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Desert and weed

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If you put the federal government in charge of the Sahara Desert, in 5 years there’d be a shortage of sand. – Milton Freidman

For forty years or more drug reformers, mainly Libertarians and Left-wingers, with a handful of right-wingers in the mix, have argued that the key to reducing and perhaps even eliminating drug crime is to simply make many drugs legal.

The argument is that if the drugs were made legal to grow or make, and sell, then criminals would be deprived of a massive source of revenue because the massive increase in production would greatly reduce the price of the drugs. Hence crime would be greatly reduced. The resulting costs of healthcare for drug addicts is argued to be a small proportion of the current crime cost and the government could now tax the product, producing new streams of tax revenue.

The suggested starting point for deregulation is Marijuana (Cannabis, Weed(US), Dope (NZ), “MJ”, Mary Jane, etc, etc), since it is – arguably – less dangerous to users in terms of addiction and general health effects.

A number of countries have done this, starting in Europe and the effects so far seem to be neither as good nor as bad as each side had argued. A handful of US States have also done this, starting with California (of course) and in their case there has been at least one unexpected outcome:

California has yet to see its black-market disappear, however. In fact, illegal growing and selling of pot have increased so rapidly in the past six years that earlier this month, Sacramento vastly expanded the state’s war on pot by taking a decades-old seasonal commission designed to curb illegal growing and turning it into a full-time, multi-agency task force with the job of snuffing out a booming black market. 

Their neighbour and ideological soulmate, Oregon, has been suffering the same problem – including gun battles between rival growers.

So why is this happening, the exact opposite of what was promised by reformers? One word: government, first via farming regulations…

In California, for instance, growers have tried to evade the environmental regulations that all farms must observe, including ones on water usage. Investigators have found miles of complex, illegal irrigation systems in the state’s national forests, diverting hundreds of thousands of gallons of water daily to illegal farms, as streams run dry.

… and taxation:

“Californians just legalized cannabis in 2016. We’ve had legal sales for three years, and the main driver of these price increases is that local cities can set a local business tax rate for cannabis. 

That’s anywhere from zero to 15% of gross receipts.  … And just for comparison, Oakland’s cannabis taxes are 417 times higher than Oakland’s taxes on guns and ammo business. And in Los Angeles, the marijuana taxes on businesses are 2,808 times higher than the business taxes on a check cashing or a payday lender.”

I do have to laugh. The reformers argued that this would be a source of tax revenue, but as usual they forgot that the State’s appetite for tax revenue is rapacious and bottomless. At least the Californian Cannabis Cultivation Tax is being eliminated after it became clear that it would likely kill the newly legalised industry.

You’d like to think that some broader lessons about tax and its effects on business would be learned here – but you would be wrong. Drug reformers are now focusing on a Federal decriminalisation across all states, claiming that these problems are being caused by those states who have not yet followed California and Oregon.

Incidentally a former Waikato dairy farmer, John Lord, has become one of the largest legal drug dealers in the United States via his ownership of Colorado cannabis dispensary chain LivWell:

The industry is highly regulated in Colorado, and based on rules around the sale of alcohol. It is overseen by the Marijuana Enforcement Division, a branch of the Department of Revenue.

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Written by Tom Hunter

November 23, 2022 at 11:41 am

Begun, the Twitter Wars have

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The Twitter wars are actually just heating up, as it is becoming apparent that the Left regarded it as “their” platform in pushing Lefty talking points (propaganda).

Actually it’s been apparent for a long time, but in the past any criticisms of them by the Right were met with their cynical smirks of “It’s a private company and can do what it wants – isn’t that what the Right have always said?”

But with Elon Musk now in charge of a privately-owned Twitter the Left have dropped that mask and come right out in the open in their demands for government censorship to replace the censorship they’d been applying behind the scenes via the hive-mind of Twitter employees who were ideologically-like-minded to the Left – or even more so.

But all of these companies are, in fact, monopolies, and thus exist in a precarious legal state — presently tolerated, but open to government harassment and persecution any time they do not follow the government’s commands.

As proof of that, Democrats are now demanding that the Federal Trade Commission investigate Elon Musk for “undermining Twitter.” By which they mean — they want him investigated for abandoning the censorship scheme they demanded the old regime imposed.

“In recent weeks, Twitter’s new Chief Executive Officer, Elon Musk, has taken alarming steps that have undermined the integrity and safety of the platform, and announced new features despite clear warnings those changes would be abused for fraud, scams, and dangerous impersonation,” the lawmakers said in a letter to FTC Chair Lina Khan

Dangerous impersonation? Of who? Oh right….

