Auckland can't afford a second crossing ... or can it?

OVER SUMMER ONE ALWAYS gets a few ideas. Some good, some questionable. Some that just seem obvious once they've occurred to you. 

Here's one of those.

Let's start with three propositions: 

1. Auckland can't afford new infrastructure.

2. But Auckland would like to move its port. (But Auckland can't afford new infrastructure.)

3. Auckland will soon need a second harbour crossing. (But Auckland can't afford new infrastructure.)

Auckland can't afford that new infrastructure. Can't it? Perhaps it can.

Let's see what happens if we put those three problems together. As architects like to say, the solution is often contained within the problem ....

LET'S START WITH A CONTROVERSY from a few years ago when then-mayor Phil Goff complained about the Ports of Auckland steadily encroaching on the harbour with its ongoing reclamation work at the Ferguson container wharf. We joked that if they kept going, the Port would eventually end up in Devonport ...

A good joke.

But what if the wharf—or some part supported by the wharf—somehow did end up there?

Might that be a good thing?

Let's think: at the moment, 

• the gap between Devonport and Port is just 800 metres -- that's compared to the 1000 metre length of the existing Harbour Bridge
• the rain line to Britomart passes right by the container wharf
• the Grafton gully motorway points in a straight line down to the container wharf
• RNZ Navy land takes up some of the best land in the country to house the world's most ineffective navy
• existing tidal wetlands and greenspace on Belmont/Devonport (Charles Reserve, Hauraki Primary, Philomel Reserve, Bayswater Park, Plymouth Reserve, Hill Park, Ngataringa Park) offers scope to avoid simply dumping traffic on Lake Rd, and instead to link up with existing Northern Motorway at Takapuna.

Could we all win?

I think we could.

So the project could feature

• elegant new 'gateway' bridge, for road, rail and foot
• new spur rail line from existing Quay Street rail line to Devonport
• new Devonport railway station, with platform under bridge (with a later link to Takapuna as well?)
• new road connection to existing motorway at Takapuna and at Grafton
• new apartments and marinas on and around existing container wharf (southside) and on former naval base (northside)

The latter (i.e., apartments) would pay for the former (i..e, everything else) --- and for the port and the naval base to move. They would have to.

There's no reason for the Navy, in particular, to be there at all—squatting on some of the country's most expensive real estate rather than hanging out somewhere much less expensive. If you must keep them in Auckland (why?) then dredge the Manukau. Removing them will help to some small extent in removing pressure from Devonport's housing market -- as will new apartments built around what will be a new transport hub there.

IN ITS FAVOUR:

• very little distance to build the crossing (just 800m at present, compared to 1000m for the existing bridge, which could still be further reduced)
• done well, the bridge and apartments together become a gateway to the city's inner harbour, re-defining it
• curved bridge which, like San Diego's renowned curved Coronado Bridge, would be high enough for ships to pass under, 
• and/or, like Santiago Calatrava's magnificent structures, delicate enough to enliven the harbour, which would be both structurally elegant and appropriate as a harbour-side gateway to the city
• even a 'utilitarian' suspension bridge or cable-stayed would suit (we have plenty of great bridge designers here
• removes some proportion of traffic from existing Harbour Bridge 
• easier Devonport road connection, removing congestion from Lake Rd
• immediate foot, cycle, and rail access to/from Devonport
• high-density apartment living on former container wharves, enjoying spectacular harbour views, a new marina, and easy walkable access to city wand waterfront
• high-density apartment living on former naval base waterfront living enjoying spectacular city views, with a marina, an easy commute to city and beyond (and public transport direct to city via new spur rail line!), and easy walkable access to both the waterfront and to Devonport...

What's not to like?

San Diego's renowned Coronado Bridge

Sharq Crossing, Doha, by Santiago Calatrava

PROBLEMS?

• Nimbys, of course, in Parnell, in Devonport and in Belmont
• some property in Belmont and in Devonport will need to be bought, voluntarily -- or perhaps the air rights bought
• Parnell owners already regularly whinge about the existing container wharf anyway
• work on coastal wetlands
• that said, this would be an ideal opportunity to fix (properly this time) some of the drainage issues around these areas
• new location needed for the container port, and imported cars...
• not an insignificant cost, but relocation also paid for from apartment sales...
• bridge needs to allow large cruise ships underneath
• so it needs to have some height!
• cost

Cost is always the biggest problem. And too much taxpayer money has been wasted already. But that's the benefit here: these apartments on both sides, sit on over 100 Hectares some of the most valuable real estate in the country -- currently occupied only by cars, containers and a Navy that could be anywhere. At even just 50-100 dwellings per Hectare that's still between 5-10,000 apartments to be sold. Multiply that number by a million and you're in the ballpark for your project budget.

The revenue from the new development (apartments, marinas, hospitality etc.) should more than pay for the project -- and further help intensify the central city, and bring down house prices elsewhere. 

The only major problem I foresee, apart from the bureaucratic haggling about which branch of government owns what, is that government (central or local) would set themselves up as the developer. 

Which never ends well.

Lifetime busybody complains about busybodying

"[A]fter 31 years as an MP, where he spent inordinate hours in creating nonsensical rules that impinge on the personal responsibility of all citizens, [Nick Smith] is now complaining as Mayor of Nelson over being declined to being allowed to purchase a 'bottle' of wine at a vineyard function where patrons were only allowed to buy wine by the 'cup.'

