Some straight answers from the Minister for Social Development. For that, at least, she gets a tick.
260 (2009). Sue Bradford to the Minister for Social Development and Employment (10 Feb 2009): Does the Minister intend to abandon the previous Government's proposal to move towards a single core benefit, given the statement in the National Party policy "Reject Labour's planned new benefit terminology which will make the government workers use the term "income support" rather than talk about benefit types."?
Hon Paula Bennett (Minister for Social Development and Employment) replied: Yes
259 (2009). Sue Bradford to the Minister for Social Development and Employment (10 Feb 2009): Does the Minister have any plans to replace the Social Security Act 1964 with redrafted legislation to govern the administration of the social security benefit system; if so what is the proposed timeframe for having any such legislation replacing the Social Security Act replaced?
Hon Paula Bennett (Minister for Social Development and Employment) replied: No.
There will however be amendment bills. One is needed, for instance, to introduce the DPB work testing National promised. In fact, the DPB itself was introduced under an amendment bill. That was a change of enormous significance. So promising not to replace an Act needn't be the disappointment it initially looks like. Especially to those of us who want real reform. Ultimately it will be unavoidable.
Saturday, February 28, 2009
Religion - good for something after all
A friend e-mailed me these. I was giving them a cursory look over when I found myself laughing outright.
Church Bulletins
These sentences (with all the BLOOPERS) actually appeared in church bulletins or were announced in church services:
--------------------------
The sermon this morning: 'Jesus Walks on the Water.' The sermon
tonight: 'Searching for Jesus.'
--------------------------
The Associate Minister unveiled the church's new campaign slogan
last Sunday: 'I Upped My Pledge - Up Yours.'
----------------------------
Remember in prayer the many who are sick of our community. Smile at
someone who is hard to love. Say 'Hell' to someone who doesn't care much
about you.
--------------------------
Don't let worry kill you off - let the Church help.
----------------------- ---
Miss Charlene Mason sang 'I will not pass this way again,' giving
obvious pleasure to the congregation.
--------------------------
For those of you who have children and don't know it, we have a
nursery downstairs.
--------------------------
Irving Benson and Jessie Carter were married on October 24 in the
church. So ends a friendship that began in their school days.
--------------------------
A bean supper will be held on Tuesday evening in the church hall.
Music will follow.
--------------------------
At the evening service tonight, the sermon topic will be 'What Is
Hell?' Come early and listen to our choir practice.
------------------------
Please place your donation in the envelope along with the deceased
person you want remembered.
--------------------------
The church will host an evening of fine dining, super entertainment
and gracious hostility.
--------------------------
Potluck supper Sunday at 5:00 PM - prayer and medication to follow.
--------------------------
The ladies of the Church have cast off clothing of every kind. They
may be seen in the basement on Friday afternoon.
--------------------------
This evening at 7 PM there will be a hymn singing in the park across
from the Church. Bring a blanket and come prepared to sin.
--------------------------
Ladies Bible Study will be held Thursday morning at 10 AM. All
ladies are invited to lunch in the Fellowship Hall after the B.S. is done.
--------------------------
Low Self Esteem Support Group will meet Thursday at 7 PM. Please use
the back door.
--------------------------
The eighth-graders will be presenting Shakespeare's Hamlet in the
Church basement Friday at 7 PM. The congregation is invited to attend this
tragedy.
Church Bulletins
These sentences (with all the BLOOPERS) actually appeared in church bulletins or were announced in church services:
--------------------------
The sermon this morning: 'Jesus Walks on the Water.' The sermon
tonight: 'Searching for Jesus.'
--------------------------
The Associate Minister unveiled the church's new campaign slogan
last Sunday: 'I Upped My Pledge - Up Yours.'
----------------------------
Remember in prayer the many who are sick of our community. Smile at
someone who is hard to love. Say 'Hell' to someone who doesn't care much
about you.
--------------------------
Don't let worry kill you off - let the Church help.
----------------------- ---
Miss Charlene Mason sang 'I will not pass this way again,' giving
obvious pleasure to the congregation.
