Friday, 19 September 2008

A great semi-final tonight!

There's a big semi-final on tonight, a tantalising prospect, a team at the very top of its game taking on a team of battlers who've played above themselves for most of the year.

Yes, in tonight's AFL semi-final Geelong, my team (go the Cats!), takes on the Western Bulldogs at the MCG -- the only semi that matters a damn tonight. 

You can watch it on Sky Sport 3 from 9:30pm, and read all the coverage you need here at the Real Footy site. 

Go the Cats!

UPDATE 1: Oh yes, good luck to all you followers of that five-tackles-and-a-kick sport, but don't be disappointed when you (re)discover that local leaguies  have no ticker. 

UPDATE 2: And I'm told the second AFL semi between Hawthorn and St Kilda will also be shown live on Sky, tomorrow night at the same time.  Looks like we all get to kick a goal.  ;^)

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Top NOT PC, 5/9 to 19/9

AnotherCocktailBarman Yes, it was a busy few days in Fiji for your favourite friendly blogger (thanks for asking), but the work still got done.  Here's what you rated here over the last fortnight:

  1. National environmental nonsense
    "If you notice this notice, you will notice there is no notice to notice."  That pretty much explains the big wet no-change-at-all that is National's environmental policy.
  2. State Police
    The non-independence of NZ's police proceeds apace.
  3. A tale of two speeches
    That was a great speech from Sarah Palin -- and it's still got the world talking -- but what about her other one?  How scary is that!
  4. "Behold, what a wonder is man!"
    Stuff mediocrity worship, just look at the power of the human mind!
  5. Who's for a poke in the eye, then?
    There's only one way to really and truly waste your vote ...
  6. Can't fail, won't fail, must fail
    Government bankers still think the magic salve of printed money can turn stones into bread, and snatch miracles out of disaster.  And guess who's gonna pay for their error?
  7. Just scratching a living in paradise
    PC staggers out of the bar to analyse why Fiji is a basket case, but why nonetheless there's some grounds for hope.

Enjoy!  And don't forget to check out the latest Objectivist blog roundup at Titanic Deck Chairs, which includes Nick Provenzo's follow-up on the controversial 'abortion' post that got anti-abortionist Palin supporters so riled up.

Beer O’Clock: The Beer Store

Regular beer correspondent Neil Miller from RealBeerNZ comes both to praise NOT PC readers, and then bury you ... in good beer.  Read on.

NOT PC readers are, by definition, a discerning and demanding bunch. While these semi-regular Beer O’Clock columns attempt to educate and expand drinker’s beer palates, there are always some questions. For this blog, the most common questions are:

    1. How come Steinlager gives me such a bad headache?
    2. How come you don’t apply Ayn Rand’s writings to beer tasting enough?
    3. How much is Lindsay Perigo’s 0900 number per minute?
    4. That beer you were writing about sounds good, but where the heck am I supposed to find it?

I don’t even want to speculate on question number three, but the answer to the fourth question just became a whole lot easier with the successful launch of The Beer Store - New Zealand’s on-line specialist beer supplier.

The Beer Store currently has over 300 boutique beers from New Zealand and the world including many which are impossible to source even in beer-rich Wellington. Most of the beers ever covered in Beer O’Clock are available at the Store. If they are not – just ask. The range is expanding daily.

In my first order, I picked up a six-pack of Croucher Pale Ale and a six-pack of Dux de Lux Nor'Wester. Next time, I can't go past the Brew Moon Hophead IPA - I haven't seen that brew here for years.

The order process is simple enough even for me to use (which means it must be very simple) and, despite placing my order late on Wednesday afternoon, the beer arrived in a robust cardboard box the very next day. It would take a phenomenally determined courier to damage the beer in this kind of packaging.

One of the very nice touches about the site is that provides quite detailed information on every beer. That takes away a bit of the guesswork about what you are ordering.

I was hugely impressed with the whole Beer Store experience from start to finish.  You will be too.

Cheers, Neil


$250 billion worth of panic.

The world's central banks are in a panic this morning, and the extent of their panic can be measured: $250 billion worth of panic.  That's how much they're quaking.  That's the amount of money six of the world's central bankers are printing up right now to spray over the world's markets in another vain attempt to prop up the system that all their high-strung economic theories told them was impregnable.

$250 billion worth of further inflation that we're all going to have to pay for, on top of all the other "credit injections" and bailout money dropped on world markets like manna from a non-existent heaven.

$250 billion manufactured out of thin air.

$250 billion that will do nothing to make bad loans magically disappear.

$250 billion worth of counterfeit capital that will have to be paid for, inescapably, out of real savings, yours and mine.

