Thursday, May 11, 2017

Just another manifestation of the war on drugs

Why can't the government 1/ understand the ramifications of the war on drugs, and 2/ extrapolate them to the war on tobacco?

Simple behavioural and economic rules apply.

Criticism of Oxfam's approach to wealth inequality

The following brief article from the Acton blog is reproduced in full due to its substantial merit:

"If people of faith want to reduce global poverty, they must begin by accurately measuring the problem. But a well-publicized report on international poverty distorts the problem and promotes solutions that would leave the world’s poorest people worse off, according to two free market experts.

Every year, Oxfam releases a report on global wealth inequality to further the agenda of the World Economic Forum. This year’s entry, titled “An economy for the 99 percent,” was released with the headline: “Just 8 men own the same wealth as half the world.”

The group’s executive director, Winnie Byanyima, said, “It is obscene for so much wealth to be held in the hands of so few when one-in-10 people survive on less than $2 a day.” But Philip Booth and Ben Southwood of the Institute for Economic Affairs (IEA), based in London, point out that there are significant problems with the report.

First, its method of measuring wealth (not income) is misleading. “Those at the bottom of the net wealth distribution include, for example, recent Harvard graduates with high levels of student debt and yet huge earning potential: they are supposed to be amongst the poorest people in the world,” Booth and Southwood write. Not that long ago, that would have included the Obamas, no one’s idea of the dispossessed and powerless.

Second, the report does not take into account life’s natural fluctuations. “A lot of people in the world have little or no net wealth,” Booth and Southwood note.

People accumulate wealth over the course of their life cycle, and even the better-off in this country do not tend to accumulate significant net wealth before their 30s. So if you consider that the global median age is about 28 years, it is hardly surprising that a huge proportion of the world’s population does not own any wealth.

Their conclusions reiterate the findings of a recent report from Canada’s Fraser Institute, which details how different stages of life bring different average earnings. Assets usually increase throughout one’s working years, until they are drawn down during retirement.

Oxfam recommends that Davos attendees pursue the global redistribution of wealth. Byanyima encourages politicians to “stop obsessing with GDP” growth, and the report recommends governments “increase the amount of progressive tax.”

But crushing poverty has fallen, thanks in large part to the free market, Booth and Southwood write. “Globally, extreme poverty has fallen from 44 percent in 1980 to around 10 percent today.” One could call as the first witness Oxfam itself, which stated recently, “The growth generated by private actors has contributed to an unprecedented reduction in poverty around the world in recent decades.”

The IEA cites examples from South Korea and Kenya to India and China. In Vietnam, income per capita rose from $100 a year to $2,000 after the country took measures to liberalize its economy 31 years ago. China saw the same measure increase from $193 in 1980 to $6,807 in 2014. “This is not due to redistribution,” the authors write; “it is due to trade and the liberalisation of some markets.”

Growing global wealth produces innovative products and services that serve the world’s poorest. For instance, Frank McCoster notes at The Conservative Online that internet connectivity is transforming the way Africans access vital services like electricity.

And as French President-elect Emmanuel Macron, the former economy minister of a socialist administration, said, “We must first produce in order to be able to distribute.” The richest 0.003 percent of the world’s population, those with a net worth of at least $240 million, donates $25 million to charity during his life.

People of faith who care about feeding the world should embrace policies that stimulate the growth of wealth, the structures that allow flourishing in the developing world, and the religious and philanthropic worldviews that encourage us to become our brother’s keeper.

You can read Booth and Southwood’s article in the Spring 2017 issue of the IEA’s Economic Affairs."

Tuesday, May 09, 2017

A flat white each day?

Bracket creep amounts to the equivalent of "a flat white each day". This trivialises the fact that the government is taking more tax from individuals in the latest financial year than the previous.

David Seymour expresses it better when saying that New Zealanders have just lost another week's work to the government.

But the increase also tends to overshadow that you are working for the government until May 8. MAY 8. Not March or April. MAY.

Mainstream coverage in Wellington amounts to a small snippet in the business pages. No wonder National gives the issue of over-taxation no priority.

Monday, May 08, 2017

What giving up looks like

A meeting was held in South Auckland last night. The dangers being experienced by dairy and bottle shop owners was the subject addressed by several MPs. However some attendees were unconvinced:

"Nothing is going to happen, they have come here to complete the formalities and wipe our tears," liquor store owner Narinder Singla said.
"I don't have any faith that they'll be doing something."
Last Friday, Mr Singla was left traumatised after two men entered his liquor store wielding screw drivers and stole money, cigarettes and alcohol.

This may be a mere matter of opinion but then again, Mr Singla might have been looking at the latest Public Service targets: