Matt Nolan

Geoff Simmons, Politics and “career suicide for an economist”

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Disclaimer:  I used to work in the same space as Geoff, and I know him as a guy who is genuine, wants to improve social outcomes, is a mad good communicator, and who works hard on the issues.  But none of this would prevent me from disagreeing with him if I did (such as my comments on food here and here and here and here), so I swear there is no bias involved 😉

In a cool interview over at interest.co.nz Geoff Simmons outlines what is going on with the TOP party, which he has just become leader of.  For the sake of clarity I think he’ll be an excellent leader for this party.  What I want to concentrate on is this quote though:

How can the public know I am serious about the long haul? When Cortez took on the Aztecs, he trashed his ships to make sure his men had no choice but to fight with everything they had. The reason I bring up that story is what I am doing right now is pretty much career suicide for an economist. There’s no going back.

Haha, this is good – I like the nifty description of a commitment mechanism.  But I’d like to ask a couple of questions about it.

Read more

Will Taylor

#VoteAKL 2016 maps

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I had a bit of a play around with mapping the voter return data from the 2016 Auckland local body elections (raw data available here).  I looked at it two ways:

  • What areas had the highest/lowest turnout? (i.e. where is participation high/low)
  • What areas had the highest raw number of votes? (“who elects the mayor”)

Maps addressing these two questions are below.  Note that they don’t include Waiheke, mainly because it’s not part of the “Coastlines” shapefile I used to crop the board boundaries and I decided the effort of separately mapping the board area to the “islands” geographic shapefile wasn’t worth the effort given I have a day job (i.e. I am lazy).  If you are wondering, turnout on Waiheke was very high (58.6%).

Percentage turnout

final-turnout

Number of votes final-votes

Will Taylor

Quote of the Day: Garner on the Greens

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Duncan Garner is a bit of a stirrer, but he pulled out some interesting numbers in his article yesterday arguing the Greens should move to the centre:

The Greens talk poverty and social justice, but the poor aren’t listening – and they’re certainly not voting for them. Look at these telling statistics from the poorest electorates in the country:

In Manurewa, in the crucial party vote, just 868 people voted for the Greens; in Manukau, East it was just 744; in Mangere, it was just 865.

Now look at the two most wealthy suburbs in NZ:

In Epsom, the Greens got 3415 votes; in Wellington Central, they got 8627 party votes, more than Labour’s 7351; in Auckland Central the Greens got 4584 votes, compared to Labour’s 4758.

I would really want to see some more numbers around this, but if this is a general trend, then it would suggest either:

  1. The Greens’ support is from the relatively well-off who care about the poor, rather than the poor themselves; or
  2. People who care about the environment tend to be relatively well-off.

Now I’m sure the make up of the Green support base isn’t that stark. But in the context of our discussion (e.g here, & here) about a centrist Green party, if the Greens moved to the centre they would likely lose group 1 but keep group 2.

The interesting question therefore is what proportion of their support base falls into both camps (i.e. care about social justice and the environment) and what weighting they place on both issues. This then follows on to the question of what is the untapped support base of people who care about the environment but generally vote National?

Will Taylor

Blue Green party: background reading

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Stoked to see Gareth Morgan’s post yesterday calling for a Blue-Green party. He sums it up well in this passage

A Bluegreen party would emphatically express New Zealanders’ preference for clever and clean as the way we want our dollars earned, while leaving National and Labour to fight over how social justice is best promoted – via National’s preference for capacity building through education and training, delivering more flexible employment and wage-setting practices; or via Labour’s penchant for widening and lifting of social assistance, greater progressivity of income tax, widening the tax base on income from capital, and greater protection of labour in the workplace.

Matt and I have been talking about this since 2008 when all the TVHE authors took a political compass test as a gimmick to provide content for the blog. Due to a combination of laziness, a lack of money and no desire to get involved in politics, we haven’t done anything about our great idea. That was 6 years ago and a lot has changed since, but we still think there is room for a centrist Green party and so are stoked to see Gareth using his profile to have a serious conversation about it.

Matt did a good post on this about a year ago (There is some pretty robust discussion in the comments section).  When discussing the failed Progressive Greens party at the 1996 (which David Farrar mentions in his post on Gareth’s post) he noted: Read more

Shamubeel Eaqub

First home buyer help – lets repeat others’ mistakes

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National has announced policy to support first home buyers to take on more debt. It will have an entirely predictable outcome: higher house prices and higher debt. This will drastically increase the cost of the homes, which are as of now being sold. I recently took the assistance of a company to sell my house fast Arizona and not only did the house get sold remarkably soon, but the money was transferred to my bank account without any delay. So this policy which has just got introduced could make things for potential home buyers a little difficult.

The only good thing about this policy is that it is relatively small: $64m over four years. That’s $16m per year and assuming 90% gearing, $160m of house sales. That’s just under 0.5% of $36b of housing turnover in the year to July 2013.

To National’s credit they couch it in terms of a short term response and in the backdrop of other work to look at housing and land supply. But it is still a bad policy that inflames demand for housing even further, before they have tangible impact on increasing supply.

First home ownership subsidy/support policies have been tried in USA, Australia and UK. This led to a high amount of borrowing by those who could not afford it. It was also at the heart of the sub-prime crisis in the USA and the subsequent GFC. Read more

jamesz

The UK’s political divide

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The Economist this week explores the political divide between the North and South of the UK: the North belongs to Labour and the South to the Tories. Unfortunately, they are unable to pinpoint the reason for the divisions, saying that “even controlling for factors such as education level, housing tenure, benefit receipts, local unemployment rates and age, the political divide remains in evidence.” That is not particularly surprising since voting doesn’t tend to follow economic divisions, for whatever reason.

An interesting theory of political divisions is provided by Jonathan Haidt’s descriptive theory of morality. He suggests that there are six foundations for our emotional response to situations and ideas: caring, fairness, liberty, loyalty, authority, and sanctity. His empirical research shows that left and right-wing people systematically differ in the weight they place on each of those foundations. For example, left-wing people are far more responsive to ideas that trigger their caring response, while right-wing people are more likely to worry about proportionality. Crucially, he claims that almost all of our responses to ideas are determined by an initial emotional response that we then rationalise. He uses his theory to explain the divisions between Republicans and Democrats in the US, but it could equally be applied in the UK.

For example, Haidt claims that most conservatives will have an emotional response triggered by the sanctity foundation, while liberals will not. The recent debate over gay marriage in the UK shows precisely that division. While liberals pointed to the importance of the liberty to marry freely, conservatives talked about the ‘sanctity of marriage’ and were morally disgusted by the idea that homosexuals could marry. Those differing emotional reactions drew the battle lines for the ensuing debate and were post-hoc rationalised in various ways by both sides.

Perhaps economists who view ideological and political divisions through a materialist lens are thinking far too narrowly. Rather than pointing to industrial policies and wealth redistribution as vote-winning tactics they should look to the emotional responses that the parties’ rhetoric evokes.