Tuesday, 15 November 2011

Whangarei event

"Fed up? Can't see the point in voting? Sick of supporting peddlers of big lies and empty promises?" asked Helen Hughes, activist, sculptress, grandmother and Libertarianz candidate for Whangarei.  “Then how about joining me and the growing number of voters who feel let down by their elected representatives.”

As part of her election campaign, Hughes has arranged a meeting for that growing number of dismayed, disheartened and disgruntled voters:

5.30pm Thursday 17 November
Northland Craft Trust pottery room
21 Selwyn Avenue, Whangarei

"I am the only candidate in Whangarei who is standing up for your rights. Libertarianz is the only party in New Zealand consistently advocating freedom and individual rights." said Hughes.

Come along and chat with the the only honest politician you’ll meet in Northland this year.

“Long-term trends in normalized economic disaster losses cannot be reliably attributed to natural or anthropogenic climate change”– IPCC

Despite the fears and, (let’s be honest, in some circles there are hopes) that extreme weather events worldwide in recent years have been due to man-made climate change, the UN/IPPCC’s latest report says, um, well …

… the human and financial toll of extreme weather events has risen. But the academic consensus [on the alleged link between extreme weather events and man’s activities] is far less certain.
    There is “low confidence” [summarises
BBC science reporter Richard Black] that tropical cyclones have become more frequent, “limited-to-medium evidence available” to assess whether climatic factors have changed the frequency of floods, and “low confidence” on a global scale even on whether the frequency has risen or fallen.
In terms of attribution of trends to rising greenhouse gas concentrations, the uncertainties continue.
    While it is “likely” that anthropogenic influences are behind the changes in cold days and warm days, there is only “medium confidence” that they are behind changes in extreme rainfall events, and “low confidence” in attributing any changes in tropical cyclone activity to greenhouse gas emissions or anything else humanity has done…

So the hypothesis that man’s activities have caused recent extreme weather events has (take your pick) “low confidence,” “medium confidence,” or has only “limited-to-medium evidence available.”  And this is the draft of UN/IPCC’s next report talking, which is, says the BBC,

explicit in laying out that the rise in impacts we’ve seen from extreme weather events cannot be laid at the door of greenhouse gas emissions: “Increasing exposure of people and economic assets is the major cause of the long-term changes in economic disaster losses (high confidence).

Or to summarise, as the UN/IPCC does:

“Long-term trends in normalized economic disaster losses cannot be reliably attributed to natural or anthropogenic climate change.”

You can’t really get more explicit than that.

And for warmists seeking evidence on which to base their cries for urgent government action to ban private activities, it just gets worse:

And for the future, the draft gives even less succour to those seeking here a new mandate for urgent action on greenhouse gas emissions, declaring: “Uncertainty in the sign of projected changes in climate extremes over the coming two to three decades is relatively large because climate change signals are expected to be relatively small compared to natural climate variability.”

Which is to say that we do know the climate is always and has always been changing. But we don’t know, and likely can’t know, if it we made it happen.

[HT Andrew Bolt]

QUOTE OF THE DAY: “Embrace default”!

_QuoteWhat good do these economists expect to come out of European Central
Bank debt monetization?
Do they really believe that once the ECB has committed itself to buying hundreds
of billions worth of Italian government bonds in order to manipulate the yield on
these bonds – against market forces – down to what the political class deems
sustainable, let’s say 5 percent, that Italian politicians will then reform public
finances in the country, that they will quickly bring down deficits and the debt load
to sustainable levels, at which point Italy can borrow from the market again, the
ECB can safely sell its bonds and reduce its balance sheet, and everybody lives
happily ever after?
    Does anybody seriously suggest that this scenario is likely, probable or even
    Fact is that none of these governments can be trusted to bring their finances
under control as long as they have access to cheap credit.. .
    “Quantitative easing” in Japan, the United States, and the United Kingdom goes
hand in hand with growing debt, not debt reduction.
Providing a lender-of-last-resort and easy money and cheap credit to governments
does not lead to deleveraging but to the opposite. Only default and cutting off a
government from additional borrowing will reform the government.
    That is why I say:
Embrace default!

                - Detlev Schlicter, “Infinite Stupidity

“Lose a Shirt, But Gain a Wardrobe”

As Silvio Berlusconi leaves office, brought down in the end not by his own petard but by his government’s penchant for spending money they don’t have, guest writer Kris Sayce from Money Morning Australia gives some perspective to the “infinite stupidity” on display as European politicians and banksters embark on what is “ultimately a sure road to complete economic destruction”: the monetisation of exploding government debt.

