Tags: economics, NZ Initiative, welfare
The biographies of top economists indicate that they were often motivated to study economics in order to be better able to contribute to the common good.
But what is meant by the common good and what policies contribute to it? After all, in general elections, voters are commonly confronted with at least one party advocating higher taxes in order to make New Zealand a better place for New Zealanders – and at least one other party advocating lower taxes in the same cause.
Welfare economics is a branch of economics that explores what might be meant by the common good, and seeks to evaluate economic policies on the basis of their effects on the well-being of members of a community.
As explained previously in the economic ABCs, an insight that has endured since Adam Smith (1776) is that competition, in conjunction with security in person and property, induces even solely self-interested butchers, bakers and the candlestick makers to serve their customers’ interests. Otherwise we freely take our business elsewhere.
During the 20th century, welfare economics formalised this insight into the proposition that stylised competitive processes will produce a zero waste welfare outcome. It is optimal in the sense that no one person’s (self-perceived) welfare can be increased with reducing that of at least one other person (whether such a change is worth doing regardless remains a moot point).
Welfare economics has clarified the many situations in which the same competitive processes will potentially fail to maximise welfare in this sense. These include problems of monopoly, public goods (such as national security and communicable diseases), environmental pollution, income distribution, poverty, malleable preferences and distorting taxes. Economists have formally shown in many of these cases how a well-motivated government might ideally use taxes or regulations to improve general well-being.
Nevertheless, related branches of economics have also illuminated many difficulties that confront government action, including problems of voting behaviour, inadequate information and political and bureaucratic incentives. The UK TV series, Yes, Minister, brilliantly depicts these difficulties. “Doing good” in government is subject to the Law of Unintended Consequences.
What about the welfare state? One of the earliest uses of this term was in the1942 Beveridge Report that ideologically proposed that the state was responsible for individual welfare “from the cradle to the grave”. What followed was a dramatic increase in taxes and social service spending in member countries of the OECD, albeit with significant national variations. Its effects on well-being will long be debated.
Archive for the ‘Uncategorized’ Category
Pilot Zaharie Ahmad Shah probably used Malaysia Airlines flight MH370 to commit mass murder/suicide, according to a book by two Waikato authors.
The captain of MH370 may have even glided the out-of-fuel aircraft to its final end in the southern Indian Ocean and sunk it intact, say Geoff Taylor and Ewan Wilson, authors of Goodnight Malaysian 370 – the truth behind the loss of Flight 370.
The authors suggest Zaharie, who prided himself on his technical expertise and methodical nature, may have got satisfaction out of making the Boeing 777 virtually impossible to find in what they described as “the ultimate post-mortem triumph”.
The book, released on Amazon Kindle on Monday and in hard copy on August 10, was written after extensive research in Malaysia and interviews with family members and friends.
Wilson, a pilot and former chief executive of two airlines, said the book analyses every possible scenario of what could have happened to the ill-fated airliner that left Kuala Lumpur for Beijing at 12.41am on March 8.
“We were able to completely rule out any possibility of catastrophic structural failure, rapid depressurisation, electrical failure, fire or being shot down as possible causes for MH370′s loss,” said Wilson, who also has transport air investigation qualifications.
“They simply couldn’t have happened. Through a process of elimination, we were left with the uncomfortable and very tragic likelihood that Zaharie – because of some personality disorder, depression or emotional breakdown – killed himself and everyone on the aircraft deliberately.”
I have no expertise in this area, but it seems pretty obvious that one of the pilots was responsible.
However Worldtruth.tv reckon they know what happened:
When it was first announced that flight MH-370 disappeared without a trace, there had been voices suggesting that the same plane will be later used in a false flag operation.
Personally, I tried to ignore the speculations thinking that no secret agency could ever conduct such an insanely-obvious operation, expecting that the rest of the world is stupid enough to buy it.
Boy, was I was wrong! …
If the US secret services got possession of the MH-370 jet, then it was a child’s play for them to set it up for a false flag operation suiting their needs. After the story of a passenger jet having been shot down by pro-Russian separatists broke loose, Russia lost a lot of credibility and support due to the US propaganda machine.
Conspiracy nutters are such fun.Tags: airline safety, Malaysian Airlines
Maisie Williams is proving there is no stark contrast between her and her TV character, Arya.
Williams, who plays feisty Arya Stark on the wildly popular TV show Game of Thrones, was refused entry to a business class lounge operated by British Airways.
The 17-year old leapt onto Twitter to criticise the airline, who do not allow people under the age of 18 into the lounge by themselves.
“Denied from the business lounge once again for being under 18 and without an adult… @British_Airways sort your s**t out,” she said.
“I’m not saying I deserve special treatment,” she added.
“Just saying if 16-18 yr olds are grown up enough to travel 5400 miles around the world I’m sure we can handle sitting quietly in the damn lounge.”
