Friday 30 April 2021

Streisand effect - Newsroom and Scott Morrison edition

This morning's news roundup from Newsroom editor Jonathan Milne included a warning about a speech by Australian Prime Minister Scott Morrison. 

Milne writes:

One traveller we'd rather didn't cross the Tasman is the dismissive and disparaging populism expressed in a speech last night by Scott Morrison. At the United Israel Appeal NSW donor dinner in Sydney, the Australian Prime Minister said identity politics and the moral corrosion caused by the misuse of social media were forces seeking to undermine society.

“You are more than the things others try to identify you by in this age of identity politics," he said. "You are more than your gender, your sexuality, your race, your ethnicity, your religion, your language group, your age.”

Morrison said people who focused on those attributes, or divided along those lines, were undermining community, and also losing sight of who they were as individuals. “When they define each other by the boxes we tick or don’t tick – rather than our qualities, skills and character – we fail to see or value other people as individuals,” he said.

Morrison uses the rhetoric of homogeneous nationalism to mask his dismissal of minorities, and their intergenerational experience of disadvantage. Trump did it in the US, Bolsonaro in Brazil – and now it's filtering out to the fringes.

NZ Opposition leader Judith Collins is toying with it, describing the proposed Māori Health Authority as "segregationist" and blithely denying all the evidence that a Māori child born today (when all other factors are accounted for) is already behind the start line in the race of life.

No doubt Collins has an eye to the success of those overseas populists, and a memory for the success of Don Brash's iwi/Kiwi. But she and her front bench are better than that and (to be blunt) smarter than that. They have a broader view of the world than did Brash, and will understand that disenfranchising minorities is a disservice not just to them but also to the productive economy that she aspires to lead.

She would be wise to consider that in denying the scientific evidence on matters like Māori health, the only minorities she does empower are those cynically populist conspiracy theorists who are leading the charge against such scientific breakthroughs as 5G, Covid vaccines and climate technologies.

It sounded like a pretty awful speech, from that description. I wouldn't normally pay much attention to what the Australian PM has to say about things, but it made me want to know just how bad it really was. 

When I read the thing, well, it really didn't look like a call for homogeneous nationalism. But you read it and judge for yourself. Thanks to Mike Reddell for the pointer.  

Thank you very much. Please be seated. Shalom. It’s wonderful to be here with you all this evening.

I want to begin by acknowledging the traditional owners of the land on which we gather, the Gadigal and Bidjigal people of the Eora nation.

I want to acknowledge, also Steven has just mentioned, our veterans or any service personnel serving who are with us this evening and say thank you on behalf of our nation for your service.

To Steven and to Judy, your leadership of this amazing Keren Hayesod organisation, the UIA Board of Trustees, world board of trustees, is a testament to the esteem in which you are held globally by the Jewish community. Your leadership here in Australia and your family’s leadership here in Australia is in the pantheon of great contributors to our nation that have built this country and as a nation we are deeply grateful to you and for the wonderful work you are doing now.

To Lance Rosenberg, President of UIA Australia, thank you so much.

Jillian Segal, lovely to see you Jillian, President of the Executive Council of Australian Jewry. Thank you for your leadership.

To Ambassador Jonathan Peled, the Acting Ambassador of Israel, it is wonderful for you to be here tonight as you always are amongst the community, Your Excellency, and it is wonderful to be joining with you here this evening.

I’m joined by some of my colleagues here tonight. One of them I’m not joined by tonight is the Treasurer, Josh Frydenberg, you may know him. In fact, I suspect about seven of you are in text communication with him right now and that you didn’t initiate it. Josh is a dear friend and a great colleague and he is doing a tremendous job as he prepares for his next Budget.

But amongst all of that, there has been a passion project for Josh, which I want to acknowledge amongst the community here this evening. And that is the work that he has been doing to provide funding for Holocaust museums. Those we know of already in New South Wales, an outstanding museum and Victoria also. But the $20 million that we worked together to ensure was provided to support the museums in South Australia, Western Australia, Tasmania, Queensland and the ACT.

That is important but I’ll tell you what’s more important - that means across the whole country now, Holocaust education will now be taught across the curriculum. No better way to remember than by teaching your children and I want to commend Josh for his leadership.

To Stuart Robert, the Minister for a very long list of things, Employment, Workforce, Skills, and Small and Family Business, another great friend of Israel who is here tonight and you know Stuart very, very well.

Dave Sharma, the Member for Wentworth who is here, a former Ambassador to Israel, known to you incredibly well. Doing a wonderful job in the community.

And Julian Leeser, who is here with us, the Member for Berowra and Joanna, it is wonderful to have you here. I will talk a little bit more about Julian in just a second.

To everyone else who went to Sydney Boys High School who is here, I know there is a lot of you because I went to school with you. It is wonderful to be amongst friends.

Tonight I want to talk about a topic that I know is very dear to you. My father was a big believer in community. He was Mayor of Waverley, he was on the Waverley Council for some 16, 17 years and he taught me a lot about the importance of community. And he learnt it all from you because my father would tell me, if you want to understand community, understand the Jewish community, which he loved passionately and dearly.

And they cared for him at Wolper in some of his last months as my mother was recently cared for there. She is fine, by the way, she just had a back operation. But the care, the community of the Jewish community, has deeply impacted my family and my father taught me that.

And so I want to talk about a topic tonight that is dear to your hearts - community. Community of individuals, we heard it on the video, a nation of individuals.