* * * *

“U.S. stocks slumped, driving the Standard & Poor’s 500 Index to its biggest
decline since August, amid concern that European leaders may be
unable to keep the euro zone intact as Italian yields surged to a record…”
                                – Bloomberg News

Europe’s problems shouldn’t be a surprise.

The big news now is the Italian 10-year bonds. Yields last week reached the highest level since the creation of the euro currency in 1999. The cost for Italy to issue debt hit 7.25% [the level that prompted Greece, Ireland and Portugal to seek bailouts], before falling back overnight to 6.29%.  They won’t stay there.

The chart below shows the six-month progress of the Italian 10-year bond. The red square is where the yield stood after last week’s move:

six-month progress of the Italian 10-year bondClick here to enlarge
Source: Bloomberg

But don’t panic. European leaders are still trying to come up with a plan… oh, hang on, maybe you should panic.

Let’s show you why…

Italy to Follow Greece?

So you can see why Italy’s yield action could be just the beginning of its problems. Take a look at the chart below of Greek government 10-year bonds:

Greek 10-year bondsClick here to enlarge
Source: Bloomberg

Those bond yields hit 7% in April 2010.

A few weeks later, after bond yields had soared above 10%, the market cheered. The Independent newspaper reported:

“Global markets surged in relief yesterday at the €720bn (£616bn) Eurozone stabilisation package put together to allay fears of contagion from the Greek sovereign debt crisis…
“Greek 10-year bond yields fell by 499 basis points [4.99 percentage points] and two-year yields fell by a record 1,327 basis points [13.27 percentage points] as panic about the restructuring deal receded.”

The joy didn’t last long. Nineteen months later and the Greek 10-year bond yield hit 30%… and two-year bond yields are now 107%! So much for the “Eurozone stabilisation package”.

Which brings us back to yesterday’s post at Money Morning Australia:

“The markets love the latest non-event from Italy. But the excitement will soon wear off and the market will fall. Then we’ll get another non-event… which the market will love… until that wears off too.”

We’ll repeat: the market is so volatile you can’t just pin your flag to the bullish or bearish side of the market…

You’ve got to play both sides.

Let’s get something straight. Of course Italy will need a bailout…

The only thing that’s not certain is how they’ll do it…

Stabbing Investors in the Back – Again!

Will it be a Greek-style default? Or will it be U.S.-style money printing? It’s the difference between being honest (default) or deceitful (money printing)…

Put another way, will they stab investors in the chest or in the back?

Neither is pleasant. But at least you’ve got a better chance of defending yourself if you know what’s coming.

It’s also important to remember the real criminals in this – governments, central banks, bankers and progressives – will look for a scapegoat to shift the blame.

Rather than admit the European debt problem is due to failed economic, financial and political systems, they’ll pin the blame on so-called bond vigilantes.

This is a term for investors who look to profit from falling bond prices. They’ll claim nations are being punished by bond traders who unfairly push bond yields too high by selling or short selling bonds.

(When bond prices go up, bond yields go down and vice versa.)

In reality, bond traders are just taking a position in the market. And don’t forget, for every seller, there’s a buyer.

What’s more, short-sellers provide a useful service to the market. They warn other investors of potential problems. Using Greece as an example again, in early 2010 commentators and investors pinned Greece’s debt problem on bond vigilantes.

At the time, Greek finance minister, George Papaconstantinou told a press conference:

“A number of people have been betting in certain ways [on a Greek default and debt restructuring]. All I can say is they will lose their shirts. I want to categorically restate that any notion of restructuring is off the table for the Greek government.”

He was right. Some short-term traders probably did lose their shirts.Business Insider noted at the time, “Greece’s ten year bond yield has collapsed a remarkable 47% to 6.6% from 12.4% (as bonds surged) just before Europe’s new bailout fund was announced…”

But the traders who kept short-selling Greek debt gained a whole new wardrobe. As the chart before shows it didn’t take long for yields to climb. And short sellers could have pocketed a 354% plus gain as Greek bond prices collapsed.

More Trouble Ahead

Could the same happen to Italy?

It’s possible. The consensus is Italy’s debt is too big to be bailed out… and it’s probably too big for a Greek-style restructuring.

That tells us you’re more likely to see something underhanded (a stab in the back for investors). But, as always, we’re not saying Italian bond yields will keep climbing in a straight line from here.

As with Greece, we’re sure European leaders will give investors plenty of false hope. Just make sure you don’t fall for the spin.

Because, if you only buy stocks because you think they look cheap, you’re taking a much bigger risk than investors who supplement their buying by selling and short selling stocks.