"Such micro-managing of behaviour is ... permitted by endless legislated nonsensical garbage emanating from the Beehive. ...

"[N]ow retired [as an MP, this pathetic little man] is reduced to whining to media about stupid inane rules he has been a prime mover in creating, one way or another, for over 40 fricken' years."

~ Gravedodger from his post 'Oi Mr Smith, read again the oft quoted statement by Cromwell to the Rump Parliament' PS: Feel free to let us know what Nick Smith is trying to demonstrate in the picture above. Answers on a postcard please.

"Profit is the signal that a need was actually satisfied by voluntary choice"

"What’s always evaded when people say 'capitalism is about profit, not needs' is that profit is the signal that a need was actually satisfied by voluntary choice. 

    "No one earns profit unless others judge the product or service worth more than the money they give up. ... 

    "When they say capitalism 'fails' to supply needs that aren’t profitable, what they’re really admitting is this: People do not value those needs enough to sacrifice their own resources for them."

~ Rock Chartrand

The Chart of the Century, in context

"Imagine a horse race between Smith, Schumpeter, and Stupidity," begins economist Peter Boettke. Who wins?

The horse "Smith" is Adam Smith. He represents the gains from trade and division of labour about which Adam Smith spoke so well.

"Schumpeter" is the horse representing gains from invention, from new technology, from all the gains that innovation brings.

Together they drive the race forwards.

But "Stupidity" is the horse sponsored by the government, and trained by big-government worshipping economists. He bumps into the others, bites at their heels, and generally gets in their fucking way. 'Stupidity' represents every stupid idea, every stupid regulation—and all that insane tinkering with counterfeit credit as if it were the way to economic nirvana. 

He takes it all backwards.

We can see Leg One of that race below: Mark Perry's famous “Chart of the Century,” tracking the price of 14 items over the last quarter-century. 

It's pretty clear that when 'Smith' and 'Schumpeter' can run largely unhindered, then nearly everyone gets better off. Even if the change in average hourly wages is taken into account, all but five of the items tracked above give those two horses (and every wage-earner) a win.

It's only when 'Stupidity' is allowed a free rein that he starts to come out ahead. (And I'm fairly sure that an analysis using NZ data would show something very similar.)

Let's hope the lesson is clear?

"The point is not to get 2 million homes."

"Right now, Auckland Council’s zoning allows people to build about a million shops selling tasty pies. ... Can you imagine it? Auckland with a million pie shops – and hardly anything else.

"Of course it is ridiculous. ... The number of pie shops finds its own level, adjusting as demand changes. There is no 'right' number that can be determined on its own. The right number is found as entrepreneurs take punts and consumers make choices. ...

"When central government asked Auckland to zone to allow up to 2 million additional dwellings, it wasn’t a demand that Auckland build that many homes. Or even an expectation that anyone would ever try to build nearly that many.

"The point is not to get 2 million homes.

"When lots of places can turn into houses, townhouses and apartments when housing needs change, then new housing can just turn up when and where it is needed. Developers watch where people most want to live, look at the cost of developing in different places, and try their luck. ...

"[Councils however] have been reluctant to allow enough new housing to keep up with demand ... [so] as a way of resetting planning culture, central government has mandated that [councils] allow more housing, using numerical targets. ...

"For now, just remember that Auckland allows about a million pie shops. Look around. Do you see a million pie shops?

"Things being allowed does not cause them to exist. But allowing competition changes, and improves, what can exist."

~ Eric Crampton from his op-ed 'The misguided fuss over ‘2 million more’ houses for Auckland' 

Tariffs: "The experts were correct all along"

"Tariffs have caused higher prices on a broad array of retail goods. The experts were correct all along."

~ Phil Magness

It's a heatwave?

"It's like a heat wave

It's burning in my heart

I can't keep from burning

It's tearing me apart"

~ Martha and the Vandellas

TERMINOLOGY IS CHANGING. WHAT USED to be called "swamps" are now wetlands. Heavy rain is now an "atmospheric river." A violent storm is now a "weather bomb" And extreme and large-scale warming events in the ocean have been dubbed "marine heatwaves."

It's said that recent flooding in New Zealand—a "glimpse into the future of climate change"—is due to our present La Niña summer and an increase in these "marine heatwaves." First arriving in the summer of 2017/18, they are now said to be "commonplace."

One of these "new" marine heatwaves helped cause the warm summer of 2018/19. Rainfall that summer "was below normal (50-79% of the summer normal) to well below normal (<50 % of the summer normal) in Northland, Taranaki, Nelson, Tasman and the West Coast as well as parts of Marlborough, Manawatu-Whanganui, Otago and Southland. Above normal rainfall (>120% of the normal) was observed around Hawke’s Bay and parts of Gisborne. Rainfall was near normal elsewhere (80-120% of the summer normal rainfall)."

The new arrival combined with La Niña conditions to get the blame for the unseasonably hot 2017/18 summer. Rainfall that summer was "highly variable from month to month and heavily impacted by two ex-tropical cyclones during February. Summer rainfall in the South Island was above normal (120-149%) or well above normal (>149%) over Canterbury, Marlborough, Nelson, and Tasman, and near normal (80-119%) to below normal (50-79%) around Otago, Southland, and the West Coast. North Island summer rainfall was above or well-above normal around Wellington and much of the upper North Island, and near normal or below normal over remaining North Island locations including Taranaki, Manawatu-Wanganui, Hawke’s Bay, and Gisborne."