Now, as some of you may know and as Steven has mentioned, I have been deeply influenced in recent years by the writings of the late Rabbi Lord Jonathan Sacks and Julian is responsible for that, because he has thrust Jonathan Sacks works into the arms of anyone who he can get a book into the hands of, rightly so and I am very grateful that he did.

On one occasion, he said because I was consuming this, that you’d better be careful, you might become Australia’s first Jewish prime minister. And I said, don’t tell Josh.

But his books Lessons in LeadershipCovenant and Conversation, and Morality, his last work, have given me a more textured understanding of Judaism, my own Christian faith and what unites us all as human beings. I shared some of these learnings with my own church community last week at the Gold Coast with Stuart Robert at their national conference.

In his works, Rabbi Sacks wrestles, a bit like Jacob, wrestles with the practical complexities of our modern pluralistic world and finds, through the tenets of his faith, as he did, a pathway to the common good.

At the heart of our Judeo-Christian heritage are two words.

Human dignity.

Everything else flows from this.

Seeing the inherent dignity of all human beings is the foundation of morality. It makes us more capable of love and compassion, of selflessness and forgiveness.

Because if you see the dignity and worth of another person, another human being, the beating heart in front of you, you’re less likely to disrespect them, insult or show contempt or hatred for them, or seek to cancel them, as is becoming the fashion these days.

You’re less likely to be indifferent to their lives, and callous towards their feelings.

Now, those of Jewish faith understand this. As Rabbi Sacks said, “The purpose of Judaism is to honour the image of God in other people.”

Reflecting the Psalmist: people who are fearfully and wonderfully made.

Such a beautiful idea. And one shared by many other faiths, including my own. Appreciating human dignity also fosters our sense of shared humanity.

This means that because we are conscious of our own failings and vulnerabilities, we can be more accepting and understanding of the failings and vulnerabilities of others.

True faith and religion is about confronting your own frailties. It’s about understanding your own and our humanity. The result of that is a humble heart, not a pious or judgemental one.

This has certainly been my experience. It has also been my privilege to appreciate the commonality of this view in deepening my ever connections with so many other faith and religious communities across Australia.

Christians from all denominations. The Eastern Orthodox faiths, Maronites, Catholics, Anglicans, and then of course Judaism, Hinduism, Muslims.

Seeing the dignity in others means we can see others as imperfect people striving to do their best. 

And, you know, in a liberal democracy, there is no greater liberal democracy than the ones that are shared here and in Israel. Human dignity is foundational to our freedom.

It restrains government, it restrains our own actions and our own behaviour because we act for others and not ourselves, as you indeed do here this evening. That is the essence of morality.

de Tocqueville agreed. He said, “Liberty cannot be established without morality, nor morality without faith’. Hayek the economist said the same thing, “Freedom has never worked without deeply ingrained moral beliefs.”

Acting to morally enhance the freedom of others ultimately serves to enhance our own freedom.

So it is no surprise then that Rabbi Sacks concluded in his final work, Morality, “If you lose your own morality, you are in danger of losing your freedom.”

The implication here is very important.

Liberty is not borne of the state but rests with the individual, for whom morality must be a personal responsibility.

In Lessons in Leadership, he quotes distinguished American jurist Judge Learned Hand, to argue this point:

I often wonder whether we do not rest our hopes too much upon constitutions, upon laws, upon courts .. believe me these are false hopes. Liberty lies in the hearts of men and women, when it dies there, no constitution, no law can save it.

Freedom therefore rests on us taking personal responsibility for how we treat each other, based on our respect for, and appreciation of, human dignity.

This is not about state power. This is not about market power. This is about morality and personal responsibility.

Now, morality is also then the foundation of true community.

The place where we are valued; where we are unique; where we respect one another and contribute to and share one another’s lives. Where we pledge faithfulness to do together what we cannot achieve alone.

Sacks describes this as the covenant of community.

The determination to step up and play a role and to contribute as you are indeed doing this evening as part of this amazing organisation. Not leaving it to someone else, to another.

That is the moral responsibility and covenant, I would argue, of citizenship. Not to think we can leave it to someone else. 

But there are warnings. Where we once understood our rights in terms of our protections from the state, now it seems these rights are increasingly defined by what we expect from the state.

As citizens, we cannot allow what we think we are entitled to, to become more important than what we are responsible for as citizens.

Teddy Roosevelt argued this more than a century ago in his famous ‘Man in the Arena’ speech. But I’m not going to quote the section that is most known. Arguing that going down this path of entitlements of citizenship, as opposed to the responsibilities, is a very dangerous one, and it indeed jeopardises national success in a liberal democracy.

He said, “The stream will not permanently rise higher than the main source; and the main source of national power and national greatness is found in the average citizenship of the nation.”

He said, “In the long run, success or failure will be conditioned upon the way in which the average man, the average woman, does his or her duty, first in the ordinary, every-day affairs of life, and next in those great occasional crises [and we know a bit about that] which call for the heroic virtues.”

Now together and individually we are each responsible for building and sustaining community, and we each have something unique to bring. Because community begins with the individual, not the state, not the marketplace. It begins with an appreciation of the unique dignity of each human being. It recognises that each individual has something to offer and that failure to appreciate and realise this, as a community, means our community is poorer and it is weaker.

In short, to realise true community we must first appreciate each individual human being matters. You matter. You, individually.