--------------------------
For those of you who have children and don't know it, we have a
nursery downstairs.
--------------------------
Irving Benson and Jessie Carter were married on October 24 in the
church. So ends a friendship that began in their school days.
--------------------------
A bean supper will be held on Tuesday evening in the church hall.
Music will follow.
--------------------------
At the evening service tonight, the sermon topic will be 'What Is
Hell?' Come early and listen to our choir practice.
------------------------
Please place your donation in the envelope along with the deceased
person you want remembered.
--------------------------
The church will host an evening of fine dining, super entertainment
and gracious hostility.
--------------------------
Potluck supper Sunday at 5:00 PM - prayer and medication to follow.
--------------------------
The ladies of the Church have cast off clothing of every kind. They
may be seen in the basement on Friday afternoon.
--------------------------
This evening at 7 PM there will be a hymn singing in the park across
from the Church. Bring a blanket and come prepared to sin.
--------------------------
Ladies Bible Study will be held Thursday morning at 10 AM. All
ladies are invited to lunch in the Fellowship Hall after the B.S. is done.
--------------------------
Low Self Esteem Support Group will meet Thursday at 7 PM. Please use
the back door.
--------------------------
The eighth-graders will be presenting Shakespeare's Hamlet in the
Church basement Friday at 7 PM. The congregation is invited to attend this
tragedy.
Friday, February 27, 2009
Summit 'n' nothing
RNZ report;
Radio New Zealand's political editor who is at the conference says some business delegates wanted to discuss changes that could be made to free up the Employment Relations Act.
They were told bluntly at a closed session that this was not the place to talk about legislation and that Prime Minister John Key was not prepared to have that sort of debate.
Radio New Zealand's political editor who is at the conference says some business delegates wanted to discuss changes that could be made to free up the Employment Relations Act.
They were told bluntly at a closed session that this was not the place to talk about legislation and that Prime Minister John Key was not prepared to have that sort of debate.
Un-bloody-believable
If I wore false teeth, this morning I would have swallowed them.
This individual,
...convicted of 31 sex attacks, abduction and burglary charges, involving four female complainants aged between 11 and 69 and sentenced to preventive detention with a minimum non-parole term of 25 years later cut to 20 years...
...is appealing the legality of his DNA sample because of the way it was taken.
He says...
...he was not treated with humanity and with respect for his dignity.
This individual,
...convicted of 31 sex attacks, abduction and burglary charges, involving four female complainants aged between 11 and 69 and sentenced to preventive detention with a minimum non-parole term of 25 years later cut to 20 years...
...is appealing the legality of his DNA sample because of the way it was taken.
He says...
...he was not treated with humanity and with respect for his dignity.
Thursday, February 26, 2009
America remembers its raison d'être
Hallelujah. Perhaps I had missed this earlier but it is news to me. Great news.
ELEVEN STATES DECLARE SOVEREIGNTY OVER OBAMA'S ACTION
State governors -- looking down the gun barrel of long-term spending forced on them by the economic "stimulus" plan -- are saying they will refuse to take the money. This is a Constitutional confrontation between the federal government and the states unlike any in our time, says Human Events.
At least 11 states have decided against an intolerable expansion of the federal government's authority over the states, says Human Events:
• Washington, New Hampshire, Arizona, Montana, Michigan, Missouri, Oklahoma, California, Georgia, South Carolina and Texas -- have all introduced bills and resolutions reminding Obama that the 10th Amendment protects the rights of the states, which are the rights of the people, by limiting the power of the federal government.
• These resolutions call on Obama to "cease and desist" from his reckless government expansion and also indicate that federal laws and regulations implemented in violation of the 10th Amendment can be nullified by the states.
When the Constitution was being ratified during the 1780s, the 10th Amendment was understood to be the linchpin that held the entire Bill of Rights together. The amendment states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
In 2009, appeals to the 10th Amendment are not based on tariffs but on unfettered government expansion in Obama's "stimulus" bill, federal mandates on abortion that violate state laws, and infringements on the 1st and 2nd Amendments, among other things, says Human Events.
