Tuesday, 8 November 2011

A carbon tax?

Libertarianz proposes a carbon tax … with some special conditions.

Talking energy fantasies in Zuccotti Park

Alex Epstein and Dr Eric Dennis head down to Zuccotti Park to talk about energy, alternative energy and some of the fantasies about alternative energy held by some of the #OccupyWallStreet crowd.  Education ensues.

And as another bonus from the visit, another #OWSer tells them what he really thinks about creators, producers, and Steve Jobs …

Europe’s monetary union is collapsing. Again.

Europe’s monetary union is collapsing.



Yes, it’s not the first time Europe’s diverse economies have been shoe-horned into monetary union—and not for the first time, it turns out not everyone is able to live in the Procrustean Bed it constructs.

In the 19th century [explains Oliver Hartwich], it was France that pushed for monetary union. After Napoleon, the French needed a strategy to bolster their influence in Europe. They tried it through monetary alliances. Belgium adopted the French franc after independence in 1830. Switzerland joined them in 1848. Italy followed in 1861, and finally in 1867 Greece and Bulgaria also linked their currencies to the franc.
    The French monetary bloc then became the Latin Monetary Union (LMU). It was a union based on the same gold and silver content of coins in all its member countries. Several other European countries from Spain to Serbia joined this union in the following years.
    LMU failed and was officially disbanded in 1927 for several reasons. It could not keep up the fixed relationship between gold and silver when more silver flooded the market. Second, there was no central authority to effectively control and coordinate monetary policy. And crucially, member states were cheating on the gold and silver content of their coins. One country was even formally expelled from monetary union in 1908 because of the grossly fraudulent gold content of its coins.
    The country in question was none other than Greece.
    In watching the current Greek tragedy we are witnessing history repeating. Once again a French initiated monetary union is on the verge of collapse. And once more, this collapse was brought about by a lack of political coordination, cheating member states and ineffective sanction mechanism.

Isn’t it odd that the experiment of fiat money union has been tried and tried, and failed and failed—yet the primary means by which country’s have successfully and peaceably coordinated their economies, the gold standard, is still shunned.

Could the reason be that “monetary union” always promises governments the opportunity (they think) to get something for nothing, but the discipline of the gold standard doesn’t?

Monday, 7 November 2011

“Welfare Reform”

For everyone who’s sick of lies and wants the real deal on the largest spend this and every other government make, welfare researcher Lindsay Mitchell has some exciting news for you:

For some time I have been working on a new website called Welfare Reform… With the election less than three weeks away it is ready to officially launch.
The site is intended to be a resource for anyone interested in welfare reform. It contains most of the information I have obtained from the Ministry of Social Development under the Official Information Act since 2001. It has links to overseas sites, recommended books, press releases, interviews etc.

Like everything Lindsay does, it is going to be very, very good.

Bookmark it.

We are now seven billon and growing!

Today, or tomorrow (or perhaps even yesterday or next week) the world can celebrate the arrival of the seven billionth human being to our present population.

This is not something about which to rend your clothes and run howling into the street—it is something about which to hooray and huzzah and to celebrate! Especially so, since for most of human history, for around one-hundred thousand years, the human population saw very little change, very few riches, and for virtually all that time it was sparse and ill fed and dirt poor.

For most of human history, the so-called Malthusian Trap remained in place, in which increasing populations tend to outstrip the food supply and the human population remained cold, dark, wet, ill and few and far between.

Not so now, for the most part. It is only since the Industrial Revolution,* that blessed moment human affairs that the Reverend Malthus barely noticed and the Greens still bewail, that increased innovation could finally begin to breed greater productivity and increasing human health and welfare—and with that, human population itself could take off and begin for the first time to flourish.

At the dawn of the Industrial Revolution, the numbers of human beings on the planet began to skyrocket, and so (in the places it has been allowed to take hold) it has continued ever since.

We are now seven billon and growing! Take that, Reverend Malthus!

Naturally, this news has occasioned great wailing and gnashing of teeth among contemporary Malthusians, who can be heard to wail everything from “if we keep breeding we’re all gonna die” to “if we keep breeding we’re going to take over the whole planet!”

Fortunately, as long as human remain free to invent and produce there is little danger of the former; and as long as the earth’s surface remains the approximate size that it is, and folk are left free to go there, there are still plenty of places for people to put themselves.

Because as you can see, even if all the world’s seven billion people lived in one enormous city in the US, then depending on the density of the city this is how big that city would be:



See: even at 7 billion there’s plenty of room to go around, and still plenty left over for farmland and wilderness. So quit worrying about there being enough room for everyone, and start realising instead that human fecundity depends on human freedom.

That’s the way to beat the Malthusian Trap—as we have been since we learned how.

* * * * *

* Summarises Benjamin Marks in 'The Malthusian Trap, “it is possible to take seriously the warnings of the pessimists, but as George Reisman and Ludwig von Mises point out, "it comes true only under socialism"” – i.e., only under a system in which private property is banned, production is strangled and the tragedy of the commons remains in effect – i.e., under a system of (non) production where the human mind is not able to read price signals and opportunities, and unable to adapt their own resources to suit.”

Symposium on Sound Money


As readers of even the mainstream headlines will be aware, the world is a dreadfully uncertain place right now. And as readers of this blog will be aware, one of the historical save havens in times of such calamity has been gold—for good and very sound reasons.