The market rallied recently because investors foolishly thought European politicians and bureaucrats could solve the problem. As we’ve said all along, the very involvement of politicians and bureaucrats is a sure sign the problem won’t be solved…

In fact, it’s only likely to get worse.


PS: Just for clarification, the interest rate or yield on a bond tends to go up as the price of the bond goes down. Which means as demand for a bond collapses, the interest rate paid by the bond issuer goes through the roof. And when the bond issuer is sitting in a sea of IOUs, that can get very unsustainable very, very quickly.

Monday, 14 November 2011

Don't care

Am I the only one who couldn't care less what the Prime Minister and the Minister of Rhyming Slang said to each other over their well orchestrated and very public cup of tea last Friday?

It seems so.

Friday, 11 November 2011

FRIDAY MORNING RAMBLE: A cup of tea and some lies down

In a lacklustre, blancmange campaign based on little more than partial promises, partial truths, partial privatisations, and will-he-won’t-he wetness about cups of tea or a lie (or two), it’s a struggle to find much worth reading about a campaign that’s doing everything to avoid the elephant in the room that is the promise of both Blue and Red Teams  to keep living beyond our means while bribing us with our own money.

So here in no particular order is just some of what I’ve read recently, or even not so recently, round the net—the stuff I thought you might enjoy too. Or at least appreciate:

  • “Political parties are trying to convince us there's a real choice for voters. But just how meaningful is this choice?..What should be apparent - but is never advertised - is just how much they agree on. An analysis of the policy and manifesto promises of the two major parties shows Labour and National are in virtual agreement on something like 99 per cent of the way society is run.”
    Left right rhetoric masks almost identical policies -  Bryce Edwards,  N Z   H E R A L D
  • “Well, if it’s frustrating to see major parties wrangle over spreadsheets it’s heartening to see someone try to unravel the narrative of each party’s campaign…”
    The story of this election – T H E   V I S I B L E   H A N D
    Fun with fiscal forecasting – T H E   V I S I B L E   H A N D
  • Raising benefits increase the rate of unmarried births, which increases dependence on welfare.
    Extending the IWTC to beneficiaries increases benefit payments. Evidence here:
    Raising benefits increases the rate of unmarried birth... – L I N D S A Y   M I T C H E L L
  • Bomber Bradbury wasn't exactly kind in his review of the LibertariaNZ's opening broadcast ad.
    So what?
    Get out of the way  - O F F S E T T I N G   B E H A V I O U R
  • There is now “credible proof” Iran is working on a nuclear bomb. We were all happy during both Gulf Wars that the Israelis had bombed Iraq’s nuclear reactor.  (Imagine Saddam with nukes? Even the primitive missiles he did fire would have had catastrophic effects.)
    So will we have reason to thank them again? Or will we instead face an Islamic supremacist with nukes, cheered on with commendable illogic from numb nuts like Jane Young?
     Time for a pre-emptive strike on Israel's itchy trigger – Jane Young, P U N D I T
    Are we paying attention to foreign threats? – Elan Journo,  V O I C E S    O F   R E A S O N
    Just-War Theory vs [Western] Self-Defence 
    -  Yaron Brook & Alex Epstein, T H E   J E R U S A L E M    C O N N E C T I O N
  • The EU’s problems stem from a destructive attempt by its leaders to save out-of-date institutions Bruno Waterfield on the EU crisis – S P I K E D   O N L I N E
  • Bryce Wilkinson takes the prior government to task for its decision to subsidize dodgy finance companies. “What was the justification for the failure to charge a fee commensurate with the anticipated losses? … There was none.” That New Zealand's Occupy-Wall-Street emulators haven't focused their attention on this debacle speaks to their economic illiteracy.
    Deposit guarantee redux – O F F S E T T I N G   B E H A V I O U R
  • Message to The Greens: Adding to the Spanish and Solyndra billion-dollar “Green Job’ debacles, yet another US Government-picked power company lies buried in the Green Graveyard, it’s resources wasted and its “green jobs” just another failed fantasy. So why would it be any different here?
    Another Government-Picked Power Company Buried in the Green Graveyard 
    – T H E   F O U N D R Y
  • I’ve said it many times before: I will take the Greens seriously when they bleat about water quality when they take Common Law methods for protecting water quality seriously
    Dams will damn our rivers – Russel Norman,  F R O G   B L O G , 2 0 1 1
    Dirty dairying and dodgy drafting -  N O T   P C , 2 0 0 8
  • Q: How do you eradicate possums? A: Give them to DoC to protect. Just like these snails.
    DoC staff 'upset' mishap killed rare snails - N Z H E R A L D

