Saturday, 11 September 2010

9/11 9 years on

Nine years after 19 Islamists destroyed the World Trade Center and 3,000 people within them, Americans are still coming to terms with the attack, the attackers, and the reasons for the attack—and with America’s own responses to that attack, both foreign and domestic.

The foreign response has immediate, bellicose, and misdirected. The domestic response is ineffectual, confused, and (even when it is positive) moves with glacial slowness.  Nine years after the World Trade Center was destroyed, its replacement is finally—finally!—emerging from the rubble. The New York Times has a great four-part presentation hosted by reporter David W. Dunlap showing the rather sombre rebuilding.  “When are they going to start rebuilding at Ground Zero? They have!”  Thank goodness. [Thanks to reader Russell W. for the link.] Watch progress (and the lights)at the Ground Zero web cam. [Hat tip Rational Jenn]


And what about the psychological responses to a war long declared but still unacknowledged? To policy both confused and myopic? On this note, on this now sanctified day of remembrance in a war declared in the name of  Islam (but still undeclared and largely unrecognised by western leaders), this thoughtful reflection by “a liberal Democrat,” writer Pamela Sutton, is worth reading, and contemplating.

There was nothing religious about the Twin towers, but it was sacred ground to me. I have never been able to return to New York City. The pain is still too fresh; too deep. Have nine years gone by? I’ve hardly noticed…

America, likewise, is stuck in a frozen prism of confused loyalties. We’re trying to move forward and backwards simultaneously. Our country is treading through congealed slush in the ice floes of polarized vision. America has no unified sense of itself, and our actions bear this out. America is trying to win a war in Afghanistan while building mosques in New York City. Presidents proclaim “Islam is peaceful,” while driving unmanned explosive drones into Pakistani mountain villages. America is obsessed with arresting and deporting illegal aliens, while simultaneously trying to embrace Islam with open arms -- no questions asked. It’s politically correct to ask if western governmental models can work in the Middle East, but it’s a hate crime to ask if Islam can ever be compatible with western democracy. Last week in Europe I stepped back from America and took a long, hard look. What I observed was confusion…

Today I received my copy of Time magazine. The cover reads: “Is America Islamophobic?” Before flipping to the article, I have a better question: “Are Muslims Islamophobic?” The unspoken answer would be “Yes.” As American troops packed up and left Iraq on Aug. 25, at least 53 Iraqi civilians were killed and 270 wounded in coordinated suicide bombings targeting Iraqi security forces throughout their country. According to Saleh Khamis, a 38-year-old teacher in Buhriz, Iraq, these attacks are “just the beginning of the storm…

Is America “Islamaphobic?” If not, we’re doomed…

Instead of burning a Koran to commemorate 9/11, as pastor Terry Jones from Gainesville is advocating, I suggest that Americans read a Koran, along with a few basic history books. As repulsive and hateful as “Pastor” Jones of the “Dove World Outreach Center” may be, the difference between him and Islamic extremists is that he is not promoting “behead an Imam day.” Spend 9/11 in a library. America needs to understand Islam in all of its complex-refracting-Medieval-nihilistic facets before we decide it’s politically correct to embrace a religion that, for as long I can remember, has wreaked terror, death, and misogyny throughout the Middle East, North and South Africa, Central Asia, Indonesia, Israel, America, and Europe.
    On 9/11 America was blindsided by Islamic extremism; and America is still deeply confused. America is as confused as airline passengers whose plane has just been hijacked. Except the plane hasn’t just been hijacked; it’s been turned into a suicide bomb. And unless we make informed decisions about Islam, our moment of epiphany will be our last.

Lest we forget.


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Friday, 10 September 2010

The disaster that is the Earthquake Commission

There’s been debates on this already at both Public Address and Kiwiblog, and probably elsewhere too, but there’s a lot of bullshit being talked about the government department that is the Earthquake Commission (EQC)—mostly about its liabilities after the Christchurch quake and what it calls its assets. Speaking frankly, there’s some numbers that don’t quite stack up, and a real question about why this particular government department even exists.

Christchurch itself has a big bill.  JP Morgan reckons there’ll be around a $4.3 billion bill to put New Zealand’s second-largest city back on its feet, or at least pull it up off its knees, of which Treasury Secretary John Whitehead calculates the government’s Earthquake Commission will have to stump up nearly half—even with their liability amounting to no more than $112,000 ($100k+GST) per house—with reinsurers and taxpayers picking up the balance.  (Nice of the taxpayer, don’t you think?)

Now, the EQC was set up after the war to socialise losses in time of earthquake or war damage. It’s like an ACC for houses: taking risk away from insurance companies and placing it squarely onto this government department. (Nice of the government to assume this liability on your behalf, don’t you think?)  Paid for by a compulsory levy on home insurance. (Nice of the government to take away your choice in the matter, don’t you think?)