Senator Ed Markey went so far as to participate in a hoax in which he colluded with a Washington Post reported so that that Post reporter would pay for blue tick status and then impersonate him (Ed Markey).

And then, having contrived this case of impersonation, Ed Markey screamed about it and demanded the FTC investigate Musk for permitting the impersonation.

It seems only fair that Twitter ban Markey from the platform for engaging in this fraud. 🙂 After all, that’s what’s going to happen to other “accounts” pulling similar – if vastly more amusing – stunts. Musk won’t of course, having brought back the Babylon Bee…

and Trump, or at least his account. Musk also understands the game being played here by the Administrative State and their six ways from Sunday of getting back at you.

Aside from the censorship fight there is also another interesting Twitter battle going on inside the company as thousands have found themselves out of a job – for the very good reason that they were useless drones. This Twitter thread explains what he’s doing, which is Whaling and Culling:

First, the “Whaling”: It’s a common refrain that you’ve probably heard at some point or another “10% of people do 90% of the work.” That’s what that tight 2 week deadline for Twitter Blue was for; he was perfectly aware that it was an unrealistic time frame. It was a test.

Hence, Elon was looking for the whales at the company. The heavy hitting, actually producing and hard people who have been there for a while. When the whales don’t have to carry dead weight, they perform like the equivalent of 10 people.

There are larger questions being raised here given the layoffs of more thousands of workers at Facebook and Amazon (can Google be far behind?), and those questions are addressed in this article, The Email Caste’s Last Stand, by Malcom Kyeyune:

The abrupt firing of thousands of employees solicited a new wave of outrage from Musk’s haters. But even if you remove him from the equation, Twitter couldn’t have gone much longer without massive layoffs. The same thing is happening across Silicon Valley. Last week, the online-payments company Stripe announced it would cut 14 percent of its workforce, as did the rideshare giant Lyft; Facebook parent company Meta looks poised to do the same. Like Wile E. Coyote, tech companies ran off the cliff long ago; only now is economic gravity starting to assert itself.

The article makes the point that when venture capital funding seemed to be unlimited, it not only encouraged all these Big Tech startups and established players to hire useless people, it basically developed a class of people not unlike the French aristocracy just prior to the 1789 revolution:

The problem was that France now had a large class of impoverished nobles, for which some sort of exclusive jobs program was absolutely necessary. They didn’t have diversified business interests like the court nobility at Versailles; all they had was their noble privilege, and if the French state abolished the last areas where that privilege meant something, they would truly be lost.

A similar dynamic is operative in America today. The people who worked “on climate” at Twitter, now being given the ax by the perfidious Elon Musk, are openly complaining that they won’t be able to find jobs anywhere else in this economy. They are, of course, right to worry.

Which is why reforms of things like the French Army went nowhere and why “reforming” Twitter and other companies to actually make money will require firing lots of these useless eaters.

However, the article goes even further in pushing this question out into the society beyond the world of Big Tech. You can see the connection between this and the increasing debates about things like UBI (Universal Basic Income), including – here in NZ – debates about WFF and the whole raft of tax credits and income supplements that now constitute what used to be called “social welfare”. I recommend the excellent series of posts on this subject at Kiwiblog by one “PaulL”, Effective Marginal Tax Rates, which goes into some detail about the changes that might be made to shift people from welfare to work.

Kyeyune raises the larger question of what “work” may actually mean nowadays, particularly for our class of credentialed (but not educated) drones:

In my own country, Sweden, the state picks up a lot of the slack. Here, small municipalities hire dozens or hundreds of communicators, consultants, and other plainly nonproductive personnel, and attempts to do something about it run into a very simple question: Where else are these people supposed to work? Who else would hire them? Though few will say it openly, the city of Uppsala’s nearly 100 communicators have nothing to do with communication, and everything to do with preserving social stability. It is, in essence, just part of a massive jobs program.

When I look at the thousands of people that the Labour government has hired into its myriad government departments, ministries, quangos, commissions, etc, I have to think that’s what’s also happening here in NZ. And like Twitter and those other tech firms, the question is how much longer can we afford to hire such people?

“To understand events around the world today, one must think in terms of the class struggle.”

