Saturday, May 22, 2010

QUOTES OF THE DAY: “What a country wants to make it richer…”

_Quote What a country wants to make it richer, is never consumption, but production. Where there is the latter, we may be sure that there is no want of the former. To produce, implies that the producer desires to consume; why else should he give himself useless labour? He may not wish to consume what he himself produces, but his motive for producing and selling is the desire to buy. Therefore, if the producers generally produce and sell more and more, they certainly also buy more and more. Each may not want more of what he himself produces, but each wants more of what some other produces; and, by producing what the other wants, hopes to obtain what the other produces. There will never, therefore, be a greater quantity produced, of commodities in general, than there are consumers for.
    “But there may be, and always are, abundance of persons who have the inclination to become consumers of some commodity, but are unable to satisfy their wish, because they have not the means of producing either that, or anything to give in exchange for it. The legislator, therefore, needs not give himself any concern about consumption. There will always be consumption for everything which can be produced, until the wants of all who possess the means of producing are completely satisfied, and then production will not increase any farther.
    “The legislator has to look solely to two points: that no obstacle shall exist to prevent those who have the means of producing, from employing those means as they find most for their interest; and that those who have not at present the means of producing, to the extent of their desire to consume, shall have every facility afforded to their acquiring the means, that, becoming producers, they may be enabled to consume.”
            - John Stuart Mill, “Of the Influence of Consumption on Production

_Quote The two great values to be gained from social existence are: knowledge and trade. Man is the only species that can transmit and expand his store of knowledge from generation to generation; the knowledge potentially available to man is greater than any one man could begin to acquire in his own lifespan; every man gains an incalculable benefit from the knowledge discovered by others. The second great benefit is the division of labor: it enables man to devote his effort to a particular field of work and to trade with others who specialize in other fields. This form of cooperation allows all men who take part in it to achieve a greater knowledge, skill and productive return on their effort than they could achieve if each had to produce everything he needs, on a desert island or on a self-sustaining farm.
    "But these very benefits indicate, delimit and define what kind of men can be of value to one another and in what kind of society: only rational, productive, independent men in a rational, productive, free society."
            - Ayn Rand, "The Objectivist Ethics," from her book The Virtue of Selfishness
                (quoted in her essay “The Nature of Government”)

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Fireworks at Ryogoku Bridge - Hiroshige

Fireworks

Another classic by the master of Japanese prints, Utagawa (Ando) Hiroshige (1797-1858). This print was from his last series “One Hundred Famous Views of Edo.  First printed in 1858, Frank Lloyd Wright was said to have owned a copy.

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Friday, May 21, 2010

Friday Ramble: The non-budget edition

Frankly, I’m sick of hearing about the goddamn budget and all the insufferable spin and lies about it.  So this latest Ramble is a goddamn budget-free zone.  Except for this:

_QuoteThe policies advocated by the welfare school remove the incentive
to saving on the part of private citizens. On the one hand, the measures
directed toward a curtailment of big incomes and fortunes seriously
reduce or destroy entirely the wealthier people’s power to save. On
the other hand, the sums which people with moderate incomes
previously contributed to capital accumulation are manipulated in
such a way as to channel them into the lines of consumption."

-Ludwig Von Mises, Human Action

  • Given the Keynesian spend-borrow-and-hope economics of stimulunacy applied by most of the world’s governments over the last eighteen months, it was surely inevitable that their borrowing-led stimulunacy would lead inexorably to a debt-lead “sovereign debt” crisis.  And frankly, their Keynes-led lunacy wasn’t doing too much better before that either.
    Bloomberg: the past five years don’t make Keynes look good – COBDEN CENTRE
  • Doug Reich explains why Europeans’ attempt to fake economic reality is doomed to failure.
        ”Market prices for securities tend to reflect the underlying fundamental value of those securities. Rather than an actual plan to cut government budget deficits by say, oh, I don't know, STOPPING SPENDING, Europeans have announced the magical creation of $1 trillion of phony money to bail out countries who are broke and can not pay their creditors. Investors have responded by selling eurocurrency and entering transactions to protect themselves from the devaluation of the currency or the default of these governments to pay their contractual obligation. Such activities allow prices to immediately reflect the true value of these instruments.”
    Germans Announce Law to Reverse Cause and Effect - Euro Drops – RATIONAL CAPITALIST
  • “Trying to suppress the symptoms without addressing the causes behind the widening in the spread can only make things much worse.”
    The Eurozone Stimulus Package and Economic Fundamentals – FRANK SHOSTAK
  • Remember how excited everyone was a few weeks ago when that unexpected drop in unemployment was announced. "That's the single biggest drop in the Unemployment Benefit since the recession began," Social Development Minister Paula Bennett enthused, after which everyone jumped on everyone else to say how amazing we all were,  Alan Bollard started harrumphing about raising interest rates, the NZ dollar went up, and Treasury started pretending the NZ economy was going to grow at around three percent over the next year.
    But guess what.  Now that the mainstream media has moved on to the next figment of their imagination, an Official Information Request made by blogger Lindsay Mitchell suggests that the form and content of Bennett’s announcement was deliberately deceptive, despite it being swallowed whole by nearly everyone.
    OIA response reveals real reason behind drop in the dole  - LINDSAY MITCHELL
  • “There will be no real growth and development in NZ while this culture prevails.”
    Owen McShane: Three Tales of Stupidity – OWEN McSHANE
  • Just while everyone is getting excited at Britain’s new political leadership, they go and announce the sort of attack on property-owners that would leave  Bernard Hickey in ecstasy.
    U.K. Capital Gains Tax Rise From 18% to 50% Would be Legalised Theft  - MIKE SHEDLOCK
  • Obama has a new US defence policy.  It’s called “Hope.”
    Coulter: "Obama National Security Policy: Hope Their Bombs Don't Work" – RATIONAL CAPITALIST
  • Wonder how it will work with North Korea?
    S Korea Confirms North's Torpedo Sank Warship (Killed 46) – BERNAMA
  • Obama’s totalitarian credentials become more obvious by the week.  This week’s example: Obama's regulatory czar Cass Sunstein talks about requiring Internet sites to automatically post links to opposing viewpoints.
    Weasel Words From a Would Be Tyrant – NEW ZEAL