Central Banks around the world have been printing paper money since 1971.  But
although this money costs next to nothing to print (or juggle in the back of
computers) it is supplied at its full face value and interest is charged. This is
debt money and they will want it repaid at some stage.
This week Greece and Italy found out about the downside of
debt. Two Prime Ministers gone. Their replacements will fare no better.
This is no way to run the world.
We have more scientists alive today than have ever lived before but almost
none of them is thinking about a scientific basis for economics. If we understood
and taught what is true about economics rather than trying to explain away
the effects of paper money printing and applying Keynesian solutions, which is
just to print more paper money, we might have a chance of solving the problem.
But the trouble is that there is too much power and profit for the money
printers and they cannot allow the system to stop. After all if you could print
up unlimited money at will you might also find it hard to stop.
We must look after ourselves as best we can. The system can only be changed after
it has been completely broken. We must watch and wait while the big bust continues.”

               - Phil at NZ’s Foundation for Economic Growth

“Just reflecting that ACT began under two
ex-Labour MPs - Douglas and Prebble.
And ACT will probably end under two
ex-National MPs - Brash and Banks.”

                                     - Lindsay Mitchell, Reflecting on the story of ACT

  • I hate to be the bearer of good news just as the Occupy Wall Street movement is gathering steam, but protesters can stop worrying about rising inequality and go home. New evidence suggests that the super-rich got hit by the recession much harder than the rest of the 99 percent.
    Don’t Mind the Gap – R E A S O N
  • Fewer folk care enough about the election even to bother standing this year.
    Candidates locked in for election – N Z   H E R A L D
  • Sorry folks, the US is "not a Christian nation"
    -We are not a Christian nation -  D I S C O V E R   M A G A Z I N E 
  • Ronald Bailey: New data on global temperature trends sheds light on Climategate
    The End of Climategate? -  R E A S O N
  • #OccupyWallStreet protesters can stop worrying about rising inequality and go home
    Don’t mind the gap -  T H E   D A I L Y
  • Why economic inequality in a capitalist system is something good, not something to be condemned.
    In Praise of Capitalist Inequality – Paul Hsieh, W E   S T A N D   F I R M
  • Frank Furedi: churchmen love the Occupy movement; it's a blank slate for shallow moral gestures
    Why church officials worship these protesters –  S P I K E D
  • This 1941 essay from Rand is remarkable, but the mature Rand would change the wording, especially the word faith.
    Ayn Rand’s Open Letter To Occupiers and Statists -   T H E   V I N C E N T O N   P O S T
  • Great house rules by which to abide:
    House Rules -   T H E     A R C H I T E C T U R E   B L O G

“Man is a being with free will; therefore, each man is potentially
good or evil, and it's up to him and only him (through
his reasoning mind) to decide which he wants to be.”

                                - Ayn Rand 1946 ~Personal notes on The Strike [later Atlas Shrugged]

  • "Tired of random and suspicious quotes from Thomas Jefferson and others being used to prove every possible position? Me too. Here are some common bogus quotes and some tips on the use of historical quotes and how to spot fakes."
    The Curse of the Internet: Fake Historical Quotes 
    - A L E X A N D E R   M A R R I O T ‘ S   W I T  &   W I S D O M
  • Latino immigration to America has slowed to a trickle since 2008, but is this as good for America as conservatives would have you believe?
    Decreasing Immigration is Bad for America – M O T H E R   O F   E X I L E S
  • "Determinism is the doctrine behind the criticism commonly levied against innovators that "if not him, somebody else would have done it". How did Thomas Edison and James Watt respond to their critics?”
    Watt and Edison Contra Determinism – W I T   L A B

More to come.
Tune in later.

DOWN TO THE DOCTOR’S: Campaign update

_richardmcgrathYou can’t keep a good doctor down. Here’s Doc McGrath’s update from the campaign trail in the Wairarapa electorate, where he received 453 votes at the last election, Libertarianz Party leader Richard McGrath says he was delighted with the attendance and response from a sizeable crowd at the Royal Hotel in Featherston last night.

Campaign Report

After a 200 km drive directly from my job a Whanganui alcohol and drug clinic, I headed straight into a debate lasting  two-and-a-quarter hours last night before a eighty-strong crowd packing the main bar in the historic old Royal Hotel.

The format was pretty much that of the Backbenches TV show, with five candidates from ACT, Greens, Labour, Conservatives and Libertarianz having their own microphone and taking turns making their policies known to the good people of South Wairarapa. Sitting National MP John Hayes was not there. Instead, he was represented by a photograph on a mantlepiece above an open fire, and by the raspberries from disgruntled voters.

