The aristocracy of pull, so long as you're the aristocrat

I hate election campaigns.

I can never tell whether some bit of idiocy is actual proposed policy, or whether a candidate was just reaching into a bag full of words in hope of getting through the next couple minutes of an interview.

I hope it's the latter in this case. Because my gawd.

Pressed on how National would incentivise businesses to ditch fossil fuels, [National Party Climate Spokesperson Simon] Watts said: “On our watch, under a National government, there would be a pretty clear conversation between government and industry. If you’re significantly profitable, then you have a social obligation in order to do what is required in terms of helping this country achieve our emissions [goals].”

On behalf of the country, the government needed to apply “the appropriate pressure to these organisations”. Watts expected businesses putting profit margins ahead of this obligation “to change their view pretty rapidly”. He didn’t specify how he’d apply this pressure as Climate Minister.

We have an Emissions Trading Scheme. It puts a price on carbon. He's talking about the covered sector, because the conversation here is around what a National-led government would do instead of dumb GIDI corporate welfare. 

Within the covered sector, the carbon price encourages companies to make decarbonisation investments that meet the bottom line, and to avoid those that are not cost-effective. That is the point of using a carbon price rather than command-and-control regulation. Businesses are better placed than governments to know which investments make most sense for them, weighing carbon cost alongside a thousand otherwise unknowable considerations. 

And Simon Watts believes that it is right and proper for government to apply 'appropriate pressure' to companies, as part of "a pretty clear conversation between government and industry." If an industry is profitable, it can and should be leaned on by Government to achieve the Government's objectives. 

Isn't it wonderful! Corporatism I mean. Government and Business, in partnership, of a sort. Where Government can apply pressure through numerous discretionary regulatory decisions that could hurt or bankrupt a company if the 'conversation' didn't go the way the government might have wanted. 

All kinds of other desirable objectives could be part of these kinds of conversations. 

Companies could be 'encouraged' to reformulate consumer goods to meet Shane Reti's views on what people should be eating and drinking.

They could be 'nudged' toward fulfilling Simon O'Connor's social views, if he were the relevant minister in an area. Or perhaps Chris Bishop's after a cabinet reshuffle. The 'conversations' would be very different! And businesses would always have to be guessing at just what an incoming Minister might consider to be the appropriate social obligation, if they dared to be profitable. 

All of it will be simply wonderful for productivity. Because the predictability of the rule of law is overrated, relative to having pretty clear conversations about one's social obligations. 

Not the Outside of the Asylum

Time flies.

From the time I got here, until relatively recently, NZ really seemed to be Douglas Adams's Outside of the Asylum. The last sane place as the rest of the world goes mad. Or at least the place going mad more slowly than other places.

I think we've left the Outside of the Asylum and have taken up camp with another of Adams's tribes: the Golgafrinchans.

Remember the Golgafrinchans? They're the ones who convinced their planet's useless people that their planet was doomed, loaded them up on Arkship B, and sent them off on a collision course with Earth. Once here, they displaced the cavemen who'd been working away at providing the ultimate answer to the ultimate question of life, the universe and everything. 

After crash-landing, they did the thing that useless people do: have loads of committee meetings rather than get on with doing anything useful, like inventing fire or the wheel. 

Like so:

The Captain made a sort of conciliatory harrumphing noise. 

"I would like to call to order," he said pleasantly, "the five hundred and seventy-third meeting of the colonization committee of Fintlewoodlewix..." 

Ten seconds, thought Ford as he leapt to his feet again. 

"This is futile," he exclaimed, "five hundred and seventy-three committee meetings and you haven't even discovered fire yet " 

"If you would care," said the girl with the strident voice, "to examine the agenda sheet..." 

"Agenda rock," trilled the hairdresser happily. 

"Thank you, I've made that point," muttered Ford. 

"... you... will... see..." continued the girl firmly, "that we are having a report from the hairdressers' Fire Development Sub-Committee today." 

