Tuesday, 30 November 2010

Te Rewa Rewa Bridge

4867173515_92260b5219_z I saw this bridge in a recent copy of Walking New Zealand magazine, and she’s a beauty.

4795077474_1e200b8e20

An 80m long pedestrian/cycle crossing over the Waiwhakaiho River--part of the New Plymouth Coastal Walkway—it’s only really let down by those aesthetically pedestrian railings. And just look at the way it focuses walkers on the mountain.4831948265_14bd849673_z

It was designed and built by a consortium led by local company Whitaker Civil Engineering Limited, and including Novare Design, CPG and Fitzroy Engineering. Paid for by taxpayers and New Plymouth’s long-suffering ratepayers, for sure, but so much better value for money than their bloody Wind Wand.

[Top two shots by Margret Brands. Lower shot by Kimbzcam.]

War & WikiLeaks

"A universal peace, it is to be feared, is in the catalogue of events which will
never exist but in the imaginations of visionary philosophers, or in the
breasts of benevolent enthusiasts."
-- James Madison

It’s impossible to easily summarise all that flood of WikiLeaked paper, although people have been trying, but at this early stage I tend to agree with Andrew Bolt’s summary, that

_Quote the overall tenor of these leaks is like the last, which confirmed just how wildly Lancet and other activist-captured bodies had exaggerated the death toll in Iraq. They tend to confirm that the perils the US confronts are real, and the claims made by its enemies tend to be false.
    In this case we get further evidence that the Saudis indeed are financing al Qaeda; that Iran and North Korea are indeed are in an axis of evil,
trading missiles; that Iran really is using Red Crescent ambulances to ferry arms to Hezbollah, as Israel has long claimed; that Iran is seen as not only a threat by the West, but the Arab world; that China was a conduit for the arming of Iran; that Russia is in a new authoritarian phase, and that China is sabotaging computer systems in the West and hacked into Google’s.

Like it or not, the world is still a dangerous place. Even Rachel Maddow agrees.

_QuoteStrip out the gossip and the diplomats-as-spies and the please-attack-Iran parts, and what you get from Wikileaks's latest is the very scary news that the Iran probably has the weaponry it needs to attack European cities.

Which is why the non-response of of the U.S. president to cross-border murder by North Korea is so dangerous, since it says to the world’s many potential aggressors of today that they will meet no serious opposition from this occupant of the White House.

We can recall how Neville Chamberlain’s agreement to back down over Czechoslovakia famously emboldened Hitler and led to world war.  We might recall how (not quite to famously) US ambassadorial assent to turn a blind eye to  Saddam Hussein’s view that Kuwait was really a province of Iraq emboldened that aggressor, and led to the First Gulf War. So how to take Obama’s response to North Korea’s unprovoked attacks on the U.S.’s military ally, which barely amounts to a stiffly-worded memo.

_QuoteHow did the White House respond to North Korea's shelling of South Korea [asks columnist Paul Greenberg]? Our president is said to be 'outraged' -- according to his spokesmen. That'd be a first. For has Barack Obama ever shown more than Thoughtful Concern on any matter, foreign (Iran's nuclear program) or domestic (the national debt)?
    Early on Tuesday morning, as the Koreans were collecting their dead, the president's press secretary, Robert Gibbs, issued a statement calling on North Korea 'to halt its belligerent action and to fully abide by the terms of the armistice agreement' signed in 1953. ...
    Dispatches from Washington Tuesday evening said President Obama wasn't planning to speak publicly about the shelling on the peninsula, preferring to issue a written statement later on.
    Why rush? It'll doubtless be neatly typed.
    Can you imagine a Harry Truman, or, for that matter a Reagan or Kennedy or Eisenhower or either Roosevelt just having an aide issue a press release when an ally comes under fire? Isn't it time for the current occupant of the White House, officially acclaimed a great statesman by the Nobel committee, to say something to both enemies and friends to assure the peace? Or do we have to sit through another yawner from his soporific press aide? ...
    As I write these lines, the current occupant of the White House remains silent, as in Silence Gives Consent. In this case, to war…

[Hat tip for James Madison quote to the Patriot Post]

Cancun, not Copenhagen

Several thousand people opposed to jet travel and profligate spending have flown to this Mexican resort to talk about how to make jet travel and any spending at all more difficult for everyone else.

320628-main_Full Their hope, if not ours, is that they can get the whole global warming gravy train back on the track from which it was derailed by an icy blast of reality and RealPolitik at Copenhagen.

The reality is that the Climategate emails, the questionable behaviour of IPCC officials, the collapse of any market for carbon "offsets", and the climate’s failure to live up to the scariest IPCC predictions (not to mention a world in which economic reality has suddenly become far more important than climate fantasy) have between them conspired to make even confirmed warmists pessimistic about their chances of resurrecting their favourite scare stories.

Still, as Anthony Watts observes,

_Quote One benefit of meeting in Mexico is that the conference will avoid the embarrassment last year when the Copenhagen meeting ended in an unexpected blizzard. It’s harder to sell global warming to world leaders who have to flee the city before their flights are grounded by an ice storm. The worst the Cancun conferees will have to deal with is the threat of being kidnapped by heavily armed gangs of drug dealers.

So why are we bailing out the Spencer family? [update 3]

News that taxpayers could be are on the hook for the failure of yet another finance company (another finance company whose business model was to stand in line for newly created counterfeit capital and use it as fertiliser to inflate borrowers’ asset values) has the added barb for struggling taxpayers that this failure will see them stumping up $178million to help out the Rich Lister Spencer family the family of the late Peter Spencer and all their depositors.

Thanks John. Thanks Bill. Way to help phony, “crony capitalists” privatise profits and socialise their losses.

This, along with the $1.8billion of good money already thrown after bad, really should call into question the acumen of these two numb nuts (John and Bill), and the haste with which they agreed to sign their government up to guarantee finance company deposits simply to keep up already overinflated asset prices.

With U.S.“quantitative easing” already set to throw more good money after bad, and give our exporters even more problems as American degraded dollar sinks against our volatile one, we can see it’s no wonder that talk of double-dip recessions is back again.

