Word of the day

October 18, 2012

Procrustean – producing or designed to produce strict conformity by arbitrary, ruthless or violent means; enforcing uniformity or conformity without regard to natural variation or individuality; marked by arbitrary often ruthless disregard of individual differences or special circumstances;   relating to, or typical of Procrustes.


Rural round-up

October 18, 2012

Trans-Tasman farm leaders in Closer Farming Relations:

Federated Farmers and Australia’s National Farmers’ Federation (NFF) have just concluded a joint board meeting in Sydney.

“Federated Farmers and the NFF are taking the spirit of Closer Economic Relations inside the farm gate,” says Bruce Wills, Federated Farmers President.

NFF President Jock Laurie said the shared challenges for farmers in both countries meant the need for the peak agricultural representative bodies to work more closely together is now more important than ever.

“From water and carbon to building consumer trust and foreign investment, the issues facing farmers and the agricultural sectors on both sides of the ditch are almost the same,” Mr Laurie said. . . .

Primary sector exports for 2012 show slight increase:

Primary sector export revenue figures for the final quarter to June 2012 are mixed. While there was a decline of 5.8 percent for the quarter, there was actually an overall increase for the year of 1.3 percent.

The Ministry for Primary Industries (MPI) today released its final quarterly report for the year to June 2012. New Zealand’s primary sector export revenue experienced a decline of 5.8 percent in the June quarter (compared with the previous June quarter) to $8,771 million. At the same time there was a production-driven increase of 1.3 percent for the year ended June 2012 to $32,119 million, due to favourable climatic conditions. . .

Dairy Women’s Network grows by 30 percent this year:

The Dairy Women’s Network celebrated a year of growth at its annual general meeting tonight (Wednesday, 17 October) including the addition of 700 new members between 1 June 2011 to 31 May 2012, increasing its total membership from 2400 to 3100.

Special guest Hilary Webber, founding chair of the Dairy Women’s Network in 1998, was at the meeting to pay tribute to retiring trustees Robyn Clements and Marie Marshall. Mrs Clements was the last remaining founding trustee on the Network’s Trust Board.

Dairy Women’s Network Trust Board current chair Michelle Wilson said it had been a year of transition and growth with many achievements. . . .

Partnership Beefs Up The Eyeball Test With No Cost To Farmers:

Hamilton, NZ – Leading farm management software provider Farmax has partnered with Beef + Lamb New Zealand to give farmers a free sward stick and instructional package that will improve the accuracy of pasture cover eye appraisals and help farmers with their seasonal pasture management.

While it might look like nothing more than a simple plastic ruler, the sward stick is as accurate as a digital pasture probe. The calibrations on the Farmax and Beef + Lamb New Zealand sward stick were developed and based on extensive research by AgResearch scientists. . . .


Thursday’s quiz

October 18, 2012

Other priorities are taking precedence today.

I’ll leave the questions up to you with an electronic chocolate cake for anyone who stumps everyone.


Tobacco out of CPI for benefit calculations

October 18, 2012

The Customs and Excise (Tobacco Products-Budget Measures) Amendment Bill passed its third reading on Tuesday.

All parties backed the bills that brought in the tax passed on a voice vote, but those removing tobacco prices rise from calculations to measure benefit CPI increases were opposed by New Zealand First, the Greens and Mana with 98 to 23 in favour.

Associate Health Minister Tariana Turia said lifting the excise duty would reduce smoking rates especially amongst younger people who were sensitive to price signals.

Turia said by 2016 the average price of a packet of cigarettes would rise to more than $20 and would make smoking unaffordable for many.

She defended taking tobacco prices out of the CPI indexing calculation for benefit increases saying it would not make sense to help fund smokers when trying to increase the cost of tobacco to them.

Increasing the price is a very effective measure for discouraging from smoking in the first place and encouraging smokers to quit.

I support this measure but wonder how much higher the price will go before it encourages a black market.

Keeping tobacco prices out of the CPI for benefit calculations will no doubt be seen as more beneficiary bashing but I don’t see why taxpayers should be funding people’s addiction to smoking.


Peters posturing again

October 18, 2012

One of the worst behaved MPs is moving  a vote of confidence in one of the best speakers in years.

NZ First leader Winston Peters is putting up a motion of no confidence in parliament’s Speaker Lockwood Smith.

He is retaliating against being ordered out of the debating chamber on Tuesday when he tried to raise a point of order – a question about procedure.

Dr Smith refused to hear his point of order because he had called Prime Minister John Key to speak and there was a row over who had precedence.

Peters was out of parliament last term when the Speaker make his mark.
He has required higher standards of behaviour from MPs and better answers from Ministers and done more than any other speaker in at least a couple of decades to improve the reputation of parliament.
Unlike some speakers in recent memory, has been non-partisan about it.
This motion doesn’t stand a chance. It is nothing more than posturing by a publicity-seeker.

 


Higher taxes less revenue

October 18, 2012

A reader sent me the link to this YouTube clip which supports my contention that a higher tax rate doesn’t mean a higher tax take.

The speaker is UCLA Economics professor, Tim Groseclose who uses the Laffer Curve to explain why:

He gives examples from the USA but we’ve had similar results here where increasing the tax rate decreased the tax take and lowering taxes raised more revenue.

He also quotes Christina and David Romer who wrote a paper on , “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks.

Access to that requires a subscription to access but Professor Groseclose wrote about it in  the Laffer Curve and new evidence that taxes stifle economic output:

The Romers examined the effects of tax policy on GDP.  They found that the effects are very large.  Specifically, they found that for every 1% that taxes rise (as a percent of GDP), this causes GDP to fall about 3%.  The authors employed some clever methods to try to find what economists call “exogenous” changes in tax rates.  When they employed their methods, they found much higher effects than economists had previously found.