"Oh... ah - " said the hairdresser with a sheepish look which is recognized the whole Galaxy over as meaning "Er, will next Tuesday do?" 

"Alright," said Ford, rounding on him, "what have you done? What are you going to do? What are your thoughts on fire development?" 

"Well I don't know," said the hairdresser, "All they gave me was a couple of sticks..." 

"So what have you done with them?" 

Nervously, the hairdresser fished in his track suit top and handed over the fruits of his labour to Ford. 

Ford held them up for all to see. 

"Curling tongs," he said. 

The crowd applauded. 

"Never mind," said Ford, "Rome wasn't burnt in a day." 

The crowd hadn't the faintest idea what he was talking about, but they loved it nevertheless. They applauded. 

"Well, you're obviously being totally naive of course," said the girl, "When you've been in marketing as long as I have you'll know that before any new product can be developed it has to be properly researched. We've got to find out what people want from fire, how they relate to it, what sort of image it has for them." 

The crowd were tense. They were expecting something wonderful from Ford. 

"Stick it up your nose," he said. 

"Which is precisely the sort of thing we need to know," insisted the girl, "Do people want fire that can be applied nasally?" 

"Do you?" Ford asked the crowd. 

"Yes " shouted some. 

"No " shouted others happily. 

They didn't know, they just thought it was great. 

"And the wheel," said the Captain, "What about this wheel thingy? It sounds a terribly interesting project." 

"Ah," said the marketing girl, "Well, we're having a little difficulty there." 

"Difficulty?" exclaimed Ford, "Difficulty? What do you mean, difficulty? It's the single simplest machine in the entire Universe " 

The marketing girl soured him with a look. 

"Alright, Mr. Wiseguy," she said, "you're so clever, you tell us what colour it should have." 

The crowd went wild. One up to the home team, they thought. 

Ford shrugged his shoulders and sat down again. 

"Almighty Zarquon," he said, "have none of you done anything?" 

NZ's Energy News has been documenting our decline. Read this and tell me that Kiwis are not the true descendants of the Golgafrinchans. Remember that nobody (except me) likes landfills, and that we are looking at energy shortages. 

Environment Canterbury has declined to process the revised application for a proposed waste-to-energy plant in South Canterbury.

“This is due to insufficient information being supplied relating to the activity and its effects on the environment – in particular, the lack of a cultural impact assessment,” the regional council body says.

In November 2022, South Island Resource Recovery Limited lodged seven applications for reassessment, after its initial applications were returned in October.

ECan regional leader of consents delivery Hayleigh Brereton acknowledges the resubmitted application addresses many of the matters raised in the previous version regarding adverse effects of the discharges to air, stormwater and wastewater. But she says one critical issue has not been addressed.

“This is a very large proposal and the first of its kind in New Zealand, and would have some wide-reaching potential effects, including many unknown effects on mana whenua,” Brereton says.

“A site-specific Cultural Impact Assessment is required to be completed either by, or in close consultation with Te Rūnanga o Waihao. This remains an outstanding matter, and we, therefore, consider the application incomplete.”

The application has been returned under Section 88(3A) of the RMA. Waimate District Council has also returned the application.

ECan says if South Island Resource Recovery Limited wishes to proceed with an application, it must submit a new one in full.

“If it disagrees with our decision, it can lodge an official objection.”

We can't have a waste-to-energy plant because it didn't have a site-specific Cultural Impact Assessment. Declined by Environment Canterbury. After it provided all the paperwork necessary showing that it didn't cause problems for air or water - the traditional environmental concerns. 

Almighty Zarquon. We're doomed. 

Uber ignorant

A lot of people who should have failed intermediate microeconomics like to make the following argument.

1. The theory of perfect competition has perfect information as an underlying assumption
2. Nobody has perfect information
3. Therefore, government must regulate to protect people from bad choices because market failure.

