Tuesday, 12 April 2011

Swimming in the path of progress

Pelican So a ragtag bunch of anti-industrialists has headed out to sea in boats made with petro-chemicals and powered by fuel oil to protest about oil exploration and the prospective production of petr0-chemicals 30km off the coast of New Zealand.

Meanwhile, a year on from BP’s Deepwater Horizon explosion, the Gulf of Mexico (the former economic Dead Sea) has been oil-free for seven months and enjoying more fish stocks than it has ever had, and the Gulf Coast itself has largely recovered.

_Quote “The spill was a disaster, but it was not the catastrophe that many people were portraying,” said Ivor van Heerden, a marine scientist who once headed the Louisiana coastal restoration programme for the state’s fragile eco-system of wetlands.

It’s the catastrophe that wasn’t. A non-catastrophe that will still help make offshore drilling better, cleaner and safer. A non-catastrophic oil spill that is still nonetheless the touchstone for most of the unwashed. Sure, as Don Boudreaux points out,

_Quoteoil spills are compellingly photographable – and, hence, attention-getting and emotion-stirring.  In contrast, lower prices for – which, by the way, mean fewer resources used to bring to market – clothing, children’s toys, digital cameras, camping equipment, kitchen appliances, groceries, and other goods that we routinely enjoy are not photographable in any compelling way.  The result is that the social benefits of corporate innovations and competition are easily overlooked, ignored, taken for granted, forgotten.  But these benefits are enormous.

petrobras-protest So why are there so many previously unwashed anti-industrialists swimming around in front of other people’s boats off East Cape ?

Precisely because the logic of environmentalism, as practiced by the anti-industrialists, is to deny man’s needs and the requirements of his survival—to deny the benefits they themselves enjoy—to follow instead a path which would logically lead to a society without technology. Even the technology that allows these people to sit, quite literally, in the path of progress.


Monday, 11 April 2011

Invitation to an opening, from Mark Wooller

image Put your glad rags on tomorrow evening* and come out to see a friend’s new exhibition in Parnell:

Mark Wooller: The First Post

_Quote Mark Wooller’s new exhibition features stunning New Zealand native forests, but also included in the paintings are the first New Zealand stamps, early postcards, street maps of early Auckland, deed documents, and even paintings of old tobacco tins…
    These paintings of luscious New Zealand forests are interspersed with early roads, allotments and subdivisions, some depicting Queen & Wellesley streets, and Parnell Road. Parnell was one of New Zealand’s first subdivisions. Wooller says, “I found old documents relating to the division of land. These old plates and deed documents had appeal with these neatly drawn out numbered squares laid on grids offering settlers a chance to purchase their own piece of paradise…. streets and views we are so familiar with years ago would have been covered in dense vegetation, to step back and witness the inevitable tide of progress, the laying out of lots and sections the measuring and creation of land ownership out of what was, years before, a land of forest.” …
     This new series of work by Wooller is not just a celebration of New Zealand’s forests both past and present but a thoughtful narrative highlighting an iconic and often controversial aspect of New Zealand’s history…


WHERE: Warwick Henderson Gallery, 32 Bath St, Parnell.
WHEN: Tuesday 12 Aril, 5:30-7:30pm—and thereafter until the 30th.

Visit new artworks by Mark Wooller at www.markwooller.com, and follow his blog at http://markwooller.wordpress.com/.

* And don’t worry—our regular Economics meet-ups are taking a break for two weeks. So instead of coming along to uni to learn about economics, come along to the gallery and invest.  ;^)

Politics over principle – the U.S. edition

Side-stepping a temporary government shutdown (which would have been the second-best* outcome of the Republicrat-Demopublican Budget battle) US politicians  have instead agreed to fake reality for one more year by attacking the country’s biggest deficit ever with "trims variously valued at effectively 0.00% of this year's federal spending."

Peter Schiff comments on the argument over a rounding error—and the final victory for compromise over necessity.

[Hat tip Objective Standard and Casey’s Daily Despatch]

* Can you guess what the first-best would have been?

No party like a Labour party (list)

Labour has released their party list for the 2011 election, and like most everyone else I'm finding it hard to summon up sufficient enthusiasm to say anything about it.

Well, almost everyone. Labour Damian O'Connor at least has strong opinions about it.

Friday, 8 April 2011

Musical ramble

Sorry I’ve had no time to post my regular Friday Ramble this week—or last week. Normal transmission will resume just as soon as … well, just as soon as I’m able to resume it.

So instead of a full ramble, let me just post a little music for the weekend following the exciting news [hat tip Arthur Streeb-Greebling]that The Stone Roses have announced plans to reform—not to say resurrected…

… which for some strange reason made me think of the best piece of music Mozart ever wrote …

… and the beautiful ‘in memoriam’ Duke Ellington played for his late friend and collaborator Billy Strayhorn…

…and how’s this for an outstanding piece of super-leviathonic, rhythmaturgicaly, syncopated,  tapstematicianismusness—Bunny Briggs dancing before Duke Ellington with all his might!

Enjoy your weekend—and enjoy an organic and kosher brew if you can!

GUEST POST: What is inflation—and why Matt Nolan should care. [Updated]

Guest post by Phil Scott of NZ’s Foundation for Economic Growth. (If you’re not a subscriber to their regular newsletters, then kindly remedy that now!)

