Monday, 26 June 2017

Character, Trust and Politics

Have you ever been asked for a character reference? I've written a few, once for a firearms licence, several for tenancy agreements, and many in professional references. Verbal references are now more common in these areas, but written character references have a second life through the reputation systems baked into all those websites we use.

It can be annoying right? Please tell us about your experience at XYZ hotel. How was your meal at ABC? How does LMNOP rate against all other filums of this genre?

Constant pestering to give feedback is the markets' response to a low-trust environment. Partly this is to guard against the risk of being conned by a scam artist, but character is also seen as vital to upside potential value, as shown by the commercial success of the "attitude is everything" concept.

Our view of someone's character develops over time through repeated interaction. Many of us are pre-disposed toward trusting others, especially if the other seems like "one of us" and therefore trustworthy. Unless there are tell-tale warning signs, we generally take people at their word, giving them a chance, an opportunity. This is my general approach anyway.

But if my trust is abused then it's all on, or all off, depending on the circumstances. Abuse of trust is a trigger that deserves a response, such as outright war (I'm going to actively punish you), or maybe just a freeze-out (I'm not playing/interacting with you any more).

This strategy is known in game theory as tit-for-tat. It's simple and effective and I strongly recommend it. You might also want to describe this strategy to people who have abused your trust, to help them understand that they need to offer something constructive if the previous equilibrium is to be restored.

Recent political and economic news highlights the role of character and trust. Here are a few examples.

Monsanto is being sued for misleading consumers about the effect of its flagship product: Roundup. Apparently, it says on the label that Roundup 
kills plants by targeting an enzyme that is not found in people or pets. The lawsuit claims that assertion is false, however, and argues that research shows glyphosate can target an enzyme found in gut bacteria in people and animals, disrupting the immune system, digestion, and “even brain function.”
This is a crucial point. If true, it would show that Monsanto has successfully used the "big lie" strategy for many years.

While we await the court's judgement on Monsanto, let's take a moment to consider another big lie strategy, this one being promulgated by the US government. I refer of course to the massive tax cut disguised as health-care reform, which for some reason needs to be done very quickly and in secret, but will be terrific, believe him. Trump is the sideshow in this one, since it is now abundantly clear that he has no fucking clue whatsoever, but while his mad antics distract large sections of the media the real business is being ruthlessly pushed through by the republicans. So he's a useful tool for the people who are actually in control of this stuff.

Speaking of useful tools, have you heard the latest claims about James Buchanan? No, not the USA's worst president, the nobel-winning economist of the same name, now under a cloud, though GMU economics graduates such as Eric Crampton are still defending him. There definitely were quite strong connections between the Mont Pelerin society and the fascist Pinochet regime in Chile so it'll be interesting to see what's in the new book. Meantime, my homework is to dig further into the concept of transitional dictatorship.

Closer to home, as the Todd Barclay scandal continues to afflict the PM and his team, thanks to the superb journalism by the new-entrant newsroom. Character is becoming an issue for the news media now, as the PM keeps changing his story and the absence of his predecessor's superb lying & bullshitting skills is really being exposed. I'm hoping that this whole thing might result in fewer future stories about "consummate politicians" whose primary skill is deception, but I'm not holding my breath.

Neither are the British. On the contrary, in the wake of woeful mismanagement and incompetence by the Tories, there are now regular eruptions of full-throated chants in support of Jeremy Corbyn. Compare this with the "lock her up" chants during trump's campaign: Hate vs Love and orchestrated vs spontaneous.

All of which reinforces a very basic point. If you need to bullshit the masses to win political power, that's probably because you're working against their interests.

Saturday, 10 June 2017

Policies or People?

There is a strong argument that politics is not about policies, but rather about the people standing for election.

This argument clearly has some merit. Until his sudden exit, John Key was untouchable as PM of New Zealand, despite the serious scandals and his appalling memory.

But the recent UK election casts doubt on the proposition and suggests that policy can make a difference in general elections. How else can we explain a massive youth turnout for some old socialist geezer, who rides a bicycle to his allotment and has been absolutely slaughtered in the press for the last couple of years?

Theresa May is/was indeed hopeless, but Jeremy Corbyn was relentlessly portrayed in the media as far worse: a dangerous man intent on undermining the fabric of UK society. I find it difficult to believe that the feckless millennial yoof were motivated to put down their phones and take the bus to the polling booth just to stick it to her.

So what got them out to vote? Was it the admittedly slick video advertising? Or was it the fully costed manifesto setting out a plan to reverse the tide of upward redistribution of the social surplus?

My guess is both, and my further guess is that Corbyn was able to credibly sell the plan because he believed in it.