$250 billion that will do precisely nothing to allay the profound structural imbalances that government meddling, government regulation and government central banks have made to the structure of the world's capital, because while government central bankers tinker with the effects of the "secondary depression" -- the turmoil in the markets that is currently making headlines and causing politicians everywhere to blame capitalism for the damage they and their central banks have done to it -- the "primary depression" which is the cause of all the turmoil is still unaddressed -- and until it is, says Antony Mueller in today's Mises Daily article, the chickens of failed economic theory will keep coming home to roost.  This is not a "cyclical adjustment" he argues, "The current economic disaster is the result of the combination of negligence, hubris, and wrong economic theory":

     For decades, an economic and monetary policy has been practiced based on the illusion of, "It doesn't matter." At first it was, "Deficits don't matter." From that, the policy of "it doesn't matter" got extended to money creation, the credit expansion, the stock-market bubble, and the housing boom. Now, we're being told that buying financial junk by the central bank to beef up banks and brokerages also doesn't matter.
As a byproduct of this mindless economic and monetary policy, financial market operators, too, have lost their heads. Trusting the official cheerleaders, investors hold on in the trenches until they will have lost their last shirt. Economic weakness is spreading around the globe. There is no new spurt of economic growth in sight. Yet many investors stay put because they have been conditioned to believe that government will bail them out.
The current financial crisis is not of a cyclical nature. The financial turmoil is the symptom of the structural imbalances in the real economy. Over decades, expansive monetary policy has gone hand in hand with implicit and explicit bailout guarantees, and this has distorted the process of capital allocation. Under such perverted conditions, those investors will win most who cast away the restraints of prudence. It is a game that can go on for a long time — up to the point when the irrationality has become systemic...

A profound restructuring of global capital has become unavoidable. Such a process is quite different from a recession in the traditional sense. In contrast to a sharp and typically short-lived recession, when, after the rupture, business as usual can go on, the restructuring of a distorted capital structure will require time to play out. Rebalancing the distorted capital structure of an economy requires enduring nitty-gritty entrepreneurial piecemeal work. This can only be done under the guidance of the discovery process of competition, as it is inherent in the workings of the price system of the unhampered market.
Anticyclical fiscal and monetary policies are of no help when it comes to the daily toil in business to work towards reestablishing a balanced capital structure. The so-called income multiplier won't work, and lower interest rates won't stimulate spending. On the contrary: these policy measures only make the task of the entrepreneur harder.
    The difficulties ahead arise from the problem that business as usual cannot go on under conditions of a credit crunch, which has its roots in the distortions of the economy's capital structure. Thus, even if the financial market turmoil were to settle, there won't be the simple resumption of the old ways of doing business. The belief that, after the financial crisis is over, the real economy can reemerge unscathed, is probably the greatest error that many investors share with the policymakers.
As a result of the bailouts and the socialization of the mortgage agencies, the financial system is now fully infected with moral hazard. The disastrous effects of these government interventions will show up soon. The major task of bringing the capital structure in order is still ahead and more pain is in the waiting...

The pain will continue as long as the primary causes are left unaddressed, and will be exacerbated severely if misunderstood as the result of "deregulation," a nonsense only a presidential candidate would be dumb enough to suggest, and if applied can only delay the necessary "nitty-gritty entrepreneurial piecemeal work" required to restructure the world's capital markets to reflect real price signals in an unhampered market.

UPDATE: The good chaps at NZ's Foundation for Economic Growth tot up the total bill:

    The USA has now pushed nearly US$1 Trillion out of the helicopter to stop the economy from failing. $168 Billion refund to taxpayers, $85 Billion to AIG, $100 Billion to each of Fannie and Freddie and $29 Billion to Bear Stearns - pity about poor old Lehmans. Plus who knows how many billions into the various stressed banks around the country.
    Where does all this money come from. Is the Federal Reserve really worth that much that it can just parcel up $1 Trillion and hand it out.
    Of course not. This is just more debt on which taxpayers of the future will have to pay interest...

And of course, this is US$1 Trillion plus the overnight bill. That's a lot of corporate welfare.

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Don't blame "deregulation," dickhead

Sometimes someone has to point out the obvious to all the morons who insist the economic problems currently being exposed are due to "deregulation."  Morons like John McCain, who's going to "reform" Wall Street, he says, and "fix" the deregulated financial system. Tyler Cowen does the job today:
    THERE is a misconception that President Bush’s years in office have been characterized by a hands-off approach to regulation. In large part, this myth stems from the rhetoric of the president and his appointees, who have emphasized the costly burdens that regulation places on business.
    But the reality has been very different: continuing heavy regulation, with a growing loss of accountability and effectiveness. That’s dysfunctional governance, not laissez-faire...
    In the meantime, if you hear a call for more regulation, without a clear explanation of why regulation failed in the past, beware. The odds are that we’ll get additional regulation but with even less accountability and even less focus on solving our very real economic problems.
Don't be surprised if this point has to be made and re-made many, many times.  The history of laissez-faire is a history of it being falsely discredited for the real flaws of politics. Says Ayn Rand:
If a detailed, factual study were made of all those instances in the history of American industry which have been used by the statists as an indictment of free enterprise and as an argument in favor of a government-controlled economy, it would be found that the actions blamed on businessmen were caused, necessitated, and made possible only by government intervention in business. The evils, popularly ascribed to big industrialists, were not the result of an unregulated industry, but of government power over industry. The villain in the picture was not the businessman, but the legislator, not free enterprise, but government controls.
Expect the current financial collapse caused by the explosion of Greenspan's rocket fuel -- who even the most braindead presidential candidate would have to notice was a government employee -- will nonetheless continue to be blamed on the nonexistent "deregulation" of the financial markets,  no matter how many times the fallacy is exploded.

