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Motu Research analysts look at food stamps, technology and productivity, Brexit and migration, taxing the poor, Presidential campaign myths, and more...

Motu Research analysts look at food stamps, technology and productivity, Brexit and migration, taxing the poor, Presidential campaign myths, and more...

Today's Top 10 is a guest post from Motu Research analysts Kate Preston, Nathan Chappell and Corey Allen.

As always, we welcome your additions in the comments below or via email to And if you're interested in contributing the occasional Top 10 yourself, contact

See all previous Top 10s here.

1) Impoverished children with access to food stamps become healthier and wealthier adults.

The impact of a long-running food stamp program in the US is revealed by following children from the 1960s and 1970s through to today. The program was found to have significant long term advantages for children of families who received food stamps during their preschool years. Young children with access had higher education and earnings and were less likely to have major health problems or require welfare support later in life. Effects were even positive for children if their family received food stamps before they were born. These children had a higher birthweight and better adult health. There was no additional benefit to continuing the programme beyond the age of five. Overall the program was a good investment for the taxpayer through the reduction in welfare and health costs and increasing future tax revenues.

2) Technology is changing how we live, but it needs to change how we work.

This one seems topical given the work currently underway in the Productivity Hub about boosting NZ’s productivity performance. Productivity growth has slowed quite substantially since the 1970s/80s, just as we were preparing ourselves for a productivity boom from IT. But this boom seems to have not shown up in the productivity or GDP statistics. A common explanation is that the massive advances in IT technology that we love, like being able to catch up with friends and family anywhere in the world, are actually free. The technology revolution has created amazing new products and services, but often we don’t pay for them. This article argues that mismeasurement can’t account for the productivity paradox because we’ve never been able to measure productivity perfectly. Technology may have changed our lives but, to a large extent, it has not changed how we work. Sure, technology has transformed a few industries, but it has not drastically changed many of the jobs we do now. Technology may not be taking our jobs, but may instead be taking over our leisure.

3) Brexit and the Impact of Immigration on the UK, London School of Economics and Political Science.

This report fiercely rebuts any idea that European Union (EU) immigrants take jobs from UK-born workers, reduce local wages and suck up tax-payer money by glomming onto the welfare system. It finds immigrants increase demand for goods and services, and may bring skills which fill gaps in the labour market. Falls in wages after 2008 in areas with high growth in EU immigrant populations were not an outcome of immigration, but of the global financial crisis. The research shows EU immigrants contribute more in taxes than they cost in welfare payments and public services. Finally, the argument that allowing refugees into other parts of the EU gives them entry into the UK is not valid, as they do not gain legal access to the UK just because they are allowed elsewhere. All in all, the report concludes that any reduction in EU immigration that would follow Brexit would be likely to reduce living standards for UK nationals.

4) Tobacco excises: tax the poor?

Eric Crampton makes the case against increasing the tobacco excise. The vast majority of smokers will continue to smoke, and they’re disproportionately poor. Why are we pushing this regressive tax, especially when there are other ways to improve health?

The greatest trick the devil ever pulled was convincing people that tobacco excise is good for the poor because the health benefits are progressive. You can get those same progressive health benefits simply by legalising vaping, without the ridiculous regressive burden.

5) The Economy is Rigged, and Other Presidential Campaign Myths, by N. Gregory Mankiw.

Greg Mankiw, a professor of economics at Harvard University, is dismayed by this year’s US presidential candidates’ comments on the economy. This is a short and sharp rebuttal to some of the recent claims of the campaigners. No, manufacturing has not dried up in the States nor will free trade agreements destroy the economy. The economy is not ruled by a mere elite few, the wealthiest people in the country don’t get away without contributing tax, and a giant tax cut will not cause exceptional economic growth (at least not enough to stop severe budget deficits).

6) How the curse of Sykes-Picot still haunts the Middle East.