Last weekend I read an article in the Saturday's DomPost entitled, "What is inflation and why should people care?" by Matt Nolan from Infometrics and the Visible Hand blog.
    After a couple of introductory paragraphs Matt states, "By definition, inflation is an increase in the general level of prices, independent of economic fundamentals."
    At no stage did he mention the money supply which I thought might be an "economic fundamental". It is quite obvious that prices cannot rise across the board unless the money supply is rising. If the money supply is static then when people pay more for some items they are automatically forced to buy less of other items which will cause the sellers of those items to reduce the price to meet the reduced demand. So changes in the money available effect changes in the price of goods. So prices will change up and down if the money supply is static but there can be no general increase in all goods unless the money supply increases.
    Therefore increased money supply must come first followed by a general price rise.
    Increasing the money supply CAUSES price inflation in goods and services.
    Sounds fundamental to me.
    But never mind, Matt is in good company. In Thursday's DomPost Ben Bernanke is quoted on page 2 as saying, "an increase in US inflation had been driven primarily by rising commodity prices globally, and was unlikely to persist."
    So Ben Bernanke tells us that rising commodity prices causes inflation. Perhaps he didn't notice the 2 or 3 Trillion dollars he produced from thin air recently.
    I wonder if Matt and Ben are using the same definition of inflation? It is difficult to construct a logical line of thought when one defines effects rather than the cause of those effects. But, then Keynes was not known for his logic either.
    Saying that inflation causes inflation doesn't seem particularly helpful in educating the public.
    My very good friend Hugh Templeton who was recently honoured by the Australian government for his work in starting up Closer Economic Relations (CER) recently borrowed my book, Human Action  by Ludwig von Mises. He informed me that this book is the best book on economics he has ever read. [He’s right you know – Ed.]
    Ludwig thinks that changing the money supply causes changes in prices of goods. In fact he starts at the logical place - the cause - and defines inflation as an increase in the money supply.
    This allows him to construct a logical and true framework for economics which clearly demonstrates cause and effect and explains economics so there are none of the current logical inconsistencies which so plague current "Keynesian" thinking.
    I have tried to describe how Austrian economic thinking describes reality in the section of our web site called REAL Economics. Perhaps Ben should have a look!

Phil Scott is the Chief Executive of NZ’s Foundation for Economic Growth. Send him mail at phil@feg.org.nz

UPDATEKeith Weiner points out, correctly, that

_Quote It's not an increase in money supply per se. For example, in a gold standard gold miners do not create inflation (or rising prices).
It is an increase in
counterfeit credit.

But that might be going one concept too far for most mainstreamers to get their heads around!

Thursday, 7 April 2011

Happy birthday, Billie Holliday

It’s April 7th. Billie Holliday’s birthday. [Hat tip Jazz on the Tube]

Happy birthday Billie.

‘Perigo!’ #3 tonight [updated]


Perigo! is the new interview show featuring New Zealand’s most experienced political interviewer, Lindsay Perigo.

“Perigo” means danger in Portuguese—and Perigo! promises danger to bossyboots and busybodies everywhere!

Tonight, on the third show in this series, Perigo interviews Muriel Newman, Principal of New Zealand Centre for Political Research, and a former Deputy Leader of the ACT Party. (Count them, there’s been something of a revolving door for ACT’s deputies.)

Tune in to see her and Lindsay discuss Liberty vs Democracy, and the current state of the ACT Party and the nation.

PERIGO!  Stratos on Thursday at 7.30 pm, Freeview 21 & Sky 89.

Here’s what episode #2 looked like…

UPDATEPerigo!  #3 is already up on YouTube [thanks Ron], and here it is:

Broken AMI [update 3]

AMI The AMI insurance company and every one of its policy holders now lies shattered by the Christchurch earthquake.

If you still needed convincing that there is no economic silver lining from the black cloud of Christchurch’s destruction—if you thought the Broken Window Fallacy was refuted by all those fabulously rich insurance companies who would sprinkle economic largesse from some unspecified financial heaven across the plains of Canterbury at no cost to ourselves—if you remained unpersuaded by Kris Sayce’s explanation of how there is no free lunch from insurance companies after a natural disaster—then perhaps today’s public announcement of AMI’s meltdown might bring the message home.

There is no free lunch from insurance companies.

There is nothing good about destruction.

It is rubbish to say the earthquake was good for the economy because the money for rebuilding comes into New Zealand from insurance companies, and won’t be taken from elsewhere in the economy.

To borrow from the title of Bastiat’s essay (just as Kris Sayce did) this only considers that which is seen but not that which is not seen.

All the money AMI had invested in New Zealand is now gone. It won’t be replaced. We will now never see what it would have bought.

Instead we see only another $500 million of your money heading AMI’s way to help bail it out, sent there by a Finance Minister as generous with corporate welfare as he is with his own housing supplements.

And we’ll never see what that half-a-billon might have bought either.

The earthquake was an unmitigated disaster.

And so, it should now be clear, is this government—who knows only how to compound it.

UPDATE 1: Felix Marwick: “National-led Government owns a rail company, a finance company, and about to pick up an insurance company. We're all socialists now.”

UPDATE 2: Felix Marwick again: “Probably they could pick up the Chch casino pretty cheap right now…”

UPDATE 3: Matt Nolan on AMI and moral hazard:

_Quote So when a disaster hits, the government is willing to bail out domestic insurance companies to “provide certainty for claimants” …
    As a result, insurance firms will discount these large-scale low-probability events – and take on more risk when providing loans.  Their willingness to take on more risk than is socially optimal [sic] will be paid for by tax payers…

Auckland Bloggers Drinks tonight

If you’ve always wanted to bail up bloggers and either give them a piece of your mind or buy them a beer, then join us tonight at Galbraith’s, top of Mt Eden Rd, for our regular first-Thursday-of-the-month Bloggers Drinks.

We’ll be all ears—and open throats.

Who’s the Wastemaster General now, Bill? [update 2]

TeWaka Bill English has been opening his mouth again and letting the wind blow his tongue around.

He says there is an “economic case” for a $2 million giant plastic waka that will be planted down at Queen’s Wharf for a month later this year.