  • Meanwhile, back in Venezuela, there’s more theft and disaster from Obama’s pin-up boy Hugo Chavez. Not content with arresting the country’s butchers last week for refusing to sell their meat at a loss, this week he’s nationalising a group of iron, aluminium and transportation companies for refusing to produce under threats.
    Venezuela's Chavez orders takeover of iron-makers  - BUSINESSWEEK
  • Obama’s poster-boy is visibly destructive.  His latest poster-girl, Supreme Court nominee Elena Kagan is less so. But it shouldn’t be. “What is the problem that so many liberal/left MSM pundits and columnists have with identifying the moral, political, and judicial philosophy of President Barack Obama’s latest nominee for the Supreme Court, Solicitor General Elena Kagan?” wonders Edward Cline. “Kagan’s positions are, if not overtly socialist, then pragmatically statist. She is for disarming Americans, she is for ‘selective’ censorship, and she worked with the Clinton administration on the first round of attempted socialized medicine. She is no friend of freedom.”
    No Friend of Freedom: Obama’s Supreme Court Nominee, Elena Kagan – CAPITALISM MAGAZINE
  • Stephen Hicks outlines how Kagan can seemingly be both for free speech and against it--a position that would make Lewis Carroll want to write about it.
    Kagan, the Supreme Court, and regulated speech – STEPHEN HICKS

_Quote Today’s debate about global warming is essentially a debate about
freedom. The environmentalists would like to mastermind each
and every possible (and impossible) aspect of our lives.”

- Vaclav Klaus, Blue Planet in Green Shackles

  • Former NZ Minister of Energy, and of Science & Technology Barry Brill explains why New Zealand’s temperature record is hopelessly compromised.
    Crisis in New Zealand climatology: The warming that wasn't – QUADRANT
  • Here’s another relatively rational look at NZ’s leaking home problem, by a chap called Ken Collins:
    Leaky Buildings – Part 1 – How did we get here. – THE SCIENCE OF ARCHITECTURE
  • No-one has been more of a thorn in the side to ClimateGate’s biggest villains than Canadian mathematician Steve McIntyre. So check out McIntyre’s presentation to the recent Heartland Institute conference ‘Reconsidering the Science and Economics of Climate Change,’ including an outline of the ‘hide-the-decline’ trick.
    Heartland Presentation – CLIMATE AUDIT
  • [Click through for all three parts]
  • To get some idea of why McIntyre upsets The Team so much, read one of his most recent pieces re-examining the way the IPCC team decided that “1998 was the warmest year in the millennium.”
    AR4 on “1998 was the warmest year” – CLIMATE AUDIT
  • By the way, this was voted best handout at the conference.
hockey
  • Specially for reader Julian, a meditation on the saying “"If you never miss a plane, you're spending too much time at the airport."
    If You Never Miss a Plane... – BRYAN CAPLAN
  • If you’ve spent any time here at all at NOT PC, you’ll know I’m very supportive of Montessori  education. So here’s a great page of links from Montessori trainer Susan Stephenson’s site giving you a full idea of what’s out there on the net to help you out with your Montessori adventure.
    The Montessori Method of educating & raising children to develop their fullest potential – SUSAN STEPHENSON
  • But as you might also be aware,  when choosing a Montessori school for your child it’s becoming increasingly difficult to find one that is actually a genuine Montessori school, and not just a Monte-Something school with Dr Montessori’s name on the signboard. This excellent two-part Canadian TV report will sharpen your critical faculty when seeking out a school for your child, and give you some idea of what to look for if you want the genuine article.
  • If liberals understand that abortion is no business of the state, but a matter of choice between a woman and her doctor, why don’t they apply that principle in the wider context?
     Abortion-Only Laissez-Faire?PRINCIPLED PERSPECTIVES
  • The elephant in the room when it comes to the debate on Arizona’s new anti-immigrant laws is drugs, specifically the War on Drugs.  Cato steps into the breach.
    A Forceful Call For Change From El Paso – CATO
  • Arizona’s attack on immigrants is, or should be, a litmus test for freedom-lovers.
    The Arizona Litmus Test – FUN WITH GRAVITY
  • However, Arizona’s new anti-immigrant laws have certainly flushed out (again) the fact that when it comes to freedom, conservatives are firmly opposed.
    On Immigration, Too Many Conservatives Oppose Liberty – ARI ARMSTRONG
  • I wonder if this might change their minds?  Or just start them to boil over. ;^)
  • So what’s the Objectivist view of immigration? Here’s a(nother) quick look.
    Immigration - DIANA HSIEH
  • Specially for Draw Mohammed Day yesterday, I’m reposting this classic Cox& Forkum cartoon:

Wikipedia defends its right to publish Muhammad images

  • And courtesy of Craig Ceely, an easy way to make every day a Draw Mohammed Day—and every email a Drawn Mohammed Email.  I give you, the Mohammed Emoticon:
            (((:~(>
    Dim, Maybe...But Not Dhimmi – LADY’S MAID JEWELS
  • For some reason or other, I can’t get this tune out of my head.  Which seems only appropriate, I guess. “He’s got the rhythm in his head.”

  • Yes, “rhythm is our business.”  Take it away Jimmy Lunceford
  • And since the theme is rhythm . . . it surely “don’t mean a thing if it ain’t got that swing.”


Have a great weekend!
PC

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What will I be when I grow up?

ATT00080

ATT00083

ATT00086a

ATT00089a 

[Thanks to reader Richard for the funnies.]

Budget 2010: Answers on a postcard please

So what exactly makes this “the biggest change in the tax system for 25 years”?  Is it just because it’s been nearly that long since Government Slavery Tax was last whacked up?