If you’re not sure what those reasons are, or you wish to know more, then there is no better opportunity to learn than in Auckland in three weeks time, when Louis Boulanger plays host to Professor Antal Fekete and his colleagues in a Symposium on Sound Money.  Says Louis:

I am organising a second week-long Symposium on Sound Money, to be held in Auckland Monday 28 November to Friday 2 December 2011
    This year’s one has the theme: ‘Gold and Economic Freedom’.  The event will consist, as last year’s did, of ten lectures: one per morning and one per afternoon.  PLEASE NOTE: the event is in three weeks’ time from now.
    This will be a rare opportunity for you to hear from Professor Antal E. Fekete of the New Austrian School of Economics (NASE) in person, as well as a number of his eminent assistant lecturers from overseas.
    You owe it to yourself to learn as much about the historical role of gold in the monetary realm of human action, if you want to not only protect your existing wealth from the on-going monetary and fiscal mismanagement worldwide, but also put yourself in a position where you can prosper from it rather than become just another ignorant victim of a dying system.
    Here is the program for the week of Monday 28 November to Friday 2 December, at the University of Auckland Business School:




Coordination of the Social Interaction (Fekete & Jaitly)



Why Gold Is Money (Boulanger)





Brief History of Gold Standard & Imposters (Fekete)



Gold Backwardation (Weiner)




Hoarding and Gold’s Role in Finance (Fekete)



Gold Standard: a Stable 3-Legged System (Fritsch)





Gold Bonds to the Rescue (Fekete)



India, Gold & the Creation (Jaitly)





Unadulterated Gold Standard Explained (Fekete)



Gold Ownership Demystified (Boulanger)




  • mornings: Professor Antal E. Fekete (Hungary)
  • afternoons:
    Sandeep Jaitly (U.K.)
    Keith Weiner (U.S.A)
    Rudy Fritsch (Canada)
    Louis Boulanger (New Zealand)

In addition, Sandeep Jaitly will now give a lecture on ‘Gold and Gold Futures – an Examination,’ which should provide us all with more practical knowledge about the gold markets.

I can say that I went to the first Symposium last year, and was bowled over. You will find no better opportunity than this Symposium to learn about the role of gold, both as a safe haven, and as the basis of a sound monetary system.

More details here.


“Share the wealth”


[Thanks to Paul for the ‘toon]

Saturday, 5 November 2011

Are you an Occupier or a Tea Partier, or … ?

The Occupy Wall Street movement has quickly spread across the world. While their goals are still vague, some general trends have begun to appear. So just where do you fall? Are you more aligned with #OWS, the Tea Party, or somewhere in between? Take the test and find out!

OWS Quiz

OWS quiz

(The idea is based on “The World’s Smallest Political Quiz.” Check it out, http://www.theadvocates.org. Hat tip Bastiat Institute and YAL at Ohio State paper, The Rubicon.)

Friday, 4 November 2011

Is debt necessary for recovery?

The chaos in Europe over Greece is the chaos of Keynesian economics in microcosm: the complete and utter explosion of the notion that over-spending and borrowing is the key to growth, progress, recovery or “stimulus.”

As Robert Murphy makes plain:

Since the crisis began, one of the dominant themes in arguments over proper government policy has been the Keynesian view that it is crucial to prop up total spending. The added twist during this particular recession is the crushing burden of private-sector debt, which allegedly makes it all the more urgent for governments to
run fiscal deficits themselves.
    In a
previous article I dealt with so-called deleveraging and argued that it was a good thing, both for the indebted individual or firm, as well as the general economic recovery.
    However … it's important to revisit the topic in a more elementary fashion: [specifically, the] casual claim that debt reduction would by sheer accounting cause total spending to fall. This is simply wrong.

Not wrong in the sense you can quibble about it over a couple of jars, but wrong altogether. Wrong in fact:

Imagine a simple world with three people: Cathy the Capitalist, Larry the Landowner, and Willy the Worker. Initially we are in a stable pattern where every period, the following transactions occur:

  • Larry pays Willy $1,000 to work on his land and harvest food.
  • Willy pays $100 in finance charges on his outstanding debt of $500 to Cathy, which is rolling over at the interest rate of 20 percent per period. (Willy each period just pays the finance charges, keeping the outstanding carried balance intact at $500.)
  • Willy spends his remaining $900 on buying some of the food from Larry.
  • Cathy spends her $100 in interest income on buying some of the food from Larry.
  • Larry eats the remaining food that he hasn't sold to Cathy or Willy.

In this scenario, every period $1,000 is spent on food, the only finished good or service. As officially measured — notice that it misses Larry's "home consumption" — gross domestic product (GDP) for this simple economy is $1,000 per period.
    Now suppose that Willy listens to those who say we should work hard and be debt free, and decides to become debt free. In this particular period, the following might happen:

  • Larry pays Willy $1,000 to work on his land and harvest food.
  • Willy pays $100 in finance charges on his outstanding debt of $500 to Cathy, which is rolling over at the interest rate of 20 percent per period.
  • In addition, Willy pays another $500 to Cathy to extinguish his debt to her.
  • Willy spends his remaining $400 on buying some of the food from Larry.
  • Cathy spends her $100 in interest income, and her $500 in principal repayment, on buying some of the food from Larry.
  • Larry eats the remaining food that he hasn't sold to Cathy or Willy.

Now in this scenario, total spending is still $1,000, and measured GDP is still $1,000. Larry the Landowner wouldn't see a drop in demand for his food. Willy reduced his consumption and saved much more out of his income this period, but this didn't affect even nominal income because Cathy's consumption filled the gap.
    Maybe our scenario isn't likely, depending on various assumptions we can make concerning Cathy's spending habits, but it is certainly possible. So we see that an economy can start out with one person having a large debt, then becoming debt free, without necessarily altering total spending or total income, even when measured in nominal (i.e., dollar) terms.

See. Simple. Even if borrowers stop spending, that doesn’t mean lenders will.

But still, if Cathy is dis-saving, isn’t that a bad thing?  And couldn’t it be said that if Cathy consumes, then there’s not real net aggregate debt reduction in the above scenario?

