Posts by BenWilson
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Hard News: Budget 2017: How do we get…, in reply to Sam M,
Genuine question: What are the biggest levers the government has access to to influence how the economy develops? I’m assuming, tax policy would be one of the biggest?
Since Parliament is effectively sovereign in the country, there is almost no way to answer that question. They can pass almost any law with a majority of votes. They can, for instance, compulsorily acquire property, seize control of assets, pass laws completely controlling economic activity, issue currency, etc.
So presumably you're kind of more asking what is the biggest lever that they are actually likely to use. It's one of the great wins of an ideology that it can make people unable to countenance a lot of the options.
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Hard News: Budget 2017: How do we get…, in reply to Bart Janssen,
But I do think the ideology of lower taxation = growth which will make everything all right is utterly debunked. It’s a completely broken model.
Yes, it's far too simplistic. It may sometimes happen that lowering taxation in something you specifically want to grow is a good idea. But there's no need for it to be forever, and each case should be frequently re-evaluated for fairness and other concerns in a taxation system. To just run a policy that always dropping tax will be good is pure ideologically blinkered madness.
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I'd certainly accept a Portugal style step change as a very important one without arguing the toss about the perpetuation of organized crime. The harm reduction is so compelling, at every level. It would be nice if they weren't flying solo on this one and we could get one more data point. And, obviously, if we could reduce harm for tens of thousands of our own people.
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Hard News: Budget 2017: How do we get…, in reply to Bart Janssen,
The solution is taxation and a government that then spends that money for the benefit of all New Zealanders.
You had me up until this point. This doesn't follow axiomatically from rejection of the hypothesis. It is simply one of the alternate hypotheses.
I'd say it's part of the solution, but not sufficient in itself. It depends what they tax, how much they tax, where the money to be taxed comes from, and how the revenue is spent. The devil is all in the details. But absolutely, any person not totally committed to laissez faire should see that raising taxes is at least a possible thing to try. There are so many knobs to twiddle in this machine.
The most difficult thing about being scientific about it is that the knobs interact, making systematic experimentation extremely difficult. You can't just turn one dial and thus conclude everything there is to know about that dial's effects. You also have to do it for a range of other settings in there. You only need a few variables and you're into impossibly large experimental combinations. But we have more than a few, we have hundreds, if not thousands of potential levers to tweak.
Which is probably why economics is always done in theory with simulations. This makes it a very soft science, if it is a science at all. It can look at historical data for many countries too, but for any combination of more than a few variables, there just aren't enough data to really make conclusions.
Which leaves us with the twiddle-and-see method. Personally I think we've jammed ourselves so far as this method is concerned. The little twiddles we are really capable of just won't do it. By "capable of" I mean what our actual politicians can manage to sell to themselves and then an electorate. Good luck selling a general rise in taxation at a time when even upper middle class people are struggling to make ends meet. In the long run it might well pay off, if the revenue is spent wisely over time. But in the short term it will ruin many people and that is what stops it happening.
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...which all just makes me feel tired of this kind of discussion. I'm glad that there's a steadily rising appreciation of this conundrum, as genuine hardship slowly slides its way up through the middle classes, and brutal homelessness has become a normal thing in this country. But still, the discussion is going to continue to follow the past. Neoliberals will insist that doubling down one more time is the way to go. The "Left" will insist that it's all about getting jobs. The middle ground will be found between those two bankrupt positions and things will continue as they have for all of my life. This is how our incremental system works. It will slowly and gradually tinker itself to death because power will continue to be held by the small group that is mostly unaffected. They will be evenly split between people who just don't give a fuck and those who vainly try to convince them to.
It's fairly clear to me that only quite drastic changes to fundamental settings are going to reverse things. Instead, we have projects to build large numbers of houses. Less than the population growth rate needs, of course, so the problem will still get worse. And any discussion about controlling the main source of population growth, immigration, will be shouted down as racist, and the "Left" will be the worst culprits of this.
We literally can not have a sane discussion about economics. It is an ideology driven field, totally dominated by the people who profit from things being as they are. It masquerades as scientific, despite endless failures to predict major events, thus automatically taking it out of the realm of public discourse and into a specialist topic. And the genius of Neoliberalism is that it plays both the wealthy and liberals at the same time. With one hand it gives rights and with the other it takes away equality.