But the New Class isn’t limited to communist countries, really. Around the world in the postwar era, power was taken up by unelected professional and managerial elites. To understand what’s going on with President Donald Trump and his opposition, and in other countries as diverse as France, Hungary, Italy and Brazil, it’s important to realize that the post-World War II institutional arrangements of the Western democracies are being renegotiated, and that those democracies’ professional and managerial elites don’t like that very much, because they have done very well under those arrangements. And, like all elites who are doing very well, they don’t want that to change.

All-corporate farming is the answer?

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The slow and steady decline of the family farm in the USA has been documented for years now by many sources.

There are many reasons for but one of the chief reasons is a paradoxic, at least if you don’t know anything about the economics of government subsidies.

At least since the 1930’s there have US Federal programs to “help” family farmers survive by basically giving them subsidies for all sorts of things. And yet…

One of the continuing themes of American agriculture in the 20th century is a decline in the number of farms, farmers and rural residents coupled with an increase in the farm size, specialization and capitalization. The two decades between 1950 and 1970 were bellwether years for these trends.

Actually all that has happened was that the larger a farm was the more money it could get from the government. So they became ever larger and began swallowing their smaller brethren.

Just 8.9 percent of American farms comprise approximately 75 percent of all farm sales revenue in the United States, illustrating how few farms provide the majority of production.

To be fair to the US government it should be said that while these programs did not help the family farm, they’re not the driving factor in destroying it. Simple economics is the culprit:

One of the main causes of this consolidation of farms is specialization. Large farms are not simply replicas of smaller ones on a bigger scale. The economic realities that allow a farmer to grow also force him or her to change the operation. Large farms almost have to specialize in a few cash crops. Or, to put it another way, specialization allows farms to grow larger. It is both a push and a pull of economic factors that fosters specialization.

And specialisation, the division of labour, has been one of the fundamental drivers of our capitalist economic system since the start of the Industrial Revolution. That is not going to change. That article mentions the size and cost of machinery resulting in dedication to single crops just to get the ROI, and I’ve seen that in my own lifetime. My Dad was pleased to own all the haymaking equipment we needed for what was a moderate-sized farm. But in the days of huge, $200,000 balers, requiring even bigger $300,000 tractors to pull them, that would be out of the question now. And it is a justifiable sacrifice, for the modern equipment gets the job in 1/3 or even 1/4 of the time, and this is combined with the fact that modern machinery means thee hay doesn’t have to bake in the sun for two days – “haylage” is the word now, with no farmer I know of doing either pure hay or pure silage. With such changes and efficiencies no farmer can complain of being forced by the contractor to do the job when rain threatens (my Dad’s reason for buying his own equipment); they can do it between the rains. I’ve not heard of a hay crop being lost for decades.

Still, all this does produce concerns:

Today in the United States, fewer than 1 percent claim farming as an occupation and only 2 percent of Americans live on a farm. In my opinion this translates to a human systemic risk for the 98 percent of people who literally depend on them (and others) for their food.

That risk was also shown in this 2021 Spectator article, as it discussed the problems of the resulting monoculture when the C-19 Pandemic responses screwed with the food supply chains:

Now we have a new abiding symbol of modern industrial just-in-time agriculture: row upon row of euthanized pigs dumped into hastily-dug, wood-chip-lined shallow graves, beasts rotting in the sun, destined never even to “turn into pork,” at best serving as a very expensive compost additive. Surely this is the reductio ad absurdum of an entire way of life — our own — and yet more support for Leopold Kohr’s incontrovertible dictum that “whenever something is wrong, something is too big.”

And before anybody gets too nostalgic, understand that this is merely another step in a process of mechanisation started over a century ago. From a 1992 book Nature’s Metropolis: Chicago and the Great West (1992) by one William Cronon:

Nothing in Chicago at the end of the nineteenth century better symbolized the city’s profoundly transformed relationship to the natural world than its gigantic meat-packing corporations. Although they joined the Board of Trade and the lumberyards in guidebooks that sought to impress visitors with the ways in which Chicago stood first among cities, the packers in fact represented the city’s greatest break with nature and the past. . . .“An industry that had formerly done its work in thousands of small butcher shops around the country must be rationalized to bring it under the control of a few expert managers using the most modern and scientific techniques. The world must become Chicago’s hinterland.” This was an epochal rupture with the past,

So I’m sad to say that this is an inevitable process that’s been going on for a long time now and which shows no sign of stopping. Still, the govermment is (still) not helping:

Biden is trying to get rid of fossil fuels, and it’s killing us,” Stanton said. “Our packaging costs almost doubled, fuel costs are through the roof, and we paid $1,000 a ton this year for fertilizer that was $500 a ton in 2021.” Natural gas is a key ingredient in nitrogen fertilizers. “So we get hit twice,” he said. “It’s putting a lot of pressure on all of us.”