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'The Tall Building Artistically Considered' - Louis Sullivan

Wainwright Building, St. Louis, Missouri, 1890-1891, Louis Sullivan (right) Guaranty Building, Buffalo, New York, 1894-1985 (left) Without Louis Henri Sullivan, the world's skylines would look very different. The tall building grew up on the American prairies with the invention by Otis of the elevator, and by Chicago engineers of the tall steel frame. 

The artistic problem was how to express this new thing. With no historical precedent on which to copy (most architects were no more original then than now) for years architects simply piled storey upon storey, Gothic upon Classical, cornice upon portico.

 The results were ... dire. It was Frank Lloyd Wright's mentor Louis Sullivan who realised not just that this would not do, but that what was happening violated a fundamental law. Like everything in existence, a building should express its nature, he said. "What is the chief characteristic of the tall office building?" he asked. "It is lofty. ... It must be tall, every inch of it tall. ... It must be every inch a proud and soaring thing, rising in sheer exultation . . . from bottom to top . . . without a single dissenting line." Said Frank Lloyd Wright some years later:
When buildings first began to be tall, architects were confused – there were no precedents – they didn't know know HOW to make them tall. They would put one two or three storey building on top of another until they had enough. 
.... I remember Leiber Meister [Sullivan] came in one afternoon and threw something on my table – it was a 'stretch' with the Wainwright Building in St. Louis designed in outline upon it. He said: “Wright, this thing is TALL. What's the matter with a tall building? Well, there it was, TALL!” After that the skyscraper began to flourish – TALL.
With the Wainwright Building, a simple ten-storey speculative block, Sullivan had discovered how to express the tall building, and into the world was born a new thing.

With the Guaranty Building four years later (right) he came to maturity in that expression: the verticals expressed, the horizontals recessed, the tripartite division, the efflorescence of ornament -- "just enough to allow the bones to show." From these two, for good or ill, all skyscrapers would derive. And with these buildings and his statement of the underlying principle of architectural design, Sullivan's place in history was complete.

Said Sullivan in 'The Tall Building Artistically Considered' : All things in nature had shapes, forms, and outward appearances "that tell us what they are, that distinguishes them . . . from each other." So too it should be in a building. Form, he said, should follow function. 

And with that, two new things under the sun was born: a dictum that would ring through the ages, and that proud and soaring thing; the tall building. 

LINKS: Louis Sullivan - What’s the Big Idea? - Peter Cresswell 
Master of the skyscraper - David van Zanten

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Thursday, 18 September 2008

What's the big fat Winstonian deal here?

While the world's markets burn -- while McBama and O'Cain make promises making them indistinguishable from each other -- while Helen Clark campaigns on "trust" that she's already demonstrated she's lost ,and John Key promises to "change" New Zealand when he's already promised not to make any change that will in any way make a difference -- while all this happens, New Zealand's media is still fiddling around with Winston Peters, his dancing monkey, and the question of which dog ate whose homework, and in which motel Brian Henry might have been when it all happened.'

Bizarre, don't you think?

Bear in mind here that the chief concern of the politicians questioning Winston on the privileges committee are not that he or his lawyer lied to us, their employees; they're not even concerned that they lied to the Electoral Commission, their referees; all that concerns them is that they might have have lied to them, the politicians, and got away with it.  In the land just south of Molesworth St, that's the only 'crime' they recognise from a colleague.

But what's the real point with Winston for the rest of us?  As Nigel Kearney asks, what's the big fat hariy deal here:

    Am I the only one who doesn't care what happens to Winston Peters?
    He lied and he got caught. But he didn't lie about something that makes any difference, in the overall scheme of things. It's nothing compared to Cullen saying tax cuts are inflationary when he knows it isn't so.
    Winston also broke the law by failing to declare donations. But a law that requires parties to tell the government who supports them is dangerous and wrong. We wouldn't want it in Zimbabwe so why should we want it here? Governments are vindictive towards people who oppose them so the right to participate in the electoral process absolutely must include the right to participate anonymously.
    Clark's decision to back Peters doesn't tell us anything about her ethical standards that we didn't already know and was not evident from her decision to make Peters a minister in the first place.

So why should we care?  Anyone?

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Today medical students, tomorrow ...

John Key expects taxpayers to pay medical students to go to school.  He expects those with very little to be taxed to subsidise those who can be expected to earn a lot. 

This is presumably what it means to be "ambitious for New Zealand" -- to pick the pocket of Peter just to fill the pockets of Paul.

Subsidies have been the hallmark of National Governments past; they will clearly also be the hallmark of would-be National Governments of the future.

It's like the bad old days all over again, isn't it.