Saturday, 13 May 2017

EPA closes ranks

New Zealand's Environmental Protection Authority (EPA) has a statutory duty to function in a way that
contributes to the efficient, effective, and transparent management of New Zealand’s environment and natural and physical resources (emphasis added)

In its 2016 Annual Report (pdf), the EPA described (p.10) its new vision and how it proposed to pursue that vision.

Our new vision – An environment protected, enhancing our way of life and the economy – will guide our strategy over the next four years. Our vision is the high-level purpose behind our work. It underpins why we were established and what New Zealanders want from us. We will achieve this through four key principles, or pillars. They are: working together as One EPA, supported by evidence, science and mātauranga Māori; by taking a customer-centric approach to our work, by partnering and working collaboratively with others for success, and by harnessing the potential of our people. Our new strategy is set out in detail in our Statement of Intent 2016-2020. We have restructured our teams so that we can best deliver on the strategic goals and intentions that you will read about elsewhere in this Annual Report.
Fundamental to this approach, is the appointment of our Chief Scientist, Dr Jacqueline Rowarth, who will work with experts from across the natural resources sector.
I was surprised by this, particularly the last bit. My impression is that Dr Rowarth is far too invested in the status quo to effectively "work with experts from across the natural resources sector". So I lodged an OIA, quoted the above section of the EPA's annual report and made the following request...

I am not alone in regarding Dr Rowarth as being extremely antagonistic towards certain types of “experts from across the natural resources sector”. Many people remember her terribly mistaken claims regarding the quality of the Waikato River water, and have noted that neither she nor the EPA has admitted any error over this. Her most recent public pronouncements on Roundup suggest that she is not up with the science regarding glyphosate and the adjuvants with which it is mixed. I am therefore concerned that the EPA is not receiving balanced scientific advice from Dr Rowarth. Please advise which individuals and/or groups is Dr Rowarth working with to inform herself about the following topics relevant to the agriculture sector in New Zealand:
  1. Biological farming, meaning farming with a focus on stimulating and cultivating beneficial biological organisms in the soil.
  2. Antibiotic resistance through the avoidance of antibiotics, including glyphosate.

In response, right at the end of the response period, I got a letter from Allan Freeth (CEO) declining my request on the grounds that this information.
does not exist and cannot be made available without substantial collation or research
So the chief scientist of the EPA cannot name any individual or group she is working with on biological farming or antibiotic resistance.

And, her boss doesn't care.

Thursday, 11 May 2017

Betting on HILP Events

Organised betting markets can help to predict future outcomes if they are sufficiently popular, because well-informed people will seek to profit from their inside information and that will affect the market prices.

Less commonly, such markets might also be useful in public policy formation. For example, you could imagine that we might get a reasonable prediction of the effect that a particular well-defined change in land-use policy would have on real estate prices in Auckland, because lots of people have a financial interest in that particular market.

Notice that these markets also need time bounds though. That's why prediction/betting markets always offer time-limited contracts. It is also why they'll be useless in predicting events of the high-impact-low-probability (HILP) type such as:

  • volcanic eruptions in Auckland;
  • your house burning down;
  • workers seizing the means of production; or
  • an excursion of GMOs ruining our environment, productive capacity or export value.  

Notice that is the incidence of such events that is of main interest. Depending on your perspective, each is a disaster or an opportunity. The scale of those effects is large, but otherwise unknown. So even if you have a time-bound view on likelihood, you'll struggle to estimate an expected value, which will make it difficult to price the risk.

Betting markets are likely to be hopeless under these conditions, but fortunately there are market-makers willing to take your money if you want to hedge against such risks. Its called insurance.

Tuesday, 9 May 2017

What is a net taxpayer?

Poor old young David Seymour was on the twitter yesterday, complaining about tax

It didn't go well, to be honest. Perhaps not as badly as when his predecessor as leader of ACT endorsed incest, but its fair to say that David did struggle a bit. In the heat of battle, he divided the population into "net taxpayers" and others, but then this happened.

No, it doesn't make sense, and Mr Seymour was deservedly ridiculed. Then a deeper question was asked

This is a good question because Davy-boy is inviting us to consider whether we've paid more than we got back, but cash payments massively understate the value given by community volunteers, and the value received by everyone from public good institutions such as schools, hospitals, firefighting, police and the prison/rehab sector.

So, no-one can actually tell whether they're a "net taxpayer" without attaching a value to their consumption of public goods. Dean is obviously OK with being a "net taxpayer" because he feels that the broader deal is acceptable. Mr Seymour would prefer we only look at the ca$h because.....?

Wednesday, 3 May 2017

StuffME - great outcome

The long wait for the Commerce Commission's decision on whether to clear NZ's big media merger ended today, with what Tim Murphy accurately described as 345 pages of unanimous rejection.

Many journalists and media managers are clearly outraged, in a way we seldom see in this country. The ongoing erosion of social services, corporate welfare and tax fraud doesn't generate this media outrage. Nor do the evasions, dissembling and lies of the politicians on whose watch this occurs. But when an independent Commission charged with administering competition laws declines to clear their own mega-merger, well its all on.

