Tuesday, 17 February 2009

Wrong rhyming slang [updated]

A few weeks ago Deborah Hill-Cone mused over “whom leftists would throw their shoes at now Dubya has yahooed back to Texas.” Now she knows: it’s bankers.

Although I bet [Gordon Brown, Barack Obama], Polly Toynbee and all the rest were quite happy to take advantage of the boomtimes when their houses were increasing in value, one can't help but wonder if they are feeling some self-loathing now. When the party stops it is much easier to blame the bankers for getting us drunk than admit we are lushes.

And much easier for big-government worshippers like Polly, Brown and Barack to blame those private bankers who were simply doling out the punch, when the primary cause of the problem was the punch bowl being spiked by big-governments’ central bankers .

UPDATE: To get some idea of the role of central banks in the boom -- which has turned to bust in a big way -- and just how seriously they spiked the punch bowl, consider these three quotes from William Fleckenstein's book Greenspan's Bubbles,

Central bankers like Greenspan [and Bollard] aren't like bankers at all... Central bankers are actually central planners [with all the failures of that breed]. Like bureaucratic leaders of central-planned or command economies, they pick an interest rate to wthin two decimal places that they guess will be the correct one, and then they proceed to cram it down the throat of the banking system.

And there are people who call the failure of The Fed a failure of free markets!

So with what was the punchbowl spiked? What were the central bankers cramming down our throats?

Greenspan erred by continually picking an interest rate that was too low, then he solved the turmoil that resulted from that decision with another period of interest rates that were again too low.

Repeat process until finished, which is what Greenspan did -- and what we're now paying for. The last tranche of easy money that left the Fed was to 'fix' the bursting of the bubble in 2001, and we know where it all ended up ...

We will quote once more an amazing nugget of research from Asha Bangalore, economist at Northern Trust Co.: No less than 40 percent of new jobs since 2001 owe their existence, directly or indirectly, to the real-estate levitation.

Submissions for sale

Have people learned nothing about the Resource Management Act after fifteen years of its imposition?

I've heard outrage everywhere about the news that the Department of Conservation took money to shut down its opposition to the Project Hayes wind farm in the South Island’s Lammermoor Range.

Words like “bribe” and “hush money” have been used.  People are outraged.  “It's venal, cowardly, and corrupt," Dunedin conservationist Dave Witherow said. "What we are encouraging is a culture of bribery," the Project Hayes objector said.  "To be blunt, [it] was about buying silence to avoid political embarrassment," says Parliamentary Commissioner for the Environment, Morgan Williams.

Where have these people been?

The Resource Management Act actively encourages corruption.  It encourages a culture of bribery. It incites it.  It makes it normal.  If people are given a “right” to object to what you do on your property, then ipso facto they have a right they’re able to sell.  And they have been.

  • That neighbour who “objects” to your extensions, but can be bought off with a bottle (or three) of wine.
  • The iwi who discover taniwhas at the bottom of your garden, which disappear after judicious application of JP Morgan’s salve.
  • The environmental group who suddenly discovers after an ex gratia payment (offered “without prejudice”) that the native snails/mangroves/sand dunes they’d been bound to protect will be fine after.
  • The historic places trust, who agree to drop their objections in return for a range of mitigation measures … and a cheque for $179,000.
  • The government department who are “legally obliged to protect the environment” whose concerns about access, visual impact, and falcons who might be hit by turbine blades, are assuaged by the payment of $125,000.

The RMA positively encourages groups like these to use the process as a meal ticket – where anywhere else this would be called blackmail.  It positively encourages planners to play both sides of the fence – where anywhere else it would be called corruption.

Have people learned nothing about the Resource Management Act after fifteen years?

It’s a case study of what happens when you expand “rights” beyond those that are legitimate.

Which is to say, it’s another classic case study of non-objective law.

Law versus the lynch mob [update 3]

New Zealand's new Copyright Law presumes 'Guilt Upon Accusation' and will Cut Off Internet Connections without a trial. CreativeFreedom.org.nz is against this unjust law - help us

Let me contrast objective law with a new law about to be foisted upon us.

First, here’s what objective law looks like:

All laws must be objective (and objectively justifiable): men must know clearly, and in advance of taking an action, what the law forbids them to do (and why), what constitutes a crime and what penalty they will incur if they commit it…


[Objective law] requires objective rules of evidence to establish that a crime has been committed and to prove who committed it, as well as objective rules to define punishments and enforcement procedures.

Contemplate those words “The retaliatory use of force requires objective rules of evidence to establish that a crime has been committed” while you read s92A of the Copyright Act, which on its present timetable will be passed into law in 11 days, 17 hours and fifty-four fifty-three minutes.

Internet service provider [sic] must have policy for terminating
accounts of repeat infringers
(1) An Internet service provider must adopt and reasonably implement
a policy that provides for termination, in appropriate circumstances,
of the account with that Internet service provider of a repeat infringer.
(2) In subsection (1), repeat infringer means a person who repeatedly
infringes the copyright in a work by using 1 or more of the Internet services of the Internet service provider to do a restricted act without the consent of the copyright owner.

What that means, says Matthew Holloway of the Creative Freedom Foundation, is Guilt by Association.

The … law reverses New Zealander's fundamental right to being presumed innocent until proven guilty, punishing internet users with disconnection based on accusations of copyright infringement without a trial and without evidence held up to court scrutiny.

The proposed law fails to adequately define “internet service provider.” (I’m a blogger; apparently that makes me an “internet service provider.”) It fails to protect people against false, frivolous or flawed accusations. (Matthew Holloway gives some examples here.) It ignores entirely the basic rules of evidence developed, with good reason, over many centuries. It confuses an accusation with a conviction.

It’s bad law.

My opposition to the Copyright Act is not due to its intent (which is to protect copyright) but because it confuses an accusation -- “He done it!” – with its opposite, i.e., : “evidence to establish that a crime has been committed.”

It is the difference between law and a lynch mob – with the lynch mob’s rope provided by poorly drafted, non-objective law.

I’m agin’ it.

NB: Contemplate this, from the Ayn Rand Lexicon, which describes the future under this law:

When men are caught in the trap of non-objective law, when their work, future and livelihood are at the mercy of a bureaucrat’s whim, when they have no way of knowing what unknown “influence” will crack down on them for which unspecified offense, fear becomes their basic motive, if they remain in the industry at all-and compromise, conformity, staleness, dullness, the dismal grayness of the middle-of-the-road are all that can be expected of them. Independent thinking does not submit to bureaucratic edicts, originality does not follow “public policies,” integrity does not petition for a license, heroism is not fostered by fear, creative genius is not summoned forth at the point of a gun.

Non-objective law is the most effective weapon of human enslavement: its victims become its enforcers and enslave themselves.

UPDATE 1: David Farrar has a guest column on the issue of S92A at Muriel Newman’s Centre for Political Research.

UPDATE 2: Russell Brown explains why your friends’ pictures are turning black all over Facebook, MySpace, Twitter. “You're seeing The Blackout, a netroots protest against Section 92(A) of the Copyright Act, which comes into force on February 28.”