These eleven states have the right to reject the stimulus plan. And they must, says Human Events.
Source: A.W.R. Hawkins, "Eleven States Declare Sovereignty Over Obama's Action," Human Events, February 23, 2009.
For text:
http://www.humanevents.com/article.php?id=30807
ELEVEN STATES DECLARE SOVEREIGNTY OVER OBAMA'S ACTION
State governors -- looking down the gun barrel of long-term spending forced on them by the economic "stimulus" plan -- are saying they will refuse to take the money. This is a Constitutional confrontation between the federal government and the states unlike any in our time, says Human Events.
At least 11 states have decided against an intolerable expansion of the federal government's authority over the states, says Human Events:
• Washington, New Hampshire, Arizona, Montana, Michigan, Missouri, Oklahoma, California, Georgia, South Carolina and Texas -- have all introduced bills and resolutions reminding Obama that the 10th Amendment protects the rights of the states, which are the rights of the people, by limiting the power of the federal government.
• These resolutions call on Obama to "cease and desist" from his reckless government expansion and also indicate that federal laws and regulations implemented in violation of the 10th Amendment can be nullified by the states.
When the Constitution was being ratified during the 1780s, the 10th Amendment was understood to be the linchpin that held the entire Bill of Rights together. The amendment states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."
In 2009, appeals to the 10th Amendment are not based on tariffs but on unfettered government expansion in Obama's "stimulus" bill, federal mandates on abortion that violate state laws, and infringements on the 1st and 2nd Amendments, among other things, says Human Events.
These eleven states have the right to reject the stimulus plan. And they must, says Human Events.
Source: A.W.R. Hawkins, "Eleven States Declare Sovereignty Over Obama's Action," Human Events, February 23, 2009.
For text:
http://www.humanevents.com/article.php?id=30807
The sky is falling....not
Finding a balance between a realistic attitude to the recession, and running around screaming the sky is falling, is not an easy thing to do. However leaning towards the latter approach runs the very real risk of making matters worse. So when I read the following,Jobs in construction, retail, hospitality, agriculture, finance and manufacturing have been declining - manufacturing and retail sectors have suffered falls in the number of jobs of more than 20 per cent in the last year....
... I get a little brassed off.
Let's contrast that statement with the latest Household Labour Force Survey - the official source of employment and unemployment data - information.
People employed by industry
Manufacturing December 2007 275,400
December 2008 269,100
Wholesale and retail December 2007 502,000
December 2008 502,000
Did he mean falls in the number of jobs advertised? If so, say so.
A combined loss of 20 percent over the past year would equate to 155,480 jobs. Assuming no re-absorption of workers elsewhere, that's enough to push the unemployment rate higher than it has been since the depression.
Still, if you read it in the newspaper....
Wednesday, February 25, 2009
National - Still buying into collectivist claptrap
National should have ignored the bollocks about women being particularly vulnerable in a recession; the braying from the Greens, the foremost stalwarts of slavish genderism.
Everybody is vulnerable.
But Pansy Wong, Minister of Women's Affairs, a department any government serious about cutting costs would have obliterated, had to put out a soppy statement reassuring women that their voices would be heard at the job summit. Still buying into all that collectivist claptrap from the left. While you are at it, are there going to be enough Asians in attendance, Pansy?
Everybody is vulnerable.
But Pansy Wong, Minister of Women's Affairs, a department any government serious about cutting costs would have obliterated, had to put out a soppy statement reassuring women that their voices would be heard at the job summit. Still buying into all that collectivist claptrap from the left. While you are at it, are there going to be enough Asians in attendance, Pansy?
Round-up from the drug policy conference
Last week a conference about drug policy was held in Wellington. The only MSM news I am aware it generated was sensationalism about a sponsor who backs cannabis decriminalisation. When that was reported the NZ Drug Foundation said this:
Mr Bell said the foundation was "neutral" on the legal status of cannabis. It did not have a secret agenda, nor was it a liberal or pro-drug organisation as its opponents claimed.