2022/23's summer was "a summer of floods and droughts, and very warm," with "a protracted marine heatwave that peaked during January." Cyclone Gabrielle of course arrived a month later when the Antarctic Oscillation "dipped negative."

Summer of 2023/24 was warm, with another marine heatwave and, for most regions, drier. The narrative of causation is already breaking down.

As it did nearly a century ago in 1934/35 when New Zealand experienced its hottest summer because of a massive warming events in the ocean. Or 1938. But this time the floods came in winter. 

SURROUNDED BY OCEAN AND WITH warm air and occasional cyclones brought down from the tropics, flooding is this country's most frequent form of natural disaster—and always has been.

Māori legend includes a story of a great flood. Tāwhaki, god of thunder and lightning, was almost murdered by his brothers-in-law. When he had recovered, Tāwhaki took his warriors and their families and built a fortified village on top of a mountain. Then he called to his ancestors – the gods – for revenge, and they let the floods of heaven descend. The earth was overwhelmed by the waters and the entire population perished. This was known as Te hurihanga i Mataaho (the overwhelming of Mataaho – one of the places that were destroyed). ...

Māori history tells of a pre-European flood in the Tūtaekurī area of Hawke’s Bay in which a party of 50 men, women and children were drowned when two streams rose. 

The early European settlers failed to realise the intensity of rainfall in New Zealand and how rapidly rivers could rise.  The New Zealand Company's very first settlers were dumped on the Hutt Riverside in Petone to begin building Britannia, their new town. It was only a matter of weeks before they discovered what a stupid idea this was, relocating after a few months of regular flooding to Thorndon.

The South Island’s broad gravel-bed rivers were particularly deceptive: they were usually shallow enough to wade across, but when in flood their currents were powerful. By 1870, just three decades after European settlers began arriving in large numbers, rivers had been responsible for 1,115 recorded drownings. Drowning became known as ‘the New Zealand death’.

The greatest flood ever observed on the Clutha River Mata-Au, New Zealand’s largest river in catchment area and volume of flow, occurred in 1878. It was the result of a succession of weather systems bringing in warm wind and rain, which melted the winter snow cover. At the height of this flood, more than 5,700 cubic metres of water poured down the lower reaches of the river every second. ... A 1938 account described the Clutha in flood:
[i]ts angry surface [was] strewed with dead horses and cattle, houses, bridges, furniture, timber and farmstacks. Some days the spring sun shone with a ghastly pleasantry on the devastated towns, while 100 miles away more heavy rain on the mountains was preparing still greater strength for the flood. ...

Twenty-one people were killed in the Kōpuawhara flood of 1938 – the largest number of fatalities from a 20th-century New Zealand flood. It is a sobering reminder of the dangers of building on low-lying land close to rivers.

A reminder we're still receiving.

And those tropical cyclones just keep arriving, as they did long before CO2 levels were rising. The fifty-four people who died in the 1968 Wahine disaster, for example, are one tragic reminder of that. That was Sub-Tropical Cyclone Giselle. And we've been through several alphabet's worth of cyclones since then, everything from Bola to Hola, and worse, to come around again to Gabrielle's letter 'G.'

And there have been many worse cyclones in the South Pacific over the centuries before human industry began. But they either didn't hit these islands, thank goodness, or there was no-one here to record them.

WHILE THE NARRATIVE WAS breaking down on the ground in 2023, it was nonetheless ramping up in the world of climate modelling. A worldwide study (above) published in 2025 claimed '2023 Marine Heatwaves [Were] Unprecedented and Potentially Signal a Climate Tipping Point.' It's that study generally referenced by warmists here. Its "breathless tone is familiar," says Anthony Watts ("new records"! "unprecedented in intensity, persistence, and scale"! "may portend an emerging climate tipping point"!) but its "underlying logic is seriously flawed."

But as Watts argues, "context matters. Particularly in climate, which has cycles that span millennia, not just decades."

The foundational flaw in this study is its timescale. The research relies on satellite data beginning in 1982. That gives us about 40 years of observational history, which is virtually nothing in terms of Earth’s climate system. Prior to satellite coverage, comprehensive, high-resolution global measurements of sea surface temperatures simply didn’t exist. Claims of “unprecedented” events must be framed within that very limited context. As I’ve said before, declaring a “record” based on such a short window is like calling a coin flip streak a “trend” after four tosses.

Ocean temperatures fluctuate naturally over decadal, centennial, and even millennial scales. Our current observational capacity doesn’t cover even half of one oceanic oscillation cycle, such as the Pacific Decadal Oscillation (PDO), which paleoclimatology suggests runs as long as 50-70 years. To suggest a climate “tipping point” based on this short dataset is not just premature—it’s scientifically irresponsible.

Yet here we are. The marine heatwave cycle in the Southwest Pacific Ocean (our area) has an estimated return period of 141 years. Yet the longest-running evidence for this, says the study, is the coastal station in Leigh, whose records go back just 57 years.