Each speaker had two minutes to introduce themself, then the adjudicator fired a series of questions at candidates, after which the forum was opened to questions from the floor.

We covered everything, from the economy to social issues and the environment. When the subject of anti-smacking laws was brought up, discussion became heated between the Labour and Conservative candidates. Ever the mediator, I stepped in to suggest that if the two protagonists did not settle down I would smack their bottoms.  Much laughter. Matter solved.

The Labour Party had loyal support from a group of people near the front who I can only describe as muppets, who applauded on cue to every noise their candidate made—even when he was just clearing his throat.  So make that unthinking muppets. (I think even Kermit the Frog would outpoint them on grey matter.) The rest of the crowd was a mixed bunch, with the usual earnest but misguided Greens voters,  serious but delusional conservatives, and the inevitable eccentric character who had to be led away after an obscure rant on a subject candidates found difficult if not impossible to understand.  

I hammered home again the irrationality of minimum wage laws, suggesting if they were such a good idea the Labour candidate would be pushing for $100 an hour.  Even the muppets wouldn’t go that far. 

I also said my party was flattered by the Maori and Labour Party's adoption of a tax-free income band for low wage earners, and received plaudits afterwards from a Labour supporter (clearly not a muppet) who hadn't realised this policy had originated from the Libertarianz Party.  (Yes, Virginia, like “One Law for All” and other sometime mainstream policies, it started first with us.)

There are further meetings for Wairarapa candidates next week on Sunday and Monday nights (Masterton), Tuesday (Martinborough) and Thursday (Carterton), in each of which voters will be offered election bribes from the twelve Nanny State political parties, or the chance to reclaim their freedom and rediscover prosperity from the one party that offers fresh hope at this election - Libertarianz.

Why do I do it? Because if I don’t, and if you don’t, then Nanny wins.  New Zealand is too good a place to let that happen.

Keep fighting!
Doc McGrath

Thursday, 10 November 2011

DOWN TO THE DOCTORS: “What will your party policies do to help the poor and underprivileged of NZ?”

_richardmcgrathYour weekly prescription of good sense from Libertarianz leader Dr Richard McGrath.

This week, around the hustings.

I’ve attended so many meetings and shaken so many hands recently I’ve prescribed myself a course of hand-cream and antibiotics, along with therapy to counter the insanity of all the state worshippers I’ve encountered.

But it’s not all bad. Take a recent meeting in Upper Hutt, when the first person that Labour candidate  Michael Bott attacked during the meeting was me! And he commented before we started that he had read a lot of our stuff. So as Mrs Marsh said on the Colgate TV ad: “it does get in”.

At least two of the other parties represented yesterday, including Labour, explicitly made mention of a tax free income band in their policies. If I recall correctly, we came up with that policy. Now the others are copying it. Great!

The Nats didn’t come, which went down poorly with the audience, a fairly left wing mob of about 50 people.

A heckler from the audience (who was the Greens candidate in Wairarapa in 2008), was told to shut up or leave by the chairman (who was the Alliance candidate in Wellington Central up against Bernard in 2008).

The Conservative Party was represented by a thoroughly nice guy, who I drove back to Masterton after the anti-ETS rally in Wgtn last year.

The Democrats for Social Credit were represented by an old timer who was wobbly on his feet and terrified me as I thought he was going to topple off the stage every time he got up to speak.

The Alliance were represented by a guy from Hawkes Bay who was fairly unimpressive and read off sheets printed off the Alliance website.

ACT’s speaker was Graeme Tulloch, a 75 year old man with fire in his belly who answered questions well.

There was a panel of three inquisitors, a guy from from Caritas (the Catholic welfare organization), a woman who provides lunches for kids in one of Masterton’s low decile schools, and a virulent poisonous nasty bitch from the Child Poverty Action Group.