And in this context I would also argue we must protect against those forces that would undermine that in community, and I don’t just mean, as I’ve recently remarked, the social and moral corrosion caused by the misuse of social media, and the abuse that occurs there. But I would say it also includes the growing tendency to commodify human beings through identity politics.

We must never surrender the truth that the experience and value of every human being is unique and personal. You are more, we are more, individually, more than the things others try to identify us by, you by, in this age of identity politics. You are more than your gender, you are more than your race, you are more than your sexuality, you are more than your ethnicity, you are more than your religion, your language group, your age.

All of these of course contribute to who we may be and the incredible diversity of our society, particularly in this country, and our place in the world. But of themselves they are not the essence of our humanity.

When we reduce ourselves to a collection of attributes, or divide ourselves, even worse, on this basis, we can lose sight of who we actually are as individual human beings - in all our complexity, in all our wholeness and in all our wonder.

We then define each other if we go down that other path by the boxes we tick or don’t tick, rather than our qualities, skills and character. And we fail to see the value that other people hold as individuals, with real agency and responsibility.

Throughout history, we’ve seen what happens when people are defined solely by the group they belong to, or an attribute they have, or an identity they possess. The Jewish community understands that better than any in the world.

So my message is simple: you matter, you make the difference, you make community. And together with family and marriage and the associations of clubs and community groups, faith networks, indeed the organisations we’re here celebrating tonight, and so much more, they are the further building blocks of community on that individual, providing the stability and the sinews of society that bind us one to another.

And upon that moral foundation of community we build our institutions of state. Within that moral context we operate our market place.

To your great credit, this event is an affirmation that morality always starts with individuals seeing the dignity and need in each other and deciding to act. You are demonstrating by your own actions that morality can never be outsourced, because when it is we rob ourselves of that precious agency and we deny the strength and goodwill that comes from building community.

You matter. Community matters. In a democracy, it matters especially. It’s a tremendous source of strength and it’s why foreign actors seek to sow discord online, in many other ways, inflaming angers and hatreds and spreading lies and disinformation.

Of course, the right to disagree peacefully is at the heart of democracy, I’m not referring to that. But democracy is a shared endeavour, and the civility, trust and generosity, they are the currency that mediates our differences.

As I said to the Australian-Israel Chamber of Commerce in Melbourne a few years ago, in the aftermath of the Christchurch massacre which broke our hearts and tore our souls, what we need is not to disagree less, in a liberal democracy like Australia, we just need to disagree better.

I’ve been so incredibly heartened to see people from across the country show the best of us as a nation this past year. As Teddy Roosevelt said, those heroic virtues that were called upon at such a time.

Drought, bushfires, floods, cyclones, pandemic - Australians have found ways to support each other and stand with each other. Checking in on each other, keeping jobs there for your employees, volunteering, helping neighbours with their shopping.

Tonight I’ve spoken of Rabbi Sacks and I think his description of community could be well applied, I think, to the best of what we’ve seen in Australia over these past few years.

There’s another Jewish leader who’s also influenced me in recent times, and on this occasion it was Josh Frydenberg thrusting a book into my hand. And I know he’s had a big impact on Josh and I know, I would say everybody in this room. And that’s the Holocaust survivor 101-year-old Eddie Jaku.

Eddie’s book “The Happiest Man on Earth” is a gift to us. I think he’s taking the title of what I might have called my book sometime. But it is a great gift to Australia. He is a great gift to Australia.

The book is a love letter to this country and I thank those of you who have come up to me tonight. As Prime Minister, not me personally, but just representing the Australian nation and saying your thanks to what Australia has meant to you and your family.

Of course Eddie’s story is harrowing but it’s also hopeful. Of life in the Nazi concentration camps. Of surviving Auschwitz, Buchenwald and the Holocaust. And of course losing his family. But never losing his faith in humanity. Finding friendship even amongst the absolute ruins.

And after the end of the War, Eddie found a home here in Australia where he was welcomed with open arms, as so many of you or your family have been.

Many of you know Eddie, because he’s guided tens of thousands of people through the Sydney  Jewish Museum. Eddie says of our country, a land where opportunities abound. And it is.

Julian Leeser has made the wonderful point that Australia is one of the few places on earth where Jewish people have not suffered persecution.

We’re not perfect, no country is, but we do have much to be proud of. We are a liberal, free people, one of the oldest continuous democracies on the planet. We have an Indigenous heritage and a rich multicultural character, both adding a brilliance and joy to our national life and character. We seek to be a good neighbour in our family here in the Pacific, and a good citizen in the world, playing our part, doing our share of the heavy lifting, meeting global challenges. We stand as a sovereign and free nation in an increasingly uncertain part of the world. We value and strive to preserve a liberal world order where the strategic balance favours freedom, always.

And we stand by with like-minded friends, such as the Jewish people and the State of Israel, who is a great friend to Australia and we are a true friend of Israel. A country that is sovereign, that is independent and free. A modern state, born anew in an ancient homeland.

Australia is a proud and faithful friend. So friends, continue to stand by each other.

When President Rivlin visited Australia, he described Australia’s Jewish community as the ‘living bridge’ between our two countries and that is indeed what you are.

You have created a bridge that has enriched Australia beyond measure.

Though numbering only about one per cent of our population, Jewish Australians have made a remarkable contribution to our national life and our story.

You have sought to be a light unto the nations, performing the mitzvot or good deeds according to the Law of Moses.

Good citizens, good neighbours and good friends, who understand through their own faith and history and sufferings that life is not what you accumulate but what you give, what you contribute.