Not just short on temporal context, but also on geographic. The climatic change is said to be global, due to increased global CO2, yet "the authors cite “region-specific drivers” for each major marine heatwave." 

In the North Atlantic, enhanced shortwave radiation and a shallower mixed layer were culprits. [Down here] in the Southwest Pacific, the heat was attributed to reduced cloud cover and increased advection. The Tropical Eastern Pacific was influenced by oceanic advection.

Notice anything? These aren’t unified, global changes due to increased CO2. They are local, meteorological, and oceanographic phenomena—exactly the kinds of natural variability we should expect in a dynamic system. The fact that these local causes are acknowledged undercuts the paper’s own argument for a singular, global cause rooted in greenhouse gas emissions.

Bad science and an unjustified extrapolation is the gist of this study and press release. Perhaps the most egregious leap comes in the suggestion that the 2023 marine heatwaves might represent a “tipping point” in the Earth’s climate system. The term “tipping point” implies a sudden, irreversible shift—a planetary point of no return. But what evidence is there for this? The authors provide none beyond the temperature anomalies themselves and vague references to mixed-layer dynamics.

No historical precedent is given. No paleoclimatic comparisons are offered. No quantitative thresholds are defined. It’s all speculation dressed up in technical language.

Meanwhile, as carbon emissions have been rising over this last century, rainfall has been going down, not up.

The highest frequency of global-scale extreme rainfall events occurred from 1960-1980 − when there were concerns about cooling. 

Since then, the frequency and intensity of rainfall events have “decreased remarkably” (Koutsoyiannis, 2020).

ALSO DECREASING—AND DECREASING REMARKABLY—is the world's s number of climate-related deaths.

One reason it's worth remarking is that severe weather events globally are themselves generally either decreasing or showing no particular trend. And that's not just me and climate scientists like Roger Pielke Jr saying that. It's the IPCC, who find no trends in flooding globally; no long-term trends in meteorological or hydrological drought; no upward trend either in so-called atmospheric rivers, and no upward trend in landfalling hurricanes or tornadoes either in the US or globally. 

None. 

And the US Govt, whose official metric records a general decrease in heatwaves since the 1930s -- or the international insurance industry, who record a decline in both US and European disaster-related losses. And the World Bank agrees. 

Meanwhile, even as alarmists talk about sea level rise inundating coastlines in the near future, the US National Oceanic and Atmospheric Administration (NOAA) records that ongoing sea level rise since 1880 amounts to only 240mm, i.e., just 17mm per decade -- measurable, but steady, and not accelerating -- and recent research shows many coastlines worldwide to be prograding rather than retrograding (i.e., shifting seaward) and at a globally-averaged rate of 260mm per year, reducing even this slow but steady threat. And the Department of Atmospheric Science at CSU records that cyclone frequency in the South Pacific (the very reason we're here talking about this stuff) has, since 1980, been declining. (Which is welcoming considering so many more people are living and building in these otherwise threatening places, in part because governments have foolishly absorbed so much of the financial risk.)

But the other main reason for climate-related deaths to fall so remarkably is the very thing warmists decry so loudly and so monotonously, i.e.,human industry, which is the very thing that keeps folk safer from the dangerous weather events that do occur. 

It was the Netherlands' rising wealth, for example, that allowed them to build the dikes and dams that protected their sub-sea level provinces from flooding. And mortality from extreme heat in the US for example, as heat waves have recently kicked up and more and more people have moved to live in desert regions, has fallen pretty much all over the country over the past 50 years. In this case, it's because of things like air conditioning and better medicine that more and more people can afford.

And in the general case, as Bjorn Lomborg explains is succinctly, it's "because richer and more resilient societies are much better able to protect their citizens." 

The climate catastrophists don’t want you to know this [points out energy advocate Alex Epstein] because it reveals how fundamentally flawed their viewpoint is. They treat the global climate system as a stable and safe place that we make volatile and dangerous. In fact, the global climate system is naturally volatile and dangerous—we make it liveablethrough development and technology—development and technology powered by the only form of cheap, reliable, scalable reliable energy that can make climate liveable for 7 billion people.
As the climate-related death data show, there are some major benefits—namely, the power of fossil-fuelled machines to build a durable civilisation highly resilient to extreme heat, extreme cold, floods, storms, and so on.

It's not just that GDP is correlated with fewer climate-related deaths and disasters, although it is; it's that the whole relationship between economic progress and human flourishing itself is actually causal. The richer and wealthier a society is, the better able it is to train the engineers and to raise the capital and to devise and build the infrastructure that allows human beings in all the many places on this fragile planet to master all the many things that nature is ready to throw at us.

And that's one phenomenon that really is global.

Here's Martha:

THOUGHT FOR THE DAY: "99% of boomer 'success' was just interest rates falling for 50 years"

 

"Ninety-nine percent of boomer 'success' was just interest rates falling for [forty] years because they destroyed the real economy."

~ Darth Powell

PS: In case you're confused ...

PPS: In case you're still confused:

"How can stock market valuations be at or near historical highs while the average [person] is about as pessimistic as they’ve ever been?

"This contradiction is a perfect illustration of the financial fun house — and the extreme distortions that relentless money printing has pumped into the system.

"If fiat currency is a dishonest measuring stick — and it is — then how do we accurately measure the stock market?