But on Thursday the foundation issued this press statement,
Harsh cannabis laws defy good sense.
Drug legislation and policy tend to focus too much on enforcement and tough-talk and too little on evidence about what really works, a visiting expert told the Healthy Drug Law Symposium in Wellington today. The result is often irrational laws that cause considerable harm, he said.
Jeremy Sare is former Head of Drug Classification at the Home Office in Westminster. He has worked as Secretary to the Advisory Council on the Misuse of Drugs and is currently a policy consultant for the Beckley Foundation’s Cannabis Commission.
Mr Sare said the UK Government’s claim that strong cannabis laws send a strong signal to young people about drug use was ‘nonsense on stilts’.
“Overstating the dangers of cannabis actually undermines the credibility of drug messages. Focus groups show that many young people who smoke cannabis occasionally or even regularly would not consider taking harder drugs. They obviously know there’s a difference.”
Then I checked out their website to see what else they had reported on. This is from a UN official who attended;
“There has been considerable reduction over recent decades in the consumption of opiates, the most problematic of drugs, and opium cultivation and production has been limited to just one or two countries in the main.”
However he said containment does not mean the problem has been solved and that the way the drug control system has been applied has led to other problems.
“An unintended consequence has been the huge criminal black market that now thrives in order to get prohibited substances from producers to consumers. This has led to a second problem – the displacement of resources away from public health and into law enforcement.
“It also appears we have created a system where those who fall into the web of addiction find themselves excluded and marginalised, tainted with a moral stigma, and often unable to find treatment even when they want it.”
And from another British expert;
“There is a growing consensus worldwide that health and law enforcement officials should work in partnership in order to meet drug policy objectives, which are essentially the same for both agencies – to reduce drug use and availability, and protect society from the most harmful elements of the street drug market,” he said.
“In the UK, for example, the police have specialist advisers who identify people needing treatment for drug or alcohol dependence, and refer them to health and social services. The result is that health and social services can reach marginalised groups, and police are happy with the reduction in crime that comes from successful treatment.
An American expert;
Drug control in the form of prohibition or a ‘War on Drugs’ has been a spectacular failure, a visiting American expert told a symposium in Wellington today.
An Australian;
Mr Trimingham, founder and Director of Family Drug Support in Sydney, Australia, is attending the Healthy Drug Law Symposium in Wellington. He told delegates today that communities need to wake up to drug issues and stop seeing them as purely a criminal matter.
And finally from another Australian expert;
Mr Vumbaca says in Australia it is now costs up to $73,000 a year for a prisoner to be in jail, while it only costs around $30,000 a year for treatment in a residential rehabilitation centre.
Prompting Mr Bell to conclude;
“The Misuse of Drugs Act was drafted in 1975 when the prevailing view was that we could punish drugs out of existence. We've been jailing the same drug users over and over again the last 30 years and it hasn't made a scrap of difference."
It seems to me that the Drug Foundation cannot be "neutral" about decriminalisation of cannabis (at least) and challenging the status quo simultaneously. Every report they made from the conference featured 'experts' advocating increasing a health approach to the drug problem. Good on them.
Mr Bell said the foundation was "neutral" on the legal status of cannabis. It did not have a secret agenda, nor was it a liberal or pro-drug organisation as its opponents claimed.
But on Thursday the foundation issued this press statement,
Harsh cannabis laws defy good sense.
Drug legislation and policy tend to focus too much on enforcement and tough-talk and too little on evidence about what really works, a visiting expert told the Healthy Drug Law Symposium in Wellington today. The result is often irrational laws that cause considerable harm, he said.
Jeremy Sare is former Head of Drug Classification at the Home Office in Westminster. He has worked as Secretary to the Advisory Council on the Misuse of Drugs and is currently a policy consultant for the Beckley Foundation’s Cannabis Commission.
Mr Sare said the UK Government’s claim that strong cannabis laws send a strong signal to young people about drug use was ‘nonsense on stilts’.
“Overstating the dangers of cannabis actually undermines the credibility of drug messages. Focus groups show that many young people who smoke cannabis occasionally or even regularly would not consider taking harder drugs. They obviously know there’s a difference.”