And he identifies another ill of this law, if it were to come into effect: “It is not only that this law denies the accused any due process, it is that it stipulates a penalty that no court would impose in adjudicating a copyright complaint even if infringement were proven…”

UPDATE 3: Stephen Fry takes the protest international on his Twitter page. (For Americans: Stephen Fry was Hugh Laurie’s comedy partner back when Hugh still spoke English.)

LIBERTARIAN SUS: A Tale of Two Sentences

Susan Ryder does something the media forgot to do: comparing the sentences handed down to two high-profile criminals.

The local news was full of reports last Friday on the sentencing of two New Zealand men for the respective deaths of two New Zealand children.

Both were high-profile cases on which much has been written and said.  Both occurred in the North Island. Both caused shock and outrage within the population at large. And both men have received almost identical sentences.

The first case concerns 51 year-old Bruce Emery, found guilty of the manslaughter of Pihema Cameron, aged 15. Thirteen months ago, Cameron and a friend decided to deface Emery’s garage in Manurewa. Armed with a knife, Emery attempted to disrupt their activities and in the ensuing fracas, Cameron was killed.

The second case concerns 49 year-old William Curtis, found guilty for his role in the death of Nia Glassie in Rotorua, aged 3. Little more than a baby when she died, Nia had the fatal misfortune to be born into the wrong family, six of whom are now in prison for her death.

So there we have the essence of each case. Let’s now look at them a little more closely.

Bruce Emery personifies the Kiwi who’s just had enough.

  1. Had enough of tolerating teens who don’t give a damn for anyone else or anyone else’s property.
  2. Had enough of paying for people who think they have the right to live off others for nothing in return.
  3. Had enough of the endless excuses trotted out by apologists for the actions of those same people.
  4. Had enough of police who never come when you call them and seldom treat this sort of property crime seriously when they do.
  5. Had enough of politicians who bleat about how they are going to “get tough” on crime prior to every election – and then do sweet bugger all afterward.

So a family man, a complete stranger to law-breaking, spots a couple of teenage vandals, grabs a knife in self-defence (so he said) and, at the end of his tether, his actions result in the fatal stabbing of one of the perpetrators.

Convicted last December, he, via his lawyer, reportedly asked the Cameron family for forgiveness. Based on the very public reaction by the Camerons to his sentencing last Friday, he will be waiting some time. Described by Herald columnist Tapu Misa as “bitter and intemperate”, the family, all sporting t-shirts bearing the deceased’s image, were visibly angry and disgusted with the sentence of four years and three months.

That the Cameron family has lost a loved member cannot be denied. That a teenager has lost his life as a result of tagging somebody’s garage is undeniably harsh. But nowhere have the Camerons acknowledged that Pihema died as a result of committing a crime, as a result of his actions. Had he been at home, or anywhere else that evening, supervised and minding his own business, he might still be alive. Had he been by Bruce Emery’s garage and not defaced it, he would not have died in the manner he did. Wailing about his loss while wearing t-shirts bearing his picture is all very well and good for ratings-mindful media and head-shaking do-gooders, but sadly, it’s a bit like shutting the door after the horse has bolted.

On to the second case where six people have been convicted and sentenced for the death of Nia Glassie, William Curtis being the sixth. Let’s re-cap what he did to his tiny de facto step-granddaughter:

  1. Tied a scarf around her neck and lifted her by it until she went purple in the face.
  2. Slapped her with such force that her face would bleed.
  3. Shouted and swore at her to shut up or he would stomp on her head.

The terror to which that child was subjected is beyond comprehension. She lived with that monster – that subhuman – for four months. And he was one of six – six – adults responsible for the terror, two of whom (his sons) are serving sentences for her murder. It has been noted that Curtis remains unremorseful for his actions.

Unlike Pihema Cameron, Nia’s mother was not outside court last Friday morning wailing and wearing a t-shirt bearing her daughter’s image. Lisa Kuka is already in prison, being found guilty on two charges of the manslaughter of her own daughter. Unlike Pihema Cameron, wee Nia Glassie never had a chance.

Tapu Misa has the temerity to say that Pihema Cameron was killed “over a bit of paint.”  Fellow columnist Brian Rudman – another stranger to the concept of personal responsibility – calls the overwhelming pro-Emery public reaction “lacking in common decency and civility.” And Maori party co-leader Tariana Turia describes taggers as a “misunderstood sub-culture of artists.” The race card has turned up with yawning predictability, as have comparisons with the longer sentence handed down to (then 12 year old) Bailey Junior Kurariki for his part in the murder of Michael Choy seven years ago, whilst ignoring the premeditated nature of the latter crime. Welcome to glaring examples of point three, as above.

And so to last Friday’s sentencing. Bruce Emery received four years and three months for the manslaughter of Pihema Cameron. William Curtis received four years for his role in the death of Nia Glassie.

Perhaps those expressing shock and outrage over “unjust” or “pathetic” sentencing might like to ponder that.

* * Read Libertarian Sus every Tuesday here at NOT PC * *

Athlete II - Stella Shawzin

You can see more of Stella’s astonishingly exuberant work at her website, including a beautiful short video of her sculpture in “motion.”  Magnificent.

Pssst: More vids here too, especially more stunning bronzes at the Fordham University exhibition.

Monday, 16 February 2009

Wimpianson outlines a dimmer future for builders

Good old Maurice Williamson.  Spurned by his leader, unwanted in the Key Cabinet, sacked from the transport portfolio for "telling it like it is," Wimpianson has been left to till the unfertile fields of the Building portfolio, where  he's clearly been putting his "imagination" and "free market credentials" to work in striking out for a brighter future for the building industry.

This, by the way, is irony.  When Williamson and Nick Smith were appointed to the portfolios of Building and the RMA respectively, I pointed out that neither of these two either understands or is even interested in the real and serious problems with the two Acts over which they now preside, and consequently far from expecting to see any genuine building reform, all that could be expected from these two was disappointment.  

I hate it when I’m right.

Wimpianson says today he wants to "shake up" the Building Act.  He's promising a "review" of the Act that would be "a multi-pronged piece of work" – a piece of work that that would “examine possible legislative changes” that include “licensing of builders” – most of whom are already out of work -- and “the accreditation of specific building materials.”

"We don't know the answers," says Wimpianson in unwittingly re-releasing the Clark Government’s building policy.  Admitting he doesn’t know the the answers is in fact the only thing here he's got right.

Consider: the vast majority of leaking homes, particularly the large scale examples, were build by Master Builders and drawn up by Registered Architects.  Did that save the home owners?

Consider: the largest proportion of building materials that have been implicated in leaking homes were accredited by the government's two building bureaucracies, BRANZ and the BIA, and installed in most cases by builders who followed the details mandated by the manufacturers and by those two august bodies (the latter of which has now disappeared like the fly-by-night outfit Wimpianson suggests builders must be).  But have those building materials manufacturers felt any legal heat?  Have those two government bodies fronted up?  Did accreditation of these materials by BRANZ and the BIA save home owners?

Which means that Wimpianson's "multi-pronged approach" shows all the imagination of a concrete block, and the same grasp of his portfolio that Sitiveni Sivivatu showed with the ball on Saturday night.

Wimpianson complains about an industry where all one needs is "a ute, a dog and a cellphone" to become a builder.  Fine words from a man who can’t even make it in a “profession” where all it takes is a cheap suit, a shit-eating smile and an ability to hold up a sign the right way up.


