Friday, May 27, 2011

FRIDAY MORNING RAMBLE: It’s a faking-reality election again [updated]

The 2011 election campaign has started early, with both sides signalling already that their primary platform this year will be faking fiscal reality. It’s going to be a long few months.

  • That should leave room for someone, you would think, to begin stating the facts about the govt living beyond its means.  But it will take a lot more gimlet-eyed passion than this. (Maybe he needs a good Press Secretary … ? ;-)
    WHY ACT? A personal statement – Don Brash, F A C E B O O K
  • And here’s a reasonable question.
    Will ACT vote against the Budget? – T H E   S U B – S T A N D A R D
  • Mind you, it’s easy for politicians to fake reality with a press corps as dim as ours.
    Why oh why can't we have a better press corps? – Seamus Hogan, O F F S E T T I N G   B E H A V I O U R
  • Oh, by the way, did you know the projected costs for the Auckland Super Shitty amalgamation are now projected to be out by a factor of 10.
    Local government minister Rodney Hide wrote in the Herald a year ago that “projected $94 million establishment costs … of the first Auckland Council” plus “a further $66 million on IT to finish the job post November 1" were “a drop in the bucket” compared to the $2 billion spent annually by Auckland's councils.” 
    Except now we ratepayers face not just the $1 billion debt left by then-mayor (and now ACT Epsom candidate) John Banks, but also the cost of half-a-billion dollars for new computer systems to run the city built by former ACT leader Rodney Hide.
    Someone has to be accountable for this – Russell Brown, P U B L I C  A D D R E S S
  • “The employment effect of a minimum wage is a classic example of the law of unintended consequences and Frederic Bastiat’s insights about the seen and the unseen. It also illustrates William Graham Sumner’s thesis about The Forgotten Man
    The Minimum Wage and The Forgotten Man – Art Carden,  B A S T I A T  I N S T I T U T E
  • Just as not all products are worth paying $15 to receive, not all jobs are worth paying $15 to have done...
    Do We Really Need a Minimum Wage? – Charlie Virgo, M I S E S   D A I L Y
  • Two weeks ago, Stephen Franks suggested the first move of new CERA boss Roger Sutton should be to free up affordable land.  Two weeks later, after lots of talk about what could be done with downtown with Other People’s Buildings (with or without their consent), we’re still waiting for him to listen to that suggestion.
    Roger Sutton’s first move – affordable land for his people? -  S T E P H E N   F R A N K S
  • “The ‘good land’ issue should have been clear to the central and local political authorities September last year – as [High Pavletich] explained at the time in the NZ Herald. Near 9 months later, the politicians are still dithering. Preference always trumps policy. If people can’t get good land here in Christchurch – people and business will go elsewhere. It is as simple as that.
    Earthquake highlights need to open city limits. – N Z   H E R A L D
  • Meanwhile, in the absence of being allowed to do anything with their own property, high levels of Christchurch residents leaving New Zealand to live permanently in Australia…
    Quake exodus sees Kiwis flock to Australia in April – Alex Tarrant, I N T E R E S T . C O . N Z
  • Not that things are great in the traditional Australian destination state, Queensland.
     The day the music died -  T H E   P U L S E
  • You don’t believe me when I say people are banned from doing anything with their property? Just ask this poor chap, arrested for trying to recover his own prope form his own house.
    Distraught quake cordon breach accused pleads not guilty – S T U F F
  • Meanwhile, the story of who the government is paying (with your money) to do things to other people’s property gets murkier by the minute.  For instance, most of the building and demolition that will (eventually) be done in Christchurch will be Fletcher Building—by government appointment. The Grand Chancellor demolition, for instance, for which Fletcher Building were awarded the tender by CERA, despite being $3 million higher than anyone else.
            Q .  Who appointed Fletcher Building to manage the demolition works and then, reconstruction works?
            A .  NZ Government firstly,  then CERA.
            Q . Who predominantly are the staff of CERA?         A . Fletcher Building employees on secondment.
           Q .  And who is the main single shareholder of Fletcher Building?
            A . The NZ Government, who with 275 million Fletcher shares, around 40%, is now the single biggest
                   shareholder in this new Govt Department. Aren’t “public-private partnerships” wonderful. And not at
                   all corrupt.

