Friday, 19 March 2010

Friday Morning Ramble (March 19): The Prostitutes & ObamaCare Edition

Just when you thought it was a slow news week . . .

  • At $200 per hour, blowing $3.4 million on prostitutes (if you’ll forgive the pun) works out at 17,000 hours--or around 5 hours a day for 9 years.
    Blame Bernard Hickey for the arithmetic.  Blame Steven Versalko for the thieving. And blame Cactus Kate for wondering whether Versalko’s wife should ditch him now, or after the lesser of 6 years or $3.4 million is paid back by his hookers.
  • Productivity, productivity, productivity. “Ultimately, the idea of productivity is essential – and yet the statistics of it are not so useful.”  Time to bring on a “Productivity Commission” then? Um…
    Productivity problems
  • Education standards are still a political football, here and elsewhere.
    Andrew Coulson explains why all age-based standards are bad:
    The False Premise of National Education Standards
    And Neil McLuskey explains:
    You Always Lose with Top-Down Standards
  • Meanwhile, over in the lucky country, “’health and welfare’ jobs have just overtaken the retail sector in terms of employment. Currently 1 in 9 jobs is in health and social assistance…"It will keep getting bigger," says labour market specialist Mark Wooden…”
    Astonishing claim
  • An interesting anecdote about the iPredict market on Roger Douglas's Private Member's Bill allowing the youth minimum wage shows just how good insider trading is at letting the market know the information it needs in a timely—almost instant—fashion.
    Markets and information aggregation
  • Remember all that kerfuffle a week or so back about a Ministry of Women's Affairs paper on salary gaps, about which press releases were issued telling us that it would tell us that all women are underpaid. Now that the paper is available, and the media has moved on, we find however that it doesn’t tell us that at all.
    Reporting on pay gaps
  • When did bad choices become “addictions”? About the time everyone wanted an excuse for evading responsibility.  More evidence here that the bad habits people like to call “addiction” are a choice, not a disease, from “a research psychologist at McLean Hospital and a lecturer at Harvard [who] mounts a devastating assault on the brain-based model of addiction”:
    Satel on Addiction
  • There was more evidence of the following thesis just this week, wasn’t there:
    Conservatives Hate Trial by Jury
  • Andrew Sullivan, and many other Atlantic readers and writers I’ll be bound, gets schooled in Israel’s history by means of some scurrilous maps.
    Andrew Sullivan Revises History (Again)
  • And historian Scott Powell reminds us just how big small Israel is.  No wonder the Arab World is complaining!
    No Wonder the Arabs Are So Angry!
  • Meanwhile, from the Department of Good News comes this:
    CIA chief Leon Panetta saysmore than half of al-Qa’ida’s top 20 commanders, and hundreds of militants, had been killed in Pakistan military operations and targeted attacks on the region over recent months.”
    Which, as Andrew Bolt observes, is “good if true.”
  • Peter Schiff takes on a point-by-point fisking of Paul Krugman.  Magic.

  • And in ObamaCare Week, Leonard Peikoff schools us once again on a basic fact:
    Leonard Peikoff: Health Care is Not a Right
  • Paul Hsieh points out that government-run health systems—any government-run health system, not just ObamaCare—necessarily pits doctors against their Hippocratic Oath. It “places your doctor’s medical conscience directly on a collision course with government bureaucrats.”
    ObamaCare vs. the Hippocratic Oat
  • Now that the Democrats’ have gone post-modern, with plans to simply “deem” Obamacare into law without even bothering to hold a vote on it, it’s clear enough, says Ed Cline, from the suicidal abuse of power that Obamacare is “not just about health care. It’s about power. It’s about tyranny. It’s about destroying America.”
    Of Tom Hanks, the “Slaughter House,“ Polar Bears, and Bronx Cheers – RULE OF REASON 
  • “This whole idea of passing a bill 'without explicitly voting for it' is the greatest evasion of legislative responsibility, the most blatant expression of contempt for the public, that I have ever seen from Congress."
    Robert Tracinski: "Now It's Up to the Bear"
  • “Krugman is right about one thing: this takeover is the culmination of decades of US government intervention in healthcare.”
    Reversing the takeover
  • Quin Hillyer says “I told you so.”
        “[Back in 2008] I warned about how if the Obamites couldn't win under the current rules, they would just change the rules or otherwise break them. The latest idea, the "Slaughter Solution," is just one such example.”
    Didn't I Warn About Alinsky?
  • Michael Hurd writes a letter to the editor:

        Under the Constitution, two houses of Congress are required to pass a bill into law so that the President may sign it. Under the Pelosi Congress, the House merely needs to “deem” a bill into law without even being concerned about the Constitution. What’s the underlying premise here, aside from a desire to institute socialism and fascism at any cost? It’s the death of rationality as applied to our government. The United States Constitution was a document whose primary purpose was to put an objective check on men through elevating objective laws above the will of any one man (or woman). That Congress and the President are even considering such a proposal as “deeming” something into law – whether they ultimately get away with it or not – shows how far our nation has tumbled from any standard of rationality and objectivity.
        “What’s at stake here is not merely politics, but philosophy. Philosophy refers to more fundamental concerns such as the nature of reality and the means by which we assess reality. Do we require facts and proof to make our claims? Or do we merely wish or “deem” to be true whatever we feel to be true? Philosophy answers these questions. And philosophy sets the terms for the kind of government we will have. Once people give in to the notion that reality is whatever anyone feels they want it to be, the way is paved for dictatorship. A philosophy based on objective reality and reason gave rise to the original American concept of freedom and individual rights; the demise of rationality means the fall of our government as we once knew it. This goes well beyond the disastrous consequences of socialized medicine. Pelosi’s law of arbitrary will is now the law of the land. The law of the land is no longer the law of objective justice; it’s the law of sheer will and power.”