Then I checked out their website to see what else they had reported on. This is from a UN official who attended;
“There has been considerable reduction over recent decades in the consumption of opiates, the most problematic of drugs, and opium cultivation and production has been limited to just one or two countries in the main.”
However he said containment does not mean the problem has been solved and that the way the drug control system has been applied has led to other problems.
“An unintended consequence has been the huge criminal black market that now thrives in order to get prohibited substances from producers to consumers. This has led to a second problem – the displacement of resources away from public health and into law enforcement.
“It also appears we have created a system where those who fall into the web of addiction find themselves excluded and marginalised, tainted with a moral stigma, and often unable to find treatment even when they want it.”
And from another British expert;
“There is a growing consensus worldwide that health and law enforcement officials should work in partnership in order to meet drug policy objectives, which are essentially the same for both agencies – to reduce drug use and availability, and protect society from the most harmful elements of the street drug market,” he said.
“In the UK, for example, the police have specialist advisers who identify people needing treatment for drug or alcohol dependence, and refer them to health and social services. The result is that health and social services can reach marginalised groups, and police are happy with the reduction in crime that comes from successful treatment.
An American expert;
Drug control in the form of prohibition or a ‘War on Drugs’ has been a spectacular failure, a visiting American expert told a symposium in Wellington today.
An Australian;
Mr Trimingham, founder and Director of Family Drug Support in Sydney, Australia, is attending the Healthy Drug Law Symposium in Wellington. He told delegates today that communities need to wake up to drug issues and stop seeing them as purely a criminal matter.
And finally from another Australian expert;
Mr Vumbaca says in Australia it is now costs up to $73,000 a year for a prisoner to be in jail, while it only costs around $30,000 a year for treatment in a residential rehabilitation centre.
Prompting Mr Bell to conclude;
“The Misuse of Drugs Act was drafted in 1975 when the prevailing view was that we could punish drugs out of existence. We've been jailing the same drug users over and over again the last 30 years and it hasn't made a scrap of difference."
It seems to me that the Drug Foundation cannot be "neutral" about decriminalisation of cannabis (at least) and challenging the status quo simultaneously. Every report they made from the conference featured 'experts' advocating increasing a health approach to the drug problem. Good on them.
Tuesday, February 24, 2009
What's the answer?
Numerical reasoning
Question;
5/3 is to 1/5 as 5 is to ?
Leave a reply even if it matches someone else.
Question;
5/3 is to 1/5 as 5 is to ?
Leave a reply even if it matches someone else.
What Kim Workman has overlooked
Yesterday Kim Workman made some estimates regarding the cost of the 'three strikes' policy. He claims that if it had been implemented in 1980 14,000 more people would now be in prison and that would have cost the taxpayer an extra $7.5 billion.
Completely overlooked is that when many prisoners are out in the community they are still costing the taxpayer through the following;
Social security benefits - using Mr Workman's 25 year time frame at today's money, around 3,000 realeased prisoners each year go on a benefit. At a cost of around $20,000 each that produces $1.5 billion.
Fathering more welfare dependents (and potential criminals) - let's assume each of the 14,000 produces just one child who is dependent on the taxpayer for 18 years. I will use $150 per week to cover their upkeep, health and education. That produces almost $2 billion.
Methadone programmes - one of the main aims of the methadone programme is to keep people out of prison. It costs around $30 million or $750 million over 25 years.
Then other things I am not equipped to put an estimate on;
Creating more insurance claims and hence, increased premiums.
The victims of their crime's loss of productivity and in many case loss of life costs taxpayers through the welfare and health systems.
I stress my counter-costings are not scientific or conclusive but they do put Mr Workman's estimate into some sort of perspective.
He also says;
If this legislation was introduced 25 years ago, we would now be faced with an influx of ex-prisoners being released into law abiding communities, each of whom will have served around 25 years in prison, and hopelessly institutionalised. They will emerge, scared, violent, without any ability to cope with an ever-changing world, and most likely without friends or adequate support. That would in turn have a significant impact on public safety and the crime rate.
