Economists' favorite economists

List of economists' favorite economists. Thanks for the ht Greg Mankiw.

http://gregmankiw.blogspot.com/2011/05/poll-of-economists.html

Mozilla defies DHS, will not remove Mafiaa Fire add-on

From, PC World, http://bit.ly/mA0oAQ, "The open-source Mozilla project said Thursday it won't comply with a
U.S. Department of Homeland Security request to remove a Firefox add-on that helps redirect Web traffic for sites that have been seized by the government. At issue is the Mafiaa Fire add-on, designed to reduce the effectiveness of an antipiracy campaign by DHS's Immigration and Customs Enforcement (ICE) division.  When users try to visit a website whose Internet domain has been seized by ICE, Mafiaa Fire redirects them to a working site set up to replace the seized domain."

Payback Time

Research Associate Nicole Alpert and Director Dan Ryan are interviewed in Gafencu Men Issue May 2011 in "Payback Time" on the Government's recent handouts. Read more at http://bit.ly/iplohW

Antitrust - "I know what you are but what am I?"

Antitrust - companies play the game "I know what you are, but what am I?"


Business Insider looks at antitrust with Apple now fighting, filing against Samsung. Note that Mom said, "don't do to others what you wouldn't want them to do to you" from Confucian theory of ethics (early variant of the Golden Rule):

己所不欲，勿施於人。
"What you do not wish for yourself, do not do to others."

 子貢問曰：“有一言而可以終身行之者乎”？子曰：“其恕乎！己所不欲、勿施於人。”

Zi gong (a disciple of Confucius) asked: "Is there any one word that could guide a person throughout life?" The Master replied: "How about 'shu' [reciprocity]: never impose on others what you would not choose for yourself?" Analects XV.24, tr. David Hinton

Now everyone is getting in the game. It's looking more and more like how George Bittlingmayer explained antitrust in The Antitrust Emperor’s Clothes.

The Social Network's famed Winklevoss' lose Facebook fight

Chief Judge Alex Kozinski: "The Winklevosses are not the first parties bested by a competitor who then seek to gain through litigation what they were unable to achieve in the marketplace."




Think about the increase in litigation that will be seen once competition law is under way.

Eldery in smuggling

Last issue, Best Practice published a story about the dangers of smuggling and how government policy affects the rates and dangers of citizens involvement. Since last year, there have been many cases of families, children, and Today, media reports emerged that customs is having a difficult time catching illicit cigarettes across the border, cases in which the elderly are involved as the smuggler. If caught, the fines are very serious, fines and jail time. It's also been found that smugglers took extra advantage of the current environment, smuggling other items such as milk powder and red wine. The elderly smugglers, who carry out about 10 packs, might receive HKD$120-150 for each trip made - it's small money, but the history of the prohibition and other bans teaches us that whenever the government attempts to alter supply, "in the absence of perfect enforcement, a class of criminals will emerge who bypass the government’s control and profit from artificially reduced competition."


It's abominable that these these "criminals" turn out to be Gong gong and Po po. On a lighter note:
 

When Harry Met Sally 2 with Billy Crystal & Helen Mirren from Billy Crystal

Universal Pensions - Should have been an April Fools

Tobias Higbie. "Why Social Security?" Social Security Administration pamphlet: 1937.

Tax Freedom Day indicates how long people must work before earning enough money to pay the year's tax obligation. It arrived April 12 in the USA this year, and has just past, on April 6th, in Australia and will finally arrive on May 30 in the UK. For 60% of Hong Kong residents, their tax day is on January 1st, as many don’t pay any taxes at all. The 40% who pay taxes have a much smaller burden than their peers in other nations, but that is set to change if political parties get their way and introduce a Universal Pension.

Most advanced economies around the world can’t realistically pay for their pension pledges. The fiscal insolvency has led many wage earners to expect to work longer, pay more towards their own health care and receive less than they paid in to pension plans.

These nations’ taxes are relatively high, but in spite of these levels, cities around America and the EU are running out of money, leaving pension funds dry and insolvent. In the global recovery, we’ve moved beyond a job’s crisis.

American taxpayers this year are doubly saddled in that they spend more paying their taxes than the total they spend on groceries, clothing and shelter – and most pre-retiree workers are pushing back their retirement age – they will retire without the benefits that they themselves paid into. 

When political parties promoted a Universal Pension, I first mistook it as an April Fool’s joke – only it wasn’t. These parties might believe they gain votes from promoting what has been a curse overseas, but most of the public is well informed, with media stories covering a woeful middle class overseas who now need to work past retirement.

Clearly, the Universal Pension is not a solution. Hong Kong’s tax system would be vastly altered to fund the pension. The current population of residents 65-and-older stands just above nine-hundred thousand, and if implemented this year, a monthly pension of HK$4,000 would cost the Government at least 40 billion.

Hong Kong has an ageing population, with the numbers of people 65-and-older doubling in the year 2030 to 2.1 million. In 2030, this cost jumps to HK$100 bn a year. Politicians haven’t come out right and said it, but they are serious about greatly increasing taxes to pay for a pension plan, speending Hong Kong down the road to a welfare state. Of course, who pays for these increases are taxpayers, wage earners and the middle class. There were complaints that the $6000 handout wasn’t enough to help low-middle-income families, but the Universal Pension essentially is asking that this same group pay taxes twice. 

Further economic hardship will be borne when companies pull out of Hong Kong as Hong Kong’s competitiveness severely taxes a hit. 

It would be unwise to believe the Government can afford a Universal Pension, and further to believe the Government could manage it. The public and the government stamped the MPF as a failure with the u-turn in the handout to a cash giveaway. The MPF illustrates the disaster that lies ahead when the Government tries to manage residents’ savings. Despite muted warnings, much legislation thus far implemented has plagued residents with black swans and unknown unknowns. With Universal Pensions, however, the warnings are as loud as monolithic economies hitting rock bottom; there is no shortage of evidence detailing the chaos endured, the sheer costs and economic devastation hitting their citizens.

Decrepit Heritage - Law and Policy crumbling property rights

It was a welcome move to allow redevelopment at Mid-Levels 6 and 8 Kennedy Road, and not employ
the devious declaration of temporary monument status. The last time the AMO got it right is when
Bruce Lee’s former residence-turned-love-hotel was denied monument status because the building had
been altered for decades. The AMO rightly had to disappoint fans given the baseless heritage claims.

However, most of the heritage policy lacks coordination at all levels, and the Government’s approach
usually mimics the bad guys in Lee’s movies, who take what they want, when they want it, forcing
somebody’s hand.

Ho Tung villa was deemed heritage, but its historical allure was debunked as urban legend. The most
embarrassing and egregious case involved Jessville mansion, declared a proposed monument, and
less than a year later downgraded to a Grade 3 historical building after owners agreed to maintain the
building as a clubhouse.

This lack of accountability calls into question all halted redevelopments since Kin Yin Lei mansion.
When the AMO flip flops in less than a year on a graded monument to the lowest of heritage ratings,
legitimate doubts arise concerning heritage and if efforts to stop redevelopment are justified. Do
“heritage” buildings like King Yin Lei or Ho Tung Villa deserve the name?

King Yin Lei was graded within the same day its monument status was declared, which doesn’t speak
well of the grading process. Tthe declaration of monument status to halt redevelopment projects skews
a grading process which is already partial, and undermines AMOs credibility.

Secretary for Development Carrie Cheung’s description of the heritage policy as take “no action if
the enemy makes no move” diverts responsibility. Recall King Yin Lei, where twenty per cent of its
facade was ruined. Conservationists and media pointed fingers at the owner, but they had the right to
redevelop. It was AMOs responsibility to protect heritage, but the AMO had not even graded King Yin
Lei, indicating it held no heritage value.

The AMO didn’t need to wait for protests before offering King Yin Lei’s owner the land exchange. Had it
established a set of fair and clear guidelines, AMO wouldn’t have cost heritage the loss of the buildings
distinctive original features.