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Stories from the street

Graffiti sometimes offers more profundity than professional so called punditry.  Below is a picture of the head of Lehman Brothers Dick Fuld, nickname "the Gorilla - the brawler known as the scariest man on Wall Street," posted outside Lehman offices for staff to post their comments on.  Two that caught my eye catch the truth of the Keynesian crisis perfectly:

Greenspan Dot Com Bailout Led to Real Estate Bubble


Austrian Economics Was Right!


So true, so sadly true.  The New York Times traces the timeline of the Fed-created boom for which we're now experiencing the bust, and of which we've only just seen the beginning.  How do we know it's not over?  Just look at the numbers.  An $85 billion bailout for AIG.  As Jeffrey Tucker notes, $85 billion was the size of the entire federal outlay 50 years ago, as measured in current dollars.  Meanwhile, as the confidence virus spreads, the UK government was contemplating nationalising the Halifax Bank, just like they previously seized Northern Rock and the US Government seized Fannie and Freddie, a bank with a £660bn balance sheet, a number representing about 40 per cent of UK's GDP!

These are big numbers being used to mop up the bubble created by Greenspan's counterfeit capital.  But the bailouts themselves are using the same counterfeit capital -- truckloads of the stuff -- they're only extending the bust and rewarding the failures of the fractional-reserve pyramid, and with credit created from where? 

From thin air. 

Says Austrian economist Frank Shostak, the "rescue" is illusory:

    The seizure of Fannie Mae and Freddie Mac by the government cannot help the housing market or the economy. Most people hold the mistaken view that the government has extra real resources that can be used in emergencies. This is erroneous. The government is not a wealth generator; it can only consume and redistribute real wealth. All that they can do is redistribute the existent wealth by means of taxes or by means of printing money. (Remember that it is real savings that makes real economic growth possible and not money.)
    The act of real wealth redistribution can only weaken wealth generators and make things much worse. Pushing more money into [Fannie and Freddie and the like] cannot set in motion an increase in lending if the pool of real savings is under pressure. After all, the essence of credit is not lending money as such but lending real stuff. Lending amounts to a transfer of real savings from a lender to a borrower by means of the medium of exchange, i.e., money.
The existence of banks enhances the use of real savings. By fulfilling the role of middleman, banks make it easier for a lender to find a borrower. When a bank lends money, it in fact provides the borrower with the medium of exchange that can be employed to secure real stuff that is required to maintain people's lives and well-being. It is therefore futile to urge banks to lend more if real savings are not there. Likewise, it doesn't make much sense to suggest that the Treasury or the Fed could somehow replace nonexistent real savings. Again all that such actions will produce is the depletion of the existent pool of real savings.

What is needed to revive the economy is a growing pool of real savings, not the denuding of real savings by the printing of more dollar bills backed only by the ability to tax.

The bust is not over.

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Don't let it happen again

I don't usually run ads, but the flaws inherent in the government-structured economy don't always bite back with the vengeance they're now inflicting:

Content2 Content3 Content4

For a short summary of what governments did to turn the 1929 correction, itself a product of the Fed's credit-created bubble of the twenties, into a decade-and-a-half long slump, Lawrence Reed's 'Great Myths of the Great Depression' [sixteen-pages in PDF] is what you need to read.

What are you waiting for?  There are politicians already out there who intend to to use the current crisis to to inflict the same sort of damage.

(And, for those who know Rothbard's reputation, this is one of his books that is worth reading.)

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Just scratching a living in paradise

It was the hand plough that got to me most.  There on the main road between two of Fiji's main cities, just minutes from a major town in an area locals proudly call 'Fiji's Salad Bowl,' a man was scratching a living -- or trying to -- on a small handkerchief of land, putting his body through exertions for which it was never intended simply to keep himself and his family somewhat fed, partially clothed and trying to pay the rent on this field and the tiny shack that occupied one corner.

It was like something out of the Middle Ages, which is a pretty fair description of the near-feudal system of land tenure that governs nearly ninety percent of Fiji's land, and which keeps most of the population in poverty -- from the 'squatters' themselves who struggle to survive, to the indigineous squattocracy who can take only pennies from their tenants, to the ten-percent of the population who've been driven from their short-term leases (the only form of ownership allowed to Indo-Fijians) and who now live in shameful conditions in Fiji's cities, excluded as they are from the "mainstream" of Fijian economic life by racist laws, and a racist constitution.

Ironically, the "system" so described was put in place by the paternalistic first colonial governor, Arthur Gordon, who wished to ensure that Fiji didn't turn into New Zealand.  An inspection of the relative standards of living demonstrates just how well he succeeded.

What he wanted was to protect native Fijians from the winds of the modern world. What he did however was to remove any possibility of Fiji itself  ever growing up and being part of that world.  What he introduced was a racially-based constitution dominated by an hereditary based Great Council of Chiefs, and a system of land tenure for most of the country that ensures no one has any genuine rights, and no possibility of economic improvement.  In 1913, US Justice Joseph McKenna declared,

The conception of property is exclusive possession, enjoyment and disposition [by which is meant to include the right to sell].  Take away these rights and you take all that there is of property.  Take away any of them and you take property to that extent. 