People like John Monash, Isaac Isaacs, Sir Zelman and Lady Cowen, Linda Dessau, Susan and Isaac Wakil, and Judy Cassab.

The amazing Sir Frank Lowy.

Isi Leibler, the late Isi Leibler, who we know passed away earlier this month, and our thoughts and prayers are with his family. He was a great blessing to this country.

My dear friends, my deputy leader and Treasurer Josh Frydenberg, another great contributor, as is Julian Leeser, making his mark.

So many outstanding Jewish Australians. So many stories of giving back.

That’s what you are doing tonight.

I know Steven is hoping the focus of that is giving. But you will, I know, because that has been your custom. To give and to give back.

In my church, we talk about blessed to be a blessing and that is what you’re doing here tonight. So being among you tonight, I’m deeply honoured to be here, I’m deeply grateful for your contribution to our nation.

I honour you as Australians, and as people of a rich heritage, a great culture and a tremendous faith.

I take to heart the words that you live out: “Pray for the peace of Jerusalem. May all who love this city prosper.”

So I conclude with the words of Eddie Jaku and his blessing to so many:

“May you always have lots of love to share, lots of goodwill to spare, and wonderful friends that care”.

Thank you and God bless you. Shalom.

If this is the new bar for beyond-the-pale right-wing nationalism as far as mainstream NZ media are concerned, well, I'm reminded of the conditions that allowed Fox News to go from zero to something like fifty percent market share in a couple years. 

Tim Groseclose and Jeff Milyo came up with a brilliant measure of media outlet ideology in the early 2000s; they anchored it to the median voter's ideological preferences using think tank citations by congressmen, and by outlets, as intermediary. 

This is what they found, in the era before Fox went kinda nuts.

Sure, Fox was to the right of centre - about ten points to the right. But it was closer to centre than most other news outlets. Out of 20 outlets, it was the 5th closest to centre, and everyone else sat to the left of the median voter. A vast section of Hotelling's beach had no hot dog vendors, so the folks setting up a hot dog stand just a bit away from everyone else's took half the market. 

It's impossible to re-create the Groseclose and Milyo kind of analysis here. Leigh and Gans had a tough time of it in Australia - they had to look at partisan, rather than ideological, bias. And Oz has thicker media and think tank markets than we do. But I wonder how much of the beach here is left yearning for a hotdog. 

Thursday 29 April 2021

24/7 Sobriety

A few stories this week reminded me of South Dakota's 24/7 Sobriety programme.

I've previously talked about South Dakota's 24/7 programme. RAND's research on it is here. Bottom line: no-alcohol conditions as part of probation or parole, monitored, with certainty of a short sentence for violation, results in reduced alcohol consumption among those with demonstrated abuse problems, and consequent reductions in offending.

I don't know how many of the more violent people in emergency housing near very vulnerable people are on parole or probation that could have come with a monitored and enforced no-alcohol condition. 

And I wonder whether running 24/7 here might improve things. A short spell in the cells for breach of no-alcohol conditions could result in net reduction in nights in cells by reducing reoffending. 

Wednesday 28 April 2021

Pandemic priorities

Prior to Covid, successive governments' approaches to public health meant that we had central government ready and able to command District Health Boards to stop the sale of soda at hospital cafeterias, but unable to tell whether hospital staff were vaccinated during a measles outbreak caused by failure to make sure everyone was getting their measles shots.

I worry that a new Public Health Agency will find itself tempted to shift back to those kinds of priorities once Covid is eventually in our rearview mirrors - and potentially even before then. 

This week's column at Newsroom argues that the proposed Public Health Agency should be split into two parts, with one party focused on contagious disease.

A snippet:

The problem was not a fragmented DHB system. Rather the problem was that public health efforts from the Ministry of Health and granting agencies focused on non-communicable disease at the expense of communicable disease.

And it is all too easy to see how that problem emerges.

Governments have a harder time dealing with things that impose longer term risk than with things imposing present costs. Hospitals must deal, all the time, with the costs associated with diabetes, with smoking, and with harmful alcohol use. While smokers pay a lot more in tobacco excise than they cost the government, the health system still bears the burden. And health professionals who deal daily with those suffering the longer-term consequences of poor diet, heavy drinking, and smoking can be powerful advocates for focusing on those problems.

So, it is always tempting, when resources are scarce, to shift focus away from workstreams dealing with longer term risks towards ones dealing with current problems. For a public health system, contagious disease is a bit like sewage network maintenance for a city council. There is always something that is a more pressing concern until suddenly there is not.

That is one reason that a dedicated agency, like Taiwan’s, can provide impressive results. Having only one job means less chance of being diverted into other tasks.

And our Ministry of Health, pre-Covid, was frequently diverted.

Monday 26 April 2021

In praise of Big Agriculture, and global trade

Foreign Policy walks us through the merits of Big Ag:

In the popular bourgeois imagination, the idealized farm looks something like the ones that sell produce at local farmers markets. But while small farms like these account for close to half of all U.S. farms, they produce less than 10 percent of total output. The largest farms, by contrast, account for about 50 percent of output, relying on simplified production systems and economies of scale to feed a nation of 330 million people, vanishingly few of whom live anywhere near a farm or want to work in agriculture. It is this central role of large, corporate, and industrial-style farms that critics point to as evidence that the food system needs to be transformed.

