Patching it up

What an unedifying spectacle Michael Laws provided on Campbell Live tonight. Campbell had a reasonable go at holding him to account, but the item really did show up the futility of trying to discuss even a simple political story in five or six minutes.

Laws seemed to have two justifications for banning gang patches, a measure which combines that oh so appealing mix of freedom abridgement and ineffectiveness!

1) Gang members commit lots of crimes, so we really ought to introduce a law to allow us to prosecute them. The question one has to ask is, if they are committing so many crimes, why can't the police prosecute them for those crimes? Is this just providing a handy stick with which a lazy/incompetent police force can beat the gangs?

2) Gang members intimidate people, even when they arent committing crimes. The problem here is twofold. Why should we criminalise a certain form of dress, just because it makes others uncomfortable? Also, does Laws imagine the average Mongrel Mob member is going to stop being intimidating, just because their patch is removed? He might have to ban tattoos, leather jackets, bandanas and menacing expressions as well. Maybe we should just have a Laws approved dress code and be done with it!

I don't have any affection for the gangs. But the thing about civil liberties is, you can't just protect them for people you happen to like.

Another thing I have been thinking about recently, which is linked to climate change, is New Zealand's power generation methods. Currently we rely on big power plants, be they Hydro, gas, geo-thermal or coal. This is quite inefficient, as much of the power generated is lost in transit. This is especially so in the case of the big South Island Hydro plants, which are located well away from New Zealand’s main population centres.

It seems to me that we ought to move to smaller, local projects to reduce this wastage, and to reduce our dependence on one particular type of energy. Currently, if there is a drought in the South Island, we are in deep trouble! This does not mean that we will generate less electrical from the big Hydro projects, just that they will produce a lower proportion of our power.

Specifically, I think we should be increasing our use of commercial wind farms, and investigating tide-based generation. These forms of generation are clean, and will help to diversify our sources of power. Also, they can be sited closer to centres of population. The Kaipara and Manukau Harbours spring to mind as good sites for tidal power, close to Auckland. Ultimately, I think people are going to have to accept the widespread installation of wind generators, as part of the price of continued secure, cheap, and cleaner energy.

We should also be encouraging households to install solar and small wind generators on their own properties. If each household could generate even 10-20 per cent of their own power, this would significantly reduce our dependence on large, new developments. As it stands now, solar generation is already cheaper than other forms of generation. A solar panel pays for itself in 3 to 5 years of operation. The only losers from households generating their own power are the commercial generators and retailers of power.

By giving incentives to households to install their own clean, cheap power source, we can reduce our reliance on big, central projects, lower the cost of electricity, and reduce our carbon footprint. Ideally, we might be able to permanently decommission our coal and gas plants, possibly retaining them as back-up generation options.

These options seem to me to be a pretty easy choice to make. Cheap, cleaner energy, with greater efficiency and security.

Climate change

I don’t think there is any real doubt that climate change is happening, or that human activity is an important cause. There is still doubt as to the nature and extent of the effects it will have. These sorts of questions are largely imponderable. This sort of change is unprecedented in recorded human history, so we cannot realistically expect to get any sort of precise idea of the likely impacts.

At this point, the debate seems to have become about what should be done. I think this move can be put down to a number of factors, including the noticeable effects climate change is already having on the environment, the widespread agreement in the scientific community, and the increasing support of public and political figures, such as Al Gore.

As far as responses go, I find it pretty odd to hear people talk about carbon credits, and restricting emissions to say, 1990 levels as solutions. These kinds of measures only serve to keep the emissions where they are now, and to redistribute who gets to do the emitting. The problem with this approach is that it is the current levels that have gotten us into this situation in the first place! Keeping levels static, or somewhat decreasing them will only serve to reduce the rate of acceleration of global warming, but cannot help to solve the problem. An incremental response to global warming is only going to work if the increments are large and frequent.

