Monday, May 22, 2017

The Paris Treaty on Climate Change

Matt Ridley notes in respect of the Paris Treaty on Climate change that:

….. the economist Bjorn Lomborg calculated how much the pledges would reduce warming, using standard models and generous assumptions about how quickly the reductions would be achieved and how long they would be sustained.

He found that all the promises made by the US, China, the EU and the rest of the world, if implemented from the early 2000s to 2030, and then sustained through the rest of the century, would reduce the expected rise in global temperature by only 0.17°C in the year 2100. That is to say, instead of rising by 2, 3 or 4 degrees or so by the time our great grandchildren are adults, world average temperature would rise by 1.83, 2.83 or 3.83 degrees. Lomborg put it this way: “Current climate policy promises will do little to stabilise the climate and their impact will be undetectable for many decades”. A different study by scientists at MIT came to similar conclusions. The INDCs add up to the square root of zilch.

However, and this is the crucial point, Lomborg also points out this invisible achievement would come at a staggering cost, somewhere between $1 trillion and $2 trillion a year: “Paying $100 trillion for no good is not a good deal”.

Friday, May 5, 2017

Cohen on Liberalism and Free Speech

Liberalism does not only fail to satisfy the new conservatives who are storming to power across the west. It fails to satisfy many who call themselves “liberal”. It is simultaneously too hard and too soft an ideology to bear. It demands tolerance. But we do not want to be tolerated as if we were poor relations. We want respect, approval and freedom from criticism and insult. In our wilder moments, we want, in our vanity, to be loved.

To paraphrase the paraphrase of Voltaire, the liberal view of sexual tolerance used to be: “I may disapprove of who you take to bed, but I will defend to my death your right to bed them.”

Just as liberals used to tolerate free speech, except when the speaker was inciting violence, so they allowed free love between consenting adults. Few now care about defending rights to the death. Many turn authoritarian and maintain you have no right to disapprove.To recap, the great mid-20th century movement for homosexual rights culminated in the recommendation of the Wolfenden report of 1957 that sexual acts between consenting adults in private should be decriminalised. It did not say that fundamentalist Christians, Jews, Muslims or ordinary secular homophobes must stop believing that homosexuality was a sin. Indeed, their freedom of speech guaranteed their freedom to disapprove. They simply lost the power to call for the police to raid bedrooms.

Equally, the old liberal insistence that free speech must be tolerated, except when it incited violence, did not mean that an audience must approve of a speaker. It remained free to argue back, denounce or satirise in the most robust manner. It just could not call on the authorities to ban speakers or the police to arrest them for “hate speech” when the speech was not so hateful it provoked attacks on its targets.Farron was being a true liberal. He disapproved of homosexuality but was prepared to defend gay rights

The strange controversy the leader of the Liberal Democrats began when he equivocated on whether he believes homosexuality is a sin shows how dead the old liberalism is. On the record, Tim Farron supports “equal rights for LGBT people and LGBT rights in this country and overseas”. But he also believes Christianity is “the most important thing in the universe bar nothing”.

The contortions he put himself through as he dodged questions about homosexuality’s “sinfulness” suggested he took his Bible literally and had dwelt on the murderous condemnations of homosexuality in Leviticus, echoed by St Paul, for longer than is healthy.

If he once did and has now changed his mind, so what? Farron was being a true liberal. He disapproved of homosexuality but was prepared to defend gay rights, just as I disapprove of religious fundamentalists but am prepared to defend their freedom to worship. Even by the low standards of 21st-century culture wars, the Farron “controversy” was absurd.

To give the absurdity a sinister twist, there is a genuine story about religion and equal rights that no one covers because it does not fit into the stereotypes of news coverage, where reactionaries are always conservative or Christian and the convergence of the far left and far right is always ignored.

Jeremy Corbyn worked for Iranian state television and spoke at Khomeinist ralliesin London. Everywhere he went, he looked a willing collaborator with a regime that flogs and executes gay men, treats women as second-class citizens and imprisons trade unionists.

If Corbyn was questioned on this, which he never is, he might say he does not approve of every aspect of Shia theocracy. But he worked for it, and was paid by it, and never found the courage to speak out on Iranian television for the victims of its oppression. A liberal society that condemns one politician who bothers God, but gives a free pass to another who works for a queer-bashing, queer-killing regime is so lost that it may never find its way home again.A liberal society that condemns a politician who bothers god, but not one who works for a queer-killing regime, is lost

At second glance, however, perhaps liberal society isn’t making a complete fool of itself. For why shouldn’t a gay man or lesbian be repelled by Farron’s contortions? At some level, they may suspect that although he will defend them he does not approve of them. Why should they accept that as good enough?

To broaden it out, why must a feminist fed up with seeing women portrayed as lumps of meat accept that she must struggle for years to find a link between pornography and rape? Why should a Muslim incensed by the anti-Muslim bigotry of the worst of the right, or a Jew incensed by the antisemitism of the worst of the left, wait until their enemies incite violence? Why not no-platform or call for dangerously fuzzy laws against hate speech before the tipping point?

For those who practise it, toleration is a hard principle to live with. It forces you to engage with enemies you abhor in argument when you don’t believe they have an argument worth hearing.

Concealed within the hardness is a soft centre, one that is too insipid for many to digest. Emotionally, it feels vapid to say that you must win arguments rather than call for the police. It can feel like an act of treason to dignify misogynists, racists or homophobes by agreeing to argue with them in the first place.

But however much the dismissal of tolerance, and the flight to a politically correct authoritarianism, makes emotional sense, practically it has been a disaster. Trump won in part because tens of millions of Americans had had it with being told what to think. Some were genuine bigots. Others could be won over if only “liberals” stopped upholding an illiberal policing of thought.

Unless they understand how they drive so many into the welcoming embrace of the right, Trump’s four-year presidency could stretch to eight. In Britain, we will have at least five more years of Conservative rule. Basic self-interest ought to persuade liberals not to provide justifications for censorship and control when the right – and the right alone – has the power to deliver both.

The politically correct movement is not only an intellectual and practical failure, it fails on the more basic level of human psychology.

You cannot demand respect from others. You can only earn it. You cannot force others to admire you, endorse your lifestyle and drop even private doubts about you. You can only persuade them to see what good there is in you. And if you don’t know by now you that cannot compel others to love you, you never will. All you can do – and all you should want to do – is take the deal when a politician says: don’t ask if I respect you, ask if I respect your rights.

Opinion by Nick Cohen, Journalist.

As originally printed in The Guardian.

Friday, April 7, 2017

Neo wowsers and Regulation

Alcohol Bans in India and the United States

by Alex Tabarrok on April 6, 2017 at 7:29 am in Economics, Food and Drink, Law, Travel | Permalink

The Indian Supreme Court has just banned sales of alcohol within 500 meters of a national highway. The ban affects not just liquor stores but tens of thousands of restaurants and hotels. In response, the Rajasthan Public Works Department announced that they would now recategorize highways in urban areas as roads! Other states may follow suit. (David Keohane at the FT has further background on the India ban.)

Lost in the shenanigans is that even if the ban were implemented perfectly it’s not at all obvious that it would reduce traffic accidents. Alcohol can be easily stored and if you are thirsty driving 500 meters doesn’t seem like very far to go to buy alcohol.

Entire counties in the United States have banned alcohol but that doesn’t seem to have reduced traffic fatalities. It may even have increased fatalities because residents of dry counties drive to a wet county to find a bar and then they drive drunk for longer distances as they head home.

Wednesday, March 15, 2017

Something has to give

Money Illusion

This misalignment is serious. Lights orange to very pink indeed. As ever – when ??!!