Three decades earlier, Gordon set in place a system of property in Fiji that ensured real property was taken away from everyone. One lot was given just the shadow of ownership, and the other was given just the shadow of possession.  Of real property rights, no-one got either.  If public ownership means no public accountability, then how about no real ownership.

squatter03 Imagine if secure title to land existed only in 8.2% of this country, New Zealand.  Imagine if most of the balance was Maori land, with the same system of collective 'ownership' that Maori landholdings have; with all the restrictions on individual ownership that make it impossible to sell, borrow against or develop -- with all the false pride that the ruling chiefs like to demand for themselves -- and with the added hindrance that all this land is 'administered' by bureaucrats from a Native Trust Lands Board, who lease small plots out short-term to smallholders like my friend above who make barely enough to keep their own bellies fed, let alone having enough left over to sustain a landlord, and who distribute these meagre 'earnings' to tribal chiefs to distribute it as alms.

It makes the sort of impoverished shanties you see on Northland Maori land look positively luxurious -- and if the same mad land law had been effected over nearly ninety percent of the country here, as it was in Fiji, then those same shanties would be here too over most of the land.

But then add something else as well to the Fijian picture: these small short-lease-holders are primarily the descendants of "girmit" indentured workers brought over from India at the behest of colonial governors from Gordon on, with few rights either electorally or in property, and the holders of their leases are primarily natives, resentful of the low rents the Native Trust Lands Board distributes, and of the immigrant population who occupies 'their' land with so little to show for it.

One side is barred from decent access to their own land, while the other is refused secure rights, and barred from any means of securing the capital or landholdings that might allow properly industrialised agriculture to develop. (You can read here something of the history and details of Fiji's feudal land tenure sustem.)

No wonder everyone is resentful.  No wonder there's a 'coup culture.'  No wonder there's so little prosperity, and we witness -- if our eyes are open to it -- the tragic existence of Fiji's squatters, mostly dispossessed Indo-Fijians who racist law has barred from owning land, and who previous governments have left at the mercy of shifting racial, economic and political tides, and of the indigenous Fijians who aren't politically connected, for whom a lifetime of poverty is the only expectation.

No wonder one of the main Fijian exports is people -- whether sportsmen or soldiers or as emigrants just getting  the hell out -- and one of the main imports is tourists -- who avert their eyes from the poverty on the way to resorts on (mostly) freehold land all along the beautiful coastline, away from the poverty elsewhere.

Despite the condemnations of Pacific leaders like Helen Clark, who has her own racist laws and shifting racial, economic and political tides to navigate, all the evidence I've seen suggests Fiji's interim Prime Minister Frank Bainimarama might be on the right track, and much of the country seems to understand that.  Writing last year in January's Time magazine, Elizabeth Keenan argued::

    When military commander Frank Bainimarama seized power in Suva on Dec. 5, he was instantly denounced by Australia, New Zealand, the U.S., the E.U., the U.N. and the Commonwealth. Exiled Prime Minister Laisenia Qarase continues to vent outrage by phone from his island village, but his countrymen don't seem to be rallying. Soldiers at checkpoints receive abuse, but also smiles, handshakes, food and flowers. Some staunch democrats who condemned George Speight's botched coup in 2000 find themselves endorsing the aims of this takeover, if not the assault rifles that made it possible. The Methodist Church and the Great Council of Chiefs, bastions of indigenous society, have urged Fijians—including Qarase—to support the multiracial interim government "for the betterment of the nation." Writing in the Fiji Times, Catholic Archbishop Peter Mataca called Australia and New Zealand's shunning of the Bainimarama administration "regrettable and shallow." Some Fijians, he wrote, believe democracy and the rule of law "were abused and circumvented long before the military ousted the Qarase government."
In Fiji, it seems, not all coups are equally offensive...
    Qarase's elected government was seen as caring most about the happiness of indigenous Fijians. Bainimarama's force-backed government aims to make Fijians of all races happy. If—and it's a huge if—he can implement his idealistic program, he might just have pulled off the coup to end all Fiji coups.

From what I've seen, that's his explicit intention.  Sure, progress hasn't been as fast as anyone would have hoped -- allowing Clark and Australia's Kevin Rudd to posture as 'democrats' by berating Bainimarama for not yet holding free elections -- but progress has been made, even as measured by 'Fiji Time,' and a 'Draft People's Charter' that's not all bad news is now touring the country gathering support.

The Charter is backed by some hard-headed analysis, underpinned by recognition, for example, that "The economic growth rate in Fiji has been in long term decline since Independence – and the rate of decline is getting faster." 

    There are [many] factors that weakened the pace of economic growth... The key among these other factors include a major property rights problem relating to the availability of leasehold land, the lack of investment in infrastructure, incompatible and inconsistent policies in some areas, and a weak legal environment for business.
    Many of these latter issues raise questions about the role of the Government in the economy. In the view of many people, the Government is over-dominant in the economy; i.e. it should reconsider its role if it wishes to achieve stronger growth, greater equity, and sustainability.