    [CORRECTION: The Government does not own 40% of Fletcher Building, nor is the single biggest shareholder,IN fact, government agencies account for only around 6% of the shareholding—the 276 million shares held by the NZ Central Securities Depository at 2, The Terrace, Wellington, are not held by the Government, nor by the Reserve Bank, but by an agency responsible for holding the shareholdings of mainly small, private “Mum & Dad” investors.
    I apologise for that error.
    The rest of the above criticism stands.]
    Fletcher
  • Who should be leaping out of the blocks to blame bad weather in the US, but Bill “Chicken Little” McKibben—a man who says mankind should simply surrender to suffering and disease rather than risk damaging weeds, rocks and mud puddles. Not only is Bill wrong ethically, he’s wrong on the weather too.
    Bill “Chicken Little” McKibben –  Don Boudreaux, C A F E   H A Y E K
  • “From bans on video games to drinks advertising, Australia has become the world’s number one nanny state. There is a PhD thesis waiting to be written some day about how Australia came to be the world’s number one nanny state; how a country that was once renowned for rugged individualism capitulated to puritanism with barely a whimper.”
    Australia: the world leader in illiberalism – Chris Snowdon, S P I K E D
  • How do you explain the mind of the modern liberal?  It’s the herd instinct, says David Mamet.
    The Liberal Mind Explained   - S M A L L   D E A D   A N I M A L S
  • Now this is seriously cool. An imaginary phone lets you answer calls on your palm. You don’t believe me, do you …
  • Finally, the CIA are to Search bin Laden’s Compound. (But first, Pakistan needed enough time to cart away any obvious evidence.) [HT Michael Yon]
    CIA to search bin Laden compound – W A S H I N G T O N   P O S T
  • “The effectiveness of the nuclear deterrent for over seventy years relied on the perception that in fact nuclear war would bring about the end of the world.” He’s right, you know, as this recently declassified 1958 film clearly suggests between the lines. “The men who produced [it] unwittingly left a testimonial to their greatest achievement, which, in retrospect, at least rivals the achievement of the Greatest Generation. It was the generation that successfully did not fight their war. We have not had a general war in nearly three generations. In the last reel, one of the fictional generals says, ‘we failed in our primary mission, but succeeded in our secondary mission, that of destroying the enemy.’ In actuality, their achievement was far greater. By luck or skill, they led us through the valley of the shadow of death to the 21st century.
    Armageddon 1958 – N O   M I N I S T E R
  • Meanwhile, back in the States… those trillions of dollars of stimulus “created/saved approximately 450,000 state and local govt jobs” … “and destroyed/forestalled roughly one million private sector jobs.”
    Study Shows "Stimulus" Protected Government Jobs while Destroying Private Ones -  T H R U T C H
  • Mind you, there were a few private-sector jobs created. But you had to know someone…
    Obama skirts rule of law to reward pals, punish foes – W A S H I N G T O N    E  X A M I N E R
  • “Programming your children into STATISTS does not come cheap...”
    $500 Million Obama Administration Program Will Help Kids ‘Sit Still’ in Kindergarten
    – B R E I T B A R T
  • When Obama’s poll ratings are in the toilet, what dies he reach for?  Simple. (Well, it did work for that other famous demagogue.)
    • “This week, Israel celebrates its 63rd birthday. For most countries, that number would elicit a shrug of the shoulders. Not in Israel's case.”
      Happy Birthday, Israel! – David Harris, H U F F I N G T O N   P O S T
    • “To say that [Israel’s 1967] borders are, even implicitly, the starting point of negotiations, is to concede something that couldn’t be further from the truth: the idea that Israel was not justified in taking the land it took during the Six-Day War. To accept the 1967 borders as a starting point is to deny that in 1967 Israel was fighting a proper war of self defense, that it took that land because doing so was necessary to eliminate the threat against its citizens’ lives, and that it was therefore justified in doing so.”
       Why It Matters Whether The 1967 Borders Are the Baseline for “Peace” Negotiations 
      - Amy Peikoff, D O N ‘ T   L E T  I T   G O
    • Here’s one simple clue why Israel is so keen on KEEPING the 1967 borders that Israeli forces won when they repelled the Egyptian, Jordanian, Syrian and Iraqi forces who had tried to drive the filthy Jews into the sea: Because in a country a tank could drive across in less than three hours, the 1967 borders were never defensible. [HT “We Say No To the 1967 Borders”]

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    • A tribute to the great man by another great man:
    • Be honest now, is this some of the best modern blues you’ve ever heard?
    • And some of the best Bach… (mein Galt, this is good!)

