Here's my Top 10 links from around the Internet at 12.00 pm today in association with NZ Mint.
As always, we welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.
See all previous Top 10s here.
My must watch video today is #8 from BBC's Paul Mason on what the Golden Dawn is up to in Greece. Disturbing.
1. But does it make us happier? - The debate about targeting economic growth or happiness is an old one.
But it's making a comeback now that growth is so hard to find and the world butts up against various restraints and distributional problems.
Robert Skidelsky has written a nice piece at Project Syndicate revisiting this issue.
He points to some research showing that rising economic growth doesn't actually boost happiness.
He also makes a nice distinction between median income and average income.
Another finding has also started to influence the current debate on growth: poor people within a country are less happy than rich people. In other words, above a low level of sufficiency, people's happiness levels are determined much less by their absolute income than by their income relative to some reference group. We constantly compare our lot with that of others, feeling either superior or inferior, whatever our income level; well-being depends more on how the fruits of growth are distributed than on their absolute amount.
Put another way, what matters for life satisfaction is the growth not of mean income but of median income – the income of the typical person. Consider a population of 10 people (say, a factory) in which the managing director earns $150,000 (£93,000) a year and the other nine, all workers, earn $10,000 each. The mean average of their incomes is $25,000, but 90% earn $10,000. With this kind of income distribution, it would be surprising if growth increased the typical person's sense of well-being.
That is not an idle example. In rich societies over the last three decades, mean incomes have been rising steadily, but typical incomes have been stagnating or even falling. In other words, a minority – a very small minority in countries like the US and Britain – has captured most of the gains of growth. In such cases, it is not more growth that we want, but more equality.
Skidelsky ends with a good point and a great quote.
More equality would not only produce the contentment that flows from more security and better health, but also the satisfaction that flows from having more leisure, more time with family and friends, more respect from one's fellows, and more lifestyle choices. Great inequality makes us hungrier for goods than we would otherwise be, by constantly reminding us that we have less than the next person. We live in a pushy society with turbo-charged fathers and "tiger" mothers, constantly goading themselves and their children to "get ahead".
The 19th-century philosopher John Stuart Mill had a more civilised view:
"I confess I am not charmed with the ideal of life held out by those who think … that the trampling, crushing, elbowing, and treading on each other's heels, which form the existing type of social life, are the most desirable lot of human kind … The best state for human nature is that in which, while no one is poor, no one desires to be richer, nor has any reason to fear being thrust back, by the efforts of others to push themselves forward."
2. 'I've run out of ammo' - The Telegraph reports Bank of England Governor Mervyn King as saying there's not much more the central bank can do to boost the economy until banks recapitalise properly.
Warning that the next generation may have to live with the consequences of past excesses “for a long time to come”, he said Britain’s banks needed to drop the “pretence” that their debts will be repaid.
“I am not sure advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values, and recapitalisation of their financial systems,” he said.
“Only then will it be possible to return to a more normal provision of the vital banking services so crucial to an economic recovery... Just as in 2008, there is a deep reluctance to admit the extent of the undercapitalisation of the banking system in parts of the industrialised world.”
He compared the situation to the “pretence that debts could be repaid” in the 1930s and added: “We must not repeat that mistake.”
4. The lost generations - Jeffrey Sachs has written an excellent piece at Project Syndicate arguing America should invest more in educating its young and points out its war on drugs is a disaster.
A remarkable new documentary film, The House I Live In, shows that America’s story is even sadder and crueler than that, owing to disastrous policies. Starting around 40 years ago, America’s politicians declared a “war on drugs,” ostensibly to fight the use of addictive drugs like cocaine. As the film clearly shows, however, the war on drugs became a war on the poor, especially on poor minority groups.
In fact, the war on drugs led to mass incarceration of poor, minority young men. The US now imprisons around 2.3 million people at any time, a substantial number of whom are poor people who are arrested for selling drugs to support their own addiction. As a result, the US has ended up with the world’s highest incarceration rate – a shocking 743 people per 100,000!
The film depicts a nightmarish world in which poverty in one generation is passed on to the next, with the cruel, costly, and inefficient “war on drugs” facilitating the process. Poor people, often African-Americans, cannot find jobs or have returned from military service without skills or employment contacts. They fall into poverty and turn to drugs.
Instead of receiving social and medical assistance, they are arrested and turned into felons. From that point on, they are in and out of the prison system, and have little chance of ever getting a legal job that enables them to escape poverty. Their children grow up without a parent at home – and without hope and support. The children of drug users often become drug users themselves; they, too, frequently end up in jail or suffer violence or early death.
What is crazy about this is that the US has missed the obvious point – and has missed it for 40 years. To break the cycle of poverty, a country needs to invest in its children’s future, not in the imprisonment of 2.3 million people a year, many for non-violent crimes that are symptoms of poverty.