"The best option is to measure value in gold, honest money that no politician can arbitrarily debase.

"If measuring in fiat is like looking into a fun-house mirror, then gold is a mirror of truth. And when we measure the stock market in gold, that truth becomes clear. Below is a chart of the S&P 500 measured in gold going back to 1950.

"Viewed through the lens of gold, the stock market tells a very different story than it does in fiat terms — and this chart makes that unmistakably clear.

"The most striking feature of the chart is what isn’t there: a sustained upward trend. The S&P 500 today is worth the same amount of gold it was in 1995.

"Despite decades of nominal gains, the stock market has repeatedly given back those gains when measured against gold. In other words, the rising stock market was more a reflection of currency debasement than of real wealth creation.

"This helps explain the disconnection at the heart of today’s market. In fiat terms, stock prices appear to be at record highs. But in gold terms — a unit that cannot be printed — the market looks far less extraordinary."

~ Nick Giambruno from his post 'The Melt-Up Trap: Why Stocks Must Rise Until the Dollar Breaks' 

Your 'employees' have given themselves another big pay rise

....

"While ratepayers across the country faced double-digit rate hikes, mayors and councillors up and down New Zealand once again saw their salaries increase this year.

"On average, councillors had their pay packets increased by 9.81 percent between 2025 and 2026, while mayors saw an 8.53 percent boost to their pay."

~ Taxpayers Union from their post 'Council Pay Rise Dashboard - How Much More Are Your Councillors Pocketing?'

The Return of Chloe's Wealth Tax

Watch any rant by Chloe Swarbrick and, after the obligatory nods to te reo, to Palestine, and to passing laws to change the weather, she'll tell you that it's time for "the wealthy" to fund everything every government could dream of. 

It's really the only substantive policy she can articulate. Yet she remains blithely unaware that the fortunes she want to sack are not gold bars under the mattress but ownership stakes in operating companies, real estate, and other productive assets, so her Wealth Tax would function as a direct penalty on those investments. That penalty doesn’t remain confined to the wealthy. Capital formation is what drives productivity growth and wage gains, and policies that discourage it ultimately leave everyone worse off.

As Adam Michel explains in this Guest Post, the chronic government spending growth she advocates cannot be paid for by ever more aggressive taxes on a narrow subset of high-income taxpayers.  Not even in a US more stocked with billionaires than she'll ever see here ...

The Return of the Wealth Tax, Evidence Against Them Is Stronger Than Ever

by Adam Michel

Wealth taxes are back in the policy conversation— a good opportunity to review how wealth taxes work and why they have been called “one of the most harmful taxes ever created.”

Wealth taxes are unique in that they are not levied on an annual flow of income or consumption (like a sales tax). Instead, wealth taxes apply to a stock of assets and are usually intended to be primarily redistributive, aiming to reverse a perceived inequality in the distribution of resources.

Wealth taxes promise redistribution but more often deliver high economic costs, administrative complexity, and disappointing revenue. California’s proposal  to impose a broad-based wealth tax on the state’s billionaires illustrates how these taxes distort investment decisions, magnify fiscal volatility, and tend to evolve from one-time levies into permanent features of strained budgets.

Wealth Taxes In the Real World

Wealth taxes impose an additional layer of tax on the income generated by the underlying asset. Most wealth consists of productive assets deployed in the economy, such as active businesses and other physical investments. The annual income streams generated by the underlying assets—capital gains, dividends, and interest—are taxed through the normal income tax system.

The existing tax system already charges the wealthiest Americans high tax rates. A Biden administration Treasury study found that the wealthiest 92 Americans faced total state, local, federal, and international income tax rates of 59 percent. Recent research by four prominent liberal economists concludes that US billionaires pay higher tax rates than their counterparts in the Netherlands, Sweden, Norway, and France, and, contrary to the headline claim, the wealthiest taxpayers also pay the highest tax rates among all Americans.

Because wealth taxes are assessed on a stock instead of an annual income flow, expressing the tax rate as an equivalent income tax rate is more informative. Unless the taxpayer is expected to slowly sell off their underlying assets, the tax will be paid from annual income. Table 1 shows the equivalent income tax rate on underlying assets with different rates of return at different wealth tax rates. At the California top wealth tax rate of 5 percent, any asset earning less than a 5 percent annual pre-tax return would face income tax rates above 100 percent before paying other taxes. Bernie Sanders’ 2020 campaign proposal included a top wealth tax rate of 8 percent.

Net wealth taxes have been tested in other countries and repealed due to high economic costs and administrative burdens. Peaking at 12 in the 1990s, only four Organisation for Economic Co-operation and Development (OECD) countries still impose broad-based net wealth taxes today: Colombia, Norway, Spain, and Switzerland. The figure below shows the trend of wealth taxes over time.

Economic and Administrative Costs

Wealth taxes can impose confiscatory effective tax rates with predictable economic consequences. By directly reducing the after-tax return to saving and investment, they weaken incentives to build businesses, expand productive capacity, and take entrepreneurial risks. Because most large fortunes are not gold bars under the mattress but ownership stakes in operating companies, real estate, and other productive assets, a wealth tax functions as a direct penalty on those investments. That penalty doesn’t remain confined to the wealthy. Capital formation is what drives productivity growth and wage gains, and policies that discourage it ultimately leave everyone worse off.

