Tuesday, 5 June 2018

Afternoon roundup

Today's worthies:
  • Cabinet has not yet produced a cabinet paper on the Taranaki oil ban, and Simon Bridges says that the government instructed officials not to provide advice on the ban. Even if you think that 'doing something about climate change' was part of a Labour/Green political mandate, wouldn't it make sense to make sure that whatever is done is the thing that can most cost-effectively abate emissions? If Bridges is right that the government instructed officials not to provide advice, can there be any good reason for that instruction? The most obvious explanations are not good. 

  • Kiwisaver provider Simplicity runs a very low fees model that is very attractive. But not one that's attractive to me, since they seem to have very strong non-return preferences baked into their model. If tobacco, gambling, oil or porn stocks started looking like attractive investment options, would they change their mind about the ban? 

  • The government's looking to repeal the three-strikes legislation. Farrar points out that three-strikes policy is fairly popular, but I'd be surprised whether people remember come 2020 unless crime figures become salient. I rather liked New Zealand's legislation, and especially in comparison to American examples. The point of three-strikes, from an economic perspective, is to maintain marginal deterrence. In short, you need a stronger expected formal penalty for a second offence or third offence than you do for a first offence to achieve the same deterrent effect. Why? Because the first offence comes with a giant informal "Now you have a criminal record and a whole pile of things you thought you could do with your life are now going to be very very hard" penalty. That informal penalty's sunk after you've got the first conviction, so you need a stronger formal penalty for the later offences. And where California induced problems by having the same harsh penalty for second and third strikes across broad classes of offences, New Zealand maintained proportionality by linking everything to the sentence-specific maximum penalty. But, all that said, I doubt there'll be any particular effect on crime. There were just too many high profile cases where judges thought any application of the strike penalties was unjust, and so invoked their discretion (in my view) inappropriately. If folks don't expect the penalty will be applied because the judges won't apply it, the law's useless even if it's great in theory. 

  • Is there any simpler explanation for the meth-mess than that Housing New Zealand had excess demand for houses and using an insanely sensitive hair-trigger for evictions let them free up some houses? Plus the usual stories around how agencies are more likely to be punished for not being sufficiently risk-averse than for being too risk-averse

  • And, finally, some good news. Catherine Healy is now Dame Catherine Healy. She heads the New Zealand Prostitutes' Collective and helped see prostitution legalised in 2003. And how can you not love a union that, on seeing abuses of migrants on temporary visas illegally working in the sex industry, argues for legalising their work too instead of having more labour inspectors going around to deport competitors? America's ahead of us on marijuana reform, but we're miles ahead on this one. Too many Honours go to career public servants whose main merit was having diligently undertaken their day-job for 40 years. This one isn't like that. 

  • David Friedman at Oxford Union on market failure. HT: Jim Rose.  

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