And people say I shouldn't use words like "moron" to describe the members of this National-led government ...

Monday morning ramble [update 2 + links fixed]

There’s a few things I’ve been lining up to talk about, but just haven’t had the time or space in the last week or so.  Here’s a few of the things you ought to know about, in no particular order:

  •    Despite the fact that falling costs is the way to economic recovery, economists are worried about falling prices.  Go figure. But as George Selgin argues, prices do need to fall, but it depends crucially why prices are falling .  Read Deflation: The Good & the Bad.
        (Such a shame he calls falling prices by the term “deflation,” which as George Reisman explains should be more accurately reserved for a contraction of the money supply. Read Falling Prices are Not Deflation but the Antidote to Inflation.)
  • Want to know why Epic Beer is so flavourful?  Find out here: How Many Hops In My Beer? - Epic Pale Ale.
  • If you haven’t yet caught up with young Tim Geithner's Plan to Ruin Save the Economy, let Jeff Perren summarise it for you.
  • And just to remind you again why governments around the world are rushing headlong down paths that responsible economists are telling them is destructive (shopping subsidies, yet!), then let Peter Boettke remind you of the reason: “Ultimately the stimulus bill[s] will not be determined on the basis of economics, but instead on ordinary politics.  And that ladies and gentlemen is the problem.” [Hat tip Anti Dismal]
  • The British government has banned Dutch MP Geert Wilders from entering Britain. The reason for the ban is Wilders’s tell-all film about Islam, Fitna.  If you haven’t seen it already, see what all the fuss is about here: Fitna - see it here.
  • How to Solve Economic Crisis in 5 minutes.  How’s that for a public service! [Hat tip Titanic Deck Chairs]
  • Brian Phillips presents "Practical" Arguments for Property Rights posted at Houston Property Rights, saying, "During my twenty years defending property rights, I have regularly encountered individuals who rely on economic and similar "practical" arguments in the defense of property rights. But these arguments are seldom effective, because people are ultimately moved by morality.” [Hat tip Titanic Deck Chairs]
  • On the basis of disagreements between economists like Robert Barro and so called economists like Paul Krugman, Clive Crook worries that “those of no decided allegiance conclude that economics is bunk.”  No, no, says Arnold Kling, it’s only macroeconomics that’s bunk. (I paraphrase just a little.)  “Macroeconomics is only one area of economics,” he says. “In my view, it is the area with the highest ratio of unresolved issues to settled questions.”  [Hat tip TVHE) In other words – this time the words of Ayn Rand, “Macroeconomics is a science starting in midstream: it observed that men were producing and trading, it took for granted that they had always done so and always would—it accepted this fact as the given, requiring no further consideration—and it addressed itself to the problem of how to devise the best way for the "community" to dispose of human effort….
        The goods, they believe, are here and will always be here. Therefore, they conclude, the consumer—not the producer—is the motor of an economy. Let us extend credit, i.e., our savings, to the consumers—they advise—in order to expand the market for our goods.
        But, in fact, consumers qua consumers are not part of anyone's market; qua consumers, they are irrelevant to economics. Nature does not grant anyone an innate title of "consumer"; it is a title that has to be earned—by production. Only producers constitute a market—only men who trade products or services for products or services. In the role of producers, they represent a market's "supply"; in the role of consumers, they represent a market's "demand." The law of supply and demand has an implicit subclause: that it involves the same people in both capacities.  
        When this subclause is forgotten, ignored or evaded—you get the economic situation of today.”

  • If you haven’t already seen it, Cactus Kate has an unusual take on Wellington’s coffee, and a bright idea on how to get rid of most of Wellington’s useless public so-called ‘servants.’ 
  • Stephen Franks points out that Roger Douglas is a “centrist” when it comes to compulsion – and so is he!  Read Stimulus packages and a curious omission from Sir Roger’s plan
  • The NZ Save the Humans blog takes the opportunity of the end of the silly “rubbish-free year” stunt from a couple of loony Christchurch environmentalists to point out just how little waste we each generate, and how many more important things there are on which to focus.  Read One Cubic Metre of Waste Each - Get Over It!.
  • Thomas Sowell’s website has a list of books you need to read.  When someone like Sowell recommends a book, it’s worth serious consideration.
  • If you still think Franklin Roosevelt’s profligacy and meddling rescued America from the Great Depression, if you haven’t already seen enough evidence, then here’s another nail in that particular coffin: FDR's policies prolonged Depression by 7 years, UCLA economists calculate.
  • Thrutch points to “a nice post over at the New Clarion examining the vital role of property rights and lawfulness in creating wealth.”  Read it: Cargo Cult Capitalism.
  • Mr Dennis points to the The big Biblical Bailout of Egypt.  The more things change …
  • Meanwhile, as Mark Hubbard says, “If you want to know why we are doomed, economically and philosophically, just read the comments to this Bernard Hickey post - many of them are downright chilling.
  • Go Roger Kerr: “Listening to some commentators, one would think the recession has given Governments the ability to produce wealth and jobs out of thin air.
        The Government is being urged to increase its spending to "stimulate" economic activity.
       What seems to be overlooked is that the huge rises in core Crown spending in recent years - some $25 billion since 2000 - saw New Zealand "lead the world" into recession. The Treasury has said "the overall fiscal stimulus is at the upper end of international reaction to the current situation."
        More spending now would be like throwing petrol on a fire.
    ”  Bravo!  Read on in this morning’s HeraldRoger Kerr: Like throwing petrol on fire.
  •     “Let's go back to the gold standard.”  Says who?  Says the Wall Street Journal, that’s who!        Says the WSJ, “If the very idea seems at odds with what is currently happening in our country -- with Congress preparing to pass a massive economic stimulus bill that will push the fiscal deficit to triple the size of last year's record budget gap -- it's because a gold standard stands in the way of runaway government spending.”
        You see why the politicians won’t like the idea? 
        Read Capitalism Needs a Sound-Money Foundation: Let's give the Fed some competition. Abolish legal tender laws and see whose money people trust. 
        Hat tip Thrutch, who picks a couple of small nits …

General debate

Go ahead, knock yourselves out.  :-)

Friday, 13 February 2009

Popular NOT PC for Black Friday, January 2009

Phew!  It’s been a scorcher of a week here in Auckland.  Yesterday was the hottest day since 1872, and I’ll wager it wasn’t as humid on that day back then. 

It’s been seven days dominated by Waitangi, talk of “stimulus” (most of it on the economic front), and overshadowed in this part of the world at least by the tragedy in Victoria.

Here’s what proved the most popular of this week’s posts here at NOT PC, as judged by how many readers visited them.

