Why Tobin Taxes Wouldn’t Have Prevented The Financial Crisis

The Economist discusses the populist rhetoric from Gordon Brown on the topic of the Tobin Tax, a fee levied by government on any financial transaction. US Treasury Secretary Tim Geithner admits that any such policy would be useless unless adopted world-wide, because trading would simply migrate to unregulated jurisdictions.

Public support for such measures is worrying though, as the Tobin Tax is ineffective in preventing risk-taking in financial markets or harmful asset price bubbles. It would be extremely effective at making markets inefficient though..

How To Lose Friends and Alienate Tax-Payers

The public sector strikers might as well be protesting against the recession, as though such a beast could be tamed by opprobrium. They seem to be confusing the dire economic circumstances facing the state and public finances, with some discretionary government policy that can be reconsidered.

Quite simply, the government has to cut back on public sector pay, and quite significantly so. According to the Department of Finance, the Irish government has suffered a €26 billion deficit in expenditure over revenue thus far in 2009. Next year, it could be worse.

The Economics of €2 Spar Hot Chicken-Fillet Rolls

The recession has brought down prices throughout the economy, in response to faltering demand. In Dublin, the most poignant example of this is Spar’s much celebrated €2 hot chicken-fillet roll.

But in the same shop, many prices haven’t fallen as much. Why is this? Like the canary in the coal mine, the €2 hot chicken-fillet roll acts as an indicator in case of recovering consumer spending.

Why Fees Aren’t Free

The decision by the Irish government to repeal the reintroduction of fees has been met with joy by students around the country. But ‘free fees’ promotes inefficiency and propogates inequality, by not imposing the true cost of education on students.

Those who criticised the reintroduction of fees claim that students couldn’t afford to pay them, and that access to education would be limited as a result. Unfortunately, inequality in educational opportunity may stem from differing financial conditions – but free fees does nothing to stop this. As long as wealthier families can gain an advantage through spending (either through private tuition or grind schools), they will do so.

A Different Kind Of Carbon Leakage

The Irish Government recently decided to ban fur farming in Ireland. Their justification for this, presumably, stems from concern for animal rights and the cruelty of the practice.

In fact, this measure may end up harming animals – by pushing fur farming out of jurisdictions with responsible and concerned governments, they are forcing fur farming into more permissive and cruel states.

The Importance of Property Rights

The New York Times discusses the diversity of revenue streams which support the Taliban in Afghanistan. In recent months, US forces have begun to express doubt over whether a policy to damage the opium trade will really hurt their finances.

Surprisingly, lessons can be learned from Peru’s experience fighting the drug trade and the ‘Shining Path’ guerilla movement in the early 1990s. In that case, the forces aligned against the government drew their power from an unlikely source.

The Folly of Central Planning

The purpose of the Central Societies’ Committee (CSC) in Trinity College is to secure funding from the Capitation Committee, and then distribute this to societies. Each year, members allocate tens of thousands of euro in funding to student societies around campus.

In a perfect world, all students would have an equal say in how college funding is allocated to societies. After all, this is your money and it is being allocated for your benefit. But a CSC composed of some 15,000 members is completely unworkable and would never reach consensus. Thus, we need a central authority to decide how to spend our money. Or do we?

Greens Are Here To Stay.. For Now – Part 2

The direct economic implications of the new Program for Government agreed  by Fianna Fáil and the Green Party was analysed here. Let’s move onto the other components of the agreement – the environment, education, health and transport.

Turning The Tide

President Hu Jintao of China was lauded at the UN climate change summit last week for his bold plans to counter global warming, reports China Daily. His remarks represent a turn-around in China’s attitude and policy.

It is all very reminiscent of the Slave Trade Act of 1807, which banned the international trade of slaves in the British Empire. For fear of becoming economically uncompetitive, the British went on to tirelessly campaign against the practice elsewhere.

Greens Are Here To Stay.. For Now – Part 1

Fianna Fáil and the Green Party have agreed a program for government, and it will presumably be ratified by the members of the Green Party today. It’s available online here. It seems extremely generous, with education and electoral reforms standing out as victories for the Green Party. Let’s take a closer look at some highlights.