Pandering to Economist
July 14th, 2008 at 12:47 pm by David FarrarGreg Mankiw writes in the NY Times about a small special interest group – economists. He give a list of eight policies that he says would appeal to the vast majority of economists.
- Support free trade
- Oppose farm subsidies
- Leave oil companies and speculators alone
- Tax the use of energy
- Raise the retirement age
- Invite more skilled immigrants
- Liberalize drug policy
- Raise funds for economic research
I support pretty much all of the above. It is of course a matter of degree. We have GST on energy and petrol excise tax to fund the roads and the ETS will be a tax on energy, so I’m not saying you want even more taxes.
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July 14th, 2008 at 12:57 pm
I wouldn’t praise economists too much… last time we had an economist in charge here in Kiwiland it was Bill Rowling and he was a flaming disaster.
Vote:July 14th, 2008 at 12:57 pm
And the last thing we need with dope-fuelled crime running rampant on the streets of South Auckland is a liberalised drug policy!
Vote:July 14th, 2008 at 1:09 pm
we all play economist at times.
like everything there are good ones and bad ones
I vote for 1 2 6 & 7
Vote:July 14th, 2008 at 1:44 pm
I also support pretty much all of the above. Not worried about retirement age – prefer people being able to choose when they want to retire (i.e. I’d like to keep working rather than have to compulsorily stop at 65 – so many interesting things to do, balanced with enjoying travel, family). Otherwise happy with all of the above (yes i’m a social liberal and mostly fiscal conservative).
I do worry about the limited amount of economic research done in NZ. We have strong advocacy groups for research into other areas, but oddly economists are one group who don’t seem to seek funding for research, despite being the science that came up with the term “rent seeking”.
Who knows what would happen if roger nome was invited to work with a team of skilled economists…
Vote:July 14th, 2008 at 1:48 pm
pushmepullu
Yes yes, there are no drugs available at the moment are there because they are illegal. Nobody gets off their head on “P” and beats the shit out of people do they…NO of course not because it’s illegal and therefore not available…
HELLO – EARTH to pushmepullu….
Vote:July 14th, 2008 at 2:12 pm
WWHS, in my ignorance I don’t know what an economist would need in terms of research funding – scientists need bloody expensive machines and materials, with occasional travel for field work. What would an economist need beyond access to research sources, statistics etc and a computer?
Vote:July 14th, 2008 at 2:33 pm
Those first two can be bloody expensive. But note that “research funding” would include the economist’s salary.
Vote:July 14th, 2008 at 2:39 pm
Indeed pete, however if one is *currently* an economist, then presumably one already has access to these resources through the institution one is affiliated with? Can never have enough databases though…
Vote:July 14th, 2008 at 2:42 pm
Those first two can be bloody expensive. But note that “research funding” would include the economist’s salary.
And research assistants. Trawling through collected data can be the work of a whole team for many months, depending on the type and quantity.
Vote:July 14th, 2008 at 2:52 pm
but not as expensive as a new clustering-algorithm-mass-spectrometer-confibulator-flux-inducer
Vote:July 14th, 2008 at 2:56 pm
Use proposal 6 to invite more skilled economists thus increasing competition in the sector and driving down costs, so we do not need to pay for proposal 8.
Vote:July 14th, 2008 at 2:59 pm
DPF:
” We have GST on energy and petrol excise tax to fund the roads and the ETS will be a tax on energy, so I’m not saying you want even more taxes.”
You may be out of step with the leading economists on this issue then. i.e. we have the fourth lowest tax on petrol out of 28 OECD countries. Also, take this
discussion between two world-leading energy economists on the Wall Street Journal’s website.
Despite being obviously pro free-market, they both agree that peak oil is real and that we need to combat it through incrementally increasing energy taxes in order to cause price-led demand reduction.
This from Robert K. Kaufmann, full professor….. His model of the world oil market is part of Project LINK, a global econometric model that was founded by the Nobel Laureate Lawrence Klein and now supported by the United Nations.