  • Duke Ellington’s 1927 masterpiece ‘Creole Love Call’ expresses the whole of love—from the sacred to the profane.  Only jazz can do this. Here it is sung by Priscilla Baskerville for the movie Cotton Club.

  • Where did all that gold go?  Turns out China is buying its own.
    China Buys its Own Gold 
  • And watch out. China has one of the world’s two big economic bubbles right now, says investor Jim Rogers. (And Rogers is always worth listening to.)
    Jim Rogers Sizes Up Two Global Bubbles
  • The Krazy Economy blogger continues his basic series explaining “how the Fed works to expand bank credit, the Fed’s massive expansion of Member Reserve Deposits, and the steady decline in bank loans.”
    Good stuff to get you up to speed with what’s going on.
    Fed and the Money Supply: Details
  • Some people equate warmist science with the science on evolution.  Some insist you’d have to be a moron not to believe in both (I’m looking at you, Pharyngula.)  Whereas others insist you’re going to hell if you believe in either (we’re all looking at you, Garth George.)
    Fact is,
    Evolutionary Theory and the Global Warming Hypothesis are a World (of Evidence) Apart
  • Where did all that warming go?  Here’s how National Geographic presented mid-century temps before warming became fashionable. Now, of course, alleged scientists have become more adept at hiding the subsequent decline.
    NHNatGeo76small_thumb How did that cooling get massaged away?
  • 51uETda8P9L._BO2,204,203,200_PIsitb-sticker-arrow-click,TopRight,35,-76_AA240_SH20_OU02_You can kill off the warmist hockey stick as many times as you like, but they still show up every time a warmist meets the press.
    IPCC's John Houghton about ecofanatics: annotated version
  • Perhaps this will help exterminate the thing permanently:
    Hockey Stick Illusion: “Shut-eyed Denial”
    It “deserves to win prizes” says Matt Ridley.
    The case against the hockey
  • According to M. Mitchell Waldrop, editorial page editor for Nature, “global-warming deniers . . . are sowing doubts about the fundamental [climate change] science.” Further, Waldrop argues in his op-ed “Climate of Fear, “scientists’ reputations have taken a hit.” Ignore the snarky reference to “deniers” and ask: is science and are scientists under attack? The answer is Yes.
    But who’s to blame?
    What Real Scientists Do: Global Warming Science vs. Global Whining Scientists
  • “The Global Warming/Climate Change charade is falling apart faster than the Democrats 2010 electoral fortunes. Falsified data, omitted relevant data, unreliable sources – the most prestigious propagators of the global warming case are beset with scandal after scandal.”
    Here are a few highlights from
    The Wreckage of the “Climate Consensus”
  •     “The death rattle of the climate campaign will be deafening. It has too much political momentum and fanatical devotion to go quietly. The climate campaigners have been fond of warning of catastrophic “tipping points” for years. Well, a tipping point has indeed arrived​–just not the one the climate campaigners expected.
        “The lingering question is whether the collapse of the climate campaign is also a sign of a broader collapse in public enthusiasm for environmentalism in general. Ted Nordhaus and Michael Shellenberger, two of the more thoughtful and independent-minded figures in the environmental movement, have been warning their green friends that the public has reached the point of “apocalypse fatigue.” They’ve been met with denunciations from the climate campaign enforcers for their heresy. The climate campaign has no idea that it is on the cusp of becoming as ludicrous and forlorn as the World -Esperanto Association.”
    In Denial
  • I do believe I’ve found my next Screen Saver/Desktop, courtesy of Despair.Com.
  •      “On the surface, the US economy is recovering. Well, not even. It is stabilizing… Economists who never expected trouble, reacted to it in a predictably moronic way - they rushed to the rescue with more debt…. But here's the interesting point: by failing to address the real causes of the crisis, the feds only allowed those undercurrents to grow more powerful and more dangerous.
        “Economists can't tell a government job from a private sector job...and can't tell $1 of government spending from a dollar spent by the private sector...and can't tell a dollar's worth of GDP from a dollar's worth of real prosperity...which means, they can't tell the difference between what's happening on the surface to what's happening underneath.”
    Who Can Blame Consumers for Being More Ready to Spend Money?
  • All the economists who either never saw the economic collapse coming or who actually helped to make it happen (these two groups overlap quite a lot, you understand) are still in there trying to “fix” what they never knew about anyway.
    They seem to think that business cycles come out of the blue, like earthquakes or cyclones.  Not so.  Not so.  They’re entirely man-made, and entirely easy to understand.
    Business Cycles, Not Our Fault
  • “The question of whether we are headed into an inflationary or deflationary environment is probably one of the most important, complex and difficult questions to answer right now. For investors, getting this call right or at least thinking about the potential possibilities is absolutely crucial…So where are we? Ahhh...if only it were that easy.”
    Inflation or Deflation?
  • Did someone say that China hasn’t been stimulating?
    China’s Currency Manipulation is a Form of Economic Stimulus
  • More news on the GDP delusion:
    Economic recovery: don’t trust the GDP figures
  • Free-riders? Who cares about them, says Yaron Brook, when “positive externalities” are so enormous.