No wonder folk are quietly rejecting monetary activism. No wonder we’re now seeing the likes of Newsweek magazine asking if we’re all Austrian economists now? Folk are gradually realising  “that government spending [has, at best] reached the point of diminishing returns, and was producing an anemic recovery that mainly benefited special-interest groups.”

_Quote Monetary activism suffers form the same fundamental flaw as Keynesianism, in that it protects inefficient players instead of injecting renewed vigor into the economy. In a telling statement of the Fed’s thinking, New York Fed member Brian Slack recently said that, with luck, quantitative easing will work by keeping “asset prices higher than they should be,” as that adds to household wealth. This is why stimulus can be so unpopular: it often benefits the rich (who own a disproportionate share of inflating assets such as stocks) at the cost of the poor (who are hurt most by the related rise in food and energy prices).

Which succinctly describes both the reasons for the failure of stimulus to achieve lift-off, and the relationship between the Spencer family and the taxpayers who will now be bailing out their big mistake.

NB: So what is Austrian economics?  Steve Horwitz explains what it is, and what it is not.

UPDATE 1: Horvitz recommends Pete Boettke’s entry on “Austrian Economics” at the Concise Encyclopedia of Economics, which offers these 10 propositions defining Austrian economics.  They’re as good a summary as you’ll see anywhere—and, I would argue, as sound a foundation as you could have to any economics that purports to understand and describe the real world:

  1. Only individuals choose.
  2. The study of the market order is fundamentally about exchange behavior and the institutions within which exchanges take place.
  3. The “facts” of the social sciences are what people believe and think.
  4. Utility and costs are subjective.
  5. The price system economizes on the information that people need to process in making their decisions.
  6. Private property in the means of production is a necessary condition for rational economic calculation.
  7. The competitive market is a process of entrepreneurial discovery.
  8. Money is non-neutral.
  9. The capital structure consists of heterogeneous goods that have multispecific uses that must be aligned.
  10. Social institutions often are the result of human action, but not of human design.

UPDATE 2: By the way, for those of you (like the NZIER) predicating talk of recession by focussing on the necessary slowdown in consumer spending (a slowdown that all the monetary activism is designed to discourage) understand that your Keynesian economics is wrong: economic growth caused consumer spending, not the other way around

UPDATE 3: As Owen points out in the comments, the Royal NZ Herald made a mistake with their front-page story, and have now quietly corrected it. Turns out it isn’t the Rich-Lister Spencer family who were the backers of Equitable Mortgages, which went into receivership on Friday, but the family of the late Peter Spencer.

Quality journalism, that.

The night the pope went partying like it’s 1492

Pope Alexander VI sure as hell knew how to give people that old time religion... c. 1492.

_Quote Once he became Pope Alexander VI, Vatican parties, already wild, grew wilder. They were costly, but he could afford the lifestyle of a Renaissance prince…  One, known to Romans as the Ballet of the Chestnuts, was held on October 30, 1501…
    “Candelabra were set up on the floor; scattered among them were chestnuts, which … the courtesans had to pick up, crawling between the candles. Then the serious sex started. Guests stripped and ran out on the floor, where they mounted, or were mounted by, the prostitutes. The coupling took place … in front of everyone present. Servants kept score of each man’s orgasms, for the pope greatly admired virility and measured a man’s machismo by his ejaculative capacity.

This surely sheds new light on the popes’ antagonism to condoms.

Read more about “the rampant pope” at Stephen Hicks’ place.

Monday, 29 November 2010

Brash on the Key Government -- “deeply worried”

Former National Party leader Don Brash has finally broken his silence over the lacklustre  performance of his successor.

Delivering his speech at Orewa, the place at which he famously delivered the speeches that turned around the fortunes of the National Party after Bill English's dismal leadership, Brash described himself as "deeply worried" by the direction, or lack thereof, being taken by this National-led Government—especially over its economic management, and its pandering to a racist political party.

The National Party’s “constitution emphasises some fundamental values” that this National-led Government has lose sight of – “respect for individual freedom and choice, personal responsibility, equal citizenship and equal opportunity, and limited government.” In losing sight of them, he is worried it is simply occupying office rather than reversing the country’s decline.

_Quote Some of my worries are quite specific.
    I worry that, despite knowing that the Labour Government’s abolition of the youth minimum wage has very substantially increased youth unemployment – by 12,000 according to Canterbury University economics professor
Eric Crampton – we have taken no action..
    I worry that, despite knowing that New Zealanders face house prices which are higher, relative to our incomes, than in most other countries, and despite our being one of the least densely populated countries in the world, we have allowed that situation to continue because we’ve not been willing to put a stop to zoning laws which drive up the cost of urban land to ridiculous levels…
    I worry that, despite telling New Zealanders before the election that we should be fast followers and not leaders in the race to reduce carbon emissions, we have introduced an all-sectors Emissions Trading Scheme in a situation where none of our three largest trading partners – Australia, China, and the United States – has yet done so, nor in two of those cases seems likely to do so.
    I worry that, despite being a party which believes in allowing people the maximum freedom to make choices for themselves, we have to date done nothing to allow more freedom for parents to choose the school their children attend.

Rather than freedom for parents, Anne Tolley’s only thrust as minister is to increase the control of the ministry over schools.

_QuoteThose are some of my specific worries. But I have two more pervasive worries.

They are the economy, and race relations.

On the economy, he says “New Zealand’s relative economic decline over the last half century is one of the steepest on record anywhere. Reversing that decline won’t be easy.” Particularly if, as he says, there is no sign the Key Government even wants to.

_QuoteThere are six broad policy areas where major change is needed if we’re to get faster and more sustainable growth.
    First, it is absolutely imperative that Government gets its fiscal deficit under control quickly… But it’s important to state that this process has barely begun…

… which is to state  things mildly indeed.