Yes, Willy paid down his debt by $500, but Cathy in a sense "dissaved" by letting her own financial assets fall by $500. If we like, we can say Cathy's debt started out at -$500, and then ended at $0, meaning her debt "increased" by $500.

So does that explode the argument? Well, no.

I can still show how Willy can pay off his debt without causing total money expenditures to fall, and without anyone in the community even suffering a drop in financial assets.
    To see this, revert to our original scenario, where Willy owes Cathy $500. As before, Willy decides to pay off his debt, through much higher saving. But this time, imagine the following occurs:

  • Larry pays Willy $1,000 to work on his land and harvest food.
  • Willy pays $100 in finance charges on his outstanding debt of $500 to Cathy, which is rolling over at the interest rate of 20 percent per period.
  • In addition, Willy pays another $500 to Cathy to extinguish his debt to her.
  • Cathy spends her $100 in interest income on buying some of the food from Larry, as she always has done.
  • Larry issues $500 in new stock shares for his landholding corporation, which Cathy buys.
  • Larry pays Willy $500 to plow a parcel of his land that was previously uncultivated.
  • Willy spends $400 + $500 = $900 on buying food from Larry.
  • Larry eats the remaining food that he hasn't sold to Cathy or Willy.

In this final scenario, consumption spending is $1,000 while net investment spending is $500, meaning official GDP is $1,500 — it has actually risen 50 percent! [Just another example of how risible is the GDP Delusion.] At the same time, Willy paid off his debt, while Cathy swapped a $500 bond for $500 in stock shares, so that (considering just these two) there has been a net reduction in indebtedness in the community.
    But what about Larry? Has he simply replaced Willy as the new debtor in our economy?
    No, he hasn't. Although Larry took in $500 while raising funds for his corporation, he is not indebted to Cathy, and so we can't say that his financial decision during the period somehow offset Willy's debt repayment. Cathy doesn't have a debt claim on Larry; instead she owns equity in his corporation. There is a whole literature in finance on the
important differences between debt and equity, including the fact that debt financing makes a firm leveraged, whereas equity financing does not.
    It's not even the case that Larry will have to reduce his future consumption in order to make dividend payments to Cathy (to justify the initial valuation of her stock at $500). So long as Larry's $500 investment is sound, the new field will increase future harvests, possibly allowing Larry to maintain his original consumption of food even though Cathy now has an ownership stake in the net profits of the business.


Contrary to the assertions of pundits like Paul Krugman [who Murphy skewers in his full post], an economy does not need mountains of debt — whether government or private — in order to grow. Corporations can still raise needed financing through issuing equity. There are pros and cons to debt financing, but it isn't necessary for a strong economy.

Question for the Day: Is anyone fiscally responsible?

Here's your question to consider this morning:

If Labour were to take office, they plan to spend $15.6 billion more than they take in; meanwhile National plan to continue spending more than $13 billion more than they take in.

So should either of them be consided fiscally responsible?

Thursday, 3 November 2011

Can they bankrupt the country? Yes they can.


Question for the day: On the EQC

Given that both the Blue Team and Red Team were respectively defending the Earthquake Commission last night and and promising to give it even more money, here’s the question I’d like you to ponder today:

Is there any good reason for the Earthquake Commission to exist?

Here’s a few things about that question to consider:

  • prior to the earthquakes, the EQC was sold as the virtual investment arm of God, with an unlimited pot of money just waiting to repair everything; post-earthquakes however it turned out the pot was virtually empty, and what it mostly contained was government bonds, i.e., billions of dollars of IOUs payable by the taxpayer.
  • prior to the prior to the earthquakes, the EQC was sold as being the first port of call in an earthquake with the money to bail out home-owners. What people only realised after the earthquakes however (and quite why it took so long to figure it out, I don’t know), was that $100,000 doesn’t go very far these days.  And that waiting for it from a government department takes forever.
  • prior to the earthquakes, the EQC was sold as being well resourced and efficient; post-earthquake however it was discovered that EQC had to actually employ people to do the jobs of assessing and paying out on claims—jobs other insurance companies were already fully staffed to do.  From whence did EQC pull all their new employees to duplicate what other insurance companies were doing? From either those same insurance companies (denuding them of their own trained staff, and slowing down their work) or from the ranks of the illiterate and the innumerate (which explains the content of so many of EQC’s assessments).
  • prior to the earthquake, home-owners might have thought the $100,000 payout from EQC  would have been a supplement to their main insurance payout. Little did they know however that they would have to wait for the their main insurance payout until some time after the EQC had got around to deciding whether or not they would get one, and how much (if any). Which has meant months and months and months of delays, and tonnes and tonnes of paper as EQC proves once again that if you want delays and obstructions, then give your task to a bureaucracy.

So with that preamble, what do you think?

Is there any good reason for the Earthquake Commission to exist?

Yes, or no?

Around Europe by stereotype

Zero Hedge has a few maps of European according to the worldview of various countries(Zero Hedge)

Here, for example, is how the Greeks see the rest of Europe:

The Brits:

The U.S.:

The Vatican:

And as a special bonus, how Silvio Berlusconi sees the rest of Europe:

More here.

Wednesday, 2 November 2011

“Don’t steal music”– Townshend

imageIllegal downloaders of Rihana and Lady Gaga were pinged overnight by the Recording Industry Association of New Zealand (RIANZ), who asked Internet Service Providers to send copyright infringement notices to 42 customers that the association has accused of internet piracy.

The first of many such notices that will be sent out as a reward for stealing music.