  • Amy Mossoff talks about the experience of starting an Objectivist discussion group at her place, and the selfish value to her of doing it.
        "I started thinking about this project when I realized that the most important thing I get from my friends is intellectual stimulation.  I noticed that when Adam and I have friends over – friends who share our philosophical views and take ideas seriously – the conversations we have make me feel great for days.  Sometimes I learn something new from the content of the discussion, but more often than not, the important thing is that the exercise of my mind refuels me and puts me into a more active-minded mode than I would normally be in.  After these visits, I feel charged up, energetic, and on my game.  Everything I do is more intense, and I enjoy my routine much more.”
    There’s good stuff in the comments as well.
    My New Hobby
  • A few websites around the place  have just discovered what was released in Ayn Rand’s journals back in 1996: that when the twenty-two year old Rand first arrived in the US from Bolshevik Russia, she planned a novel (which she never completed) based on a cold-hearted killer.  Apparently that’s okay when you’re Truman Capote or Dostoyevsky, but not for Ayn Rand.
    Find the truth about the story here:
    Smearing Ayn: Rand, Nietzsche and the Purposeless Monster
    Rand's views on murderer William Hickman
  • I’ve just finished John Lewis’ magnificent book Decisive Wars and the Lessons of History, with lessons from history from Sparta to Hiroshima; from Sherman’s burning of Atlanta to the failure of pre-war appeasement of Hitler.  Here he is talking on the lessons of that book for today.
        “With the creation of the Department of Homeland Security, America has accepted a permanent, institutionalized state of siege on its own soil. But is this the correct strategy? In this lecture Dr. John Lewis examines several examples from history—including Ancient Greece and Ancient Rome—in which great nations, facing attack, have acted defensively rather than with bold offense. The results are clear: such a policy is suicidal. Rather than bracing against further attacks at home or spreading “democracy” abroad, America should destroy her enemies.
        “But this strategic lesson needs a moral foundation….”
    WATCH HERE: The Failure of the Homeland Defense: The Lessons from History [66:41 min.]
  • The integrator of the whole of economics is . . . Say’s Law! (Well done there at the back.)   The estimable Steven Kates (who, as it happens, sits on Australia’s Productivity Commission) explains how Say’s Law integrates the whole of economics; and how John Maynard Keynes never even understood, let alone refuted it.  And look just how underhanded Keynes was . . .
    Watch Why Your Grandfather’s Economics Was Better Than Yours [57:00 min.]

  • BUY IT AT AMAZON! And good news: Kates’ classic book Say’s Law & the Keynesian Revolution has been re-released in paperback.  One of the best explanations around of economics’ most basic law.
    BOOK REVIEW: Say's Law and the Keynesian Revolution: How Macroeconomic Theory Lost Its Way
  • Samizdata reports that “Western Australia has a population of 2.2 million people, and occupies an area of just over 2.6 million square kilometres. Just for reference, that is seven and a half times the size of Germany or alternatively ten times the size of Texas.
        “However, average house prices are amongst the highest in the world, as there is a shortage of land.”
    And wouldn’t you know it, there is: and it’s those same “smart-growth” arseholes that have made every other housing market so expensive who’ve done the same job in WA.
    It's time misguided land starvation was stopped
  • Here’s a neat idea for American history buffs—or for those who’d like to be.  The project is called PatriotCast, and aims to be a “a real-time, online reenactment of the American Revolution. Or perhaps the best way to describe it would be a ‘Twit-enactment’.”
        “That’s right, PatriotCast will be using the increasing popular mini-blog/ social networking site as its platform to provide real-time, daily updates on the events that shaped this nation’s beginning.
        “Another way to think of it would be as if ‘Twitter’ were around during the 18th century and perhaps a large news corporation using twitter was following the politics and actions in America between the years of 1775 and 1783.
        “PatriotCast will reenact and in a way mirror those years between the years of 2010 and 2017, with tweets coming usually everyday (often multiple tweets per day) corresponding with the historical date.    The tentative start date for the Twitter feed to activate will be April 1st of 2010 which would correspond with the historical date April 1st 1775, and so on for eight years.”
    Sounds like it’s worth signing up!
    PatriotCast Project
    PatriotCast at Twitter
  • Trey Givens takes on one of those difficult problems in modern manners:
    Who Pays on Guy-Guy Dates? 
  • From JazzOnTheTube: Chick Corea tells the story of the great 1930s cabaret pianist Fats Waller acknowledging Art Tatum as he entered the club one night. He announced to the crowd, "I am just a piano player, but tonight God is in the house." 
    Born blind, it’s said that friends tricked him when he was a learning piano by buying a piano duet on disc and telling him it was played one-handed—which is how he went on to learn it.
    Here’s Art Tatum with ‘Willow Weep For Me.’

  • And for something completely different . . . here’s Daniel Barenboim with the world’s best-known piano sonata [hat tip Lindsay Perigo]:

  • And finally, a cogent thought for the weekend—and, frankly, for any other time  [hat tip Luke Setzer]:


Enjoy your weekend!

PS: Don’t know about you, but I can’t wait until AFL starts next weekendIt’s in a league of its own:


It’s the greatest sport in the world … even if they have to play AC bloody DC all through their bloody ads to help prove it.

KRIS SAYCE: How Will Heads of Government Departments Cut Regulatory Costs?

More wisdom from`Kris Sayce at Money Morning Australia.

* * * * *

_Kris_Sayce We couldn’t help but laugh at the front page of yesterday’s Australian Financial Review (AFR):

“Tanner takes razor to red tape”

Apparently, “The Rudd government will increase the powers of its red-tape regulator in a bid to prevent any unnecessary rules from stifling economic growth…”

Red-tape regulator!

Anyway, it goes on,

    “Finance Minister Lindsay Tanner will subject new legislation and regulation to greater scrutiny while also forcing the heads of government departments to take greater personal responsibility for finding ways to cut regulatory costs.”