Anybody else remember this government’s election pledge not to raise GST?  And to give significant tax cuts?

How grateful are you  now to Dodger Rugless for introducing Grab, Snatch & Take all those years ago?

Is it really a tax cut when taxes across the board are going up?

How come none of the Nats or any of the dozens of talking heads interviewed yesterday mentioned the cost of the Emissions Tax Scam?

Why are so-called conservatives cheering hikes in welfare at a time of depression?  How grateful would you be now for a politician with Ruth Richardson’s courage?

If Greece, Ireland & the UK can recognise that now is a time to cut the salaries of MPs & bureaucrats, why has the NZ government been doing the opposite?

If conservative governments are supposed to be responsible, why is it that when this government is already spending beyond its means, it now intends to borrow nearly half-a-billion more to fund it increase its spending by yet another $1.1 billion?

Just how the fuck is that revenue-neutral?

Has anyone noticed any decent spending cuts anywhere?

How coincidental is it that most of the changes in this budget are too complicated to calculate simply? You think that’s just coincidence  that it leaves ample room for spin?

If demand for rental units stays the same, but the supply of rental units goes down because owning a rental unit has just been made less attractive, what do you think will happen to rents?

If this government truly wants to help local businesses, then why has it just made it necessary for landlords to raise rents on commercial property?

If the money supply were to stay the same while GST is increased, what do you think that would do to the total level of spending in the economy as measured without GST? And by implication, to GDP?  And, by further implication therefore, what does this tell you about this government’s expectations (or even instructions) regarding monetary inflation?

Regardless of what you think you’re going to win on the budget’s swings, if when prices go up by more than six percent next year as a result of  the budget, will that make you worse or better off?

You think it’s just coincidence that the government’s online Budget tax calculator tells you all about what you win on their swings, but nothing about what they take away on the roundabouts?  You know, like rises in rents and price inflation and ACC levies; like increases in Government Slavery Tax and tobacco and alcohol tax; like the coming rises in petrol and power tax because of the ETS . . . ?

Did you notice how Bill English now insists your buildings won’t depreciate in their first fifty years?  Bet you didn’t know he’s relying on the New Zealand Building Act to make it so.  And we all know how well their Building Act works, don’t we?

If it’s true that wages rise as productivity-per-worker rises (which it is), and it’s true that productivity-per-worker rises as more capital is made available per worker (which it is), and it’s true that this government wants wages to rise (which is questionable), then why is this government discouraging capital investment by not allowing businesses to write off the depreciation of their productive capital?

How excited are you at the IRD getting more than one-hundred million dollars to “crack down” on the so-called “black economy,” i.e., on the only part of the economy that is actually working.

If you voted for ACT in 2008, how do you feel about them voting “enthusiastically” for this budget?

They say a picture is worth a thousand words.  Are these the best thousand words about this budget?

budget1 [Cartoon from The New Zealand Week]

Answers on a postcard, please.  More questions welcome.

UPDATE: Accountant Mark Hubbard has a few questions of his own, and more than a few answers.

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Jiyu Gakuen School, Tokyo – Frank Lloyd Wright

JiyuGakuen001

Another of the fourteen buildings Wright designed in his ten-year sojourn in Japan building the Imperial Hotel in Tokyo, ‘Jiyu Gakuen,’ the school he designed in 1921-22, means ‘free spirit,’ the very spirit with which Wright was seeking to endow the building and the children who used it. 

Centred on the dining hall and assembly room shown here, the classrooms wrap around and enclose a grass courtyard.

wraj_myonichi

“Wright fashioned every detail with young children in mind, explains “Wright archivist Bruce Brooks Pfeiffer.

5a     “The scale of the rooms themselves, as with the furniture, likewise considers a child’s point of view.  Wright and Arata Endo, his associate in Japan, wrote, ‘This little school building was designed for the Jiyu Gakuen—in the same spirit implied by the name of the school—a free spirit.  It was intended to be a simple happy place for happy children—unpretentious—genuine.’

Jiru

Check out the school’s English language website for more info, and this (somewhat dark) slide presentation on the school by Wright apprentice Edgar Tafel. And I’ll keep looking out for a scan of the Wright’s delightful sketch of the school which first made me fall in love with it.

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Thursday, May 20, 2010

The End of the Euro: Wheeeeeee . . . [updated]

The End of the Euro is nighAll that’s left now is food for the vultures.

UPDATE: Neil Hume at Alphaville reports, "they have it all planned: they are going to sink the ship (Greece). Merkel is now drafting law for orderly insolvencies, but they don't want anyone to make money out of it, hence the ban." If this is true, it 's curtains for Europe. Shorting the Euro at this point is like shorting Lehman: you may see savage short covering squeezes but the end result is well known. [Hat tip  Bob English]

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Budget Day: Open Debate [update 4]

I know there are plenty of intelligent readers out there with plenty to say about all the new theft announced this afternoon, so let’s use the power of the internet to get your thoughts recorded here.

Which is to say, this is an Open Debate on the Budget.

Go to it!

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“Everybody Draw Mohammed Day”—it’s here [updated]

jp-mo-300x216 It’s not just Budget Day today, it’s also the first annual International “Everybody Draw Mohammed Day”—which does at least have parallels with Budget Day because after Bill English has read out the contents of his Tax and Tax and Tax Budget we will all, I suspect, feel like our wallets have just been taken out with a sword.

International Everybody Draw Mohammed Day was announced, if you’ll recall, to support free speech, numerous cartoonists and the makers of South Park, upon whom retribution was called down for the sin of poking fun at he who shall not be mocked, nor whose supporters may be taken the piss out of.

Even before it’s kicked off internationally there’s a good helping of mockery from which to draw much mirth.
Click here to read more ... >>

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Just who exactly are all these taxpayers?

Here’s a question to contemplate this morning: Just how many actual taxpayers do you think there are in New Zealand?

