Friday, 23 September 2011

100,000 green jobs from $2.5 billion of green pork? Who are they kidding. [UPDATED]

Russel Norman’s Green party issued a report this week claiming they can add 100,000 “green jobs” to the economynew jobs created by taking $2.5 billion away from an existing group of producers and giving it to a new group who will vote green—“green jobs” created out of renewable energy technologies, i.e., energy that would not be economic without a government subsidy. New green jobs “created,” if they are at all, by taking away existing jobs., somehow, by spending $2.5 billion

Haven’t we heard this before, somewhere?

Yep, in Spain: where each “green job” costs taxpayers around $752,000 to $800,000 each in subsidies, and entails the loss of 2.2 other jobs, resulting in a subtracted of around 110,000 jobs from elsewhere in Spain's economy.

Great result.

And where else have we heard it before? That’s right, in the US: where the White House sank half a billion taxpayer dollars into Solyndra, a company it knew was failing—but whose owner happened to be a large Obama donor famous for saying on Zero’s election “we’re trying to get as much stimulus money as we possibly can.”

What’s the bet Russel has people in the wings thinking along the same lines as George Kaiser.

Now don’t get me wrong. There’s clearly scope for alternative technologies—it’s unlikely we’ll be using the same energy sources one-hundred years from now as we do today. But the chances of a government selecting today which out of the many thousands of alternatives might be successful tomorrow, and then shovelling our money at them in the expectation of, in Russel Norman’s words, “capitalising on the growing international market for clean energy technology”? About zero too, I’d say.  (If you must have a political party picking winners, then at least have the sense to simply give your champions tax cuts instead of just throwing pork at them.)

Mind you, Russel’s report really is a great looking piece of work. Great report. Great cover. Serious typeface. Important-sounding numbers. It weighs about the right amount. It just doesn’t even begin to hold water. It looks like it was put together not by a team of employment and energy specialists, but by a public relations expert only in weighing words by the dollar. In fact, I reckon this (from Aussie TV show Hollowmen) is how they put it together:


[Hat tip Offsetting Behaviour]

UPDATE: Watch the story of the US’s poster child for “green stimulus”—“demonstrating,” said Zero, when announcing the pork, “that the province of green energy is not just an article of faith.” Yeah right.

[Hat tip Daniel B.]

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GUEST POST: The Naked Central Banker

Guest post by Murray Dawes from Money Morning Australia

Well it looks like Bernanke has finally given up.

Operation ‘Twist in the Wind’ couldn’t jump-start a Honda Civic.

Delivering lower long-term interest rates won’t inspire crippled banks to lend or indebted consumers to borrow. The unintended consequences of this new plan are the Fed will increase its risk at the long end of the yield curve while bond prices are at the highest in a generation.

So who’s going to bail out the Fed if bond prices crash?

Oh that’s right, they’ll just print their way out of trouble.

What will printing do? Ultimately it will feed into higher inflation which should make long-term interest rates go up, not down.

But it’s not just what the Fed has said it will do. You can read a huge amount into what the Fed didn’t do.

There are internal splits within the Fed on the issue of money printing.

The market was hoping for some more candy from the Fed but got none. That is big news. The Fed is basically saying it won’t bail out the market right here. That’s bad news for the share market.

The only reason shares have been holding up lately is because of the fear or hope that the Fed might print more money to keep markets afloat.

Without that crutch, the market is faced with an economy that has stalled and a European Union that is cracking wide open. Based on that, why would you buy the stock market?

For all of the talk about how cheap the market is, you have to remember that the cheapness is derived from bottom-up forecasts [Ed note: analysts who look at individual stocks are called bottom-up analysts, analysts who look at the broader economy and then select stocks are called top-down analysts]. And they are looking decidedly optimistic based on where most economic indicators are currently pointing.

And as those forecasts ratchet down the market won’t look so cheap.

On a technical note, we have rarely seen so many charts resting on the precipice as they are now.