But U.S. dependence on large farms is not a conspiracy by big corporations. Without question, the U.S. food system has many problems. But persistent misperceptions about it, most especially among affluent consumers, are a function of its spectacular success, not its failure. Any effort to address social and environmental problems associated with food production in the United States will need to first accommodate itself to the reality that, in a modern and affluent economy, the food system could not be anything other than large-scale, intensive, technological, and industrialized. 


Vertical integration might bring significant benefits. Big agricultural corporations would have significantly greater incentive to invest resources into the long-term improvement of the land they own and farm, implement evidence-based farming practices, and spend on capital-intensive technology.

Large companies are also, counterintuitively, more responsive to demands for social responsibility, not less so. It is large, multinational corporations, not smaller regional operators, for instance, that have been willing to make zero-deforestation commitments in places like Brazil. That’s because, even though they can leverage their size and economic power to thwart reform, they are also easier to target, pressure, and regulate than more decentralized industries.

For these reasons, a food system that is bigger, more consolidated, and more vertically integrated might actually deliver better social and environmental outcomes than the one we have today. Either way, big farms and big agriculture are here to stay. They are a fundamental feature of global modernity, not a conspiracy by capitalists and corporations to poison people or the land.

Ultimately, improving the U.S. food system will require, first, appreciating it for the social, economic, and technological marvel that it is. It feeds 330 million Americans and many millions more around the world. It has liberated almost all of us from lives of hard agricultural labor and deep agrarian poverty. It has allowed forests to return across much of the United States while also sparing forests in many other parts of the world. It does all this while being extraordinarily efficient environmentally. A better food system will build on these blessings, not abandon them.

Relatedly, Sarah Taber's worth following on Twitter. She's an ag consultant in the US, debunks a fair few myths about family farms. She's not a huge fan of corporate models, but the idealization of family farms and of myths that small artisanal organic farms could possibly sustain modern societies - she really doesn't go for that either. Here's a thread on manure

Sunday 25 April 2021

The case of Californian tomatoes

It's a weird way to cite Clemens et al 2018.

NZIER's latest report for ProdComm on immigration has a box inset titled "The case of Californian tomatoes." 

The inset, pasted below, notes the American 'bracero' agreements between the US and Mexico which allowed Mexican manual labourers to work in American fields. The inset goes through a 2010 piece by  Ed Taylor looking at the substitutes that emerged for imported workers, after the end of the restrictions. It notes mechanisation, and describes rising wages over the subsequent period alongside unionisation and other changes.

It's a bit hard to establish causality in any of that discussion. The Taylor 2010 piece is a bit of a narrative literature survey. But the impression left by the inset was that the substitution away from bracero workers, after the programme ended, led to higher wages for farm workers. I've copied it below; maybe your reading of it is different than mine.

But the first footnote in the inset is to Clemens et al 2018. Footnote 212, at the end of the first paragraph. Looking at the footnote's placement, it seems there just to establish the existence of the bracero agreements. But Clemens 2018 is the piece I talked about in my NZ Herald column last year, when I was annoyed that NZIER had ignored Clemens's work in its first report. 

That work, published in the AER in 2018, didn't just document that the bracero arrangements existed. It  was able to establish causality about the effects of ending the bracero agreements for the wages of local farm workers. It used a diff-in-diff structure comparing states that relied on bracero workers with those that didn't, before and after the end of the programme. And it showed no increase in wages for local farm workers consequent to the ban on bracero workers. 

Clemens et al conclude:

The exclusion of Mexican bracero workers was one of the largest-ever policy experiments to improve the labor market for domestic workers in a targeted sector by reducing the size of the workforce. Five years afterward, the agricultural economist William Martin called advocates of the policy “obviously… extremely naïve” since “capital was substituted for labor on the farm and increased effort was exerted by the agricultural engineers in providing the farmers these capital alternatives” (Wildermuth and Martin 1969, p. 203). We find that in broad terms this assessment, though perhaps uncharitable, was accurate: bracero exclusion failed to substantially raise wages or employment for domestic workers in the sector. Employers appear to have instead adjusted to foreign-worker exclusion by changing production techniques where that was possible, and changing production levels where it was not. This mechanism requires further elucidation. Further research should explore other natural experiments to test causal links between labor scarcity and endogenous technical change, as urged by Acemoglu (2010, p. 1071)

So, the restriction did lead to mechanisation (and changes in which crops were planted) but that didn't do anything for wages or employment of local farm workers. 

It's then, well, I bit weird to write a whole box inset on the changes in access to migrant labour in US agriculture that leaves a strong impression it led to improved wages, while entirely ignoring the finding of the first paper cited in the box inset, published very recently in the top journal we've got, that shows no causal link from banning migrant workers to higher wages. 

How does that happen? Did nobody read the Clemens piece or know what it was about? Or did it just not seem relevant to any of them that the paper's clear finding was rather at odds with what the box inset was suggesting?

If you like mechanisation for mechanisation's sake, or take a cargo-cult understanding of productivity, then maybe banning migrant workers and replacing them with machines, with no effect on wages or employment for local farm workers is great. Pull a pile of foreign workers out of the denominator on a productivity calculation and put machines in instead, and you'll get a different number on productivity. 

But there's a difference if that outcome obtains because the firm saw the machines as being more cost-effective as compared to it obtaining because the foreign workers were banned. 

Deporting all the RSE workers to force their replacement by machines seems a cargo-cult version of productivity. That Clemens found no improvement in wages for local ag workers suggests pretty strongly that the move there really wasn't improving the local workers' productivity in any meaningful sense. 