  • Waitangi Day Ramble
    A ramble through a whole bunch o’links that grabbed my eye, and obviously yours as well.
  • Failure?
    My short comment on the death of Antonie Dixon seemed to attract some disagreement …
  • The "John Galt Effect"
    Scientist Arthur Robinson identifies an “opportunity cost” about which many economists appear altogether ignorant, and about which economist George Reisman appears to think it’s about to be ratcheted up another stop.
  • Minimum wage rise: everybody loses
    Minimum wage laws aren’t a “balancing act.”  Abolish them and everybody actually wins – unlike what happens when you raise wages in the teeth of a depression.
  • Cash for conquests
    The new National Government’s approach to Treaty negotiations looks like this National-led Government is going to be as generous in doling out taxpayers’ money for imagined slights as the last National-led Government, if its promised taxpayer-funded payout to the descendants of one of NZ’s most infamous murderers is any guide.
  • LIBERTARIAN SUS: Political Correctness = Fear
    There’s more than one way to exercise control, says Susan Ryder.
  • Douglas offers taxpayers a ‘Conscientious Objection Option’
    Roger Douglas has been reading Libz policy again, and (with America’s National Review looking on) he’s put it at the heart of his new plan to rescue the economy and put it on the path to prosperity.

Thanks for reading and commenting. It would have been awful lonely if nobody here had shown up.  :-)
Cheers, Peter Cresswell

Beer O’Clock: EPIC takes on the world!

  First, Epic came on stream just for Cock and Bull drinkers.  Then it came for beer drinkers and bottle stores across New Zealand.  And now, with the invitation to brewer Luke Nicholas for his multi-award winning Epic Pale Ale to be one of six beers included in the International Real Ale Festival in the UK later this year, it’s now heading towards world domination – and deservedly so.

Nicholas will be brewing 100,000 pints just for this festival.  From the Epic Beer website:

Ale-Fest-A2-VR-724548    “Since launching in May 2006, Epic Pale Ale has won major beer awards and critical acclaim. Most New Zealander’s are only just beginning to discover the flavours I like to pack into my beer. It’s still quite unknown here but is gaining an international reputation as a ‘must-try’ New Zealand beer. International judges and experts that have tried it, hold it in high regard. Maybe brewing for the biggest festival in Britain will create a little profile and help Kiwis realise what they have on their doorstep!”
    Luke has amassed a history of top awards for his beers over the last decade including the unique distinction of brewing the Supreme Champion Beer of New Zealand a record three times. He is raring to unleash his beer on unsuspecting British palates.
    “Another Kiwi brewery sent the Brits a pub. Epic is sending them the brewer. They won’t know what hit them!” Luke laughs.

Get some in now, before the poms take it away for good.  And keep up with Beer O’Clock here at NOT PC so you can get in early on a good thing.

Cheers, PC

FEG’s Quote of the Month

NZ's Foundation for Economic Growth posts this as their Quotation for the Month:

At a lunch at the Bank of England, just ten days before his death in 1946, John Maynard Keynes remarked:

"I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago."

ARI outreach hits London [updated]

NOT PC readers who, like me, follow the progress of Objectivism with great interest will be very pleased to hear of the Ayn Rand Institute's new "outreach" programme.  Kenneth Irvine spoke to Ayn Rand Institute head Yaron Brook about it after Brook's talk at London's libertarian Adam Smith Institute.  He reports here that the future looks fruitful.

    ARI is engaging with think tanks, libertarian and conservative, on both sides of Atlantic as part of an outreach programme. He spoke positively about working with Cato and FEE in the US and the Adam Smith Institute and IEA in the UK. Dr Brook spoke critically of the Mises Institute, LewRockwell.com and the Independent Institute, especially on foreign policy and their anarcho-capitalist politics. [Read on for more.]

I agree this is by far the least attractive part of LewRockwell.Com and the Mises Institute, and seriously undermines the superb economic commentary both otherwise provide – which unlike their other commentary is based four-square on von Mises’s path-breaking work.

And if it’s true that this is the apparently insuperable obstacle in the long overdue rehabilitation of George Reisman in the ARI ranks, that would be very sad indeed.

UPDATE: Here's the Adam Smith Institute's write up of the event.

The main argument that Dr Brook advanced ... was that defenders of freedom must do more than just talk about economics. They also need to make the moral case for capitalism and rational egoism. Freedom to pursue your own interests must not be reduced in argument to a utilitarian system of maximizing outcomes, Brook said, but should instead be celebrated and advocated as the ultimate, moral ideal. And that, of course, is what Ayn Rand did so well.

All in all, then, an excellent evening. And despite Rand's relative obscurity in the UK, a very well attended one too.

DNA, and the presumption of power

I'm one-hundred percent in support of taking DNA from criminals.  Yes, I agree with all the proponents of the measure that it is in many important ways the modern equivalent of a fingerprint, and that the efficient use of DNA 'fingerprints' will be a boon to crime-fighting.

That said however, I'm vehemently opposed to the present proposal to take DNA from everyone police “intend to charge” with an imprisonable offence.

This is not a contradiction.  If you can't see the difference,then you probably qualify for membership of the present parliament, since it looks like barely anyone there understands the concept and importance of the legal presumption of innocence either.

There is a distinct difference between one who has been charged, or about to be charged, and one who has been convicted – between one who has been arrested (and who is still presumed to be innocent), and one who has been found to be a criminal -- someone from whom all reasonable doubt about their guilt has been removed.  There are more than enough real criminals about to make a database so big it will confound the organisational capacity of the NZ police force, without even needing to begin collecting DNA from those who aren't.

And let's make something clear. DNA collection is every bit the boon to crime-fighting it is said to be, but it’s more than just a “modern-day fingerprint”; it's your DNA -- something that's actually part of you. It's something that's not just your property, it is you.  Consequently, unless it's taken voluntarily, perhaps to clear you of a crime you know you didn't commit, then to take it by force when you're still presumed to be innocent is a violation of your most fundamental rights. It’s not just an unreasonable search and seizure, but something far worse.

Thank goodness you might think then that Attorney General Chris Finlayson understands at least this much when, unlike previous Attorneys General, he signalled that the present proposal violates NZ's Bill of Rights.  How disgraceful therefore that he and his colleagues are prepared to ignore that fact and proceed to vote in support of it going to its second reading.

The Nats have indicated countless times both in opposition and when previously in power that they view the presumption of innocence not as a fundamental legal principle to be upheld, but as a barrier to New Zealand The Way They Want It To Be.

That’s an uncomfortable realisation for the rest of us.

Good news from ignoring bad law [updated]

SMH-Bushfire SYDNEY MORNING HERALD: Fined for illegal clearing, family now feel vindicated
    "They were labelled law breakers, fined $50,000 and left emotionally and financially drained.
    But seven years after the Sheahans bulldozed trees to make a fire break — an act that got them dragged before a magistrate and penalised — they feel vindicated. Their house is one of the few in Reedy Creek, Victoria, still standing." [Hat tip Jeff Perren]

There are probably several good morals in that story that are so obvious I’ll allow you to draw them all yourself.

Would that the law-makers understood any of them.

UPDATE: Tim Blair posts the more tragic counter-example, by far more common:

Peter Mitchell applied for permission a couple of years ago to remove some trees close to his property. Permission denied. On Saturday, his house burned down. Mitchell plans to rebuild, and this time he won’t be bothering with any council permission nonsense: 

“I’m just going to cut down the trees and push the perimeter back a bit more. If I build on the same place, I have to feel I am going to be able to defend it and not play Russian roulette.” 

