Das BERL report ist Krap

Eric Crampton and Matt Burgess have performed an in-depth defrag of BERL's harms of alcohol and drugs bullshit report, concluding that the logic is about as over-leveraged as a sub-prime lender:

“What we found shocked us. BERL exaggerated costs by 30 times using a bizarre methodology that you won’t find in any economics textbook,” Dr Crampton said.

As Blaise Drinkwater informs us, BERL founded their facts on more esoteric polemics, namely Karl Marx's Das Kapital:

UPDATE: You know it's gotta be good when one of the footnotes is this:

Marx, Karl H. (1867), Capital: Volume One: A Critique of Political Economy

Evidently, they've picked up on something amazing: BERL uses the Labour Theory of Value. That's +5 ouch-points.

The Law Commission's got a bit of work ahead of it, what with wide-ranging reports on Drugs and Alcohol due to be released any day now. It seems much of the rationale behind Sir Geoffrey Palmer's speeches on these matters is discredited. Indeed, Crampton and Burgess have not only undone BERL's harms index credibility, they have proved what everyone already knows but lacked the numbers; the government makes a very tidy profit off alcohol and tobacco.

Here's hoping Graeme Edgeler's Legal Beagle blog on Public Address gets picked up by the Law Commission in their revamp of online participation. That's the sort of informed public debate the Law Commission needs more of. Daggs knows, the Law Commission could get better advice than at present.

Blame it on the 80's

Paul Krugman reckons Reaganomics has a lot to answer for, if the question was "Who really caused the Great Recession?" Me? I blame uninspiring US economics teachers in the high schools and their bored, uninterested students. Take note of this clip from Ferris Bueller's Day Off. All this seems horribly relevant now:

Can't read a balance sheet to save his life

Dear Russel Norman,

Pardon me, but that profit and loss statement you're reading is upside down. Read carefully, Russel, I will write this only once. Interest and exchange rates go up and down, inflation is permanent. As someone who can remember the 8 cent Popsicle, while you were in nappies in Oz, inflation has a very special place in my memory. Ask any senior citizen. Stuff costs more now. That's inflation.

As Muldoon showed back in '84, you can't peg a currency for political convenience (a bit before your time also). Attempting to do so is akin to pretending to conduct an orchestra containing instruments beyond your control. Similarly, the dark money of the banking system is beyond the control of the government apparatus to a significant degree. Yeah, it'll cost more for offshore financing, but if the price is right and it'll show growth on the bottom line, it's fair game.

Inflation is something within the powers of government. If interest rates go up, it means that we should weigh the odds of borrowing against the benefits it entails. We should aim at getting more bang for our buck. Ensuring inflation stays between a band of 0 - 2 percent per annum provides stability for the greatest possible good.

Thanks to Winston, that band was expanded to three percent. It's currently over four. I've said it to Cullen, I'll say it to you. Leave It the Fuck Alone. Monetary policy is not the issue. Productivity and international competitiveness is. Same as it has always been.