Friday, June 22, 2007

"The Outcomes of Income transfers"

Richard Worth has cut and paste my press release for his newsletter, News Worthy. Good. But here is the rest of it for anybody interested in Mark Harrison's new book, The Outcomes of Income Transfers.

New Book Questions Case for Welfare

Monday, June 18, 2007

A new book The Outcomes of Income Transfers assesses the benefits of state redistribution. Economist Mark Harrison examines not only the financial cost of income transfers but the link between happiness and income as revealed by economist-led 'happiness research'.

Welfare commentator Lindsay Mitchell says, "Rather than supporting more redistribution Mark Harrison believes the research does the opposite."

Mark Harrison writes, "(Further), the factors that research shows do promote happiness - marriage, achieving something yourself, being engaged in useful work, good prospects for your children, self-respect, self-reliance, safety, self-fulfilment, social connections, and a belief that you have control over your life - are often undermined by current welfare policy.....receiving money without working does little for happiness which explains why the growth of the welfare state has not increased happiness."

Behavioural economists, according to Mark Harrison, hold that people are subject to self-control problems and misjudge or disregard factors that will lead to long term happiness; "A focus on immediate gratification reduce(s) future happiness."

To this end Harrison says that behavioural economics tells us more about welfare recipients than the rest of the population. "Specifically welfare recipients have more extreme judgmental biases and self control problems than the general population. Their deviations from standard economic assumptions about behaviour are especially pronounced. The social pathologies of crime, substance addiction and illegitimacy are more common among welfare recipients, and are linked to impulsive behaviour that develops in a culture of poverty and low IQ."

Turning to the conflicting issue of wanting to help children of beneficiaries while recognising the harm welfare may be doing to their parents, Harrison cites welfare reformer Charles Murray's thought experiment. It asks, should your child be orphaned tomorrow, which family would you choose to raise him. The poor working couple who value integrity and responsibility or the couple who have never worked, have no regard for the aforementioned values but have plenty of food, good clothing and amenities provided by others?

Most people would choose the first which leads Harrison to conclude, "We need to worry about the incentives created by programmes and be careful of supporting policies that condemn more children to a fate we would not choose for our own children."

Mark Harrison has produced a thought-provoking study that reveals firstly the economic cost of transferring income to the poor is very high, but secondly, and arguably more importantly, the results are not necessarily worth pursuing.

Prohibition and paternalism

The Australian government is moving to impose alcohol bans on aboriginal communities and make receipt of welfare contingent on parents getting their children to school and spending at least half of their benefit on food and essentials.

Prime Minister John Howard said his government would ban alcohol in remote Aboriginal communities and impose strict new limits on welfare payments to try to ensure Aboriginal children were safe from abuse and alcohol-related violence.

"This is a national emergency," Howard told Australian parliament. "We are dealing with a group of young Australians for whom the concept of childhood innocence has never been present. That is a sad and tragic event.

"Exceptional measures are required to deal with an exceptionally tragic situation."

Howard said the prohibitions would apply in the outback Northern Territory but urged state governments, over which he has less constitutional control, to match them across the entire country.

I really don't know how to respond to this. Prohibition and paternalism have no track record of success. NZ experimented with them on the East Coast 70 or 80 years ago but the results didn't hold.

On the other hand, what are the options? From what I understand job/wealth creation schemes run by aboriginal communities haven't been a roaring success.

The focus has to be the children and their future. The prohibition and paternalism won't solve their parent's problems but it might improve the children's prospects. These kids need educating to an standard where they can leave communities that have no futures and make their own way in the world. We exercise both prohibition and paternalism over children anyway. But they need to grow up knowing that freedom and choice are achievable with age.

Or these conditions could make their environment even more dangerous. If children are already being bartered for alcohol increasing it's scarcity and price won't necessarily stop that horrible practice and could worsen their vulnerability. Prohibition will increase crime levels so truckloads of correctional and law-enforcement resources will be vital to protect innocent members of these communities. Are those resources available?

This is such a tough problem and one the state has to do something about.

