The small consequences of punishing the fabulously rich. The complexities of superannuation are quite beyond me — probably because I don’t have any. But during the debate on the changes to taxing the nest eggs of the rich (changes that apparently are turning out to be quite modest) I started wondering why there has to be any tax saving for retirement savings at all.

A paper by  US and Danish academics Raj Chetty, John N. Friedman, Soren Leth-Petersen, Torben Heien Nielsen, and Tore Olsen, Active Vs. Passive Decisions And Crowd-Out In Retirement Savings Accounts, based on 45 million observations from Denmark on savings , makes we wonder even more. For the answer to the question they ask — what happens when top income earners receive smaller subsidies for retirement savings? — is a clear “not much”:

“When individuals in the top income tax bracket received a smaller tax subsidy for retirement savings, they started saving less in retirement accounts …”

“But the same individuals increased the amount they were saving outside retirement accounts by almost exactly the same amount, leaving total savings essentially unchanged. We estimate that each $1 of government expenditure on the subsidy raised total savings by 1 cent.”

“If subsidies have little impact on retirement saving, are other policies more effective? We find that ‘nudges’ such as automatic contributions by employers have much larger effects on savings. When individuals switch to firms with higher automatic employer pension contributions, their savings rates increase significantly. Most individuals are passive savers who do not pay attention to employer pension contributions and thus do not offset such contributions by saving less in other accounts.”

And the final conclusion?

“These findings call into question whether tax subsidies are the most effective policy to increase retirement savings. Automatic enrollment or default policies that nudge individuals to save more could have larger impacts at lower fiscal cost.”

Steady as she goes. Very little change over the last week in the Crikey election indicator, with the numbers moving ever so slightly back in Labor’s favour — the victory chance now put at 13.5%.

Make sure the microphone is off. Talking before the start of a press conference, when perhaps he thought the mics were off, Uruguayan President José Mujica called Argentine President Cristina Fernández an “old hag” who was worse than her “one-eyed” late husband and former Argentine president Nestor Kirchner.

NPR reports Mujioa was heard saying on a video published by Uruguayan newspaper El Observador last Thursday that “one eye was more of a politician”. Then, for good measure, Mujica referred to Fernández as having no idea what she was doing, referencing her trip to Rome to visit the Argentine Pope Francis. “You’re not going to go to a 70-year-old Argentine pope and explain to him what’s a map, what’s mate [Argentine tea] and what’s a flask,” Mujica said.

An embarrassing moment in South American diplomacy without doubt, but perhaps not as s-xist as former Italian prime minister Silvio Berlusconi’s description of German Chancellor Angela Merkel as an “unf-ckable lard-arse“.

I don’t want to scare you, but … My complacent weekend reading was disrupted somewhat by a couple of pieces I stumbled across dealing with pandemics and things. I’m not qualified to comment on the plausibility of the points raised but the pair, listed at the end of my News and Views Noted Along the Way snippet, did have me reaching for a second bottle of red.

Back in budgies. Months of careful image management and now this! The Opposition Leader in this morning’s Daily Telegraph:

Putting a curse on you. An innovative campaign tactic in Venezuela. The country’s acting President, Nicolas Maduro, has put a curse on citizens who do not vote for him in next week’s election. At a rally in Amazonas state, a largely jungle territory on the borders of Brazil and Colombia, Maduro, according to a BBC report, said: “If anyone among the people votes against Nicolas Maduro, he is voting against himself, and the curse of Maracapana is falling on him.”

“He was referring to a 16th Century battle when Spanish colonial fighters defeated indigenous fighters decisively.

“If the bourgeoisie win, they are going to privatise health and education, they are going to take land from the Indians, the curse of Maracapana would come on you,” the candidate continued.

“Analysts say that Venezuela’s mix of Catholic and animist beliefs, especially in the south-central plains and jungles, is fertile ground for talk of spirits and curses which may otherwise seem out of place in an election campaign.”

A quote for the day on a new era in political corruption.

“New York is having awful corruption scandals. The charges involve politicians acting in such an insanely stupid way, it shatters our longstanding confidence that taking money was the one thing they know how to do well.”

— from The New York Times.

News and views noted along the way.

  • The National Digital Public Library is launched! — “The Digital Public Library of America, to be launched on April 18, is a project to make the holdings of America’s research libraries, archives, and museums available to all Americans — and eventually to everyone in the world — online and free of charge.”
  • Can we get Hillary without the foolery? — “PLEASE don’t ask me this anymore. It’s such a silly question. Of course Hillary is running. I’ve never met a man who was told he could be president who didn’t want to be president. So naturally, a woman who’s told she can be the first commandress in chief wants to be. ‘Running for president is like s-x,’ James Carville told me. ‘No one ever did it once and forgot about it’.”
  • Hunger strike at Guantánamo — “The Obama administration justifies the force-feeding of detainees as protecting their safety and welfare. But the truly humane response to this crisis is to free prisoners who have been approved for release, end indefinite detention and close the prison at Guantánamo.”
  • Evaluating Asia’s mega-regional RTA: The Regional Comprehensive Economic Partnership — “Led by ASEAN, the negotiations will include all ASEAN members and its six FTA partners: i.e. Japan, China, South Korea, India, Australia, and New Zealand. Successfully concluding this trade deal would create the world’s largest free-trade bloc with profound economic implications for members and for the world economy.”
  • Scientists decode dreams with brain scans
  • Non-embryonic stem cells: the dawning of a new era of hope — “Ethical worries have slowed medical research into applications for stem cells. But scientists like Robert Lanza have developed less controversial ways to derive stem cells from normal body cells rather than embryos and are already launching the first clinical trials.”
  • Apparently, some people can’t be bothered with food
  • Top university, a great degree — but as for a job, dream on — “A new breed of apprentice is finding greater favour with employers than the conventional graduate.”
  • Why fake ID is an American rite of passage
  • How animals may cause the next big one — “… as David Quammen puts it in his masterful new book Spillover: Animal Infections and the Next Human Pandemic: we are an ‘outbreak,’ a species that has undergone a ‘vast, sudden population increase.’ ‘And here’s the thing about outbreaks,’ warns Quammen: ‘They end…. In some cases they end gradually, in other cases they end with a crash.’ … What will cause it? Most likely, a virus. What kind of virus? A brand new one, or new, at least, to humans. It will likely be a coronavirus.”
  • Is this a pandemic being born? — “China’s mysterious pig, duck, and people deaths could be connected. And that should worry us.”