Electoral Finance Act still law, but ... [updated]

It started with the Labour Party changing the law to stop Bernard Darnton suing them over their 2005 pledge card, continued with their Electoral Finance Act by which they attempted to squelch free speech and hog-tie their opponents, and now after many months of shouting in the end a bill to remove that incursion into Mugabeism from our law books was introduced to parliament last night, and it looks like by this time next week it will be dead – with the exception of one clause.

And in the end, after all the months of hysterically defending the indefensible, even Labour voted for its removal, and new Labour leader Phil Goff had the grace and common sense to concede it was a mistake.

Unfortunately, reports do not record what Helen Clark’s face looked like when she was required to file into the lobbies to begin voting against the mechanism by which she hoped to achieve a permanent Premiership.

UPDATE:  Since he did so much to sterling work to bring about its imminent dissolution, David Farrar deserves a word here:

    A rare joint award to Labour and National for starting the repeal of the Electoral Finance Act.The real evil of the Electoral Finance Act wasn't so much in its substance (even though that was bad enough) but more so in the way it was drafted without any attempt at consultation with the public or Opposition political parties…
    The anger in National (and elsewhere) over the Electoral Finance Act is palpable. The Act is detested, and represents to National the closest we have come to a constitutional coup - an attempt to so skew the playing field, to the benefit of one party only. Many in National would happily sign up to an "utu" response where the EFA is not only repealed, but is inflicted on Labour in reverse.
    But wiser heads have prevailed, and National is sincerely committed to multi-party (and public) consultation over the replacement to the Electoral Finance Act.

This indicates why National’s promised repeal only gets two cheers from this quarter.  In contradiction to David’s conventional view, the real evil of the Electoral Finance Act wasn't at all that it was drafted without any attempt at consultation with the public or Opposition political parties.  (As long as a law protects individual rights then it’s not “consultation” but urgent introduction that’s necessary.)   In fact, the real evil was that the Electoral Finance Act was a total affront to free speech, and to the standards of what purport to be democracy.

Sheesh already!  The evil of the act cannot be so so simply dispelled by waving over it the magic wand of “multi-party (and public) consultation”: what it needs is the introduction of objective law to govern NZ’s elections that is clear, impartial, and that actually protects NZers’ rights to free speech and free association --which includes the right to donate however much one wishes to to whomever one so chooses.

Te Rauparaha – KL Sutherland

ClaNote096a  The face of a mass murderer.

Nice drawing by Kenneth L Sutherland, RN. And a very nice wood block engraving. Such a shame about the subject.

It’s the killer whose genocidal rampage from Kawhia to Kaiapoia has just been rewarded with a government apology and the promise of truckloads of money to his ancestors.

How he would laugh.

Read the short story of his exploits here: Cash for Conquests.

You’ll laugh your arse off.

Thursday, 12 February 2009

Keynesia is here!

We’ve been struggling to find a replacement for the word “Helengrad” now that regime change is here.  “Helengrad” captured the mood of a decade and the nature of Helen’s regime perfectly, and the search has been on all summer for a replacement. What do we call Wellington now that Key is there?

Key-ev doesn’t cut it.  Ta-John-Key-Stan? Too much of a mouthful. John-obyl? Too much explaining to do.

So, fortunately for our vocabulary, if not for our wallets, yesterday’s spend-up announcement jogged Liberty Scott’s creative faculty into action, and out popped the obvious replacement: Keynesia – named after the patron saint of bureaucrats and Bill English.

I can see it now on sign boards all around Wellington:

Welcome to Keynesia! 

And I'm sure, like you, I look forward to the economic “stimulus” created by the erection of all those new signs.

Communist Monopoly

1790abfde0b58518d3a589d0f7151af7.tiny A new board game is sweeping the world: Communist Monopoly.  

Play it. 

Or else!

Leave CEOs alone

In the teeth of the Obamessiah’s assault on CEOs’ salaries, Yaron Brook from the Ayn Rand Institute says CEOs’ salaries are the business of shareholders, and of shareholders only.

Join the debate at the Business Week Debate Room.

The nine most frightening words in the English language

Obama’s selection of Harvard Law professor Cass Sunstein as his ‘Regulatory Czar’ threatens to turn a joke into grim reality, says Paul Hsieh at Pyjamas Media.

Hsieh characterises Sunstein’s so-called “libertarian paternalism” as the butt of Reagan’s famous joke: “I’m from the government, and I’m here to help” – what Reagan called the nine most frightening words in the English language.

Obama’s Nanny is looking forward to telling Americans how to live.  Hsieh is not.  The new nannies “actually believe that ‘they’re from the government and they’re here to help us’,” he says. “If we listen to them, then the final joke will be on us.”

Read Obama’s Regulatory Chief Believes in Paternalistic Government.

Quote of the Day: Predictions of the collapse

As if Henry Hazlitt wrote it yesterday, instead of in 1946!

Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment.

Alex Epstein supplies the appropriate comment.

NOT PJ: Carisbroke

Bernard Darnton went to Dunedin in search of pink elephants and found a white one …

What is it with politicians and stadiums? Even those rare politicians who are only slightly profligate, when presented with an artist’s impression of a stadium they develop all the self control of a half-Irish half-Frenchman with six hours to live who’s discovered a liquor cabinet in a brothel.

Speaking of alcoholic and sexual dissolution, I went back to Dunedin earlier this week. I stepped off the airbridge and into thirty-three degree heat. I lived in Dunedin for sixteen years and I don’t think it ever got to thirty-three, even if you added all the temperatures together.

The next day it was back to the usual summertime drizzle and eleven. I don’t remember deliberately spending much time outside when I lived there so I understand why those considering a new stadium to replace Carisbrook would like a roof on the thing.

The problem is that stadiums with roofs are scandalously expensive. Dunedin’s comes in at around $200 million (that’s $400 million including cock-ups), which in a city of 100,000 means a chunky rates hike. Per capita, it’s twice the cost of Auckland’s rightly-rejected billion-dollar bedpan. The $200 million price tag assumes everything goes well, meaning the weather has to be perfect when construction starts in June. Perhaps a roofed building site should go in first.

Boosters for these boondoggles always talk about what great investments these projects are. What they don’t explain is why they have to steal the money to “invest” from reluctant ratepayers rather than raise it from private businesses who’d like to roll around in the supposedly inevitable profits.

The Carisbrook Stadium Trust talks about how the new stadium will kick-start investment in North Dunedin “in exactly the same way the Telstra Dome has in a once forgotten docklands area of Melbourne.” They don’t mention that the Telstra Dome is bankrupt.

The Trust’s website drips with cargo-cult logic: “[The stadium] will present an economically robust city to attract new businesses.” They’re just not quite barefaced enough to say, “Build it and they will come.”

How do self-stroking politicians get away with promoting these staggeringly expensive vainglorious projects?

Simply, the numbers are too big. People don’t understand the word “billion.” It sounds like “million,” which means “quite a lot,” and “billion” also means “quite a lot” – maybe a bit more. But the difference is vast. A million dollars is what you’d get earning the average wage for twenty years. A billion dollars is what you’d get if you won Lotto every week for twenty years.