It's wrong on a pile of grounds. First, and most importantly, the first welfare theorem gives us sufficient conditions for optimality, not necessary ones. But even leaving that aside, we need a Demsetz move into comparative institutional analysis. How do people act to overcome their information problem? Are there profitable opportunities for some entrepreneur to bridge the knowledge problem so that consumers and producers can meet up successfully? Are there heuristics that consumers use in response to information problems and how close to optimality do they get us? And, most importantly, do the legislators and bureaucrats have any better clue themselves?

On that latter point, here is how New Zealand's Parliament covered itself in glory this afternoon in the select committee hearings on Uber. Parliament's deciding how to modernise the transport regs so that innovation can happen. There are some problems in the proposed legislation, but the Transport Committee has the MPs who are most expert in the committee's area. The best of the best. Here's what they thought about how Uber works:

Appearing before Parliament's Transport Committee, Uber New Zealand general manager Richard Menzies tried to argue that the company should not have to adopt outdated taxi requirements like logbooks, signage and stringent driver and vehicle checks.

But first he was forced to explain to the committee, over and over again, that Uber was not a "rank and hail" taxi company.

National MP Alastair Scott was the first to bite.

"We're concerned that you could get some gypsy operators who are not licensed by anyone appearing on a taxi rank."

Labour MP Sue Moroney interjected, offering a more politically-correct term: "Cowboys".

"Cowboys, gypsies, whatever," Scott said.

Menzies politely explained that an Uber vehicle could only be ordered through its app.

"People can't simply spot at Uber and jump into random car," he said.

Labour MP Sue Moroney wasn't convinced.

"How do you know that? How do you know that people who are your drivers are not sitting at taxi stands or being hailed?"

Menzies, looking slightly bemused, said: "We don't use taxi ranks."

None of these people seems to have ever used the service, or ever to have talked with anyone who has.

Green MP Jan Logie noted that the law change would allow Uber to use taxi ranks - how did Uber feel about that?

Menzies, again: "The way our system is currently set up, we don't need taxi ranks."

The whole point of Uber is to not have drivers sitting around at freaking taxi ranks, idling. They go to where demand is expected.

As it was becoming apparent that no MP on the committee had ever used the Uber service, National MP and technophile Maurice Williamson piped up that he was a "massive fan".

But he did not favour the ordinary Uber, he said. He wanted to know when Uber New Zealand would roll out Uber Black - the company's VIP service.

By now, Uber's committee appearance had gone well overtime. But Moroney wanted one last shot, asking Uber whether it would actually follow any rules set by Parliament.

"All I want to hear is that you won't be breaking the law," she said.

Menzies raised his hands in front of his face, wordlessly, as the committee chairman brought the session to a close.

I have a different argument we might wish to consider, in place of the one with which I opened. I think it works better.

1. Good laws don't require that MPs have perfect information about the industries that they're attempting to regulate, but they should be at least half-way to having a clue.
2. They don't. Not even close. And the feedback loops that help normal people get a clue when they make mistakes - those don't operate for MPs. They can be wrong, forever, with no personal consequence. They may even be more likely to be re-elected rather than less if they're wrong in particular ways.
3. Therefore, Parliament should get out of the way. Stop pretending you're protecting me from bad cab drivers or whatever with rules that protect incumbents when you have absolutely no clue how Uber even works. Get Out Of The Way. Everything else has far more risk of doing harm than of doing good. 

Trump reconsidered

In March I said that Trump wouldn't be the end of the world.

He likely won't be the end of the world, and is still likely to be less bad than most people think. But he will be terrible.

Two things I'd revise from my March piece at The Spinoff:

First, I had not sufficiently accounted for the harm that a vindictive President can do through the levers of the administrative agencies.

Second, I had thought that the GOP elite's hatred of Trump would prove a constraint against him: that he would face internal party opposition that would constrain some of what he might want to do. I was too optimistic on that one. The GOP elite fell into line when Trump won the candidacy. I doubt it was because they accurately forecast a Trump win. Rather, they had, I think, careerist concerns about being seen to oppose the President. That part is the scariest if we look ahead through a Trump Presidency, forecast at 81.6% as I head out from the office.

