Tuesday, November 04, 2008

Rugby Gods speak and the message is: "No poofters!" [updated]

Both Russell Brown and Cactus Kate point out the obvious about yesterday's Michael Jones/Inga the Winger endorsement of John Key and their much-publicised visit to South Auckland:  It's about religion, stupid. Says Cactus:

They [the rugby Gods] criticised Labour, saying they had undermined the moral values of Pacific people by decriminalising prostitution and allowing civil unions.
As much as you would like to blame Labour for everything including undermining the morality of New Zealand society ... this reeks of the very sort of nonsense that two role models in a minority community should know better than to fuel.

Too right. And there's something of a double standard that allows them to get away with it: they're not just sporting Gods, which gives them a well-deserved pass card for most things, but they're also, ahem, brown -- which these days delivers double-plus immunity to serious criticism.

In effect they've made a statement here that Polynesians should vote National as Labour endorses those horrible immoral homos and hookers. I would imagine no one of a lighter-skinned race could get away with such a comment. It was big news when Lockwood relayed on employers' comments relating to the size of Asian hands and Polynesian toilet habits...

Because essentially, outside the 'no homos and hookers' lark -- which, let's stress, Key is happy to channel for electoral benefit without any commitment, thank goodness, to alter -- there's no difference in what either National or Labour promise for South Auckland: which is more of the same welfarism that's killing it

No place in the country gets more government money and government 'interventions' poured into it than South Auckland – yet no place in New Zealand has worse social statistics.
    The only answer you will get from National, Labour or any other government party is more money, more programs, more social workers. And then they shut their eyes to the inevitable crime blow-out and blame it on … the weather.  Or the moon. [See for example my earlier articles on this].

Michel and Inga can talk all they want about wanting "our people" to be not just working in factories but owning those factories, which outside the overt racism is a wonderful sentiment, but there's nothing in National's toolbox that will make it any easier for that to happen, no sign they're any more aware than Labour of the welfare mountain on the horizon, and in any case it wasn't the primary reason for their endorsement: It was always all about religion, stupid.

UPDATE: Canterbury Uni economist Paul Walker points out that it's not just National's toolbox is empty, there's but it's actually destructive. "It won't help anyone own more factories, it could however put people off wanting to try to own them." Which, he says, raises serious questions about John Key's much vaunted economic understanding.  Read his piece in full at his Anti Dismal blog: Key's economic understanding.

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17 Comments:

Blogger Paul Walker said...

PC, I would have to say that there isn't much that's good in National's economic policy in general. It won't help anyone own more factories, it could however put people off wanting to try to own them. I explain more about my view of National's policies here.

11/04/2008 11:46:00 am  
Blogger PC said...

And why are so few people pointing it out?

I think you should send your piece out as an 'Op Ed,' Paul. Apart from being wrong about ACT, it all needs to be said more widely.

11/04/2008 12:04:00 pm  
Blogger Paul Walker said...

About Act I did say "most sound", a relative statement. Compare them with the Greens or Labour or the NZ First or ....

11/04/2008 12:38:00 pm  
Blogger PC said...

Ah I see, the old 'damning with faint praise' line.

Well done. ;^)

11/04/2008 12:47:00 pm  
Blogger Philip said...

Yes, this is the reason I'm going to vote for Labour. Sure their economic policies are terrible and so on, but National's aren't much better, and their social policy is a lot worse.

We are in the middle of very turbulent economic times and the most important issue facing NZers is whether or those goshdarned poofters can marry each other? Are you serious? You are actually going to base your votes on that?

11/04/2008 02:00:00 pm  
Blogger Elijah Lineberry said...

"...That was a Party Political Broadcast from the Labour party.."

Phillip, thank you for quoting Labour's latest television advertising almost word for word.

11/04/2008 02:18:00 pm  
Anonymous Sus said...

So let me get this right, Philip, if you'll pardon the pun.

You're going to vote Labour even though "their economic policies are terrible, etc".

Ah, there are more than two parties, Philip. This isn't the US where the only choices are Snow White & Black Beauty.

Check out other parties. It's a really dumb idea to vote for a party with "terrible policies".

11/04/2008 02:30:00 pm  
Blogger PC said...

Actually, I think Philip was trying for irony.

Like Key, he doesn't care why the Tories got the endorsement; like Bill English he doesn't care that the Tories' economic policies will be economically destructive; like most Tory supporters, all he cares about is John Boy getting his feet under the Treasury benches -- and he has 'faith' that somehow that event on its own will change his life.

What a dickhead.

11/04/2008 02:44:00 pm  
Blogger Philip said...

Elijah: I haven't actually seen Labour's latest TV advertisements, so I can't really comment on this.