There is very little support beneath current levels. And Bernanke revealing himself as the king with no clothes should be enough of a catalyst to cause a stampede out of stocks.

In the latest YouTube free market update we said Bernanke needed to surprise the market to engineer a rally. He didn’t. He moved the deckchairs on the Titanic and shrugged his shoulders!

Look at this chart of the ASX 200:

ASX 200 daily chart

ASX 200 daily chart[Click here to enlarge]

You can see that over two years’ worth of buying is now out of the money.

I assure you most of these buyers have not hit the sell button yet. If we get another bad night tonight in the US then you could feel very confident that the S&P/ASX 200 will revisit the August low of 3765… and perhaps fall lower. [Update: there was a bad night. And the ASX went as low as 3880 and is now at 3906.]

The key level to watch in the US is 1155 on the S+P 500. This is the ‘Point of Control’ of the most recent distribution (we explain this in the latest free market update, click here to watch now).

If the market busts under there, then it’s odds on the S+P 500 will move down to 1100 points [Update: as of writing it is at 1129 and falling] . And if the market falls below that level, what then?

Below there it gets really scary.

Murray Dawes
Slipstream Trader

Related Articles at Money Morning Australia:


Thursday, 22 September 2011

Expanding ‘Explaining Postmodernism’


Here’s a new re-issue of a recent book, an important bo0k, an essential book—this expanded second edition of which offers even more philosophical self-defence than the first. Allow me to just quote what I said about the first edition, which itself went through ten printings in the seven years since its release, and all of which I would only say again (but in much pithier fashion) about this new Expanded Edition:

This [small] book should be in every student's backpack. In the post-modern intellectual battleground in which each student find himself submerged - and sometimes drowning - this book offers essential intellectual self-defence for every student who still cares to think. No matter if you already know every answer to all the sundry irrationalities you face every day - herewith is a comprehensive summary of your intellectual enemy that for the first time clearly and comprehensively puts each of the post-modern heroes in their place.
    Why is that so important? Well, what do you feel when you watch a butterfly emerge from its chrysalis? You watch it greet the sun, spread its wings and almost give thanks to existence for its rebirth. Imagine then another human being gleefully stamping their boot on that reborn butterfly, smilingly stamping the life out of it. Such is the situation in many places of academe. This book gives a defence to the fragile butterfly of the intellect.
    One of the worst periods of my own life was spent at Auckland's Architecture School where I found myself being taught by intelligent human beings, many of whom seemed somehow intent on using that intelligence to snuff out young students' sense of certainty and their joy in learning about ideas and creating great art. I watched as many students became either irrational automatons emulating the noises made by these lecturers, or gave up in disgust - often questioning themselves and their own ability. They were crushed. That situation was not unique to my own alma mater - it pertains to nearly every grove of academia in the Western world. This book explains the mentality of scum who earn a pay-cheque by gleefully crushing impressionable young minds, and the strategies they employ to do it.
    The book is a "great but very scary read." Written like an adventure story, it guides the reader confidently and clearly through the intellectual history of the last three-hundred years in order to explain why the `new intellectual age' we find ourselves in is in most respects a toxic Age of Crap.
    My only gripe is that the adventure story does not end with a happy ending - although Ayn Rand and the Objectivist antidote to this intellectual poison are implicitly present on every page, where I expected their explicit appearance at the conclusion Stephen delivers only the truism that "what is still needed is a refutation of these [post-modern] historical premises, and an identification and defense of the alternatives to them."   
    Here would have been an obvious opportunity to send the reader to cleaner Objectivist pastures elsewhere in which this work is being done. A recommended reading list would have been a welcome addition - perhaps he intends to set up such a thing online? *
    In any case, as with the recommendations given by others, this is "not a book review but a flat-out endorsement." In many respects Stephen's book is a much-needed update of Rand's essay "For the New Intellectual” but this time expanded and with footnotes - it is like seeing the `director's cut' of Rand's earlier essay. It is that good.
    Buy one for a student today. You might just save their life.