Saying you have an economic case for X has a very specific meaning. It means you envisage specific economic benefits to specific economic players from X.

Does anyone really believe there is any economic benefit to be derived from this beyond the direct $1.8n million benefit to Ngati Whatua themselves? If there is an economic case for the waka, then I say let those who think they stand to benefit economically take the entrepreneurial risk themselves.

How dare Bill English and Pita Sharples and Ngati Whatua big cheese Ngarimu Blair load that entrepreneurial risk onto taxpayers instead of taking it themselves.

This is a very good example of why entrepreneurial risk should always be borne by the owners of capital—not by taxpayers at the behest of politicians playing political games.

There is little enough capital in this country anyway, most of it still malinvested. Should taxpayers bear the risk with their capital of Bill English's/Pita Sharples’s/Ngarimu Blair’s entrepreneurial acumen? Or lack thereof?

Hell no.

This is why taxpayers should not bear the burden of paying for a big plastic waka. If there are economic benefits to be had from it, then let those who stand to benefit stump up and risk their own capital.

Same argument for Team New Zealand, frankly. If there are economic benefits to be had from yachts with New Zealand logos floating around the world's pleasure spots, then let those who stand to benefit stump up and risk their own capital.

Same argument for the Rugby World Cup itself, frankly. If there are economic benefits to be had from "showcasing New Zealand," of from building “slugs” on Queen’s Wharf to “showcase New Zealand businesses,” then let those who stand to benefit from that showcasing stump up and risk their own bloody capital without dipping into other people's pockets.

And same argument for an inner-city rail loop round central Auckland. If there are economic benefits to be had from a rail line under central Auckland, then let those who stand to benefit economically from that rail line take the economic risk themselves.

These are many, many, many things that are "nice to have"--and those who find them nice should be the ones that have to find the money.  Why the hell should people who might think it's nice just to afford their rent be forced to take food out of their own mouths to pay for someone else's idea of "nice."

There are many other things that others might think it "nice to have" but will never ever have any economic benefit at all. That are just Waste with a capital ‘F.’ Boondoggles that Bill English should recant on now. And if he doesn’t recant on them now when his Government confronts the most economically destructive natural disaster the country has ever see combined with the biggest government deficit this country has ever seen then one has to wonder when he will.

  • A bailout for South Canterbury Finance debenture holders. Nice for some. Not nice for NZ taxpayers.
  • A bailout for AMI Insurance policy holders. Nice for some. Not nice for NZ taxpayers.
  • Welfare for Working Families. Nice for the middle class families getting the welfare. Not so nice for the taxpayers paying for it.
  • Interest-free loans for students. Nice for the students getting the interest-free loans. Unaffordable for for the taxpayers Bill English still forces to pay for it.
  • Michael Cullen’s train set. Nice for the few people who use it. Not nice for those taxpayers Michael and Bill taxed to pay for it.
  • Nick Smith’s Emissions Tax Scam. Nice for the bureaucrats administering it. Nice for those who think it makes NZ look “nice” to the rest of the world. Nice for Nick Smith who gets to strut around looking “nice” before his friends at the world’s climate conferences. Not nice at all for all you hard-pressed producers and consumers who have to pay for it.
  • Continuing to pay for Ministries of Women’s Affairs, Ethnic Affairs, Maori Affairs, Pacific Island Affairs and Consumer Affairs (let all these pressure groups handle their own bleeding affairs); for Ministries of Youth Development, Economic Development and most of the Ministry of Social Development (have you seen them doing any developing to speak of?); for Commissions for Commerce, Children, Electricity and Race Relations; and Councils for Alcohol Advice, Fish and Game, Gambling and “Human Rights”—not to mention the whole litany of other government millstones hanging round the neck of producers.
  • And of course “Party Central” itself and its giant plastic waka—which as everyone really knows has no economic case whatsoever.  It is simply nice for Pita Sharples and the Ngati Whatua Browntable, and very nice for John Key and Bill English—who get to buy the Maori Party’s votes in Parliament with money out of your pocket.

Before the last election, when National’s luminaries were swallowing dead rats while pretending they didn’t know there was an economic crash coming, they were busy calling Michael Cullen the Wastemaster General.

Who’s the Wastemaster General now, Bill?

Who’s the Wastemaster General now, John?

UPDATE 1: Eric Crampton: “Oh, the dangers when the government starts picking winners.”

UPDATE 2: Please take this 3 News poll: “Should the taxpayer or businesses pay for World Cup projects - eg Cloud or the Waka... ? “

Wednesday, 6 April 2011

Freedom, when we have it … and when we don’t

Here’s two book-ends on the same basic subject: freedom, in both application and obliteration.


Eric Daniels gives a “dangerous” talk at the North Carolina TED on "The Moral Case for the Free Market.”


Alan Charles Kors delivers a talk at the Clemson Institution for the Study of Capitalism titled “Socialism's Legacy: Lest We Forget”
Ayn Rand observed that "instead of prosperity, socialism has brought economic paralysis and/or collapse to every country that tried it." Following the collapse of the Soviet Union, many optimists claimed that the world was now somehow "after socialism." There are reasons, however—structural, political, moral, and intellectual—why the collapse of Communism did not entail the end of socialism. This talk will explain why there can be no "after socialism" until the West comes to ultimate terms with the catastrophic legacy of international communism.

[Hat tip Bradley Thompson]

Pseudo-economics and earthquakes

Reading Dim Post this morning, I see that Danyl McLauchlan still believes that money can be plucked from the trees—that it would be “economic stupidity” to cut taxes and government spending to help New Zealanders faltering finances recover from the earthquake.

_Quote_Idiot The reality is [says Danyl] that government spending flows into the economy, so if you cut it you’re going to have basically the same impact as raising taxes.