    That’s all from me.
    Have a great weekend!
    And maybe see you on Sunday?
    PC

  • Thursday, May 26, 2011

    Economics for Self-Defence

    Regular readers will already be familiar with the regular Tuesday night ‘Economics for Real People’ sessions—an introduction to basic economic concepts that are unlikely to be covered at school.

    So I’m thrilled to be able to tell you we’re going to add a regular Sunday Morning Economics Programme, in conjunction with our weekly Tuesday seminars, so that real people can learn and integrate all the pro-capitalist economic knowledge they will ever need.

    This course is the most comprehensive and integrated course of economics available and will be invaluable to any student of economics—especially to help debunk knowledge that just isn’t so—or to any intelligent person who would like to learn the subject of market economics for the first time. (No prior economic knowledge is assumed. There is no maths.)

    clip_image002These seminars will take place every Sunday morning. (And what else would you be doing apart from recovering from your hangover?) The course takes the form of an audio lecture from Professor George Reisman after which we will discuss the material presented.  Professor Reisman is no slouch.

    "Reisman's exposure of modern mercantilist fallacies takes its place alongside that of Adam Smith."
                - James Buchanan, Nobel Laureate in Economics, 1986

    High praise indeed!

    Professor Reisman completed his PhD under the direction of Ludwig von Mises and is the author of the magnum opus entitled Capitalism: A Treatise on Economics—subtitled A Complete and Integrated Understanding of the Nature and Value of Human Economic Life. That subtitle is no understatement.

    We will be using this book as the framework for our course.  Its author is, in our view, the world's greatest living economist.

    "Every commentator on current affairs who is not a fully trained economist ought to read George Reisman's book if he wants to talk sense. I know no other place where the crucial issues are explained as clearly and convincingly."
                -
    F.A. Hayek, Nobel Laureate in Economics, 1974

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    The primary course book is online and the PDF version can be found here. However, we strongly suggest that you purchase a copy for your own library. It will prove a very useful resource as you further your studies.

    Professor Reisman’s great accomplishment is to integrate the achievements of the Austrian school of economics (he studied under the Dean of Austrian economists, Ludwig Von Mises, so has a direct intellectual lineage to Carl Menger) with the accomplishments of the British Classical School, including Adam Smith—and with the moral base given to capitalism by Ayn Rand.

    In particular, he repairs the many errors of the Classical School that eventually undermined them.

    If you are interested in attending please let us know (or just turn up) by calling Julian on 021 305199 or email UOAEconGroup@gmail.com. We hope that you will take the opportunity to listen to and hear from one of the great economists of the 20th Century.

    First Seminar: Nature and Value of Economics, Readings: Pages 1-12 of Capitalism.

    Please meet outside the main entrance to the ASB Tower each Sunday morning at 10.25am, and we will enter building. If you are late, please text Julian on 021 305 199 and we will let you in.

    Summarising the programme, Professor Reisman suggests “the essential and principal themes of the program are

    1. the individual pursuit of material self-interest under freedom is the foundation of the development of capitalist institutions and of economic progress and prosperity;
    2. the economic institutions of a capitalist society—among them private ownership of the means of production, division of labour, saving and capital accumulation, economic competition and economic inequality, and the profit motive and the price system—make possible continuous economic progress and continually rising living standards for all;
    3. the material self-interests of all men are harmonious under capitalism, and that the extension of economic freedom, and thus the progressive movement toward logically consistent, laissez-faire capitalism, is the solution for all the leading political-economic problems of our time, such as mass unemployment and depressions, inflation, shortages, economic stagnation and decline, monopoly, and international and domestic economic conflict.

    “Consistent with its themes and with the axiomatic nature of the value of human life and well-being, the program is unreservedly pro-capitalist in every respect…”  That will not surprise any readers of this blog.

    What this program offers—what makes it a program— is the organisation and integration of all the very vital and extensive material one needs to know in order to defend capitalism competently and effectively.

    Come and join us on this intellectual adventure!

    Please meet outside the main entrance to the ASB Tower each Sunday morning at 10.25am, and we will enter building. If you are late, please text Julian on 021 305 199 and we will let you in.