The speeches + answering questions went on for two hours – quite a long meeting, and most of the audience hung around for the cup of tea at the end. Answering the question “What will your party policies do to help the poor and underprivileged of NZ?,” here’s what I said to them:

Welcome ladies and gentlemen.
My name is Richard McGrath, and I work as a doctor in general practice and in the field of addiction treatment.
I represent the Libertarianz Party, who believe that solutions to poverty need to take regard of the rights of everyone in society.
They need to reward endeavour and productivity, and they need to avoid eroding the moral fibre and self-esteem of welfare recipients.   
The key to addressing the problem of poverty is in making it easier for people to help themselves and others, and to give those who are truly disabled the security of an adequate income stream.  
The poor and underprivileged can be divided into 2 groups – those who can do something to help themselves, and those who are truly disabled and can never hope to discover self-sustaining sources of income.
The Libertarianz Party has policies that will assist both groups of people.
For those people capable of work, we advocate:
•       Abolishing minimum wage laws.
These laws stop the low-skilled from obtaining their first job, and threaten the livelihoods of marginally productive workers.
My party believes it better that a young man with time on his hands be earning $10 an hour in gainful employment, than $5 an hour playing on his X-Box on the unemployment benefit.
       Implementing a tax free band for the first $50k of income.
Currently government taxes from the first dollar, then gives low and middle income earners Working for Families tax credits. There is a cost to this double handling, which could be eliminated by not taxing low income earners in the first place.
•       Abolishing GST, a tax which hurts everyone including the poor.
For those people permanently incapable of work, Libertarianz Party policy is:
•       To fund the permanently incapacitated by way of private individualized annuities 
         funded from the interest on capital raised from the sale of state owned enterprises.
•       To encourage the young and able of today to think ahead and purchase disability,
         income protection and accident insurance;    join private welfare groups such as trade 
         unions, friendly societies or lodges;    or set aside sufficient savings so they are
         adequately covered in the event of permanent disability. Reward this sort of forward
         planning with tax credits.
The Libertarianz Party believes in a smaller less intrusive government, that would allow local communities and neighbourhoods to set up their own solutions to the problems of poverty, long term unemployment and disability; using their own money.
Eighty years of government-run welfare has failed the poor and underprivileged – my party has a better plan that is fair to everyone. 
Thank you.

Minto’s Forced Equality Would Destroy Ambition

In my spare time I’ve been looking at other party’s policies, such as they are. One that caught my eye was John Minto’s call for GST to be abolished.  I support him. But don’t just lift the GST on lentils and cumquats, as Phil Goff suggests as well - take it off all goods and services, and instantly make them 15% cheaper.

Minto is quite correct in calling for “dramatic, revolutionary change in economic policy” - but the change New Zealand needs is not the poverty and slavery of communism that he advocates, but the motivation and life-enhancing opportunities offered by free market capitalism.

imageI also back John Minto’s calls for a tax-free income band, but  the Mana Party are “wimps” for suggesting a figure of $27,000 whereas I hold that the first $50,000 of income should be exempt from molestation by the IRD.

The Mana Party’s backing of Labour’s $15 an hour minimum wage, fixing it at two-thirds of the average wage, is a cynical method of ensuring there will always be an underclass of jobless New Zealanders that the hard left can manipulate.

If minimum wage laws worked, then all the left-leaning political parties, including National, would be calling for $100 an hour as the bottom line. The fact is that minimum wage laws cause unemployment, particularly for the young and vulnerable who need jobs the most. That’s why Libertarianz wants such laws struck out.

The rest of the Mana Party tax policy is lifted straight from the Communist Manifesto – which I’m sure comprises Mr Minto’s bedtime reading.

Health Promises Highlight Ryall’s Contempt For Doctors

Tony Ryall’s election promise to make doctors provide around-the-clock medical care for all children under six - regardless of the urgency of the perceived problem and free of any surcharge - is bullying and hypocritical.

This promise was made without consulting those who would have to provide the service: GPs like myself and our staff.

imageThis is a blatant election bribe that treats doctors as chattel who can be ordered to provide services day and night, for no charge, at the whim and behest of the Minister.

This is the same Tony Ryall who once described the Clark regime’s management style as command-and-control. So now he’s running the show, how does Tony’s regime differ?

The reality is that the National Party government is no better than the one it replaced. It has equal contempt for general practitioners and their staff.

The Libertarianz Party would excise the State from the provision of health care services by abolishing subsidies, reducing taxes, and opening up orthodox practitioners to competition. We would allow more affordable options for people on limited budgets.

And, importantly, we would enforce the ban on human slavery which Mr Ryall has conveniently sidestepped with extravagant election promises that would impose further obligations on already-overworked GPs.

Labour/National Economic Policy is Insulting

In the face of the most severe economic crisis since the end of World War II, New Zealanders are looking to political leaders for direction—or at least for them to get out of the way. However all we are being offered is the same old tired formula of divide and bribe.

Labour/National and their various cling-on parties are practitioners of the worst kind of “trickle down” imaginable. All are addicted to the concept of central government sucking up as much money as possible and then trickling down on the rest of us.