In other words, it’s not important where money comes from to “subsidise” recovery, just as long as a stream of purchasing power emerges from somewhere. Anywhere. Even if that purchasing power must first be taken out of taxpayers’ pockets.

As if having folk in their role as taxpayers subsidise themselves as consumers somehow provides some sort of stimulus.

What Danyl forgets is is that subsidies are paid for by someone, and that no method has yet been discovered by which the community gets something for nothing.

And if  you think there has been, then I have a plastic waka to sell you.

“Green energy” is economically senseless

Following on from yesterday’s post, Jerry Taylor and Peter Van Doren give five reasons why “green energy” is economically senseless:

  • “First, green energy is diffuse, and it takes a tremendous amount of land and material to harness even a little bit of energy…”
  • “Second, it is extremely costly…”
  • “Third, it is unreliable…”
  • “Fourth, it is scarce….”
  • Finally, … electricity produced by sun or wind cannot be stored because battery technology is not currently up to the task.

In short,

_Quote The fundamental question that green energy proponents must answer is this: if green energy is so inevitable and such a great investment, why do we need to subsidize it? If and when renewable energy makes economic sense, profit-hungry investors will build all that we need for us without government needing to lift a finger. But if it doesn't make economic sense, all of the subsidies in the world won't change that fact.

Hence our working definition of Renewable Energy = “unreliable energy produced by means that would be uneconomic without tax breaks and subsidies.”

Read The Green Energy Economy Reconsidered.

[Hat tip TOS Week in Review]

Tuesday, 5 April 2011

New green technologies …

This is the first and probably only time I’ll be posting a ‘Dilbert’ cartoon here. But this is unusually good:


And unusually topical, given the leaking of the Government’s Energy Strategy, the first three of twelve “areas of focus” of which are these:

image Just for the record, the working definition of Renewable Energy is “unreliable energy produced by means that would be uneconomic without tax breaks and subsidies.”

Discuss, with reference to this Government’s (leaked) Energy Strategy.

Monday, 4 April 2011

ECONOMICS FOR REAL PEOPLE: Economic Harmonies, III - The Price System & Economic Coordination

174890_113543235391042_4579644_n This week at the UoA Economic Group we continue our discussion of the fundamental Economic Harmonies.

Tomorrow night, Tuesday, guest lecturer Sean Kimpton explains how price signals and the daily decisions of entrepreneurs between them coordinate the worldwide Division of Labour.

  • How the various branches of business are kept in proper balance;
  • the impetus to economic progress;
  • how 'Paris Gets Fed';
  • the effect of price controls;
  • how consumer advocates harm consumers;
  • how speculators help them.

All this and much more!
Join us tomorrow night, Tuesday, 6pm, at the Auckland University Business School (note the room change from our usual).

data=XCVihWRtq4WsaAaVG7VezksrTNzDcIEE_YWd04ht9zkDZSpIOEWoVOQcm6ijrNG-RJHfajJgcjB4DR3sumbBl1J9R-Uy_B7Qm4inb8sWhere: Business School OGGB 223,
                  Level 2, Owen G. Glenn Building,
                  12 Grafton Rd,
                  Auckland University [Map here]
When:   Tuesday 5 April, 6:00pm

Summary of last week’s discussion: This last Tuesday we talked about the leading implications of the Division of Labour, which can be summed up as The General Gain from the Existence of Others

  • Why, in a division-of-labour society, prosperity is open to everyone;
  • What Steve Jobs gained from his cleaning lady (and what she gained from him);
  • Why Lady Gaga should spend more time caterwauling and John Grisham more time writing books;
  • Why Malthus was wrong, i.e., why greater population is a blessing not a curse
  • How it is exactly that in a division-of-labour society each of us gains from the existence of each other.

Remember to visit - and join - us on Facebook to keep up-to-date with our programme for the year:

Perigo, 1

Lindsay Perigo’s new TV show is broadcast weekly on Stratos Thursday night at 7.30pm. It can be seen on Sky 89 and Freeview.

But for those, like me, who can’t get any of the above—or who are out on Thursday nights—it’s good to know that it does appear eventually on YouTube, and his Peritorial’s will always go up at SOLO.

So it sure as hell gives me great pleasure to present the very first Perigo show, with his very first guest Dr. Ron Smith from Waikato University (first broadcast Thursday March 24th).

Why business leaders should care about intellectual property

Property rights and the concept of intellectual property have been under attack right from their very inception.

You’d expect attacks from the Marxist left and the downloading ignorati, who between them are are always on the lookout for more excuses to loot and plunder.

But today, the attacks come just as often from the know-nothing right—from National’s Nick Smith and his Resource Management Act, from National’s Gerry Brownlee and his Earthquake Requisitioning Authority, and from National-lapdog Rodney Hide and his creation of a super-sized bureaucracy for Auckland’s “city planners.”

But even more virulent than any attack that lot can provide are the attacks on intellectual property  from know-nothings at the Cato Institute and the Mises Institute—from know-nothings in both who have used the reputation gained and once upheld by these institutions to argue against the very ideas their namesakes once upheld.

In this 8-part presentation (originally presented in Chicago back in November) George Mason University professor Adam Mossoff blasts the very flawed philosophical framework from which the tattered arguments of the likes of Cato’s Tom Palmer and Mises Institute’s Steven Kinsella are launched, demonstrating that if either know anything, it is certainly not the ideas that underpin their field: specifically, the ideas of monopoly, coercion, scarcity, value, and even property itself.

The likely result is that to the extent either has any following at all, the result will only be to undermine the notion and knowledge of of property rights itself among those followers.

Yes, the full presentation is a long one. But if you purport to hold a position on the subject, particularly if you rely on the unstated assumptions of the likes of Palmer and Kinsella, I would strongly commend digestion of it to your attention.  Here’s part 1 of 8 …

Friday, 1 April 2011

Thousand-grand designs


If I had a new client for every time someone has said to me, “Oh, you’re an *rchitect, you must have seen [some house or other] on Grand Designs?” then I’d have an awful lot of clients.