These desperate last minute attempts in crisis management are often cheered, but could cost Hong
Kong the early demoltion of possible heritage buildings that aren’t on a watch list. These “just in the nick
of time” actions always surprise owners with heritage demands, and create both real and opportunity
costs. The Ho Tung redevelopment, for example, was estimated at $3 bn. The AMO has said purchasing
heritage sites would be a "last resort", and therefore it is unfair to force owners to foot the entirety of
the heritage bill, exemplified by Jessville mansion’s clubhouse.

Privately owned heritage-worthy sites have been in the same state for decades, thus there is no well-
founded reason why, after years of government assessment that those sites which have not been
declared monuments should suddenly be protected as such. With seventy percent of identified heritage
buildings privately owned, and more ungraded and unnoticed - a number conservationists put in the
thousands, the need for overhaul is pressing.

If Hong Kong is increasingly deprived of historic landmarks, it won’t be to the fault of property owners, it
will be the AMOs. The AMO has repeatedly admitted problems with its policy but no changes have been
made, leaving the principal strategy to continue evading justifiable grading and infringing upon property
rights. If the public wants to keep its heritage, it needs to demand the heritage policy is renovated.

For starters, the AMO needs to stop using the monument status as a bargaining tool to stop
redevelopment, and should further clarify rules in its grading system. Economic incentives go a long way
in preserving heritage, but haven’t been fully utilized in Hong Kong.

The AMO doesn’t have pockets deep enough to buy every heritage property, and owners shouldn’t be
in a position where the older their building is, the less control they have over it. Public interest in the
use of heritage should be defended, but so too must the property rights of owners. Treating heritage
buildings as they were part of a knick knack collection should be discouraged as they often ignore
property rights – here, heritage itself needs defending, as not every beautiful or decades-old building
qualifies.

Middle ground can be found in jurisdictions that have balanced these interests with economic incentives
at play. Hong Kong’s heritage policy needs to ensure it doesn't employ a strategy which is dreamt
up out of thin air to control what someone does with their property, but has a real focus on maintaining
and promoting heritage.

One of the problems that exists is with the legislation directing AMO itself, along with a number of other offices that don't seem to have a clue how to coordinate with each other. But as long as the public allows AMO to remain as is, the heritage policy and the laws that guide it remain in a state of decay.

For more on this, visit Hong Kong: Sidestepping Property Rights in Preservation

Tracking the Minimum Wage

Minimum Wage in Hong Kong will cost far too many people their jobs and increase the real wage. But, this doesn't include the additional costs in administration or change in workflow. Lion Rock will track developments and also management fee increases, food costs, and employment data from several industries employing large amounts of minimum wage workers to measure the impact of the minimum wage. Feel free to send us tips when you hear of them.
Updates will appear here, and on LRIs website.

Date	Details	Source
3/30/11	Approx. 80 cleaners and back-up staff at Eastern Hospital are asked to switch contracts from a monthly to a daily basis and told lunch breaks and rest days are not included in pay.	http://bit.ly/stnd80minwage
4/11/2011	Cleaning workers in old blocks fired or forced to work fewer hours.	SCMP
4/11/2011	Rehiring of 200 security guards to reduce future long-service payments.	SCMP
4/11/2011	Tour guides forced to work part-time so they are paid less in non-peak season.	SCMP
4/11/2011	Chain store workers told not to have lunch in stores so the company does not have to pay meal breaks.	SCMP
4/11/2011	Workers at a chain sign contracts giving them paid meal breaks but unpaid rest days.	SCMP
4/11/2011	Half of the city's 180 internet cafes say they will be forced to close due to the minimum wage law and proposed rules barring them from operating in residential buildings and banning people under 16 after midnight.	SCMP

• Cleaning workers in old blocks fired or forced to work fewer hours. Security guards told to do their duties.
• New City Property Management sacks, rehires 200 security guards to reduce future long-service payments.
• Tour guides forced to work part-time so they are paid less in non-peak season.
• Japan Home Centre chain workers told not to have lunch in stores so the company does not have to pay meal breaks. Workers say this is impractical due to limited manpower.
• Half of the city's 180 internet cafes say they will be forced to close due to the minimum wage law and proposed rules barring them from operating in residential buildings and banning people under 16 after midnight.
• Workers at the Tsui Wah restaurant chain sign contracts giving them paid meal breaks but unpaid rest days.