And now James D. Hamilton, professor of economics. He has written extensively on oil price shocks and is the author of “Time Series Analysis,” the leading graduate text on economic forecasting.
Vote:July 14th, 2008 at 3:03 pm
Roger, you’ve been called on that before too. Last time it didn’t say what you claimed it did, it probably doesn’t this time either. You need some new sources.
Vote:July 14th, 2008 at 3:05 pm
Paul – I’m just quoting the conclusions of each economist. They say other things as well, but surely it’s their conclusions that matter. If you don’t think so, read the whole discussion thread.
Vote:July 14th, 2008 at 3:25 pm
Yes, let’s do number 8.
Then we can have more free-trading, farm-hating, oil-subsidized, tax-mad, granny-bashing, immigrant, drug-crazed economists!
Yay.
Vote:July 14th, 2008 at 3:43 pm
Surely there is an ‘economics’ dimension to number 7 as well – if nothing more than cost of enforcing drugs policies, harm done by those on drugs, etc.
Vote:July 14th, 2008 at 3:57 pm
stephen
Number 7: For a start the cost of drugs would fall dramatically, if Joe Blogs was allowed to grow a few dope plants for personal use in their own home then there would be a massive decrease in the cash flowing to gangs and other organised crime.
Dope is no harder than Tomatoes to grow, a lot more expensive because it’s illegal.
Vote:July 14th, 2008 at 4:36 pm
burt: Cannabis is not a benign drug. It is strongly implicated in the development of psychosis, heart disease and lung disease. Legalizing it would see a rapid uptake; bordering on the frequency of use of tobacco and alcohol with similar devastating health results. In addition, there is recent hard medical evidence that use of cannabis can lead to hard drug use, despite the protestations of the greens. This means it is highly likely that the gangs will simply move up the drug chain and deal in the harder drugs as their “market matures” (as our economic friends would say).
Vote:July 14th, 2008 at 4:47 pm
Last year there was a very interesting UK report published into the harm caused by different types of drugs. See link:
http://www.medicalnewstoday.com/articles/65988.php
The measurement of “harm” included:
(a) physical impact on user
(b) tendency to induce dependence and
(c) family, community and social costs
Interestingly, the study included tobacco and alcohol and in fact ranked them higher (on the harm index) than some other illegal drugs such as cannabis, ecstasy and LSD. Which begs the question – do all our drug laws stem from a principled, rational and consistent basis? And why has the Law Commission excluded tobacco and alcohol from its current review of the Misuse of Drugs Act?
Vote:July 14th, 2008 at 4:50 pm
MacDoctor
I’m not going to dispute the claims you have made, many studies have been done and each side take their own conclusions to fit their own agenda. Particularly in the area of causal or correlated to psychosis the debate rages and each side constantly claims victory – and on we go.
However the point is – it is out there already, it is widely used in our society and prohibition simply puts the cost up and creates rich people out of law breakers. Stamp it out 100% sure give it a go – hasn’t be possible yet has it, anywhere, ever. So should we continue to spend millions fighting a battle in a way that we cannot win?
Vote:July 14th, 2008 at 4:55 pm
These days, though, it is not predictable at all what someone who is an “Economist” will actually support……….a good proportion of them are income-redistributing Marxists………it is possible to get a Uni degree in Economics these days without getting your head around the overwhelming superiority in practice of free markets at all………
Vote:July 14th, 2008 at 7:13 pm
“roger nome (3690) says
DPF:
” We have GST on energy and petrol excise tax to fund the roads and the ETS will be a tax on energy, so I’m not saying you want even more taxes.”
You may be out of step with the leading economists on this issue then. i.e. we have the fourth lowest tax on petrol out of 28 OECD countries.”
Actually DPF is right here. While its true that the use of Pigovian taxes is supported by many economists, the size of said taxes is still an issue. And it is possible that current taxes are larger than environmental externalities would require. Recently the Institute for Fiscal Studies in the UK has argued in a report that “The authors note that road fuel duty is much higher in the UK than the environmental cost of vehicle emissions would appear to justify.” So its not clear what the size of the optimal Pigovian tax is, and thus DPF has a point.