By the time anyome is released from a three strike progression they are likely to be middle-aged to old. This is the group from which the least violent crime hails.
I guess the bottom line for me is protecting innocent people. My main reservation now is will the three strikes policy actually make criminals more dangerous when they are free but approaching their final strike?
Completely overlooked is that when many prisoners are out in the community they are still costing the taxpayer through the following;
Social security benefits - using Mr Workman's 25 year time frame at today's money, around 3,000 realeased prisoners each year go on a benefit. At a cost of around $20,000 each that produces $1.5 billion.
Fathering more welfare dependents (and potential criminals) - let's assume each of the 14,000 produces just one child who is dependent on the taxpayer for 18 years. I will use $150 per week to cover their upkeep, health and education. That produces almost $2 billion.
Methadone programmes - one of the main aims of the methadone programme is to keep people out of prison. It costs around $30 million or $750 million over 25 years.
Then other things I am not equipped to put an estimate on;
Creating more insurance claims and hence, increased premiums.
The victims of their crime's loss of productivity and in many case loss of life costs taxpayers through the welfare and health systems.
I stress my counter-costings are not scientific or conclusive but they do put Mr Workman's estimate into some sort of perspective.
He also says;
If this legislation was introduced 25 years ago, we would now be faced with an influx of ex-prisoners being released into law abiding communities, each of whom will have served around 25 years in prison, and hopelessly institutionalised. They will emerge, scared, violent, without any ability to cope with an ever-changing world, and most likely without friends or adequate support. That would in turn have a significant impact on public safety and the crime rate.
By the time anyome is released from a three strike progression they are likely to be middle-aged to old. This is the group from which the least violent crime hails.
I guess the bottom line for me is protecting innocent people. My main reservation now is will the three strikes policy actually make criminals more dangerous when they are free but approaching their final strike?
The awful welfare bind NZ is in
The DomPost reports that nearly 800 families are claiming the Restart benefit. Given entitlement was backdated to November 8, I believe this is quite a low number. Especially over a period where unemployment traditionally rises anyway. Of course, for context, what we need to know is how many applications have been denied.
I suspect that many of those claiming will be people returning to the DPB from working 20 or more hours per week and qualifying for the In Work payment. (It's a surprise that the Child Poverty Action Group haven't been carping about the inequity of this situation as they go on endlessly about the unfairness of the In Work payment and how it discriminates against children of beneficiaries. Now children of beneficiaries whose parent has been in work are getting more than those whose parents haven't.)
The article goes on to mention the Jobs Summit. My input/suggestion would be a radical overhaul of social security. As they say, ad nauseam, extraordinary times call for extraordinary measures. It should have been done when the economy was strong. But now the matter is even more urgent.
Here's the awful reality. We can't treat individual benefits in isolation. Some say, get rid of the DPB! But because, unlike other countries, NZ pays unemployment benefits as of universal right, from general taxation, denied the DPB, most of these individuals will gravitate to the dole. The US was able to reform their DPB equivalent because unemployment insurance wasn't automatically available to all. It is impossible to extract a positive effect from abolishing the DPB without reforming the unemployment benefit (and sickness and invalid benefits for that matter).
When social security came into being it was funded primarily through a special and additional tax. Only contributors reaped the benefits. That changed in the 1960s when it was decided that social security would be paid wholly from the consolidated account. What a mistake. How we are going to pay, are already paying, for the utopian ideal of a fair income for every citizen regardless of their input.
I suspect that many of those claiming will be people returning to the DPB from working 20 or more hours per week and qualifying for the In Work payment. (It's a surprise that the Child Poverty Action Group haven't been carping about the inequity of this situation as they go on endlessly about the unfairness of the In Work payment and how it discriminates against children of beneficiaries. Now children of beneficiaries whose parent has been in work are getting more than those whose parents haven't.)
The article goes on to mention the Jobs Summit. My input/suggestion would be a radical overhaul of social security. As they say, ad nauseam, extraordinary times call for extraordinary measures. It should have been done when the economy was strong. But now the matter is even more urgent.