With a million dollars you could buy a nice house, a decent car, and a world trip. A billion dollars would get you a Scottish castle on a hundred acres of land, a seven-bedroom fifteen-bathroom Hollywood mansion furnished by Saddam Hussein’s decorator, a Formula 1 racing car, James Bond’s Aston Martin, a Russian oligarch’s superyacht with matching helicopter and submarine, a return trip to the International Space Station, a case of French champagne every night for the next hundred years, your own weight in caviar, a divorce from Heather Mills, and a Tutankhamen-style 110-kilogram solid gold sarcophagus for that subtle finishing touch.

Politicians know they can bandy around big numbers because nobody really gets how big they are. I mean Texan-elephant-with-a-dodgy-thyroid big; Gilbert-Grape’s-mother-getting-impregnated-by-Mr-Creosote big. They also know that big numbers can be made into small numbers if you divide by the population and the number of days in the year: “The stadium’s cheaper than a can of Speight’s!” (And in the small print: per person per day for the rest of your life.) If someone demands that you buy them a beer every day for the rest of your life, you know the correct response.

When politicians suggest these grandiose schemes, I always think of Sapurmurat Niyazov, the recently dead president of Turkmenistan. He wrote his own sequel to the Koran, renamed months of the year after himself, and erected an enormous gold statue of himself in the centre of Ashgabat, the country’s capital. The statue slowly rotated during the day so that the sun always shone on his face. And it cost less than a new rugby stadium.

* * Read Bernard Darnton’s NOT PJ column every Thursday here at NOT PC * *

Dance – Henri Matisse, 1910 [updated]


Henri Matisse’s bright and deceptively simple painting seems to viewers either full of life, or full of ominous portent.  It seems to work somewhat like a litmus test.

The figures first appeared in his painting The Joy of Living -- “this musical canvas” a critic called 
it in 1906.  Dance, Matisse once said, evoked “life and rhythm.”  To the curators of NY’s Museum of Modern Art, “these are no ordinary dancers, but mythical creatures in a timeless landscape.”

Life and rhythm are what I see here – that broken circle is about to be exuberantly rejoined, not irretrievably broken.

NB 1: Read more about the Fauvist art movement, of which Matisse was a leading member, here.

NB 2: Jonathan Jones discusses the painting's fascinating history on the occasion last year of its frst visit to Britain.  Says he:

It is the most glorious work of art we will see this year. Savage and classical, ancient and modern, civilised and barbaric: Dance is all these things. Its beauty comes from a time and a place when art was being remade. It is a blazing modernist banner of desire...
    In the first decade of the 20th century, any adult - including Matisse, born in 1869 - would have grown up in the Victorian age. Even in Paris, where artists had long made a virtue of shocking moralists, sex was disreputable - it is what happened in brothels depicted by Toulouse-Lautrec. Now, suddenly, here is Matisse's Dance, a painting that declares there is no higher, no more human thing than to dance in naked ecstasy: to burn with passion.

Wednesday, 11 February 2009

Local & offshore stimulunacy [update 6]

Do I really need to write any more on so-called stimulus packages, or the fiction of the so-called multiplier effect, just because John Boy and Billy Bob invoke these statist delusions again today?

UPDATE 1: 61 traitors voted to pass America’s stimulunacy package.  Jeff Perren has a list of just some of the pork for which American taxpayers are going to have their pockets picked, absurdities which almost make our local package look sensible, and the Wall Street Journal steps up to the plate with this cogent dismissal of error at the heart of the stimulunacy and the multiplier delusion.

    So there it is: Mr. Obama [and the local layabouts are] now endorsing a sort of reductionist Keynesianism that argues that any government spending is an economic stimulus. This is so manifestly false that we doubt Mr. Obama [or the local layabouts] really believes it. He has to know that it matters what the government spends the money on, as well as how it is financed. A dollar doled out in jobless benefits may well be spent by the worker who receives it. That $1 of spending will count as economic activity and add to GDP.
    But that same dollar can't be conjured out of thin air. The government has to take that dollar away from someone else -- either in higher taxes, or by issuing new debt in the form of a bond. The person who is taxed or buys the bond will have $1 less to spend. If the beneficiary of that $1 spends it on something less productive than the taxed American or the lender would have, then the net impact on growth will be negative.

 UPDATE 2: Wanna get your head around the scale of the problem created by all this stimulunacy? Simple.  Just watch Glenn Beck Making Fed Data Fun & Scary.

UPDATE 3: Paul Walker says:

    Given that the government has just announced that it will waste $500 million of taxpayers money on our very own stimulus package, it may have helped if John Key had read the recent Wall Street Journal article by Gary S. Becker, the 1992 Nobel economics laureate, a professor of economics at the University of Chicago and senior fellow at the Hoover Institution, and Kevin M. Murphy, a MacArthur Fellow, an economics professor at the University of Chicago and a senior fellow at the Hoover Institution, before making such an announcement.
    Becker and Murphy make the obvious, to everyone but the government, point that There's No Stimulus Free Lunch: It's hard to spend wise and spend fast
    [Their] four points apply as much to New Zealand as they do to the US, so I would like to hear the government's reply to them. It is incumbent on both supporters, and opponents, of any stimulus package to evaluate each of [their] four factors. Has the government really done this? If so, what are their conclusions? If not, why not?

UPDATE 4 [revised]: Charles Anderson has done some sums for Obama’s package. At US$825 billion and an estimated 3.7 million jobs “saved” (an estimate without backup, by the way), “The cost per job created or saved in Obama's plan,” he says, “can be calculated to be US$222,973”!

The exclamation mark is my own. 

Feel free to send me your own calculations showing us how much NZ taxpayers will be paying per “job” to attempt to keep the economy inflated. You may use in your calculations either the NZ$500 million boasted about in John Boy’s and Billy Bob’s announcement early this morning, or the NZ$11 billion boasted about in parliament earlier this morning, or the NZ$35 billion Bill English told the House this afternoon is going to have to be borrowed over the next five years just to avoid cutting spending (the sort of thing Roger Douglas called “mortgaging our children for the next round of spending increases,” and Dick Armey more colourfully called “fiscal child abuse.”  You could divide these by some arithmetical sum based on the “the 170,000 people predicted by Treasury to be unemployed over the next 3 years,” the 105,000 people presently drawing the dole, or the roughly 300,000 NZers on all forms of welfare (apart from WFF).

UPDATE 5: Newstalk ZB’s Barry Soper reckons that when asked about the number of jobs he expect this package to “create,” John Boy nodded his head at a figure of about 2000.

UPDATE 6:  Here’s a question for eager young economists:  How about you explain in one easy paragraph the relationship between the Broken Window Fallacy and the jobs created and the money spent through “stimulus” packages like this.  And then send that explanation to all those so-called economists talking it up who clearly don’t have a clue what you’d be talking about.

UPDATE 7: Be thankful for small mercies, says Liberty Scott. “Be grateful the package is rather small, [which means] its damage will be relatively small.”

Locke the libertarian? [updated]

Did anyone else see Green MP Keith Locke describing himself self-contradictorily as a “libertarian eco-socialist” in  this self-serving article over the weekend?

Anybody care to comment?

UPDATE: The article was written to allow Keith to complain about being surveilled by the SIS “since he was eleven.”  Trevor Loudon opens up his Keith Locke files and says, given Keith’s loopy history, “I would be protesting if the SIS wasn't monitoring Keith Locke and would be most disappointed if they didn't continue to do so.”

