The Household Labour Force Survey (HLFS) data has been volatile recently. It is survey based and is usually benchmarked to Census data. Sampling is also affected by Census results. The latest Census data suggest some big revisions ahead for many of the published HLFS indicators, including employment.
The RBNZ today exempted new home builds from high loan to value restrictions.
The reason for putting the policy in place is financial stability. That is to reduce the accumulation of high-risk debt in the banking system. By this test, and this should be the reasonable test, this is bad policy.
By this exemption the RBNZ is saying that it is less risky to borrow to build a new house than to buy an existing house. I disagree that new house prices move less than existing house prices. So, the RBNZ is now exercising a policy of exclusion – against those high LVR borrowers who want to buy existing homes.
The justification that we need to build more houses, surely is retorted with, is this the right policy to address that problem? It also raises the question of why was this not a consideration before the LVR policy was implemented? What did the RBNZ actually know about how high LVR loans were being used, by whom and where?
By increasing highly leveraged credit flow to new builds will not solve issues to slow land release and planning restrictions.
By seemingly bending to industry and political pressure, the RBNZ has tarnished its shield of independence. I am fearful of ongoing lobbying and political interference it invites heading into the 2014 election.
Keeping in mind Shamubeel’s point that we need to be careful looking at aggregates, I thought it would be nice to update the graph from this post back in early-2009 – when people were talking about 11% unemployment (Note: I have moved both series across a year).
Cheers Statistics NZ.
This supports the type of story we have seen from the employment rate data, and our suggestion here that the 87-92 period was incredibly ugly for NZ. As a result, even though in GDP terms the current slowdown looks like one of the worst NZ has experienced (though not so much in RGNDI terms – given the lift in NZ’s terms of trade) overall employment and unemployment outcomes have thankfully been nowhere near as bad as in the early 1990s. I’m looking forward to all the analysis that will appear sifting through the data and working out why this is the case
On Thursday I was in the supermarket after a long day of reading – with a long night of reading ahead. Next to me was a deal, dark chocolate Tim Tam’s, two packets for $5. They are great with coffee and so I reached to grab them – however, then the barrage of health related stories I’ve seen at the moment came into my head.
These are empty calories, fake food, there is no nutritional value, they are not good for me. I could do with losing a couple of kgs, and my weak willpower ensures that future me will find it just that little harder to get to the size I want to be!
Then I thought, blah blah blah. Information is great, but looking solely at the cost of “empty calories” without thinking of the subjective benefit I get is as dumb as Boris Johnson presuming that maximising the GDPs is all we want. Yes there is a time inconsistency issue, but as I am aware of it, and surprisingly active at trying to deal with it, I am pretty comfortable that I can make my own choices …
In my view economists, and other forms of social informers, have a role to provide information and help describe trade-offs for the public. But lets not get on people’s back because they enjoy action that has a corresponding cost to themselves. Analysts that go too far in telling other people how to act have moved past acting in the public interest, and are starting to act more in terms of ego or an inflated sense of confidence about their own understanding [to be clear this comment is NOT pointed at anyone, it is a hypothetical - accusing anyone in NZ of this would be strawmaning them].
In this case I purchased the Tim Tams and had a few with a coffee. I spent the rest of the afternoon reading about economics and many utils were gained. I have no doubt that other people, with different preferences, would not have gained the utils in this case – but that is completely irrelevant, these are my preferences, which are revealed by my action. Not your preferences.
As you saw from Shamubeel’s post this morning, there was a discussion on well-being and statistics to celebrate the International Year of Statistics – an event that Shamubeel spoke at. Donal summarised the event here.
It was good times and all, well-being is important, as is measurement. All the speeches were good, with Phillip Walker drilling home the importance of measuring wellbeing, Mai Chen adding that we need to be more intelligent about how we consider social capital and culture (as well as measuring it), Shamubeel pushed everyone to think past aggregates and consider data in relation to the choices of individuals, and Campbell Roberts indicated that the reporting of statistics, and the narrative, are incredibly important. Another key point that Roberts stated was that statistics offers a lens on reality and in this way they are useful – very much so.
However, we have a summary from Donal and Shamubeel’s post on his speech. Given I was in the audience trying to eat all the food Shamubeel told me I should post something – so I thought I would point out that there were a couple of areas where I felt a touch nervous. This isn’t to criticise anyone – it was a great day with a lot of good points raised. However, I just felt I should add some detail on a couple of points I felt were left to the side during the day – perhaps because they were too obvious, or seen as inconsequential at the time.