And we shouldn't just feel relieved we aren't having to make these kind of decisions because these problems aren't absent from NZ. This touches on the Tamihere/Jackson solution. They want welfare controlled through community trusts who will work with the most dysfunctional families. A policy I think we will be hearing more about next year.

Thursday, June 21, 2007

Another Bradford bill

What is the rationale for the current voting age? Any ideas? Sue Bradford wants it lowered to 16. Strikes me that the Greens would be the major benefactor of such a change. But driving at 15, working, paying taxes, having babies and going on benefits all happen at 16 and 17. Has she got a point? These arguments are always fraught because rules can't take account of the individual. If 16 is too young why isn't 18?

Freedom of speech stomped all over

This is a disgusting example of the dumbed-down world in which we live. A student thinking for himself and backing it up with research is ostracised by school authorities. Kieran King thinks alcohol and tobacco may be more dangerous than marijuana. But he's not allowed to say so.

Mentally fit to vote?

When I read the headline, STATES FACE DECISIONS ON WHO IS MENTALLY FIT TO VOTE, I balked. Surely people couldn't be denied a vote based on their assessed mental capacity? (No jokes about Green voters please). But reading on I can see the dangers of people being manipulated. Unfortunately it may be one of those situations that has to be lived with for the sake of a bigger principle.

Police are human too

Excellent analogy from Bob McCoskrie in the NZ Herald this morning;

"With drinking we're saying it's not the drinking it's the way we're drinking ... it's the same with smacking - it's not actually smacking that's the problem, it's just some people go way over the top.

"This is a waste of time because it's not dealing with the real causes of child abuse."

Thinking about the business of police guidelines, discretion etc., police will be acting on reports of smacking, much of which will be in the home and involve one person's word against another if it is disputed.

Many parents will be familiar with the scenario of one sibling complaining of being hit or pinched or shoved or tripped up by another (unless your children are angels). It doesn't happen very often in my house, thankfully, but occasionally.

What to do? Fortunately I know my children; I know which is more likely to be telling the truth and which is more likely to be exaggerating; I know how badly they were hurt because I know who is likely to overreact and who is rather more staunch. I know them well enough to accept where there is smoke there is fire. But was the offence inconsequential? Should it be punished? To be brutally honest, it is my mood which is likely to most influence the outcome.

If I am calm and objective I'll attempt to negotiate a truce, explaining why neither parties behaviour is getting them anywhere. If I'm tired and fed up with their bickering I'll order them to separate rooms, giving a right old tongue lashing to the perpetrator, regardless of however mercilessly they may have been provoked. You should know better - you don't hit! Control yourself! (Whilst hypocritically barely controlling myself)

The point of all this being? The police are human too. And they have far less knowledge of the participants in any reported event. What happens when a cop is called in to a reported smacking incident is going to very much depend on his interpretation of the situation, the guidelines and what kind of day he is having.

Wednesday, June 20, 2007

Work for the dole expands

The Australian government is about to put up to 80,000 more people on work for the dole programmes. This is a big undertaking given there are only 4,000 on the them currently. According to Centrelink (WINZ equivalent);

Work for the Dole is about helping job seekers improve their employment prospects by providing opportunities for work experience. Communities are involving job seekers in local projects providing facilities and services of value to the community.

Work for the Dole placements cover a wide range of activities, such as heritage and/or history, the environment, community care, tourism, sport, providing community services and restoring and maintaining community services and facilities.

NZ Labour has constantly bagged the scheme, describing it as failed ;

"Early data shows 30 per cent of job seekers who do full time work for the dole either go on to a part-time job or leave income support completely, compared to only 14 per cent of similar job seekers who did not do full time work for the dole," Dr Stone said in a statement.

Double the success rate isn't failing.

The trouble with job creation schemes is they are expensive and they compete with the private sector. I would rather see people in private sector jobs, even if they are subsidised for a time.

To 'anonymous'

Oh Dear. I made a blue. Here's an 'anonymous' comment from yesterday.