Agora I/O Conference

This past weekend, Agora I/O: The Agorist Unconference was broadcasted. Check it out.

 http://agora.io/etienne/ and for the back vids, http://agora.io/etienne/archives
"About Page" blurb:
"There are lots of conferences in the liberty world, but none operate according to the free market libertarian anarchist principles of agorism. Until now! Agora I/O is a new un conference where you'll find the greatest people, ideas and tools for advancing the stateless society. You don't want to miss this, and you don’t have to! Agora I/O is exclusively online, so you can participate from anywhere an internet signal reaches."

Speakers: James Babb, Cat Bleish, John Bush, Josh Carter, Gary Chartier, John
Connolly, James Cox, Michael W. Dean, David Derby, George Donnelly,
Zaira Dynia, Karen Emery, Pete Eyre, Nick Ford, Ian Freeman, Patri
Friedman, Carla Gericke, Thad Getterman, Allison Gibbs, Gil Guillory,
Eric Johnson, Debbie Harbeson, J. Kent Hastings, Ron Helwig, Scott
Horton, Steve Horwitz, Iloilo Jones, Tomasz Kaye, Angela Keaton, Neil
Kiernan, Peter G. Klein, Stacy Litz, Tarrin Lupo, Tennyson McCalla,
Kirk McNeil, Carlos Miller, Stefan Molyneux, Momma Ally, Carol Moore,
Corey Moore, Mookie Moss, Stephanie Murphy, Nina Paley, William
Pearson, Drew Phillips, Lawrence Reed, Pasha Roberts, Larken Rose,
Mary Ruwart, Michael Salvi, Nick Saorsa, Shane Sheid, Michael
Shanklin, Steve Scheetz, J. Neil Schulman, Sovereign Curtis, Brad
Spangler, Niki Staehle, Marc Stevens, Jason Talley, Mark Thomas, James
Tuttle, Alex Wied, Lance Weber, Jason Wohlfahrt, Darian Worden and
Jeffrey P. Zacher

Lion Rock in 2011 Property Rights Index

"Now that the correlation between economic well-being and property rights has been established, it is imperative to continue improving property rights on a global level."

-Hernando de Soto

Lion Rock featured in the 2011 Property Rights Report

The 2011 International Property Rights Index (IPRI) is an international comparative study that measures the significance of both physical and intellectual property rights and their protection for economic well-being.

The Lion Rock Institute’s Research Associate, Nicole Alpert, authors one of the case studies featured in the report, “Hong Kong: Sidestepping Property Rights in Preservation,” and details the current raggle-taggle heritage strategy:

In essence, a proposed monument allows the government to hold private property hostage, regardless of heritage value, eventually forcing private sector participation in the charade that is heritage conservation.

 The Index focuses on three areas: Legal and Political Environment (LP), Physical Property Rights (PPR), and Intellectual Property Rights (IPR) in order to incorporate and grasp the important aspects related to property rights protection.

Hong Kong's Rank
World Rank: 13 Regional Rank: 4

IPRI in Hong Kong rose to its highest level since the index began, indicating an interest in improvement and that more can be done. Judicial Independence rose 0.4 points, making up for declines in the three other variables. Protection of Physical Property and Registering Property both saw modest gains.
The increase in Copyright Piracy was reflected in the improving professional opinions about Hong Kong’s protection of intellectual property. The result is a 0.8 increase in IPR. Germany ties Hong Kong in its World Rank.

Interesting US and UK news in the past few days:

Local Liberty Dollar 'architect' Bernard von NotHaus convicted
The former head of an Evansville-based company that tried to introduce a currency that competed with the U.S. dollar has been found guilty of federal charges in the US.