So just to summarise: the government decided to assume the risk of earthquake damage, giving you (in your capacity as home-owner and insuree) no choice at all about joining their scheme, and (in your capacity as taxpayer) no choice at all about assuming the risk should the government department’s investments fail to pick up its tab. So, since the scheme is a sunk cost, you really have to hope their appointed bureaucrats would have the smarts to do the job required, wouldn’t you. Wouldn’t you? (Stop laughing at the back.)

Well, you can see just by that $100,000 figure that those bureaucrats are not exactly on top of their game; while there was a time when $100,000 would build you a replacement home (which is what the figure was supposed to cover) that time is very long ago. The grey ones at the EQC haven’t quite caught up with the inflation of the last few decades.

Since it’s had no major payouts since its inception, however, there’s been no major questions about its operations. Until now.  Cometh the disaster, cometh the questions.  Because while the drop in its liability per home means EQC is less exposed than it would be, leaving reinsurers and taxpayers to pick up the tab for which you’re paying your compulsory levies, the EQC will supposedly have built up for itself a large lump to pay for The Big One that everyone and his favourite geologist knew would be coming some time. A lump large enough to pay for this one and the one that might come soon after that, without putting the taxpayer (i.e., you and I) at risk.

So has it?

Well, “not so much.”

John Key told Q+A, and I quote,

_Quotethe Earthquake Commission has enormous funds, 15 billion dollars, largely invested offshore… [including] about six billion in cash.

So it all looks good, then. The taxpayer won’t be called on. Phew.

Except it hasn’t got $15 billion at all.  Or anything like six billion in cash.  This is is just (what’s the word I’m looking for here?) flat-out bullshit. Because as the EQC’s on Annual Report reveals,

_QuoteEQC has custody of the Natural Disaster Fund, around $5.6 billion of public money…[and because reinsurance kicks in after the first $1.5b of costs, this gives] an estimated value of up to $8.1 billion before having to call on the Crown Guarantee.


Still, that should still cover things, shouldn’t it? We taxpayers are safe?

Except when you read more closely you discover that

_Quote approximately 67 percent of EQC’s portfolio is invested in NZ Government Stock and NZ Government inflation-indexed bonds.

And as you’re probably aware, this is where the word “invested” is something of a misnomer. Because NZ Government Stock and NZ Government bonds are nothing more than little bits of fancy printed paper backed by nothing more than … the NZ Government’s ability to tax you and me.

So much for those “enormous funds.” Because when all’s said and done, on the first occasion when it’s drawn on, we discover that the Earthquake Commission has—not $15 billion—not $8 billion—not even $5 billion—but little more than $1.5 billion of actual investments to draw on, the rest of their “assets” consisting only of a promise to make you and I pay.

Nice, huh.

So while the government quietly goes about starting the printing presses to avoid us working out how we’re being fleeced (producing fancy bits of government paper they call cash to back those other fancy bits of paper they call bonds to pay a bill with which you and I should never have been faced), can we please, just as quietly, get rid of this bureaucratic encumbrance (i.e., the EQC) and leave risk and insurance where it belongs—with the insurance industry. Because once they’ve made this pay-out, the EQC is an organisation with no funds, no backing, and no reason to exist. Let the people who do know what they’re doing do it. And stop the grey ones adding an avoidable man-made disaster to an unavoidable natural one.

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Net Non-Neutrality

Guest Post by Jeff Perren.

I have as article on the Orwellian-named nonsense of so-called Net Neutrality posted over at Breitbart’s Big Journalism blog.

Your comments will help me win a free trip to Iceland to study medieval anarchism. Ok, that's not true (thankfully). But your views would be welcomed, anyway.

The article begins:

_Quote "Progressives are up in arms after Google appears to have caved on Net Neutrality by partnering with Verizon to abandon their core aims. Writing at Huffington Post, Josh Silver of the ironically named Free Press laments:
‘For years, Internet advocates have warned of the doomsday scenario that will
    play out on Monday: Google and Verizon will announce a deal that the New York Times
    reports ‘could allow Verizon to speed some online content to Internet users more quickly
    if the content’s creators are willing to pay for the privilege.’

Let us, as the postmodernists say, deconstruct this…

Read on here: “‘Net Neutrality’ — Let the Free Market Reign.”


Prison, by Piranesi


No one does dark, oppressive and threatening like Piranesi.  He draws like an angel, and produces hell on earth.  What he draws is something to learn from, then avoid.


Thursday, 9 September 2010

“The crimewave that shames the world” [update 2]

When Ayaan Hirsi Ali recommends reading a piece by Robert Fisk, it’s worth taking notice. So let’s do that.

On her Facebook page she recommends

5030390_447743t _Quote this important, horrific piece by Robert Fisk of the Independent on honor killings. Fisk writes: ‘It's one of the last great taboos: the murder of at least 20,000 women a year in the name of 'honour'. Nor is the problem confined to the Middle East: the contagion is spreading rapidly.’

This relates to the post below. When 20,000 women a year are killed in the name of “honour,” can the culture in which this is done be called a “civilization”?  Good to see that Mr Fisk is finally losing his “blinkers of moral equivalence,” and taking notice of the crime whose name the left generally dares not speak—or as he titles it:

UPDATE 1: Speaking of “moral equivalence,” Doug Reich offers today’s leading example:

_QuoteWhen a renowned Muslim cleric calls for the beheading of a Dutch politician, we hear nothing from Western leaders. However, when some reverend in Podunk, USA decides to burn some Quran's on his lawn, we get fiery condemnations from General Petraeus, the State Department, and the White House.

UPDATE 2: Here’s the second part of Robert Fisk’s important series (words I never thought I’d write):


GUEST POST: Defending Western civilization

Guest post by Marsha Familaro Enright and Gen LaGreca

    As September 11th approaches, we remember the morning in 2001 when the World Trade Center turned to rubble. It is a fitting time to consider the nature of the civilizations that collided that day—and how to defend ours.
    In their quest to establish a worldwide caliphate, radical Islamists invoke morality, claiming they have God’s sanction for performing their barbarous acts.
    To defend Western civilization, we, also, need to invoke morality. But although the world envies the prosperity we’ve achieved, it is widely seen as the product of soulless materialism, of unbridled “greed,” of unscrupulous self-indulgence.
    What moral claim, then, can we make for our way of life?
    24702_Pytheas To understand the moral values of the West, let’s turn to its beginning. In her prescient 1943 work of political philosophy, The God of the Machine, Isabel Paterson chose as the symbol of Western man a figure from Ancient Greece: Pytheas (right). This enterprising merchant left his homeland to explore Britain and beyond, seeking tin to make bronze. Insatiably curious, Pytheas also discovered the relationship between the moon’s phases and the tides, and was the first to describe the aurora and other phenomena.
    Pytheas epitomizes the Western spirit: a self-directed man whose free will determines his life’s course, a thinker who employs reason and science to understand the world around him, and a producer who seeks to sell goods in peaceful trade.
    From its founding, America was intended to be the country where Pytheas could flourish—the first nation established to protect the life, liberty, and property of the individual. It did so by curbing government power over the peaceful activities of its citizens.
    In this, the contrast between America and radical Islam could not be greater.
    Whereas Thomas Jefferson exhorts us to “question with boldness even the existence of a God,” militant Islam kills people for apostasy.
    Whereas James Madison proclaims that man has “a right to his property” and equally “a property in [all of] his rights,” Palestinian Islamists strap suicide belts on five year-olds, seizing their young lives for the sake of ancient vendettas.
    Whereas the Declaration of Independence affirms America’s devotion to life, Osama bin Laden declares: We love death. The U.S. loves life. That is the difference between us two.
    “The excellence of the West” lies in its “respect for the human being, the recognition of his individuality, the liberty it has granted him,” observes Saudi Shura Council member and Muslim reformist Ibrahim Al-Buleihi.
    “Humans are originally individuals,” he continues, “but cultures (including Arab culture) have dissolved the individual in the tribe, sect, or state.” It is only “with the diffusion of philosophical ideas from [Ancient] Greece” that “the human being became an individual of value for himself . . . and not merely a means for others.” (“Profile of Al-Buleihi,” The Aafaq Foundation, July 6, 2010)
    Thus, in our civilization, a person is born free to live for his own sake and to pursue happiness. In radical Islam, a person must obey a central authority and sacrifice his life to its aims. Which society is better?  And which would you actually describe as a civilization?
    Granted the West’s superiority, why is radical Islam advancing? Author Ayaan Hirsi Ali, a former Muslim, cites “an active propaganda campaign” in which “the Saudis invested at least $2 billion a year over a 30-year period to spread their brand of fundamentalist Islam.” (Wall Street Journal, August 18, 2010)
    Why aren’t we passionately defending our civilization? Certainly, money isn’t the obstacle. Is it because we don’t understand the nobility of our individualist foundation, including the virtue of private advancement and profit?
    We must never forget that we of the free West are all the country of Pytheas: a people of free will, free minds, and free enterprise. Our spectacular prosperity is not our dishonor, but the glory of our liberty.
    It is said that Ground Zero is “sacred ground.” In truth, all of America is sacred ground—because it is in America more than anywhere else that the individual is most made sacred.
    We of the West must assert the moral superiority of our civilization—or lose it to our enemies.
* * * *
Marsha Familaro Enright is president of the Reason, Individualism, Freedom Institute, the Foundation for the College of the United States.
Gen LaGreca is author of
Noble Vision, an award-winning novel about the struggle for liberty in health care today. Visit her website at

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Wednesday, 8 September 2010

‘The Soldier of Marathon Announcing the Victory,’ by Jean-Pierre Cortot

5531_1134311232211_1060216879_30323582_8045715_n You all know the  story, or should do.

This is Cortot’s evocative depiction of the moment when the soldier, Pheidippides, arrives in Athens having run his last race—bearing the news as he expires that Greece has triumphed over the invading Persian army.  Browning immortalised the story in verse.


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billindxIt's surely occurred to everyone at some stage during an earthquake that when the ground is moving underneath you, the best place to be would be well away from the ground.

That thought also occurred to a very smart New Zealand engineer back in the 1970s, Dr Bill Robinson (right), and in 1976 he developed a system to do it that is now implemented in around 3,000 buildings and bridges worldwide—including, unfortunately, Wellington’s parliament buildings (simultaneously protecting its inhabitants, and making the idea of a Wellington earthquake far less attractive).

lead_rubber Robinson’s basic system is essentially a lead-rubber bearing (left) placed between the ground and a buildings foundations either during original construction (as with Te Papa) or afterwards (as with the parliament buildings) to reduce the force exerted on the building by the ground’s movement.  The outer rubber “sandwich” gives the bearing flexibility, while the lead damps down the movement and absorbs the earthquake’s kinetic energy, turning it into heat. 

 isolation1figure3Working together in the same way a car’s springs and dampers do, they reduced the earthquake force in buildings and bridges in both the Northridge and Kobe quakes to about one-fifth the seismic force that un un-isolated building or bridge would suffer—allowing bridges, hospitals and buildings necessary after a major shake to to ride out the earthquake undamaged, even while all around them is a sea of destruction.

You can see how effective it is in these videos of building models on a “shake table” set up to compare buildings that have been base-isolated and those which haven’t.  It’s a pretty persuasive demonstration.

Since Robinson’s invention of the lead-rubber bearing, many other systems have been developed following the same principle—including base-isolated tables designed to protect fragile objects during a quake. And there’s even one Canterbury economist who’s protecting his child right now with what he calls “a Gerry-rigged earthquake base isolation unit” for his 4 month old, which has successfully kept Eric Crampton’s youngster safe through two aftershocks.

There’s a neat video here at the Science Learning site where Robinson explains the life-saving concept of his lead-rubber bearing and how he came up with it—and there’s plenty more links there to take you further…

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DOWN TO THE DOCTOR’S: Bribes & elections – reality & problems

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

This week:  How Bribes Win Elections – the reality and the problems.

1. DOM-POST: “Australia decides, finally“The Liberal and Labor parties have been locked in negotiations with independent MPs over the formation of their next government since the August 21 election failed to deliver a clear mandate. But Ms Gillard yesterday locked down the numbers needed for a parliamentary majority.”

The reality: Julia Gillard cuts a $10 billion bribe, just sufficient to secure the support of the wavering ‘independent’ MPs, so that she can cling to power. 

The problem: A system that allows such naked bidding wars. An expectation that there had to be a government with the ability to ram through legislation through sheer strength of numbers, rather than debating each issue on its merits. The unedifying spectacle of Gillard and Abbott trying to top each other’s rural broadband bribes. The thought of Julia Gillard’s grating twang assaulting the eardrums of decent folk for heavens knows how many more months as Australia’s PM.

2 “DOM-POST: $15m package to keep workers afloat“The Government has stepped up its assistance to quake ravaged Canterbury with a $15 million package to help workers hold on to their paypackets as businesses struggle to get back on their feet.”

The reality: A little more than a year from the next election, John Key proposes giving $15 million of your money as a handout to small business owners in Canterbury. There are lots of Labour Party MPs in Christchurch and surrounding areas (Burns, Dalziel, Dyson, Cosgrove) as well as Jim Anderton. Cosgrove and Burns sit on majorities of less than 1,000 votes. John Key’s “package” could end up funnelling $100 million to his new friends in Canterbury. 

The problem: The fact that the $15 million is not his to give. John Key playing favourites, manipulating the economy with money for which you might have had other plans (the bit that is ‘not seen’, as Frederic Bastiat put it), bailing out good and bad businesses alike. Kissing hands and shaking babies as he does a vote-buying tour of Canterbury with half the Cabinet tagging along on his coat-tails at our expense. The inconsistency of his actions—normally a business suffering earthquake, fire, flood damage or vandalism has to finance their own recovery via insurance that they had the foresight to purchase, and without taxpayer handouts (just as it should be).

3. NZ HERALD: “Australia ‘heading for boom’"’All of the pre-conditions that led to the General Financial Crisis are gone,’ Dr Gelber said. ‘The boom won't mature in 18 months, it will take six or seven years, or eight or nine.’ ‘Now is the time where I would go aggressively equity and away from fixed interest because the risk is gone,’ Dr Gelber said…”

The reality: None of the conditions that led to the global financial crisis are gone. It’s easy for Dr Gobshite to predict a boom in six to nine years, because he will have moved on from his job and his comments be long forgotten. Anyone who says “the risk is gone” in the context of economies and international markets should be approached cautiously and with a long sharp pole.

The problem: Politicians appear to have learnt nothing from the events of the past three or four years. They continue their currency manipulation with resultant credit booms, speculation and share/commodity bubbles which eventually burst. Essentially they are in denial about the causes of the General Financial Crisis. History is doomed to repeat itself.

“When the people fear the government, there is tyranny—when the government
fears the people, there is liberty.”

- attributed to Thomas Jefferson


Inner city Christchurch

I asked a friend who lives and works in inner-city Christchurch to send me his thoughts.  Lacking his laptop, which is damaged, this is what he typed out for me on his mobile phone.

Since Saturday’s earthquake, life in Christchurch has give me an insight into how a community functions—strangers helping strangers; Facebook groups of students providing random acts of assistance; drivers co-operating at out-of-order traffic lights. People have got on with the essential tasks, and exercised their judgement in their safety and property.

One of the less impressive aspects of community life exposed to view however has been the response of local government. Their perspective has been that anyone other than themselves are a problem rather than a solution. Their view of the public as incompetent, dishonest and stupid has made a bad situation very frustrating to those effected in the inner city. People walking around creating lifelong memories, or just trying to comprehend the destruction of their city, are denounced as “rubberneckers.” The odd vandal becomes a “looter.” Businessmen seeking access to their own buildings must first seek and ask the permission of a person with a clipboard—and a power complex.

All of these “trouble-makers” making “trouble” reinforces their view that they need to assert more control over us. It’s for our own good, you know.  (Meanwhile, the only “rubberneckers” allowed into the inner city by the clipboard wielders are those with a title. Like “prime minister.” Or “mayoral candidate.”)

Finally, the view has already been advanced that the building regulations enforced by local government played a major part in their being no loss of life. Those advancing this view have overlooked something altogether too obvious to mention, but I will.  Contrary to this simplistic view, the buildings that have collapsed in the inner city were virtually all the very listed and historically protected buildings the council insisted must be preserved. These were buildings that, without the intervention of the council, would in most cases been replaced long ago with something much safer. Only timing and luck has spared the council of direct responsibility for the death of their constituents.


Tuesday, 7 September 2010

‘Woman with a Parasol’ – aka ‘Madame Monet and Her Son,’ by Claude Monet


The subject appears to be Claude Monet’s wife and sun.  The real subject is wind, and movement—expressed in colour and texture.


Earthquake Engineering of the Day: The K-Braced Frame

New Zealand engineers are among the world’s leaders when it comes to earthquake engineering—everyone in Christchurch right now might like to pause at some stage and say a silent “Thank you” to the men and women who designed the structural systems that kept them safe through an earthquake of the same strength that killed hundreds of thousands of poor souls in Haiti last January.

So I thought over the next few days, by way of thank you, I’d start showing you just a few of the ingenious creations of seismic engineers that help keep people safe, beginning by re-posting a system I talked about a few months ago, the “K-braced frame.”

There are people who say engineers aren’t creative. Not true. Just look at this cunning rearrangement of traditional structural elements that makes tall buildings less expensive to build for earthquakes, safer in an earthquake, and more likely to be useable afterwards.

auckland-hospitalYou might have seen ‘K-braced frames’ on the outside of buildings all over the world, and you’ll certainly have spotted them if you’ve ever taken a decent look at Auckland Hospital (right), which is a variant on the theme.

And it’s a pretty good theme. You see, the main aim in earthquake design is to make sure people can get out safely – which means to avoid the building collapsing.  The K-brace (and its cousins the V-brace and the D-brace) do that and much more: they also make it easy to repair the building after an earthquake so that it can get straight back into action – which is pretty important for a major hospital.


The two key elements of these bracing beauties are, 1) the “triangulation” of the structural members, and 2) that little piece labelled ‘e’ on the drawings above. ‘e’ is actually called a “link”—a “sacrificial link.”

The seismic engineer uses the nature of both geometry and earthquakes to make your tall building safer. And how he does it is so elegantly simple it’s almost laughable. He does it by making that little link act like the fuse in your fusebox.

SacrificingTheLinkYou see, earthquakes tend to shake buildings from side to side, the result of which which you can see happening in that diagram on the right.  And since triangulated structures tend to be rigid, when the building moves a little to one side the geometry of the K-brace means that the link moves a lot.

So as the building moves from side to side in a quake (and some quakes can go for a minute or more, meaning lots of shimmying) that link is working up and down and up and down so many times it eventually turns the heavy section steel into chewing gum. Into plastic. And and in the process of being deformed, it’s absorbing much of the earthquake’s energy that would otherwise have gone into destroying the parts of the building that hold it up.

But as long as our sacrificial link is turning to plastic, then our beams and columns aren’t. That’s the beauty of the system. Let the link die, and use it to absorb and save the building and its occupants—and afterwards, by way of repair, all that’s often needed is to take out the deformed links and replace them with new ones.

Now how’s that for ingenious.  Taking the same materials normally used in a building frame, and placing them in an arrangement designed to better combat earthquakes. And since creativity consists of “the power to rearrange the combinations of natural elements” then this sort of ingenuity is the very acme of creativity, and much more interesting than most of the stuff that flies under that flag.

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Good post-earthquake commentary

Some good post-earthquake comments and science around the traps.

And I enjoyed this comment by Owen McShane over at Frog Blog’s earthquake thread:

_Quote The BIG story is that this massive earthquake in a major city has resulted in zero deaths. The timing had much to do with it of course because most people were safe at home in their lightweight timber framed suburban beds.
    Had they been in offices many would have been turned into hamburger my moving filing cabinets etc.
    The low damage level is a tribute to our engineers scientists and our building codes.
    Hopefully more people will be aware that “solid brick” is not your best friend in an earthquake.
    Of course we know that Christchurch is subject to earthquakes. That is why there has been a major programme for strengthening older buildings. Every part of NZ is at risk of earthquake. It’s just some are more at risk than others.
    The light timber frame is the ideal construction. I remember a seminar on earthquake design from an expert who had just returned from the great Alaskan earthquake. I house, which could have passed for any bungalow in Auckland, rolled down a steep hill during the earthquake. The window panes remained intact.
    Remember, an earthquake of this magnitude killed 230,000 people in Haiti. Mud bricks may be romantic but they kill you in an earthquake.
    Also those people who have to leave their homes do not have to worry about squatters. They have secure title to return to.
    It is also amazing how quickly services etc are being restored. There is little one can do to prevent underground effects such as broken pipes and gas lines.
    The response time is remarkably good.

If you see other good commentary around the traps, leave a links in the comments and I’ll post them here on the front page.

  • Spotted by Mark Hubbard: a very good article by Frederic Sautet at his 'Coordination Problem' blog, comparing Chch and Haiti earthquakes:  Earthquakes as Economic Phenomena.

    _QuoteThose who live in Christchurch were saved by capitalism and the accumulation of capital it has enabled over the years. Natural disasters are economic phenomena. Governments, including in the West, often ignore this truth to the detriment of the victims who suffer twice—once from the earthquake itself, and a second time from the consequences of poor government policies.

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Monday, 6 September 2010

‘Flaming June’ – Frederic Lord Leighton, 1895

FlamingJune (1) Frederick Lord Leighton, Flaming June, Oil on canvas, 47” x 47’

No, it’s not June, it’s September.  But it’s Spring here in NZ, and life (and summer) is ready to awaken. And I think we need some beauty to remind us why life is worth living. 


“I love the sound of breaking windows” [update 10]

I'm sure the thoughts of all my readers are with the people in Christchurch, and have been since they first heard of the disaster.

That it is a disaster instead of a tragedy is almost a miracle.

That no-one was killed may be attributed to the earthquake striking when everyone was abed, instead of out in the streets; that our structural engineers have the knowledge to allow structures to safely resist a 7.1 shake and 93 aftershocks (and counting); and because New Zealand is still wealthy enough to build what they recommend.

Thank goodness for NZ's structural engineers, who in the field of seismic design are recognised world leaders.

Thank goodness too for the civilised way in which most Christchurch folk pulled together to help each other through the calamity, and will no doubt continue to. With the exception of a few vandals taking the opportunity to loot other people's property, these are the sort of people whose city one would like to share—one of the few blessings of a catastrophe like this lies in discovering (if you didn't already know them) the good people who live just over your fence.

One of the alleged silver linings that is talked about, however, is very much NOT a blessing.

There is a lot of work to do now just to get the city back into the shape it once was, and this going to take an awful lot of resources and cost somebody an awful lot of money.  Around 500 damaged buildings, several damaged bridges and many damaged roads, broken sewerage and failed water reticulation systems … all up everyone in the city now faces a bill of around $2 billion in repair costs to get things back to how they were, not to mention all the time and opportunities lost while those repairs are being done.

Early Saturday morning I wondered aloud on Twitter who would be the first moron to start talking about the blessings of all that destruction.  We didn't have long to wait for that moron.  9:20 the very next morning, the Prime Minister was front and centre on TVNZ’s Q&A programme saying (with a smile) “every cloud has a silver lining, there’ll be tremendous stimulus.” [Watch the moron here, at 11:30min in.  Hat tip Paul B for spotting it.] In subsequent interviews elsewhere, Smile and Wave talk more about the “stimulus” effect of the destruction, with the government (he says) picking up most of the tab for the repairs. And he’s been joined in this chorus by other morons like the head of the Contractor’s Federation, Ollie Turner, who talked about this as “a much needed [economic] upturn”—especially for his members.

These are people who love the sound of breaking windows—or at least the fallacy thereof—and who wish to compound the unavoidable natural disaster with an entirely avoidable economic one.

Since he’s only thinking about his members, the head of the Contractor’s Federation could at least be forgiven for violating the very first rule of economics, stated so well by Henry Hazlitt:

_Quote The whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy: it consists in tracing the consequences of that policy not merely for one group but for all groups.

Hazlitt wrote a whole book expressing the lessons embodied in that one principle.  The very first application of the lesson is, of course, our old friend the broken window fallacy. Allow me to just slightly rewrite Hazlitt’s illustration of it for today’s readers, to demonstrate how morons can turn a $2 billion disaster into one costing everyone $4 billion:

_QuoteLet us begin with the most topical illustration possible: let us choose all the broken buildings and shattered panes of glass now littering Christchurch’s streets.
    A crowd gathers, both in Christchurch and on televisions around the world, staring with quiet horror at the gaping holes in the buildings and the rubble and shattered glass over the streets and businesses of the city. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the business owners that, after all, the misfortune has its bright side.
    A Smiling and Waving Man smiles and waves about the work this will give to unemployed tradesmen. And the head of the local Contractor’s Federation smiles that it will make business for many glaziers and the members of the local Contractor’s Federation.
    As they begin to think of this they elaborate upon it. How much is the whole repair bill? Two billion dollars? That’s quite a sum. After all, if earthquakes didn’t happen in a recession, what would happen to the glass business and the businesses of all those builders? Then, of course, the thing is endless. The builders will have $2 billion more to spend with other merchants, and these in turn will have $2 billion more to spend with still other merchants, and so ad infinitum. The rubble and smashed windows and  will go on providing money and employment in ever-widening circles.
     The logical conclusion from all this would be, if the crowd drew it, that, far from being a public menace, the earthquake was a public benefactor.

    Now let us take another look. The crowd is at least right in its first conclusion. This major act of destruction will in the first instance mean more business for glaziers and contractors. They will be no more unhappy to learn of the incident than an undertaker to learn of a death. But the ratepayers, taxpayers, business owners and their insurers will be out $2 billion that they were planning to spend for new suits, new factory equipment, new computers, new buildings, new investments and new business opportunities.
    Because, instead, they are first going to have to put things back the way they were, they will have to go without the suits, factory equipment, computers, buildings, investments and business opportunities (or some equivalent needs or luxuries). Instead of having a functioning city and $2 billion we now (after some time) have merely a functioning city. Or, as all these plans were already in the making before the earthquake hit, instead of having both a functioning city and new suits, new factory equipment, new computers, new buildings, new investments and new business opportunities we must be content instead with just the reconstructed city.
    The net result of the “silver lining” is that the community has lost all the new suits, new factory equipment, new computers, new buildings, new investments and new business opportunities that might otherwise have come into being, and is just that much poorer for the loss.
    The gain in business for the glaziers and contractors making repairs, in short, is merely the loss of business for the tailors, retailers and entrepreneurs, and for the builders and designers who erect new buildings. No new "employment" has been added. Smile and Wave and the people in the crowd were thinking only of two parties to the transaction, the owners of the bent buildings and the repairers. They had forgotten all the potential third parties involved, those who missed out on their business because they had to pay for the buildings to be un-bent. They forgot about them precisely because they will not now ever enter the scene.
    They will see the new windows and repaired buildings in the next few weeks and months—along with all the strutting politicians who will say that it was they who made the repairs possible. They will never see the extra suits, computers, buildings and business opportunities precisely because they will never be made. The morons see only what is immediately visible to the eye, and nothing or no-one else beyond it.

So far as I know, Smile and Wave and the head of the Contractor’s Federation are the only morons so far to use words like “stimulus” “earthquake” and “silver lining” in the same sentence.  But please do send in any other sighting you see—I’d love to start cataloguing them here.

And feel free too to send the sightings to the US blog that catalogues sightings “Broken Window” stupidity.  Here it is: Broken Window Watch.

And here’s Nick Lowe, with what could be their theme song.

UPDATE 1: More sightings of the Broken Window Fallacy sent in by readers:

  • _QuoteDon Brash, on Q+A on muttered that the quake would have economic benefits because of the work required to rebuild the city. Don should know better.  (Sometime back North Shore mayor Williams said that the leaky homes saga would be good for economic growth for the same misguided reason. [Sent in by Don W.]

Keep ‘em coming.

UPDATE 2: Kudos to writer Zetetic at The Standard who correctly identifies Key’s blather as an example of the Broken Window Fallacy.  But I’ll take a point off because he/she can’t tell the difference between a Broken Window and “real stimulus.”

UPDATE 3: Stephen Toplis, head of research at Bank of New Zealand. Cameron Bagrie, chief economist at ANZ. Hamish Rutherford, Business Day journalist.  Abject fucking morons, the lot of them.

_QuoteBut as Christchurch Central MP Brendon Burns described it, these losses may be offset by a “silver lining.” The rebuilding programme will kickstart the construction industry in the region and probably require tradespeople from other centres. Gross domestic product figures will improve in the aftermath and so will the employment rate…

UPDATE 6:  NZ Herald business editor Liam Dann confirms his credentials as a stimulunatic.

_QuoteIn Italy at the weekend, the world's smartest economists gathered to discuss weighty issues, such as whether governments should pump more stimulus into their ailing economies.
    At the same time in New Zealand, a massive earthquake was making that decision for us…. nature has unleashed the biggest job creation scheme this country has seen…. we are going to see billions of Government dollars injected into the southern economy.
    With any luck, that may kick-start strong economic growth for the whole nation.