Libertarianz recognizes however that economies are, in fact, organic. That they grow from the bottom up, through the actions of hard working folk acting in their own rational self interest—the very people Labour/National treat as milch cows.

New Zealanders have the boldness to get ahead in life, the wisdom to know it takes effort to do so, and the maturity to respect those who succeed. By contrast, our professional politicians seek to appeal to people’s worst instincts: to laziness, greed and envy. They regularly behave like overgrown toddlers themselves in Parliament, and apparently assume the rest of us to be similarly infantile.

It is time to stop looking for answers from this political “elite” who see every crisis as merely an opportunity to increase their own power base.

We need to get unproductive politicians and bureaucrats out of the way of productive workers and businesses. In Parliament, Libertarianz will support any legislative step, however small, towards reducing the tax and regulatory burdens on private enterprise.

imageTaxing Kiwis into a state of financial hardship and then drip feeding them back our own money in order to keep us dependant on the state is simple cruelty. At the very least, bribing us with our own damn money and then expecting us to be grateful for it is a massive insult.

A vote for Libertarianz is the best way for New Zealanders to send the message they refuse treated with such contempt any longer.  A vote for Libertarianz is a serious protest vote.

Libertarianz have released a video on the problems created by government bribery – available at http://youtu.be/xYPnpSTnEfE

Libertarianz Party Creates Unusual Political Broadcasts

imageOh, and in a move away from the usual brief adverts on main channels,  Libertarianz candidates are presenting a series of four half-hour shows starting this Thursday at 8pm on Stratos TV (Freeview channel 21 and Sky channel 89).

By creating full length programs and broadcasting on the less expensive Stratos TV, we hope to impart more information to potential supporters of our radical ideas.

Tonight, we present a special documentary on the Christchurch earthquake, appearing at 8pm on Stratos TV (Freeview channel 21 and Sky channel 89).

It shows the devastating effect of government bureaucracy following the earthquakes of 2010 and 2011, and argues for Libertarianz policy to make Christchurch a free enterprise zone.

Spread the word!

Radio Interview

I just finished an interview on Radio 531PI with morning host Yolande, who had looked at our website and was interested in our principles based around freedom!  I was given free rein to advertise Libz and spoke almost uninterrupted for 10 minutes.

The station is aimed at a Pacific Island audience, so I talked about low taxes and abolishing the minimum wage.

imageI said our party wouldn’t have to stand if National stuck to its stated values, which are largely along our lines.

I pointed out the arrogance of taxation – government thinking it knows better how to spend your money than you do.

I called politicians cold blooded reptiles who don’t mind sacrificing their children and grandchildren on top of a mountain of borrowed money.

I said electing governments has been like electing a school bully who will pick your pockets for the next 3 years.

I pointed out that taxing those on low incomes and giving some back as welfare payments is wasteful double handling, and a pernicious theft of people’s futures.

I said Labour would prefer young and low skilled people to be sitting at home playing X-Box for $5 an hour than out there in productive work earning $10 an hour. 

I got a word in re our website and directed listeners to it.

I thought it went bloody well. Yolande was courteous and complimentary and said she wants to interview me again during the campaign.

I genuinely think her curiosity has been tickled by what I had to say. I came on straight after Carmel Sepuloni who had been giving listeners the same old Big Govt diatribe, and the first thing I did after introductions was attack the way big government solutions had failed the people of NZ.

Good to be out there offering some semblance of sense in an election based more than most on evasion of basic economic realities.

See you next week!
Doc McGrath

Political sex poll

Jim Tucker’s journalism school is running a poll on which politician people would like to screw.

Which is kind of appropriate, since we spend so much being screwed by them.

Is any other country shooting themselves in the foot like we are? [updated]

Eric Crampton asks, for the third time in three years, “is any country other than New Zealand both facing a binding Kyoto cap, by which I mean one that can only be met by costly efforts, and planning on meeting its obligations by buying international credits?”

Answer: no.  It appears* we are the only country facing this kind of self-inflicted wound, and given our reliance on exports and our small size and distance from markets, the one that can least afford it.

So no wonder this Government plans to continue with it.

* * * *

* Eric: “It's possible that some other country is doing it; I just can't find any evidence that anybody is and can find evidence that some rather prominent ones aren't.”

From Bill Gates, to #OccupyWallStreet

A simple way to understand the anger of the #OccupyWallStreet crowd is not to look at what you think they might be saying, it’s to look at what they were taught. It explains virtually everything—their foot-stamping petulance, their flights from reality, their know-nothing certainty, their wishing that their wishing would “make it so.”

They are a perfect product of their classrooms, with everything that implies.

