jamesz

Franken-regulation

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Greenpeace’s environmental plan has just been released and it says pretty much what you’d expect: be more sustainable. The thing about it that intrigues me is the presence of an emissions trading system, efficiency standards for all energy consuming appliances and legally binding targets for renewable energy usage.

The point of trading systems is to internalise the costs of emissions in the most efficient way by allocating the costs through a market mechanism. Why would you then try to second guess the market by forcing emissions standards and renewable energy targets on people? Read more

Matt Nolan

Political quiz

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We have discussed where we stand on the political spectrum before, but now it seems that there is a quiz that tells us where we stand (ht Kiwiblog). Below I will tell you the results of the different authors here:

Matt: National (83%), United (73%), NZF (64%), ACT (63%), Labour (61%), Progressives (50%), Greens (46%)

Matt Comment: Very surprised with my results – I didn’t think that my views were so close to those of other parties. My main focus was on economic/employment issues along with the environment.

Goonix: ACT (82%), National (62%), UF (55%), NZF (48%), Labour and Greens (35%), Progressive (28%).

Goonix Comment: The quiz results are pretty much bang on for me. The high ACT score demonstrates my broad alignment with libertarian principles while at the same time my fundamental distaste for military action (the primary area that I disagree with ACT on). The rest of the order makes sense and I’m very happy that I’m less than half aligned with NZF/Labour/Greens/Progressives. 🙂

Agnitio: National (72%), UF (71%), ACT (69%), NZF (62%), Labour (55%), Progressive (49%), Greens (40%).

Agnitio Comment: I didn’t know United future stood for antyhing so I’m surprised by by 71% rating with them! Other then that no surprises I guess. Interesting thing about the Greens is I agreed with them 92% on environmental issues yet they still come in on 40%, just shows how crazy I obviously think the rest of their policies are! Bring on the Blue-Green party!

Rauparaha: Labour (66%), United Future (65%), National (61%), Greens (60%), ACT(59%), Progressives (58%), NZ First (46%)

Rauparaha Comment: I seem to have a fairly uninformatively narrow spread. Parties are either too socially conservative for me or too economically prescriptive. It’s nice to see that I at least don’t side with Winston on many things.

goonix

Private prisons: National’s policy and “the proper scope of government”

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Today National released their corrections policy, which would allow the private sector to tender for the management of prisons.

Although not a completely ‘new’ concept for New Zealand (Auckland Central Remand Prison was privately run under the last National Government) it nonetheless raises the issue of when is it appropriate for such services to be ‘contracted out’ rather than provided ‘in-house’ by the government.

Hart, Schleifer and Vishny’s “The Proper Scope of Government: Theory and Application to Prisons” asks the question when should a government provide a service in-house, and when should it contract out provision? (Anyone interested in the full article may be able to locate it here).

The authors’ develop a model for asset ownership (in this instance a prison), which can be owned by the private sector, who contract back to the government, or alternatively can be owned outright by the government.

The central finding of the paper is that the private sector has relatively stronger, but seemingly contradictory, incentives to both reduce costs (driven by a profit motive, which comes at the expense of quality) and increase quality (to get a higher price from the government, who is an ongoing buyer of the service). In this instance the quality of a prison entails order in the prison, amenities that prisoners receive and rehabilitation.
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Matt Nolan

A second recession?

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Or so say economists at Infometrics (a organisation I am involved with 😛 ).

Why should we expect another recession over the first half of 2009 – especially when we are coming out of a drought!

Well one justification could be that households are highly indebted, and the price of that debt is going up – so now households will want to pay some of it off.  When households are paying off debt they can’t consume – a factor that will reduce economic activity.

Discuss 😛

Matt Nolan

Providing a “capital injection” for households?

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It appears that National intends to do just that following this election – providing grants to individuals who lose there job beyond the unemployment benefit, but only for “during the recession”, and only “needs based”.

This is probably one of the most ridiculous ways anyone could try to deal with the current recession – although I guess increasing taxes, slashing spending (especially on the supply side), and then hiding it under the PM’s pillow would we a little sillier.

Lets think about this grant a little – what is National trying to say?  Do they think the unemployment benefit is too low?  That is supported by this quote:

The support plan was designed to help them remain confident and carry them over until they got another job.

If so, why don’t they just increase it, instead of fluffing around with “grant schemes”.  Or do they believe that unemployed people will be worse off during the recession than not in the recession – because that doesn’t make much sense to me.  I thought the cost to households in the recession stemmed from unemployment and lower real wages – being “unemployed” is just as bad in any state.

If National actually wants unemployment benefits to be partially time limited – then introduce that scheme, instead of some fluffing grant. Either they are introducing that policy, or they are trying (unsuccesfully) to sound like they are dealing with the financial crisis.

Overall, what the hell are the parties doing – is any party actually going to try to do what is best for the country in the face of this external shock … didn’t think so 🙁

Matt Nolan

Liverpool 1 Chelsea 0

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This is the year!