Economics

The take down of Piketty

The left-wing loves Thomas Piketty, but it appears that like most socialists he has lied about and massaged the data that he uses to make all sorts of claims that the luvvies of the left are all wetting their knickers over.

Tom Woods discusses the major errors in the Piketty book.

As one commenter says:

The main problem is not Piketty’s thesis but the fools that take the thesis as gospel and then either influence those in power or come into the position of controlling the levers of power to implement Piketty’s ideas. With that said,what happens when the “rich” refuse to pay Piketty’s suggested worldwide taxes? Or for that matter “shelter their wealth.” In the end Piketty’s ideas are not based on logic,reason or “human action” but strictly on a monopoly on the use of guns and force.

Listen to the discussion and be fully armed to counter the leftist arguments based on Piketty’s hallucinations.

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Cheap weed in Washington State after legalisation causes glut in supply

Washington State legalised cannabis and in the first year growers rushed to market hoping to make a killing…predictably there was an over supply and prices dropped through the floor.

Have you ever been tempted to buy your dog a truckload of steaks just to see if there was a limit to how many of them they could eat at just one sitting? Well when marijuana became legal in the state of Washington, we were similarly curious about whether there was a theoretical maximum amount of pot that its residents could smoke… and now our questions have been answered.

The Associated Press, via ABC News, reports that marijuana sellers in Washington are actually suffering from large unsold surpluses of pot, as supply is now vastly greater than demand for the demon weed inside the Evergreen State.   Read more »

Labour in the UK declares a crisis in energy…problem now solved

Oh dear lord, it seems Ed Miliband has David Cunliffe and the NZ Labour party advising them.

They are even mimicking declaring a crisis for particular industries and just like in New Zealand they have tried to come up with their own power solution.

It has of course been widely mocked.

Labour’s flagship energy price freeze was branded ‘a joke’ last night, as senior figures in the party confirmed it has been reviewed in the light of falling prices.

The price freeze, which Mr Miliband pledged would last until 2017, has been thrown into turmoil in recent weeks as a slump in the price of oil saw the prospect of falling energy prices.

The Daily Mail revealed yesterday that Labour is conducting a U-turn on the policy, which was launched by Ed Miliband in 2013.

It has now been ‘re-branded’ as a price cap, which will allow bills to fall to reflect tumbling wholesale prices.

Yesterday E.On became the first Big Six firm to offer a cut in gas prices of 3.5 per cent to its customers, and others are expected to follow suit.  Read more »

Will Labour run on a Financial Transaction Tax?

Labour have a finance spokesman who has never worked in the real world, and basically has very little idea about finance.

It wouldn’t be surprising if he did what the Democrats are doing now they are in opposition, and promote a Financial Transaction Tax.

To pay for the plan, the U.S. would impose what Van Hollen called a tiny fee on market transactions, of 0.1%. A Democratic aide said the fee would apply to any buy or sell transactions, and include stocks, bonds and derivatives. The plan would also limit tax deductions on CEO pay above $1 million.

So far this type of tax has only been promoted by the looney left, in the form of the Alliance and Jim Anderton, Mana, and the Greens.

5. Financial Transaction Tax

The Green Party will:

  1. Involve New Zealand with the group of countries working to agree on a tax on international currency movements, to set up a fund to provide capital for poor countries to improve their social and environmental wellbeing. This would discourage currency speculation without being high enough to impede genuine trade.

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Bugger, another global warming catastrophe claim busted

It looks like, contrary to the alarmists views, that global warming is actually helping wheat production, not hindering it.

Forbes reports:

Global wheat production set new records in 2013 and 2014, contradicting alarmists’ claims that global warming is reducing wheat harvests.

Global warming alarmists and their lapdog media allies decided Christmas Week 2014 should be filled with claims that global warming is crushing wheat production. Grist, Reuters, the UKGuardian, and the Columbus Dispatch are among the many news organizations parroting alarmist assertions that global warming is reducing wheat harvests. The Reuters article, for example, cites a study co-authored by several global warming alarmists to claim, “In recent decades, wheat yields had declined in hotter sites such as India, Africa, Brazil and Australia, more than offsetting yield gains in some cooler places including parts of the United States, Europe and China.”