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    What more is there to say about Bin Laden’s death?

    What more is there to say about Bin Laden’s death? Well, quite a bit—and Pat Condell says most of it.

    Pat Condell: “Justice for President Obama”

    [Hat tip Doc McGrath]

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    Don’t drink in public. It can make you bleed from the mouth.

    “Government is not reason; it is not eloquent; it is force,” said George Washington. “Like fire, it is a dangerous servant and a fearful master.” Latest example here.

    Drinking in public is illegal. So there.

    [Hat tip Sally O’B.]

    NOT PJ: High-Altitude Finance

    _BernardDarntonThis week, Bernard Darnton is outwitted by an urchin.

    Oxygen deprivation can make you stupid, and stupidity can be expensive. I found this out (like I didn’t already know it) on the walk back down from the Perfume Pagoda in Hanoi. On the way up I had somehow acquired a guide. He was a boy carrying a chilly-bin the same size as himself full of soft drinks. He told me that when we got to the pagoda at the top of the mountain I would be hot and thirsty and he would sell me a drink. “Very expensive,” he said, grinning.

    Oh, you little third-world scamp, I thought, your honesty is endearing but I’m wise to your game. True enough: at the top I was hot and thirsty, achingly tired, and my vision was a little blurry as I fought for air. He sold me a drink. It was quite pricey. But I thought the little tyke had earned it. He really had earned it. He was a very good guide; he was knowledgeable, he showed me round the site, and his English was excellent.

    UrchinOn the way back down I complimented him on his English and he told me that he went to a good English school. Sadly, he was going to have to stop his lessons because they cost fifty-five US dollars a month. He paused and then it occurred to him - perhaps I could pay for a month’s lessons. I’d been thinking he deserved a decent gratuity but in a dollar-a-day economy like Vietnam’s $55 would have been a stupendous tip. “How about twenty-five,” I countered. My mouth was out the door running before my brain had even put its shoes on. Two dollars is what my brain suggested when it eventually sputtered into life but by that time my guide had evaporated, carrying a month’s wages.

    Back at the bottom of the track, fed, rehydrated, and with oxygen saturation back up to normal levels, one of the others in my group asked sheepishly, “Did anything weird happen to any of you guys up there?”
    Some visitors hate Hanoi because of the petty scamming. Usually it’s just for a dollar or two - the taxi ride that goes round in circles, the rickshaw tour to nowhere, the street corner currency trade that doesn’t quite add up - but it’s constant.

    I didn’t hate it. I was charmed by its scallywaggery. I wasn’t going to let a couple of dollars ruin a trip that cost thousands. And the little buggers always smile when they’re ripping you off.

    WhimpSomeone else who always smiles when he’s ripping you off is low-ball share buyer Bernard Whimp but he’s far less likely to leave you feeling charmed, and far more likely to walk off with a lifetime’s earnings.

    Whimp sends out letters making unsolicited offers for shares at a fraction of their market value. An unending supply of people who have neither any idea what their shares are worth nor the wit to find out willingly make the trade.

    There seems to be a steady parade of people who have somehow acquired chunks of Fletcher Building or Contact Energy but have no idea what the share market is. These people provide the fodder for Whimp’s schemes.

    His activities have led to run-ins with the Securities Commission and the brand new Financial Markets Authority and a date at the High Court. What I can’t work out is why it’s any of the government’s business. If someone like this offers to buy your shares for far less than they’re worth the correct answer is, “Piss off,” not “Yes - thanks for the cash - but why, oh, why won’t the government do something about me being so stupid?”

    We don’t need laws to stop people like Bernard Whimp. Trading with him is voluntary. If you have no idea what your shares are worth, you’re probably better off with the cash. At the very least, take a deep breath and make sure there’s some oxygen getting to your brain before signing the form. Caveat venditor.

    Looking back, that experience outside the cotton-wool of Western consumer protection laws was probably the best value education I ever got. For a few dollars I got a crash course in how not to be a gullible moron. In the same way that being innoculated with live virus keeps you safer than living in an antiseptic bubble, three days in Hanoi prepares you for the world far better than a lifetime of being told that the government will protect you from your own idiocy.

    Bernard Darnton writes every week at NOT PC, in between writing letters of refusal to low-ball low-lifes.

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    Wednesday, May 25, 2011

    DOWN TO THE DOCTOR’S: Where the State does have a role

    _McGRathLibertarianz leader Dr Richard McGrath offers inoculation against the nonsense appearing in recent stories and headlines.

    This week: Where the State does have a role .

    • DOMPOST: “Court rules to let child die in peaceAn urgent night court session upholds the decision by a seven year old boy’s mother and the hospital staff looking after him to allow him to die by not performing surgery…

    THE PROBLEM: Should the state be able to force doctors and nurses to operate on a child dying of a hideously painful illness when the mother opposes such a decision?

    THE DOCTOR SAYS: You can’t help but be deeply touched by the story of this poor child and his family. Both he and his brother were affected by a congenital terminal illness which caused increasing pain and stripped them of their dignity and all quality of life.
        A court was convened to decide whether a decision by hospital staff not to operate on the seven year old boy, whose brother had already died of the disease (about which details have been suppressed), was tantamount to homicide.
        I find it disturbing that a court should even be considering whether they can force a surgeon to operate on anyone, or charge him with homicide if he declines to operate and the patient then dies of natural causes. That makes the doctor a slave, with a gun to his head or whip to his back, his assets frozen and his liberty threatened by the State, if he doesn’t comply.
        I have always maintained that a person should not be prosecuted for a decision not to act - unless that person is looking after a dependent child, and the basic necessities of life (food, shelter, warmth and nurturing) are deliberately withheld, causing objective harm to the child; or that person has contractual obligations to care for a person and fails to discharge their part of the contract.
        In this case, the boy’s mother and hospital staff were all agreed that to operate on this boy would have prolonged an agonizing and inevitable death (not an easy decision to make), and the court eventually endorsed this decision.
        Bravo to the boy’s mother and to the hospital staff who would all have been deeply affected by their experience looking after this child. It’s very sad that this boy and his brother suffered without reason. But there is no justice in Nature; that is a human concept, involving ethics and a sense of morality. That is why we sit above the other animals as masters of this planet.

    “I have often wondered at the smugness at which people assert their right to enslave me, to
    control my work, to force my will, to violate my conscience, to stifle my mind — yet what is
    it they expect to depend on, when they lie on an operating table under my hands?”
    - Dr Thomas Hendricks, in the novel Atlas Shrugged by Ayn Rand

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    Crystal Chapel, by Bruce Goff

    More beautifully animated architecture by Bruce Goff.  This time his unbuilt project, the Crystal Chapel.

    Animation produced by Skyline Ink Animation Studio

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    Tuesday, May 24, 2011

    Music and more

    Did you know Bob Dylan is seventy years old today?  He said years ago he wanted to emulate those old blues men who just keep touring and touring until eventually they fall over—which is just what Bobs’ been doing these last few decades, all the while seemingly about to fall over almost every concert.

    Here’s a fast survey of Bob’s back pages, courtesy of Graham Reid’s Elsewhere. And here he is with Alan Ginsberg inventing music videos. Happy birthday, old feller.

    And here’s a tribute by Hugh Cornwell.

    (And speaking of Graham Reid’s Elsewhere, if you like modern music and don’t subscribe to his regular newsletters… shame on you. Do it now.)

    Thank Australia

    I bet you didn’t know that most of the important innovations of modern life were demand-driven—and the demand came from Australia…

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    Hone, meet Jesse Jackson

    If Hone and Jesse Jackson haven’t met already, they should. After all they’re both card members.

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    But then so too is every Maori Party member—and everyone on the Maori Party roll.

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    Minimum wages. Again. [Update 3]

    Phil Goff has gone where common sense has feared to tread. Desperate for the attention of anyone, even Matt McCarten’s union, he told Labour delegates over the weekend that if he somehow found his way into Premier House in November, the first thing he would be doing is to price unskilled labour out of the employment market.

    Which is exactly what raising the minimum wage to $15/hour would do.  In fact, that’s what having a government-imposed minimum wage does. It sets a floor below which freely-agreed wage rates between employer and employee are made illegal, and would-be marginal employees are instead made depressingly unemployed.

    It’s like kicking out the bottom rungs of the employment ladder, and telling the unemployed you’re doing it for their own good.

