Monday, January 16, 2017

Is the hysteria about inequality overblown?

Oxfam are releasing a report this afternoon belly-aching about the disproportionate amount of wealth owned by the richest New Zealanders. Andrew Little is already on the band-wagon blaming National.

While 'wealth' and 'incomes' are not an exact match, in the interests of balance:


For those who like to look at the bigger picture the accompanying text is interesting:

The long-run perspective in Figure J.7 can tell more than one story.  Taking the end of the “great compression” (1950 to 1980) as the starting point, the conclusion is that for the five English-speaking countries in the graph, inequality (understood as the share of income received by the top 1%) increased strongly to 2011. With the 1920s as the starting point, the “great compression” can be seen as the “aberration” and now the distribution has returned to where it was ninety years ago.

Source

Friday, January 13, 2017

The negative effect of welfare on children's outcomes

Unfortunately time does not permit me to add much commentary but you can go to the link below the graph for more detailed information. Essentially when tracking the progress of children born in 1993 the lines clearly demonstrate the negative influence of welfare on future outcomes:

(left click to enlarge)

Extracted from

NZ Herald coverage of report here

Thursday, January 12, 2017

Quote of the Day


Poverty in a society is overcome by productivity, and in no other way. There is no political alchemy which can transmute diminished production into increased consumption.

– John Chamberlain


(hat-tip FFF)

Wednesday, January 11, 2017

The Left's intransigence over tax cuts

Just home from an Australian sojourn  (during which I managed to read an entire book, a particularly dark Colleen McCullough book), here's an op-ed  from Gordon Campbell you might wish to comment on:

Ever since the world fell prey to the mullahs of the free market in the 1980s, no amount of real world evidence has managed dispel one key tenet of their economic faith. Namely, the idea that if you cut income taxes and taxes on small business, a wave of individual enterprise and entrepreneurial energy will thus be unleashed, profits will rise and – hey bingo! – the tax cuts will soon be paying for themselves via all that extra economic activity that this virtuous cycle will have set in train.
My off the cuff response:

Tax cuts are never significant because state-spending won't allow it.

Insignificant tax cuts will not stimulate entrepreneurship.

Typical governments are in the business of balancing budgets. REAL tax cuts are rare in the developed world.

What I do believe is that the Laffer Curve is real. You can only squeeze a lemon so much.

New blog

Mark Hubbard has started a new blog about art, films and books which looks promising. The art selection so far has introduced me to unfamiliar but attractive paintings. About to add to my blog roll.

Saturday, December 31, 2016

"Draconian" approach will have a cost

The clamp down on public gatherings for the purposes of entertainment is becoming more and more of a problem. Just last month I blogged about the heavily-policed fiasco that Martinborough food festival has become. The latest comes in the form of the Kurow races, an event that has probably been held for more than a century and I imagine is akin to Tauherenikau on News Years Day, a benign but happy family picnic occasion.

New alcohol rules imposed on the Kumara Nuggets race meeting on January 14 have resulted in a sting in the tail for punters.
The Kumara Racing Club has been required to have 22 private security guards on course, instead of five, and that has pushed up the entry fee from $10 to $15.
The club applied to the Westland District Council in early October for the liquor licence, only to be met with a barrage of new requirements from health authorities, which created a "a lot of uncertainty" around being able to run the meeting next month, committee member Les Guenole said today.
The club had previously been planning to have alcohol-free areas but was instead told to hire more security guards, and was prevented from being able to advertise the meeting as BYO...
In a statement, Westland Mayor Bruce Smith criticised the hoops the Kumara Racing Club had to go.
"Crown (Public) Health, council and the police all became involved and unrealistic restrictions were requested by these parties based on what they say is legislation," Mr Smith said...
It was a turnaround for an event which was described this year by the West Coast police in the local media as "being well run with very few problems".
Being now required to increase security numbers, along with ordinary police presence was "a draconian step," Mr Smith said.

And that is the kicker. In the usual lazy and unjust bureaucratic modus operandi, all events are being punished because some become unruly - or draw a few individuals who are anti-social.

This blanket approach will have a cost. Not just economic.

I heard a brief item on the news yesterday that police were upset with people setting up Facebook pages to alert drivers to the whereabouts of alcohol check points.

The police are losing public support. If they treat us en masse like bad guys then they can expect a reaction.

Earlier this year I heard a second hand report of a police man being very fair to a young individual who he could clearly see broke the law by making a forgetful error. The officer exercised his judgement and did not throw the book at him.

Events should be treated similarly. Authorities could and should exercise some reasoned judgement and discretion.

Friday, December 30, 2016

Inculcating students and selling books

Two professors wrote a book called Urban poverty, penal welfare and health inequalities.

Here is a brief precis. I note,

"New Zealand’s once-humanitarian welfare system genuinely supported those in need, says Professor Darrin Hodgetts."

The thrust of the book is that welfare has become punitive and demeans those who need it.

The welfare system the professor refers to can only be that established in the late 1930s for the very reason that there was little support for the needy prior.

From that time until the 1960-70s it was impossible to get a sickness or invalid benefit if you could not prove you were of good moral character and had not been the active cause of your own misfortune. Specifically, "That incapacity for work was not self—induced or in any way brought about with a view to qualifying for an invalid's benefit."

You could not get a deserted wife benefit if you didn't apply for maintenance from the father of your children. Unmarried mothers frequently felt they had little choice but to give up their child for adoption.

Is this the "once-humanitarian" welfare system referred to?

Or was it the period before the early nineties when sole parents piled onto welfare at an astounding rate. So astounding that after only 2 years of the DPB, a ministerial inquiry was being called.



 As a result a stand-down period was established and marriage guidance counselling made effectively compulsory. Solo mothers protested. Is that the "once-humanitarian welfare system" referred to?

It can't be the system post early-1990s because that's after the benefits cuts -  the neoliberal policies that the book attacks - along with the current welfare system, those who designed the policies and deliver the services.

I don't believe the "once-humanitarian welfare system" ever existed. But that's not the point. That's just my opinion.

The point is this new book is required reading in course work (along with a plethora of other leftist claptrap).

No doubt the publishers were also well aware of guaranteed sales when accepting the manuscript.


Thursday, December 29, 2016

Quote of the Day

 “It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.” 

Thomas Sowell (apparently retiring from writing his syndicated column aged 86. His brief farewell is also well worth a read.)

Tuesday, December 27, 2016

Ethnic variation of people not in labour force

Just before Xmas Stats NZ released a report about people not in the labour force. The graph that caught my eye is below:


At  a glance you could be forgiven for thinking that Europeans are spending a lot of time playing around while Maori, Pacific and Asian people spend a lot of time studying.

The explanation for the divergence is provided:

This difference for the European ethnic group can be attributed to its different age structure when compared with the other ethnic groups. The median age of the European people not in the labour force was 66 years in the September 2016 quarter. In contrast, the median age was 30 years for Pacific peoples, 32 years for Māori, and 33 years for the Asian ethnic group. If we restrict the population to only look at those aged under 65 years, then study or training is the most-common main activity, and looking after a child is the second most-common main activity for all four of the ethnic groups looked at.
The median age of European people not in the labour force is double - or more than double - that of the next three largest ethnic groups.

Astonishing variation, but when you think about it, not that surprising. The European dominance of the baby boomer ranks and older accounts for this large anomaly.