Fortunately, several of Dann’s readers demonstrate in the comments below his moronic Pollyanna-ism that they’ve got more smarts than he has, one of them pointing out, correctly, “If earthquakes are a source of prosperity then there is no need to wait or them to come along - just start tearing down buildings and enjoy the prosperity.”

UPDATE 7:  ASB chief economist Nick Tuffley joins his colleagues from the other major banks in talking complete and utter bollocks:

_QuoteOver a longer period, the impact on GDP is likely to be positive [said the moron in an article penned by Brian Fallow], on the grounds that $2 billion, say, of damage represents close to $2 billion of additional demand, in rebuilding, repairing and replacing what was damaged.

I swear, if you didn’t read these comments for yourself, you’d think I was just making them up.

UPDATE 8: Hallelujah!  Despite the welter of alleged economists talking up the benefits of destruction, Westpac’s Brendan O’Donovan says we’re worse off for the earthquake, not better. GDP is not a good measure, he told Radio New Zealand this morning, because it doesn’t measure the capital destruction. If natural disasters were really a boost to the economy then we should just go around smashing our windows every week. “If it is a $2 billion cost then wealth has taken a $2 billion hit.”  Listen in to this rare piece of good sense out in public.  The conversation starts about 1:30 minutes in.  Listen to it at least twice,

UPDATE 10:  Good sense is finally starting to outdo non-sense.  This just in from Stuff’s Business Editor Patrick Smellie:

_QuoteLet’s get one thing straight. Earthquakes are not good for the economy.
    There’s been some feverish talk about the damage to Christchurch being some kind of god-send for the construction industry, especially after last week’s prediction of a collapse in activity in that sector, with 20,000 to 30,000 jobs at risk.
    But try painting the destruction as good news for someone whose house is threatened with collapse on the next big after-shock. Don’t expect a sympathetic reaction.
    Yes, it’s true that there’s suddenly a lot of work in Christchurch for anyone skilled in wielding first a sledgehammer and then a normal hammer.
    But an earthquake is only good for the economy in the same way that wars are: once everything’s been wrecked, it needs to be rebuilt.
    But what do you have once you’ve rebuilt? You have what you had before, only newer.
    Admittedly, there will be an opportunity to throw some Batts in the ceilings of elderly homes that are temporarily unroofed, and some property owners will take the opportunity to renovate earlier than they might have. Nationally, retailers of baked beans, torch batteries and big bottles of water will probably report a stronger month than usual.
    But there is still virtually no productivity gain, no new long-term economic activity generated, and no addition to the national balance sheet from reconstruction in the aftermath of a disaster.

Well said, sir. The point about renovation is worth chewing over a bit more.  The third chapter of Hazlitt’s seminal Economics in One Lesson, written immediately after the war when so many alleged economists were talking about “The Blessings of Destruction,” contains this observation on the improvements the destruction makes possible [starting on page 13]:

_QuoteIt is sometimes said that the Germans or the Japanese had a postwar advantage
over the Americans because their old plants, having been destroyed completely by
bombs during the war, they could replace them with the most modern plants and
equipment and thus produce more efficiently and at lower costs than the Americans
with their older and half-obsolete plants and equipment. But if this were
really a clear net advantage, Americans could easily offset it by immediately
wrecking their old plants, junking all the old equipment. In fact, all manufacturers
in all countries could scrap all their old plants and equipment every year and erect
new plants and install new equipment.
    The simple truth is that there is an optimum rate of replacement, a best time for
replacement. It would be an advantage for a manufacturer to have his factory and
equipment destroyed by bombs only if the time had arrived when, through deterioration
and obsolescence, his plant and equipment had already acquired a null or a
negative value and the bombs fell just when he should have called in a wrecking
crew or ordered new equipment anyway.
    It is true that previous depreciation and obsolescence, if not adequately reflected in
his books, may make the destruction of his property less of a disaster, on net balance,
than it seems. It is also true that the existence of new plants and equipment
speeds up the obsolescence of older plants and equipment. If the owners of the
older plant and equipment try to keep using it longer than the period for which it
would maximize their profit, then the manufacturers whose plants and equipment
were destroyed (if we assume that they had both the will and capital to replace
them with new plants and equipment) will reap a comparative advantage or, to
speak more accurately, will reduce their comparative loss.
    We are brought, in brief, to the conclusion that it is never an advantage to have
one’s plants destroyed by shells or bombs unless those plants have already become
valueless or acquired a negative value by depreciation and obsolescence.
    In all this discussion, moreover, we have so far omitted a central consideration.
Plants and equipment cannot be replaced by an individual (or a socialist government)
unless he or it has acquired or can acquire the savings, the capital accumulation,
to make the replacement….

Which is precisely Brendan O’Donovan’s point above.  If the earthquake imposes a $2 billion cost, then capital has taken a $2 billion hit.

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