I am one of those people.  Government administers most of the land, most of the business and gets to allow or disallow most of the enterprise.  No wonder there isn't much.  Bureaucratic management works as badly in Fiji as everywhere else, and enterprise is further stifled by the lack of secure property rights removing one of the primary means by which feudalism is transformed into capitalism. 

Property rights are more important than democracy.  No question.  What's crucial in Fiji is not democracy per se, but real secure property rights that will allow real capital to transform the lives of both squatters and squattocracy.  Fijian-Indian activist Thakur Ranjit Singh argues that "democracies that are devoid of or lacking in granting freedom, rights and equality to all its citizens and those without social justice are not worth defending. Qarase's regime that Bainimarama removed was an epitome of such a democracy..."  Singh argues that military commander Commodore Voreqe Bainimarama had saved Fiji from becoming "another Zimbabwe" with serious abuses of human rights and social justice.  Yes, there's been beatings and violations of free speech, but it's worth making the point that if he's to be believed, and the more I've seen of him the more I do believe him, then Bainimarama is genuinely trying to right a real wrong: the wrong of corruption in Government, and of a racist Fijian Government system that has in the past favoured indigenous, well-connected Fijians over other citizens -- and it's worth noting that at least some of the resistance to him is along racist lines. This post and comment for example at The Rotten State of Fiji blog gives some idea:

    Frank has gone completely mad! ...
    A lot of stupid Indians here continue to support Frank and his cronies. This isn't helped by the vengeful mob of Indians settled overseas in Australia and NZ. In the media, they continue to support Frank. In fact, I reckon, Australia and NZ should send those lot back to Fiji and ban them from returning. (Comment: I am with you...this coup was pro Indians and these stupid lot should be sent back to their motherland ... just like Butadroka said, quote Indians will always be Indians...unquote.)
Tim Wikiriwhi supported argued in The Free Radical last year that Bainimarama's coup wasn't just another power grab.
    Bainimarama’s coup is the complete opposite of the previous three coups, each of which attempted to establish absolutely the UN’s apartheid agenda for "indigenous rights." Whereas Rabuka and Speight were acting to cement the racist laws that raised indigenous Fijians over other Fijians, Bainimarama is a defender of the principle of equality.
Bainimarama said he was compelled to act against the government because corruption had flourished under Qarase, whom he himself appointed after the 2000 coup, and because of proposed laws that would grant pardons to plotters in a 2000 coup and hand lucrative land rights to indigenous Fijians at the expense of the large ethnic Indian minority

Wikiriwhi points to words such as these from the Commodore: “We want to rid the constitution of provisions that facilitate and exacerbate the politics of race,” arguing that

    In seeking to put a permanent end to the racist Fijian electoral system and to permanently abolish laws that grant favouritism to indigenous racists, he is in my estimation worthy of praise and support...
In seeking to permanently abolish laws that grant favouritism to indigenous racists, you're unlikely however to attract the support of the racists themselves.

And what point is democracy anyway without individual rights?  As author Tom Bethell points out, property rights and the rule of law must come first.  What you need first is the rule of law as it was developed in England -- and then denied to England's new subjects in places like Fiji by governors like Gordon.

    If you can get that without democracy, as the Hong Kong Chinese did, maybe you are in business. Democracy, especially at the early stages of development, will only mess things up.  You don't need full liberty of speech either--they certainly didn't have it in Adam Smith's England ...
    To get the political architecture right, you must do things in the right order. It is not hard to understand that to build a house, you have to bring in and assemble the parts in the right sequence. Something like that applies politically as well. I once heard Peruvian economist Hernando de Soto point out that when the correct laws are not in place (as is true all over the Third World), and the people cannot get clear title to land, the construction of informal housing will take place in reverse order. Squatters bring furniture with them; then they put up a makeshift roof, then walls, finally if they're lucky they may get a utility hookup. Foundations are probably never built. In the same way, instant democracy disorders the political economy. Democracy is something that should come later rather than earlier.
    What is needed first is a system of law that treats everyone equally, penalizes wrongdoers, and gives security to property and its exchange by contract. This will foster a sense of justice and encourage people to be productive.

fijiWhile imperfect, it looks to me like Fiji's 'Draft People's Charter' is a step down that necessary track.  Sure, prosperity has its own problems, but as we flew back to New Zealand on Tuesday and looked down on the prosperous New Zealand landscape, it should have been clear even to the most jaundiced green eye that a land with industrialised agriculture and houses derided as "McMansions" offers a lot more comfortable existence than one -- no matter how good the coast looks in the travel brochures -- whose interior is filled with shanties and squats, and is scratched over by hand ploughs.

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Who to vote for?

      Helen Clark, John Key, and Winston Peters were flying to a debate.
      Helen looked at John, and said, "You know I could throw a$1,000 bill out of the window right now and make somebody very happy."
    John shrugged his shoulders and replied, "I could throw ten $100 bills outof the window and make ten people very happy."
    Winston added, " I could throw one hundred $10 bills out of the window andmake a hundred people very happy."
  Hearing their exchange, the pilot rolled his eyes and said to his co-pilot,"Such big-shots back there. I could throw all three of them out of the window and make 4.3 million people very happy."
    Who to vote for?
    The Pilot !