Sounds good doesn’t it? Heads of government departments cutting regulatory costs. Hmm, how will they do that we wonder?

But that’s the trouble, they can’t. It’s impossible. There’s no market mechanism for them to benchmark against. It’s not as though federal government departments can send spies out to see what that other Australian federal government is doing, because there isn’t one.

And even the idea that it can benchmark against other departments’ costs is false. Without a motivation to make a profit, and fully knowing that any shortfall can be covered by increased taxes or public borrowing, governments can’t know whether it is saving money.

Besides, hapless public servants will inevitably fall for the old, “costs have increased due to inflation” trick.

They’ll see any cost increase in-line with price inflation or just below price inflation as a ’saving.’ Their other trick will be to claim the rate of cost increases is lower than in previous years.

Either way, there won’t be any savings.

But back to the AFR. The bit that really tickled us was this:

    “Mr Tanner has finalized orders that would empower an independent agency to decide whether a department needed to report on the economic cost of a new regulation, taking the decision out of the hands of the department itself. The change gives the Office of Best Practice Regulation (OBPR) greater authority to scrutinize laws and rules proposed by departments…”

Ah, only in government. You can imagine the conversation when this OBPR department was set up:

Pen-pusher 1: I’ve had a great idea of how we can cut red tape.

Pen-pusher 2: Really, how?

Pen-pusher 1: It’s simple, we’ll set up a brand new department, staffed by tens, even hundreds of people to handle all the red tape and then it can make the cuts.

Pen-pusher 2: You’re a genius.

Pen-pusher 1: I know.

Only a chump would think that creating a whole new government bureaucracy in some way reduces bureaucracy. One step forward, two steps back.

However, that wasn’t the most ridiculous thing we read yesterday. That honour goes to Nobel prize winning economist Paul Krugman for his column in the New York Times.

As we’ve written before, not only is it sad that a supposedly well-educated man like Krugman could get so much wrong, but it’s even sadder that so many people read and truly believe what he has to say.

And even sadderer is that the chumps in government largely follow his advice.

Take this bit of babble:

    “Most of the world’s large economies are stuck in a liquidity trap – deeply depressed, but unable to generate a recovery by cutting interest rates because the relevant rates are already near zero.”

Doesn’t something seem terribly wrong with that argument? If low interest rates was the solution to excessive debt then surely interest rates near zero would already have solved the problem.

Wouldn’t the fact that it hasn’t solved the problem not make you think that perhaps, just perhaps, low interest rates aren’t the solution at all?

Perhaps when you keep doing the same thing – cutting rates – and it keeps causing the same problems – excessive credit – the answer is to do something else. Such as not letting the ‘excessive credit genie’ out of the bottle in the first place.

Not according to Krugman. With interest rates near zero, he and his Keynesian mates are in a bind. They’ve got no more ideas apart from closing their eyes and wishing really hard that it will all go away.

Actually, that’s not strictly true because –- wait for it -– Krugman does have a cunning plan.

But before I reveal his dastardly deed to solve the world’s woes, there is a point he makes about what would happen if China started to dump US dollars. Something we covered in yesterday’s Money Morning.

Krugman asks:

    “What you have to ask is, What would happen if China tried to sell a large share of its US assets? Would interest rates soar?”

No need to bother yourself by thinking of an answer, Krugman’s got that sorted:

    “Short-term US interest rates wouldn’t change: they’re being kept near zero by the Fed, which won’t raise rates until the unemployment rate comes down.”

Is that possible? Let’s think about it. Let’s look at the transaction from the both sides.

If the Chinese did dump US dollars then they’re doing so because they believe something else represents better value. Either they’re selling US dollars to buy another currency to hold, or they’re selling US dollars to buy a physical commodity or some other asset.

Either way, the seller is selling because it values the US dollar less than the currency or item it’s buying.

But what about the buyer of the US dollars? If the buyer is a firm that’s sold a commodity or other good to the Chinese then the buyer of the US dollars will either keep the dollars to invest or it too will trade them in for something else –- another currency maybe, or more supplies for the business.

Again, the business makes a decision about which is more valuable or useful to it –- the US dollars or what can be bought using US dollars.

So, to avoid lengthening this example, let’s assume the firm intends on saving whatever proceeds it has. Its first choice is to keep the money in US dollars and earn only a fraction of a percent in interest.

That’s not much of a return. But the firm must really believe that’s the best investment for them when all things are considered. If it wasn’t it wouldn’t make the investment.

But that’s a firm buying and selling stuff. Let’s also consider a big global investing firm. In both instances the investors that need to get a return for their clients. Is holding US dollars such a great idea?

It certainly isn’t a good idea if you’re concerned that a big holder of US dollars –- China –- plans on selling lots and lots of the little Greenbacks.

The reason it’s not a good idea for the investor is this: when any asset is sold down, the price tends to fall. It’s the same for shares, property, bonds, and even currencies.

If that happens then, relative to other currencies, those investors that continue to hold US dollars would see the value of their US dollar assets fall. The knock-on effect is that investors would anticipate a further sell-off and therefore look to sell their US dollar positions first. It would be the proverbial rush for the exit. Unless…

What’s the one thing that could discourage an investor from selling a depreciating asset? One thing would be an increase in the income flow from retaining the currency. In other words, a higher rate of interest.

If as an investor you’re offered a higher rate of interest, you may view this as an acceptable trade-off to counteract the falling value of the dollar. This could make you less likely to sell your US dollars.

But if there is no interest rate incentive it’s only natural an investor would look to sell out before other sellers pushed the price down.

With no comparable increase in the interest rate, the investor isn’t getting paid for holding on to the currency.