Cash for conquests

haka_2301 We are about to get a taste of the new Government’s approach to Treaty negotiations, and it looks like this National-led Government is going to be as generous in doling out taxpayers’ money for imagined slights as the last National-led Government .

The Ngati Toa deal is instructive.  Only in modern New Zealand would copyright protection for an unpublished chant extend back nearly two-hundred years (as long, at least, as you have the right skin colour), and taxpayers’ money and an apology given to the descendants of a stone killer for the treatment of said killer.

Ngati Toa are about to be given buckets full of taxpayers’ cash to apologise for things those taxpayers haven’t done, along with an apology for the “kidnapping and detention of 18 months” of Ngati Toa chief Te Rauparaha – the “kidnapping and detention” of whom was the consequence of his having tortured, slaughtered and murdered in cold blood from Waikato to Taranaki to the Horowhenua to Kapiti to the Cook Strait to Wairau to Kaikoura to Kaiapoi to Akaroa.

He went everywhere, man, and a trail of corpses was left behind him – and the bucketfuls of cash now promised are paying for what those corpses bought him.

Te Rauparaha’s Akaroa slaughter gives you the character of this “warrior” still so revered by the tribe*.  The argument with the Banks Peninsula Maori began when Te Rauparaha exhumed and ate the decomposing body of their chieftain’s grandmother, which must have tasted grand after being dead for several months, and concluded with a carefully planned torture and slaughter of the chieftain and his family and the sacking of his pa – after which he headed home carrying “500 baskets of human flesh … destined for cannibal feasts at Te Rauparaha’s settlement on Kapiti island,”* a settlement he had stripped from the inhabitants only a few years earlier after an earlier slaughter, and on which he maintained slaves “scraping flax” to be traded for arms and ammunition for further conquests.

It should be no surprise that Te Rauparaha was an enthusiast for the Treaty – he reasoned that after his two-decade reign of terror he could use the Treaty and the protection of naive British governance to “confirm his dominion” over his recent conquests – all of which had been seized in two decades of war before the Treaty was signed, and many of which he had conquered only in order to onsell to New Zealand Company agents (who, to their disgrace, were the knowing beneficiaries of his blood lust).

Little did he know how successful his ruse would be, or for how long.  His blood-soaked “dominions” are being paid for still, just as this murderer had hoped, since for the most part it is those very lands he obtained by bloodshed for which his descendants are today being  rewarded with our largesse.

Such is modern justice in New Zealand.

Sealegs, and the business cycle

The Sealegs company, developing so-called amphibious vehicles, has been talked up by investment advisers for years.  God knows why.  Their leading product is essentially a rubber boat with a retractable undercarriage, an unattractive proposition for which they charge the whopping sum of US$75,000 for their starter model (plus postage and packing).  No wonder they struggle for buyers.

A company that has never made a profit, that’s been backed for years by investment capital that might have gone somewhere that might have grown investors’ capital instead of consuming it, I wasn’t surprised to see the postponement this week of their latest rights issue.  “The Sealegs board considers current economic conditions will not support an expansive business plan,” says Sealegs chief executive David McKee Wright.

Perhaps it’s fairer to say that current economic conditions mean the owners of investment capital are looking more seriously at where they’re throwing their money, and obvious malinvestments like this one are going to feel the heat.

That’s a good thing. 

Readers who want to understand the business cycle, who want to understand where all the money goes when we go into the bust phase of the cycle, should look at so-called “investment” vehicles like this one, since you can see in microcosm what has happened to the whole economy.

"Somebody had blundered," wrote F. Scott Fitzgerald in the collapse at the end the Roaring Twenties, "and the most expensive orgy in history was over."

    It was borrowed time anyhow -- the whole upper tenth of a nation living with the insouciance of grand ducs and the casualness of chorus girls.  Even when you were broke you didn't worry about money, because it was in such profusion around you.

When central banks are pumping out easy credit to create a boom then rhetoric rapidly overtakes reality.  When the whole “upper tenth” is living with the insouciance of grand ducs and the casualness of chorus girls, when money is pumped out with such profusion, then malinvestments like Sealegs and the like look mighty attractive, and real resources are wasted on phony “opportunities” based on little more than hype [see Sealegs’ share price track here].  The result is that the pool of real savings – which represents real capital -- is consumed instead of grown – burned up in the boom that the easy credit made possible, and flushed out in the bust that the easy credit made necessary.

To paraphrase Gresham’s Law, the counterfeit capital created by the central bank consumes the real capital built up by savers.

I’ll leave it as an exercise for you, dear reader, to understand the implications if the days of easy credit are continued, as governments insist they must, and if malinvestments that need to fall over continue to be bailed out – as the owners of those malinvestments plead that they should.

UPDATE:  Tyler Watts writes in the MIses Daily Article today on the importance of letting failures fail.  To quote Warren Buffett, it’s only when the tide goes out you can see who’s been swimming naked. 

Quote of the day: Reason!

I am not primarily an advocate of capitalism, but of egoism; and I am not primarily an advocate of egoism, but of reason. If one recognizes the supremacy of reason and applies it consistently, all the rest follows.
- Ayn Rand

Two Bridges - Erasmus and Ling-Tie

A guest post by Jeff Perren that originally appeared at his Shaving Leviathan blog.
It's easy to see why the locals call the Erasmus Bridge in Rotterdam "The Swan." But it may be too timid a metaphor. The structure's grace and beauty far outshine that creation of nature.

(Photo by Lars Mathiassen)
    The Erasmus is a design known to bridge aficionados as 'cable stayed'. A series of thick, ultra-strong steel strands reach from the tip of the pylon (the swan's 'neck') to the roadbed below, looking like nothing so much as a set of taut piano wires. Like a cross-beam on a swinging gate, those cables resist the downward forces on the road.
    Designed by Ben van Berkel and completed in 1996, the bridge is 800 meters (2,600 feet) long, about 10% of which raises to allow ships to pass under.
    Bridge building has undergone something of a renaissance in recent decades, thanks in no small part to the work of Dr. Tung-Yen Lin of Berkeley.
    During his seven-decade career he taught or was directly responsible for numerous innovations, not the least of which was his promotion of pre-stressed concrete in building structures, now ubiquitous.   
    He used the technique in building his own home, which featured a 1,000 square foot interior span free of supporting beams. (He used the area as a ballroom to dance with his wife.) Dr. Lin passed away in 2003 at the age of 91.
    One of his most beautiful creations is the stunning Ling-Tie bridge in Nanning, China, completed after his death. Resembling a rounded harp, it provides a fascinating design variation that combines an arch with cable stayed features.

Only two out of dozens of spectacular monuments to genius, these bridges demonstrate that the great age of building is far from over. While they get less fanfare than in generations past, they remain some of man's greatest achievements.

Tuesday, 10 February 2009

Douglas offers taxpayers a ‘Conscientious Objection Option’ [update 2]

Roger Douglas has been reading Libz policy again, and he’s put it at the heart of his new plan to save the economy and put it on the path to prosperity, to be announced at Orewa tonight. 

Libz have pushed for a tax-free threshold for income tax of $50,000.  Douglas is willing to allow $30,000.