UK home buyers offered cash splash to enter market
Echoing the housing boom in the run up to the credit crisis, first-home buyers in parts of Britain are offered deposits of as much as 70,000 pounds ($113,000) to help them get on the property ladder. All a little strange considering budget cuts and the recent crisis.

41.8% of reduction in jobs since 2006 in US due to min wage increases

Political Calculations this week takes a look at the US Federal minimum wage and job losses among those making that and below. They reason that, given the employment figures below:

2006: avg employed members of the civilian labor force: 144,427,000
2010: avg employed members of the civilian labor force: 139,064,000 (5,363,000 less)

...in percentage terms of the change in total employment level from 2006 to 2010, jobs affected by the federal minimum wage hikes of 2007, 2008 and 2009 account for 41.8% of the total reduction in jobs seen since 2006.

Lion Rock Newsletter

Lion Rock's Newsletter

The budget has been announced on Feb 23. Many members of the Legislative Council were very dissatisfied, as well as Hong Kong Residences. Because of the reaction, an amendment was announced last week. The Lion Rock Institute welcome the Tax Refund, but not the $6000 handout to every adult Hong Konger, even the details has yet been confirmed. This will surely destroy the principle of financial management of Hong Kong Government. Also an awful precedent to Hong Kong, benefit to those who complain the most!

During the protest on Mar 6th. There was a young boy, asking for handout to the children too, in front of the camera. The Lion Rock Institute is very worried that the society has forget about the founding principle of Hong Kong, more to those who work harder (多勞多得). We hope that this young boy, is only an exceptional case in thousands of Hong Kong Children.Link

There's more - click here to read the web version

Healthcare fail...Foot slimming operation for designer shoes...

The strange places healthcare can go wrong.

Lust For Designer Heels Drives Woman To Get Unnecessary Foot-Slimming Operation

At age 20 Hannah Bailey got a painful,$8,000 foot operation paid for by Britain's Ntaional Health Service because she was in excruciating pain — if you count the psychological trauma of not being able to fit into designer shoes as "pain," which no sane person would. The Daily Mail reports that Bailey, who is now 23, recently admitted that she lied to her doctor to get a free operation.

US v HK

The US House passed emergency short-term legislation which cuts spending by US$4 billion (HK$31.2 billion), which will be followed with another bill to set spending levels through end of the current budget year. Meantime, the Hong Kong Government, on the recent HK$6000 return to perm residents 18+ exceeds the initial HK$24 billion cost projection, and now amounts to HK$40 billion (US5.1 billion).

Hong Kong, no doubt, is in an enviable position. In 2008, Hong Kong's fiscal savings to GDP was over 50 percent, and this year, it's over 70%. Normally, the suggested level is 30 - 50 % GDP, but we're going for teacher's pet. Let's break down all the billions.

Capital Investment Fund  - HK$516.7 billion
Exchange Fund - HK$592.2 billion,
Statutory Bodies - HK$76.6 billion
Loan Fund  - HK$18.5 billion
SFC - HK$6.7 billion
More to be added later - yes - there's still more.

But for all of that, the city still inherits the Fed's fiscal policy, inappropriate for local conditions. The Hong Kong dollar is pegged to the USD which continues to hold less of a likeness to the Hong Kong economy. The weak USD and QE fuels Hong Kong's inflaton and property prices, as does investments coming in from China.

Tsang warned of the tightening of both these leaky faucets when he was defending his previous budget (not the new budget a la populistemode). Although Tsang alluded to protecting residents from inflation by not releasing cash, he made an about turn one week later. Let's see what the fallout will be (not speaking of  the Government's opinion ratings and the changes in society to Government's already weak stance).

Whatever it is, it should not amount to much. The most expansionary budget in years, these handouts will hardly affect Hong Kong's inflation, which as mentioned above, is not based on internal factors. Food prices will continue to go up, other jurisdictions CPIs will continue to trend that way, and a strong yuan and weak USD are the main causes of Hong Kong's inflationary pressure. Estimates are that at least half of the handout will be saved anyway.

Even though economists are saying its nothing more than a drop in the bucket, these handouts are like little drops of poison in the way they are changing residents expectations. More on this later...