Almost at the same time, The Who's Pete Townshend used his inaugural John Peel Lecture in Salford, England to attack illegal music downloaders as thieves, which they are, and Apple as

a "digital vampire" that is "bleeding" artists and "destroying copyright as we know it.”

Townshend, who first began dreaming about the internet back in 1971, urges Apple's iTunes “to use its power to help new bands” in a similar manner to the late John Peel, and the independent record labels he helped champion.

But he reserved the greater part of his ire for today’s bedroom pirates who demand a right to the fruits of his and his colleague’s labour without paying for it.  Townshend, who has deservedly earned a small fortune from royalties, concedes that many a creative person much earlier in their career than he “would prefer their music to be stolen and enjoyed than ignored.”

This is the dilemma for every creative soul – he or she would prefer to starve and be heard than to eat well and be ignored.”

It is not them he blames (far from it) but the thieves, the pirates, the the music “fans” who illegally download music and starve those they claim to admire. Says Townshend, accurately:

They may as well come and steal my son's bike while they're at it… I wonder what has gone wrong with human morality and social justice."

Here’s The Who:

The Who - Music Must Change 1979  (posted by IvorTheEngineDriver)

Fixing what?

Welfare Commentator, Lindsay Mitchell, talks to Libertarianz about her research which shows that negative social outcomes are more closely aligned to being on a benefit than being poor.

But what about National’s new welfare policy?

It’s unambitious as hell.

Lots of name-changing just hides its lack of substance.

And what sort of policy to minimise the cost of welfare—the single highest spend by this over-spending government—starts by spending even more? Around $130 million more every single year...

Question for the day: About “entitlements” [updated]

Here's a question for you to consider this morning.

Is a welfare cheque an entitlement?

Yes, or no?

Feel free to explain why. Or why not.

Don Watkins Q&A Question 4 from The Undercurrent on Vimeo.

Tuesday, 1 November 2011

The question after last night’s televised debate …

The question after last night’s televised debate: does John Key lie?

Answer: Yes, he does.

The Kiwi Future?

What happens when more and more New Zealanders refuse to pick up the paddle and start working for themselves?

Monday, 31 October 2011

Roger Kerr 1945 – 2011


As many of you know already, the always combative Roger Kerr has fought his last battle. He died on Friday night after a year-long illness.

Roger was on point for most of the reforms that constitute the opening up of post-Muldoon Fortress New Zealand, and the formation of the freer markets that were the result. He was singularly successful both in persuading New Zealand’s corporate moguls that ending protectionism was in their long-term interest, and that they should fund a permanent organisation, of which Roger became head, to promote the necessary “permanent revolution” for which Roger saw that first freeing up as just the beginning.

Unfortunately, that second revolution never came, being lost in the blancmange of spud-like Compromise, comradely Clarkism, and now Smile and Wave Nothingness.  But never for a moment did Roger give up the battle.

He will be sorely missed. As Lindsay Perigo said of his departure, “The best tribute we can pay is to continue his valiant battle against statism.”

This 2011 interview with Lindsay, which would have been one of the last he gave, gives a taste of The Great Man:

And from Roger’s blog, which will never again host a Friday Graph, comes this announcement of a service to honour Roger’s life to be held on Thursday 3 November at 2.30pm at Old St Paul’s in Wellington.

A selection of public tributes to Roger:

The story of The White House

imageStupid story of the day, from this morning’s Herald: a woman bought and transported a 100-year-old Epsom villa to a new site overlooking the Kaipara Harbour, a house that for all its life has been painted white.

Both sites are within Rodney Hide’s City of the Supersized Bureaucracy, in which planners have been given wider powers.

What those planners told Julie Cotton is this: in Epsom, the only colour you have permission to paint you house is white.  But in Kaipara, virtually the only colour for which you don’t have permission to paint your house is white. (Yes, dear reader, in the Brave New City anything that isn’t prohibited is made compulsory.) From the Herald story:

_QuoteThe villa had been painted white its whole life - a council heritage requirement for a house of that age in Epsom - and the Cottons wanted it to stay that way.
    However, shortly after moving it to Tapora, the family were told by a council inspector they had to paint the house one of 50 dark colours, including green, brown, or black.
    The order was based on the West Coast Policy Area, which states parts of the North Rodney area landscape are highly exposed to the risks of development, meaning the colour and material of houses should complement the surrounding environment

Yes, that’s right, the RMA, the District Plan and Rodney’s planners have all been insisting that this house, which can’t be seen from any road, must essentially be painted in camouflage in order not to offend non-existing passers by. So that poor Julie Cotton, who always wanted “a big, white house on a farm,” is now instead faced with painting her house to look like an army barracks.

Just another story from this Brave New City.

Lock up your babies, it’s election season

Now the rugby’s over we’re straight into the far less entertaining election season in which not a hand will not be shaken nor a baby left un-kissed.

Every election is the same. This time at least it’s a mercifully short, four- week popularity contest, but it’s still the same advance auction of stolen goods in which class and race hatreds are polished,  bigotries burnished, statistics  tortured, economics ignored, and taxpayers and producers taken for granted.

The hand kissing and baby shaking started with a rush over the weekend.

But also, there was this:

Rich Pricks in New Zealand

Direct from Libz TV: Rich Pricks in New Zealand, by Libz Wel-Cen candidate, R-Dawg Cutting, featuring The Milminator.

Sunday, 30 October 2011

The dangers of faith

Richard Dawkins speaks with an extremist Muslim … but no communication was possible.

Friday, 28 October 2011

In the year 2033

Who would have thought this Labour Party would have the courage to open the can of worms that is the debate about Government Super’s sustainability—and to open it with a flourish.

What they’ve done is to look at the financial chaos around the world and realise that a large portion of it comes from government’s borrowing unsustainably to fund election bribes welfare. And they’ve made a tough call.