    Now I doubt that Phil Goff disagrees with any of the analysis suggesting his move would cost young and unskilled jobs. Like Paul Bennett, he cares more about his job than theirs.  But if you really think that raising the minimum wage by one-sixth (by $2/hour, from $13 to $15) won’t affect the number of folk to whom employers can offer paying work, then I suggest you buy just as much when the price of beer goes up by one-sixth; just as much milk and cheese when the price of milk and cheese goes up by one-sixth; just as much petrol, as many hamburgers, as much on your mortgage.

    If you think that putting up the costs of a thing won’t affect how much of the thing can be bought, then I have a large number of overpriced things right here to sell you.

    It’s no different for jobs than it is for milk and cheese.

    The only way that raising the minimum wage rate won’t affect any jobs at all is if raising the rate is simply a ratification of wage rises that have already occurred due to increases in productivity and investment. And if you think you’ve seen any of those, I suggest you head to the nearest optometrist to get your eyes looked at.

    John Key reckons he knows all  this. He reckons Phil Goff’s wrong. Mind you, if he did know it and if he did care about it enough, then his party wouldn’t have raised the minimum wage rate in February. But they did, so he clearly doesn’t .

    And if he did know about, and care about its effect on marginal employees, his party would have voted for Roger Douglas’s bill to abolish the ban on youth rates and so allow employers to pay youth rates again to young unskilled employees (the abandonment of which has seen youth unemployment soar).

    But they didn’t. So I doubt he does.

    PS: Just as ignorant as the claim that raising minimum-wages by fiat doesn’t cause unemployment is that claim that it does cause price inflation.  That it sets off a so-called “wage-price spiral.” The proponents of this argument reveal an ignorance even greater than Phil Goff’s.

    Price inflation is a phenomenon in which we see universally rising prices right across the board. But if the price of Product A goes up because the wages of the those producing it have gone up, then that leaves less in consumers’ pockets to buy Product B, C and D—in which case the reduced demand for these products will lead to lower incomes for these producers and unsold stocks of goods.

    The only way the prices of all products can go up right across the board is if the government expands the money supply so that all products can be bought at the new higher prices. In other words, if the increase in money wages is accompanied by a commensurate increase in monetary inflation.

    Which is, I suggest, what Phil Goff is counting on when he talks about raising money wages.  At root, he’s just another inflationist.

    UPDATE 1: Higher wages do not create price inflation. Don’t just believe me. After all, I don’t even wear a tie:

    UPDATE 2: “Could someone please ask Phil Goff [asks Eric Crampton]why, if a fall in unemployment following a small increase in the minimum wage during a boom period is post hoc ergo propter hoc evidence that a large increase during a recession would not reduce employment, why he isn't promising to raise the minimum wage to $20?”

    UPDATE 3: Danyl at Dim Post drops this dangerous graphic into the conversation and concludes “more research is needed.”

    minwunemp2

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    Garvey House, by Bruce Goff

    I love the architecture of Bruce Goff. Where other architects create boxes borrowed from the past, or assemblages making you fear for the future, Goff was always seeking to create a three-dimensional wonderland packed full of human delight.

    Like this, his first design for the Garvey House.

    One of a series of beautiful animations done by Skyline Ink Animation Studios for a recent exhibition of Goff’s work in Frank Lloyd Wright’s Price Center.

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    Monday, May 23, 2011

    ECONOMICS FOR REAL PEOPLE: The “Market Failure” Fallacy

    Econ

    Here’s what our friends at the UoA Economics Group will be discussing tomorrow evening.

    You've all heard about so called "market failure"--indeed, if you've studied economics at all you've been lectured on it, examined on it, and told at length that the phenomenon is endemic to capitalism.

    This week however, in our Economics for Real People presentation, we're going to suggest that it isn't.

    That the doctrine of market failure itself fails: That markets don't fail in the manner described; that explanations have long existed for the alleged failures presented in economics classrooms; that there is a failure far more fundamental than market failure that the proponents of the doctrine overlook entirely; and that the primary reason for the ubiquity of the market failure doctrine is not economic, but something much more fundamental.

    Date: Tuesday 24 May
    Time: 6pm
    Room: University of Auckland Business School, Owen G Glenn Building, Room 219 (Level 2)

    Look forward to seeing you.