It seems that most of Wellington is convinced by the kinds of stories that were prevalent among the American progressives of the 1930s. It didn't lead to good policy back then either. If you've read Tim Leonard on that era, it's hard not to hear echoes of Edward Ross's worries about migrants' predisposition to "underlive" locals. 

Friday 23 April 2021

IRD OIA denouement

It looks like I'd failed to blog the denouement to the IRD data OIA mess last year. Let's fix that now.

Loyal readers will recall the history:

It's been a long saga, and it isn't over yet. But the end is in sight. 

On 12 February, 2019, I put in an OIA request for the data from the polling that IRD had commissioned from Colmar Brunton on tax attitudes. 

On 12 March, 2019, IRD declined the request on grounds that it would be considered sensitive tax data. I brought the matter to the Ombudsman the next day. But it later turned out that they had ordered the data destroyed. 

On 1 November, 2019, IRD gave me revised grounds for having refused the request: that the data had been destroyed. 

I had a chat with the Archivist's Office about what's required for that kind of destruction of public records, then went back to the Ombudsman.

On 12 March, 2020, the Chief Ombudsman provided a substantial slap to IRD and directed them to get the data. 

At last night's meeting of the Khandallah Economics Association, I'd noted some of these problems where it seemed, at least to me, as though IRD was acting as though it thought the OIA didn't apply to it, and that it seemed to be ignoring its requirements under the Public Records Act. 

But then I'd realised I'd failed to blog the last bits. Covid-year, eh?

IRD eventually provided some of the data. They provided it in aggregated form. They also provided the individual-level data, with every detail blacked out. I've put everything up in a folder, here. You can also find IRD's explanation of its reasoning about why they could black everything out. 

On seeing the data dictionary, it was rather less interesting than I'd expected. I'd thought it was going to be about attitudes towards specific taxes. Instead it was about trust in IRD. It would be fun to play with anonymised data from that survey. But it was no longer worth protracted battles via the Ombudsman's office. I thought it was going to have data about views on capital gains taxes and land taxes and the like; nope. All the back-and-forth is taxing. 

But I'd also put in a query with the Chief Archivist because it looked like IRD had ordered data destruction in ways contrary to their disposal authority. Then I OIAed for any note sent from the Archivist to IRD about it. And I got this from the Chief Archivist. 

I read this as a bit of a slap to IRD for ignoring its requirements under the Public Records Act. 

I should have blogged this ages ago. Apologies!

Thursday 22 April 2021

In praise of parametric insurance

It's not quite the kind of parametric insurance offering I've been after, but it's getting closer to it. Bounce Insurance now provides a quasi-parametric earthquake insurance product. 

Individuals can get $10k or $20k coverage; businesses get up to $50k. 

If ground force acceleration in your neighbourhood exceeds the trigger value, then you get paid out. You have to attest to that you've incurred losses at least as large in value as the amount you've insured against; there's potential for spot audit later to confirm. But they pay out within days.

I wrote about it in this week's column for the Stuff newspapers.

Parametric products are much simpler. They are common in North America for crop insurance. Rather than forcing anyone to try to estimate the cost of a heavy frost for an orchard, the insurance simply pays out if temperatures drop below the trigger levels. And larger payments for harder frosts are possible as well.

These kinds of products are exceptionally well suited to earthquake risk. A major earthquake on the Alpine Fault is overdue. And, every year, there is about one chance in 120 that Wellington will get to enjoy an earthquake as large as the 2011 Christchurch quake. In that kind of scenario, it is hard to say exactly what losses any of us might experience – but they will be substantial.

If you own a downtown business, will your loss come from the building’s failure? From a neighbouring building’s failure? From council cordons around downtown that could easily last for a year? From depopulation? From blocked transport routes?

Your homeowners’ insurance could see your house rebuilt, after a lengthy process, or a cash settlement, which may be rather less than you had hoped for if there is argument about the extent of the damage.

If your job shifts out of town because your employer is leaving, you may be trying to sell a broken house along with its insurance claim, in a hurry, at the same time as many others are trying to do the same. If your home is your biggest asset, the loss will be substantial and is both uninsured and uninsurable.

A parametric insurance product does not care about the nature of the loss or about measuring its extent. If the insured event happens, payment comes quickly. Unfortunately, those wanting parametric earthquake insurance have had no options at all, until this year.

I've wanted a contract that pays a very large sum if a Mercalli VIII event happens. There are reasonable odds that Wellington doesn't recover from that kind of event. The Bounce product is an improvement, but still isn't quite what I'm after. It triggers on ground force acceleration of 20 cm/s, which they describe as matching strong to severe earthquake on the Mercalli rankings (VI or VII). 

I'm really after catastrophic coverage: a large payout for a very severe event. I'm not worried about my existing insurance coverage for Mercalli VI events. I am worried about what happens if downtown is cordoned off for a year and the city can never come back from it. So rather than $20k coverage against major and more minor earthquakes, I'd be interested in something more like $1m coverage against "death of the city" events.

I'd also worry a bit about the loss attestation provisions. It seems a way of squaring a near-parametric product with NZ insurance regulations that don't really want insurance products that look like event derivatives or financial instruments. But it could come back to bite if someone wants to argue the toss about the extent of loss after the event. 

