The Standard(*), No Right Turn(*), and Hard News(*) have all commented on a graph showing the declining share of labour compensation in national output over the period 1981-2002. The claim/implication is that right-wing policies have contributed to the drop in labour’s share, and that the Labour government’s policies have reversed that trend somewhat in recent years. Does this explanation make sense?
Source: Stats NZ (national accounts)
When people look at government they often see a group of people that they feel are responsible for taking care of the country. Looking deeper, some people see a representation of society that is supposed to do what is in the social interest. Looking again we might see an organisation who is dominated by interest groups and competes with other institutions for resources in the national economy.
All these views of government are true. This does not make them evil or virtuous, they are merely a central component of the current social structure.
Now no matter what view you have of government, there is one thing you are likely to believe – that government should do what is in your countries best interest. However, is this right?
The one thing I hate about election year is seeing policies which are put in place to win an election and no basing in economic theory.
Reading this quote from Trevor Mallarad made me angry
“…there is no way that it is fair for one employee to be paid less each week in their take home pay than an employee doing the same tasks, simply because they choose to be in KiwiSaver and the other employee doesn’t.”Either Trevor Mallard is an idiot and he truly believes this, or he’s not an idiot and is doing this to try and win an election.
Just remember Kiwisaver savings are a form of income. If we give both enrolled and non-enrolled people the same take home pay, then we are effectively saying that people on the Kiwisaver scheme should be paid more for the same task – explain to me why Mr Mallards concept is fair again?
Agnitio
Over at the Standard they are discussing the perceived inequity associated with a shift from a progressive income tax system to a flat income tax system.
This is an issue we have discussed before in this post. In the post we asked “what is the equality-efficiency trade-off” and “is the tax system the best way to redistribute income”.
The first question matters, because if we are reducing growth in the economy sufficiently by redistributing income it may be the case that lower tax cuts are parteo superior – which implies we could say they were better without having to make any assumptions (apart from the assumption that people prefer more). Even if the efficiency gains are not that strong it does imply that less than 78% of the population (the figure that the Standard states) will have a higher tax bill.
The second question matters as even if we are in a situation where a certain set of value-judgments implies that redistribution is optimal, there may be a better may to do it than through a progressive tax system.
Now even ignoring those two points we have the issue that “fairness” is a value-laden concept.
It appears that the Standard is unhappy (*) (*) (*) with the ANZ-National piece on government sector spending (*).
Now the criticisms of the ANZ-National line appear to be:
I can understand the Standard’s irritation at some of the headlines that have been taken from the piece – but nonetheless I feel that their criticisms of the actual discussion that ANZ provides are off the mark, here’s why:
After reading this excellent post on the liquor store regulation idea on Kiwiblog (which aggregates the thinking of a number of other blog authors posts on the issue are found ,,,), I’ve decided to do a little thinking out loud about the issue.
Now, to analyse what it going on we have to ask why we want to have tighter controls on liquor outlets in the first place. From what I can tell, liquor outlets aren’t the direct cause of harm – the consumption of alcohol is. As a result, these measures are based on the causal link: More liquor outlets -> more liquor consumption -> more crime.
For fun, lets take as given that more liquor consumption leads to more crime. We still need the prevalence of more liquor outlets to cause more liquor consumption for this story to float. How does this work?