In response, British Airways said:
“Hi Maisie. We’re sorry if you were disappointed, lounge guests must be 18 or older. We look forward to welcoming you soon.”
Williams, not content to end it there, continued.
“Yes.. @British_Airways fully understand that, my question is why? Why can we travel alone but not use the lounge? It makes no sense.”
British Airways said the policy was in place due to the complimentary alcohol bar, which could be freely accessed by anyone within the lounge.
That’s silly. They also serve alcohol on board the planes There is a way they could deal with that, by having a section of the lounge alcohol free. Or just to have someone tell a 16 or 17 year old who enters that they can’t use the bar.
Best headline on the issue was Arya Stark adds British Airways to her listNo tag for this post.
Just five to go:
Economics would be a pale imitation of itself without volatility, or at the very least about as stimulating as watching paint dry. Luckily the world is a complicated place, where prices fluctuate for various reasons, and this, for the most part, is a good thing.
On a microeconomic level, producers wouldn’t be able to discover demand if there was no volatility. Volatility is indeed an essential ingredient for commerce to exist, with entrepreneurs engaging in a process of arbitrage between the price at which they buy inputs and the price at which they sell output. Furthermore, there would be no way of allocating scare resources to their most efficient use if we didn’t have price movements to guide the market.
Price changes are also needed to encourage investment in a particular sector. Long-term trends in commodity prices, such as Asia’s growing demand for protein, tell farmers that the investment needed to convert their land to dairy pasture is likely to payoff in the end (though not guaranteed).
Although price fluctuations usefully steer production and investment, this doesn’t mean all types of volatility (or lack thereof) are equally desirable. The effect of politics on markets can stifle or increase volatility completely separate from fundamental price drivers.
International debt markets are a good example. The yield on 5-year Greek government bonds has been trading at a fairly consistent level of just over 4 percent for some time. Meanwhile Argentinian 4-year bonds (the closest comparable security) are trading at 7.6 percent. The difference has almost nothing to do with economic fundamentals, since both countries are in major financial strife.
An investor, who knew nothing about the political support being lent by the European Union, might conclude from the yields that Greece is responsible with its public finances compared to Argentina. In actual fact Greece’s public debt to GDP stands at 161 percent, whereas Argentina’s public debt is equivalent to 42 percent of GDP.
The opposite can also be true. Investors in New Zealand’s listed electricity sector know only too well how volatile share prices have been due to the Labour and Green’s proposal to restructure the market, when in actual fact the fundamentals of the industry haven’t really changed.
To conclude, change, or volatility is a good thing in economics, provided it is based on market fundamentals and not political hot air.
Next week is Welfare!Tags: economics, NZ Initiative
Not seen this before but a great speech by Ashton Kutcher at the Teen Choice Awards last year. School principals should read these words out at school assemblies. The key part:
I believe that opportunity looks a lot like hard work. When I was 13 I had my first job with my Dad carrying shingles up to the roof, and then I got a job washing dishes at a restaurant, and then I got a job in a grocery store deli, and then I got a job in a factory sweeping Cheerio dust off the ground. And I’ve never had a job in my life that I was better than. I was always just lucky to have a job, and every job I had was a stepping stone to my next job and I never quit my job until I had my next job. And so opportunities look a lot like work.
I so absolutely subscribe to that. I’ve appreciated all my jobs. I was a paper boy. I worked in a dairy. I swept floors and emptied bins at Woolworths. I worked on a till. I was a receptionist at a medical centre. I was a kitchen hand. I was a secretary to a group of psychologists. I helped at specimen reception in a medical lab. I was an administrative assistant. Every job has been appreciated, and was an opportunity.Tags: Ashton Kutcher, jobs
Questions for Oral Answer
Questions to Ministers 2.00PM-3.00PM.
- Rt Hon WINSTON PETERS to the Prime Minister: Does he stand by his statement: “We have a plan, and that plan is working for New Zealand.”?
- Hon DAVID CUNLIFFE to the Prime Minister: Does he stand by all his statements on regional development, if so, how many regions of New Zealand now have a lower number of people unemployed according to the Household Labour Force Survey compared to when he took office?
- JAMI-LEE ROSS to the Minister of Finance: What measures has the Government taken to support New Zealand families – particularly through delivering better public services to those most in need?
- METIRIA TUREI to the Prime Minister: Does he stand by all his Government’s policies?
- ALFRED NGARO to the Minister for Social Development: What reports has she received about the progress of the Government’s welfare reforms?
- Hon DAVID PARKER to the Minister of Finance: Has he seen reports that $4 to $5 billion will be sucked out of the economy due to the 35 percent fall in dairy prices since February, and what policy responses, if any, does he intend to make to counteract this?
- LOUISE UPSTON to the Minister of Education: What progress is being made on Better Public Services targets in education?
- JACINDA ARDERN to the Minister of Police: When was the Minister of Police first informed of the misreporting of Police statistics in Counties Manukau, and what did she do with the information when she first received it?