Trust me though, if I were some fervent labour supporter trying to whip up votes by posting comments on the blogosphere I'd probably start somewhere other than a libertarian blog.

sus:
Not sure which minor parties are more to my social tastes than the Labour party? Most of them have policies that I disagree with vehemently, whereas I can't really think of any Labour ones that I dislike so much!

11/04/2008 02:45:00 pm  
Blogger Philip said...

http://www.valueyourvote.org.nz/

This is the sort of thing I'm talking about.

In my book, family friendly on that list = bad, family unfriendly = good.

Remove electoral finance bill from the list.

Would be interesting to know where the Libertarianz would sit?

11/04/2008 03:14:00 pm  
Anonymous phil sage (sagenz) said...

as posted at Pauls site. prefer to get bitch slapped here...

oh ffs. what a pile of academic bullshit. just as bad as clark and Cullen, albeit from the other side of the ideological tree. No basis in observable reality

The strategy is called backing yourself. Its what entrepreneurs do every time they start a business. You invest in your own business first. That has been missing since the sharks spun the average NZSX investor in the late eighties.

You also take no account of the GDP multiplier effect of investment in NZ on jobs and tax income and wealth vs an investment overseas.

Take a trip out of the ivory tower and observe how business really starts.

sorry to sound grumpy but I get sick of the same bs being spouted.

11/04/2008 10:27:00 pm  
Blogger PC said...

Phil,

What a pile of self-apologetic drivel. Just accept that if John Key fully nationalised the banking system, or spent billions of dollars on a whooping great spend up, that you'd be right in there kissing his economically ignorant arse.

You're a disgrace.

"The strategy is called backing yourself. Its what entrepreneurs do every time they start a business. You invest in your own business first. "

Let's make this so simple even a Tory can understand it.

First of all, government can only get money to "invest" by one of three ways: by taxing, by borrowing or by printing money.

All of these take money away from entrepreneurs, and from savers.

Government investment begins by taking away the necessary capital from productive enterprise, and continues by bidding away their resources. And by doing so it denies the basis for a genuine recovery, which is only going to arise from genuine productive investment -- ie., investment that pays for itself.

So the strategy is not "backing yourself," but denying others. Specifically, it's denying resources to those people who are genuinely productive and pouring them down a black hole marked failed economic theory.

Bu, you continue. You talk of academic bullshit, then bleat that I "take no account of the GDP multiplier effect..."

Where, pray tell, did you hear of this fictional effect? In academia? Talk about piles of bullshit built upon nonsense.

There is nothing significant about the so called "multiplier effect." It's simply a more rarefied form of the "Broken Window Fallacy" -- denuding one group of people of their resources to perform Keynesian "miracles" for some other group of people. And it's a fiction based on arithmetical fiction, as Henry Hazlitt points out: If savings equal investment (which they do) and the proportion of income invested happens to be 10 percent (because the so called "marginal propensity to consume" is .9), then by simple arithmetic the "multiplier" has to be 10, that is, Y/I = 1/.1 = 10. So what? Were the proportion of investment instead 20 percent, the multiplier would be 5 by a similar calculation.

So what? Recovery is not built on consumption, as you and your economically ignorant heroes suggest, but on production. And your Mr Key's big spend-up will kill production gains as surely as if they passed a law ordering factories to work three days instead of five.

I suggest you get your head out of your failed textbooks, and out of John Key's arse, and start doing some serious thinking.

11/04/2008 11:50:00 pm  
Anonymous sagenz said...

Ah Pete. Sorry about delayed response. You totally missed my point. I am suggesting that New Zealand as a society back itself by investing its super savings in New Zealand rather than with overseas Pension funds as part of a "diversified strategy". You would argue that money should remain untaxed. Jump off the ideology tree and accept there are some National savings. Invest that money in New Zealand companies rather than overseas pension fund and see GDP grow. It does not need to earn the same as a pension fund because the GDP multiplier effect of NZ investment on wages paid, services bought and tax paid.

11/08/2008 12:48:00 am  
Anonymous Falafulu Fisi said...

Sagenz said...
I am suggesting that New Zealand as a society back itself by investing its super savings in New Zealand rather than with overseas Pension funds as part of a "diversified strategy".

Sagenz, your suggestion flies in the face of the goal of Modern Portfolio Theory (MPT) which is to minimize risk (ie, mimimize losses). MPT is a rock solid theory that had won the pioneers (Sharpe, Miller, Markowitz) who developed it the 1990 Economics Nobel Prize.

MPT is not academic bullshit, because it is shown to work (not always 100%) and it is widely adopted by financial investment analysts of today around the world. If you're in the investment industry (as an analyst) and you don't use the MPT model, then I think that you're offering your clients a below par service. MPT will always minimize the losses regardless of market movement compared to the same portfolio with exact asset classes but doesn't use MPT.