I usually have to confess that, no, I didn’t see the aforementioned house on Grand Designs; that, no, I”m not a regular watcher of the programme; and that, no, most of the designs I’ve seen on Grand Designs leave me rather cold—most of them exhibiting the real problem with British architects, which is their facility for designing expensive and time-consuming ways to build the same old British box.

Which is what virtually all the grand designs I’ve seen amount to. Some good people paying a lot of money to clad an expensive but otherwise very basic box. People paying a thousand-grand or more so they can to live in the same box as their neighbour but with slightly more esoteric cladding.

Anyway, along those lines then here’s Grand Designs’ presenter Kevin McCloud’s top ten “greatest architectural homes” in Britain—featuring boxes clad in rubber, glass, shingles, charred cedar and hand-tooled oak.

At least there’s one genuine masterpiece there at number five.

Wednesday, 30 March 2011

Study of reclining nude, oil on canvas, by Jasmine Kamante

Female nude study_DSC_4148

New painting by Jasmine Kamante, local artist from whom we’re expecting great things.

... and everyone in Christchurch will get a pony. Or not.

I heard John Key this morning saying his shiny new Earthquake Recovery Authority (to provide "leadership and co-ordination of the ongoing recovery effort in Canterbury”) will make recovery faster, easier, better and more “sustainable.” In short, he foresees a steak on every plate, and a car in every new de-liquified driveway.

It’s certainly put an even larger steak on Gauleiter Brownlee’s plate, even if he is yet to find a permanent chief executive to share the new meal with him.

What power does the new Earthquake Recovery Authority have to deliver all this largesse, and make Christchurch’s post-earthquake recovery possible?  Basically, they have all the powers the Earthquake Recovery Gauleiter has, with only a committee or two to limit them.  As we have already seen, these include the power to

  • demolish other people’s buildings; and
  • requisition other people’s land; and
  • ban people from their own property; while
  • spending months deciding what people will be allowed to build where.

Basically, it’s an authority charged with “getting things done” that will continue doing everything in its power to make it impossible for entrepreneurs and property owners to get their own things done.

Want to rebuild your damaged commercial building?  You’ll have to wait at least six months until council/government/the new authority decides what (if any) new building standards it needs to be built under.

Want to rebuild your damaged house?  You’ll have to wait at least twelve months until council/government/the new authority decides what (if any) houses can be built or rebuilt on liquefied or unstable land.

Want to build new housing on the outskirts of town? You’ll have to persuade council/the new authority to relax their ring-fencing of the city, and wait at least eighteen months for the council’s damaged (and uninsured) services and infrastructure get to you.

Want to start building a new commercial heart to the city away from its now-devastated centre? You’ll first need to persuade the author’s of council’s “Strategic Plan” that there’s no way the city is ever going to “sustainably” (or affordably) the way the city is ever going to develop NOW, post-earthquake, the way they thought it would before the earthquakes struck.

In a nutshell, the new authority rests on the philosophy that it will be big government that “gets things done,” with all the costs, authority and powers of confiscation that requires. 

So there will certainly be certainty here with which folk in Christchurch can begin planning their own recovery. It is the certainty of uncertainty—full-on regime uncertainty—the certainty that no personal planning or investment will really be possible for months (if not years) to come; and that one’s land or property may be requisitioned (or made off-limits) with barely any notice whatsoever.

Oh, there will be “consultation.” Oodles of it. Whole committees and “advisory boards” full of it.

But there is a world of difference between folk making their own choices about their own advancement, and other people making those choices for them—however much “consultation” with them is carried out.

And the choice that already appears to have been made for everyone is that Christchurch will be rebuilt largely where and how it was before—oblivious to the fact that city has gone for good—with you and I and every other taxpayer for decades to come picking up the tab, rather than relying on the rebuilders themselves to make their own choices about where and how their own land, property, resources and money are best used.

UPDATED:  “Brownlee” changed to “Gauleiter Brownlee,” as was appropriately suggested by a commenter.

Another mainstream economist, another idiot

News that government might be cutting bureaucrat numbers ever so slightly has summoned up idiocy from alleged economists and journalists alike. This morning’s Radio NZ report is representative. Take a look:

_Quote_Idiot Finance Minister Bill English is defending the timing of further cuts to the public service amid warnings this may ultimately be bad for the economy.

What’s this about “further” cuts? What decent cuts have we seen? And how could cutting the unproductive be at all “bad” for producers?

_Quote_IdiotMr English announced on Tuesday there will be more consolidation of departments and agencies over the next two or three years…
    He said he has no master plan …

Well, that much at least has been evident for all of the last two or three years.

The chief economist at research firm BERL, Ganesh Nana, says the cuts should be made when the economy is strong and public servants have somewhere else to go to get another job…

So it is somehow wrong to make cuts when spending is unaffordable. Is this guy an idiot? It would seem so:

_Quote_Idiot… Ganesh Nana says the cuts risk hurting the Government's accounts, rather than helping them and now is not the time for aggressive action… Cutting spending risks tipping the economy into a very long period of depressed activity and hurting the books even more, he says.

So let’s see if we can follow what passes for Mr Nana’s “reasoning.”

This alleged economist suggests that cutting spending when government debt is spiralling out of control (even by the timid amount Bill English might countenance) will somehow be worse for government accounts. How’s that again?

His argument for this seems to be based on the ridiculous “circular flow” model of the economy which looks only at how much money passes from person to person rather than how much productivity those transactions purchase.