Reuters did not indicate whether it had fact-checked the straightforward claim that global crop yields have been declining in recent decades. Reuters also failed to provide any countering viewpoint, giving readers the impression that declining global wheat yields are universally recognized. Knowing, however, that global warming alarmists and their ventriloquist dummies in the media often make straightforward factual claims that are proven false by objective, verifiable data, I decided to fact-check their straightforward claim about declining global wheat yields.

Not only are global wheat yields not declining, they are rising at a spectacular pace. According to objective U.S. Department of Agriculture (USDA) data, global wheat yields have risen by 33 percent since 1994. Moreover, there has been a 4 percent increase in areas harvested for wheat, indicating increased atmospheric carbon dioxide, improved soil moisture, and global warming are making more lands suitable for wheat harvests. Cumulatively, the 33 percent increase in wheat yield per acre and the 4 percent increase in land harvested for wheat add up to a near 40 percent increase in the global wheat harvest since 1994.

The spectacular gains in wheat yields show no signs of slowing down as the Earth continues its modest warming. The year 2014 saw the highest global wheat yield in history, exceeding the 2013 yield that had also set a new record.

Looking a little closer at wheat production data, the alarmists’ propensity for telling lies extends far beyond lies about global wheat production. It turns out the alarmists and their media allies are also telling lies about wheat production in the very nations and continents they claim are experiencing wheat production declines — India, Africa, Brazil and Australia.

Alarmist lie? Well I never. Same with media…who would have ever thought it?

Let’s start by looking at Africa. Egypt is the only African nation that cracks the global top 20 in wheat production. In Egypt, wheat output has quadrupled during the past three decades, with the past 10 years producing the 10 highest wheat crops in Egyptian history. This is quite a contradiction to Reuters’ claim that “In recent decades, wheat yields had declined in hotter sites such as India, Africa, Brazil and Australia….”

And it’s not just Egypt, either. Africa’s second largest wheat producer, Morocco, produced its largest wheat crop in history in 2013.

On the other side of the African continent, South Africa alsoproduced record wheat yields in 2014, continuing a trend of rising South African wheat yields that extends back to the 1980s. Taking advantage of rapidly rising wheat yields, South Africans have been able to cut the area cultivated for wheat production to merely one-third of 1980s levels while still maintaining steady total wheat production. This has enabled South Africans to produce additional crops on former wheat farms and return much of the cropland to its natural condition for Africa’s iconic wildlife.

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About that income inequality thingy the left always bang on about

All last year we heard various Green and Labour politicians go on about income inequality…and how the “poor” of New Zealand are sooooo hard done by.

On top of that they claim that National is evil incarnate and the poor are being hammered by National just for shits and giggles.

They point to all sorts of weird economists who have written books that upon examination the facts don;t stack up.

Buy that has never stopped the left-wing pushing a massive lie on the people, just look at global warming by way of an example.

Since they like quoting reports and overseas facts how about they report this one…the one that says that inequality isn’t growing, it is reducing….and has been for 20 years. (Kind of like there has been no warming for 20 years also)

Income inequality has surged as a political and economic issue, but the numbers don’t show that inequality is rising from a global perspective. Yes, the problem has become more acute within most individual nations, yet income inequality for the world as a whole has been falling for most of the last 20 years. It’s a fact that hasn’t been noted often enough.

The finding comes from a recent investigation by Christoph Lakner, a consultant at the World Bank, and Branko Milanovic, senior scholar at the Luxembourg Income Study Center. And while such a framing may sound startling at first, it should be intuitive upon reflection. The economic surges of China, India and some other nations have been among the most egalitarian developments in history.

Of course, no one should use this observation as an excuse to stop helping the less fortunate. But it can help us see that higher income inequality is not always the most relevant problem, even for strict egalitarians. Policies on immigration and free trade, for example, sometimes increase inequality within a nation, yet can make the world a better place and often decrease inequality on the planet as a whole.

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So-called OECD report into inequality slammed by Rodney Hide

In the NBR Rodney Hide does what no mainstream journalist apparently bothered to do, actually read the co-called report by the OECD into the economy.

Andrew Little and Russel Norman were involved donkey deep in slamming the government over the “report”, but it appears they didn’t read it either.

Rodney Hide did however.

[W]hat a proposition! That inequality hampers growth.