Government Super in its present form is unsustainable, they say. And they’re right. Yes it is.

The simplest way to remedy that is to raise the age at which Government Super is payable, they say. And they’re right. Yes it is.

So, therefore, they say we must immediately got on with raising the age incrementally … so that by 2033 the qualifying age will be 67.  Did they really say 2033?


Surely, Phil, you have to be kidding.

Yes, yes, I know you’re simply opening the debate, and for that I doff my hat to you.  But to kick the can down the road to 2033 is, frankly, to acknowledge the problem and then do nothing about it. (And no, implementing compulsory “saving” and raising payroll taxes to pay for this and other promises is not a solution, but two new problems.)

Mind you, acknowledging this problem is still one step further than Smile and Wave has done. He’s now hamstrung by his ridiculous promise never to touch Government Super as long as he’s PM. If this announcement makes him wriggle while others around him grasp the necessary nettles, then all the better for that.

And if the necessary nettles are grasped, and this National Party wants to put blue water between itself and Phil Goff on Super (rather than the red water that separates them now Goff is outflanking them on the right) they could easily announce a much more robust plan to raise the age in more appropriate increments to erase the problem in much better time.

Or they could even do something along these lines.

PS: In more “are they finally getting it” news, it turns out that Hone’s Mana Party is prepared to grasp a few nettles themselves.

Correctly diagnosing the present tax system as being bad for the poor, since every dollar the poor earn and spend is taxed like hell, Mana wants to get rid of all income tax on the first $30,000 of income, and to get rid of the Government Slavery Tax (GST) altogether.

All good stuff—or at least it would be if they planned equal cuts in spending to balance this out. But still, it’s a healthy start.

PPS:  And in even more “finally getting it” news, it looks like even the National Party are able to admit when they are wrong: they’ve announced this morning that exploding youth unemployment has (finally) changed their mind on the Youth Minimum Wage. Bravo!

Yes, three years and several thousand youngsters on the scrapheap too late. But still: “Bravo.”

Except, except ... as Eric Crampton points out the large print of this policy announcement giveth while the small print taketh away. What National pledge to do is not to take away the Youth Minimum Wage but instead to "expand eligibility for the New Entrant's Wage (now called the Starting-Out Wage)":

The starting-out wage will be set at 80 per cent of the adult minimum wage and three groups of people will be eligible:
  • 16- and 17-year-olds in their first six months of work with a new employer.
  • 18- and 19-year-olds entering the workforce after more than six months on a designated benefit.
  • 16- to 19-year-old workers training in a recognised industry course involving at least 40 credits a year.
What's the sum total of the changes then?
  • 16 and 17 year olds get an additional three months' eligibility for the training wage. Maybe this is enough to make employers deem the transactions costs worthwhile, maybe not;
  • 18 & 19 year olds have access to the starting out wage - this is new;
  • Youths in training only have to be doing 40 instead of 60 credits per year.
In short, there's not much there. 

Cartoon by Richard McGrail
Not.  Much.  There.

Shorthand not just for this policy announcement, but what's between a politician's ears.

Except this time, there's even less than meets the eyes.

Sometimes a party will be accused of hypocrisy when it simply says the populist and wrong thing while quietly getting on and doing the right thing. Given the electoral environment, in which doing the right thing is rarely the populist thing, behaviour like this is understandable, and almost forgiveable.

What is neither is to say the right thing, and to take all the flak for it, while not even intending to actually do what you say you'll do.

This isn't hypocrisy.  It's just flat-out political flatulence.

“Mr Brownlee: Tear down this wall!”

There are two film featurettes highlighting this year’s disaster in Christchurch. Here’s the trailer for the first, When A City Falls:The People’s Story, a feature documentary about the people in Christchurch before, during and immediately after the earthquakes. It is harrowing.

The second film has a different focus, takes in the longer time frame since the quakes, and looks at a different, though related, disaster.  With interviews from local Christchurch business owners and commentators, this one looks not at the earthquakes directly, but at the man-made disasters following in their wake.

As someone said on Twitter yesterday, “the first disaster was the earthquakes.  The second disaster is the political decisions made in their aftermath.”

Because what wasn’t destroyed in the earthquake is being destroyed now, by government both central and local. Literally. And I don’t just mean people’s buildings—often without their permission, or even their knowledge. What’s being destroyed is enterprise, people’s futures, and the very future of business in what was New Zealand’.

What’s needed to repair and renew the city is not gobs of (borrowed) government money; it’s the enterprise of entrepreneurial NZers who are currently locked out of their city.

Referring to both the hurricane fencing that surrounds the Christchurch CBD, and the unhelpful attitude of CERA and other bureaucrats who are impeding access to private property within the CBD and delaying the resuscitation of business activity, let us all echo the youngest of the interviewees on the second featurette:

"Mr Brownlee, tear down this wall!

Thursday, 27 October 2011

#OccupyWallStreet: A new slogan…

_DavidGallandGuest post by David Galland of Casey Research

In New York City for our “Singularity Summit,” Alex Daley of our Casey Extraordinary Technology service and I decided to see what all the commotion is about and so wandered through a light drizzle to Zuccotti Park, home to the Occupy Wall Street protestors.

The group sure is attracting a lot of media smoke, so might there also be fire?

While it may be a conceit, as a young person arrested in the Oakland Induction Center riots, circa 1967, I like to think I know at least a little about grouping together in order to take it to the man.

So, based on my experience, how does OWS stack up?

In a word, pathetic. For three reasons.

1. Lack of a solidifying (or even coherent) purpose. 

First and foremost, the movement lacks a cohesive purpose.

As expected, there were a dozen or so cliques touting anti-capitalist themes. But other than in a general sense, they were far from the majority, which I would loosely describe as loosely described.