How do you spend $6000?

People are already talking about how to spend the handout. There's no going back now, handouts have become the norm and will be expected...What can the Gov do now but keep on giving? If the politicians just held out a bit longer, perhaps the public could have got a bit more given how spineless this is looking. The massive redistribution of wealth will be covered later, but you have to be amazed at how quickly this turn around was!

Are they so worried about protests? And, how long will 6K make Hong Kong people happy for, before they start noticing the same problems getting worse? By the looks of today's facebook and twitter posts, people are very happy and have forgotten how ill-conceived this has been from the very beginning.

All focus on happiness on future prospects and spending so far (until the technicalities of dishing out the 6K is met) except for the small group of non-residents who I hear are thinking about staging protests until they get $6K too.
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Some want to take vacations, and already there are some groups dedicated to charity, http://www.facebook.com/home.php#!/home.php?sk=group_193789920643573&notif_t=group_added_to_group 

(LRI wants to add you can also donate it to the Institute - now there's a thought )

Hat Tip - get back up and running

Thanks for those who asked us to keep blogging, and also for the heads up on the integration not showing up, but we are now up and running smoothly. If there was ever a market to rejoice in for having too many choices, it would be the internet. Lion Rock has brought back the infamous blog - with the most read article having been on controversial tobacco taxes - you can also look forward to continued commentary on the state of Hong Kong affairs, the economy, and of course, liberty.

Watch this space...and always feel free to comment.

MPF back tracked

John Tsang just announced the administration will withdraw the plan to inject HK$6000 into MPF accounts. Instead, the Government has decided it will just hand it out to permanent residents aged 18 or above. More on this later...

Also, in what is a vast improvement for families, the Government announced that salaries tax reductions would be up to 75% for the coming year. The Hon Fin Sec Tsang made these announcements after meeting with awmakers this morning. With public support and opinion polls low, legislators had enough weight to threaten voting against the budget unless aspects were changed.

Budget woes and MPF

Recently, Hon Fin Sec John Tsang has said that he will consider other measures in this year's budget. The budget, at best, hasn't been received well by the public, noted through numerous demonstrations and protests at the Government House and LegCo. Like many of us, LegCo has raised concerns about the plan for a one-off injection of HK$6,000 into Mandatory Provident Fund retirement schemes. Their cause for worry is that recipients couldn't immediately use the funds given they would be locked up in the MPF for years.

Real cause for worry is that the MPF is a waste. With such high administrative and management fees, the (opportunity) cost to account holders is high and contributions forced by law into the MPF, where only fund managers have something to gain, could be better invested somewhere else. If there were ever a time for an injection (grating against the tradition of Hong Kong's laissez faire principles in what amounts to a redistribution of wealth), it would have been during the financial crisis, after the Government forced your salary into MPF accounts, and couldn't ensure it's value.

Estimates are that higher fees (administrative costs are ~1.92%) reduce future returns by as much as a third. Therefore, theHK$6000 injection actual value is less by at least one thousand dollars as a result of the high administrative costs. From the HK$24 bn injection, fund companies receive roughly (.02 x 24bn) HK$480 million. There are estimates that administration costs have already made fund companies HK$33 billion. In essense, you pay HK$13 K from your MPF acocunt just to have one.We're glad that political parties and individuals see eye to eye with Lion Rock on this, and further, that Tsang is willing to take a closer look.

See more writing on MPF from Lion Rock's website and the recent article below: 

Extra MPF cash only benefits fund managers
March 1, 2011
SCMP

Handouts have remained the norm in the government's yearly budget, thanks to a surplus. And, with large fiscal reserves, it finds itself deep in a quagmire of political hypersensitivity, pressured to portray its measures as returning funds to residents. Rather than tax breaks, erroneously perceived to aggravate inflationary pressure, the government suggested a one-off MPF injection of HK$6,000 into all accounts. The logic that, with high inflation, it was safer to make use of the Mandatory Provident Fund is highly questionable; Hong Kong's inflationary problems are a monetary phenomenon, imported from the US. 