Lindsay, you've blatantly misrepresented Hyman's article, which is headed "A Universal Benefit Works for Women". She was writing about the benefits for women of a universal basic income. The article also points out that a UBI would not discriminate - by definition, everyone would get it. Now if you want to argue about UBI (which seems to be a dead issue, so not much point in that) go ahead, but don't depict it as 'wages for housework' only for women. It never was.

Quite right too. I was being flippant and hasty.

So let's be serious. A UBI of $8,000 for everybody would discriminate. Why? Because the lion's share of the tax paid to fund such a scheme would come from men. It would simply add to the forced redistribution of wealth which already moves broadly from male to female through the benefit system.

Also the children's UBI would go to the main caregiver which is usually the mother. That's $8,000 per child she has control of.

And finally, I depicted the UBI as being for caring and cleaning services. Prue Hyman most certainly did see the payment as recognition for the 'value of caring for children and dependent relatives'.

"Paying taxes gives sexy feeling"

That's what the DomPost headline says. Truly.

a group of neuroscientists and economists at the University of Oregon, Eugene, has teamed up to get inside the heads of charitable citizens. The researchers recruited 19 female students and placed them in magnetic resonance imaging (MRI) machines to monitor the caudate nucleus and the nucleus accumbens, ancient regions of the brain, which produce feelings of pleasure and fulfillment. Each student participated in an economic game centered on charitable giving. They first received $100 in cold hard cash and were told any money left at the end of the study was theirs to keep. They then learned about a local food bank that would benefit from any donations from their account.

The volunteers then watched a screen as a computer program decided what to do with their money. Sometimes students could choose whether to give to the food bank. Other times, the computer "taxed" their account, donating money automatically to the food bank. And, once in a while, money would magically appear, either in their account or in the food bank's coffers.

Most subjects experienced the "warm glow" effect after voluntarily giving money, but some were also wired for pure altruism. In this latter group, the pleasure zones of volunteers' brains lit up when the food bank received money, even if the volunteers were being taxed. More surprisingly, when these subjects saw the computer randomly place money into the account of the food bank, they had a stronger positive reaction than when their own funds suddenly increased. And this big mental reward paid dividends to the food bank. Students exhibiting pure altruist behavior ponied up twice as much money as their "warm glow"-only counterparts, the team reports tomorrow in Science. The findings should surprise economists, says co-author Ulrich Mayr, as they indicate that some people care more about money going to the public good than to themselves.

Silly bints who know very little about why and how many people use foodbanks. When are they going to repeat the experiment on people (of both sexes) who live and work in the real world I wonder.

Tuesday, June 19, 2007

No Waka Allowed

Alinghi boss Ernesto Bertarelli has refused permission for the waka to accompany Team New Zealand to the starts of the America's Cup.

I blame it all on that Willie Jackson who has bitched and moaned ad nauseam about "rich boys toys" and the "filthy America's Cup". I have e-mailed him to ask if there is a Maori word for the concept of ill-wishes coming to fruition. If there isn't, one should be coined - just for him.

They're wasting their time and our money

Dope users ignore police to buy supplies. We are supposed to be incredulous that people who went to buy from a tinnie house have walked past police in high visibility jackets to make their purchases. Actually I am incredulous that the police bother. Another one will quickly sprout up when this one is shut down.

Many of the people charged with attempting to procure cannabis were employed and included a roofer, kitchen hand, mothers and students. They varied in age from a minor to a 63-year-old.

Employed now. By the time the cops are finished with them they might not be. Just what is the point?

I am also reminded about being told just recently that the Wellington City Council introduced a voluntary drug test for some of its workers. Only one put himself forward. And was tested positive. And got the sack. Was he Irish? I asked my friend. No. He was a Maori, she replied. At which we burst into raucous laughter. (My friend is Ngati Porou).

If drug tests were widespread and mandatory we wouldn't have a workforce. Nobody to do the hard yacker and unpleasant jobs many would wrinkle their noses at.

A man's work is never done

Radical feminists love to prattle about the value of unpaid work. Such martyrdom going on behind four walls and no financial appreciation. They churn out studies showing what their caring and cleaning services would be worth in the marketplace but don't want a husband, the only one with any interest in paying them to look after their own. So then they do the next best thing and use these specious surveys to demand the government pay them a wage (eg Prue Hyman's universal benefit for women).