You know who I mean, the ones actually paying for the whole dog and pony show. Let’s see if we can deduce it to the nearest dozen or so, eh?

The Stats Department reports the estimated resident population of New Zealand was 4.03 million in New Zealand at the last count in 2006. So let’s say 4.0 million in total, of which 2.7 million or so are of a working age—and of these around 200,000 are in school or courses of study.

So we’re already down to 2.5 million.

Of these 260,000 or so are self-employed, 1.8 million or so are working for wages, and a lucky 170,000 are living off their investments.

Some people are doing all three, and all power to them for that.

So let’s say we’ve got around 2 million in total keeping the bureaucrats and moochers fed and working (you see what I did there?). And of those, well over 800,000 are receiving government money directly, so they’re out too.

Which leaves us just 1.2 million to feed Bill English’s ego this afternoon.  Except not all of those are actual tax-payers.

You see, the ranks of those 260,000 self-employed include “consultants” working for all manner of government departments, both central and local, giving “advice,” writing reports, and selling their various shell games and motivational bullshit; and we've also got self-employed planners, arborists, quality assurance blowhards and the Directors of the Pipi Foundation. All of them making a living by sucking off the state tit. Since we’re only looking for the number of taxpayers down to the nearest dozen, let’s say fully a third of self-employed people keep their families fed this way, and each of them has a 'support team' working for them of at least three or four. So that’s around 300,000 on the take.

Down to 900,000. And we’re still going.

Now, what do lawyers do all day? Take Mai Chen and Geoffrey Palmer for example: would there be a reason for their existence if they couldn’t go up the road and put their tongue in the ear of Government fairly frequently?

And what about the other large law factories that infest our city restaurants and bars? Would the law factories exist in such size and numbers if the government’s legislation factory were called to a halt? I think not.

And if tax laws were radically simpler, as they were maybe seventy years ago before the birth of the Welfare State, would we need so many accountants? I think not either.

Neither lawyers nor accountants work for government directly, but they’re no less arms of the state for all that—and they sure as hell wouldn't exist in the quantities they do without Big Government's blandishments. For the most part they're parasites, and their costs come out of our pockets. So deduct another 200,000, because their shiny suits seem to be everywhere (and what's worse, some of these people are this country's best and brightest, their efforts being expended not on producing wealth but instead on making it impossible for others to do so; but that’s another story).

So we're left with how many then? 700,000? Does that seem about right?

No, of course not.  There’s at least 200,000 of them on middle-class welfare, sucking down Welfare for Working Families like there’s no tomorrow while pretending they’re not beneficiaries.

So that’s just 500,000 hardy souls who are braving red tape, OSH, assorted government inspectorates and regulatory agencies, and (if they’re an exporter) the tyranny of distance, or a small domestic market if they're not; braving all this just so they can earn a living and carry all the rest of us on their backs. And from these few brave souls Bill English plans reaps around $60 billion every year, and pays off his quarter-of-a-billion dollar of borrowings every week. 

Do the sums. What those 500,000 are each being forced to pay to keep the welfare state running now is not pretty. And they've just been “asked” to pay $1.1 billion more . . .

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Now, THIS is a Decent Budget! [updated]

I’m very pleased to see a budget released today that frees New Zealanders instead of shackling them further.  I’m talking of this one:

PRESS RELEASE
FOR IMMEDIATE RELEASE
Budget

Libertarianz Alternative Budget 2010

    "I'm pleased to present a real alternative to the tax-and-spend budget that National will present today," Libertarianz leader Richard McGrath said today.
    "Unlike other political parties, Libertarianz believes your money belongs to you," explains McGrath. "That's why our budget is designed to slash taxes and let you keep far more of your own money."
    "National is making a big deal about finally offering you a tax cut this year. But keep in mind that National's income tax cut will be much reduced by an increase in GST.  This isn't a tax cut, it's a tax shuffle. Libertarianz policy has always been and will always be to cut taxes as fast and as hard as possible."
    "Libertarianz will make the first $50,000 of income tax-free immediately. This means that the average New Zealand household, with an income of $68,000, would keep an extra $403 per week, going a long way to offset rising food, electricity and fuel prices."
    "We will also immediately scrap GST, knocking $27 off a $250 grocery bill and ten dollars off the price of a tank of petrol."
    "The government will say they can't afford this – but it's not their money – it's YOURS. You have the right to spend your money however you wish. Libertarianz is pro-choice when it comes to your money."
    "Of course you can't cut tax without cutting government spending – and we're happy to oblige. Education, health, and superannuation are far too important to be left in the hands of politicians."
    "We will allow people to spend as much or as little of their money on these as they wish. It is up to you to decide how much to spend on your family's healthcare, your family's education and your family's future."
    "Schools and hospitals will be given back, as shares, to all New Zealanders. All other state assets not required for the essential functions of government (law and order, and defence) will be sold.  The proceeds will be used to fund superannuation and healthcare for the retired, along with residual obligations such as ACC, invalids benefits. The DPB will continue for three years."
    "With the Libertarianz budget, the churning of money through the government's sticky fingers will be almost eliminated by the tax-free threshold. A flat tax on income over that $50,000 threshold of 25%, reducing 5% per year for 5 years, will fund a smooth transition. After 5 years, no more revenue will collected from the citizenry by coercion or force. The government will have to ask you nicely if they want your money."
    McGrath concludes, "It's enough to make you vote Libertarianz!"

For more information, see www.libertarianz.org.nz or contact:
Dr Richard McGrath
Libertarianz Leader
Email: richard.mcgrath@libertarianz.org.nz

POSTSCRIPT: Questions?  You have questions? 

Fear not: Your questions about the 2010 Libz Alternative Budget will be similar to questions about previous Libz Alternative Budgets, which all seek to wean New Zealanders from the state teat.

So here are some answers to frequently asked questions about a previous model.

Enjoy!

UPDATE: Matt Nolan at The Visible Hand of Economics gives the Libz budget the standard mainstream critique:

“…far too extreme – even if solely on efficiency grounds.”