I live in a time when the Mayor of my city of unaffordable housing was the man who made me pay for my tertiary education, and he's the "Left" wing option. How the hell can I engage with any of this?
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AI is constantly raised as the thing that will take all our jobs. This has no basis in observation of what has actually occurred with AI. The loss of jobs is down to EVERY kind of technological improvement and AI is the very least of all of our worries. It is literally the hardest kind of productivity improvement to make.
I'm always annoyed by this because it defers into the future a problem that is not only already here, but has been for several hundred years. It's this easy catch all end-game, this singularity, this cataclysm that suddenly ends work. Wake up! Work is already ending. Every time we improve something, we remove a little bit of our pressing need to work. We literally have to manufacture scarcity in order to justify work.
AI is not going to build the houses we need. That will be chippies and plumbers and electricians and jib stoppers and painters and carpet layers and so on, hundreds of jobs that are simple things that generally can be learned quickly, don't really require that many years of training. All of these people can work way, way faster than they could 100 years ago on account of their tools and materials being vastly superior. But we have somehow landed ourselves in a situation that despite having far more capacity than ever before to produce one of the most basic needs in human life, literally the first thing a human lost in the bush should set about organizing, we have found ourselves unable to do this basic thing.
Our economic situation has simply stopped functioning when it can't provide basic needs in a time that we have supercomputers in our pockets.
I felt this way ten years ago. To be honest, I felt it somewhat even twenty years ago, when even on a very high income I found that property seemed impossibly out of reach. I also felt that property was a fundamentally unproductive thing to invest in, but that our society was so invested in it that it was going to keep inflating massively for the foreseeable future. It is too big to fail. I knew I had to be in it, or be losing ground. It wasn't about getting ahead, even then. It was about stalling how rapidly I was becoming less wealthy, as property rose in value far faster than my disposable income. I managed with a whole lot of scrimping and some good timing to get into it. Since then, my paper wealth has steadily risen but my personal evaluation is that I'm effectively the same as I was then. The mortgage is bigger. It's still 30 years before it will be paid off. I'll still be in an average house in a poor suburb.
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Up Front: What's the Big Idea?, in reply to Moz,
To be fair, The Bubble Bubble guy thinks everything is a bubble at the moment, hence his name. He might be right, but until it all bursts, we can't be sure.
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Up Front: What's the Big Idea?, in reply to Rich Lock,
The important caveat I see is that the house types are very different, that 1-2 bedroom flats are actually like a thing, unlike here. We don't really do the terraced house thing either. An "average house" in NZ is literally a house, freestanding, probably with a small amount of land. So to compare apples with apples we probably should only look at what those cost in the UK.
But obviously the existence of all those smaller units in the UK is a good thing for accommodation of people who don't want (or can't afford) the quarter acre, and we really don't have that here. I think that impacts on "affordability". But yes, it's certainly affording something that is actually different.
The median wage seems almost identical to here (oh, how times have changed!), and lending ratios seems similar, as is the near certainty of young people requiring deposit gifts from some source.
Yet still, I can't help but feel that if the average "house" in the UK is around $400,000 NZD and in NZ it's $500,000 that's a pretty straightforward measure of NZ prices being inflated beyond UK values. If you're an existing house owner in NZ you could probably afford to trade down to living in the UK, with 100k leftover from your previous budgeting. That is a real turnaround. Obviously things are not that simple, my understanding is that buying property in the UK (actually pretty much everywhere else in the world apart from Australia and the USA) is an absolute nightmare, even if you're a citizen, let alone if you are not.
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Up Front: What's the Big Idea?, in reply to Rob Stowell,
OK, I thought so. I don't think you're misusing it, it's just a confusing term when used this way, which is hardly surprising considering that it was coined by a spin doctor. Essentially you're using it to mean "moving to the middle"? AKA Centrism, and maybe Third Wayism?
So many different ways to reinvent the two dimensional analysis that has dominated Anglo political discourse since always. TBH, I don't think either agreeing with or opposing this strategy makes that much sense. Neither is a big idea. They're old ideas, and the frame the entire discourse as taking place along the single dimension between the two main parties.
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Up Front: What's the Big Idea?, in reply to Carol Stewart,
OK, it doesn't really sound like something you'd dispense with. At the very least you could use it to gain more confidence that your big idea was really gaining traction. Or it could work the other way, showing that it actually is not. Either way, it's making a picture based on information about what we observe, rather than what we want to observe.