We saw one group against fracking and another small pod holding up signs calling for justice for the victims of Ecuadorian death squads. One old-timer held up a soggy sign with a passage of the US Constitution, lecturing passionately to a small contingent of bored youths on how said passage had been violated.

Standing nearby in the small park, an aspiring young Che was trying to get the attention of fellow les miserables in order to tell them how South America had been a non-violent paradise prior to the arrival of the white man. Others want to "eat the rich," while another... Well, you get the idea.

I am sure there was a divergence of opinions on this and that back in the Sixties, but I can assure you that everyone who sat in at the Oakland Induction Center, and dozens of other locations like it, was clear that the objective of the protest was to stop the Vietnam War. In the case of Oakland, by blocking the doors to the center through which the US war machine was regularly processing thousands of slaves, er, draftees, precedent to flinging them into a losing war in a country that not one in a hundred of them could even point out on a map.

By contrast, Occupy Wall Street appears to be little more than a gathering spot for the misguided, ill-informed, disgruntled and disenchanted. That is not to say that there aren't some legitimate gripes represented among the motley. Rather it is that unless and until they actually decide on a specific objective, their chances are slim of accomplishing anything more than encouraging copycat groups in other countries to riot for more targeted purposes - for instance, in Italy to protest government austerity measures.

As to who is encouraging those other groups, look no further than the television vans around the park perimeter. I strongly suspect some producer somewhere decided that OWS could be made into good drama for the nightly newsertainment, and so it came to pass. Given the lack of vigor in the park, it wouldn't surprise me at all if said producer had to periodically nudge the lumps with the toe of his boot and encourage them to make some noise for the cameras.

2. What leaders they have, appear to be both idiots and ideologues. A leader leads, as in getting the masses to act in concert in order to achieve a specific goal. Given the Tower of Babble gibberish so clearly in evidence, it's clear that no one near the top of the flock has a unifying vision or the ability to rally the troops in cohesive action.

If you want to understand just how painfully moronic the purported thought-leaders of this movement are, you only have to take a few minutes to watch this YouTube video.  (I have to warn you, however; this may cause irreversible brain damage.) The speaker is none other than uber-greenie Bill McKibben.

Doug Casey recently referred to these guys as "watermelons"... green on the outside, red on the inside, and I can't argue the point. In case you are wondering, the spastic wiggling of fingers in the background is called "twinkles" - and is done when trying to express enthusiasm for a speaker without interrupting them with applause.

So, what's got McKibben and his troupe of scary sycophants all heated up at Zuccotti Park? None other than the proposed extension of the Keystone Pipeline, an evil tube of death flowing from the tar sands of Canada to the Gulf of Mexico. In McKibben's own words, according to certain unnamed scientists, "If we build this pipeline, it is game over for the climate."

Game over for the climate? Egads! Death to us all, including the doe-eyed little polar bears! And people accuse us here at Casey Research of being gloomy and doomy.

Thanks to regular correspondent Marko, here are a couple of maps that clarify the dire threat posed by the proposed Keystone extension, this veritable Godzilla of Goo. So, what does the extension actually look like? See the dotted lines on the map just above. Monstrous!

Devastating, no question about it.

Next, (right) we see a map of all the many pipelines in the US that are interconnected with the Canadian oil fields.

How can anyone deny that McKibben and his chorus are right... we should fight this monstrosity at all costs! To the ramparts!

That would show those filthy Canadians what to do with their filthy oil... namely swing that dotted line west in order to better ship the stuff off to China.

3. If You Aren't Getting Arrested, You Are Doing Something Wrong!

Seriously, I wanted to stand up in the middle of the park, clear my throat and yell, "Hey, listen up! What are you doing here? Pull yourselves together and get down to business!" (Egged on by Alex for his personal entertainment, I'm pretty sure.)

So, here's the set-up. The protestors, which number only in the dozens, are encamped in a small park in a fairly non-descript and unimportant corner of Manhattan. They are literally surrounded, in order of scale, by the police, the media (in nice, cozy vans), and Falafel vendors (it's hard not to love the contradiction between the signs saying "Down with Capitalism" and the Falafel vendors doing land office business selling the protestors their grub).

In other words, like the "Free Speech Zones" now mandatory for anyone caring to express an opposing opinion as presidential motorcade6s rush by, the Occupy Wall Street folks have allowed themselves to be corralled within the boundaries of a designated protest area, approved by the powers-that-be as suitable for the malcontents.

Exposing the extent of the farce, the New York Police force has a portable, extendible watch tower that looms over the park, keeping a Sauron-like eye on the goings-on. That thing would have lasted about ten minutes back in the good old brick-throwing days.

If I learned nothing back in the Sixties, it is that (once you decide on an objective) you need to assemble in the spot that most forcibly gets your point across - by disrupting business as usual - until the government has no choice but to arrest you, after which you return to same scene and repeat until someone gives. You win if the other guy blinks. Were I trying to discomfit Wall Street, I'd be blocking the doors of the major financial houses.

But what I'd really do is to forget Wall Streeters; they are mostly only symbiotic parasites stuck in the guts of the Washington overlords. And so, speaking only hypothetically here (because one would never advocate an open uprising against one's own government), were I leading the Occupy Wall Street mob, I'd have them on the next bus to the Golden City of Oz. And once there, I'd hand out chains and padlocks for the mob to lock themselves, like early Christmas ornaments, to the gates of the White House and to the front of the congressional hive.

That, however, probably won't happen. Instead, I suspect these directionless 'shrooms will remain largely hunkered down in their little park, venturing out only occasionally to be joined by sport rioters with no larger purpose than shouting out in a crowd, until the Northeastern winter picks them off one at a time.