At present, in a New Zealand weighed down with government debt and an over-abundance of grey ones, those transactions are far too often producing no productivity at all.  (And that’s when they’re not paying grey ones to hinder productivity.)

Cutting spending on bureaucrats so there are more scarce resources available for productivity could be considered a bad thing only to an alleged economist who’s never understood what transforms resources into real wealth. And that’s certainly not paying for offices full of bureaucrats to make that sort of productivity impossible.

Monday, 28 March 2011

“Planning” to stop Aucklanders plan

Kip's Law:  "Every advocate of central planning
always —
always — envisions himself as the central planner.”

“The monument to Soviet central planning was . . . a heap of surplus
left boots without any right ones to match them.”
~The Economist

“[Today’s argument is about how to pay for the Auckland mayor’s rail dreams fantasies.] There is
of course no good way to pay for something you do not need.”
- Owen McShane

big_government_i_heart_cp_protest_poster-p228652185006148257tdcp_400 There is nothing more odious than the sight of a group of politicians with no real skills between them running up the flagpole their “plans” for a region’s (or a country’s) economic future.  The spectacle of Len Brown and his equally inept councillors issuing a “Thirty Year Plan” for Greater Auckland——and an equally motley lot attempting to predict how Christchurch will develop now its east and centre have been devastated—a band of people unable between them to even manage their credit cards telling several million other people how and where they must live and work—would be amusing if not so damaging.

A myth exists that politicians “run the country.” That without them no planning would exist. Nothing could be further from the truth. The only planning that truly does exist is not the shambolic dictation of politically-diven reef fish suffering from power-lust, but the economic planning undertaken every day by all those millions of people who aren’t politicians.

_Quote The overwhelming majority of people [notes George Reisman] have not realised that all the thinking and planning about their economic activities that they perform in their capacity as individuals actually is economic planning.  By the same token, the term “planning” has been reserved for the feeble efforts of a comparative handful of government officials who, having prohibited the planning of everyone else, presume to substitute their knowledge and intelligence for the knowledge and intelligence of [hundreds of thousands], and to call that planning.

2359443We don’t have to look at Soviet Five Year Plans to know the failure of central planning.  The feeble ability of politicians to successfully “plan” anything beyond their own TV appearances can be seen in the Auckland roading network itself, which was “planned” by the panjandrums back in the 1960s (back when a fifth-hand Morris Minor was a sought-after family car), and is only now being partially completed fifty years later.  (An “achievement” underscored by Andrew Galambos’s pithy observation that traffic jams are an example of the collision of capitalism and socialism: capitalism can produce cars faster than socialism can produce roads.)

And the paucity of “vision” exhibited by political entities can be seen in their plan to create a new government department with the power to “plan” the recovery of  Christchurch—a recovery whose possibility is daily prohibited by the very entities who will head up the department. And it can be seen in that the statements made last week by the “chair” of the Christchurch Planning Committee Sue Wells (poor woman thinks she’s a piece of furniture) that the “Spatial Plan” previously drawn up by her Committee of Super-Importance will need only “minor tinkering” now the city they purport to “plan” has been devastated by two of the biggest earthquakes in modern history.

6cNK2YiQI0EmqQgUNtoCCd Perhaps she and her colleagues could look at the history of West Berlin, and how (after the devastation and dislocation of the war had ripped out both its heart and its other half) the heart of the newly-divided western part of the city quietly relocated away from the Wall that had cut right through its former centre to a newer, less damaged centre around the Kurf├╝rstendamm that was both more logical and more economically viable in the changed post-war environment than its former heart around Potsdamer Platz.  (A move to ponder in considering the resurrection and probable relocation of Christchurch’s heart.)

Or perhaps they could just get the hell out of the way so people can plan their own futures with all  the planning and economic coordination made possible by the price system and voluntary cooperation rather than by grandstanding and political prohibition.

This is what it really would mean to “unleash Auckland.”  The debate in Auckland at present however is the manner in which Auckland’s elected and unelected diktatoriat wishes to put a leash around Aucklanders’ necks.

In this guest post below, Owen McShane comments on the new “Spatial Plan Discussion Document” issued by Auckland’s would-be central planners last week, saying the battle lines are being drawn “between retro vision and current realities.”

_MCSHANE3 Retro Visions vs Current Realities: The Chips are Down
by Owen McShane

Auckland’s Spatial Plan – Council's Discussion Document.
1. Evidence or Visions?
The battle lines are being drawn.
    The Government legislation that created the Auckland Council included a requirement for an “evidence-based” Spatial Plan as a general planning framework for the region to be governed by the new Auckland Council. Government has recently presented a set of position papers establishing its preferences for an approach based on rigorous analysis of existing patterns and trends rather than utopian and coercive visions. The position papers flag the reasonable position that Government will not ask the taxpayers to fund major projects focused on the Auckland CBD unless they are supported by rigorous analysis, including costs and benefits.
     The Council has today published its own discussion documents – Auckland Unleashed – and it seems New Zealand may be entertained or mortified by a long battle between two opposing attitudes towards developing an appropriate “spatial plan.”
     The Government has the whip hand insofar as the Council hopes the taxpayers will fund many of the visionaries’ bills. Those who are asked to pay the piper can reasonably expect to call the tune.
    On the other hand, over the past few decades, the ARC and its Smart Growth friends have had the advantage of enthusiastic support from the news media, and a host of commentators and influence brokers, who have backed these Smart Growth utopian visions with unalloyed enthusiasm. Our local regional governments and advisors have been slavishly following the patterns already established in a multitude of cities and regions in the New World.
     However, over the last few years these Dense Thinking coercive policies have delivered their inevitable downside and the costs have come home to roost.
     The recent collapse in the property and finance markets has certainly generated some second thoughts within the New Zealand Herald. Recent editorials, and columns by informed commentators such as Fran O'Sullivan, are raising questions, and challenging assumptions that should have been asked and challenged in the past.
    The Herald has even recognised that people's responses to surveys often indicate what those surveyed believe other people should do, rather than reflecting their own real-world choices or preferences. Much of the public support for public transport reflects a desire for other people to ride on trains to free up the roads for their own convenience. [Ninety-five percent of people surveyed think other people should use public transport. – Ed.]
    So before the “discussion” gets underway we should all insist that the policy makers and planners open their conversations with questions asking “How and where do you want to live?” rather than “How and where do you want everyone else to live?”
    The Council's discussion document is here:


    2. The Herald Challenges Past Planning Dogma.
A good starting point for the Herald's reporting is here:


    And useful links, including Fran O’Sullivan’s “Brown Needs to Up the Ante”, are here:


    However, Brian Rudman continues to hold the traditional retro-rail fort. His position is a simple one – which explains much of its appeal. His answer to every urban problem is a train.
    Professor Jonathan Richmond, author of the seminal work “The Mythical Conception of Rail in Los Angeles” somewhat wistfully observes that males do seem to be fascinated by the sexual metaphors associated with rail including the prospect of long shiny tubes plunging into deep dark tunnels.” When did you last hear a woman champion the benefits of riding on the trains?
    See the pages (13 – 16) titled Technological Sex Symbols on Steel Rails, for Richmond’s entertaining but perceptive commentary.
     Anyhow, the shift in the Herald’s thinking is a political game-changer. Maybe the editors of the motoring pages have suggested that Aucklanders are not addicted to their cars – they actually chose to use them because they provide so many benefits. Women in particular appreciate having their own grope-free zone.

    3. Auckland “Unleashed” or Auckland “Constrained”?
Paragraph 374 of People and Place indicates the Discussion Documents’ overall bias in favour of a compact dense city where land use is constrained by Metropolitan Urban Limits.
    While the options are mentioned the document keeps returning to this current model as the preferred option. It reads:

_Quote_Idiot 374. The existing option is for a quality compact Auckland where growth of people and jobs is directed into our town centres along our main roading arterials, and is confined within a metropolitan urban limit where the urban area accounts for about 12% of all of the land across Auckland. The limit to growth within Auckland was based on accommodating 20 years of growth, noting that growth would need to include higher densities around the centres and more intensive patterns of development along growth corridors.

There is little discussion of who does this directing of people and jobs and where they derive their moral authority to do so. Anyhow, there is little in any of these documents to suggest that Auckland is to be “unleashed” – indeed the general tenor of the promotion plans for everything suggests that Aucklanders will remain severely constrained and must learn to do as they are told.

    4. The Unfortunate History of Metropolitan Urban Limits.
Metropolitan Urban Limits, of one kind or another, have a long history.
    A villa was originally a Roman country house built for the aristocracy who made sure their country estates were not surrounded by plebeians by containing them within the city walls. Many plebeians lived in tenements called insulae. Some were above or behind their shops. The Romans were early adopters of mixed use and MULs.
    More recently, the urban Jews of Europe were contained in ghettos with clearly defined limits to keep them in their place. Around 1800, the Russians engaged in the first modern exercise in social engineering, treating the Jews as earth or concrete to be shoveled around. They confined the Jews behind the limits of the Pale of Settlement. Those who emigrated were “Beyond the Pale.”
    More recently again, the US cities confined their black populations to the “red line” districts which were an informal system of urban limits which set the territories where properties could be sold to blacks and where they could not.
    Kathryn Stockett, author of The Help, reminds us (or should remind us) of another consequence of urban limits when she describes a black neighbourhood in Jackson, Mississippi, in 1962:

_QuoteSo Jackson’s just one white neighbourhood after the next and more springing up down the road. But the colored part a town, we one big anthill, surrounded by state land that ain’t for sale. As our numbers get bigger, we can’t spread out. Our part a town just gets thicker.”

    And rents get higher. The American black families were only able to join the middle class when they were unleashed from these constraints and able to move into the suburbs and buy their own homes and secure family assets that could finance their children through college.
    Metropolitan Limits, whether stone walls, informal understandings, legal zoning rules, or some variation of the Pale have always been used to keep the poor and unseemly in their place.  As I said to a committee of Rodney District Council some years back:

_Quote These MULs work at one level. You don’t see many Maori families in Rodney District do you?”


    5. Put Bad Data in – and Bad Plans Come Out.
The Herald story is accompanied by claims that “by 2050, 2.6 million people will live in Auckland”. This meaningless statistic is used by Auckland central planners to justify massive spending on rail tunnels etc, all serving Auckland’s central core.
    Actually, four future populations for “Auckland” have been “mentioned in dispatches” – 500,000 more, 700,000 more, and 1,400,00 million more (double), and the total of 2.6 million listed above. (Critics should always ask “What and where is Auckland?”)
    These population projections for the Auckland region, or wherever, make no attempt to identify where in “Auckland” the growth will actually occur.
    It may be true that Auckland’s population will grow by some large number over the next 30 years but where, within Auckland, will this growth actually take place?
    The international evidence is that Auckland’s urban core will lose population and jobs and yet that is where the central planners seem determined to spend most money on infrastructure. (See my previous Digest for the evidence.)
    Clearly the Auckland planners want to stop people living and working where they want to and force them to live where they will supposedly use public transport rather than their evil cars.

    6. The suburbs will grow and the central core will shrink.
Wendell Cox's  analysis of all the US and Canadian cities of more than 1 million people strongly indicates that the urban core will lose population and jobs to the suburbs and beyond.
    Phil McDermott's work suggests this is already underway in Auckland. Go to Cities Matter at:


    We are in for a fight between the central planners and the believers in spontaneous order. The Herald editorials of the last two days, and the columns by Fran O'Sullivan, support the argument that the market and people’s preferences will prevail. The costs of trying to stop this natural churning (The central planning penalties) will be high.