I think that ~20% allocation of the NZSF as its fund managers are doing it now is the right level for local investment. John Key is proposing the allocation of ~ 40%, which I think that it is a high risk in the view of MPT. Here is an interesting paper which showed the benefits of international diversifications. One can buy a copy online. The abstract is pasted below:

Abstract:
———------
We examine the influence of industrial structure on the cross-sectional volatility and correlation structure of country index returns for 12 European countries between 1978 and 1992. We find that industrial structure explains very little of the cross-sectional difference in country return volatility, and that the low correlation between country indices is almost completely due to country-specific sources of return variation. Diversification across countries within an industry is a much more effective tool for risk reduction than industry diversification within a country.

Does industrial structure explain the benefits of international diversification?

There are other economic/finance peer review papers on international diversification that I can show you, but the one I have cited above is enough to make my point here.

So, the point is, diversify the funds internationally because it is more protected against risks of drastic market movement (ie, losses) rather than locally.

I had posted the same message at NZX blog, because Mark Weldon & David Skilling are advocating the same thing as John Key and you Sagenz.

PS : I am not an investment analyst, however I do develop numerical models for software application in financial market analytic. I have implemented a number of different variants of MPT models. Some are static such as the original Markowitz and some are dynamic, ie, the risk is analyzed in real-time and the portfolio weight compositions are updated and rebalanced accordingly. This dynamic capability depends on how fast the data is streamed from the Market exchanges. So, if you need some tips on investment analysis, then you're welcome to drop me an email. PC knows my email.

11/08/2008 07:13:00 am  
Anonymous Falafulu Fisi said...

Sagenz said...
I am suggesting that New Zealand as a society back itself by investing its super savings in New Zealand rather than with overseas Pension funds as part of a "diversified strategy".

Sagenz, your suggestion flies in the face of the goal of Modern Portfolio Theory (MPT) which is to minimize risk (ie, mimimize losses). MPT is a rock solid theory that had won the pioneers (Sharpe, Miller, Markowitz) who developed it the 1990 Economics Nobel Prize.

MPT is not academic bullshit, because it is shown to work (not always 100%) and it is widely adopted by financial investment analysts of today around the world. If you're in the investment industry (as an analyst) and you don't use the MPT model, then I think that you're offering your clients a below par service. MPT will always minimize the losses regardless of market movement compared to the same portfolio with exact asset classes but doesn't use MPT.

I think that ~20% allocation of the NZSF as its fund managers are doing it now is the right level for local investment. John Key is proposing the allocation of ~ 40%, which I think that it is a high risk in the view of MPT. Here is an interesting paper which showed the benefits of international diversifications. One can buy a copy online. The abstract is pasted below:

Abstract:
———------
We examine the influence of industrial structure on the cross-sectional volatility and correlation structure of country index returns for 12 European countries between 1978 and 1992. We find that industrial structure explains very little of the cross-sectional difference in country return volatility, and that the low correlation between country indices is almost completely due to country-specific sources of return variation. Diversification across countries within an industry is a much more effective tool for risk reduction than industry diversification within a country.

There are other economic/finance peer review papers on international diversification that I can show you, but the one I have cited above is enough to make my point here.

So, the point is, diversify the funds internationally because it is more protected against risks of drastic market movement (ie, losses) rather than locally.

I had posted the same message at NZX blog, because Mark Weldon & David Skilling are advocating the same thing as John Key and you Sagenz.

PS : I am not an investment analyst, however I do develop numerical models for software application in financial market analytic. I have implemented a number of different variants of MPT models. Some are static such as the original Markowitz and some are dynamic, ie, the risk is analyzed in real-time and the portfolio weight compositions are updated and rebalanced accordingly. This dynamic capability depends on how fast the data is streamed from the Market exchanges. So, if you need some tips on investment analysis, then you're welcome to drop me an email. PC knows my email.

11/08/2008 07:15:00 am  
Anonymous Falafulu Fisi said...

The link to the paper that cited in my previous message is available from the link below:

Does industrial structure explain the benefits of international diversification?

11/08/2008 02:29:00 pm  
Anonymous sagenz said...

fala - The intellectual logic of mpt is brilliant and irrefutable for a diversified portfolio that has no material impact on its target market. I have not made myself clear enough again.

The super fund investing in new zealand will boost new zealand wages and GDP. That means more tax and more savings and more GDP per capita. At heart the point of soveriegn wealth investment is to raise returns for shareholders (citizens). So the NZSF should consider not just the direct portfolio return on nz vs international but it should also include the GDP multiplier effect of investment in NZ. The direct effect of that investment in NZ is substantial. The dribble down impact of investment returns and global gdp in foriegn markets is negligible by comparison.

I have not seen any academic analysis of this MPT impact of soveriegn vs private investment but I do not believe it exists.
If you happen to know of some I would be most grateful.

11/09/2008 12:41:00 am  

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