volume measure of these indicators equal with a “statistical discrepancy” figure.

In New Zealand, our statistics department releases production and expenditure GDP, but does not force them to be equal.  They state that they believe the production figure is more reliable overall – and that is why people discuss this figure.

Of course, GDP misses many “non-market” forms of value-added, it is a measure of “production” so misses the fact that a higher terms of trade increases NZ’s implicit income, furtermore it misses “international transfers” which are highly negative for an indebted nation like NZ.

Furthermore, we have to ask why we are looking at the figures.  Is our concern that someone in the same role gets more $$$ in Aussie and so has the incentive to move over there?  If that is the case, why not just compare the PPP adjusted wages for those professions?  Simply looking at GDP misses the fact that our two economies produce different things, and hire different types of labour.

I am not a fan of cross-country comparisons at this type of aggregate level, and I think we should be thinking carefully a little more carefully about what our concerns are regarding the NZ economy directly – rather than focusing on the arbitrary target of our relative living standards compared to other nations.  I realise these relative standards might give us some information on “what we could do” – but unless we are careful when looking at the NZ economy they will lead us towards policy mistakes.