Take as an example the letter said to be by Bill Gates circulating by email a few years ago.

Bill Gates's Message on Life

For recent high school and college graduates, here is a list of 11 things they did not learn in school.

In his book, Bill Gates talks about how feel-good, politically-correct teachings created a full generation of kids with no concept of reality and how this concept set them up for failure in the real world.

RULE 1......Life is not fair. Get used to it.

RULE 2......The world won't care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself. This may come as a shock. Usually, when inflated
self-esteem meets reality, kids complain it's not fair. (See Rule No. 1.)

RULE 3......You will NOT make 40 thousand dollars a year right out of high school. You won't be a vice president with a car phone, until you earn both.

RULE 4......If you think your teacher is tough, wait till you get a boss. He doesn't have tenure.

RULE 5......Flipping burgers is not beneath your dignity. Your grandparents had a different word for burger flipping; they called it opportunity.

RULE 6......If you mess up, it's not your parents' fault, so don't whine about your mistakes, learn from them.  This is the flip side of "It's my life," and "You're not the boss of me," and other eloquent proclamations of your generation. When you turn 18, it's on your dime.

RULE 7......Before you were born, your parents weren't as boring as they are now. They got that way from paying your bills, cleaning your clothes and listening to you talk about how cool you are. So before you save the rain forest from the blood-sucking parasites of your parents' generation, try "delousing" the closet in your own room.

RULE 8......Your school may have done away with winners and losers, but life has not. In some schools they have abolished failing grades; they’ll tell you that effort is as important as results; they'll give you as many times as you want to get the right answer lest anyone’s feelings be hurt. This doesn't bear the slightest resemblance to ANYTHING in real life. (See Rule No. 1, Rule No. 2 and Rule No. 4)

RULE 9......Life is not divided into semesters, and you don't get summers off.  They expect you to show up every day. While we're at it, very few jobs are interesting in fostering your self-expression or helping you find yourself. Do that on your own time.

RULE 10.....Television is NOT real life. Your problems will not all be solved in one soundbite, nor in 30 minutes minus time for commercials. In real life people actually have to leave the coffee shop and go to jobs.

RULE 11.....Be nice to nerds. Chances are you'll end up working for one.

This neatly tells you what they were, and weren’t being taught by their “teachers.”  One could be forgiven that in boiling down the litany of complaints and manifestoes emanating from the #Occupy movements, these complaints are at their root: that the world is not how their teachers taught them it would be.

As I said, they are a perfect product of their classrooms.

Wednesday, 9 November 2011

Mark Steyn could not be more pessimistic about America’s future

Despite writing what some have called the ultimate dystopian novel describing America’s future —a future that many see coming to pass with virtually every new headline coming out of Washington—Ayn Rand was never pessimistic about America’s future:

If America is to be saved from destruction [she said]—specifically, from dictatorship—she will be saved by her sense of life.

She made that observation forty years ago.

Now Mark Steyn thinks that sense of life will not be enough. If it even still exists. Read his Case for Pessimism. It makes for sobering reading.

Why should that matter to us, down here in EnZed? Because Ronald Reagan was right: If freedom is lost in America there will be no place to escape to; America is the last stand on Earth.

Thomas Hobbes Occupies Wall Street


For centuries philosophers and anthropologists have been arguing about what the hypothetico-historical “State of Nature” might have looked like way back before the advent of civilisation: was it populated by the “noble savages” hypothesised by Rousseau? or by lives that, in Thomas Hobbes’ words, were “nasty, brutish and short”?

To what should be the delight of philosophers and anthropologists, accounts emerging from the #OccupyWallStreet protests suggests the State of Nature is re-emerging down at Zuccotti Park.  And it looks more Hobbesian than anything dreamed up by Rousseau.

Is that why the Occupiers are so gung ho about increasing the power of Leviathan?

Question for today: Anything more important?

So we’ve had the debate about Labour’s spreadsheets and how many times Phil Goff features on their billboards, and about John Key’s cats and who once hit him back in Primary School.

So the question for today is this: Do you think we might at some stage in the next seventeen days hear your masters talking about anything more fundamental? At all?  Or is this it.

Emissions Trading Scams

Australia’s PM Julia Gillard has just passed a carbon tax tax on its producers after promising pre-election she wouldn’t. New Zealand’s PM John Key introduced an Emissions Trading Scam after promising pre-election he wouldn’t do so until everybody else did. And they haven’t.

“Never let a good crisis go to waste.” That’s all the thinking that’s really going on here: i.e., never let the chance of a new revenue stream go to waste.

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.