Are Economists Political Liabilities?

Are Economists Political Liabilities?

Hugh Pavletich FDIA

Performance Urban Planning

Christchurch

New Zealand

July 3, 2010

Why house prices are affordable in many North American markets “doesn’t make sense” to Dominic Stephens, a senior economist with Westpac Banking Corporation New Zealand, according to this article - Westpac predicts house prices decline.

It would appear too many Bank economists contribution to society is on a par with local government employees in the United Kingdom and elsewhere (although the local government staff appear more entrepreneurial – if the UK Daily Mail article is any guide).

Following economists less than stellar performance through the Global Financial Crisis, Efrain Rojas was of the view that Perhaps Economists Should Be Picking Vegetables.

It seems too, the Australian Treasury economists were no great help to the Australian Government with the Mining Super Tax fiasco, as explained by Brett Glegg and Matthew Stephens within Treasury tarnished by turn of events over mining super tax | The Australian –

“In the end the miners were not provided with Treasury’s modeling until last Wednesday. These were the numbers that, according to one insider, had come from ‘planet Mars’.”

“’They had made it up and had no idea how to back it up. It was like sitting university professors down to lecture primary school students’ one of the miners advisers claimed yesterday.”

“The talk around the mining industry is that (Australian Federal Treasurer Wayne) Swan remains a very angry man. But he is also concerned that his standing among the miners has been lethally eroded……….”

It seems likely former Australian Prime Minister Kevin Rudd may not be “overflowing with gratitude” either.

It will be interesting to see if the Council of Australian Governments inspired request to the Productivity Commission, to report later this year on Planning, Zoning and Development Assessments - Business Regulation Benchmarking - Productivity Commission “get it right” this time. The PCA’s involvement back in 2004 was a complete fiasco, that killed these important issues “stone dead” in Australia at the time. It took the Annual Demographia Surveys, with the first release early 2005, to reignite theses issues in Australia and get them underway in New Zealand.

The reality is that there are major changes required in the training of economists (refer Scoop: Housing Bubbles And Market Sense), property appraisers / valuers and planners. Professor Peter Gordon of the University of Southern California is making a good start with the planners (refer ECON-201: Economic Thinking for Planners and Developers | Planetizen).

ENDS

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