_QuoteSecond, we urgently need to get the tax on business income down…
    Third, … “privatisation” has become a dirty word in New Zealand, thanks to Helen Clark’s propaganda … But the New Zealand paranoia about privatisation is entirely unhelpful if we’re to increase our growth rate…

There is no serious argument against privatisation, and as the Labour Party quietly announced last week while the media were looking elsewhere, even their paranoia against it is being reconsidered. But Brash maintains it’s up to the National Party to roll pack the paranoia, and to

_Quoteto be at the forefront of challenging why the state should be:

    • The biggest owner of dairy farms in New Zealand;
    • The biggest fund managers in New Zealand;
    • The 50% owner of a large chain of petrol stations;
    • By far the biggest owner of rental properties;
    • The dominant generator of electricity;
    • The dominant owner of our trains and planes;
    • The owner of our most aggressively growing bank.

And reason why it should be? Because listed like that, you realise just how pervasive are government-run “businesses” in what is reverting to the Polish shipyard we gave up twenty-five years ago.

_Quote“The assets owned by central and local government are now some six times the value of all the shares on the New Zealand stock exchange,”

notes Brash, with more to come when taxpayers are forced to fund government broadband—and the decisions on the use of those assets are no better now than they were when Muldoon was squandering enormous sums on “Think Big,” and Michael Cullen was spending money we couldn’t afford to buy a railway that barely exists.

_QuoteFifth, we need to reduce the huge burden of regulation which still encumbers the business sector – and indeed, encumbers us all as individuals. Why should it take months and months to get a simple building consent to build a modest home in a residential area? Why should it take two years to gain approval to set up a 30-child childcare centre? …  The Resource Management Act and the way in which local councils interpret it have a lot to answer for.
    People need to be much freer to use their own property as they see fit. Yes, there are public interest issues – pollution, effects on neighbours, and so on – but they don’t include some council’s judgement about “sustainability”, or fit with a bureaucratically imposed “spatial plan.”

But instead of freeing up New Zealanders from the control imposed by the Resource Management Act,  all the Key Government has done is to free up the government  from its constraints, and to give those bureaucrats more power in Auckland.

_QuoteAnd sixth, we must explain to the public why foreign direct investment in New Zealand is almost always beneficial to New Zealand.

Xenophobia must be expunged from decision-making, just as racism must be expunged from politics. This was Brash’s second substantial point.

_QuoteNational campaigned in at least the last three elections on the principle that all New Zealanders are equal before the law.

Now, however, it has reversed that—supporting special treatment for one race in law, and supporting a racist political party in Parliament.

Brash makes good points on every one of these issues, but it’s at this stage that he now missteps, giving tacit support to the ACT Party’s bizarre campaign to effect the permanent nationalisation of foreshore and seabed.

Unfortunately, this shows he’s learned nothing in the five years since he campaigned himself to nationalise foreshore and seabed. And unfortunately, this is what will be most reported about his speech, and in that reporting will undercut every good thing he did have to say. Because he is right to conclude that

_Quoteour great country is perhaps more at risk today than at any time since the Second World War. I believe it’s safe to say that our relative decline – both in terms of our economy and in terms of racial harmony – will never be reversed if our political leaders allow themselves to be driven entirely by political polls…
    Winston Churchill once recalled the time he heard a speaker say that leaders ought to “keep their ears to the ground”. Churchill’s response was typical and as relevant in New Zealand today as it was in the United Kingdom 60 years ago. “All I can say,” he responded, “is that the British nation will find it hard to look up to leaders who are detected in that somewhat ungainly posture.”

Friday, 26 November 2010

A Thanksgiving Day lesson in political philosophy

_jeffrey-perren Guest Post by Jeff Perren.


Possibly you've read the story of how the Jamestown pilgrims nearly starved their first two years in America, and what saved them. In 1620, half the population of the Plymouth Colony died during its first harsh winter. The second half was close do doing so but...
_Quote the fall of 1623 marked the end of Plymouth’s debilitating food shortages.
For the last two planting seasons, the Pilgrims had grown crops communally – the approach first used at Jamestown and other English settlements. But as the disastrous harvest of the previous fall had shown, something drastic needed to be done to increase the annual yield.
In April, [William] Bradford [leader of the colony] had decided that each household should be assigned its own plot to cultivate, with the understanding that each family kept whatever it grew. The change in attitude was stunning. Families were now willing to work much harder than they had ever worked before.
In previous years, the men had tended the fields while the women tended the children at home. “The women now went willingly into the field,” Bradford wrote, “and took their little ones with them to set corn.” The Pilgrims had stumbled on the power of capitalism. Although the fortunes of the colony still teetered precariously in the years ahead, the inhabitants never again starved.
It's only one data point, but a characteristic one. The pattern has been repeated countless times in dozens of countries over centuries now. Yet, almost 400 years later, we're still debating Progressives about the practicality of Capitalism vs [Communism/Socialism/Social Democracy/You-name-it-ism].

Clearly, economic facts alone are not going to decide the issue. Progressives are immune. Time to ramp up the moral crusade. Time to declare that even if, contrary to all history, Paul PoorGuy winds up much poorer than Peter Privileged, it's still wrong to force Peter to support Paul.

When we start to make progress on that front, I'll be truly thankful.

[Hat tip: Daniel Griswold of Cato for the selection from "Mayflower: A Story of Courage, Community, and War by Nathanial Philbrick."]

“..a producer’s holiday.”

No, it’s not Thanksgiving in New Zealand, but since America is on holiday most of the internet is quiet.

It’s a holiday with a decent message:

[Thanksgiving] is a producers’ holiday. The lavish meal is a symbol of the fact that abundant consumption is the result and reward of production.

A useful reminder in an age when virtually every country of former producers is now drowning in debt it can’t pay for to fund  consumption it can’t afford.

The whole world has to re-learn the lesson America’s first pilgrims on the shores of New England had to either learn or die—a lesson that took them From "Starving Time" to Cornucopia.

And in a week that proved to be one of New Zealand’s most tragic, it might be a good time—today—to pause and just quietly give thanks ourselves to the existence of everything human beings have produced that makes  our lives worth living. We do have much to be thankful for, not least that we live in a time when the death of 29 people is a tragedy, the result of a terrible accident, when for most of human history such an event was almost a regular occurrence.

Thursday, 25 November 2010

Nimrod – Edward Elgar

We went to a great concert by the APO tonight. Brilliant orchestra. They dedicated their performance of this piece to the fallen miners of Pike River.

NOT PJ: Snake Oil

_BernardDarnton This week, Bernard Darnton cuddles an orangutan.