From The Economist – Buttonwood -  March 4th 2017:

Interest rates and investment returns

Low rates usually mean low returns; so why are markets so buoyant?

 

IF THERE is one aspect of the current era sure to obsess the financial historians of tomorrow, it is the unprecedentedly low level of interest rates. Never before have deposit rates or bond yields been so depressed in nominal terms, with some governments even able to borrow at negative rates. It is taking a long time for investors to adjust their assumptions accordingly.

Real interest rates (ie, allowing for inflation) are also low. As measured by inflation-linked bonds, they are around -1% in big rich economies. In their latest annual report for Credit Suisse on global investment returns, Elroy Dimson of Cambridge University and Paul Marsh and Mike Staunton of the London Business School look at the relationship between real interest rates and future investment returns. Very low real rates have in the past been associated with poor future equity returns (see chart).

That may come as a nasty shock for state and local-government pension funds in America. They have to assume a future rate of return on their investments when calculating how much they need to contribute to their plans each year. Most opt for 7-8%, a level that has prevailed for years. That return looks highly implausible at a time when ten-year Treasury bonds yield just 2.4%.

There is a strong incentive not to change these assumptions. CalPERS, a Californian state pension fund, has cut its assumed return from 7.5% to 7%. But even that small shift will cost the state $2bn a year in extra contributions.

Why should low real rates and low returns be linked? One reason is that very low real rates are associated with times of economic difficulty, and thus periods when corporate profits are under threat. But a low real interest rate also means a low cost of capital for companies, which ought to be good news. Indeed, central banks ease monetary policy to try to drive down interest rates, and thus encourage business investment.

There has been some recovery in business investment since the last recession. But that recovery has not been as robust as might have been expected, given the low cost of capital. In a recent speech, Sir Jon Cunliffe, deputy governor of the Bank of England, noted that “in the 40 years to 2007, business-investment growth averaged 3% a year. In the eight years since the crisis it has averaged 1.5% annually.”

A number of possibilities could explain this decline, including a lack of access to finance. Banks have been boosting their capital ratios in recent years and have been more reluctant to lend. But another factor relates to the “hurdle rate” companies use before they decide whether to invest. A survey by the Bank of England indicates that firms are still using a hurdle rate of 12%, around the average of the rate of return on investment they have achieved in the past.

In other words, despite the big fall in the cost of borrowing since the crisis, the hurdle rate has not come down. Since the risk-free rate is in effect zero, the bank says British firms are now looking for a 12-percentage-point margin compared with one of seven points before the crisis. This could be a version of “money illusion”, when people fail to adjust their expectations for nominal returns as inflation declines (in this case, both real and nominal expectations ought to have fallen).

There is an alternative explanation for the failure of expectations to shift. Both businesses and investors, realising that the economic outlook is uncertain, may be demanding a higher risk premium for starting new projects or buying shares. That explanation is a little hard to square, however, with the repeated new record highs being scaled by stockmarkets or with the high valuations afforded to American equities.

Since the market low in March 2009, dividends have risen by 48% in real terms and real share prices have risen by 167%, according to Robert Shiller of Yale University. The cyclically-adjusted price-earnings ratio (or CAPE), which averages profits over ten years, is 28.7, its highest level since April 2002. In the past, very high CAPEs have been associated with low future returns.

Indeed, having analysed the data, Messrs Dimson, Marsh and Staunton reckon global investors are expecting a risk premium of 3-3.5% relative to Treasury bills—a level that is lower, not higher, than the historic average. So something does not add up. American pension funds are optimistic. Businesses are cautious. Shares are trading on very high valuations. Not all these assumptions can be proved right.

Wednesday, March 1, 2017

Where Rashid and Juliet can’t wed

Many countries make it hard to marry someone from another religion – change is needed

Around two dozen countries have no provision for civil marriage

ARMAN DHANI, an Indonesian journalist who is Muslim, broke up with his Catholic girlfriend of five years when he reached the heartbreaking conclusion that they would never be able to marry. Indonesian officials refuse to register inter-faith marriages because the law does not mention them. “My mother said: ‘If you want to marry her she must convert to Islam,’” he says. “But I didn’t want to make her betray her religion.” He felt he could not change religion either. “If I converted to Catholicism I would become dead to other Muslims.”