Wealth taxes also distort capital allocation. Investors have a strong incentive to shift portfolios toward assets that are harder to value, easier to shelter, or more mobile across borders, rather than toward their most productive use. This encourages tax avoidance rather than genuine economic activity. It can mean less investment in long-term projects, more leverage, and greater reliance on complex financial arrangements to reduce reported net worth.

Wealth taxes are also administratively complex. Valuing a broad range of assets every year is extraordinarily difficult. Unlike easy-to-value publicly traded stocks, most wealth is tied up in closely held businesses, partnerships, real estate, artwork, and other illiquid or unique assets. Annual valuation invites avoidance and disputes, which raises compliance costs for both governments and taxpayers. It took 12 years for the IRS and the Michael Jackson estate to reach a court-mediated agreement on the value of its taxable assets. Going through such a process every year for all taxpayers with assets above or near the tax threshold is administratively impracticable.

Because of persistent administrative difficulties and taxpayers’ behavioural responses, wealth taxes raise comparatively little revenue. Countries that experiment with wealth taxes repeatedly find that taxpayers adjust their behaviour or move in large numbers, undermining optimistic revenue forecasts. Before France repealed its net wealth tax in 2018, the government estimated that “some 10,000 people with 35 billion euros worth of assets left in the past 15 years.” 

Spain experienced a similar behavioural response following the 2023 “solidarity tax,” which raised just 40 percent of the projected revenue. Cato’s Chris Edwards summarises that “European wealth taxes typically raised only about 0.2 percent of GDP in revenues. Given the little revenue raised, it is not surprising that they had ‘little effect on wealth distribution,’ as one study noted.”

California’s Proposal Is a Warning for the Country

California’s proposed 5 percent wealth tax is especially notable because it would layer on top of the most progressive tax system in the OECD. The state already relies on taxpayers making over half a million dollars a year (the highest income 2.5 percent) to pay 49 percent of income tax revenue. They do this by combining high marginal income tax rates and heavy reliance on capital gains taxation, which makes revenues volatile and highly sensitive to the fortunes and domiciling decisions of a small number of taxpayers.

The initiative’s own findings make clear that this will not be a one-time tax. The ballot text explains that the wealth tax “would only modestly slow” the growth of billionaires’ fortunes in California. That admission undermines the premise that the tax solves any underlying fiscal or wealth distribution problem. If a tax leaves wealth largely intact, political pressure to repeat, expand, or permanently extend it is inevitable. This is what happened in Spain, when its “exceptional and temporary” wealth tax became permanent. California’s proposal should be understood in this light, not as a one-off correction, but as a test case for permanent wealth confiscation.

The lesson extends beyond California. Chronic spending growth cannot be solved by ever more aggressive taxes on a narrow subset of high-income taxpayers. Wealth taxes are not a solution to budgetary or economic gaps; they are a symptom of a broken fiscal system grasping for short-term revenue while postponing the difficult but necessary work of restraining spending growth. 

* * * * 

Adam Michel is director of tax policy studies at the Cato Institute, where he focuses on analysing the economic and budgetary effects of taxation in the United States.
    He is widely published and quoted in the Wall Street Journal, the New York Times, the Washington Post, and elsewhere. He has also appeared on Fox News, CNN, and CNBC to discuss tax policy and its economic effects. In addition to numerous book chapters, his scholarly work has been published in the Journal of Public Budgeting and Finance and Tax Notes.
    His post first appeared at the Cato at Liberty blog.

“The traditional politician asks for your vote so that they can fix your life, as if they know what you need."

“The traditional politician asks for your vote so that they can fix your life, as if they know what you need. What I say is, I ask for your vote so that I can give you back the power to be the architect of your own life.” 

~ Javier Milei, from his Nov 2024 interview with The Economist

Driving around NZ ...

 Tyler Cowen remembers his time driving around NZ in the early 90s ...

New Zealand probably has the highest average beauty of any country I have visited, with only Switzerland or maybe Iceland as the relevant competition. ...

I had not yet realised that all stores, including grocery stores, in the smaller towns, would be closing early. And that many people did not have the habit of eating out in restaurants. ...

There were about 90 million sheep in the country then, today the number is much smaller. Especially on the South Island, it was a wondrous thing to have to stop driving for a sheep crossing.

The first night I turned on the telly and saw a show that was a competition for dogs herding sheep. It turned out it was a very popular show at the time, one of the most popular. Literally at first I thought it was some kind of Monty Python skit.

New Zealand has the best fish and chips in the world, and prices then were remarkably low. ...

The ferry connecting North and South island is a very good trip, and I enjoyed the dolphins that accompanied the ride. ...

Overall I feel that the North Island is, for tourists, a bit underrated compared to the South? ...

Invercargill ... was not worth the trip. I expected something strange and exotic, end-of-the-earth feeling, but mainly it was a dump ...

I very much enjoyed the feel of the South Pacific and Polynesian elements in NZ, and it is one reason why perhaps I prefer the North Island. Where else can you see that in developed country form?

Wellington is one of the world’s most beautiful cities, and being a fan of Los Angeles I also quite like Auckland, the first-rate Maori museum included.

His US commenters add...

The main problem with driving in New Zealand is having you stop every few miles to admire the views. ...