And furthermore, if the investors knew in advance that interest rates would not rise then why hang around waiting for something that’s not going to happen. And investors must be pretty certain interest rates won’t go up because the US Federal Reserve tells them so:

“…warrant exceptionally low levels of the federal funds rate for an extended period.”

OK, “low” doesn’t necessarily mean zero, but it clearly doesn’t mean 2% or 3%.

But the typical response to that is, won’t the ‘free market’ automatically adjust interest rates higher? Correct, a ‘free market’ would do that. But don’t forget, whenever there is a central bank a free market in the truest form doesn’t exist.

Besides, as Krugman ingeniously points out:

    “Long-term rates might rise slightly, but they’re mainly determined by market expectations of future short-term rates. Also, the Fed could offset any interest-rate impact of a Chinese pullback by expanding its own purchases of long-term bonds.”

That’s right, the Fed will keep interest rates low by just buying up all the bonds. Bond sellers will get a bail-out and receive top dollar rather than suffer losses from falling bond prices. And buyers who may have bought bonds at a lower price (when bond prices fall interest rates rise) won’t get a chance to benefit from a lower bond price and higher interest rate because the Fed will just print money to try and support the bond price at a higher level and therefore maintain low interest rates.

That means investors who may have been tempted to keep hold of their US dollars in order to invest in lower priced bonds with a higher yielding interest rate will now have no incentive to do so.

I mean, seriously, can it really be true that a Nobel Prize winning economist thinks it’s a good idea for the Fed to create money from thin air to pay off debts? It’s just not logical.

Think about it, if it was such a good idea why don’t all governments do it? Then there would be no government debt at all and we could all start from scratch. Better still, why not let all private individuals do the same thing?

Krugman and the dopes at the Fed must surely know that monetizing debt by just creating more money to pay it off is a bad idea.

But just in case you need confirmation of why it’s a bad idea, it’s simply this. It’s an appalling inflationary tactic that harms everyone. The only short-term beneficiaries are the government as it doesn’t need to suffer the wrath of the electorate by either cutting services, raising taxes, or defaulting on debt.

Everyone else is a loser.

Naturally Krugman wraps up his sorry tale with another fallacy:

    “It’s true that if China dumped its U.S. assets the value of the dollar would fall against other major currencies, such as the euro. But that would be a good thing for the United States, since it would make our goods more competitive and reduce our trade deficit. On the other hand, it would be a bad thing for China, which would suffer large losses on its dollar holdings. In short, right now America has China over a barrel, not the other way around.”

We can only think he’s got in mind that old saying: “If you’re in debt to the bank for a million dollars and you can’t pay it back, you’re in big trouble. But if you’re in debt to the bank for a billion dollars and you can’t pay it back, the bank is in big trouble.”

It’s a nice saying. Very twee. Trouble is, it’s not true in the case of the individual, and it’s not true in the case of China. Although, granted, for different reasons.

Although it’s true that the obligations the US has to China is little more than the ‘promise to pay the bearer’ a gazillion dollars, the reality is that the US doesn’t have China over a barrel at all, far from it.

As we pointed out yesterday, China is probably already resigned to losing a big chunk of its US dollars. That’s why it’s building skyscrapers instead of building piles of Greenbacks.

According to Krugman, China has around the equivalent of USD$2.4 trillion of reserves. Of which, according to the US Treasury, USD$889 billion is held in US treasury securities.

In other words, about 37% of China’s reserves are in US dollar bonds.

So, if China did dump all of its bonds and US dollars, what would the impact be? Well, we’ll assume the bonds and dollar isn’t going to fall to zero – we’ll assume that because Krugman seems confident the Fed would backstop it by buying up these securities!

Therefore, the Chinese may take something of a hit, but unless we’re talking hyper-inflationary money printing by the Fed – which is possible – then the Chinese will still get something out of it.

But even if we are talking hyper-inflation, so what. China has 63% of its reserves that aren’t denominated in US dollars. That’s 63% of its reserves which would increase in value relative to US dollars. What it loses in US dollar terms it gains in all other terms – China has a hedged exposure.

The losers would be America not China. A terminally weakened currency and massive debt which no one would want to buy. Not until hyper-inflation had run its course anyway.

A nation that would be unable to afford to import goods and services. The only possible savior for the US is its massive holding of gold – providing it’s all accounted for! But even so, that doesn’t necessarily give it a get-out-of-jail-free card. Having a store of gold is fine, but unless the US could do a quick about-turn and reinvigorate its formerly productive economy, then the gold would slowly but surely be exported in exchange for consumer goods.

Let me put it this way. The picture Krugman paints is a world where everyone pays off their own debt by creating money out of thin air, and where the economically successful economies play second fiddle to the weak and desperate.

It’s a world that doesn’t and cannot exist. It only exists in the child-like minds of mainstream economists who fail to understand the real consequences of harmful government and central bank policies.

Don’t get us wrong, we think the whole China story is a bubble waiting to pop. But the idea that the US is playing this perfectly and holds the upper hand is completely and utterly false.


NB: Meanwhile, in completely unrelated news to Australia’s announcement of a “red-tape regulator” to stimulate economic growth, here at home in New Zealand, Finance Minister Sir Double Dipton and “Regulatory Reform” Minister Rodney Hide have announced the creation of “a Productivity Commission” to help boost New Zealand’s economic performance . . .

Villa Malaparte, Capri - Adalberto Libera and Curzio Malaparte

The Villa Malaparte on the Mediterranean isle of Capri “is as much a house as it is a sundeck.”