Vote:July 14th, 2008 at 8:47 pm
“And why has the Law Commission excluded tobacco and alcohol from its current review of the Misuse of Drugs Act?”
Damn good point. Wonder what ACT’s view on all this is..?
On no.5, that aspiring economist Don Brash had something fairly innovative…anyone remember?
Vote:July 14th, 2008 at 9:58 pm
MacDoctor, simple for me.
1. Noone anywhere has been successful in banning cannabis
2. Cannabis has many bad side effects, but so do tobacco and alcohol. I don’t believe the impacts on those who abuse it are worse than tobacco and alcohol are for abusers
3. I don’t believe it is really a gateway drug, any more than alcohol is a gateway drug (ooh look, all those cocaine addicts used to drink alcohol)
4. Making it illegal forces those who do use it to associate with criminals. This means that:
a) they now have an easy path to buy harder drugs
b) when they run out of money the criminals have all sorts of suggestions on how they might get more money
5. Making it illegal pushes up the prices
6. Making it illegal creates profits for criminals
7. Making it illegal avoids us taxing it, so it cannot fund its own health costs like alcohol and tobacco do
8. Making it illegal makes it hard to have a rational public health discussion about it – like we have about alcohol and tobacco
9. Making it illegal makes all the users into criminals
I remember reading an article in the Economist, the money quote was from a journalist who said he knew the battle against cannabis was lost the day he went to a nice middle class dinner party and was offered cannabis or alcohol. The party was at the local chief of police’s house.
My view is that we’ve tried prohibition, it has comprehensively failed. It hasn’t reduced usage, and has all the downsides I listed above. Sure, legalisation (or even decriminalisation) probably wouldn’t reduce usage either, but it sure as hell would get rid of all those negatives.
Vote:July 15th, 2008 at 8:30 am
Yes yes, there are no drugs available at the moment are there because they are illegal. Nobody gets off their head on “P” and beats the shit out of people do they…NO of course not because it’s illegal and therefore not available…
HELLO – EARTH to pushmepullu….
Oh yes burt you are quite right. And since people still get murdered despite the fact it is illegal I guess that should be legal too right?
Vote:July 15th, 2008 at 8:48 am
interesting, which of these does labour currently support?
1. Support free trade – YES
2. Oppose farm subsidies – YES
3. Leave oil companies and speculators alone – YES
4. Tax the use of energy – YES
5. Raise the retirement age -YES
6. Invite more skilled immigrants – YES (KINDOF, RAISES THE BAR RECENTLY)
7. Liberalize drug policy – NO
8. Raise funds for economic research – NO
Liberal left?
Vote:July 15th, 2008 at 9:06 am
Good point expat. ‘Yes’ on no.5 though??? News to me.
The left are a hell of a lot more liberal than the left (or right) were 20 years ago thats for sure. Or ‘neo-liberal’, perhaps.
Vote:July 15th, 2008 at 10:19 am
I’d agree with expat’s view.
And no to more economic research. There is plenty of it out there if you know where to look. No doubt economists would more of it, as we would all like more work in our chosen field of endevour.
Vote:July 16th, 2008 at 2:13 am
I’d have to disagree with this point. Why would you want to support yet more big State taxation? In the UK governments of all persuasions have used “road fuel duty” as a convenient way of raising additional revenue which is then wasted on pet projects and wasteful public spending. Far better to keep taxes low and reduce the size for the State.
Suffice to say that AGW is a con and you should not be taxing people for problems that don’t exist but creates problems of opportunity cost in terms of changed behavior that would not occur in an optimal efficient free market.
Vote:July 16th, 2008 at 8:24 am
You can’t think of even *one* other reason to reduce energy consumption? What if the money was recycled back in to say, insulating people’s homes?
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