Well, what do you know. It's official. Men do unpaid work too. British researchers have put the value of a father at NZ$17,000 a year. The services they provide include being a taxi-driver, a sports coach, a gardener, a home handyman and even housekeeper.

So a question for the feminists. Where should they send the bill?

Monday, June 18, 2007

A black hole

With a depressing sense of deja vu I read this headline yet again;

Local Authority Expenditure Rises

It never drops. Here are the figures for 2001 - 2006

Total revenue excluding non-operating and extraordinary items

3,838.9 million

A massive FORTY PERCENT increase, with most of the revenue coming from rates equating to $734 for each and every New Zealander.

Taking the Code of Conduct seriously

Saturday's DomPost editorial was a rather funny parody about missing clauses from the proposed minor party Code of Conduct;

We will behave in a manner that enhances the dignity and decorum of the House. (Members wishing to gesture at each other across the floor of the House will use only the middle finger of the right hand. Using two fingers causes disorder.)

And Deborah Coddington is also suitably impressed with said Code;

Last week, Parliament's minor parties signed a code of conduct so MPs behave nicely to each other. Isn't that what Standing Orders are for? This code looks suspiciously like a desperate attempt at headline grabbing. Act's Rodney Hide says he's now the "bad boy trying to be good". Does anyone fall for that? I've had more than my share of men behaving badly, and they never truly change.

Not having had "my share of men behaving badly" I couldn't possibly comment.

It's more than appalling , Don

Creative New Zealand shouldn't exist. It is not the role of government to pay for art. But that it should be paying for the production of a play based on stolen material, a play with content the ruling government want to promote as widely as possible, is much worse than "appalling". It is 'cancerous and corrosive'.

Sunday, June 17, 2007

Pregnancy + plonk = pariah

An article in the SST alerted me to the new advice being given by the UK govt. If you want to verify something best go straight to the horse's mouth. Does the following make any sense or does it just smack of the we-know-best and you-lot-are-idiots nanny state?

New health guidance published today is advising pregnant women or those trying to conceive to avoid alcohol.

The revised Department of Health advice says:

- Pregnant women or women trying to conceive should avoid drinking alcohol.

Deputy Chief Medical Officer Dr Fiona Adshead said;

"We have strengthened our advice to women to help ensure that no-one underestimates the risk to the developing foetus of drinking above the recommended safe levels. Our advice is simple: avoid alcohol if pregnant or trying to conceive. This advice could also be included on alcohol packaging or labels.

"The advice now reflects the fact the many women give up drinking alcohol completely during pregnancy. It is now straightforward and stresses that it is better to avoid drinking alcohol altogether."

1. The previous advice in England was: pregnant women or women trying to conceive should not drink more than one to two units of alcohol once or twice a week and should avoid getting drunk.

2. The revised advice is not a result of new scientific evidence, but is consistent with the current evidence. We have revised the advice to make it easier to understand and to provide consistent advice across the UK.

3. Last year the Department of Health commissioned the National Perinatal Epidemiology Unit to undertake a review of existing national and international evidence on the effects of alcohol on the developing embryo, foetus and child. The principal findings were that there is no consistent evidence that low to moderate consumption of alcohol during pregnancy has any adverse effects although there is some evidence that binge drinking can affect neurodevelopment of the foetus.

4. While scientific basis for our advice has not changed, the evidence base is not extensive and we believe it is possible the previous advice could be misinterpreted by some that it is safe to drink 'a little' when pregnant, where 'a little' can differ from person to person. Most women do actually stop drinking or drink very little in pregnancy, so a slightly stronger message is aimed at those who do not reduce their consumption to appropriate levels.

So for no rational reason the UK government is now telling pregnant women not to drink at all. And that sort of edict shapes what society thinks.

So if you are up-the-duff, don't dare indulge in a drop of drink (despite the fact that a small amount of alcohol will be metabolized in the liver and never cross the placenta according to experts) because some disapproving dickhead will be delighted to lecture you in the danger of ignoring the great and good government gobbledegook - either literally or in spirit.