Matt Nolan

The elephant in the room: Compulsion

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Compulsory super is being suggested, again.

I agree with Kiwiblog’s first statement that compulsory super is bad policy – but then he states:

However KiwiSaver is close to de facto compulsory as it is opt out, and the subsidies are so great you have to be very poor or very stupid not to take them up.

Serious, what the frik.

It is opt out, because it wants to “change the framing” of saving, in order to see if people have a framing issue with savings.  However, they messed any potential for using this as a test for framing by epically subsidising the scheme – subsidies which are inefficient and generally unfair.

I wouldn’t use the dumb subsidises in Kiwisaver as any sort of argument for compulsion.

Trust me, if we are about to get into a debate on the merits of compulsory superannuation there is going to be a lot of “against” posts on this blog – lets hope we don’t go there.

Update:  An anti-compulsion post on Policy Progress that is worth flicking over.

Matt Nolan

The ultimate policy?

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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!

Matt Nolan

Ridiculous statement

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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.

Matt Nolan

Get the right counterfactual!

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Arnold Kling makes an important point when discussing market failure on Econlog:

Instead, it says that every industry is dysfunctional in its own way. But every industry is dysfunctional.

He points out that this may lead people to the conclusion that:

And in every case, experts wielding the power of the state are presumed to make things better.

Now, to the sheer majority of people this conclusion would seem suspect – which in itself tells us that there is something amiss.  The “something” that is missing is the imperfection of government policy.

Yes markets fail, but the state isn’t able to perfectly correct for such things.  In order to justify intervention, we need to be able to say that the cost of market failure exceeds the costs associated with government intervention.

This raises an interesting issue – if it is up to policy makers to make a judgment call on these costs, and for some reason they believe that their abilities are greater then they are are (say because they don’t face punishment if they fail, and so never have to update their beliefs with regards to their abilities) then we are more likely to get government intervention when it is inappropriate then no intervention when it is appropriate.

That is just a little point to keep in mind – and is probably one of the justifications for having a Treasury department that looks at the quality of spending rather than just balancing the books.

Matt Nolan

Competition for Ecstasy

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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.

Matt Nolan

Housing and “production”

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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.

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