6. 'A dove in hawk's feathers' - FT.com reports ECB President Mario Draghi appeared before Germany's parliament overnight to argue that his Big Bazooka would not put a rocket under inflation.
One German parliamentarian described him as a 'dove in hawk's feathers', while another said he was a 'Prussian from Southern Europe.'
7. A laundromat for red hot rubles - Jeff Randall writes in The Telegraph from the unheralded Euro-zone member that is almost bankrupt -- Cyprus. He points to a growing Russian influence and a bunch of new Chinese immigrants. Russia and Cyprus share a religion and a liking for cash transactions.
The number of Russians visiting Cyprus has tripled in three years to more than 400,000 and many do not intend to go back. The official estimate of Russian residents here is about 50,000 but double that seems nearer the mark. Aside from the appeal of an agreeable climate and a low tax rate, the Russians' penchant for cash transactions prompts widespread suspicion that the island is becoming a giant laundromat for red-hot rubles. Cypriot authorities deny this.
The Russians' location of choice is Limassol, a 45-minute drive from Paphos, where there is a Russian-language newspaper, a Russian-language radio station, two Russian-language schools and enough prostitutes from former USSR states to keep the Red Army tied down, as it were, until Christmas. And the Chinese are keen too.
The Russians, quite correctly, view Cyprus as a convenient backdoor to the European Union – and they are not alone. The Chinese have also started arriving, encouraged by what they regard as an incredibly low bar to immigration. Forget all those tricky visa forms, for anyone prepared to spend €300,000 on a property in Cyprus there is the bonus of eligibility for permanent residency. Once this is achieved, the owner is entitled to move anywhere within the EU. For the price of a shoebox in Shanghai, Cyprus is offering a gold-card travel pass and much more besides.
8. Greece's Golden Dawn and a new Kristallnacht - Paul Mason does a great job at BBC's Newsnight reporting on the rise and rise of Greece's neo-fascist Golden Dawn party as Greece's Depression is deepened by its umpteenth austerity drive. HT BusinessInsider
Golden Dawn MP Ilias Panagiotaros allegedly led an attack on a Greek theater where an Albanian was directing a play last week. Golden Dawn supporters clashed with riot police and hurled bricks while the actors and guests were trapped inside – unsure of whether help was on the way.
Panagiotaros told Mason that he estimates 50-60 percent of the Greek police force supports Golden Dawn, and "every day it is growing," – which means they don't get involved when Golden Dawn is doing damage. Some Greeks claim terrible mistreatment at the hands of police who openly boast their allegiance to Golden Dawn as well.
9. The scale of the Auckland task - Bernard Orsman at NZHerald and Jenny Keown at Stuff report from the Property Counci's conference on residential property development on the scale of the task facing Auckland's Council and property developers. The Auckland Plan states they will have to build 400,000 houses over the next 30 years, most of which are supposed to be inside the urban limits in medium to high density forms.
The obvious is now dawning on everyone. To build that many houses so close together will require a massive increase (and reform) in the construction sector, and a whole lot of change of the look and feel of Auckland, including the height and density of the cityscape. That's a whole lot of unhappy home owners in that sentence. NIMBY will be a massive force to overcome.
Former McConnell Property CEO Martin Udale tells Orsman that 50,000 to 80,000 houses would have to be demolished in Auckland to create the space needed to build 300,000 of those 400,000 homes in higher density developments within the city boundaries.
Mr Udale, who now heads Essentia Consulting Group, said one of the biggest risks for the unitary plan was holding political leaders' feet to the fire. "We can't allow the politicians to hide behind community nimbyism and the cave dwellers," he said. The unitary plan had to make widespread infill development easy with provision for height - "this town has a phobia about height".
"We want innovation welcomed, pushing the envelope to be the norm. It's how better things get done."
Stuff reports Todd Property's Strategic Planning Manager Neil Donnelly as saying he doubted Auckland could build the 10,000 houses a year it needed.
Todd Property, owned by Wellington-based Todd Corporation, manages the development of major subdivisions in Auckland, including the Long Bay community on the North Shore, Stonefields at the base of Mt Wellington and Ormiston in South Auckland.
He told a Property Council conference that these projects had orders for 5,000 houses within the next eight to 10 years, which represented just five per cent of the council's projected required housing supply.
''This is despite us being one of the largest providers. The matter of scale is the biggest issue facing Auckland,'' said Donnelly.
The housing development industry needed to shift from its cottage size to something larger in scale, he said. ''We need to roll out a significant number of types of developments for people. Providing 10,000 dwellings is going to have to be provided by large entities - and an industry with a balance sheet.''
He questioned whether developers should trust Auckland Council to deliver infrastructure for large scale housing developments, given the council's failure in this area.
10. Totally Jon Stewart with a summary of the end of the Presidential Campaign
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