When I posted it here before I mentioned that it featured in a Jean-Luc Godard film, Le Mepris (i.e., Contempt), starring Brigitte Bardot and the house.  Of the film itself, Godard declared:

    “Rome is the modern world, the West. Capri represents the world of antiquity, of
nature before the advent of civilisation ... In short, the title of Le Mepris
could have been Remembrance of Homer.”

Here are a wee clips from that film showing both house and Bardot.  Not a bad combination, I’m sure you’ll agree. (Incidentally, “the old guy” in the clips is veteran director Fritz Lang, one of Ayn Rand’s favourites.)

Remember, this was intended for the big screen, so for the full effect open it up to Full Screen.

Thursday, 18 March 2010

Celebrate Human Achievement Hour!

On March 28h, 2009, between 8:30pm and 9:30pm lights around the world are supposed to go out to ‘celebrate’ Why On Earth Hour.’  That is, unless we Celebrate Human Achievement Hour instead!

As the saying goes, Exploit the Earth or Die!

Jury nullification wins in Waihopai decision

CLICK FOR STORY I must confess that I’m not worried by a jury’s decision to set at liberty the three nutcases who attacked the Waihopai spy base. In fact, I have to say that I’m rather pleased.

I’m rather pleased—not because I agree with Leason, Land and Murnane’s vandalism; or with their arguments to justify their wilful damage (that they mounted the attack “to prevent others' suffering”); or with the “reasoning” used by lawyer John Miller that the jury acquitted the fruitcakes because they “genuinely believed” their actions would save lives.

No, I’m pleased because it’s great to see the concept of jury nullification given legs. 

    “Jury nullification occurs [says Wikipedia] when a jury in a criminal case acquits a defendant despite the weight of evidence against him or her. Widely, it is any rendering of a verdict by a trial jury which acquits a criminal defendant despite that defendant's violation of the letter of the law…”

The American  Fully Informed Jury Association maintains that

    “The primary function of the independent juror is not, as many think, to dispense punishment to fellow citizens accused of breaking various laws, but rather to protect fellow citizens from tyrannical abuse of power by government.”

The principle of jury nullification is a just check on government. It’s one way to combat bad law—a pressure-relief valve on tyranny--a long-established method recognising that jurors are entitled to vote on a verdict based not just on the facts in front of them, but according to their own conscience. 150 years ago, following the principle of jury nullification, American juries were delivering not-guilty verdicts for people who freed runaway slaves—freeing people by following their own conscience instead of the law. Today, however, people are being imprisoned by guilty verdicts delivered by unwilling juries unaware that they have the power to set good people free. 

Writing about the imprisonment of Ed Rosenthal in 2003, for example, Reason magazine observed:

    “Many people, especially conservatives, are troubled by the idea of jury nullification, with its apparent invitation to apply vague, unwritten standards. But the Rosenthal case shows [one example of] how this power, which has a venerable history in Anglo-American law, can help combat a far more dangerous kind of lawlessness.”

To whit: the tyranny of bad law.

It’s true that jury nullification cuts both ways, but to see a jury in this age delivering a verdict which, however much I disagree with it, gives voice to their own conscience instead of black-letter law is, to my mind, progress. 

It’s just a shame that what the jurors’ conscience contains is so obviously fatuous.

Stimulating corruption

Is this a “Green New Deal,” or eco-fascism? Corporate capitalism, Obama style?

Or just big fat corruption.

Hat tip Craig Ceely, who says,

    “I especially liked Rachel Maddow's triumphant "Ta-Daa....!!" at the end. Yeah, way to understand economics, Rachel.”

It’s sure as hell appropriate the story involves windows.

Take a look at the videos, then read up about the character of Orren Boyle in Ayn Rand’s Atlas ShruggedTo paraphrase Santayana, "Those who do not learn from fiction are condemned to live it."

Yeats speaks!

In honour of Paddy’s Day, the day when the land of poets and scholars is honoured by the worldwide consumption of millions of gallons of stout, here’s a few old poems of Ireland’s greatest poet, William Butler Yeats.

The first clip has the old bugger reading a few of his poems himself, including ‘The Lake Isle of Innisfree,‘The Fiddler of Dooney,’ ‘The Song of the Old Mother’ and ‘Coole Park & Ballylee.’

Read beautifully, with all the rhythms of poetry.  “I took me a devil of a lot of trouble to get into verse the poems that I am going to read,” he says,”and that is why I will not read them as if they were prose.”

Here’s his best, ‘The Second Coming.’ For “rough beast,” some might read “drooling beast”:

Here’s a beautiful animation of his short ‘Cloths of Heaven.’ 


And here’s a choreographed piece—yes, with dancers an’ all—set to Yeats’ ‘Song of Wandering Aengus’ sung by Christy Moore.’  It’s said to look best if watched in a darkened room.  And presumably with a drink. A dark one


Wednesday, 17 March 2010

The weasel words of “planning” power-lust

What do town planners mean when they talk about things like “affordable housing” and “community”? 

What they don’t mean is making houses affordable, or about anyone other than themselves.

The terms that planners use, and the way that planners use them, are nothing more than euphemisms for control. What they mean is nothing more than fog used to “transfer many of the most important decisions about the use of private property from the rightful owners to the political process, dominated by planners and the … most powerful and vocal special-interest groups.”