In 2002 the hills of South Wales were redolent with the fragrant vapours of something … chippy. Farmers had discovered that their Land Rovers worked perfectly well on throwaway vegetable oil. They’d also discovered that Her Majesty’s Customs and Excise weren’t collecting fuel tax at the local fish and chip shop. They were just a few years ahead of their time.

Christchurch is currently suffering a plague of rickety old buses plastered with advertisements explaining that we were supposed to get new buses but there was a an earthquake and blah, blah, but the new ones are coming and they’ll be all shiny and run on biodiesel.

Biodiesel is now big business - if by “business” you mean “heavily subsidised fad”. Whereas inventive Welsh motorists saved a small fortune in excise duty with their do-it-yourself tax cuts, in the government’s hands biodiesel had become an expensive boondoggle.

The 2009 budget contained a $36 million subsidy for manufacturing biodiesel, most of which the government will give back to itself in the form of payments to state owned Solid Energy’s Biodiesel NZ division.

Luckily this is outweighed by Solid Energy’s $68 million annual profit from its real business. As a state owned enterprise, the company is required to behave like a proper business and so it can’t invest its own profits in biodiesel because that would be a reckless waste of money. Hence the money-go-round.

New Zealand already has some experience with biodiesel powered vehicles. Earthrace was built in Auckland to showcase eco-friendly technologies and claim a world record for circumnavigating the globe.

After many mechanical difficulties and the killing of a Guatemalan fisherman, Earthrace managed the round trip in sixty-one days, a day slower than the fastest circumnavigation by a nuclear submarine (with no carbon emissions) and ten days slower than the fastest trip by a sailing ship (with no carbon emissions).

Physicist David MacKay (incidentally chief scientific advisor to the UK Department of Energy and Climate Change) has noted that Earthrace consumed four times as much fuel per passenger-mile as the QE2, that paragon of environmental ascetism.

With the ignoble exception of Earthrace, which was briefly powered on Pete Bethune’s liposucked arse fat, New Zealand biodiesel is made from canola. Around the world biodiesel is made from many kinds of vegetable oils but they all amount to one thing: burning food.

Between biodiesel and ethanol production for fuel, five percent of the world’s food is now burnt for fuel. In 2008, diversion of food into fuel programmes combined with an Australian drought to push prices up to the point where there were riots in several countries.

In general, however, food production is keeping pace with the world’s population. While environmentalists whined about overpopulation and mass starvation, technology and capitalism got on with the job of feeding everyone. Only the meddlers and do-gooders can bugger it up. Making a bet that we’re all going to starve and then passing laws requiring us to set fire to the grain reserves is just not cricket.

If we want to feed everyone - and it would be unkind not to - then land for growing biofuels has to come from somewhere else. And the only other places that are really good at growing stuff and that aren’t already covered in food are forests.

Conversion of tropical forests into palm oil plantations for biodiesel is already happening in Malaysia and Indonesia. And, in a tragic greenie-on-greenie scrap, that “sustainable” fuel production can only occur by destroying the habitat of orangutans.

So here’s the question: if you’re going to drive an empty bus round and round in circles from one shopping mall to an identical other, should it be powered by burning the remains of animals that died 300 million years ago ,or by burning orangutans today?

* * Bernard Darnton ‘s NOT PJ column appears here at NOT PC every Thursday. * *

DOWN TO THE DOCTOR’S: The death cults of Islam and Environmentalism

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

This week:    Islam and Environmentalism - Cults of Death

  • NZ HERALD: “Pike River disaster: The day hope endedA second explosion ends all reasonable hope of rescuing the trapped coal miners on the West Coast…

    THE DOCTOR SAYS: As I sat yesterday afternoon digesting the sad news, I remarked to a workmate how open-cast mining didn’t seem so bad after all. Well, blow me down (no pun intended) if SOLO spokesman Mark Hubbard didn’t beat me getting these thoughts into print with a press release (reprinted in the post below) pointing out that much of the blame must rest with the anti-industrial (a.k.a. ‘environmentalist’) lobby, who oppose open-cast mining in favour of protecting mud puddles and mosquitoes. As Mark put it:
                “So, why was Pike River not an open cast mine? Answer: the bureaucrats in DOC who    
            place a higher value on a
    tree, than on humanity, and certainly an individual human
            being.”

  • NZ HERALD: “Gruesome abuse case sparks cry for migrant protectionA 23 year-old Indonesian woman working as a maid in the bosom of Islam has her lip cut with scissors, her back scalded with a hot iron, her finger broken and her legs pummelled. Allah be praised…

    THE DOCTOR SAYS: Really, what can a Muslim woman expect if she chooses to work in the country that is the spiritual homeland of a religion that is intensely anti-female, and in all respects a cult of death? This poor woman is still alive, however, which is more than can be said for another Indonesian maid who, as the article tells us, was tortured to death by her Saudi employer then dumped in a rubbish skip.
        At least the Indonesian press are so disgusted they have featured the story of Sumiati, the disfigured young woman, in the newspapers and on television, every day for the past week.

  • NZ HERALD: “ACT campaign against foreshore bill costing National votesACT is sending out flyers in protest at National’s attempt to privatise ownership of the foreshore and seabed…

    THE DOCTORS SAYS: The ACT Party has done a complete about-face, trashing its principles and openly opposing the concepts of privatisation and private property.
        The Libertarianz Party, on the other hand, upholds both. We understand that land tends to be better maintained - and more productively used - if it is owned by actual flesh and blood humans (or co-operatives thereof) rather than the Marxist abstract entity misleadingly labelled ‘The People.’
         It must be gut-wrenching for any ACT member that truly believes in freedom and free-market values to see their deputy leader John Boscawen write this:
                “[It] seems only a matter of time before nationalised resources - oil, gold, silver,
            uranium - are denationalised, which could see some of the benefits of those resources in
            the foreshore and seabed go into private iwi hands rather than to Government coffers…”
       
    This makes it clear beyond words that today’s ACT Party believes in the nationalisation of land and all associated minerals and resources, doesn’t it.
        Perhaps it should now merge with what’s left of the Alliance.