Some of the negative comment has ignored the Commission's statutory role, which was determined by the question asked of it by the applicants. The applicants admitted that the merger would reduce competition and sought authorisation, which required them to show that the public benefits of the merger were greater than the detriments. For a media merger, this scope raises all kinds of legitimate concerns, including about the plurality of views.

The lengthy process has also been disparaged, but again, this was largely the applicants doing. Even after the official process of submissions was complete, the applicants continued to send confidential submissions (legal and economic I believe) to the Commission. One can hardly blame the Commission for taking the necessary time to consider these submissions properly, especially since there was no opportunity for merger opponents to comment on these late submissions (not to mention the ever-present threat of legal challenge).

Despite some comments, no-one is disputing that these business are facing serious commercial challenges. Certainly the Commission understands this, as any reasonable reading of the decision will show. Earlier in the process I wrote about hard news as a public good, and how it might be funded.

Industry insiders have got their thinking caps on too. Just yesterday, the NBR quoted some anonymous soul ($) suggesting collaborative models that don't need mergers, including
  • pooling editorial resources (similar to the NZPA or the AP);
  • pooling technical resources (to achieve economies of scale with technical infrastructure); and
  • the development of an innovation task force focused on evaluating and implementing new business models.

These collaborations would site nicely with another good idea floated today for a return to local ownership.

Innovation won't stop and I bet it'll be stronger as a result of this decision. After all, the applicants really did admit that they don't know how to fix their problems and just need more time and money to figure out the answer!

There is one further reason to applaud this decision. The Commission, relying largely on its own analysis has faced down a very aggressive barrage from two large and influential companies. That is a good sign for the future.

Monday, 24 April 2017

Rachel Carson - mass murderer?

The website for the recent March for Science really buries the political lede pretty deep: reading it, you'd struggle to understand why scientists suddenly feel the need to march in the streets. The answer of course is that USA's President* Trump is so ignorant/corrupt that he's appointed industry shills to control the Department of Energy and the Environmental Protection Agency, people whose views are in stark contrast with the climate science which overwhelmingly finds that, yes, we humans have actually fucked up the planet.

Scientists in NZ supported their USA colleagues last weekend, and good on them. Protest is politically effective, even though no-one admits it at the time. And as Trump is showing, science can have political ramifications because it affects power structures.

Which brings me to Rachel Carson. When I think of Rachel Carson, I think of as a pioneering and brave scientist who helped initiate a very valuable social awareness of the environmental hazards of pesticides. Others blame her for malaria deaths.

Seriously, they do. I knew this already but it's such an extremist fringe that I was really stunned to hear it from the head of research at New Zealand's wealthiest think tank.
Since the obvious apparently needs stating, this denies the free will of other individuals and societies to choose their own actions. Even if you assume that the DDT is the best/only way to control malaria, it is just nutty to suggest that Rachel Carson stopped that from happening. You might as well blame Henry Ford for road deaths.

Since just a bit more context that indicates Eric d

Tuesday, 14 February 2017

Nazi Punching - View from Aoteoroa

Fascism creeps, so it can be difficult to see it rising, though it's all too obvious once established, as the Nazis showed.

The moral case for Nazi punching therefore relies on how far advanced and established is the Nazi/Fascist agenda.

If you're living in a country where Nazi views have no real traction or support base, like me & Liam, then spontaneously punching a Nazi is over-kill, anti-social and you shouldn't do it, in my opinion.

There are plenty of Nazis polluting the commons in this otherwise fine land, but they don't need punching. Robust non-violent resistance is enough to contain powerless Nazi idiots like Kyle Chapman. No need to punch Kyle in the supermarket - just keep starving him of oxygen.

USA is in a far worse position than us: their new President has Nazi-like views and appointed actual Nazis as his closest advisors. So far, the (s)hit list includes: Muslims, Hispanics, Media, and the Judiciary... and its only the start of week four.

In that context, Nazis are a clear and present danger to many groups of people. They have power and they're using it to harass and intimidate sections of the USA's community of interest (which includes entry visa holders). If I lived in the USA, I'd want to make sure that Nazis don't feel sufficiently emboldened as to march down public streets advocating for their blinkered hatred.

If you're wavering, read about the battle of Cable St and have a wee think about which side you'd've backed.

Tuesday, 10 January 2017

Soil Carbon

One of the biggest arguments for excusing agriculture from New Zealand's emissions trading scheme (ETS) is that we farmers have no real prospect for mitigating these emissions. The EPA's chief scientist has recently argued that
"turning down agricultural emissions means altering biology - or getting rid of animals" 
Dr Rowarth indicates that both of these options are doomed by economic realities. I was puzzled because the biological farming methods we and others use are largely focused on fostering and cultivating (altering) soil biology, and here was the chief EPA scientist intimating we are mad.