The Middle East, considered the cradle of civilization, has been a bit of a mess for a while now, with ISIS, horrific sectarian bloodshed, the Syrian Civil War etc. etc. This article argues that many of the regions problems can be traced back to the Sykes-Picot agreement of 1916; the agreement that split the defeated Ottoman Empire into British and French spheres of influence. After years of corruption, mismanagement, and repression, the countries that came out of Sykes-Picot don’t really resemble cohesive societies. Whether the agreement shoulders all of this blame we don’t know. But it does show that nation building is hard when you don’t necessarily know a lot about the nation you are trying to build. Are new borders the answer? We’ve seen with the partition of India, Yugoslavia, and Sudan that it is a very messy, often bloody process. We just hope that the people in the regions are being listened to, surely what they want is what matters most?

7) Should the Middle Class Fear the World’s Poor?

The basic economic case for trade is that the gains to the winners are supposed to outweigh the losses to the losers. Unfortunately, recent research has suggested the losers in rich countries do worse than we realised, and may never recover. Should we still encourage globalization in light of this, given its power to pull people out of poverty?

The author gives three arguments for why we shouldn’t use gains to the global poor to justify losses to the middle class in rich countries. First, he doubts the empirical evidence that gains to the world’s poorest come from losses to the rich middle class; second, he doubts voters will ever accept such a reason; third, he doubts the moral case of accepting losses to the middle class, rather than focusing on the excesses of the ‘international elite’. We’ll leave the merits of these arguments for the comments.

8) Markets as selection devices

Markets are supposed to select the best firms – those that make the best products and make the most profits for the owners. But do firms survive because of careful product design, acute understanding of market conditions, or shrewd business strategies that make them successful in the long rung? Or do some firms survive simply by luck? This is more of an issue in financial markets. The article references studies that have shown good 6-month performances of fund managers can lead to inflows of funds, even though 6 months is not long enough to tell if the fund manager is good or just lucky. The article argues we need to keep asking what markets are selecting for and why poor firms continue to exist.

9) At Strawberry Fields, Feuding Musicians Give Peace a Chance by Corey Kilgannon.

How the musicians of Strawberry Fields in Central Park have overcome the tragedy of the commons to develop a self-governing system. Elinor Ostrom would be proud.

10) And finally, ha!  And ha ha!

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# 4- Tobacco Excises: The discussion does not consider the wider health costs of smokers on the health system: More heart attacks/strokes etc. It also does not consider the deterrent impact on our mokopuna. So overall interesting but needs to think wider.


TSY advised back in 2012 that the excise tax collected was already exceeding the wider health costs;

On the narrow fiscal grounds of covering the costs smokers impose on government, further
increases in tobacco excise may not be justified. At over $1.3 billion per year, tobacco excise
revenues may already exceed the direct health system costs of smoking. When the broader fiscal
impacts of smoking are considered (eg shorter life expectancy reducing smokers’ superannuation
and aged care costs), smokers are probably already “paying their way” in narrowly fiscal terms.


Days in hospital before choking to death
Cost per day
Surgery to chop off rotten bits X number of operations
Unproductive time on "smoko's"
Unproductive time as relatives visit smoker in hospital
Cleaning streets of the butts (if the street dwellers don't find the butts first)
Secondary smoke issues
Total cost to society (have I missed anything?)

Deduct the tax paid:
Average smoker ciggie's per day (20???)
Tax per
365 (366 on leap year for the nit pickers out there)
Years until croak.

I am sure that you will find that the tax paid does not cover the cost


This sort of stuff has been studied in detail. Long life is expensive from a healthcare and pension perspective. Smokers easily pay their way and help solve the pension crisis at the same time.

From a Dutch study:
"Furthermore, the greatest differences in health-care costs are not caused by smoking- and obesity-related diseases, but by the other, unrelated, diseases that occur as life-years are gained (Table 1). Therefore, successful prevention of obesity and smoking would result in lower health-care costs in the short run (assuming no costs of prevention), but in the long run they would result in higher costs."…


total lifetime health spending was greatest for the healthy-living people, lowest for the smokers, and intermediate for the obese people.


#10 the 2nd one. People dying in their sheets vs. cheese consumption. It's about time the world woke up to the fact that cheese-mares are real. EAting excessive amounts of cheese prior to sleep cause nightmares which inturn result in death. I think cheese needs to have a warning label on it.

Do not consume this cheddar before you hit the beddar.


#6 is the usual claptrap from a US-centric POV: it can be summarised as 'let's hope that Reason prevails'.

