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Comments on: Green’s Investment Bank http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/ The Visible Hand in Economics Sun, 18 May 2014 21:25:49 +0000 hourly 1 https://wordpress.org/?v=6.9.4 By: National’s not alternative budget: Budget 2014 | The Dismal Science http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43183 Sun, 18 May 2014 21:25:49 +0000 http://www.tvhe.co.nz/?p=11379#comment-43183 […] the Labour and Greens alternative budgets were focused on industrial subsides (the “Green energy bank” is a […]

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By: Budget 2014 | The Dismal Science http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43174 Thu, 15 May 2014 22:17:43 +0000 http://www.tvhe.co.nz/?p=11379#comment-43174 […] off alternative-budget, election-manifesto announcements from ACT, Labour, and the Greens. It would say that ACT fails on Point 3, and Labour on Point 2. I fully expect to see all the […]

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By: National’s not alternative budget: Budget 2014 http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43161 Thu, 15 May 2014 07:39:40 +0000 http://www.tvhe.co.nz/?p=11379#comment-43161 […] the Labour and Greens alternative budgets were focused on industrial subsides (the “Green energy bank” is a […]

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By: The other Neil http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43151 Wed, 14 May 2014 07:34:00 +0000 http://www.tvhe.co.nz/?p=11379#comment-43151 In reply to Matt Nolan.

I read the ‘Policy’ again. Apparently they are putting up fuel taxes to help fund this, so they will make us all poorer to make us ‘better off’.

They quote The Clean Energy Finance Corporation as earning ~3% over its cost of funds. This completely ignores the required rate of return for the type of early stage high risk investment. On this basis the government should own everything. I guess that is part of their plan.

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By: Miguel Sanchez http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43141 Tue, 13 May 2014 09:25:00 +0000 http://www.tvhe.co.nz/?p=11379#comment-43141 In reply to Paul Walker.

Apparently they are. http://www.nzherald.co.nz/element-magazine/news/article.cfm?c_id=1503340&objectid=11211745

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By: Matt Nolan http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43140 Tue, 13 May 2014 09:01:00 +0000 http://www.tvhe.co.nz/?p=11379#comment-43140 In reply to Jim Rose.

No idea, there really isn’t enough detail in this policy to tell what is going on – and the justification that “other countries did it, and the money was used” isn’t particularly compelling.

So far, none of the parties have really been particularly impressive – at least they have been relatively restrained.

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By: Jim Rose http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43139 Tue, 13 May 2014 08:51:00 +0000 http://www.tvhe.co.nz/?p=11379#comment-43139 What special insight do bureaucrats and politicians have as entrepreneurs?

The average salary of the top 25 hedge fund managers in the world is about half a $1 billion.

Do you seriously think a bunch of government analysts sitting at their desks in Wellington paid $100,000 a year can play the same game even on the small stage that is New Zealand?

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By: Matt Nolan http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43137 Tue, 13 May 2014 06:19:00 +0000 http://www.tvhe.co.nz/?p=11379#comment-43137 In reply to Blair.

“I would prefer to see the environment supported through Pigovian taxes and removal of distortionary taxes, bribes etc in favour of dirty industries but as far as second best solutions go this sort of thing is not the end of the world.”

I am in that direction also – but even then there are two issues:

1) Using a second best when a first best is do-able is strange.
2) I don’t know if I would term this second best, stating it is second best involves assuming that it is constructed optimally and transparently – which is actually a big assumption for such a direct control type institution

I’d also note that if the problems in the financial industry are due to mistakes in financial regulation, this would imply fixing up financial regulation – not have the government circumvent it by assuming it is a failure, thereby shifting risk onto taxpayers. A lot of policies involving finance seem to involve shifting risk onto taxpayers, and it concerns me.

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By: Blair http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43136 Tue, 13 May 2014 05:21:00 +0000 http://www.tvhe.co.nz/?p=11379#comment-43136 I’m not entirely opposed to this sort of thing. You have to start by reviewing the performance of the private sector. Banks have pulled back from this sort of thing for complex reasons – basically, the risk-weighing treatment is not as favourable as that for mortgages, credit derivatives, etc. The other thing is credit committees which have a problem with any project that hasn’t been done 4x before in-country. The head of the CEFC in Australia takes the view that once they have allowed a new technology to do the first few projects, they (the Clean Energy Finance Corporation) are obsolete; the banks can take over.

I would prefer to see the environment supported through Pigovian taxes and removal of distortionary taxes, bribes etc in favour of dirty industries but as far as second best solutions go this sort of thing is not the end of the world.

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By: Green’s Investment Bank http://www.tvhe.co.nz/2014/05/13/greens-investment-bank/#comment-43135 Tue, 13 May 2014 04:52:08 +0000 http://www.tvhe.co.nz/?p=11379#comment-43135 […] By Matt Nolan […]

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