An additional HK$6,000 in our pockets would not have significantly increased inflation; instead, it would have made life easier for those having a difficult time. If the government logic is applied, Hong Kong would have been in deflation given that last year's IPOs absorbed approximately HK$480 billion of funding in 2010 (20 times the MPF proposed injection). Now, MPF funds sit useless and losing value.

The MPF, like inflation, acts as a regressive tax and is thus a hypocrisy, forcing residents into arrangements with certain financial institutions. Collusion is evident in that the government forces salary earners to pay into certain funds, cared for by certain banks. It is a tragedy that, regardless of the salary earner's economic situation, their own fiscal choices are cast aside.

Whether it is someone's relative who needs expensive medical treatment, parents who wish to send their children to study abroad, or young professionals who want to make a down payment on a property, the government forces these income earners to buy a fund where only the fund managers have something to gain.
Worse, the HK$6,000 injection faces the same eventuality as all funds thus far contributed: high management fees and, due to a lack of competition, lower rates of return. Should the contributions which employees are forced to pay into the MPF be freed up, people could look at other investment vehicles and competition would rush in, offering 2.3 million workers better options. And returns on other investments should not be underestimated given the relatively poor rates of return and high administrative costs of the MPF accounts.

Legislators and the government supported lifting the minimum income level so that low-income workers could be spared the mandatory contribution, but discussion concerning the other two million workers who remain burdened was stymied last year.

Clearly, the policy agenda for the MPF has expired. It was implemented to save the government from future expenditure, making it mandatory for people, who wouldn't otherwise, to save for a rainy day or retirement. In the mid-1990s, in MPF debates, many legislators had the foresight to claim that businesses would be happier with the MPF than residents. Now is the perfect time to start getting rid of the "mandatory" in the Mandatory Provident Fund.

Nicole Alpert is a research associate at the Lion Rock Institute, Hong Kong's leading free-market think tank

Hong Kong Trends - Minimum Wage and Unemployment

HK Economic Trends was published on 28 Feb, from the CSD. Page 3 looks at happy figures for unemployment in Hong Kong, said to be the lowest in Hong Kong's recent history.

Watch this space, however, for the minimum wage to have its effect on unemployment. For Oct to Dec 2010, unemployment in "Retail, accommodation and food services" was the highest, over a percentage point more than in other industries, and Hong Kong can expect that trend to continue.

Payrolls increased across the board, and with economists predicting at least 100,000 people out of work (and unfortunately, now perhaps more; the undefined law created the consequence of surprising businesses with greater payments than they imagined with the $28 rate/hour, translating to even higher unemployment forecasts), looks like the unemployment rate in this sector is set to further increase.

Food Labeling - 一畫勝千言 - Why we don't get it

A picture is truly worth a thousand words. I should've included a can of soup where the stubborn and sticky label covers the instructions to add a cup of water.

It's all a bit silly when we pay more as a result of the law and can't even view the preparation directions. Indeed, with inflation a global trend, the percentage of prices rises an additional ~5 percent on top of inflationary pressure due to labeling restrictions, extra manpower to replace stickers, words, and marker out statements. The labeling law did seriously restrict consumer choice in that ~10 percent of products have disapeared from the shelves, leaving customers waiting for their products to arrive and some whose distributors wouldn't provide the labeling information to due to extra costs.

That said, the grocery stores and gourmet boutiques seem to be doing a great job of inviting new players into Hong Kong's market to regain what was lost, for instance, in this photo, a marinade sauce from Christchurch, NZ (and due to recent events there, hope they are well).

All this, and most people don't read those food labels anyway, save for perhaps their ingredients. A recent HKU study found that mostly no one can name all the key nutrition categories required by a labelling law, and just 13 percent look at the label.

Blog continues as... blog

While the Institute's website was upgraded, Lion Rock often published articles here for discussion. Now, most of our articles, activities and commentary can be found on our website, www.lionrockinstitute.org.

Finally, the blog's purpose can be that, of well, a blog. So watch this space.