Matt Nolan

Economist’s pledge

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Primum non nocere, first do no harm.  This is a good pledge for a medical professional, and would be a great pledge for a policy analyst, but it doesn’t make much sense as a pledge from an economist – as we don’t actually make decisions, we frame situations and describe trade-offs.

However, this does not mean that economists do not have some sort of moral obligation associated with their analysis.  In order to cover this off Robin Hanson discusses the “efficiency economist pledge” (ht Robbie A). :

I pledge to be an efficient economist, who helps clients find win-win deals to resolve social conflicts.

Reading the full pledge, it seems that the goal is to use economic advice to provide the client with the knowledge and tools they need to get what they are after.

This is as opposed to a moral principle I have heard discussed by Eric Crampton which pertains specifically to doing work for government.  Namely that when there is a difference between the social optimality of a policy and the policy that suit policy wonks, it is not right to provide advice that specifically benefits your client at a cost to broader society. [Do I have this right Eric?] Update:  Eric lays out his view more fully here.

If I have described Eric’s additional moral requirement appropriately, then my main counter to this has always been “it isn’t the economists fault that they are taking the incentives involved, it is just an illustration of government failure”.  The illustration should be made more apparent IMO, but I do not blame analysts for acting in their self interest.

The Hand

All Whites vs Australia

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Tonight at 9.30pm (NZ time) the All Whites will take on Australia over in Melbourne.  The squad is named here (expected Aussie squad here).

Everyone at TVHE is very excited that the All Whites have qualified for the World Cup, and also pumped for the match against the Aussies tonight.  So pumped that Nolan put down $5 on NZ to win (at 10:1).

So good luck boys, we are looking forward to watching you get amongst.

Update:  Feel free to go into comments and discuss your fantasy squad for today 😉 .  Also Yellow Fever discussion is here (pg 21 is where we get more into game day).

Update:  All Whites lost 2-1.  Up 1-0 at half-time.  Great performance boys.  And seriously, our first team looks pretty good – its going to be a great World Cup 🙂

Matt Nolan

Taxonomy changes to rebalance New Zealand

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In a shocking report on Scoop (ht GLS) I heard the following:

A recent report revealed New Zealand has some of the lowest taxonomy rates in the OECD.

:O

If we are going to catch Australia in taxonomy rates, we need to have higher taxonomy rates!

Bill English also made the following excellent point regarding spillovers from taxonomy adjustment:

You’ll have to wait until Budget day, but I can say taxonomists not having to faff about with the difference between Archaebacteria and Eubacteria would boost productivity as much as any other change we’ll make.

Agree 100% …

Matt Nolan

Labour’s alternative budget

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Ok, I haven’t seen an actual alternative budget – but given they are the main opposition I’ll turn what they have said into one, so that I can give them the same airtime as others.  We have already discussed Act, Libertarians, and National – and I aim to get something on the Greens out by week end.

So judging by this speech here, post Budget

Labour will take a different approach
to savings,
to exports
to foreign investment,
to monetary policy, and
to support for research and development, and innovation and skills.

How are these policies different – and what trade-offs are involved.  That is what we will discuss here.

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goonix

Govt considering SOE sales

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Bill English has been quoted as saying the Government is considering the sale of certain state owned enterprises in its next term. Apparently the Government are currently preparing an “investment statement” that will outline what it considers possible.

Currently a significant portion of Government capital is tied up in the SOEs, around $40 billion dollars (around four times the size of the largest projected Government deficit).

SOEs perform, as a class, very poorly. Recent reports suggest that in the last financial year they returned 1.5% on equity. This is below the risk free rate of return.

Such poor allocation has real costs to the New Zealand economy. The opportunity cost of maintaining investment in such low returning assets (as a whole) effectively amounts to taxpayer resources being wasted.

It is therefore very worthwhile that the Government looks at its investments and considers whether SOEs might be better placed in the private sector’s hands.

Matt Nolan

Budget 2010

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Apologises for the EPIC delay in doing this.  I wanted to have comments up by 6 (it was not out till nearly 10), but a meeting ran overtime, work servers went down, and my trip home from work on this was slower than expected. [ed. And the site went down …]

First here are links to other round up post round the country as of now:  Offsetting Behaviour, The Standard, Red Alert, Kiwiblog (*,*,*,*), Dim Post, NZIER, Infometrics, Rates Blog (*,*,round up post!), NBR, Not PC (*), Public Address, Education Directions (*,*,*).

So far we’ve done a review of the ACT and Libertarian alternative budgets.  Now it is time for the actual Budget, and then if we see any other alternative budgets we will have a look of them too 🙂  When reading all these reviews, keep in mind that I am aiming to be critical – I am putting up trade-offs so I will NEVER say “that is a good policy”.  I am not trying to say I hate any of these groups by doing this, I am just trying to describe other ways to look at policies to give them context.  If you keep that in mind when looking, then hopefully it will be useful.

Ok, so let me roll with my personal opinions – hopefully supported by a sound economic framework 😉

Also note that this is a first brush on what seem to be the main issues.  Over the next few days I plan to get down into more specific policies – and I will see if I can discuss some things through the weekend.

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