I guess I fundamentally don't get why nobody's doing something like the following:

  • Define a set of catastrophe bonds for major quake markets. Wellington. Tokyo. San Francisco. Seattle. Vancouver. Taipei. Los Angeles. Tehran. Manila. Lima. Tianjin. Jakarta. Christchurch / Alpine Fault. Each bond would pay a margin over a global index's return, in exchange for the risk that the bondholder would be partially wiped out if the trigger event happens. Investors could have their funds split across the earthquake markets proportionately to demand in each of those markets for the insurance products. 
  • Sell insurance to people wanting parametric coverage in each of those markets. They'd have to pay investors their margin over the index fund's return for the risk transfer; that's what their premiums would be. 
  • Money from investors would just go into the index fund, ready to be liquidated to cover insured people's claims if needed. If, say, 20% of the insured value were in LA and the LA quake triggered, then that proportion of the fund would be liquidated to pay out the insured people, and investors would take that hit to the fund's value. 
  • Presumably premiums in any market could bid up if the accumulation in that market started getting high. 
I suspect a combination of thin demand and regulatory issues lead to missing markets. 

Wellington's median house price is now over a million dollars; there have to be tons of people for whom a house in an earthquake zone is their biggest asset, and they face massive uninsured and currently-uninsurable risk. But I doubt many have gazed long into the "Wellington gets an earthquake at least as big as Christchurch 2011" abyss and what it could mean. 

I understand there to be potential regulatory issues in these kinds of contracts; they're presumably the reason why Bounce has had to require that claimants certify that they incurred losses at least equal to the amount paid out. And while that's easy on small-scale stuff, it might start being a worry if you were trying to get a million dollars' coverage. Could you really prove, to an insurance standard, that you'd suffered a million dollars in loss because of the event - when nobody knows whether the city will be dead or whether it will bounce back? But the alternative might be considered to be a financial derivative rather than insurance, and then a whole different complicated bucket of regulation applies. 

Monday 19 April 2021

Afternoon roundup

The afternoon's worthies:

  • Rowan Simpson on venture capital in NZ. In a world awash in capital, is it even plausible that capital is the main constraint preventing successful NZ startups?
  • Fiji goes into lockdown. When I advocate for Green Zones with the Covid-free Islands, I'll often get correspondence from folks wishing that Fiji be included in such considerations. On the other side, I hear a lot of worries about porous borders for those with private jets. How well the Fijian government gets this outbreak under control could provide useful information. 
  • Anyone who writes about problems at the border will get a lot of correspondence from people stuck in desperate situations. Folks here who haven't seen their wife and kids for over a year and who've had no hope at all that they'd be able to bring their families over. It's been grim. And, finally, it looks like there might be some action on it. Henry Cook reports that families of healthcare workers and of those here on temporary visas will be able to apply to get in. Look at the Facebook thread on this video of the 14 April Immigration briefing from Minister Faafoi. I wonder whether the government was worried it might start losing nurses and medical staff to Australia, which has made it easier for families to get in from abroad. 
  • Export education is close to ruined. Says Universities NZ Chief Exec Chris Whelan, "If borders are not open by the start of next year we may as well never open." This should be manageable. You'd think that if we're mostly vaccinated by the end of the year, we could start admitting students who had been vaccinated and who are coming from places with low Covid rates. The UK has gotten its biweekly case count below 500 per million population. You'd think that the Universities themselves could run quarantine for those students, following protocols including daily testing. I'm pessimistic the government will allow it though.
  • Why am I pessimistic? MIQ is a shambles; the government doesn't trust itself to expand MIQ capacity; the Ministry of Health refuses simple obvious moves to increase safety. They can't even get border workers vaccinated and the data system for tracking vaccination is still in progress. The government seems unable to deal with it and incapable of imagining that anyone else could do a better job. And because the government has successfully demonstrated how risky the border is, even the Green Zone with Australia is viewed with suspicion: only 49% of Kiwis supported it; 28% opposed. See also Richard Harmon on it
  • It also doesn't help that Immigration NZ is "racist and stupid." Where I've argued that chefs and migrants from places with underrepresented cuisines should have priority in visas, Immigration NZ wants to deport the chef at Besos Latinos Ceviche Bar, because apparently he's stealing a Kiwi's job or some such nonsense. Vogons. Xenophobic Vogons. 
  • Jo Moir thinks officials shouldn't play along at Select Committee when Labour tries to run down the clock with patsy questions. I agree. But I wonder. CEs and DCEs are responsible to Peter Hughes. If things run this way, we might infer that Hughes wants it to run that way. Embarrassing failures of the public sector can then be dealt with quietly behind the scenes, eventually, rather than being disclosed to Parliament. 
  • The Commerce Commission has reminded smaller companies not to engage in anticompetitive conduct. There's a tool for whistleblowers to use. I wonder if there's anyone who's been suffering from cartel-like anticompetitive use of occupational licensing restrictions who might wish to lodge a complaint. 

Thursday 15 April 2021

The cost of a rolling omnishambles

The travel bubble with Australia has not brought room for others to come into the MIQ system from overseas. Instead, spaces are being decommissioned. Why? The system is leaky. The government cannot afford to let riskier people into those spaces, because the system can't handle them. 

My column in Insights last week went through the problem.

Maintaining quarantine-free travel with Australia is important. Expanding the bubble to include other Covid-free places like Taiwan and the Pacific Islands should be next. Both require keeping Covid out. Localised outbreaks would cause travel headaches, but broader outbreaks could break the bubble.

New Zealand’s MIQ system has barely held together over the past year. Otago public health researchers tallied thirteen border failures since July, and at least six internal MIQ facility failures. Despite being a year into this, basic errors continue to be made – like gathering visitors from different facilities onto the same bus for trips out to the park.