Libz have for years pushed for a ‘Brian Edwards Option,’ allowing those like Edwards who advocate higher taxes to keep paying them and to keep receiving state-funded health and education, while the rest of us can opt out and in return look after our own health, welfare and education.  We call this last the Conscientious Objection Option, which over time would become the preferred option.  Douglas is allowing an “opt in” system which is not a million miles away, and not at all difficult to introduce. Says Douglas,

I believe that the only way to change our economic prospects is to radically redesign our income tax system in concert with our social welfare system. Individuals should have the ability to opt in to the new system. Individuals who like high tax rates and monopoly-run health, welfare, education, and superannuation services can stick with the old system. But if you want to opt out of that failing system, then you should be able to have a lower tax burden in exchange for taking personal responsibility over your life.

It’s not all that’s needed by a long chalk, but it’s a start.  Would that he were listened to.

UPDATE 2: The only things that travels faster than bushfires is ideas.  From Libz, to Douglas to America’s influential National Review Online in … less time than it takes for politicians to start pointing the finger.

Libertarianz: setting brushfires in people’s minds since 1996. [Hat tip New Zeal]

New blog, new voice of reason

New blog added to to the ‘Regular Reading’ blog roll is Voices for Reason, where experts from the Ayn Rand Center for Individual Rights will provide daily commentary on breaking news from the perspective of Ayn Rand’s philosophy, Objectivism.

Debi Ghate from the Ayn Rand Center says, “It is our goal to make Voices for Reason the go-to source for our unique perspective on the most important news of the day and the state of our culture. Our writers will share their insights, evaluating current events using Ayn Rand’s philosophy of reason, individualism, and laissez-faire capitalism as their guide.”

Sounds good to me!

Minimum wage rise: everybody loses

minwage We’re in recession, moving inexorably into depression. 

Jobs are short, confidence is low, and prices and profits are falling.

Yesterday’s announcement that “the minimum wage” is going to be raised is an indication, however, that economic recovery is what politicians are eager to avoid.

We’re in a hole, and all they want to do is keep digging.

Let me explain that point.

When the prices producers can get for their produce are going down, as they do in a recession, then producers themselves need to cut costs if they're going to survive.  That’s a law of reality that affects everyone from car-makers to Christchurch prostitutes.

It’s serious.  When the prices for goods and services are below the cost of producing those goods and services, as they so often are in a recession, then producers either cut their costs or go under.

What happens to those marginal businesses (and to economic recovery) if they can’t cut their costs?  I’ll leave that question as an exercise for you.

How can governments help? Well, a responsible government could help this process of recovery by cutting their own spending and removing any legal impediments to letting prices fall -- which, crucially, includes the price of labour. Allowing viable producers to cut costs in the face of falling prices, especially the cost of labour, is what leads the economy into a genuine recovery.

Conversely, prohibiting cost cutting delivers the opposite result. By meddling and over-spending, by keeping prices high and setting ‘price floors’ that make it hard for marginal producers to survive, they either delay or kill stone-dead any genuine recovery.

Yesterday's decision by the National/Act/Maori Government to **raise** the minimum wage in the face of falling prices and falling production confirms that this Government intends to take the latter route.

The minimum wage is a price floor below which staff are not legally allowed to work.  The result of setting the price for labour above the market clearing price is to put labour out of work.

It’s as simple as that.

If the National/Act/Maori Government knew what they were about they wouldn’t be raising the minimum wage, they’d be abolishing it.

Prices don’t need to be fixed or kept up – at the present time they urgently need to fall.  One man’s price is another man’s costs.  As the likes of Pigou and Haberler and Patinkin have argued, “falling wages and prices would increase the real value of money holdings, and the spending out of those real cash balances would restore the economy to full employment” -- and while monetary wages might fall, as they need to, as productivity increases and the purchasing power of every dollar increases, then real wages will actually rise

It’s not a balancing act: Everybody actually wins.

But this benevolent process can only come to fruition if the politicians and the union reps get out of the way first.

The sad thing about yesterday afternoon’s announcement however is not just the number of people it will throw out of work and the businesses it will throw out of business, it’s the clear indication that the actions of this government will not be determined on the basis of economics, but instead on ordinary politics. And that ladies and gentlemen is the problem.

Despite the comments from so-called economists this morning, this is not good economics.

There are so-called economists arguing that a hike in the minimum wage will help recovery by inducing an increase in consumer spending.  These are people who think money grows on trees.  They are utterly ignorant of where this “extra spending” is supposed to come from, which is from the earnings of producers – earnings that are now severely reduced.  This is not even economics, it’s just stupidity.

There are so-called economists who’ll insist that the derisory “tax cuts” delivered last week should be enough to fund today’s cost increase.  These are people who one can only assume have never seen a balance sheet, nor grasped the extent of today’s problems.

And there are so-called economists who argue that wages are inherently “sticky downwards,” that lowering the price of labour is inherently impossible so don’t even bother trying.  Now, it’s certainly true that wages are going to have trouble falling in the context of minimum wage laws and the refusal of unions and policy-makers to let wages decline – and the insistence of so-called economists that they don’t need to.

But sadly for these theorists, their theory is contradicted by cases such as this one, and by the history of depressions past.

Remember the Great American Depression of 1920?  No?  There’s a very good reason for that: there wasn’t one.  Unlike the Great American Depression of the thirties, when the US economy went into a tailspin and President Hoover did everything he could to keep prices and wages high, in the recession of 1920, prices and wages were allowed to fall, allowing things to get back on an even keel, and within a year the economy was booming away again.

The same thing happened in New Zealand in the early thirties.  While FDR was meddling away trying to keep prices high (prolonging the American depression for nearly a decade), New Zealand’s political leaders allowed wages and prices to fall, and by 1934/45 the New Zealand economy was back into recovery mode.

These are the lessons from economic history that honest historians, economists and politicians should be learning, and talking about.

Sure, you can listen to the likes of Sue Bradford and Phil Goff and Helen Kelly and the boys at the Double Standard who demonise private enterprise and spout economic illiteracy.

There are important lessons from history they do need to learn.  In the context of economic recovery they need to learn that the demonisation of private enterprise is counter-productive, especially to the low-paid people they clam to be speaking for. They need to learn it just as much as American president Barack Obama needs to learn it, as Lew Rockwell explains:

    With his rhetoric and policies, [Obama] has decided to demonize private enterprise, just as FDR did, as a way to present government as the great savior. Now, think about this. If there is a way out of the recession, it will have to be provided by private enterprise. It will come by new businesses, business expansions, entrepreneurship, new technology, and this will be the source of lasting jobs and prosperity.
You cannot make a country rich by looting taxpayers and paying people to pound nails into siding at public schools! These activities amount to capital consumption. They are not sources of investment. You can say that they are stupid tasks or wonderful tasks, but it is not a matter of ideology as to whether such public projects will make us all wealthier. They will not. They drain the sources of wealth from society. They represent a cost, not a blessing.

Neither jobs nor spending grows on trees.  That’s not ideology: that’s reality.  Private enterprise is the engine of both new jobs and any real recovery we’re ever going to see – it is the solution to recovery, not the impediment.  Responsible governments understand that. 

Does this one?