New Years Eve Open Forum

Registration stickers

We should always be aware of incentives caused by changes in policy. Far for me to advocate excessive regulation, but today’s report on WA about to remove registration stickers seems to open a new avenue for abuse. Registration stickers (I assume in WA too) have the registration number printed on them – it is easy for the Police to check that the registration number matches the number on the sticker (which is inside the car and less easy to tamper with).

While the WA Police seem to have some fancy technology, what’s to stop (say) a criminal swapping his/her number plate from one car to another (both being the same model and colour)? It would allow additional time to get away.

Perhaps there needs to be a way for a permanent number to be stamped on all of the panels of each car that can be read (say with UV light) and make it very difficult to tamper.

But we can expect big brother to instal some transmitting device into each car to ensure we all keep to the speed limit.

Happy New Year fellow Catallaxy file readers and bloggers. I’ll make one prediction: nuclear power will become acceptable in Australia during 2010.

Meanwhile, I’ll continue my dreams of a Personal Transportation Device which flies and is computer controlled making all public transportation redundant.

The European miracle

The IPA Review has a book review by Richard Allsop, looking at two books on the rise of European civilization. A very large book by the Oxford archeologist Barry Cunliffe advocates a kind of geographical determinism, so “over millenia [the Europeans] became hardened to be mobile” largely due to the proximity of water to much of Europe.  He sees trade as a central factor, whether of goods, ideas or practices. John Hirst, an Australian historian, has written a brief overview with the emphasis on classical learning, Christianity and the German warrior culture.

These bold sketches bring to mind a contribution from the late Gerard Radnitzky who attributed the “European miracle” to the rise of autonomous science and the “taming of the state” which came about in Europe but not in China which a thouand years ago would have looked a better bet for the rise of an industrial civilization.

ClimateGate on Finnish TV

ClimateGate has been extensively covered on Finnish TV. An English transcript has been posted on the web.

(HT: Climate Audit)

IPA Review

Some of the December edition of IPA Review can be read on line. Sinc and Chris Berg have a piece on “Climategate: What we have learned so far.”

But the most concerning revelations aren’t contained in the emails. They’re in the files detailing the complexity and uncertainty of climate modelling. The contortions which CRU programmers have had to make to force their data into what appears to be a predetermined conclusion underlines just how little we actually know about past and present global climate.

Imputed Rent

One of the more silly ideas going around is that owning your own home is some sort of tax rort. To overcome this rort some public finance economists argue that imputed rent should be included in the tax base. Earlier this year I went along to the Henry Review tax conference held in Melbourne. Several of the speakers argued that a tax should be included on imputed rent but, ho ho ho, the punters are too stupid to understand the benefits of ‘good tax policy’. As it turns out, the ‘punters’ understand all too well what a tax on imputed rent would be – an open invitation to be skinned alive by the tax authorities.

This brings me to this comment by ‘Pegasus’.

It’s a wonder Sinclair didn’t propose the GST be imposed on married people.

Well using the same logic as a tax on imputed rent, it could be. Afterall married people tend to form households that undertake a range of activities that could be contracted out. Food preparation, cleaning, companionship and conjugal rights could all be subcontracted in a market and would be liable for GST. The government could collect that tax too.* Of course, this is an absurdity and the ‘punters’ recognise it to be so. Yet so many public finance economists don’t seem to understand the aburdity, rather choosing to mock the layperson taxpayer rather than recognise their aversion to being fleeced.

It seems the Henry Review itself won’t propose taxing imputed rents on the family home.

The review panel has not fallen for the obvious traps of taxing the family home, or extending the land tax base to households in exchange for the abolition of stamp duty on home sales.

* If you use this logic, one of the biggest tax rorts is library books. Every time you borrow a book from the library you avoid paying GST on the book.
Update: Regular commentator badm0f0 doubts that economists support the notion of taxing imputed housing rents. Here is an article by Ross Gittins, a speech by Ken Henry, a paper by Richard Disney – at the Henry Tax conference, and calculations made by the Australian Treasury. As for the mocking laughter that I heard at the Henry Tax conference you’ll have to rely on my memory.

Market solutions

Markets provide solutions to all sorts of problems. Satoshi Kanazawa raises the issue of compatibility inequality and wonders why nobody cares about this problem.

In the United States, millions of people – mostly, young, poor men, the same people who don’t have health insurance or choose not to take advantage of the available health care – are left mateless, sexless, and childless, and are destined to die as total reproductive losers. In every human society, there are more childless men than childless women.

How come nobody cares that millions of people in the United States fail to achieve the ultimate goal of all biological existence, the meaning of life itself? Why isn’t it the government’s job to make sure that every American has sex regularly and frequently and produces children? Why doesn’t the government import surplus women from Russia and Ukraine and distribute them at taxpayers’ expense to millions of young, poor men who can’t otherwise get laid?

We should be thankful. Maybe government isn’t as big as it could be.

One solution to this ‘problem’ is suggested by Eric Crampton – the deadweight losses of such a redistribution would be very large. Yes – that is true. Of course, before we started conscripting foreign women to the cause, we’d have to round up all those local women who remain, rather selfishly, deliberately barren and force them to marry and have kids. So you get the idea as to how large those deadweight losses are likely to be.

But there are two other points that need to be made. First, prostitution provides a market mechanism whereby mateless men (and others too) can acquire sexual services. The second point is far more fundamental and builds on Gary Becker’s insights. There is a reason why some men don’t attract (reproductive) partners; they are deadbeats and no woman will have them as the father of her children. This is natural selection at work. Laws that promote monogamy already provide a marriage subsidy to men. The logic being that women have to have all of a lessor quality reproductive partner than share in a higher quality reproductive partner.
(HT: Offsetting Behaviour)

Austrian economists at play

Some of the Austrian economists as they will never be seen again.

I wonder if Ludwig von and F A H ever partied like that?

The founding father, Carl Menger, was a bit of a playboy, he claimed that he spent too much of his youthful energy on love affairs. A liaison with one of his household staff resulted in a son named Karl who became a leading light in logical positivism. An unintended consequence!

Those evil neo-liberals

CL left this in the open thread but it needs a thread of its own.

Mr Hawke fired up when fellow interview guest and public intellectual Clive Hamilton attacked the Hawke-Keating government’s economic reforms along with society’s obsession with growth and wealth generation.

The former prime minister dismissed the criticisms as “crap”.

“I say ‘crap’ because I find it strange verging almost on the obscene to hear comparatively well-situated people telling the poor they don’t need to aspire to improve their condition through wealth,” he said.

Mr Hawke said the world was not going to solve problems like climate change or provide better educational opportunities without gaining extra revenue from taxpayers in a growing economy.

“Tonight in this world one billion people will go to bed hungry,” he said.

“Now, if the affluent world is going to help these billion people, are they going to do it by saying a prayer, sitting in their professorial chair and saying growth is terrible?”

Apology

A lot of comments are getting spammed. I’m not sure why. I’ve just cleaned out several comments and posted them up. Comments with more than two links go into moderation as do multiple postings of the same comment. First time posters and returning commentators (to the new site) will also go into moderation, I’m approving people as quickly as I can. Please don’t change your ID to make new comments, as you are recognised as a new poster and go into moderation etc. Hopefully these teething problems will sort themselves out fairly soon.