Buy it at Amazon in either Kindle or hard cover.  Or, if you really are a poor student, read the first edition online in PDF at the author’s website.

NB: The expanded edition also includes Hicks’ essays Free Speech and Postmodernism and From Modern to Postmodern Art: Why Art Became Ugly. Images of the art works discussed and referred to in the latter essay are available at a dedicated page at his website.

* A recommended reading list?  Here’s one. And here’s another.

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Yes, we’re small-minded.

How small-minded are New Zealanders?

At a time when the world is collapsing in an orgy of European and American debt, our second-largest city lies in ruins and the Rugby World Cup has arrived on our shores to lift our spirits, most New Zealanders are eager to find enough time amongst it all to get incensed about a comedian impersonating an airline pilot. (“Send them to jail!” “A serious security threat!” “I need to get a life!”)

If you’re one of those people, please ask yourself: “Is this really the best thing I can be doing with my time? Seriously?” After all, nothing came or was likely to come of it, and if anything it showed airport security was working well enough to stop him before he tried to fly your Grandma to Timaru. 

Aren’t there enough real things to get irate about, without creating them out of nothing?

Even with the Rugby World Cup right here in front of us, instead of just getting enthused about the tremendous outpouring of excitement we have seen, too many people are concerned instead about too many other people being out enjoying themselves, about the state of the trains, and about England players (gasp) having a few beers after a game—not to mention the colour of their jerseys during it. 

“My God! They’ve stolen our jersey!” “They shouldn’t be allowed to disrespect our jersey!”  Etc. Ad nauseum. It seems both the English, with their black jerseys at this World Cup, and the French, with their dark-dark blue at the last, both spotted how easy it is take a small-minded NZer’s eye off the ball.

As have the Australians in times past. Just remember how incensed everyone got when David Campese had the temerity to disrespect the haka!  Yes, folks, that was right before he helped his team dismantle our team at another World Cup while you were out filing a complaint with the Race Relations Commissioner.

And Lord knows there’s enough hakas around to disrespect right now. You can’t turn a corner for the sight of someone slapping their thighs, rolling their eyes, and bellowing incoherently into some imagined opponent’s face.  Since this is rapidly becoming our default form of greeting visitors, seemingly spilling over now into even less savoury forms of sledging,  it’s no wonder some of our cousins over the ditch are starting to get concerned about us.

It has always been this way. We focus obsessively on the small and unimportat while the large goes on around us unnoticed.  Just ask Alasdair Thompson, or Paul Henry --- both of whose employment status instantly became a Matter of National Importance when they … when they what? Can anyone even remember now what seemed so important then? 

Our penchant for small-mindedness while the world burns around us is perhaps our small country’s way of handling being small in a world where bigness seems to count. But it’s not one of our most attractive traits.

There ought to be a law against it.

Tuesday, 20 September 2011

ECONOMICS FOR REAL PEOPLE: History of Business Cycles


Here’s the news about tonight’s session from our friends at the UoA Economics Group:

Hi all,

    In recent weeks we examined the causes of the booms and busts that seem to be becoming more frequent. We spent time examining the Great Depression and the role of the Central Banks at that time.
    But a good question asked by some in those seminars was whether there were booms and busts before central banks were created.
    The answer to this requires a study of history and specifically of the history of business cycles in the United States. So in tonight’s seminar we will look back in time to see what we can learn from the past. While the examples will be based on US history, virtually all the same things can be said about the UK and NZ etc. We will discuss what lessons we in New Zealand can take from the US experience.
    Look forward to seeing you tonight.

    Time: 6:00pm
    Date: Tuesday 20 September
    Location: Case Room 1, Level 0, University of Auckland Business School

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Key Government overturning Supreme Court, and principles of good law [update 2]

The Key Government seems to have learned nothing from the many mistakes of the Clark Government.  Instead of avoiding them, it is repeating them. Virtually all of them.