Michael Sanera of North Carolina’s John Locke Foundation has done us a favour by translating a few of the more arcane terms used by planners, all of which are used “to cover the reality that their recommendations reduce basic individual freedom.” Some of my favourites:

  • affordable housing: An extortion scheme to force homebuilders to sell their houses at below market prices.
    The political demand for affordable housing is created by restrictive land-use policies, such
    as those recommended by town planners.
  • auto-dependent: People who prefer to drive automobiles, and communities that fit their preferences.
  • best practice: Whatever are the latest planning fads.
  • compact development: Congested, crowed housing conditions.
  • growth: City development the satifies to the whims of planners and special interests.
  • incentives: Legal extortion systems operated by the city.
  • mixed use: A combination of commercial, residential and other uses in the same area.
    An example of mixed use would be retail shops on ground floor and apartments or condos
    on upper floors. For most of the last century, this practice was prohibited by zoning “best
  • open space: A requirement that homebuilders provide more land than homebuyers desire.
  • public realm: Anything that can be seen from a street.
  • stakeholders:  Special-interest groups consulted in the development of land-use plans and
  • subdivisions: The revealed consumer preferences in neighbourhoods, which planners therefore dislike intensely.
  • sustainability: Absurd idea that without government planning, builders would create developments that fail to meet people’s needs.
  • trees: A valuable natural resource that planners (1) assume benefits everyone, (2)
    want planted and protected for everyone’s benefit, and (3) want the costs of
    the forced planting and protecting borne solely by the affected landowners.
  • walkability: Designed to discourage driving.

_RodneyHood-Scum Read them all here: A Planners' Glossary: Understanding Raleigh's New Development Code, the Diagnostics & Approach Report .

And bear in mind that town planners everywhere use these euphemisms for control—including here in Auckland, where Rodney Hide is about to give the scum more power over your property.

Sanera’s sign-off line from author C.S. Lewis is apposite:

    “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”

The nannying never ends.

DOWN TO THE DOCTOR’S: Sewage and SWAT teams

Libertarianz leader Dr Richard McGrath ransacks the newspapers for stories on issues affecting our freedom.

This week: Sewage and SWAT teams.

  1. Auckland: Our failing city – A rising population, overloaded infrastructure, bigger houses “putting pressure on city limits”, and increasing amounts of rubbish ending up at the landfills. Doom and gloom merchants warn of problems ahead for the “Super” City (should we call it Hide Park?). One of the main problems seems to be antiquated sewage and stormwater drainage systems with overflow sometimes causing sewage to flow into the sea. City councils have presided over deteriorating services for well over a hundred years. Why do we persist in leaving management of sewage and other infrastructure in the hands of local government, who have thus far done a woefully inadequate job? To protect the environment, I say let’s introduce user pays for sewage disposal – perhaps metered and charged to the household depending on use. Allow private competitors into the urban sewage disposal business; allow people to use septic tanks and on urban properties. In other words, give Aucklanders the choice of opting out of the failing government-provided systems and give them a rate rebate (read: tax refund).
  2. Twelve arrested in drugs busts – Heavily armed police executed home invasions of several Tauranga properties over the past 4 days, to arrest people for possessing and cultivating recreational drugs. The Armed Offenders Squad was used to intimidate the arrested people. Nowhere in the news item is it implied or suggested that the occupants of the properties were brandishing firearms at innocent people. Where will the AOS be deployed next -- at IRD searches of businesses and homes? At public appearances by the Prime Minister? Where will this end? Clearly, use of the AOS is now discretionary –- to be called upon any time there is a possibility that someone somewhere in the vicinity of government activity might own a firearm. And let’s face it, there is a high rate of gun ownership in New Zealand, so the AOS could turn up in your town soon, for any reason the government see fit. Am I being a bit paranoid? Or could New Zealand end up like Maryland, where there are 4.5 SWAT team raids per day?       

When the people fear the government, there is tyranny - when the
government fear the people, there is liberty.
    - Thomas Jefferson  

20-question American Revolution quiz

CLICK HERE FOR THE STORY OF THE FLAG! Consider this proposition: “One cannot really understand and appreciate American values and the exceptional nature of the United States of America if one does not have a thorough grounding in the history of the American Revolution.”

While you’re considering it, take the 20-question American Revolution quiz and see how much you do know [hat tip Charles Anderson].

And if you can get more than my own score, ahem, I’ll give you a loud cheer--and probably get you along to the next pub quiz.


Cuddling enemies while telling Israel to go to hell [update 4]

Before his election Mr Obama said of foreign affairs that he would talk to anyone, even murderers.

And he has.

But “anyone” seems to exclude allies.

The governments of Iran, China, and Russia (among other regimes) have all, in various ways, insulted the U.S.and its president with no reaction, at least not a public one.”

All things are equal to the Obama Administration.

When Saudi Arabian leaders fund terrorism against America, Obama bows.

When Tehran, the home of Shi’ite terrorism, sends missiles into Israel by proxy, insurgents into Iraq by command, and publicly beats thousands of Iranians for the sin of protest, the Obama Administration offers gently soothing words.

When Hamas fires those missiles into Israel, blows up buses full of human beings, and calls for Jihad against America, the Obama Administration sends aid.

But when Israel, the freest country in the Middle East, builds houses—yes, build houses--the American State Department can only make threats, talk about “insults,” and deliver demands it knows can not be met.

It was once said of basic diplomacy that the principle to be followed was to  “keep your friends close and your enemies closer.” The Obama Administration can’t even be that cynical. They appear to believe in keeping their enemies close, and telling their allies to go to hell.

No wonder the number of their friends is dwindling so fast.