Our working hypothesis goes like this:
  • we can use liquid foliar feeding (alongside dry ground-spread) to stimulate pasture growth
  • the diverse (salad bar) plants will share some of the nutrients with the soil through root exudates
  • the soil critters (worms, beneficial bateria & fungi) have symbiotic relationships with the plants, supplying them with macro and micro-nutrients.
There is a critical feedback loop here: we feed the soil biota & in return those beneficial critters scavenge around, scooping up nutrients and delivering them back to the plant in an available form.

Most farmers know that P gets locked-up in the soil. That's why the fert reps say we have to keep putting moron, even when the soil tests say we have plenty. We sacked these twits years ago. Since then we've been using small amounts of slow-release organic P and like to think that our soil biota are helping to unlock the abundant P reserves we see in our soil tests.

We reckon that farming can and should be regenerative: we are trying to build the soil rather than deplete it. Traditional agricultural systems have been terrible at conserving carbon but recent science suggests that alternative grassland management systems can indeed regenerate the soil and sequester atmospheric carbon.

If you thought these soil carbon prospects might be of interest to the chief scientist for NZ's EPA, you are sadly mistaken. When I asked Dr Rowarth recently why we don't care about monitoring soil carbon she had three reasons: NZ already has lots of soil carbon, it comes & goes with drought and its very hard to measure. I don't buy any of these reasons: they sound like excuses to me.
  • The current stock of soil carbon is irrelevant except as a baseline measure: farmers should be accountable for changes in soil carbon stocks. 
  • Droughts as a source of soil carbon volatility could be easily managed in a regulatory regime - for example with a rolling average over a few years.
  • And technology is rapidly cutting the cost of measurement.
To be clear, I am not suggesting that it is particularly easy to bring soil carbon into the ETS. Those opposing the idea have no shortage of roadblocks to promote. Instead, I am arguing that New Zealand should be working actively towards surmounting those roadblocks. Those controlling the relevant public funds are actively denying that this is warranted, but seem to have no science on their side - just blind faith in the status quo.

It is particularly distressing that our Environmental Protection Agency seems more interested in excuses than in pushing for (or even admitting there might be value in) scientific effort directed towards this particular form of "environmental protection" for which we pay our taxes.

Tuesday, 3 January 2017

Rowarth as Columnist

Here's the second paragraph of a column by the EPA's chief scientist, Jacqueline Rowarth, from the Rural News on 20/12/16.
Although farm animals aren't included in New Zealand's Emissions Trading Scheme (no country has put agriculture in to any sort of GHG scheme), many people still point fingers at 'polluters' and regard the animals and their owners as free-loaders.
The rest of Rowarth's article explains why this is "odd". Basically: farmers are the backbone of the economy, NZ's emissions are globally small, and there's really nothing farmers can do anyway.

Whatever our contribution to the nation's economic spine, we farmers are actually free-loaders in respect of emissions. We emit like mad and the taxpayer picks up the tab. This is the undeniable truth - regular payments are being made by the NZ government for our agricultural emissions.

Yet the chief EPA scientist supplied an opinion piece to the Rural News, on the topic of agricultural GHG emissions, that doesn't just avoid admitting the public subsidy of agricultural emissions, but is entirely framed as a counter-argument to the 'odd' people who are rude enough to mention it in public.

The EPA administers New Zealand's ETS. The EPA said they hired Rowarth to help "New Zealanders understand the science behind EPA decisions". That's a fine role, but it does not include spouting bollocks about ETS policy in the rural press.

Call me old-fashioned, but this seems like a no-no to me. Suppose for example that Electricity Authority hired Lew Evans or Geoff Bertram as its chief economist and let them keep spouting their views in the mainstream media. Or suppose that FSANZ hired Katherine Rich or Sue Kedgely on similar terms regarding food policy. Or suppose the police hired Garth McVicar or Dakta Green as a drugs policy advisor without constraints on how that role was parlayed in the news media.

I reckon that regulators should not be public advocates for or against the laws they enforce.

Update 5 Jan
Based on FB discussion I think the above post goes a bit too far, because it doesn't mention the fact that regulators should actually promote the things they're legally charged with promoting and we should applaud regulators when they do this.

I don't think this saves Dr Rowarth however. The objective of the EPA is "to undertake its functions in a way that contributes to the efficient, effective and transparent management of New Zealand's environment and natural and physical resources".

We might disagree about whether Dr Rowarth's column was contributing to the "efficient and effective" part of this objective, and I would argue it wasn't, but there was definitely no "transparent" contribution. On the contrary, the article opened with a deliberate attempt to obscure the fact that cleaners and truck drivers pay for farmers' emissions through their taxes.