Tragedy of the Anti-commons: Medieval Storytime and Christchurch

In the story of Sir Cleges, a generous Knight falls on hard times due to some extremely bad planning: he dissipates his estate in holding elaborate Christmas feasts. But as reward for his generosity, he finds a fruited cherry branch at Christmastime. He brings the fruit to King Uther Pendragon as Christmas gift, but is stopped along the way by three veto-players - the porter, the usher, and the steward - each of which in turn demands, in exchange for access to the King, a third part of whatever bounty the King might bestow upon him.

And so when Sir Cleges finally reaches the King and is asked what reward he might wish, he requests a dozen hard blows. A third go to the porter, a third to the usher, and a third to the steward.

It's a beautiful solution to the tragedy of the anti-commons. Recall that where the tragedy of the commons obtains when no player has veto rights over the use of a resource, the tragedy of the anti-commons ensures the underexploitation of a resource when there are too many veto-players.

If only a beneficent King existed to hear the entreaties of the Christchurch entrepreneurs being trodden upon by some of Tony Marryatt's functionaries [HT: Homepaddock , and see here]. A city can stand a lot of stupid during normal times. Examples of it are legion. And cities with nice climates that are otherwise desirable places to live see some erosion in the city's amenity value as consequence, but things tick along; there's a lot of ruin in a city. But we can't afford the normal local government stupidity when we're trying to convince people to stay here and rebuild.

I don't really care what Tony Marryatt is paid, although Glenn Boyle nicely surveys the relevant comparable salary packages and finds the Chief Clerk's been systematically overpaid by Christchurch City Council. Still, even if he were paid a million dollars instead of a half million, that would still be about three bucks per capita. Know what? I spend more than that on coffee on the typical day. And so do you. If you realized that the equivalent of your contribution to Clerk Tony's salary fell out of your pocket two blocks back on a walk, you'd likely shrug it off rather than go looking for it. It's a lot, and more than he's worth, but it's not something about which I'd go to the barricades. But if you're interested in the extent to which Marryatt is overpaid, go and read Glenn Boyle's analysis at the link above.

But I care that he's presiding over a local government important parts of which are failing at a time that they cannot afford to fail. As we're getting ready for the one-year anniversary of the February 22nd earthquake, we're only just starting to have land approved for subdivisions on the fringes of town. We could barely afford the stupidity of local land use regulations prior to the earthquake, but we were hardly alone in having those kinds of problems. But the rigidities imposed by those regulations verge on insane in a post-quake world. Hugh Paveltich notes here, about 2/3 of the way down, Christchurch's disastrous performance in getting new building consents through as compared to neighbouring Selwyn and Waimakariri.

Building regulations, zoning rules, insurer requirements, a less-than-friendly city plan still under development, RMA, EQC and CERA - each of those is a pretty substantial veto step in the way of developers who might want to reinvest their insurance payouts in Christchurch. More Council staff should be helping residents and investors navigate their way through the morass rather than providing additional veto points. There have been some moves in that direction, but it's getting a bit late.

It's also getting just a bit late for all the folks who can't fix their homes without CERA approval, can't live in their homes because Council won't let them, and whose temporary accommodation insurance payments are running out. Kafka rules. Council should be advocates for these guys.

I don't know whether firing Tony Marryatt and having early elections solves things. I'm less than convinced that a new lot of Councillors is likely to achieve much. But worries about employment law potentially requiring that Marryatt receive a substantial payout if he's fired quickly are a sideshow. I'm not yet convinced that it's worth doing. But if it's worth doing, I'm happy to pony up my $10 share to be rid of him. The costs of having a poorly performing Chief Clerk are an awful lot higher than what we'd have to pay to be rid of a poorly performing Chief Clerk. A good Chief Clerk, like King Uther in the story, would be distributing beatings to ticket-clipping veto-players.

Meanwhile, Joe Bennett's been given official permission to live in his own home (previously, and here). Small bright sparks.