Speaking of driving, the drive to Milford Sound has to be one of the top 10 most beautiful drives in the world. The drive up the glacial valley to Aoraki (Mount Cook) is up there too. ...

It reminded me of old California. Nice climate, access to sea, good food, vineyards, hills, lots of room. Especially on South Island. Auckland is crowded. ...

They can have lunatic politics also. As an island, they tried to cut the world off to keep COVID away. That was not feasible. So they got COVID and economic collapse. ...

In the US, there is a lot of Second World War history, not much First World War history. The opposite is true in NZ. The bloodbath in Turkey is still vivid to them. You don't see Churchill statues in NZ. ...

New Zealanders were the least status-conscious people I've ever seen anywhere. The particular combination of British manners with a total lack of the British class system is underratedly charming. It's not just the interactions with people, btw, that bespeak the lack of status consciousness: you can see it in the modesty of the built environment as well. People's 'stuff' is there to function, not to show off, and until you go there it's hard to understand what the difference is because most of us are fishes in the water of status-consciousness, so we just take the show-offiness of stuff around us for granted. ...

Restaurant choices were a bit basic outside of the major cities but meat and produce at almost any grocery store are excellent, far better than home. ...

"Welcome and here's your milk." I found the perfunctory hotel milk to be odd, too. I asked my kiwi friends about it. "It is assumed if you are a person in a place you will obviously require some milk." ... 

Kiwis are literate, I am happy to say. I wish we were.

Locals will know more how sincere that is, but Aotearoa/ NZ seemed like a country that genuinely wants to acknowledge the past and the people who lived there before the West showed up.

Unlike Australia, they didn't live there very long before the West showed up. Human habitation of New Zealand, whether by Maori or by Europeans, is younger than Oxford University. ...

If you're looking for that 90s low-key vibe, it's moved to Tasmania. ...

More here.

"More than two decades on, the speech reads less like a product of its time and more like a warning that New Zealand chose to ignore."

 

"Today [now yesterday] is the last Tuesday of January. It is a date that should matter more in New Zealand’s political memory than it does.

"On the last Tuesday of January in 2004, Dr. Don Brash stood at the Orewa Rotary Club and delivered what remains one of the most important political speeches given in this country in modern times. It was calm, forensic, unapologetic and, most importantly, correct.

"More than two decades on, the speech reads less like a product of its time and more like a warning that New Zealand chose to ignore.

"Brash opened by setting out five priorities that would be familiar to anyone paying attention today. Declining relative incomes compared with Australia. An education system failing the least privileged. Welfare dependency eroding personal responsibility. A justice system more concerned with offenders than victims. And finally, the issue he focused on that night, the dangerous drift toward racial separatism and the entrenchment of what he rightly called the treaty grievance industry.

"That phrase alone was enough to end his political career.* Not because it was wrong, but because it was accurate."

~ Matua Kahurangi from his post 'The last Tuesday of January and the speech New Zealand still refuses to confront'

* To be fair,  his political career didn't end immediately; but it had been put on notice. Even a near-reversal in National's worst-ever election loss under Bill English wasn't enough to save it.

The Minister for Epsom speaks

...

...

 

 "Depressing to see ACT—once upon a time at least ostensibly a pro-market party—apparently opposed to freeing up land use, and enabling urban land prices to fall a lot."

    ~ Michael Reddell

"Neo-Aristotelian ethics offers a powerful alternative to modern moral theories that struggle to explain why morality has the authority it does."

"In much of twentieth-century moral philosophy, ethics was rebuilt ... [Once p]hilosophers ... abandoned the idea that things have natures or essences that determine what counts as their flourishing. ... morality [instead] had to be reconstructed in other ways: by appealing either to outcomes (consequentialism), or to rules (deontology), or to agreements (contractualism), or to sentiments (expressivism). The result was an ethics often detached from the way we ordinarily evaluate living things in the world.

"Neo-Aristotelian ethics [by contrast] is a deliberate return to an older starting point. ... [that] revives Aristotle’s central insight: that moral evaluation is a species of natural evaluation. To call a human being good is, in a deep sense, analogous to calling a wolf healthy, an oak tree flourishing, or a heart sound. Morality is not imposed from outside human life by rules or calculations; it arises from the kind of beings we are.

"This approach does not represent a nostalgic return to antiquity. It is a highly contemporary, analytically precise attempt to restore a metaphysical foundation that many modern ethical theories quietly lack. ...

"* Rights, dignity, and human nature

"Modern moral discourse frequently appeals to human rights and dignity, but often without explaining why humans possess them. Neo-Aristotelian ethics provides a grounding: humans have rights because of the kind of beings they are. Their rationality, sociability, and capacity for flourishing make certain forms of treatment incompatible with their nature.

"Thus rights are not abstract moral inventions, but discoveries about what respect for human life requires.

"* A return to realism

"Perhaps the most striking feature of neo-Aristotelian ethics is its realism. Moral judgements are not expressions of emotion or social convention. They are claims about how a certain kind of being ought to live in order to flourish.

"To say that cruelty is wrong is, on this view, as objective as saying that a plant deprived of sunlight is unhealthy. Both are evaluations grounded in the nature of the organism.

"This realism reconnects ethics with biology, psychology, and anthropology. It restores continuity between our understanding of life and our understanding of morality.