The article was something of a Nixon-goes-to-China phenomenon.  That is, while conservatives tend to claim that taxes strongly decrease GDP, liberals tend to claim that taxes have at best a weak influence on GDP.  When the Romer-Romer article reported a strong influence, one of the most interesting aspects of the finding was that it came from a very liberal quarter – namely, one of its authors was a senior member of the Obama administration. . .

. . .  the Laffer Curve specifies that there exists a “hump” tax rate – a rate that maximizes revenue to the government, and if the government raises taxes above the hump rate, then its revenue actually decreases.

Academic economists generally agree that the hump rate is very high, something like 70%.  However, although Romer-Romer article did not explicitly discuss the Laffer Curve, its results imply that the hump rate is much lower, something like 33%.

To see this consider the following example.  Suppose a country’s GDP is $100 billion, and suppose its tax rate is 33%.  Then its tax revenue will be 33% of $100 billion, or $33 billion.  Now suppose it raises taxes to 34%.  If the Romer-Romer result is accurate, then this will decrease GDP by 3% to $97 billion.  Tax revenue will be 34% of $97 billion, or $32.98 billion.  Note that this is slightly less than the revenue at the 33% rate.  If you experiment with other tax rates, you’ll see that revenue is maximized when the tax rate is 33 1/3 %.   Moreover, as the tax rate increases to rates higher and higher than 33 1/3 %, government revenue becomes smaller and smaller. . .

Remember this next time someone suggests raising taxes over 33 1/3%.


October 18 in history

October 18, 2012

1009  The Church of the Holy Sepulchre, in Jerusalem, was completely destroyed by the Fatimid caliph Al-Hakim bi-Amr Allah, who hacked the Church’s foundations down to bedrock.

1016 The Danes defeated the Saxons in the Battle of Ashingdon.

1081  The Normans defeated the Byzantine Empire in the Battle of Dyrrhachium.

1210  Pope Innocent III excommunicated German leader Otto IV.

1356  Basel earthquake, the most significant historic seismological event north of the Alps, destroyed the town of Basel.

1386  Opening of the University of Heidelberg.

1561  Fourth Battle of Kawanakajima – Takeda Shingen defeated Uesugi Kenshin in the climax of their ongoing conflicts.

1599 Michael the Brave, Prince of Wallachia, defeated the Army of Andrew Bathory in the Battle of Şelimbăr, leading to the first recorded unification of the Romanian people.

1648  Boston Shoemakers formed the first U.S. labour organization.

1748The Treaty of Aix-la-Chapelle ended the War of the Austrian Succession.

1767 Mason-Dixon line, survey separating Maryland from Pennsylvania was completed.

1775  African-American poet Phillis Wheatley freed from slavery.

1851  Herman Melville’s Moby-Dick was first published as The Whale.

1860 The Second Opium War  ended at the Convention of Peking with the ratification of the Treaty of Tientsin, an unequal treaty.

1867  United States took possession of Alaska after purchasing it from Russia for $7.2 million. Celebrated annually in the state as Alaska Day.

1898  United States took possession of Puerto Rico.

1921 TSS Earnslaw’s maiden voyage from Kingston to Queenstown.

TSS Earnslaw

1912  The First Balkan War began.

1914  The Schoenstatt Movement was founded in Germany.

1919 Pierre Elliott Trudeau, 15th Prime Minister of Canada, was born (d. 2000).

1921  The Crimean Autonomous Soviet Socialist Republic was formed as part of the RSFSR.

1922 The British Broadcasting Company (later Corporation) was founded.

1924  Amateur radio operator Frank Bell sent the first trans-global radio transmission from Shag Valley, East Otago to London were it was received and replied to by amateur operator Cecil Goyder.

First trans-global radio transmission to London

1925  The Grand Ole Opry opened in Nashville, Tennessee.

1926 Chuck Berry, American musician, was born.

1927 George C. Scott, American actor, was born (d. 1999).

1929  Women were considered “Persons” under Canadian law.

1929 Violeta Chamorro, President of Nicaragua, was born.

1934 Inger Stevens, Swedish actress, was born (d. 1970).

1936 Adolf Hitler announced the Four Year Economic Plan to the German people. The plan details the rebuilding of the German military from 1936 to 1940.

1939 Lee Harvey Oswald, alleged assassin of John F. Kennedy, was born (d. 1963).

1944 – Adolf Hitler ordered the public funeral procession of Nazi field Marshall Erwin Rommel, commander of the Deutsches Afrika Korps

1945  The USSR’s nuclear programme received plans for the United States plutonium bomb from Klaus Fuchs at the Los Alamos National Laboratory.

1945 – A group of the Venezuelan Armed Forces, led by Mario Vargas, Marcos Pérez Jiménez and Carlos Delgado Chalbaud, staged a coup d’état against then president Isaías Medina Angarita.

1954 The New Zealand Opera Group (later renamed NZ Opera Company) had its first opening night when it performed The Telephone in Wellington.

NZ Opera Group's first opening night

1954  Texas Instruments announced the first Transistor radio.

1967 The Soviet probe Venera 4 reached Venus and becomes the first spacecraft to measure the atmosphere of another planet.

1968 Bob Beamon set a world record of 8.90 m in the long jump at the Mexico City games.

1989 East German leader Erich Honecker resigned.

1991  Azerbaijan declared independence from USSR.

2003 Bolivian Gas War: President Gonzalo Sánchez de Lozada, was forced to resign and leave Bolivia.

2007  Karachi bombings: attempted assassination of Benazir Bhutto.

Sourced from NZ History Online & Wikipedia


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