There’s more.

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Michelangelo Portrait Bust, by Sandra Shaw

Mich

It takes some courage to sculpt a bust of the world’s greatest sculptor. But with this piece, sculptor Sandra Shaw demonstrates she has courage and talent in spades.

Imagine, if you will,  [says Sherri Tracinski]

    “a sculpture that portrays a creative genius in a moment of pride in his own work. Viewing such a piece for a moment at a gallery or in a museum provides a great deal of fuel, reminding you of the pride you seek in contemplating your own work and reviving a sense of joy in achievement that might have been dampened by a grinding work schedule. It is amazing that such a refueling can occur from just a brief moment's viewing—but imagine what is possible if that same work sits next to you in your office, providing that same sense-of-life refueling every day, in every moment that you look up from your desk.”

The sculpture Sherri is talking about here is this one, above.  I thoroughly recommend her account of it.

Incidentally, you can still buy a casting of the Michelangelo from the Quent Cordair Gallery … or anything else of Sandra Shaw’s work.

Tempting, huh.

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Wednesday, May 19, 2010

DOWN TO THE DOCTOR’S: Theft, and lots of it

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

This week: Theft, and lots of it

_richardmcgrath Story of the week, certainly from a business point of view, is Bill English’s second Budget. As usual, the metropolitan papers are full of commentary that has a distinct bias against people that have made themselves wealthy through hard work. There seems to be a general consensus that such people are not paying their “fair share” of tax. The DomPost headline “How The Wealthy Dodge Tax” says it all. As though tax avoidance was illegal, which it’s not. Or immoral, which it’s not. Tax avoidance is a legal and moral act of self-defence. Tax evasion is an illegal but moral act of self defence. As John Shewan, oft-quoted chairman of Price Waterhouse Coopers, opines, tax avoidance trusts are the result of stupid tax rules. Not that he questions the moral legitimacy of extortion, which is what taxation is. Shewan argues that the laws as they stand allow people to defend themselves against government predation, as though self-defence was a bad thing. (I wonder if he thinks women shouldn’t scratch the eyes of would-be rapists?)

John Key wants more “fairness” in the tax system—which means what,exactly?

A flat tax system, so that everyone gets the same amount of their earnings stolen from them? No, I don’t think John is going to give us that.

A tax-free income band as proposed by the Libertarianz Party, so that the first $50,000 of earnings was left untouched, so that everyone got a tax cut? No, John isn’t partial to that either.

What then? John’s dream for the country is to align the proportion stolen from people’s paypackets with the proportion stolen from their trust accounts. Good boy, John! Equal theft from all! I think that’s what people voted for in 2008, wasn’t it?

John Armstrong, in the NZ Herald, says this Budget is all about tax, tax and tax. Taxes on emissions. Taxes on income and spending. If it moves, Bill will tax it. (And if it stops moving, he’ll put it on welfare.)

According to Mr Armstrong, National “needs to demonstrate it wants to stem tax avoidance.” Which means, if I might translate into common sense, that “people need to be relieved of any means to protect the money they have rightly earned.” A Herald reader responded thus:

    “The snarky comment thrown at higher income earners about wheelbarrows perpetuates the entrenched attitude in NZ that anyone who works hard to improve their income is a greedy fat cat who should be penalized by having a huge portion of their income expropriated and given to politicians to spend on vote-winning schemes such as ‘Working for Families’ (as in, I'm working, for your family)… That so-called wheelbarrow of cash is mine, I worked for it, I made sacrifices to earn it. I am, & many others like me are, sick and tired of donating it to politicians’ pork barrel schemes!”

Well said, that man!

The Christchurch Press notes that “Key Defends Tax Cuts.” Well, sort of. He (rightly) argues that reducing the rate of theft on higher income levels will stimulate economic growth. But does he believe that increasing the consumption tax will also stimulate growth? Imposing consumption taxes tend to hurt most both low-income earners and the traders who do business with them. Imposing additional taxes on landlords discourages people from investing in rental property, reducing supply in the long-term. Imposing a tax on carbon dioxide emitters hampers local industry, encouraging it to move offshore. 

So much for encouraging growth.

“Rich Kiwis Miserly With Words,” says the DomPost. By which they mean wealthy people are reluctant to publicly disclose the methods by which they protect their assets from the IRD. Wouldn’t you be reluctant too, if it was your money? Bob Jones, bless him, is not afraid to come out fighting. “Any tax system would be unfair,” he says. Damn right. “I’m a libertarian,” he says, “[and] if I had my way there wouldn’t be any taxes at all.” Good on you, Bob. I guess that means you’ll be voting Libertarianz next time.

Sam Morgan, sadly, claims later in the same article that he doesn’t “have a proper job” and that it’s not right that he doesn’t pay tax. Sam, you helped create TradeMe, which has enriched the lives of countless New Zealanders. You have been richly rewarded for a fantastic effort. You deserve your wealth. Bill English and John Key do not. They have stolen enough of it already. You owe them nothing. They owe you your freedom. Stop giving your oppressors the sanction of the victim. That is what they are after, what they crave above all else. They want you to love them, as they drain your lifeblood and disempower you. Anyway, as someone pointed out in the comments that follow the article, Sam is probably paying upward of $3m in tax on the earnings of his trust. He needn’t feel the slightest bit guilty for his sin of being productive.

My advice, Sam, is find a tax haven and shift your fortune there. Or gift the money to the Libertarianz Party at the rate of $27,000 each year so that Bill and John don’t get their sticky paws anywhere near it.

This is what John, Bill and Steven are doing with some of that money you, the successful, have been trying to keep: propping up the socialised railway system, formerly known as Michael Cullen’s train set, with a billion dollars of your money. It’s so financially unviable it needs more than the cost of purchase to keep it going. John Key has a dream, however: that in TEN YEARS, the nationalised railway system will be financially viable. TEN YEARS! Oh, and they only want another $3.6 billion of your money to keep it going until then. Forget whatever dreams you might have had for that money of yours; John has his own dream for it. A dream that is a claim on your wealth and assets.