It sounds nonsense, but is it? I thought on your behalf, dear readers, I should wrap a wet towel around my head and find out.

The first thing I noted was that it’s not an official OECD report. It’s a working paper. “The opinions expressed and arguments employed are those of the author.” “OECD Working Papers should not be reported as representing the official views of the OECD.”

Ok so not a report at all, just a working paper from some womble.

The study itself starts badly saying it’s not known whether inequality has a positive or negative effect or whether it has any effect at all. The author has no theory. There is no testable hypothesis.

Undaunted, he dives into 40 years of data across 31 countries. His trusty computer and statistical package grinds away.

Aha, out spits a result. It’s significant! But it makes no sense. Especially the bits that didn’t make news.

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Guest Post: MSD ups efforts to detect sole parent benefit abuse

Lindsay Mitchell has been doing some digging  and come up with some interesting information regarding benefits and who should and shouldn’t be on them.

She has given me permission to repost her information in the interests of giving her a wider audience.

I have found the following information enlightening…especially as it appear to show that over 10% are abusing their benefit.


 

We all know that there are plenty of people pulling a single parent benefit who have partners. Anecdotal evidence aside, there are two data sources pointing to this.

One is the Growing up in NZ study, which I wrote about here but it gets quite complicated.

The second is simpler. It’s revealed in a passage from Child Poverty in New Zealand, by Simon Chapple and Jonathon Boston:

“Work undertaken at the Department of Labour and based on matching Household Labour Force Survey (HLFS) and administrative welfare records indicated, firstly, that in 2011 about 10 per cent of people whose welfare records showed that they were receiving an unemployment benefit reported to the HLFS that they were actually in full-time employment (i.e., working at least thirty hours a week), and hence were ineligible for the benefit; secondly, that more than one-third of people on an unemployment benefit self-reported as not actively seeking work – and one in five expressed no intention to seek work in the coming year; and, thirdly, that about 10 per cent of people whose welfare records showed that they were receiving a DPB reported being partnered or living as married.”

(After an MBIE refusal to release the paper to me, the matter currently sits with the Ombudsman).

Back in October I blogged about a trial mentioned in the MSD Annual Report.

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Taxpayers’ Union smacks up Robertson for making it up

The left love to talk about ‘trickle-down economics’ and destroy its validity.

The trouble for Grant ‘less pies’ Robertson and Russel ‘give me my flag back’ Norman is that the ‘neoliberal theory’ is a figment of their imagination.

They were both on Radio Pravda (sometimes called Radio NZ) this morning bleating on about the latest OECD report calling for us all to be poorer so the poor feel better.

The Taxpayers’ Union has republished a piece which destroys Robertson’s credibility as Labour’s finance spokesperson.

Trickle-down economics is an example of a “ridiculous beyond belief” idea; that giving money to the rich will eventually trickle down to the rest of the economy to benefit all. Indeed, the refutation of this theory of trickle-down economics dominates the discourse.

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Uh oh, another hippy lie busted, Peak Oil is well dead now

Remember peak oil?

The hippies still cling to this shibboleth like Michael Jackson to a small boy.

But the reality is there is more oil now than ever before as we have got smarter and technology improvements give us access to previously uneconomic oil supplies. And the alarmists are upset that oil prices are falling.

Many environmentalists had assumed that if neither fear nor reason helped us to lessen our reliance on oil, then at least we could count on scarcity. But scarcity is not an economic or environmental policy. Humans have long had a habit of expecting the sky to fall. Yet from Malthus to Paul Ehrlich, predictions that the planet was on the verge of starvation have never come to pass (or at least not as broadly as expected). Nonetheless, the drop in oil prices comes at a terrible moment. Last month the Intergovernmental Panel on Climate Change reported that our only chance to halt the rising temperature of the Earth, and to prevent the calamity that rise will cause, would be to eliminate fossil-fuel emissions by the end of the century.

A plan to end U.S. fossil-fuel dependence would be an unlikely goal in any case, but, if oil remains easily accessible, it becomes politically impossible. “It is technically feasible to transition to a low-carbon economy,” Youba Sokona, the co-chair of one of the I.P.C.C.’s working groups, says. “But what is lacking are appropriate policies and institutions. The longer we wait to take action, the more it will cost to adapt and mitigate climate change.”

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