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The Robie House - Frank Lloyd Wright

robieHousepic1 In many ways the culmination of Frank Lloyd Wright's 'Prairie House' phase in both drama and spatial sophistication, the Robie House of 1908-10 is currently undergoing restoration to restore it to its former glory, before reopening as a fully restored architectural house museum on May 1, 2010. 

Story here at Prairie Mod, and more details including pictures here at the FL Wright Preservation Trust.

And more pictures here, including the original presentation sketch.

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Wednesday, 17 September 2008

Like water for oil, the market always matters

In the wake of Hurricane Ike, commentators once again are complaining about price gouging.  A commenter at the Freakonomics blog makes the perfect point:

May we speak for a minute about Ike's effect on gas prices? Everyone I speak to is irate about the perceived "gouging" and "unfairness" of raising the price of gas to reflect a shortage. I try to tell them I would rather have gas available at $8 a gallon than no gas available at $3.50 a gallon. Then it's my decision how badly I need to make that trip — no to Starbucks, yes to the hospital and so on. Even though they acknowledge the logic, they keep coming back to "but it's not fair."

I have been very interested in the studies showing perceived fairness is an innate need for human interaction. But nobody seems to be talking about the benefits to the public of maintaining SOME availability, even at high cost. Economics loses again.

Notice the difference between what happens with markets and without.  As David Zetland points out (via Paul Walker) we can see the difference starkly in the difference between oil, which even after Ike remains available at a price, and water -- which from Australia to California is in short supply. Why the difference?  Because of the "fundamentally different means and success in coping with 'shortage'.”

    Ironically, we are coping better with scarce oil — nearly 60 percent of which we buy from a broad — than scarce water, which falls from the sky....
    Why such a contrast? Because oil is bought, sold, and marketed as a commodity. Water, in contrast, is treated as a “human right” that should not be allocated by price. Because scarcer oil costs more, quantity demanded falls to equal supply.

Want water?  Pay for it. Want oil?  Pay for it.  I'll let you draw the obvious conclusions about ticket scalping.


Who's for a poke in the eye, then?

Imagine you're confronted in the street by a bully who insists you “make a choice":  "Do you want a punch in the nose, or a poke in the eye?” 

Isn't choosing either one or other wrong?  By choosing either, says the Tomahawk Kid, you are giving them your permission to do both!

So if you wouldn't make that choice, why do you vote for the lesser of two evils?  Isn't it the same?

You wouldn't do it Obama McCain -- you shouldn't do it with McBama and O'Cain -- so why do it here at home?

The only wasted vote is a vote for someone who's going to do you over.

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Warriors' scalps

They're "bloody mongrels," says the Mad Butcher of people who are willing to sell their tickets for the Warriors semi-final to people who want to buy them.

No, they're not, says moi -- as I've had to say before on previous occasions.

To the consumer, which in this case is the chap or chappess who didn't manage to buy Warriors' tickets in the eleven minutes in which it took to sell them, the scalper offers the service of offering tickets that they'd otherwise not be able to secure.

If you value my ticket to this unlikely semi-final more than I do, and you're willing to show that with ready money, then why does our voluntary trade make me a bloody mongrel, when our willing sale obviously makes you so happy?

Methinks the Butcher should rethink his outburst when he gets back from his Croatian holiday.

: Scalpers are good! Paul Walker agrees: "Ticket reselling in an open competitive retail market situation like Trade-me is a good thing for fans, not a bad thing..."

I was wrong!

It's nice to be wrong sometimes.  

I arrived back from holiday, turned on the radio -- and the first two words I heard were "Owen Glenn."  Nothing much changed in a week then, apart from more lies, more spin, and the same lack of evidence that Brian Henry and Winston Peters came up with at the culmination of the Winebox Inquiry. 

They had nothing then to justify any of their claims; they have nothing now to back up their fibs.  The dog, once again, has eaten all their homework.

But I was wrong about one thing.  I said some weeks ago that while it was obvious even then that Winston and his "blood brother" were up the creek without a paddle's worth of evidence, for the five percent or so of morons who are his target voters (which is all he needs to survive, remember) Winston's picture in the papers day after day would be all that was needed to get out and vote for him again.  "Winston isn't dying of this," I said, "he's dying for it."  
For months now he's been trying to get headlines, for anything -- anything at all --  and we all know that Winston doesn't care what he get headlines for just as long as he gets those headlines.  He knows that his voters are too dim to either know or care what those headlines are for, just as long as that stern jawline is amongst them.
But it turns out they aren't that dim.  For years, Peters has relied on the assumption that there is a five-percent rump of the New Zealand population so braindead they don't notice he's nothing but an empty windbag pedding a pack of lies.  But polls now show his party just six weeks before an election sliding inexorably under two percent, and into oblivion -- and with a similarly small number believing the derisory stories Peter and Henry have cooked up for the privileges committee, this means that the number of morons in the country is somewhat fewer than I thought.