Say “Hi!” to the newish boss, same as the old boss.  

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

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Let’s (not) bash landlords

Everyone’s getting excited about the prospect of watching Bill English bash landlords tomorrow afternoon, with no thought (or just poorly-thought out thoughts) as to what bashing landlords will do to tenants, or to whether or not landlords themselves deserve to be bashed by the double-dipper.

Which of course, they don’t.

But bashing landlords is always fashionable, and those doing the bashing can always count on the support of ignoramuses who can be heard to argue that landlords’ income is unearned—i.e., that their rents and the capital gains they might enjoy from their property are “unearned income” that these (so-called) “greedy scum” don’t deserve to keep.

Now, if you think that sort of argument and this sort of argument sounds just like stale, warmed-over Marxism, you’d be right, as Amit Ghate points out today in a fortunately-timed article entitled ‘The Nonsensical Notion of ‘Unearned Income’.’ 

    “The concept of ‘unearned’ income is the remnant of a long-refuted economic theory known as the ‘labor theory of value.’  Though first proposed by classical economists such as Smith and Ricardo, today it is most closely identified with Karl Marx, who was its last — and most consistent — advocate.
    “Essentially the labor theory of value holds that values are determined by the (physical) labor it takes to create them. Thus physical exertion becomes the measure of an item’s worth. According to  Marx — and to his modern adherents like [Bill English], [Idiot/Savant], [the writers of The Standard] et. al. — any values created in ways other than by brute force are ‘unearned.’ …   So while today’s politicians generally fail to protect the individual’s right to property, they’re openly hostile to so-called ‘unearned’ income and property.  Hence their unabashed support for these new taxes.”

I recommend reading Amit’s explanation of why this idea of “unearned income” is fundamentally wrong, and is the argument behind more than just attacks (and taxes)on landlords.  Hint: it’s all about the mind, grasshopper.

POSTSCRIPT: There’s an added irony about the parasites who attack landlords as “greedy scum” while sucking down as much taxpayers’ largesse as they can.

In general the parasites at The Standard and No Right Turn uphold Marx’s exploded Exploitation Theory (i.e., the theory that “capitalism promotes a system of slavery wherein the labor of workers is exploited to attain profits on behalf of the relatively few businessman or capitalists”) and Marx’s “Iron Law of Wages” (i.e., the theory fallacy that without trades union and benevolent labour-loving government, employers would pay employees whatever they want, driving employees’ wages right down to subsistence level).

But when it comes to landlords, they’re both now arguing against the Exploitation Theory, “arguing that [rents] are set by supply and demand, not at whatever level the landlords want and not at whatever level the tenants want.” See, here’s IowaHawk writing in the comments at The Standard:

    “Rentals are not set by landlords saying:
            ’Gosh Humphrey, I think I deserve an extra $500 a year.”
            ‘Why yes Reginald, that’s only fair. I deserve to make an extra $1000 a year in rent, so I’ve raised the rent on my peons too!’
    “No. Rentals are not set by landlords making up what they want. They are set by supply of rental property vs demand for rental property. Charge too much and you find your property empty – and for landlords with a mortgage that’s very, very expensive.” [Emphasis in the original]

Ironic, don’t you think.  Especially because the same argument they’re using here for rents overturns their own theories about an “iron law of wages”: that is to say, wages are not set by employers making up what they want, [emphasis mine] they’re set by a combination of supply and demand and the productivity of labour. (Read George Reisman’s ‘Classical Economics vs. The Exploitation Theory’ for the full story on this, which also explains the role of the mind in overturning the fallacy.)

REMINDER: Perigo on air now [update 2]

A reminder note here that Lindsay Perigo is on Radio Live from 12:30pm to 4pm this afternoon.

Listen in online at the Radio Live website, or just check out radio frequencies there.

And ring in on 0800 RADIO LIVE (0800 723 465).

UPDATE 2: Well, that appears to be that then.

US Senate stands unanimously athwart Euro bailout yelling “no!”

The one-trillion dollar European bailout was made up mostly of smoke and mirrors—the smoke was the “shock and uh” of the initial announcement, intended to arrest the Greek crisis.  The mirrors came later, i.e., a labyrinthine tale of credit swaps and paper-printing and IMF money explaining (supposedly) where the trillion dollars was supposed to come from, and how exactly the “sterilisation” of that sea of money was supped to be done.

Except the mirrors are still awfully foggy, and the lions’s share of that money—the only part of if that wasn’t just paper  hot off the printing press—may now not be coming at all, because “the US Senate has just voted 94:0 to block use of taxpayers’ money for IMF rescues.” Explains Ambrose Evans-Pritchard in the UK Telegraph:

    “Europe may have to clean up its own mess after all. The US Senate has voted 94:0 to block use of taxpayers’ money for IMF rescues that make no economic sense or bail-outs for countries like Greece that far are beyond the point of no return.
    “ ‘This amendment will help prevent American taxpayer dollars from underwriting dysfunctional governments abroad,’ said Texas Senator John Cornyn, the chief sponsor. ‘American taxpayers have seen more bailouts than they can stomach, and the last thing they should have to worry about are their hard-earned tax dollars being used to rescue a foreign government. Greece is not by any stretch of the imagination too big to fail.’
    “Co-sponsor David Vitter from Louisiana said America had run out of money. ‘Our country already owes trillions of dollars in debt. We simply can’t afford to take on other countries’ debt in addition to our own.’ “

Bravo.

[Thanks to reader Julian for the tip. And Bernard Hickey for two hat tips.]

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How to talk straight

Q: How do you know when a politician is lying?
A: When their lips move.

While Australia’s opposition leader Tony Abbott confesses he’s the very epitome of that joke, except maybe when he’s reading out something speechwriters have written for him, New Jersey governor Chris Christie tries to break that mould.