And not just fuel costs but other government-induced discrepancies:

Store chains, he said, bring in sweet potatoes from Georgia — where, under federal law, seasonal farm workers make just $11.99 per hour, compared to the $15.54 hourly wage mandated in New Jersey.

“For New Jersey farmers, that pay rate went up $1.50 last year, and it went up $1 the year before that,” Cassaday said. “What with labor, fuel and fertilizer, my input costs have probably gone up 50%.”

Meanwhile, buyers — equally squeezed by inflation — are offering farmers less and less.

“One area chain store paid me $17 a box for my sweet potatoes three years ago,” he recalled. “Last year they paid me $15, and this year they told me they’re paying $13. Next year I can’t plant them,” he said. “I cannot compete with that farmer in Georgia.”

I was interested to see that one of the farmers quoted – one Natasha Stein-Sutherland – had been a dairy worker in NZ after she finished her degree at Cornell university, and the she milks a 1000 cows in New York state, which I never think of for dairy farming, or farming in general. My assumption may become truth over time:

“I used to be the largest grower of processing peaches in New York, for fruit cocktail and diced peaches,” said Bittner, 64, whose orchards — apples, cherries, peaches, plums, and more — thrive in the rich soil of the Lake Ontario shoreline.

“I have a young peach orchard coming into production right now that was planted for processing and we’re going to have to cut it down. It’s heartbreaking. But we lost that peach processing market to China,” he added. “We had to remove all that acreage. There was no home for it.” American fruit canneries across the US have closed in recent years after China’s low labor costs sent prices for imported canned fruit plummeting, according to industry experts.

Yet supermarkets keep touting their “local produce.” “Bulls–t,” said Cassaday, 55. “It’s going to come to the point where there will be no local growers left and all our produce will be imported.”

Well yes, and while you can’t argue with all this in terms of how it’s made food cheaper than ever…

… you do have to wonder whether the marketplace is actually pricing in the cost of disrupted food chains when something goes wrong. What cost then? For those socialists out there who view all this as just another example of why capitalism fails, allow me to introduce you to economist Ronald Coase‘s famous 1937 paper, The Nature of the Firm, which explains the shifting dynamics of when and why firms (including partnerships) are created rather than contracting out to the marketplace. It’s a question of internalised vs externalised costs and they change over time.

I’m not familiar enough with economic theory to know if Coase’s theorem has been played up against the larger idea of free trade in marketplaces between nations, but it seems to me that one can substitute a nation for a firm and ask the same question: internal production vs external contracting in the marketplace, when it comes to things like silicon chips for weapon systems – and food.

Within the next few months, the United States is projected to import more agricultural products than it exports for the first time in history.

Written by Tom Hunter

November 15, 2022 at 9:48 am

This is Quantitative Easing

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Or Modern Monetary Theory (MMT).

Take your pick but basically it amounts to central banks creating vast amounts of credit by various means and then blowing that into the economy to keep the private sector moving along.

At which point it ends up in the hands of very rich people who own assets.

To that end I loved the myriad idiocies about such things in this ranting post over at The Daily Blog by one Finn Flynn, The Road to Serfdom: ACT’s map to backwards. Mr Flynn is one of those Far Lefters who now run around getting outraged if anybody calls him a communist, since in the wake of the collapse of so many communist socieities, and the soul sucking uselessness of the ones still going, such people are regarded as fringe figures generating more mirth than anger nowadays and worthy only of mockery.

But if you read that piece you realise that…. he’s a just another dirty commie. 😂😂

I wrote a comment in response to just three of his idiocies (“the hands-off response by Herbert Hoover” is a classic) but naturally they didn’t get published, so I’ll stick with just one here because it’s relevant to the topic of this post. Mr Flynn writes:

But ACT insists that the Reserve Bank should focus solely on using the OCR to control inflation. Why? Because inflation eats away at investment returns for the wealthy. If inflation reduces the value of a dollar over time, then lenders – wealthy investors and financial institutions – reap less return on money they have already lent. They get the same nominal dollars back, but their spending power – their value – is less. So ACT must stamp out any instruments that undermine the interests of the wealthy. 