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    MACHINE OF THE DAY: The largest floating offshore facility in the world

    Shell’s 488m long floating liquefied natural gas facility, the first ever of its kind, will allow oil producers to open up new natural gas fields at sea currently considered to costly or difficult to develop.

    It’s “a game changer.”

    Technology. It’s what keeps us alive.

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    GUEST POST: The humility of non-central planning, and vice versa

    Guest post by Vedran Vuk of Casey Research’s ‘Daily Dispatch.’.

    In my article last week, I pointed out a failing of some very smart people, such as Ben Bernanke. As a result of their superior intelligence, many lack humility and delude themselves into thinking the economy can be centrally planned through a series of equations.

    In response, a reader sent in the following remark:

    "[It is] all a matter of one-upsmanship. You point out the failings of ‘smart’ people, thereby making yourself even smarter than they are. Just another ego conflict..."

    It seems like a good point, but let me clarify why this is wrong. In my opinion, neither Bernanke nor anyone else can centrally plan the economy. I'm not making the claim that I can centrally plan it better. Well, isn't the free-market a central plan? No, it isn't.

    Adherents of the free-market system assert that millions of individuals following their own plans will come up with better economic decisions than small committees in government offices. A belief in the free market necessarily requires a more humble understanding of one's own capabilities. It is a confidence in the plans of others, not one's own plans for them.

    This viewpoint is the complete opposite of thinking oneself smarter than everyone else. It is admitting that one is not smarter than the entire economy.

    Furthermore, most Daily Dispatch readers know my respect for the marketplace. In my opinion, we don't live in a world where profits can be picked like low-hanging fruit. Markets are fairly efficient, with intense competition. I've pointed this out in past issues (March 8th issue introduction). For every good investment idea, one must a find a reason to explain why every other highly intelligent market participant doesn't see it. The marketplace is filled with participants far more intelligent than me. Anyone who believes himself consistently smarter than the whole market is either a fool or delusional. Such beliefs are a recipe for disaster.

    As one of my favorite quotes goes,

    "The job of the stock market is to take the smartest people in the world and smash their faces into the pavement on a regular basis."

    The fields of economics and finance necessarily require humility.

    So, is there an "ego conflict" here? Well, I admit my inability to plan the lives of millions, and I'm not smarter than the whole marketplace. Furthermore, I'm probably not smarter than Bernanke, but I do have more respect for the complexity of the market and the limitations of my own capabilities. And that gives me an edge in my analysis that I think Bernanke lacks.

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    Sunday, May 22, 2011

    Sunday Stupidity: “Do as you’re told … or else”

    There’s nothing like religion for enforced obedience. Do what the Attilas say, say the witchdoctors, or suffer for all time to come.

    Paul, Christianity’s inventor, was clear that good Christians should reject good old common sense in favour of scripture—and your own independent judgement in favour of faith in and obedience to authorities, “even when they demand that you believe ridiculous tales and perform unspeakable acts.”*  In fact, such is his explicit advice.

    Let every person be subject to the governing authorities; for there is no authority except from God, and those authorities that exist have been instituted by God. Therefore whoever resists authority resists what God has appointed, and those who resist will incur judgement. For rulers are not a terror to good conduct, but to bad. Do you wish to have no fear of the authority? Then do what is good, and you will receive its approval; for it is God's servant for your good. But if you do what is wrong, you should be afraid, for the authority does not bear the sword in vain! It is the servant of God to execute wrath on the wrongdoer. Therefore one must be subject, not only because of wrath but also because of conscience.
                 - Paul, Letter to the Romans, 13

    In short, Obey and Suffer... and Shut Your Mouth!

    Paul’s earthly master Peter (the authority, ironically, Paul refused to obey) was even more explicit that orders should be followed even—or even because of—the suffering it engenders.

    Slaves, accept the authority of your masters with all deference, not only those who are kind and gentle but also those who are harsh. For it is to your credit if, being aware of God, you endure pain while suffering unjustly. If you endure when you are beaten for doing wrong, where is the credit in that? But if you endure when you do right and suffer for it, you have God's approval. For to this you have been called, because Christ also suffered for you, leaving you an example, so that you should follow in his steps.
                - Paul, 1 Peter 2

    Nice people, these Apostles.

    However, we can have sure certain faith that all of those to whom these rules apply have of course already been taken up in yesterday’s rapture. So the rest of us can happily ignore them.

    * Hat tip Noodle Food]

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