It's nice to be proved wrong sometimes.  

UPDATE:  And it's amusing to watch some people who twist themselves into contortions just so they can try for the state of moronry -- Chris Trotter for example, who so wants to believe Winston will be there to prop up another Clark Government, he's willing to believe all this.


Black shower

The Black Power gang has lodged a Treaty claim with the Waitangi Tribunal "saying gangs exist because of colonisation."  And of course, they're right.  If not for colonisation there wouldn't be gang warfare, would there, there'd be tribal warfare.

Is that what they're complaining about?


With headlines like these below coming from the States, it's obvious that in the November elections the big issue will be "the economy, stupid." It doesn't look good, does it:

•AIG Plunges After Cut in Credit Rating Jeopardizes Effort to Raise Capital

•Overnight Interest Rate Doubles as Banks Hoard Cash on Failure Speculation

•Federal Reserve Adds $50 Billion to Money Market, Sending Funds Rate Lower

•Barclays Discussing Purchase of Lehman Assets, May Seek Broker-Dealer Unit

•Wall Street Convulsions May Further Erode U.S. Growth, Put Pressure on Fed

•Goldman Profit Slumps 70%, Biggest Drop Since Company Went Public in 1999

•Consumer Prices in U.S. Fall First Time in Almost Two Years as Fuel Drops

Yet if "it's the economy, stupid," it's clear that both US candidates are stupid when it comes to the economy.  The collapse of US markets has hit traders, bankers and politicians alike like a hurricane, and to all of them the crisis has all the hallmarks of a natural disaster.  But it's not.  It's entirely man-made -- yet despite all the primary causes emanating from government agencies, chief amongst them the counterfeit capital created by the US Federal Reserve, all the two leading candidates have to say is to waffle on about "fundamentals" about which they're both fundamentally ignorant, and to try and outdo each other in plans to further "regulate" financial markets.

Obama plans "an overhaul of Wall Street regulations, saying the subprime housing crisis and other problems stemmed in part from lack of transparency and accountability in the financial system."  McCain meanwhile promises to "reform the way Wall Street does business, and put an end to the greed that has driven our markets into chaos. We'll put an end to running Wall Street like a casino."

Of the two, McCain sounds the more economically illiterate -- but it's no more than a matter of degree -- but no less illiterate than the Bank of America CEO, who's more than happy to pick up Merrill Lynch for a song, despite being completely unable in the interviews I've heard to explain the process by which Merrill Lynch et al came to this parlous state.

Ignorance, ignorance everywhere ... yet the reason for the crisis is not difficult to identify.

The immediate reason for this economic depression, as Mark Thornton points out at the Mises Blog, "is the bust in the housing market."  But this shouldn't have come as any surprise to rational observers, any more than the tulip bubble of the seventeenth century or the South Seas Bubble of the eighteenth century would have been a surprise to rational observers of the time. 

While mainstream economists wring their hands now in dismay, Austrian economists were reporting on the housing bubble and its causes throughout the boom. As Thornton notes,

Beginning in early 2003, Frank Shostak, Christopher Meyer, Lew Rockwell, Robert Blumen, Jeff Scott, and others, including this author, were writing and lecturing about the housing bubble. We identified the cause of the bubble as the Federal Reserve and its inevitable consequences of a bust in the housing market and the overall economy.

Unfortunately, mainstream observers weren't listening. 

They weren't listening when the Federal Reserve created this latest bubble.  They weren't listening while Alan Greenspan was putting the rocket fuel of counterfeit capital into the economy.  They weren't listening when Bear Sterns was bailed out (with yet more counterfeit capital).  They weren't listening when Fannie Mae and Freddie Mac were created -- and then nationalised.  They weren't listening when the FDIC itself was created and expanded, which helped create the "moral hazard" of removing risk from those who risk your savings.  They weren't listening when the "conventional wisdom" of fractional reserve banking, which needs al these smoke and mirrors of government intervention to prop it up, was pointed out to be another Emperor's New Clothes just waiting to be exposed.  As banker Christopher Meyer points out about the fractional reserve system on which the whole banking system is now based, "there is always a bubble in the making in a world of fractional reserve."  No amount of further regulation can fix that -- what's necessary is the much wider understanding that the single greatest factor in causing booms and busts is the expansion and contraction of the money supplySee.

* * * * *

NB: I can't help but mention a local commentator yesterday about whom I'd had high hopes but who's proved himself, unfortunately, to be almost as bad as all the rest.  Trying to summarise the economic situation on National Radio's 'Panel' yesterday, Bernard Hickey said economic booms were "created by greed," and busts are always "characterised by fear" -- and since both are irrational, government regulators are necessary to stabilise the markets... 

Never has such an irrational argument for regulation been made by someone so seemingly obvlivious to all the evidence before their eyes.

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Tuesday, 16 September 2008


Yes, I'm back.  Very stressful it was.


What did I miss?