Unfortunately, as Spengler deliciously observed the proximate cause of the venerable (the fall of Ottoman is approaching it's centenary) ME mess is a lack of the very foundation of Western Civ: the spread of Reason and Science. It's not called the 'Enlightenment' for nothing.

Goldman drily observes that the ME is in the early stages of a Thirty Years War, akin to the 1618-48 equivalent in central Europe, which trashed a wide area as armies were left to forage for their sustenance with predictable effects, led to the death of between one-third and one-half of the population, and was ended by the Treaty of Westphalia which effectively sanctioned Nation-States and created firm national borders for the first time (there had been march zones - effectively owing allegiance to either, both, or no neighbour previously).

The great task of diplomacy in the 21st century is a sad and dreary one, namely managing the decline of Muslim civilization. There is a parallel to the great diplomatic problem of the late 19th and early 20th century, the dissolution of the Ottoman Empire, which the diplomats bungled horribly. It is no job for the idealistic, namely the Americans, nor for the squeamish, namely the Europeans.

It's gonna be messy, and Goldman's advice is simple: stay outta the mess itself, and contain its spread across borders and oceans. We don't have a dawg in this fight, and for that we can be thankful.

I'd suggest a follow-up in - oh - 2036, on this one.


There are more than echoes of that period in the decline and collapse of the Franco-German empire, aka the EU.…

The reason our country is reasonably civilised is based on this stuff.


The gap between what I pay for Google Maps and the value I get from it is called "consumer surplus," and it's Silicon Valley's best defense against the grim story told by the productivity statistics. The argument being that we get GPS for free and so it does not contribute to GDP
Take schools, hospitals, roads, and much more infrastructure. These things were paid for decades ago and so this generation gets the benefit of those services for free. Therefore those benefits do not contribute to GDP either.


Google makes stuff.
Google sells it for nada, i.e. nothing to the consumer.
Consumers like that, paying nothing that is. But consumers may pay in a way.
Perhaps consumers pay by being constantly bombarded by targeted advertising that Google collects a fee on, whilst selling computer,phone,tablet browsing activity to the hightest bidder, so the advertisters then think , hey Google is great, we sell more of our product when Google advertises it.

Consumers think, Google services, hey great, It's free, cool.
Just so Mr Google can go buy a new boat every other day.
Mr Google does a few party tricks, like reinventing the electric car.
Promotes it's own good works, gets invited to nicest parties in town.
But it's sideline, cost of doing business.

Nothing in life is new or free. It Happens.
Perhaps it's why the the Romans built huge stadiums for Galdiator bouts, keep the masses busy with cheap or free entertainment whilst fleecing them on every other thing, city taxes and stuff.


And Google gets to choose what news we get to see by placing the news items they want first and the ones they dont want you to see last.


I just googled Bernie Sanders as i wanted to know what he was going to do next

This was googles first pick

Hillary Clinton gets endorsements from Obama, Biden and Elizabeth Warren – as it happened

How is that for manipulation of the media

I did not want to know about Hilary i wanted to know about Bernie


Pretty creepy for sure. I guess they set a low bar with the "don't be evil" tag line. Anything lesser than evil is fair game?

"Google has demoted the site EU Referendum to “below the fold” in searches for the term “EU referendum”, where it isn’t visible to most web surfers unless they scroll down.

The political site, which was founded by author and researcher Richard A.E. North in 2004, was the top search result for the topical expression across all the major search engines for a decade.

At Google, the site has been demoted to 10th (or 13th, depending on how you count it) for the search term, with links to the BBC and the pro-EU Guardian newspaper ranking higher. North’s site still ranks No.1 for the same term over at Yahoo! and Bing.

Google dominates the market with over 90 per cent share of search engine traffic in Europe.

The No.1 ranking search result on average receives 33 per cent of the traffic generated from a search, studies have found, a number which diminishes rapidly as the ranking falls. Sites in 10th place receive only around 2.4 per cent.

Europhile newspaper the Financial Times ranked as the most influential British political blog in 2006, and the site kept its top spot in the search results even after a domain move."…


Dyson butchers the EU project. No wonder leave is pulling ahead.…