  • NZ HERALD: “Grower tariffs rise to $235m – Our fruit and vege exporters paid a tariff of $34k each, on average…

    THE DOCTOR SAYS: All the more reason why governments should keep their noses out of peaceful international trade and stop imposing tariffs that make our exports more expensive for people overseas.
         Instead of passing taxpayer money to corrupt foreign governments, John Key’s administration should concentrate on pursuing free trade agreements with as many countries as possible – before trimming back the Ministry of Foreign Affairs and Trade to the bone, or even abolishing it altogether.

  • NZ HERALD: “Lame duck PM loses support but drafts new budget Irish PM outlines a budget to slash billions of euros from state spending over the next four years…

    THE DOCTOR SAYS: Heard the one about the Irish turkey? He’s looking forward to Christmas.
        Seriously though, Ireland is now experiencing the economic reality that the Greek government has had to confront, and that the governments of Portugal, Spain, Britain and other European countries will shortly be forced to address: You can’t keep spending money you don’t have. Especially when you don’t actually produce any wealth, you merely take from others.
        I’ve always found it mildly amusing that the media talk of the imposition of ‘austerity’ measures’ when governments find themselves going broke. Others would, with infinitely more accuracy, describe it as ‘living within your means,’ ‘balancing the budget,’ ‘paying off debt,’ or even ‘not consigning future generations to debt slavery.’

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

GUEST POST: Why Wasn't Pike River Mine Open Cast? [update 3]

_MarkHubbard Mark Hubbard says* what many of us are thinking about the tragedy at Pike River.

I feel empathy for the family and friends who the perished miners leave behind.. I do not feel grief though, for the same reason I feel no personal grief for the millions of young men who died in the last two world wars: I knew none of them personally, as I knew none of these men. There have been far too many plastic tears in the reporting of this disaster…

Many involved acquitted themselves well—one man especially for whom I have acquired enormous respect: that man is Peter Whittall. It’s no accident this great man has risen from miner to CEO. If you want a case study in competence, communication and simply being ‘human,’ then use Mr Whittall as your example. His bearing in the media exudes a morality and sensibility of man qua man.

And despite the flak they’ve taken, I also think the police acquitted themselves well—and as Lindsay Perigo observes, the second explosion has shown their prudence was well-founded.

But for me the police made one error. I think Stephen Franks was right. If I am a free man, then that includes the freedom to die nobly, or stupidly (take your pick)… If men wanted to go into this mine to rescue their loved ones, as irrational and ill-advised as that would have been (and presuming that would not itself risk a second explosion), that was still their prerogative. If the police did physically stop this (some comments from the grieving relatives would indicate this, but it is merely supposition on my behalf), then the police were beyond the mandate a free society should have given them.

These are hard questions emotionally, but they are also very simple…

So to the even simpler issue of where my anger truly lies.

Open-Cast This mine increased the standards of living of us all via the mechanism of free markets and wealth creation. So should it exist? Yes. Of course. The mine however was known in the industry for being ‘gassy’: that is, the coal seam released a lot of methane as it was mined, which is dangerous, despite its being a 'wet mine': this fact caused problems and cost overruns throughout its development, especially around the ventilation system (cost overrun $7 million just on that). Was there a way to reduce the danger of a ‘gassy’ mine to the workers who took out the coal? Yes – an open-cast mine would have held none of the risks of this mine, for the methane would have dissipated immediately without enclosed spaces in which to build up.

So, why was Pike River not an open-cast mine? Answer: the bureaucrats in DOC who place a higher value on a tree, than on human beings, insisted it couldn’t be.

It is significant that DOC have felt needed to put out their own press release they disclaiming any responsibility. But their very own press release damns every bureaucrat involved:

_Quote_Idiot Environmental concerns did not compromise safety at the Pike River mine, Conservation Department director-general Al Morrison says. "We set stringent conditions and they met them to the extent that we gave them a conservation award."  [Emphasis mine.]

And:

_Quote_Idiot"The Pike River mine had to navigate sensitive environmental challenges above the ground, as well as difficult geology below … The company has an access agreement with DOC. Once mining has finished, all evidence of the project has to be removed, such as buildings, bridges and powerlines. Pike River Coal has spent millions of dollars to meet environmental guidelines. It recycles water, has kept its surface features to a minimum and has zig-zagged powerlines and roads around ancient rimu trees."  [Emphasis mine.]

And, the truly damning part:

_Quote_Idiot"New Zealand has an opportunity to be a world leader in developing `green mines'. Our mine at Pike River proves that it can be done. It was likely any new mines would be underground. In such cases the surface impact is small, the infrastructure is removed at the end of mining and the small areas affected are restored. On the small areas affected, trees grow back."  [Emphasis mine.]

Well now we know what a green mine does: it kills humans.

Killers So, under DOC’s watch, under the Gaia-worshipping eyes of the bureaucrats, open-cast mines will never occur in NZ, and they weren’t even an option for Pike River. Yet if Pike River had been an open-cast mine, all 29 of these miners would still be alive.

That’s where your real anger should be directed, and that’s what any “inquiry” should skewer.

* * * *

* Excerpted, and cleaned up slightly from his SOLO press release this morning.

UPDATE 1: UPDATE: You can donate to the Mayoral Relief Fund for the families of the victims at Give A Little.  [Hat tip Kiwiblog]

UPDATE 2: Here’s a very helpful science blog posting on the intrinsic dangers of coal mining, where explosions are always waiting to happen [hat tip Moira Fraser]:  http://bit.ly/eSv0pp

UPDATE 3: Chris Trotter (yes, Chris Trotter) pays beautiful poetic tribute to the twenty-nine

Wednesday, 24 November 2010

‘Isle of the Dead,’ by Arnold Bocklin

The_Isle_of_the_Dead_1880

The Isle of the Dead, 1880,
Oil on canvas, Kunstmuseum, Basel

As good as gold? Or as bad as paper [updated]

"Of all the contrivances for cheating the laboring classes
of mankind, none has been more effective than that
which deludes them with paper money."
                   - Daniel Webster

I’ve bagged Bernard Hickey mercilessly (and deservedly) for his calls for a return to Muldoonist mercantilism, but in truth there’s one thing about Bernard that has to be said: he at least realises that the present monetary system is broken. He realises that we are living not just through global financial and economic crisis, but (more accurately) a monetary crisis. He realises, more perhaps than many of the other status-quo merchants, that the way the present system is set up makes it both unsustainable and destructive. Sadly, however, he is as incapable of proposing any solution to the crisis beyond reversion to many of the statist band-aids that helped cause it.