"Hey dude, where you going?"

"Ah, er, out for a latte."

"Really? You sure? That's what the last hundred people said, and they never came back. "

"No man, seriously, I'll be back.  Seriously."

And so, rather than ending with the bang of exploding tear gas canisters and the strident sirens of paddy wagons, I expect OWS to end one day after the few remaining protest leaders, staring at each other across the leftovers of last night's falafels, realize they are pretty much alone and shuffle off muttering something about the need to get a job.

If you sense a certain disappointment in my remarks, you would be right.

For starters, the protestors provide such tangible proof of the failure of the US educational system. Things have gotten so bad, so politically correct, so politicized, so degraded by teacher bias, so removed from the hard sciences, so enamored of the big lies, that the vast majority of rank and file down at Zuccotti appear almost devoid of reason - and therefore rationality - about what it is they are doing.

Secondly, I'm disappointed because if there was ever a good time for a protest - against the sovereign states with their constant meddling in their economies, in starting wars, tampering with justice, interfering with the personal pursuit of happiness, and regulating business out of business - it is now.

Unfortunately, if there is a unifying theme even remotely present in the OWS movement, it is that the government needs to meddle more, not less.

If I wasn't so lazy, or maybe indifferent, I might suggest a counter-demonstration with a simple slogan:

Stop Meddling!

Concise and straightforward. Better, because from the standpoint of organizing, it opens up a wide vista of potential protest locales. The Fed, the FDA, the Congress, the Treasury, the White House, the State Department, the Department of War... why, the list is (sadly) almost endless at this point.

And it wouldn't start on Wall Street, but about 227 miles south.  In Washington.

Unbreaking news: New poll

More unbreaking news for you, this time: the latest opinion poll with 100% agreement.

The mystery of currency creation

Ever wondered about the mystery of currency creation? Given that the way currency is created is behind so many of the world’s problems in the four decades since the world went permanently off gold—you know, massive inflations, massive instability, the theft of your savings, the Great Financial Crisis…

So here you go, mystery explained in six minutes by Rich Dad advisor Mike Maloney, explaining how currency is created through "fractional reserve banking," and why the banking system “is a pyramid scam of epic proportions.” The video is only 6 minutes long but, as David McGregor at Sovereign Life says, “you will learn more in that time about the root cause of our economic problems than thousands of hours watching the news on TV.”

Portraits, by Richard Schmid


Richard Schmid’s portraiture is bold and energetic, seeming to come out of the raw canvas like a thunderbolt.


Thanks to Jasmine and Jesper for putting me on to his work.


Wednesday, 26 October 2011

Poor old Banksie

Poor old Banksie. There are complaints about the traps that Labour have stooped to “dirty tricks” in their attempt to smear ACT’s Epsom candidate John Banks.

Amusingly the so-called “dirty tricks” involve posting around the electorate flyers quoting the candidate, and posting online his fiscal record while in office–all very helpful you would think to a candidate whose billboards boast his “experience” as his best feature.

Yet his record has less than meets the eye; leastways, less than met the eye of Don Brash and the ACT selection team when they selected “Banksie” as their candidate in their must-win seat. Because they apparently didn’t know when they selected him what everybody else knew long ago: That Banksie is a bigot. That Banksie is a spendthrift. That if he wants to run on his “experience,” then he can expect his past experiences to come back and bite him.

 His statements quoted on the pamphlets would bad enough, especially for any candidate representing a purportedly “liberal” party.  But it his fiscal record as Auckland mayor that should frighten the socks off anyone voting for him in the hope that the ACT Party represent fiscal responsibility.

If there is a surprise for me in Epsom [writes Labour's Epsom candidate David Parker, accurately], it is that so few people knew that John Banks tripled Auckland City Council’s debt during his last three years as Mayor. This recent history is very damaging for Key as well as Banks, given their repeated assertions that they are fiscally responsible and Labour is profligate.
The reality that Banks was “borrow and spend” will get through. I am telling everyone! Every letter box in Epsom will get this message…
    The reality is that Banks’ very public record is there to haunt Key and Banks. The man who claims Muldoon as his hero has the worst economic record of any Mayor, ever, in the entire history of New Zealand.
    While the last Labour government ran budget surpluses and reduced government debt, this is what John Banks did to Auckland:

        Auckland City Council debt more than trebled in his last 3 years as Mayor!
            2007          2008         2009                31/10/2010
            $135m      $322m      $499m             $738 million !!!!!!!!

This was all pre amalgamation [and therefore represents the debt racked up just for the much smaller original Auckland City Council], and resulted in three credit downgrades for the council from Standard and Poors (from AA+ to AA-).
The Act spin that debt increased because the old Auckland City was borrowing for the new City is untrue. (That extra $416m of borrowing in the 2010 year took Auckland City Council debt to $1,155m at the time of amalgamation, but is excluded from the above figures.)
   So John Banks certainly does not stand for fiscal responsibility.

He sure doesn’t.

One can only wonder about ACT’s sickening pragmatism in selecting this bigoted moron as their candidate in the first place.

Feeding the 99% plus [updated]

Peter Schiff visits the #OccupyWallStreet crowd to debate capitalism with them, arriving under a banner reading “I Am The 1% … Let’s Chat.” “Schiff had plenty of takers,” recounts John Hayward at the Human Events blog.

The ensuing encounter is a master class on what happens when a serenely confident man, with full command of his facts, talks to a passionate mob of clueless wonders who don’t know a thing about their supposed cause, and don’t think they should have to… Schiff doesn’t just engage these people, he short-circuits them.  You can see one or two of them making a visible effort to think, which they abandon after realising it’s easier to chant slogans.