The huge surge in wealth that happened to Musk, Zuckerberg and Bezos, in 2020-2021, is a direct result of QE/MMT. They don’t hate inflation but love it, because inflation loves assets. You don’t need to be a billionaire either; ask any Auckland homeowner about rising house prices in 2020 and 2021 as our government did the same thing in the NZ economy.

I’m also pretty sure that Flynn – despite commenting loftily on Hayek’s Road To Serfdom – has never actually read it, given the howlers he makes about it. For a start, Hayek actually saw a place for Western economies to have social welfare systems; in fact he thought them vital, so he’s no purist on Laissez-faire. The overwhelming thrust of his analysis in that book was that centralised command-and-control economies (like the USSR) would ultimately fail because they could not replicate the enormous amount of economic data that exists in marketplaces. Incidentally the same limit on information applies to the forecast dystopias of Artificial Intelligence’s running the world.

Flynn also references “Historian” Howard Zinn’s A People’s History, because of course he would. Never mind that the “Historian” himself said it was less history than a polemic, and it’s been regularly torn apart as such by even Leftist historians.

Having said that the following moving graph – obtained via the NZ blog, Utopia – does a good job of tracking the wealth comparisons of four of the richest men on Earth:

  • Elon Musk
  • Jeff Bezos
  • Bill Gates
  • Mark Zuckerberg

The tracking runs from 2007 to late 2021. It should be noted that in 2022 Zuckerberg’s fortune has collapsed by about $100 billion.

Two things about this chart strike me as curious.

First, the surge in Bezo’s fortunes in 2016-2017, when he suddenly moved past Bill Gates to become the richest man in the world (publicly anyway – there are those like Putin), even though Microsoft and Amazon were constantly switching places in total wealth; it’s not like Amazon, where Bezos has his wealth stacked, suddenly surged the same way.

Second, the same thing happens to Musk starting in early 2020 as he goes past Bezos in about a year. I’m well aware of the fact that a combination of people being forced to sit at home during Chinese Lung Snot lockdowns resulted in massive increases in the use of Facebook for social connection and ordering stuff from Amazon to be delivered at home.

But what’s the reason for Musk’s wealth explosion? I can only assume that it’s due to the massive amount of shares he has in Tesla and the fact that those shares took off finally, even if the company’s total value is nowhere near that of Amazon, Apple and so forth. But given that it’s tough for a company that actually builds things to expand as fast as an data-based business model, I can only assume that 2020 was the moment that investors started betting on the future by diving into Tesla as the leading EV manufacturer.

Still, it’s a cool video to watch.

This is free trade?

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Although I don’t follow British politics closely I still like to take an occasional glance at the political blog site, Guido Fawkes (also known as Order, Order), to get his often waspish perspective on the subject.

In 2014, at Guido’s tenth anniversary party, London MayorBoris Johnson said that the site “has long been the dung on the rosebush of politics”.

The man behind the site is one Paul Staines, a British-Irish right-winger/Libertarian, and he seems well plugged in to the system, with personal contacts among politicians, activists and media people. The result is that his blog is very popular, as it should be with writing like this:

Does the Tory Quarterdeck, its High Command, fear putting someone of talent, presence, capacity, personal force and experience in as Chief Whip?

Do they not realise that the Labour Whips are a lethal force? That they are wily with every sort of procedural innovation? That they operate a disciplinary regime that would have been illegal in Nelson’s navy? That their motto is, “We can make you want to be dead”? Do they not know what they are up against?

But it was this little throwaway piece I saw that made me laugh.

It’s a good reminder of how the State continues to be involved in “Free Trade”.

Written by Tom Hunter

November 2, 2022 at 7:35 am

You Vill Eat Zee Bugs

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In a complete change from yesterday’s delicious item on Pastrami & Rye and other yummy things, here’s something decidely not tasty, and it’s happening a lot closer to home than I expected, since I thought they’d try this shit in part of Europe and the US first.

But I guess those peoples, with their history of fine cusine, have better taste than Australian schoolkids:

A teacher from one of the 1,000 Australian schools feeding kids chips made out of powdered crickets asks, ‘Do crickets taste good?’ The student nods and the teacher adds, ‘Yeah. Let’s eat some more crickets…!’

Bugs are on the menu again… Why does the World Economic Forum have such a weird obsession with making our kids eat them?

Well the WEF has many weird obsessions and should be nuked from orbit the next time it meets in Davos. It’s the only way to be sure.

But all their obsessions have one thing in common, which is not massive, transformative economic change – that is merely the strategy – but the goal of saving the planet from the humans – so we can save the insects, at least the ones we’re not eating:

The official World Economic Forum line is that eating meat is accelerating the effects of Climate Change. Therefore, to fix ‘the climate’ humans need to reduce their consumption of meat and replace it with a climate-friendly substitute. There are a few on offer, but the favourite is insect protein.

It’s not just dairy farming that’s in the gunsights of these creatures. Here in NZ they may not have to use the insects-as-protein angle since the various new environmental regulations that are coming could wipe out at least 20% of sheep and beef farmers, and of course we’re already losing tens of thousands of hectares of such land to pine forests for carbon farming.

But in Australia they’ve gone for the propaganda angle instead, hence the schools, though exactly how this propaganda was enabled I’m not sure. It certainly involves private enterprise, with a company called Circle Harvest involved – there’s one in England called Yum Bug, who’ve obviously decided on in-your-face propaganda with that name. But the teachers, as one would expect, are fully on board:

“Chips are great, aren’t they? And these chips are even better because they think they’re better for you!’…‘Can you taste it? No, you can’t. It tastes like normal CCs doesn’t it?”

Yeah, because insects taste like shit. But if you just add the 11 secret herbs and spices then they taste great, better than tofu.

The secret, as with all the best propagandists in history – from the Jesuits to the Communists and Nazis – is to get to the young kids. A decade from now these little ones will be demanding their insect meals at university and by 2060 they’ll be in government and leading corporations like Yum Bug.

I’ve never seen the following movie because although I liked Science Fiction as a kid I was not into dystopian predictions of a shitty future for the Earth, but I guess I should watch this now as a guide to what the WEF will come up with next.

Written by Tom Hunter

October 22, 2022 at 6:47 am

The government trap

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It is not from the benevolence of the person that we expect them to work, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.”

Recently over at Kiwiblog there has been a superb series of articles by one of the regular commentators there, PaulL, which looks at the problems created for beneficiaries by government.

His analysis focuses on our combinations of tax rates and various types of benefits – also called transfer systems – and how this creates barriers in moving people from welfare to work. The key phrase is Effective Marginal Tax Rates.

Admittedly it’s a problem common across the Western world, perhaps the entire world. I agree with his first point:

I would argue that at the lower end incentives matter even more than the top end.  For someone earning $180K per annum, working an extra hour isn’t a massive stretch.  For someone not working at all, working that first hour is a massive change.

I’m not going to list all the details and the graphs of his posts but merely some of the key conclusions from each post, which are regrettably often the same:

Working 10 hours per week,[Sole parent, 2 kids, impact of working additional hours] their income after expenses is $918 per week.  From there to 36 hours a week there’s no point in working those extra hours – the household income remains at basically $920-$930 per week… Nobody in their right mind would work 40 hours a week to get $170 more disposable income than they had when they weren’t working at all.  That’s $4 of disposable income for each hour of work.

For this household 83% of the increase in the minimum wage actually flows to the government in taxes and clawbacks. This household is a perfect example of the type of household we’d typically talk about when increasing the minimum wage – a single wage earner with two dependents. And yet, that minimum wage increase costs business a lot of money, most of that money flows to government. 

EMTR Other Demographics: for people who are lowly paid and part time, there is relatively little incentive to increase hourly earnings – for every extra dollar per hour you earn the government claws back 70% or more.  This may reduce the likelihood people would invest in training or moving into more responsible / onerous positions.

I wonder if any of the Labour Party people, or any Left-Wingers, have ever done such a calculation when they bellow about how the minimum wage can help people, save people? For that matter, has anybody from National or ACT ever made these arguments when confronted with the emotional blackmail surrounding the minimum wage?

I’ve never heard such arguments from such people, but they are desperately needed, for as PaulL observes:

The productivity of a country as a whole is really just the sum of the productivity of the people in that country. If significant chunks of our population have no incentive to invest in improving their productivity, because it makes no difference to their income, does that impact our national productivity and wealth?

Our productivity has been dreadful for decades, as documented by Michael Riddell, and although our lousy investment in capital (a strange failure for a “capitalist” economy) is the primary problem, it is made worse by the stupid barriers identified in the KB posts against people who would like to better themselves.

Written by Tom Hunter

October 15, 2022 at 1:32 am

Plant-based foods

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I can’t even.

I’ll let this guy say it for me regarding plant-based foods (see The Metaphysics of Plant-based Bacon)

Just one fun fact from the link:

4. Bacon is 86 percent cheaper than it was 100 years ago.

Fortunately I think this will be bust:

Today we are looking at the plant-based meat category. Spoiler alert: I find the plant-based meat category bland and uninspiring. And honestly, I think we can reasonably lay plant-based meat mania to rest in peace in the history books, right alongside 1990’s emu farming mania in the US.

Leaving only mockery in its wake. A Nightmare on Bowen Street

That was later the theme for a nightmare from which I woke in a cold sweat, dazed and confused, similar to the feeling when opening an ACC bill.

I was seemingly attending a function in Wellington entitled ‘the NZ Showcase of Incompetency’. Our fearless leader was to be keynote speaker, however her fiance had just tested positive to something and she was also in a Zoom call with Sri Lanka’s regulators on “how to destroy your farming sector and democracy within a 12-month timeframe”.

The dress code was a moko and cowboy hat or socks and sandals – with the theme for the night “A Smorgasbord of Socialism”. The canapés were an unpalatable mix of plant-based righteousness and laboratory-created confusion, the drinks trolley empty apart from “an optional selection of Three Waters” which upon entry we were all lined up and forced to consume.

Read the whole thing.

Also read, Are Vegetarians Twice as Depressed as Meat Eaters?:

To investigate the relationship between a meatless diet and depression among adults, a team of Brazil-based researchers gathered data from more than 14,000 people between the ages of 35 and 74 over a six-month period. They evaluated participants using the Clinical Interview Schedule-Revised instrument, a questionnaire that helps diagnose common mental disorders like depression and anxiety. “Depressive episodes are more prevalent in individuals who do not eat meat,” the authors concluded.

That chimes with my personal experience. Very dour people who don’t see much good in the world, although that may also be due to the 100% correlation with being Warmists and roughly 90% with being Leftists.

Written by Tom Hunter

October 7, 2022 at 1:01 pm

Iron Lady? Meet Tin Lizzie

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The recent Tory backdown on cutting taxes, especially the highest rates, sadly came as no surprise to me, even though the wind and noise generated by new Tory PM Liz Truss, was an impressive change from the Green world of Boris.

After several days of the markets shitting themselves over the increased debt and various other forecasts, Liz backtracked. Obviously the Supply Side arguments that worked for Reagan in the early 1980’s – no direct spending cuts to compensate, with economic growth spurred by the tax cuts doing the job instead – did not work this time. Perhaps the Conservative Party, which the Financial Times somehow ridiculously thinks is now the most right-wing party in the world, didn’t support the tax strategy, and threatened Truss’s tenure as PM? It’s what did Thatcher in at the end.

But let’s compare these Massive Tax Cuts to other things that cost the government money.

Oh yeah, that’s some blow to fiscal stability.

Gerard Baker summed it up well in the Wall Street Journal:

You probably wouldn’t have guessed that, after these measures, the size of the U.K. tax burden has gone all the way back to what it was in 2021. . .

Try to shave a little off tax to improve incentives for work and investment and raise Britain’s abysmal productivity, and you are cast by the vast army of U.S. and international financial bureaucrats, socially conscious asset managers and media organizations as a heartless Hayekian tyrant, kicking away the crutches that keep Brits from being consigned to the poorhouse. . .

The wider message for conservatives everywhere: Any effort to depart from the trajectory of expanding government will be met with fierce resistance. Flinch and watch as the ratchet moves higher.

That laughter you hear in the background is me looking at the ACT posters that are already up: Real Tax Cuts.

And as for that Ratchet of State Power, I was amused by this from Guido Fawkes:

“I always knew that it was going to be a political problem. I mean, let’s be honest, this was a political trap that was set by Gordon Brown in the dying days of his role as PM, right. And I paid the 50% tax. I was in business then. And I remember how devastating it was because actually, it meant you were paying about 65% tax. And there’s something in your mind, which is like, really, you know, only 35% for me? And I’m doing all these hours. I was a business person, then it was set as a political trap…. In theory it [the top rate of tax] should never have been there.”
– Foreign Office Minister Gillian Keegan 

A bomb designed to blowup David Cameron twelve years ago finally exploded. As Guido points out, the additional laughter you can hear is that from Gordon Brown.

 Even the IFS’ Paul Johnson thinks in revenue terms “It might plausibly cost nothing at all”The tax was not about raising revenue – it was about political positioning.

Stop laughing. What do you think Labour’s 39% income tax rate on those earning $180,000+ was really all about here in NZ?

I very much doubt that Liz has this poster anywhere near her.

Nor is she probably aware of this speech by Thatcher to the Conservative Party conference in 1980:

It isn’t the State that creates a healthy society. For when the State grows too powerful, people feel that they count for less and less. The State drains society not only of its wealth but of initiative, of energy, the will to improve and innovate, as well as to preserve what is best. But our aim is to let people feel that they count for more and more. If we can’t trust the deepest instincts of our people, we shouldn’t be in politics at all. . .

To those waiting with bated breath for that favorite media catchphrase the “U-turn,” I have only one thing to say: You turn if you want to: The Lady’s not for turning.

Written by Tom Hunter

October 7, 2022 at 10:02 am

Record Tax Take overshadowed by Labour’s Spending

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$108 Billion. That’s the sum of our money that has been taxed from our incomes, company profits and goods and services.

But Finance Minister Grant Robertson said the lower-than-expected deficit shouldn’t lead political parties to yell out for cuts as there was still a deficit and New Zealand faces “choppy waters ahead”. He’s ruled out tax cuts that “disproportionately support the wealthiest New Zealanders”. National said a “careful” minister would produce “prudent tax relief” and still invest in public services.

Those wealthy NZers who would be “disproportionately support[ed]” are also those who disproportionately provide the bulk of that tax revenue! In fact, the top 3% of NZ income earners (in 2020) paid 26% of all income tax collected. In 2012, the richest 10% of NZ income earners paid 47% of all income tax!

I’d like to keep more of what I earn. I’d like to be able to support my wife and future children with a single income, with minimal government help. I’m happy for a portion of my wages to go to a well-functioning government to wisely spend on things that genuinely make the country a better place.

The Minister of Finance has ruled out tax cuts despite the record take of income tax. Because no matter how much money is coming in, even more is going out under him! Let’s look at some figures of what I reckon could be reduced or eliminated so that we can afford a tax cut – we’re currently looking at a $9.7 Bn deficit, so can we cut $10 Bn from the books? How about we start with the following:

  • Welfare benefits were costing $23 Bn in 2017, and are now up to $40 Bn this year.
    • Jobseeker and Emergency benefit at $3.3 Bn (up from $1.7 Bn in 2017)
    • Sole parent support up to $1.7Bn (up from $1.1 Bn in 2017)
    • Wage subsidy scheme at $4.8 Bn (it was $1.2 Bn in 2020 and $1.1 Bn in 2021)
    • Accommodation assistance at $2.3 Bn (up from $1.1 Bn in 2017)
  • Health expenses are now totalling $30Bn, up from $16 Bn in 2017. Nearly $7 Bn of that is due to health services for COVID-19, including vaccines and managed isolation /quarantine.
  • Educational departmental expenses are up to $2 Bn from $1.2 Bn in 2017. Not sure we need to increase the bureaucrats in the Ministry by that much!
  • Tertiary education funding has increased from $2.5 Bn to $3.2 Bn, for an increase of just 20,000 places. That’s $35,000 for each extra tertiary student.
  • ‘Core Government Services’ departmental expenses have increased from $1.8 Bn to $2.7Bn, the headcount of the public sector increasing a whopping 28%
  • $1.4 Bn has been spent on transport expenses in relation to COVID, including ‘shovel ready’ projects and temporary relief packages
  • $4.2 Bn on “COVID-19 Resurgence Support Payments” whatever they are
  • $135 Million on the “COVID-19 Cultural Sector Response” from heritage, cultural and recreation expenses
  • $1.6 Bn on the Emissions Trading Scheme

Now, I’m well aware that inflation since 2017 has been just under 20% in total. And wage inflation has driven some of the increased tax take, and government departments will therefore need to increase their expenditure to not only pay their people, but also to purchase other services which are now more expensive. Which increases inflation, leading to employees seeking higher salaries, and around the circle we go!

But really, does the government need to be spending an extra $52 Billion compared to 2017? The 2017 budget was $76 Bn of spending. Under Labour, that has grown to $128 Bn this year. If the budget had simply kept in line with inflation, it would only be $91 Bn.

I reckon there’s an easy $20 Bn to be saved from just reducing or outright eliminating some of the increased spending above. And then all of a sudden government books are in surplus, and maybe we can reduce the tax burden on hard-working, middle-class NZers like me.