Australians do not bring Covid into MIQ, though they might catch it there. Poor MIQ practice means new arrivals can infect departing guests. Because the government knows that MIQ practice has been shoddy, it does not trust the system to handle more people from riskier places like America, Canada, and the UK.

So the government will de-commission MIQ spaces rather than let them be used, and has halted travel from India entirely.

If there were no way of improving safety in MIQ, limiting risk by limiting numbers would be the only option until we are all vaccinated.

Alternatives are worth trying.

This week we found that border workers haven't been bothering to comply with testing requirements. Don't blame the workers - blame a system that never bothered to set up audit trails to ensure that testing was being done. And we found that lots of frontline border workers haven't bothered getting vaccinated. Again, don't blame the workers - blame a system that never bothered to follow Queensland in setting up a Public Health Order forbidding unvaccinated workers from the front-line.  

Oh, and there also seem to be a few issues in the vaccine roll-out. 

Otherwise fine, as they say. 

I get a lot of people on Twitter saying none of this is a problem because there's no Covid here. I don't know whether they believe that, whether they want to believe that, whether they're blind partisans or what. 

But there are substantial costs.

All of it means greater risk of the virus getting out. That brings risk of harms, as well as additional restrictions. L3 doesn't come cheap. 

But in the bigger picture, assuming that contact tracing can keep on top of minor incursions, the omnishambolic approach mainly means that we will not have a functioning border system for another year. 

The government has said that we can open the border when the vaccine roll-out is completed.

But if the government could trust that MIQ were being run competently, we could accommodate a lot more arrivals in the interim. 

From my Insights column:

Testing every guest every day would sharply reduce transmission within MIQ. Infected people could quickly be shuttled to quarantine.

Cheap, accurate, and non-invasive saliva-based PCR testing is available. Rako Science has capacity to test every single person in MIQ, every day. But the Ministry of Health’s Request for Proposals only seeks testing of border workers – who are now vaccinated and lower risk.

What are the costs of not doing this? 

Around 1.1 million Kiwis aged 15+ were born outside of New Zealand and outside of Australia as of the 2018 Census. We all have families overseas that we haven't been able to see for over a year. We all face risk of needing emergency travel, either family coming in, or us going over there. Then add in Kiwis born here whose kids had moved abroad.

When you're dealing with 1.1 million+ people, even low probability events happen in large numbers. 

And the MIQ system cannot deal with those numbers. It doesn't have the scale. And it doesn't have the scale because the government outright refuses to run things competently. Running it in demonstrably unsafe ways means nobody would ever support expanding it - it's too risky.

It's hard for a lot of Kiwis to feel any sympathy for those of us who were not born here. Some Kiwis actively hate migrants. Being able to have family come in from overseas, if you yourself can't afford an overseas holiday at all, seems like an incredible luxury. And it is. 

But there are piles of families that are just split by the border. One would come for work, expecting the partner and kids to follow, and then the border closed. These folks haven't seen their partner and kids for over a year. Think about what that has to be like for them. Imagine yourself in a similar spot. This isn't some necessary cost of keeping Covid out. It is entirely a consequence of policy decisions to treat the border, and vaccination, as being rather low priority. 

Here's a snip from that piece: 

Basaly's wife Germin Gendy and two children were booked to fly from Egypt's capital Cairo to New Zealand on March 27, 2020, just before our country was plunged into lockdown and borders closed. If their flight was just days earlier they might have made it in time. 

"I can't stop crying because of this situation," Basaly said.

With 11 years experience on projects in the Middle East, including the Suez Canal, he's now considering taking his family and his skills to Australia.

"I can't stand it anymore - it's very hard for us… there is a possibility I can bring them there."

This is a cost of choosing to run an unsafe border system that cannot accommodate sufficient travel.

It is also a cost of allocating scarce MIQ spaces to nutritionists to serve an America's Cup boat race team, and the families of 'critical' boat race people, because the government says that the nutritionist for a boat race team is more important than an engineer's wife and toddler that he hasn't seen in over a year. And it's the a cost of a system that'll chuck a permanent resident visa at a cricket player so he can come back given the MIQ rules for entry, but will stall non-preferred migrants' families in queues forever, because the government simply weighs at zero any cost imposed on those who are not yet resident.  

And even for folks lucky enough to have their nuclear family here, it can be hard. I know one family that's soon moving back to the UK. They moved here a couple of years ago and have had a baby here. They'd relied on being able to get help from their parents who'd come in from the UK. 

That sounds all rich and luxurious and scoffable, but think about it a bit harder. If you've come in here from abroad recently and have a new baby, you don't have any of the social support that those born here build over a lifetime. There's no extended family around to help. You've only just started making social links; you can't impose reciprocal obligations. Instead, you get bursts of very welcome assistance while family are visiting. And you've based your arrangements around that. 

Now, that's all gone. And maybe things get easier after the vaccine's roll-out, or maybe it all gets delayed further because of new variants. One person inside the system tells me the government is prepping for MIQ to last for at least another year from now. The uncertainty of whether anything at the border might get fixed, combined with the rapid roll-out of vaccination abroad, starts driving choices. 

And I worry that too many see the costs on Kiwis born abroad as a benefit.

A shambolic border system isn't an unalterable fact of nature. It is a costly policy choice. 

Setting sensible systems for the entry of those vaccinated abroad seems important when it seems easier to get the UK and North America vaccinated than it is to fix our MIQ system.