    7. New York Suburbs grow twice as fast as the Core.

    Wendell Cox reports on New Geography (25th March) that the growth of New York population reflects the general trends of cities in the US and Australia. (Note: the census period is ten years and the 2.1% core growth occurred over ten years and is not per annum growth.) This is hardly a triumph of agglomeration and densification. Wendell Cox writes:

_Quote  Just released census counts for 2010 show the New York metropolitan area historical  core municipality, the city of New York, to have gained in population from 8,009,000 in 2000 to 8,175,000 in 2010, an increase of 2.1 percent. This is the highest census count ever achieved by the city of New York.”

    Nonetheless, the figure was 245,000 below the expected level of 8,420,000 (based upon 2010 Census Bureau estimates). The higher population estimate had been the result of challenges by the city to Census Bureau intercensal estimates. The city of New York attracted 29 percent of the metropolitan area growth. Approximately 43 percent of the metropolitan area’s population lives in the city.
    Overall, the New York metropolitan area grew from 18,323,000 to 18,890,000, an increase of 3.1 percent. The suburbs grew approximately twice as rapidly as the city of New York, at 4.0 percent, and attracted 71 percent of the metropolitan area growth.

    8. Auckland's Place in the Economy.
Para 48 of “The Big Picture” says:

_Quote_IdiotNationally, Auckland contributes around 35% of New Zealand’s GDP annually, and is one of a handful of world cities that generates more than 30% of its nation’s GDP. Auckland’s share of the national population (33.4%) and its population growth rate (1.6% per annum), are both relatively high in international terms. The goal now is to use our strengths to improve our economic performance and contribution to the national economy.

    This ratio is not so unusual if we look at the Federal States of the USA, and even of Australia – which would seem to be a more reasonable comparison. After all, if New Zealand became a State of Australia, would Auckland generate 30% of Australia’s GDP?
    Phil McDermott’s take on this is that “the policy-makers lean too heavily on the notion that scale begets growth (agglomeration economies) when the reality is that Auckland has been underperforming the rest of the country (and our trans-Tasman neighbours).”

    9. Paragraphs 43 and 44 of “The Big Picture” trot out the standard myths
    which supposedly drive “urban intensification”:

_Quote_Idiot44. The third megatrend is urgency to fix the environmental problems of the modern world. In today’s world, being green is a minimum standard. Global warming, pollution, peak oil, loss of biodiversity and water scarcity are driving public concerns for action by central government, local government and the corporate world.

    Curiously, all these issues encourage decentralization rather than intensification – unless of course you base your conclusions on dogma rather than evidence.

_Quote_Idiot44. The Auckland Plan proposes playing a leading role in promoting a low carbon footprint for Auckland. We need to lead by example in energy efficiency, in the promotion of walking, cycling and public transport, and in landfill and waste management. The discussion document sets out some proposals for Auckland to harness the global trends in these areas.

    The Australian Research summarized in Consuming Australia concludes that inner city dwellers have larger carbon footprints than those living at low density on the periphery.
    Maybe the authors of the discussion documents should focus more on learning from the research on these global trends rather than on “harnessing them” – whatever that means. Could it be “constraining them”?

    10. Conclusion.
These are no more than a few initial thoughts from a brief scan of one or two chapters of the “Discussion Documents”, and of “The Big Picture” in particular.
    But Council’s visions do not bode well for the economic growth and development of most of Auckland. The Council decision-makers seem determined to carry on with more “Smart Growth.”
    Rod Oram claimed on television that all the international research shows that cities that “ooze” into the greenfields are less creative etc and more expensive etc than dense cities with high quality public transport.
    Actually the international research shows quite the opposite. But it seems that Oram cannot distinguish between academic research and central planning dogma.
    Anyhow, we now have a document to get our teeth into, and it is encouraging to have Central Government, and the Herald, increasingly on our side.
    It’s time for those with concerns for the future of Auckland to challenge these vision-based false claims, one by one.
    We have access to the resources and skills, both local and international, to do the job.
    Christchurch appears to be seizing the opportunity to become a modern multi-nodal connected city, and end up as the dominant urban economy of New Zealand. The people may have loved their Heritage Buildings. But Auckland seems determined to create a heritage economy.

Thursday, 24 March 2011


The real world will change not a wit with the fall from grace for man once described in Parliament as "the son Helen Clark never had."

It's often said that a great political career can be ended in an instant by the appearance in their bed of either a live boy or a dead girl.

There is nothing great about Darren Hughes, but that truism will haunt whatever political career he has left--whatever the outcome of the police inquiry into his actions one late night and early morning last year.

Richard Worthless could tough it out until his sordid behaviour with a live girl was finally sufficient to dismay his boss.  But this morning's front page dissemination of Hughes's evening and early morning with the 18-year-old young man will be enough to hang him politically--however accurate or inaccurate the account.

For my own part, as long as he hasn't broken the law I don't care what Hughes or any other politician gets up to in the privacy of their own lives. Couldn't be less interested. That's their business--or should be.

What I really object to is what they get up to in the glaring publicity of their day job: Which is exercising their power lust over every part of our lives.  Which is our business--or should be.

Frankly, I don't really care what happens to Hughes. He had never had a real job, and beyond developing a certain glib talent at lying for a living (which, besides the ability to fake sincerity--which he was beginning to develop--is the only skill a politician really needs) had never shown any sign of developing any other skill that might fit him for any real career.

But his own future bothers me not. He's a politician, and whatever happens to him now the place he presently occupies will always contain just another politician.

So resign or not--if he's sacked or if he isn't--with any of those eventualities the real world will change not a wit.

And I for one will not care.