NB: Some background here:
Barack Hussein Obama vs Israel- SULTAN KNISH.
What Obama is Actually Trying to Do in Israel – THE ATLANTIC

    “Biden, a buffoon, will get over the humiliation. He has the resilience of a rubber mouse pad.
    “Obama and Company would rather not see that construction take place because it would upset the Palestinians. The stateless Palestinians, you see, seem to be a better ‘client state’ and ally to the U.S. than is Israel. The Palestinians do not recognize Israel’s right to exist -- indeed, Israel is missing from the maps Palestinian school books -- while Israel is expected to recognize their right to swamp Israel with its stateless manqués and so destroy it. The land at issue is land Israel won during the 1967 war.
    “Why would Obama and company side with losers? What could they possible gain in their ostensive fantasy of seeing Palestinians mix and mingle peacefully with Israelis in some Hegelian thesis-antithesis apotheosis? Daniel Pipes offers some advice to Obama, Clinton, and other policymaking denizens of the White House:

    ‘It concerns not a life-and-death issue, such as the menace of Iran's nuclear buildup or Israel's right to defend itself from Hamas predations, but the triviality of the timing of a decision to build new housing units in Israel's capital city. Wiser heads will insist that White House amateurs end this tempest in a teapot and revert to normal relations.’

    “That advice is premised on the assumption that Obama and Company care about Iran’s nuclear buildup and Israel’s right to defend itself against Iran and the stateless beggars of non-existent Palestine, armed as they are by Hamas and Hezbollah. It presumes that the White House’s amateurs value ‘normal relations’ with Israel. It asks that Obama and his fellow amateurs appreciate that it is a matter of life-and-death for Israel.
    “But, in truth, Obama does not value Israel. He would rather see it compromise and negotiate itself out of existence. Just as he would rather see America submit to socialism.”

UPDATE 3: And meanwhile, while Biden and Obama and Clinton (Mrs) keep talking about “insults” from Israel, deadly rocket attacks against Israel began again this morning from her peace-loving neighbours in Gaza.  And do you think anyone of Biden or Obama or Clinton (Mrs) have taken time out from denouncing Israel for building houses to denounce the attacks, to denounce the Al-Qaeda linked attackers, to denounce Hamas—whose responsibility it is to control Gaza—or to denounce Tehran, who supplies the materiel for the rockets.  Do you think for one moment they’d open their yaps to denounce that?

Don’t make me laugh.  That might look too much like taking a moral stand.

Happy Paddy’s Day

A few things to consider on St Patrick’s Day:

guinness-draft1 Jameson_1780_Whiskey

And I do mean serious consideration.

And in related news, Irish scientists have just discovered that the bubbles in Guinness go down instead of up. True story.

A tale of two Napoleons [updated]

Delaroche - Napoleon Crossing the Alps

Two paintings of Napoleon Crossing the Alps—above by Paul Delaroche, below by Jacque Louis David.

David’s is majestic, energetic, imperial; Delaroche’s . . .  well, it’s just the opposite. David’s (painted during Napoleon’s reign) is neo-classical; Delaroche’s (painted four decades later) is naturalistic—almost journalistic: In David’s Napoleon commands a dashing charger; in Delaroche’s he sits on a mule.

If in Jacque Louis David’s version of the same subject you can see Napoleon’s imminent victory, in Delaroche’s you can see his long term defeat already etched into his very being.

But despite there being any number of reasons to celebrate Napoleon’s eventual defeat, David’s is still the better painting by far.

David - Napoleon Crossing the Alps 

UPDATE: Stephen Hicks has a revealing list of influential philosophic admirers of the French dictator:

    From Maynard Solomon’s Beethoven:

    bonaparte-dabos-apsley-house-75x98‘For Beethoven’s German and Austrian contemporaries, the Napoleonic image was especially potent: Bonaparte’s admirers included Kant, Herder, Fichte, Schelling, Hegel, Schiller, Goethe, Hölderlin, Wielan, and Klopstock. Grillparzer, in his Autobiography wrote, ‘I myself was no less an enemy of the French than my father, and yet Napoleon fascinated me with a magic power … He put me under a spell, as a snake does a bird.’ (p. 134)

    “Why am I not surprised by that list of names? [asks Hicks.] Are there any military dictators they didn’t or wouldn’t admire?”

Tuesday, 16 March 2010

Man-haters hour coming up

You are strongly encouraged to head over and read what John Ansell accurately calls Poneke’s Case For the Human Race:  “a trenchant attack on the greenwashing exercise that is Earth Hour.”  It’s magnificent. It begins:

    _quoteEarth Hour” a pathetic attempt for publicity by flat-earthers who hate everything that is good about humanity   
    “We humans are not a pestilence on this planet. We should be proud of our achievements – art and science, jet aircraft and vaccination, space travel, computers, electricity, great civilisations, the lifting from poverty of billions of people. We live in the greatest age in human history.
    “Yet, we are told daily by the media, by the flat-earthers of the “green” movement, by doom-mongers such as the high priests of the global warming industry, that we have destroyed our planet, that we are a plague on the Earth, that we must repent and beg forgiveness by some kind of mix of returning to the caves from which we came millennia ago while simultaneously paying trillions in indulgences to the Russian mafia. Forgive me Father Gaia, for I have flown.

Ansell makes the point that

    _quote It’s good to have a clean planet, but exaggerating the problem is having an  immense cost, which ordinary New Zealand families will soon be needlessly paying.
    “Millions of Africans have already died for the green religion, as food crops are used for biofuel, causing food prices to double.
    “And the greenies have the cheek to claim their (futile) efforts to cool the planet comes at no cost to those who live on it.”

logo-exploit-the-earthFinal word to Poneke:

     _quoteAt 8.30pm on Saturday March 27, we are ordered by WWF – the organisation that fabricated the IPCC’s “peer reviewed” claim that the Himalayan glaciers would melt by 2035 – to turn off the lights that make our nights so bright and liveable.”

Tell them to go to hell.

As the saying goes, the choice for humans is simple: Exploit the Earth or Die!