The invitation to comment on the proposed Regulatory Standards Bill opens with Minister David Seymour stating ‘[m]ost of New Zealand’s problems can be traced to poor productivity, and poor productivity can be traced to poor regulations’. I shall have little to say about the first proposition except I can think of a lot of New…
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The state of the current economy may be similar to when National left office in 2017. In December, a couple of days after the Treasury released its 2024 Half Year Economic and Fiscal Update (HEYFU24), Statistics New Zealand reported its estimate for volume GDP for the previous September 24 quarter. Instead of the expected trivial…
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Can we trust the Trump cabinet to act in the public interest? Nine of Trump’s closest advisers are billionaires. Their total net worth is in excess of $US375b (providing there is not a share-market crash). In contrast, the total net worth of Trump’s first Cabinet was about $6b. (Joe Biden’s Cabinet total was about $118…
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While we may not always have quality political leadership, a couple of recently published autobiographies indicate sometimes we strike it lucky. When ranking our prime ministers, retired professor of history Erik Olssen commented that ‘neither Holland nor Nash was especially effective as prime minister – even his private secretary thought Nash was ineffectual’. Even so,…
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It is difficult to make sense of the Luxon Coalition Government’s economic management. This end-of-year review about the state of economic management – the state of the economy was last week – is not going to cover the National Party contribution. Frankly, like every other careful observer, I cannot make up my mind. Certainly Christopher Luxon and…
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By way of prologue, the closest parallel to the current economic situation may be when Ruth Richardson became Minister of Finance in late 1990. The economy had been contracting, although there were signs of a fragile recovery. She was an Austerian and cut public spending savagely. The economy plunged a further 5% in GDP per…
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How the Prospect Theory of Behavioural Economics Makes Economic Analysis Difficult Behavioural economics has been described as the most revolutionary thing which has happened to economics for ages. The notion that people do not behave like ‘rational economic men’ (women are mainly ignored) undermines the microeconomic foundations of the subject. Not the empirical evidence on…
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The Dangers of Delusions of Grandeur This is a column about MAGA – Make America Great Again. But as a prequel I scroll back sixty years to when I was teaching in England. I have fond memories of the students – bright and personable as they were. But their attitudes to England and the world…
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Property rights – which enable decisions over tangible and intangible assets – are critical to an economy as Why Nations Fail pointed out. Not just private property rights for, as we shall see, they are more complicated than that. Neoliberals argue that private property rights lead to the maximum economic prosperity; they used that to justify privatisation….
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The current rise of populism challenges the way we think about people’s relationship to the economy. We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. The re-election of Donald Trump is…
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Does the Autumn 2024 British budget point to a change in fiscal strategies? Many countries found their fiscal position was unsustainable, following the 2008 Global Financial Crash. Their public spending was well in excess of their public revenue and they had to borrow more heavily than lenders thought prudent. Almost unanimously, such countries tried to…
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Last week’s column mentioned the three 2024 Nobel laureates in economics. The column focused only on the 2012 book Why Nations Fail by Daron Acemoglu and James Robinson with little reference to Simon Johnson, although the three have worked closely together for about 30 years. Johnson published last year, with Acemoglu, a 599-page book: Power and Politics: Our…
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This year’s Nobel awards in economics raise critical issues about the future of the world. I was not alone with high hopes when the Soviet Union collapsed. It has been good to see various nations leave the yoke of the Soviet Empire and move towards liberal democracies with thriving economies although sometimes it has been…
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Healthcare sector management needs to break away from its obsession with financial information and focus on funding for access. Health New Zealand recently ‘proactively released’ 454 pages about its financial performance to July 2024. Here is a letter it did not release. Hon Dr Shane Reti, Minister of Health. Dear Minister. We have been deluging…
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What might the public’s increasing demands for safety and security tell the economist? Criminology and economics are quite different disciplines. Someone from one discipline trespasses on the other with the greatest of caution, something which, I’m afraid, not all economists have. There is a foolish economics literature about the ‘optimal level of crime’. Before it…
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Today’s mañana strategy will lead to a crisis for the oldest elderly. It is said that the only certainties are death and taxes, but a lack of each causes uncertainties. As longevity increases, the pressures on state spending increase. A reluctance to increase taxation means the pressures on the elderly increase. The dilemma is usually…
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Stagnation and Contraction In this column I use the less familiar measure of GDP per capita instead of the GDP measure favoured by the commentariat. I became familiar with it when I began doing international comparisons because of the population differences between countries, while I depended upon the measure while working on New Zealand’s economic…
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Congestion pricing is easier said than done. The first seminar I attended in Britain – around sixty years ago – explained a scheme for road usage pricing which would eliminate traffic congestion and direct roading investment. It was impressive and elegant (as many such seminar propositions are) but proved impractical and costly to implement (ditto)….
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The background to In Open Seas: How the New Zealand Labour Government Went Wrong:2017-2023 Not in Narrow Seas: The Economic History of Aotearoa New Zealand, published in 2020, proved more successful than either I or the publisher (VUP, now Te Herenga Waka University Press) expected. I had expected that it would be a sleeper, a steady…
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Comment to Fabian Society at the National Theatre Alive Film of ‘NYE’: 13 September, 2024 You will hear I have some voice limitations. It is the result of successful surgery on my larynx. When I reflect on what happened, I am struck at the quality and the expertise of the healthcare professionals who treated me…
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