Here's the awful reality. We can't treat individual benefits in isolation. Some say, get rid of the DPB! But because, unlike other countries, NZ pays unemployment benefits as of universal right, from general taxation, denied the DPB, most of these individuals will gravitate to the dole. The US was able to reform their DPB equivalent because unemployment insurance wasn't automatically available to all. It is impossible to extract a positive effect from abolishing the DPB without reforming the unemployment benefit (and sickness and invalid benefits for that matter).
When social security came into being it was funded primarily through a special and additional tax. Only contributors reaped the benefits. That changed in the 1960s when it was decided that social security would be paid wholly from the consolidated account. What a mistake. How we are going to pay, are already paying, for the utopian ideal of a fair income for every citizen regardless of their input.
Monday, February 23, 2009
S92A PROTEST
Following the advice of Kiwiblog (who seemed to have trouble following it himself),
Don’t worry too much if parts of your site are still accessible. The main thing is not to put any fresh content up (except S92A material) on Monday morning, so that anyone checking the blogs out on Monday morning will find nothing but black banners protesting S92A.
Comments disabled
Update; Normal service resumed
Don’t worry too much if parts of your site are still accessible. The main thing is not to put any fresh content up (except S92A material) on Monday morning, so that anyone checking the blogs out on Monday morning will find nothing but black banners protesting S92A.
Comments disabled
Update; Normal service resumed
Sunday, February 22, 2009
Basis for unemployment prediction of 11.2 percent
According to a NewstalkZB report the NZ Institute has "dropped a bombshell" warning unemployment may reach 11.2 percent. I always wonder how they make these predictions. Here's the answer;
The eminent American economist Kenneth Rogoff and co-author Carmen Reinhart released research showing that recessions originating in financial crises such as the current global recession are
generally protracted affairs associated with profound declines in output and employment. On average, real house prices decline 35 percent stretched out over six years, while the downturn in equity markets lasts for at least three and a half years. Unemployment rises, on average, by seven percentage points. The decline in economic activity is steep – an average decline of over nine percent –although output recovers more quickly than employment with recovery starting after two years.
Applied to the New Zealand context, for example, this points to a worrying possibility that unemployment could rise from a historical low of 4.2% to a rate of 11.2% over the next two years – a rate exceeding the most pessimistic forecasts at the present time. This simple extrapolation may be misleading, however. The Rogoff/Reinhart study included all major postwar banking crises, and two major pre-war crises. Labour markets in advanced economies such as New Zealand have become more flexible over time, meaning that the unemployment impact may be less extreme today than predicted on the basis of historical averages. On the other hand, the present crisis is arguably more severe than any earlier banking crisis given its global scope, whereas earlier crises were more confined to one or more countries.
The point about the flexibility of labour markets is important and confirms that government moves to increase flexibility even further are well-advised.
The eminent American economist Kenneth Rogoff and co-author Carmen Reinhart released research showing that recessions originating in financial crises such as the current global recession are
generally protracted affairs associated with profound declines in output and employment. On average, real house prices decline 35 percent stretched out over six years, while the downturn in equity markets lasts for at least three and a half years. Unemployment rises, on average, by seven percentage points. The decline in economic activity is steep – an average decline of over nine percent –although output recovers more quickly than employment with recovery starting after two years.
Applied to the New Zealand context, for example, this points to a worrying possibility that unemployment could rise from a historical low of 4.2% to a rate of 11.2% over the next two years – a rate exceeding the most pessimistic forecasts at the present time. This simple extrapolation may be misleading, however. The Rogoff/Reinhart study included all major postwar banking crises, and two major pre-war crises. Labour markets in advanced economies such as New Zealand have become more flexible over time, meaning that the unemployment impact may be less extreme today than predicted on the basis of historical averages. On the other hand, the present crisis is arguably more severe than any earlier banking crisis given its global scope, whereas earlier crises were more confined to one or more countries.
The point about the flexibility of labour markets is important and confirms that government moves to increase flexibility even further are well-advised.
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