Developed in crisis and destined to die in another one, let’s join him at least in agreeing that the present system is broken, just like all the other systems of the last century from which it grew. But let’s disagree with him in saying that the only solution is his reversion to currency nationalism and the breakup of world trade. The solution, I suggest, is to revert to the system that built internationalism and world-wide prosperity just over a century ago.

The present system, which has lasted barely two decades, has been dubbed “The Great Moderation”: based on a model in which a government’s Central Bank Governor sets interest rates to maintain so-called price stability (while all around him booms and busts), it is a paper-based currency system built on organising ever-rising mountains of debt into ever-more ballooning quantities of currency.

From Europe to America, the system is clearly broken, not least here in New Zealand where (even when things were apparently running well) the new money entered the system as unsustainable debt, and the interest rates set to maintain domestic “price stability” set up a positive feedback loop punishing progress, rewarding stagnation, and (still) attracting the sort of hot foreign money to our shores that drives up our dollar’s exchange rate without making any real capital investment to compensate producers for the rises in their costs.

Hickey is right to criticise the present collapsing system; but he’s wrong to think that a few statist band-aids could, would, or should fix it. Like the few other commentators who’ve identified that things as they are now are indeed broken, he’s left floundering when it comes to what “new thing” to fix it all with.

And since ours is not the first monetary system to have collapsed, we’ve seen plenty of “new things” to fix the same old monetary problems over the last century—each of them purporting to be the way to wealth and riches (or, to use the words of John Maynard Keynes who was responsible for at least two of those systems, they way to effect “the miracle of turning stones into bread.”)

Consider, over the last century—ever since the First World War threw all the belligerents off their managed gold standards—there’s been fix after fix to the world’s monetary systems, each one lasting barely two decades before collapsing just like the latest system, taking in its wake the wealth, prosperity and hard-earned savings of everyone who trusted it.

Ever since gold coins were taken out of workers’ hands, we’ve seen a (mis-)managed bullion standard leading to explosive boom then catastrophic bust (1921 to 1933); worldwide competitive devaluations leading to monetary and military chaos  (1933 to 1946); the unsustainable Bretton Woods I, which collapsed in 1971 when the US defaulted on its gold obligations, and the world collapsed into a decade-and-a-half 0f stagflation;  and finally the “Great Moderation” of the last two decades which supposedly brought all the chaos under control.

Yeah right.

We’ve seen a century in which the world’s money has abandoned its links to gold, and has built instead a money that is built on debt, and lots of it; a century in which we’ve gone from a money that acted as anchor has been transformed to one that swings like a weather-vane; a century of chaos in which at least ninety-five percent of the value of every paper currency has  been destroyed—and people’s savings and prosperity with it.

Things certainly are broken.

 

Recognising the current catastrophe as just the latest monetary dissembling since the links to gold were dissolved, some folk are calling for a return to gold.

The present head of the World Bank, Robert Zoellick, has begun to suggest that the world needs to think seriously about “readopting a modified global gold standard to guide currency movements.”  What he means by that, however, is a “gold exchange standard,” something like the one (mis-)managed earlier last century in which governments and central banks hold gold in ingot form, and let people see it on television occasionally just to keep them happy it’s still there.

Without any doubt at all, this will work no better than it did before—particularly since no debt-laden government on earth is interested in sound money at this time.

Meanwhile, Financial Times columnist Martin Wolf asks, “Could the World Go Back to a the Gold Standard?”

_Quote It is not hard to understand the attractions of a gold standard. Money is a social convention. The advantage of a link to gold (or some other commodity) is that the value of money would apparently be free from manipulation by the government. The aim, then, would be to ‘de-politicize’ money.

But Wolf musters more objections than praise for the system that leaves money free from political manipulation (objections which Richard Ebeling masterfully dismisses).

In response to calls like Zoelick’s and Wolf’s, there are folk like Edwin Vieira who call for a return to the sort of real gold-coin standard that underpinned the long-term prosperity of the late-nineteenth century, a standard that leaves gold coins in the pocket of workers—giving them the power to manage their own affairs that the governments took away.  [Hat tip Antal Fekete]

But their remains this recalcitrant rump of people who do know that the world’s money is broken, but who resist the call for its full de-politicisation. Much of that resistance is based on the love of the state, but much is based on just flat-out ignorance.

Consider this piece by Nouriel Roubini, for example, one of the few folk to warn in advance about the onset of the latest crisis. Here's Why a Gold Standard Won't Work , he says. Let’s fisk what he has to say.

…a gold standard would make central banks unable to fight inflation or deflation, much less do anything to combat persistent unemployment…

Since the central banks’ paper is itself (during the boom) the source of price inflation, and the centrally-managed fractional reserve system the source (during the bust) of monetary deflation, this seems a bizarre complaint to make about a gold standard, particularly when those charts above show the sort of real  price stability that gold anchored over centuries of growing prosperity. Furthermore, the world had never seen the levels of structural unemployment seen in the 20th and 21st centuries of debt-based monetary booms and busts.

A fixed exchange regime, even if it is not a gold standard…just exacerbates the business cycle. Roubini asks us to imagine two countries: One that's growing very quickly, and one that's growing very slowly. The economy that is growing quickly would tend to "overheat"—an economic phenomenon characterized by accelerated growth, inflation and the potential for asset bubbles. In the economy that is growing more slowly, there would be a tendency toward deflationary pressure and recession. So, instead of having a central bank with the capacity to successfully counter-balance these tendencies, an economy with a fixed exchange rate regime would continue to reinforce the existing negative trends in the business cycle…

This really is flat-out ignorance. In a gold-based system of stable exchange rates (stable, because all prices everywhere are determined in weights of gold) the higher priced, overheating economy with lower interest rates would tend to lose gold (lose it because more imports are bought, and because money will be seeking higher interest rates), giving the precise counter-cyclical pressures that are needed; whereas the more depressed economy with higher rates and falling costs will tend to attract gold and new investment. 