Indonesia is one of about two dozen countries with no provision for civil marriage. Others include Israel, Jordan, Lebanon and almost all Arab states. Only unions conducted according to the rules of officially recognised religions can be registered. In Indonesia children of unregistered unions cannot get birth certificates, without which they struggle to receive health care or schooling.

Some couples of differing faiths, or none, go abroad for a civil ceremony. Each year about 3,000 couples from the Middle East get married in Cyprus, which brands itself the “island of love”.

Campaigns to introduce civil marriage are afoot in many countries. But governments often fear angering politically powerful religious groups. In Lebanon marriages and other matters of family law, such as divorce and inheritance, are left to the religious courts of 18 Muslim, Christian and other sects. This allows politicians to sidestep the tricky task of crafting family laws that would be acceptable to leaders of all those faiths. In Indonesia, says Mr Dhani, both Muslim and Christian leaders fear that an inter-faith marriage would inevitably end up with one of the partners converting.

In many places, anyone who dares to wed across religious lines faces ostracism—and perhaps even violence. Getting rid of legal barriers would not remove all the risks. But it would help, a bit.

As published in The Economist 18th February

Monday, February 20, 2017

USA–Really 11 separate ‘nations’

This map shows the US really has 11 separate 'nations' with entirely different cultures

MATTHEW SPEISER

11 NationsColin Woodward and Tufts/Brian Stauffer

In his fourth book, “American Nations: A History of the Eleven Rival Regional Cultures in North America,” award-winning author Colin Woodward identifies 11 distinct cultures that have historically divided the US.

“The country has been arguing about a lot of fundamental things lately including state roles and individual liberty,” Woodward, a Maine native who won the 2012 George Polk Award for investigative reporting, told Business Insider.

“[But] in order to have any productive conversation on these issues,” he added, “you need to know where you come from. Once you know where you are coming from it will help move the conversation forward.”

Here’s how Woodward describes each nation:

YANKEEDOM:

Encompassing the entire northeast north of New York City as well as parts of Michigan, Wisconsin, and Minnesota, Yankeedom values education, intellectual achievement, communal empowerment, and citizen participation in government as a shield against tyranny. Yankees are comfortable with government regulation. Woodward notes that Yankees have a “Utopian streak.” The area was settled by radical Calvinists.

NEW NETHERLAND:

A highly commercial culture, New Netherland is “materialistic, with a profound tolerance for ethnic and religious diversity and an unflinching commitment to the freedom of inquiry and conscience,” according to Woodward. It is a natural ally with Yankeedom and encompasses New York City and northern New Jersey. The area was settled by the Dutch.

THE MIDLANDS:

Settled by English Quakers, The Midlands are a welcoming middle-class society that spawned the culture of the “American Heartland.” Political opinion is moderate and government regulation is frowned upon. Woodward calls the ethnically diverse Midlands “America’s great swing region.” Within the Midlands are parts of New Jersey, Pennsylvania, Ohio, Indiana, Illinois, Missouri, Iowa, Kansas, and Nebraska.

TIDEWATER:

Tidewater was built by the young English gentry in the area around the Chesapeake Bay and North Carolina. Starting as a feudal society that embraced slavery, the region places a high value on respect for authority and tradition. Woodward notes that Tidewater is in decline today, partly because “it has been eaten away by the expanding federal halos around D.C. and Norfolk.”