"* Conclusion: ethics restored to its natural home

"Neo-Aristotelian ethics offers a powerful alternative to modern moral theories that struggle to explain why morality has the authority it does. By returning to the idea that humans have a nature and that flourishing is measured against it, it makes moral evaluation intelligible in the same way that natural evaluation is.

"Ethics becomes neither rule-worship nor outcome-calculation, but a reflection on what it means to live well as the kind of creature we are.

"In doing so, neo-Aristotelian ethics does not merely revive Aristotle. It restores to moral philosophy a metaphysical foundation that allows morality to be seen, once again, as part of the natural order of things."

~ Tim Harding from his post on 'Neo-Aristotelian Ethics'

"Visual Elevator Music"

"Generative AI was trained on centuries of art and writing produced by humans. ... When generative AI was left to its own devices [however], its outputs landed on a set of generic images – what researchers called ‘visual elevator music’ ... pleasant and polished, yet devoid of any real meaning. ...

"The findings ... show that the default behaviour of these systems is to compress meaning toward what is most familiar, recognisable and easy to regenerate ... [resulting in a form of] cultural stagnation. ...

"It’s the slow flattening of creativity into polished sameness.

"AI is like a robot that learns by looking at lots of pictures, stories and songs. But it mostly remembers the ones it sees the most. So when it makes new things, it keeps making very similar stuff again and again.

"It’s why so much AI imagery looks the same.

"The algorithm just doesn’t know how to be weird and creative like humans do."

~ Ahmed Elgammal

A prime example of TDS

"National[ist] Conservatives have Trump Deification Syndrome (TDS).
    "They feel that He works in mysterious ways.
    "They are faith-based voters."

~ Keith Weiner

"The fall of the Iranian regime would be the Berlin Wall moment for the Middle East. Needs to happen."

 

"The fall of the Iranian regime would be the Berlin Wall moment for the Middle East.

    "Needs to happen."

~ Neil Stone

"[P]eople with empty hands took to the street chanting for freedom, dignity. They want to have a normal life and they are being killed by IRGC, the Revolutionary Guards. 

    "I think this is the Berlin Wall moment in Iran—if the international community gets united the same way when they were all united to help East Germany to bring down the Wall. Now Iranian people are trying to bring the wall of dictatorship down. We need to see action from Europeans [and from the] free world, otherwise ... they will kill more innocent people."

~ Masih Alinejad on the nationwide protests

"From bored of peace to Board of Peace in five days"

"Just a few days ago, on Sunday, the president wrote that he no longer felt 'an obligation to think purely of Peace,' since he hadn’t been awarded the Nobel Prize. Yet here he was: from bored of peace to Board of Peace in five days. Forget the road to Damascus; true conversions happen on the jet to Davos.

"And who better to solve the world’s conflicts than the man who, in his speech at the WEF a day earlier, became confused about whether he wished to illegally seize Greenland or Iceland? ...

“'Everybody wants to be a part of it,' Trump insisted of his new club. But big European countries had already turned him down. The initial members include Saudi Arabia, Israel and Belarus. Vladimir Putin says Russia may join too, if, and this is not a joke, he can pay the membership from Russia’s frozen assets. If these guys can run a peace initiative, the Sinaloa Cartel can run Narcotics Anonymous."

~ Henry Mance in Financial Times op-ed 'From bored of peace to the Board of Peace'

Power politics from ancient Greece

"So many people quote the famous line from Thucydides—'The strong can do what they can, and the weak must suffer what they must'—and forget that the amoral imperialists who used that line in the end lost their war and their empire. 

    "Thucydides does not offer the line, 'The strong do what they can,' as a neutral analysis of how international affairs operate. He offers it as an expression of the reckless arrogance that brought about the destruction of the Athenian Empire."

~ David Frum

"Thucydides is often interpreted as the proponent of power politics .... However, again, a careful reading of the text reveals a deeper ambiguity. Is Thucydides genuinely teaching that might makes right or is he more interested in illustrating Athenian hubris or both?”

~ Franz-Stefan Gady from his article 'Hey Policy Wonks, This Is How You Should Read Thucydides'

"Other countries are not ripping off the US on trade"

"The Trump Administration and I are here to make a very clear point—globalisation has failed the West and the United States of America. It’s a failed policy… and it has left America behind.
    "America is done exporting jobs and offshoring its future. We will no longer give in to globalisation.”

~ Trump's Secretary of Commerce Howard Lutnick at the World Economic Forum

“'Globalisation has failed' claims Trump’s Secretary of Commerce at Davos.

    "Give me a break. Global free trade hasn’t failed. It helps America PROSPER."

~ John Stossell

"Everything Lutnick said in that statement is wrong, but the biggest flaw is that the US has somehow been 'left behind.' The US continues to enjoy one of the highest standards of living in the world, and it has been rising in the Age of Globalisation too (whenever you define it)."

~ Jeremy Horpedahl

"The US since 1990: 

• Real GDP per capita: +68% 
• Real median wages (PCE): +34% 
• Infant mortality: -42%  
• Life expectancy: +4 years 
• Nonfarm employment: +46% (50M jobs) 
• Median household wealth: +128% 
• Industrial capacity: +76%"

~ Scott Lincicome