Perhaps the two highest profile judicial mistakes of the Clark Government’s last term, with the biggest consequence for the Government itself, was (first) its overturning of the Appeal Court’s decision allowing iwi to take cases in common law arguing for their ownership of specific parts of foreshore and seabed, and (second) its passing of retrospective legislation covering its arse over the pledge card.

The Clark Government’s first intervention didn’t just overturn the judiciaries’ independence, one of the bulwarks of Objective Law, it politicised a decision that would have been far better taken through the courts in common law—without all the screaming and shouting, and the resignations of ministers and formation of new parties. (Wooh, talk about unintended consequences!)

Its second intervention, passing retrospective legislation to protect itself from the consequences of its own law-breaking, overturned yet another bulwark of Objective Law: the principle that, to be objective, law must be known in advance.

In every regard, the law must be adapted to its essential goal: predictability. "[M]en must know clearly, and in advance of taking an action, what the law forbids them to do (and why), what constitutes a crime and what penalty they will incur if they commit it."

A bad habit of changing law retrospectively, just because it doesn’t suit the government, is hardly the mark of good predictable law.

But does this National-led Government learn? No way. It’s just announced it plans to pass law overturning the Supreme Court decision disallowing the Supreme Court’s decision in the case of the police surveillance of the Urerewa 18 17 15 4.  At a stroke, overturning virtually all the principles of good Objective Law–and all because the government wrote bad law in the first place.

Maori Party MP Te Ururoa Flavell is absolutely right.

"It appears that what the National Government will ask us to do, is to suspend the law temporarily - to condone the unlawful act by the Police; and then to add fuel to the fire by introducing legislation to make the 'unlawful' lawful. What sort of justice system do we have if the upholder of the law is allowed to break the law and get away with it?”

Fair question? It’s certainly not one that’s worthy of respect.

UPDATE 1: Speaking of Objective Law  and the separate arms of government being independent, I just heard the Prime Minister tell Leighton Smith “I’m not going to allow these people to walk free.” With the clear implication he will change whatever law  is necessary to do that.

There was a time in  history when the superiority was realised of “a government of laws, not men.” Feel free to write whatever opinion you like about whether this still exists.

UPDATE 2: Dim Post on John Boy’s Bureaucratic Capture:

“John Key isn’t an intellectual … [which]  makes him vulnerable to mistakes like this decision to retrospectively validate illegal activity undertaken by the New Zealand police. The bureaucrats embarrassed by the Supreme Court’s finding that the police acted illegally can argue that it would be awfully practical and convenient for the state to pass legislation dumping the Supreme Court’s interpretation of the law, and the Prime Minister doesn’t have the intellectual clarity to say, ‘Hold on a minute. That violates almost every principle my own party is supposed to stand for!’”

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Monday, 19 September 2011

A Puritan World Cup?

After another weekend of great games and celebrations, the puritans want to take the city back. “Auckland’s party mood worries officials” reports a po-faced Royal NZ Herald this morning, with stories not about the thrill of seeing smiling, happy faces filling the city but instead of meetings, concern and  “urgent talks” about the phenomenon.

Remember Mencken’s working definition of  Puritanism:

The haunting fear that someone, somewhere, may be happy”

That’s exactly the type of thing worrying these “officials.”

Here’s some good advice fro them: “Chill out: it’s a party.”


Christchurch property-owners shrug

It looks like the rebuilding of Christchurch will happen, if it happens at all, without the folk who built it in the first place--“as quake-weary CBD property owners start using their insurance money to buy new buildings in Auckland and overseas.”

And why wouldn’t they? For one year they’ve been kept from their buildings and treated like mushrooms—allowed to visit to extract the important tools of their business only for ten minutes at a time, and only after loud and repeated protests; not even given the courtesy of consultation about the demolition of their own bloody buildings; and then told by the ruling junta what grand plan they intend to impose on property-owners’ property, with or without their consent.

So why would property-owners stay and re-invest there, now that they’re newly liquid?

It’s terribly sad. But I did say this would happen.