Instead of having a central bank which over the last century has always made things work, gold effects a naturally-equilibrating process which has been known about for centuries (at least since David Hume first explained it in the 1700s) and which worked to harmonise world trade over the period in which it flourished most successfully.

….fixed rate regimes inhibit the ability of banks to provide lender of last resort support to an economy when necessary….

But as the present bank bailouts demonstrate, the “lender of last resort” fallacy leaves the world trapped in a cycle where new debt is simply passed round and round in circles.  We need a mechanism to wind up failed banks, not to reward them while impoverishing ourselves.

Roubini raises the following question: If you are on a gold standard, or modified gold standard, what do you do in the event of a bank run—if you don't have enough gold to fully back the currency? Roubini explains that most central banks in today's economy have far greater financial liabilities than gold in reserve. In fact, according to Roubini, in the case of most central banks today that ratio is about 40 or 50 to 1.
    Of course, many who support a gold standard would say that limiting the ability of central banks to increase their leverage would be a benefit of adopting the gold standard…

They certainly would. As Roubini must surely know (unless he’s simply being disingenous), virtually all of those arguing for a return to the classical gold standard have been in the van in calling for an end to the unstable fractional reserve system on which it was unfortunately based (and which still exists in the paper system, exacerbating the violent monetary inflations and deflations of boom and bust); and those who support a gold-coin standard like the one Vieira proposes insist that all central banks be kept away from gold as a matter of urgency, with those coins being put in the hands of workers, credit unions and private (non-leveraged) banks.

“We printed at once the notes, large and small,
Tens, twenties, fifties, hundreds and all,
You can't imagine how it pleased the folk, short and tall!”

- Goethe, Faust (Part II, Act I)

Of course, the major objection to the reintroduction of any gold standard is that it would take away the freedom of governments to “manage their own affairs,” by which is meant it would impose on them a fiscal discipline that would make impossible governments’ rampant profligacy, their inflationary electioneering, their multiplication of the welfare-warfare state, and the creation of all that paper-based “sovereign debt” in which the world, from Ireland to Sacramento, is now drowning.

It should be understood (and this is probably the most important lesson to take from all this) that far from being something about gold to decry, this discipline that it imposes on governments is in fact one of gold’s primary virtues.

UPDATE: The government thinks they own our money. George Reisman explains it is otherwise.

Tuesday, 23 November 2010

So much for honest government

Was the government changed at all at the last election?

You wouldn’t think so.

  • Nanny is still with us.
  • Her anti-smacking law is still with us.
  • Aside from making it easier for the govt to bulldoze houses and factories, the Resource Management Act is fundamentally unchanged.
  • Council rate rises continue to rise, even as their borrowings to fund their spending increases accelerate.
  • The global warming/emissions trading scam continues.
  • Our substance is still eaten out by KiwiRail and KiwiBank, KiwiSaver and Welfare for Working Families, by bureaucrats and central bankers, by the IRD and ACC -- and by politicians whose snouts are in the trough with an arrogance and sense of “entitlement” that normally takes three terms to develop, not just one.
  • And in the face of the biggest economic crisis in seventy years we have a Finance Minister who can talk only about “sharp edges” and “green shoots” “rebalancing,” and between times acts in a manner that makes a deer in the headlights look purposeful.

So it’s all not good. Not good at all. 

And then yesterday it was reconfirmed, as it was was in September last year, and then again back in April this year, that the Electoral Finance Abomination is on its way back again, with just a few tweaks from Simon Power-Lust to pretend that all the campaigning and protesting and marching in the streets to oust Helen’s Electoral Finance Act really  meant something.

But it didn’t.

We marched to tear down Helen’s anti-democratic attack on free speech, only for you lot to vote in this lot to do the same themselves. To replace her Electoral Finance Abomination with their Electoral Finance Abomination-Lite. It includes:

  • a $300,000 spending limit on non-political parties running protest campaigns in the three “official” months of the election.
  • These “third party” protestors must register with the grey ones if they want to spend anything more than buying a classified ad in the Herald;
  • and include their names (and addreses?) on their ads and billboards.
  • "Anti-collusion" measures to really crack down on these jumped-up ne’er-do-wells with the temerity to criticise their betters.
  • More taxpayers’ money gifted to the big two parties to advertise themselves on television and radio to the effective exclusion of the smaller parties.

And of course Labour will support it all because it, too, wants to limit the political competition—any competition at all—from anyone outside the Tweedledum and Tweedledumber of The Big Two parties.

What a crock.

So much for all the pontificating blowhard National Socialist MPS who blew hard and long at rallies around the country about the iniquity of Helen’s Electoral Finance Abomination, only to introduce their own.

Just as they marched and blew hard and long at rallies around the country about the iniquity of Helen’s  ant-smacking law, only to support it themselves.

They are scum, scum, scum, from their back teeth to their bum.

Bernard Darnton said two-and-a-half years ago that he looked forward to seeing the back of Helen Clark, but did not look forward to seeing the front of John Key.

Two-and-a-half years on from exchanging one from another, the only visible difference is a smile and a wave and the endless repetition of the word “relaxed” while things fall to pieces around him.

But of any fundamental change, there is none. None at all.

Here’s a poster produced by Whale Oil based on those produced for the last free speech campaign. All it needs is some funding and a corner site somewhere.

jk-efa-560x141

So much for responsible government.

This big-spending government got a wake-up call this weekend, courtesy of the gimlet eye of the ratings agencies who are now scouring the world to find the next Ireland on the horizon—and with this government borrowing a quarter of a billion a week just to tread big-spending water, the New Zealand Government is now in their sights. The Wall Street Journal quotes

_Quote ANZ senior economist Khoon Goh, who says, the outlook revision suggests "Standard & Poors are more concerned about the state of the government's finances than initially thought."
    The net result is that the government will have to tighten its belt more than initially projected and try to return to surplus…

Sadly, it was apparent listening to Billy Bob English on Radio NZ this morning that it’s a wake-up call he’s too tied up in the status quo to take, and that his government is going to carry right on spending more than it has.

So much for responsible government.

The tower from space

It’s easy to forget, sometimes, what exciting times we live in.

Here, for example, is what the tallest structure ever built looks like from the highest resolution satellite in operation—surely an iconic image representing many magnificent human achievements we’ve already begun taking for granted.

GeoEye Picture and story from New Scientist magazine.

Pike River disaster

The thoughts of all involved with this blog are with the friends and families of the trapped Pike River miners.

At this stage, there’s not much more to be said—or that can be. So, pace Wittgenstein, we will remain silent.

Rodriguez House - Rudolph Schindler

schindler001

A rare big-budget house for architect Rudolph Schindler, this 1930s Californian masterpiece can now be bought for around $3million.

6a00d83451cbb069e20120a5baacb1970c-800wi

6a00d83451cbb069e20120a5642ff4970b-800wi

Monday, 22 November 2010

Idiots guide to a public sector that produces no wealth

Producers produce. Governments consume. And so it has always been.

And if governments continue to grow as they have—consuming in the process their country’s substance—they’re going to bury everyone, consumers and producers alike, in the mountain of government debt that no-one can pay for except the very producers they’re killing off.

Martin Durkin shows how Britain reached this parlous state.

Don’t laugh. It’s all equally true for us, as well.

Government spending is not productive spending; what it spends it spends almost entirely on consumption. Explains George Reisman,

_Quote In the same sense as a housewife, the government is not a producer but a consumer, who is dependent upon producers.  All of its physical production, like hers, is in the last analysis a consumptive production. It is a production which cannot replace the means with which it began ...  a production which leaves the government poorer by the amount of funds it has expended.  In order to continue the activity, resort must be had to an external source of funds -- in the government's case, the taxpayers or the printing press.”

Government spending always has to be paid for.  Deficits even more so—

with interest.

And perhaps even worse than this ongoing consumption of our substance by the grey ones—and the widespread ignorance about the destructive process it represents—is the enormous number of bright, intelligent, resourceful individuals who, instead of working to produce things, head off to work every morning to sit behind a government desk writing reports on how the life of producers can be made more difficult.

And the tragedy is, they think their efforts are worthwhile.

Electile Dysfunction: ‘None of the Above’ Wins Mana By-election

Guest post by Dr Richard McGrath

Libertarianz Party leader Dr Richard McGrath said Saturday’s debacle in Mana was an embarrassing kick in the guts for the two main political parties, with only 55% of people judging any candidate worthy of their vote.
    He suggested that in any by-election where less than 50% of people vote, the seat should remain vacant until the next general election.
    “Kris Faafoi struggled to win the support of a quarter of eligible Mana voters. What sort of mandate is that?”
    “Our own candidate, Sean Fitzpatrick, took a pasting on Saturday, receiving 43 votes - despite a great effort on the campaign trail.”
    “But the big losers in this by-election are the Labour and BlueLabour candidates. On election night they were well beaten into the minor placings by ‘None of The Above’, which garnered an impressive 45% of votes.”
      “The people have spoken. ‘None of the Above should now take their seat in Parliament…”

Read more here.

Sunday, 21 November 2010

Conservatives Misread Lomborg's "Cool It"

Guest post by Jeff Perren

Several recent conservative commentaries offer a sympathetic review of Bjorn Lomborg's global warming documentary "Cool It."

These well-mannered gentlemen have been snookered.

According to the approving Spectator story, "Mr. Lomborg's thesis is straightforward: Global warming is real and humanity needs to do something about it."

PC has provided countless links pointing to data that radically undermine the scientific portion of that thesis. In the past ten years it's been exposed as incoherent, evidentially weak, and often supported by outright fraud.

The policy portion is even worse. The idea that "we" should do anything about the climate - beyond leaving individuals free to adapt to any changes that occur - is the fatal flaw in Dr. Lomborg's argument. No matter what we discover about the physics of the Earth, the politics of the world — not to mention human nature — make it clear that capitalism is the best cure... if there were any problem to solve.

Lomborg may be more skeptical and slightly less statist than many of his fellow Greens, but he still accepts their basic views. He's still committed to Comtean altruism, Roussean environmentalism, and garden-variety collectivism. He still touts a highly dubious hypothesis to justify them. Running around Africa crying over the poor doesn't change any of that.

Bjorn Lomborg is more dangerous than Al Gore precisely because he appears (and is) more moderate. Obvious con men like Gore expose their own racket before long. It's those who are more apparently reasonable - but still opposed to individualism and freedom - who do most of the damage today. Smiley-faced fascism is still fascist. Nanny may intend to be kind, but it's still unwise to give her $100 Billion of taxpayer funds and the power of the State in order to 'do good'.

Friday, 19 November 2010

General Debate

_Fekete I’ve just spent a fascinating week in the company of some wonderful people at Professor Antal Fekete’s Symposium on Sound Money (right), and now I’m heading off to Great Barrier Island for some R&R.

My thanks to Louis Boulanger and Professor Fekete for an outstanding and enthralling week.

While I’m away, why not treat this post as an  opportunity to debate whatever you want to, and raise whatever points you wish to.  Think of it as a managed commons.

What’s on your mind?

Thursday, 18 November 2010

Demeter & Persephone

Deméter_tipo_Madrid-Capitolio_(Museo_del_Prado)_01 Demeter was the Greek goddess of the harvest, and Persephone, her beautiful daughter, the goddess of the seasons (who Pluto famously “took to wife”).

In a pre-scientific culture intimately dependent on the vagaries of the harvest, where a bad crop could mean famine and death, the manner in which the gods or goddesses responsible for the life-giving harvest is personified tells you a lot about the culture.hades450

In most cultures, the god was a violent, unpredictable god requiring placation. (A personification in mythic form of the malevolent universe premise.) But in the Hellenic Greek culture, the life-giving divinities were depicted not as monsters or ogres with the arbitrary power of life or blod-curdling death, but as beautiful women who must be seduced—a a depiction in stone and ceramics of the sunlit, benevolent universe premise that would inform and eventually permeate the life-affirming pagan Greek philosophy to come.

And artists today still use the myths to tell a tale that Homer told

demeter