GREATER APPALACHIA:

Colonised by settlers from the war-ravaged borderlands of Northern Ireland, northern England, and the Scottish lowlands, Greater Appalachia is stereotyped as the land of hillbillies and rednecks. Woodward says Appalachia values personal sovereignty and individual liberty and is “intensely suspicious of lowland aristocrats and Yankee social engineers alike.” It sides with the Deep South to counter the influence of federal government. Within Greater Appalachia are parts of Kentucky, Tennessee, West Virginia, Arkansas, Missouri, Oklahoma, Indiana, Illinois, and Texas.

DEEP SOUTH:

The Deep South was established by English slave lords from Barbados and was styled as a West Indies-style slave society, Woodward notes. It has a very rigid social structure and fights against government regulation that threatens individual liberty. Alabama, Florida, Mississippi, Texas, Georgia, and South Carolina are all part of the Deep South.

EL NORTE:

Composed of the borderlands of the Spanish American empire, El Norte is “a place apart” from the rest of America, according to Woodward. Hispanic culture dominates in the area, and the region values independence, self-sufficiency, and hard work above all else. Parts of Texas, Arizona, New Mexico, and California are in El Norte.

THE LEFT COAST:

Colonised by New Englanders and Appalachian Midwesterners, the Left Coast is a hybrid of “Yankee utopianism and Appalachian self-expression and exploration,” Woodward says, adding that it is the staunchest ally of Yankeedom. Coastal California, Oregon, and Washington are in the Left Coast.

San Francisco City and Homes

Shutterstock / prochasson fredericSan Francisco is a natural fit for Woodward’s Left Coast.

THE FAR WEST:

The conservative west. Developed through large investment in industry, yet where inhabitants continue to “resent” the Eastern interests that initially controlled that investment. Among Far West states are Idaho, Montana, Wyoming, Utah, Washington, Oregon, North Dakota, South Dakota, Colorado, Nevada, Utah, Nebraska, Kansas, Arizona, New Mexico, and California.

NEW FRANCE:

A pocket of liberalism nestled in the Deep South, its people are consensus driven, tolerant, and comfortable with government involvement in the economy. Woodward says New France is among the most liberal places in North America. New France is focused around New Orleans in Louisiana as well as the Canadian province of Quebec.

FIRST NATION:

Comprised of Native Americans, the nation enjoys de facto independence by being far in the North. Woodward says the territory of the First Nations is huge, but its population is less than 300,000, most of whom live in the northern reaches of Canada.

Woodward says that among these 11 nations, Yankeedom and the Deep South exert the most influence and are constantly competing with each other for the hearts and minds of the other nine nations.

“We are trapped in brinkmanship because there is not a lot of wiggle room between Yankee and Southern Culture,” Woodward says. “Those two nations would never see eye to eye on anything besides an external threat.”

TEd Cruz filibuster

APIn 2013, Ted Cruz infamously held the Senate floor for 21 hours in an attempt to filibuster Obamacare.

Woodward also believes the nation is likely to become more polarised, even though America is becoming a more diverse place everyday. He says this is because people are “self-sorting.”

“People choose to move to places where they identify with the values. Red minorities go south and blue minorities go north to be in the majority,” Woodward explains. “This is why blue states are getting bluer and red states are getting redder and the middle is getting smaller.”

The Business Outsider Australia

Friday, February 17, 2017

Foreign Drivers and Driver Testing

Is the number of accidents caused by foreign drivers increasing? No. It has been fairly constant at around 6% of all accidents for the last decade.

In that time tourism numbers have increased 30%.

So would requiring tourists who are here more than three months to undertake a driving test make much of an impact. The data suggests next to nothing.

In 2016 there were 1,817,136 tourists here and only 40,336 stayed for more than three months. That's 2.2%.

So this measure would impact just 2.2% of tourists in NZ. If tourists cause 6% of all accidents then you might expect a 0.13% reduction in the road toll.

And that is only if you make the generous assumption that having them sit a NZ licence test will mean they are guaranteed to have no accidents.

So the proposal, while well intentioned, will achieve basically nothing.

Thanks to Kiwiblog for putting these numbers together.