It seems to me that we need to fundamentally change the types of energy generation we use, and how we use the energy generated. To do this, we need to change the incentives involved. At the moment, oil is too cheap, because the price of it does not represent the environmental costs of using it (these costs are left to be borne by future generations, in the form of a degraded environment). One response to this would be to tax oil. This would be a good response, as it would give incentives to develop alternative energy sources. However, it risks stunting the world economy if it is not accompanied by positive measures to create alternative energy sources.

To do this, I would suggest trans-governmental “prizes” for firms which develop cost effective, clean energy sources and delivery systems.

In theory, the market will provide incentives for the development of alternative energy sources as oil becomes more scarce, and thus more costly. The problem is, I don’t think we can afford to wait that long. Effectively providing a big government incentive would lead the market to take into account the environmental and social costs of our reliance on oil, and would help to jump-start the process of finding alternatives. Basically we would be using positive incentives to correct a market failure. Coupled with gradually increasing taxes on oil, this would steer the market towards sustainable energy.

Overrated

I find the latest interest rate rise by the Reserve Bank pretty frustrating on two counts.

Firstly, the economy seems to be slowing, and inflation is undercontrol. An interest rate rise just seems to be unneccesary. The Reserve Bank seem to have an attitude which views any inflation as a huge problem, and which views growth and low unemployment as problems, in that they cause inflation. It just seems so odd to view economic growth as a potential problem to be overcome in the pursuit of low inflation, rather than the other way round! I think this is a consequence of continued over-reliance on monetarist economic theory across the western world. Note that I am not saying that monetarist economics has no value, or that inflation control is not valid. What I am saying is that too much emphasis has been placed on this.

Fortunately, this is somewhat balanced by Cullen's fiscal policy. While this is seldom recognised, Cullen seems to be running a pretty classic Keynesian programme, running a surplus in times of growth, and hopefully running a deficit in times of recession. It remains to be seen though whether people will actually accept new borrowing when we next have a recession.

My second, more specific point about the Reserve Bank is that Bollard can only seem to use one, blunt intrument to target inflation. Specifically, he is concerned about the residential property market, yet the only tool he can use is one that not only has spillover effects on other sectors (such as business investment). It is not even effective at deterring residential property purchase This is because of the prevalence of fixed term loans, the ability of residential investors to write off much of any losses against taxes, and because of the banks' ability to extend the amount and term of loans to compensate for rate rises. Indeed, probably the only people rate rises will deter are first home buyers who are already on the very margins of being able to borrow.

Even if we do accept that inflation is a problem, and I think too much emphasis is given to it, we need to find more precise ways of targetting the sector of the economy which is actually the problem. Any ideas?

Charity begins in Parnell

There has been much talk this week about which is best, private charity, or public assistance. I highlight the "or" because this seems like a very strange debate to me. Personally, I doubt that the government are really saying that private charity is a bad thing. Of course, if people want to give money to worthy causes, that is great.

However, as far as I can see, charity is problematic in a number of ways. For a start, almost by definition, people will probably only give enough to charity to avert the very worst catastrophes. People will give to charity to help starving people, but they are unlikely to give enough to fix substandard lving conditions, or other less dramatic cases. As such, a charity based "safety net" would not bring in enough money to put an ambulance at the bottom of half the cliffs, let alone fencing the cliffs off in the first place!

It also creates a huge problem in the sorts of things that will attract money. Only causes attractive to coporates, or the wealthy will have any hope of attracting money. If your cause doesn't involve cute kids or fluffy animals, you'd better watch out!

Finally, the whole notion of people being reliant on charity is just so unattractive. I think this is what Cullen is talking about when he derides "tory charity". The prospect of people being beholden to the wealthy, and having to go cap in hand to them just gives rise to a view of society that is the opposite of egalitarian; a paternal, top-down, Victorian nightmare. For all the faults and strange incentives of the welfare states, at least it gives people some rights, and removes the need to grovel in the dust for a muesli bar!

So of course charity is a good thing, or course it is great when people give their money to worthy causes. We just need to make sure it isnt an excuse to reduce state assistance to the needy, or to make people reliant on the good grace of the rich.