Do you think we could do with more straight talking like that here?  And maybe in Oz?

Wouldn’t it be refreshing if all the spinsters were sacked?

As the IndyPosted blog says of this.

“When Christie runs for  reelection, there will be no question of where he stood when he was in office. That is how you have a political debate, when opposing sides label their ideas honestly. That is why people are e mailing each other this video and urging them to watch it. Even if you disagree with Christie, it’s good drama.”

Sure is.

Meanwhile, Tony Abbot struggles with the Cretan paradox.

[Hat tip Canadian blog Small Dead Animals, which has the neat headline for it: The World Still Has Too Many Communications Directors ]

Kiwi Fail [updated]

At a time when everyone in the country is strapped for cash, when business is tight and incomes for everyone are stretched—even the income of government, which is spending one quarter-of-a-billion dollars a week more than it extracts from all of us—this government has decided to throw yet another quarter-of-a-billion dollars down the black hole of Kiwi Rail, with another half-a-billion dollars to come in the next two years.

Thanks John.

Thanks Bill.

Thanks Steven.

And thanks David Farrar, who’s now so far up the backsides of his own luminaries he’s prepared to defend even this patent irresponsibility at a time of penury:

“The Government really has little choice. One can’t sell Dr Cullen’s train set. No one would buy it.”

As Paul Walker responds, “there is an important message in the point you make.”

There sure is.  And here’s a clue to what that point is: What’s the real value of something that no-one wants to buy?  Answer: Nothing.

I suggest you keep this quarter-of-a-billion-dollar generosity in mind tomorrow when Bill English tells you how he’s devised new schemes to extract more money from you rather than cutting his government’s coat according to the cloth they can afford.

UPDATE: Steven Joyce argues that bailing out KiwiFail with our money will put it on the road to success.  It’s the same patently stupid argument that’s been used in making five previous bailouts over the last twenty years.  But this time, this bailout will be different, of course . .  .

Says Liberty Scott:

    “It should be so obvious to a child that buying something that is worth NZ$690 million and having to spend $750 million to save it is lunacy. Labour receives the blame for the former, and now New Labour National does for the latter.
    “What to know why you're not getting a real tax cut? Ask both of those gangs of reckless spendthrifts. Why their parents didn't spend a couple of hundred bucks to buy them train sets when they were kids so they could indulge in this pastime is beyond me?”

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The theme tonight is ‘Sacrifice’ [updated]

The artistic theme tonight is the morality of sacrifice—of which,I am not a fan.

CLICK HERE TO WATCH AT YOUTUBE

The video linked above begins the theme.  Its an excerpt from “John Galt’s Speech,” by Ayn Rand, given visual form as part of an ongoing project by YouTube user GaltSpeaking. (Embedding of the video is disallowed, so click here or on the pic above to watch it.)  Appropriately, perhaps, it’s Episode 14. Consider it.

126582479-M The sculpture by Australian artist Rayner Hoff is called ‘Sacrifice.’  Few twentieth-century sculptures celebrate the morality of sacrifice more nobly. More starkly. More appropriately.

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Under a morality of sacrifice, the standard of value is not your own happiness, but that of others.  Not your own prosperity, but that of others.  Not your own life, but those of others. (As W.H Auden sarcastically summarises, “We are all here on earth to help others; what on earth the others are here for I can’t imagine.”)

The result of all this sacrifice amounts to a row of zeroes; or as the excerpt from Galt’s Speech linked above points out:

"Under a morality of sacrifice, the first value you sacrifice is morality…"

Think about it.

In the meantime, and as an antidote, let’s talk about happiness. “What else could be more important?”

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Tuesday, May 18, 2010

Grass-roots revolt among the Nats

It had to happen.  There looks to be some sort of grass-roots revolt among National Party members over the imminent introduction of Nick Smith’s insane Emissions Tax Scam.  Story here and here at Whale’s blog, and a new development here at Adolf’s.

More power to those members, I say.

I wish them all the best. If they do pull it off, the whole country will be in your debt.

And if they can do this, they’ll have enough momentum to kick on with the job of giving their party back a spine.

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REMINDER: Perigo on air now

A reminder note here that Lindsay Perigo is on Radio Live from 12:30pm to 4pm this afternoon.

Listen in online at the Radio Live website, or just check out radio frequencies there.

Leaky logic on leaky homes

John Key and Maurice Williamson are now both saying taxpayers have to cough up for around one-quarter of the multi-billion dollar leaky-home bill because it's all akin to "a natural disaster of huge proportions."

For most people, that would lead to the obvious quip that it's good to see National Party ministers recognising that the National Government that caused the problem was akin to a natural disaster.

But that would be too easy, and not quite accurate, because most people inclined to make that quip still labour under the assumption that the primary cause of the problem was the Nats' “deregulation” of the building industry in the early nineties.

As you know, I don't buy that argument. Sure, the government played a part in the problem, but it wasn’t the Nats’ deregulation that caused the problem (because, dear reader, there was none).  Their role consisted in putting into place a regulatory regime that, in obscuring who was bearing the real risk in new buildings, ended up as the worst of both worlds. 

Basically, local-government bureaucrats  are simply not competent to do the job that the legislation of successive governments have required of them, i.e., to act as some sort of 'gatekeeper' of building quality. 

And the central-government bureaucrats at BRANZ and the Building Industry Authority, who between them were required by law to vet all materials and building processes, were not competent to act as any sort of ‘gatekeeper’ of materials’ quality.

The involvement in the building process of both government and council might have suggested to buyers that somehow the rules of risk and reality had been suspended, and that that the rule of caveat emptor didn’t apply.  But they do, and it still does.

Who drives a car off the lot without first getting it checked out? But putting central and local government bureaucrats into positions of authority that they just weren’t competent to carry out encouraged buyers to “drive away” a new house with only some un-backed pieces of paper to protect them.

Buyers may not have realised that a council-issued Code of Compliance for their new house and a BRANZ appraisal for the materials it was built with were between them about as credible as a Goldman Sachs mortgage-backed security. But they didn’t.  And they weren’t.

Sadly, the intrusion of councils and government departments into a process in which they're just not competent to play a part raised costs for builders and home-buyers in the first place, and puts ratepayers and taxpayers on the hook now for something they themselves haven’t done.

That’s the direct consequence of placing risk where it shouldn’t be.

But that leaves us all confronting a tough question: while we can all sympathise with those caught up in this plight, why should ratepayers and taxpayers who didn't choose to invest in these lemons have to bail out those who did?

That’s still the hard question that talk of a “natural disaster” just doesn’t so easily brush away—because this was not a natural disaster, it was entirely man-made, and those who were mainly to blame have largely managed to escape responsibility for it.  And by saying "those who are mainly to blame," for the most part I don't mean designers and builders.

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GUEST POST: The source of economic growth

Guest post by patent attorney and entrepreneur, Dale Halling.

What is the source of economic growth?  Trying times like these make this question even more important.  The chart on the right is particularly instructive about the sources of economic growth.  It defines what engineers call a boundary layer condition.  The chart shows per capita income from 1000 BC to 2000 AD, where income has been normalized to one for the year 1800, when per capita income finally takes off (only true for western countries; for instance, African countries still have incomes near or below that shown on this chart, and incomes in Japan do not take off for almost another 100 years).

So the million dollar question is why does income take off around 1800 after millennia of going nowhere?  Let’s examine the standard answers for getting our economy growing today. 

Is the reason that income takes off around 1800 because taxes suddenly get lower (or higher) around 1800?  No tax levels did not change significantly around 1800 and in fact they were lower than today until around 1900.  Tax levels averaged 10% or less of GDP during most of history. 

Is it because the size of government suddenly shrunk (or grew) around 1800?  No, the size of government did not change significantly around 1800.  The size of government did not start to grow until around 1900. 

Is it because we suddenly created the world’s greatest “cash for clunker program” – in other words was Keynes right we just had to stimulate demand? Well during the period from 1000 BC until about 1800 AD is called the Malthusian period, after Thomas Malthus.  During this period humans are just like every other animal and our population expands until we are on the edge of starvation.  I am pretty sure that there was plenty of demand during this period, at least for food. 

Does income suddenly take off because we figure out how to control our money supply just right?  No the tools for controlling the money supply around 1800 were pretty crude. 

The only reason we are wealthier today than in 1800 or 1500 or 1000 BC is because of our technology.  If we had the same technology as our ancestors we would be no wealthier than they were. 

I am not the only one to point out that increases in our level of technology are the only reason for real per capita increases in income.  Robert Solow won the Nobel Prize in economics for essentially this point.  Other economists who have study this area include Paul Romer of Stanford, Jacob Schmookler who studied the relationship between inventions and economic growth and Gregory Clark from UC Davis.  This area of economics is often called Economics 2.0 or Innovation Economics.  One of the best books on this area (other than my book The Decline and Fall of the American Entrepreneur ) is a business book, entitled The Invisible Edge. 

Not coincidentally, 1800 is around the time the first modern patent systems are created.  Patents are the only free market system for encouraging people to invest in inventions and technology.  Patents are legal title to your invention.  The first patent statute in the US is passed in 1790.  The US becomes the economic and technological leader of the world because of our patent system, not because of some innate Yankee ingenuity.  We are the first country in history to recognize that inventors have a right to their inventions.  In fact, the only place where the US Constitution uses the word “right” is with respect to patents and copyrights.[1]

Despite the overwhelming evidence for the connection between patents, technology and economic growth, some detractors argue that this is just the purest coincidence.  The chart at the right shows per capita GDP for various countries.  As already explained, US per capita GDP takes off around the time we create our patent system.  Japan comes to the US and studies why we are successful around the 1860s.  Their conclusion is that the US patent system is why the US is a technological and economic powerhouse.  As a result the Japanese copy the US patent system sometime in the 1870s, which is when their per capita income takes off.  A similar situation occurs in China.  On the other hand there are numerous countries with no patent system or ineffectual patent systems that are still stuck in the Malthusian trap.

Patents are the free market system for conferring legal title to inventions and encouraging investment in technology.  Increases in technology are the only way to increase real per capita income. 

A strong patent system is the keystone upon which economic growth is built. 


[1] US Constitution, Article 1, Section 8, Clause 8.  Note the Bill of Rights are amendments to the Constitution.

Dale Halling is an American patent attorney and entrepreneur. Read his regular thoughts at his State of Innovation blog.  (This post originally appeared at the State of Innovation blog. It has been lightly edited and reformatted for clarity.)

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Moll House – Hans Scharoun

Moll%20House%20Stepsscharoun.ausschnitt5-Moll Hans Scharoun talked of “creating with space”—his houses, of which this pre-war 1937 example is an early hint, were irregularly ordered open-planned concoctions centred around a “middle space” that organised the whole, around which the satellite spaces overlapped according to function and topography—each of which was given its own definition within the larger whole. 

Rather than a standardised “system of band boxes,” as he called the “handed down” principle on which so many standardised boxes have been produced, his houses were individualised for each client, and each context.

The context of this house, the Moll House, required a traditional face be represented to the street, beyond which the house gradually opened to the gardens and landscape beyond, which for Scharoun were an integral part of the house itself.scharoun.ausschnitt6-Moll

scharoun_ausschnitt1

The Moll House was created for a married couple, one of which was a painter and the other a sculptor, for each of whom Scharoun created a studio—setting up a relationship with the music room that formed a “spatial triangle” across different levels.

scharoun.ausschnitt7-Moll Little documentation now exists of many of Scharoun’s houses, a great pity since his strand of modernism had so much more to offer than than the sterile boxes produced by his modernist contemporaries that are now copied so poorly, so slavishly, and in such quantities today.

Check out this site however, which attempts a basic spatial analysis of this deceptively complicated house.

Or at least a few more plans and sections.

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