- Hon TAU HENARE to the Minister of Justice: What recent Better Public Services results has she announced for the justice sector?
- CHRIS HIPKINS to the Minister of Education: What evidence does she have that the Government’s Investing in Educational Success programme, which removes teachers and principals from their classrooms for two days a week, is the best way to spend over $359 million in order to raise student achievement?
- PAUL FOSTER-BELL to the Minister of Conservation: What new initiatives has the Government taken in the Rimutakas and other areas to help the recovery of endangered native bird populations?
- Dr KENNEDY GRAHAM to the Minister of Finance: Does he stand by all his statements?
Today Labour are asking about regional development, the fall in dairy prices, police statistics and changes to teaching. The Greens are asking about whether the Prime Minister stands by all his government’s policies, and whether the Minister of Finance stands by all his policies. New Zealand First is asking about New Zealand’s economic outlook.
Patsy of the day goes to Paul Foster-Bell for Question 11: What new initiatives has the Government taken in the Rimutakas and other areas to help the recovery of endangered native bird populations?
Government Bills 3.00PM-6.00PM and 7.30PM-10.00PM.
1. Accounting Infrastructure Reform Bill - Second Reading
2. Land Transport Amendment Bill- Committee Stage
3. Veterans’ Support Bill - Committee Stage
The Accounting Infrastructure Reform Bill is being guided through the house by the Minister of Commerce, Craig Foss. This bill continues the changes begun by the Financial Markets Conduct Act 2013 and the Financial Reporting Act 2013. It proposes amendments to the rules on who may perform statutory audits, to the restrictions on legal form for audit firms, to the requirement for independent assurance of financial statements for certain charities, and to the rules relating to how the New Zealand Institute of Chartered Accountants structures itself.
The Land Transport Amendment Bill is being guided through the house by the Minister of Transport, Gerry Brownlee. This bill seeks to lower the adults legal alcohol limits from 400 micrograms (mcg) of alcohol per litre of breath to 250mcg, and from 80 milligrams (mg) of alcohol per 100 Millilitres (ml) of blood to 50mg.
The Veterans’ Support Bill is being guided through the house by the Minister for Veteran’s Affairs, Michael Woodhouse. This bill proposes a new support scheme for veterans of military service that would replace the current scheme prescribed in the War Pensions Act 1954.
Tags: oral questions, Parliament
Danyl blogs at Dim-Post:
It’s been a shambolic couple of weeks for Labour. They had their congress and launched a major education policy, carefully designed to attack National where they were vulnerable and attract centre voters back to Labour, and they’ve spent every day since then talking about either Moas, or banning cosmetics, or Cunliffe’s ‘man apology’, or changing the burden of proof in rape cases, or Kelvin Davis’ support for the holiday highway, or te reo in schools – with some Labour MPs supporting this and some opposing – ie they’ve been talking about pretty much anything other than the huge new policy they just launched.
That is a good summary. Labour has been in the news almost every day for a fortnight, but on a different issue – and generally a negative one.
Sounds like Labour are finally working this out, as Stuff reports:
Yesterday’s frontbench meeting is understood to have settled on a radical rethink of strategy for the remainder of the campaign, with Labour set to focus on fewer key policies and messages.
This is sensible. What is alarming is that such a common sense approach is thought to be a radical rethink.
But will the party keep to the script?
MPs are also under orders to be more disciplined. Cunliffe is believed to have had words with veteran MP Trevor Mallard about his plan to revive extinct moa, which grabbed headlines on the eve of a Labour Party conference that was supposed to showcase the leader.
Others singled out for criticism for going “off reservation” include Tainui MP Nanaia Mahuta and Te Tai Tokerau candidate Kelvin Davis, who have both taken opposing views to party policy on issues in their areas.
A senior MP said the latest poll ratings were a concern.
“We have to be bloody good at what we do, we’ve got to be very tightly focused and on message.
“We’ve got good policy, got a good campaign plan, we know we’ve got the troops on the ground, we can pull this up.”
There was an acknowledgement that the public was confused by the number of different signals coming from Labour, and that was blamed on “trying to do too much too quickly”.
“Then there’s another level with people saying things that are completely off the script.”
That included Cunliffe himself, for his apology “for being a man” to a Women’s Refuge conference.
But will Labour be disciplined enough. I doubt here. Here is Sue Moroney campaigning for free Moroccan cooking classes:
Cooked Moroccan tonight – wonder why National despise it so much they cut funding to nite classes. Must be the fragrant spices #ForabetterNZ
— Sue Moroney (@suemoroney) July 19, 2014
And it gets better. Sue also wants free Photoshop classes. Presumably for Labour Party staff.
@thekiwicanary When we bring back night classes, the locals where the demand is. Photoshopping could be popular.
— Sue Moroney (@suemoroney) July 19, 2014
Do you really think this is a Labour Party that could achieve surplus and run a balanced budget?Tags: Labour