Schiff’s basic point, which is grasped but dimly: capitalism does not need to be fixed it needs to be restored. But there is at least one point of agreement...

(At least he found folk to debate. Across the Atlantic it’s more a case of #UnOccupyLondon as it turns out the “occupation” is really by a bunch of empty tents. HT Phil S.)

Here’s something else the #OWS crowd (and most of today’s politicians) need to get to grips with:  “What the protesters [and the politicians] do not realize is that the wealth of the one percent provides the standard of living of the ninety-nine percent… all of us, one hundred percent of us, benefit from the wealth of the hated capitalists. We benefit without ourselves being capitalists, or being capitalists to any great extent.”

How so?

Because, explains George Reisman,  the vast majority of the wealth owned by the so-called “one-percent” is not held in the form of candy bars or champagne bottles, but in the form of the capital goods and equipment that produce the consumer goods on which we (and the protesters) all depend—capital goods that only come to represent wealth to the extent they are used to produce the goods and services people, in their capacity as consumers, really want.

_QuoteThe protesters have no awareness of this, because they see the world through an intellectual lens that is inappropriate to life under capitalism and its market economy. They see a world, still present in some places, and present everywhere a few centuries ago, of self-sufficient farm families, each producing for its own consumption and having no essential connection to markets.
    In such a world, if one sees a farmer’s field, or his barn, or plow, or draft animals, and asks who do these means of production serve, the answer is the farmer and his family, and no one else. In such a world, apart from the receipt of occasional charity from the owners, those who are not owners of means of production cannot benefit from means of production unless and until they themselves somehow become owners of means of production. They cannot benefit from other people’s means of production except by inheriting them or by seizing them.

But in the modern world (at least, to the extent that the so-called “one-percent” are not simply milking government subsidies and bailouts, which is how Russel Norman, Bill English & David Cunliffe all seem to think business should work), all of us benefit from the private ownership of their means of production whoever owns them—just as long as the owners are left free to produce and innovate. We all get the benefit of their production, both as buyers of the products of those means of production, but also as sellers of labour employed to work with those means of production.

_QuoteThe wealth of the capitalists, in other words, is the source both of the supply of products that non-owners of the means of production buy and of the demand for the labor that non-owners of the means of production sell. It follows that the larger the number and greater the wealth of the capitalists, the greater is both the supply of products and the demand for labor, and thus the lower are prices and the higher are wages, i.e., the higher is the standard of living of everyone. Nothing is more to the self-interest of the average person than to live in a society that is filled with multi-billionaire capitalists and their corporations, all busy using their vast wealth to produce the products he buys and to compete for the labor he sells.
    Nevertheless, the world the protesters yearn for is a world from which the billionaire capitalists and their corporations have been banished, replaced by small, poor producers, who would not be significantly richer than they themselves are, which is to say, impoverished. They expect that in a world of such producers, producers who lack the capital required to produce very much of anything, let alone carry on the mass production of the technologically advanced products of modern capitalism, they will somehow be economically better off than they are now. Obviously, the protesters could not be more deluded.

This is not just hyperbole. The world the protesters yearn for (and which the politicians are only to eager to deliver) is one in which multi-billionaire capitalists and their corporations are increasingly and ruinously shackled. We have everything to lose by that, and only the chains of penury to gain.

We are all better off by multi-billionaire capitalists and their corporations not being shackled; not being stolen from (or subsidised); but instead being left free to produce, free to innovate, and of course free to fail. Indeed, our very well-being depends on the freewheeling production and creative destruction of capitalism. History itself shows that this is so:

_QuoteThis can be seen in the fact that today, the average worker works 40 hours per week, while a worker of a century or so ago worked 60 hours a week. For the 40 hours he works, the average worker of today receives the goods and services comprising the average standard of living of 2011, which includes such things as an automobile, refrigerator, air conditioner, central heating, more and better living space, more and better food and clothing, modern medicine and dentistry, motion pictures, a computer, cell phone, television set, washer/dryer, microwave oven, and so on. The average worker of 1911 either did not have these things at all or had much less of them and of poorer quality.
    If we describe the goods and services received by the average worker of today for his 40 hours of labor as being 10 times as great as those received by the average worker of 1911 for his 60 hours of labor, then it follows that expressed in terms of the amount of labor that needs to be performed today in order to be able to buy goods and services equivalent to the standard of living of 1911, prices have fallen to two-thirds of one-tenth of their level in 1911, i.e., to one-fifteenth of their level in 1911, which is to say, by 93 1/3 percent.

The problems in recent years have not been due to the rampant running amok of multi-billionaire capitalists and their corporations, but the opposite: the running amok of regulators, subsidisers, bailout merchants and money printers—all of them keen to shackle winners, subsidise losers, and print more of the same collapsing currencies whose printing led us directly to world disaster. Concludes Reisman,

_QuoteThus, however ironic it may be, it turns out that virtually all of the problems the Occupy Wall Street protesters complain about are the result of the enactment of policies that they support and in which they fervently believe. It is their mentality, … and the government policies that are the result, that are responsible for what they complain about. The protesters are, in effect, in the position of being unwitting flagellants. They are beating themselves left and right and as balm for their wounds they demand more whips and chains. They do not see this, because they have not learned to make the connection that in violating the freedom of businessmen and capitalists and seizing and consuming their wealth, i.e., using weapons of pain and suffering against this small hated group, they are destroying the basis of their own well being.
  However much the protesters might deserve to suffer as the result of the injury caused by the enactment of their very own ideas, it would be far better, if they woke up to the modern world and came to understand the actual nature of capitalism, and then directed their ire at the targets that deserve it. In that case, they might make some real contribution to economic well being, including their own.

Read Reisman’s thorough critique of the economic fallacies behind the #OWS movement: