Tuesday, 22 November 2011

QUOTE OF THE DAY: Does a businessman need to understand economics?

_Quote4Qua businessman, a man does not need to know economics. If he does know it,
his knowledge does not affect his strictly business decisions, such as whether or not to
raise his price when his costs increase. But each businessman does need to understand
economics if he wants to defend his business against those who want to seize it or shut
it down or confiscate his profits.
A businessman does not need to understand economics in order to run his business
successfully—just in order to keep it.

                               - M. Northrop Buechner, from the Preface to Objective Economics: How Ayn Rand’s
                                                                                  Philosophy Changes Everything About Economics

So, what about the electoral system then?

This Saturday you have three votes.

You can vote for the pack of bastards you prefer, which bugger you want in your electorate, and which system should be used to decide which buggers are finally elected.

So unless you decision is to stay home, you have three different decisions to make.

Liberty Scott has already done the hard work for you on the first two questions. But what about the third?

Should we keep MMP or abandon it? If it’s abandoned, what should replace it?

Liberty Scott is going to vote to change the system. But what to?

Read and find out.

DOWN TO THE DOCTOR’S: Vote to get the buggers off your back

_McGrath001Libz leader Dr Richard McGrath has a message to anyone with liberty in their brain, hope in their heart and any fire at all in their belly.

In late 2008 Helen Clark passed on the keys to her ninth floor Beehive office and the strings to Nanny State's apron to her successor, “smiling assassin” John Key.

Since then, the current Prime Minister has recycled most of Clark's collectivist policies, coating them with ever-thicker layers of blandness and a finishing coat of blancmange. His Labour counterparts and the mainstream media however would have us believe there has been radical change of direction, that the National Socialist Party represents the free market running rampant.

Like hell it does.

Over the past month, it is the Libertarianz Party who have taken the present administration to task for abandoning its stated values. It is the Libertarianz Party who has pointed out John Key is just Helen Clark in drag. It is the Libertarianz Party who have marketed policies  the antithesis of John Key's big government agenda. It is the Libertarianz Party who have pointed out that “Brand Key” and its supporters are empty vessels. It is the Libertarianz Party who have identified that this government is doing to Christchurch what the earthquake did not, and to the economy what even Michael Cullen would not.

Unlike the representatives of every other party, our candidates have argued consistently for freedom in economics and in our private lives—that government must be kept out of the board room and out of the bedroom.

We have taken unorthodox stances on issues such as asset sales, share giveaways, carbon taxes, income taxes, minimum wage laws and welfare reform. Always, we have ensured that principle took precedence over pragmatism.

A few days remain until the polling booths open and the voters speak once again. Whether our party does well or remains mired below the margin of error is entirely up to you voters. There is little doubt however that even if libertarian MPS are not voted into parliament, libertarian ideas are slowly diffusing into the public consciousness.

imageWhen Frederic Bastiat is quoted in a NZ First MP's maiden speech (Bill Gudgeon, 2002) you realise that libertarian thought can emanate from the most unlikely of places.

When professional trougher Charles Chauvel calls fellow trougher Peter Dunne "Ayn Rand with hair," people ask each other who Ayn Rand was.

There is some satisfaction in knowing that even if the Libertarianz Party is not represented in the next parliament, our ideas are permeating into the national consciousness, one (usually) enlightened soul at a time.

Those of you reading this who are already Libertarianz members, thank you for supporting the party of freedom, responsibility and tolerance with your membership. In the week leading up to election day, make our name known to as many voters as you can, and make sure you turn up on Saturday yourself!

To those of you not yet in that enlightened band, I urge you to think carefully on Saturday who actually runs the country,* and then vote to get politicians off their backs and out of their pockets … and yours. To think about the defining characteristic of government, force, and consider whether any of the creatures on offer in your electorate deserve your mandate to wield it. To think about who really owns your life**, and then vote to give substance to that knowledge.

Because if all you vote for is more of the same—more spending, more debts, more nannying, from either Blue Team or Read—then you really do have no justification for complaining. Because it’s clear that you’re happy to give ownership of your life away.

And why would you want to do that?

Best wishes
Richard McGrath - Libertarianz Party leader

*   Q: Who runs the country?
     A: You do, of course. Each of you runs your part of it—or as much of it as you’re allowed to.

** Q: Who owns your life?
      A: It depends …


Give ‘em away

Privatise New Zealand


Gone by lunchtime

Monday, 21 November 2011

Who to vote for this election

I have a few minor quibbles with some of his choices—and many of his choices will surely surprise you as much as they did me—but if you want to know who to vote for and who to ignore in your electorate this Saturday, then Liberty Scott's patented New Zealand election 2011 electorate by electorate voting guide is essential reading.

And no, it’s hardly part-led or partisan, as this party breakdown proves:

26 ACT candidates
11 from Labour
9 from National
8 Libertarianz candidates
8 from Aotearoa Legalise Cannabis Party
2 Independent candidates, and
1 from the Maori Party

In addition, there are 4 Abstentions where all the alternatives are just too disgusting to contemplate.  Which is currently my position in my own electorate of Epsom.

PS: I’ll give you my own,shorter voting guide later in the week. Who to vote for, and who to vote against.  And who to be so disgusted by that any action against, anything at all, should be contemplated.

Leaders debate ‘Die Wurm’


As you’ve possibly already heard, if you’re planning on giving yourself nausea tonight by watching TweedleDum and TweedleDummer pretend to slug it tonight out over their minute differences in policy on TV3’s sanitised “debate,” then you’ll find that downloading your own “worm” in either Android or iPhone form will allow you to add to the pretence debate by making your own contribution to the rise and fall of the onscreen “worm.”

Which means that every time either Smile-and-Wave or Smile-and-Cringe says something you can agree with, you can give them a loud online cheer.

Which really means you can set your own worm to “disapprove” for the whole evening, and then head off to do something much more productive with your night than watching these morons pretend they have anything fundamental about which they disagree.

Here below is ‘Die Wurm’* I’d prefer them both to meet tonight. Instead, they’ll face John Campbell…


* * * * *

* As every Wagner lover could tell you, ‘Die Wurm’ is German for dragon.

Shelf Life for Dummies

I’m pinching this idea from Craig Ranapia, who pinched it from the “Shelf Life” feature from The Spectator’s Book Blog.

1) What are you reading at the moment?

Umberto Eco’s new one The Prague Cemetery, and Detlev Schlicter’s Paper Money Collapse: The Folly of Elastic Money and the Coming Monetary Meltdown.  (Come on, everyone reads at least two books at once, don’t they?)
I’m not finding Eco’s as enjoyable as his other novels—so far it seems like a rehash of his much better Foucault’s Pendulum but without the drama, humour or sympathetic characters, which leaves me disappointed. Detlev’s book is fantastic in explaining the dangers of central banking and the modern system of paper money creation—why it is both iniquitous and leads inevitably to collapse. Well written, it fills a number of holes in the money creation story.

2) As a child, what did you read under the covers?

I did some of my best childhood reading under the covers. I recall reading the likes of E.W. Hildick’s Jim Starling series, Bertrand Brinley’s The Mad Scientists’ Club and even C.S. Lewis’s Narnia series under the bed clothes, and have turned out none the worse for it. (Quiet at the back!) Thank Galt for good torch batteries. But curious that parents want you to read, then complain enough when you do that you have to hide under the covers to do it.

3) Has a book ever made you cry, and if so which one?

No (although several scenes from Les Miserables always comes close), but a few carefully placed books did on a couple of occasions save me from crying by being placed down my pants when the cane was being applied. See, you should always have books with you.

4) You are about to be put into solitary confinement for a year and allowed to take three books. What would you choose?

Hmm, you’d want something that could be read and re-read and studies and thought about wouldn’t you.  So how about Gibbon’s Decline & Fall of the Roman Empire, Victor Hugo’s Les Miserables, and Blackstone’s Commentaries on the Laws of England. Between them that should offer plenty of food for thought. (Mind you, if I were only given one choice it would have to be Arthur Koestler’s Darkness At Noon. Because if I was given only one choice, I would undoubtedly be in a position to learn much from the fate of Koestler’s protagonist.)

5) Which literary character would you most like to sleep with?

Now there’s a question. How many strong, intelligent, sexy women are there in literature? Not many.
But I confess I wouldn’t push Robert Heinlein’s girl Friday out of bed for leaving crumbs. Or Dagny. (And if The Avengers could be reclassified as literature…)

6) If you could write a self-help book, what would you call it?

How to Write a Self-Help Book Without Sounding Like an Arsehole. And if I could pull that off, then maybe I’d start on Things Your Teachers Never Taught You (But Should Have), and Did Teach You (But Shouldn’t Have). Because that’s an important one.
But it would be very, very long.

7) Which book, which play, and which poem would you make compulsory reading in high school English classes?

Not being a fan of compulsion, I’d prefer to make them “highly recommended.” But these would be my choices:

  • The Fountainhead, by Ayn Rand. Offers the crucial lesson to teenagers that if living second-hand (by peer pressure) doesn’t kill you outright immediately, it will certainly kill your soul eventually. (Edward Cline’s Sparrowhawk series would be a close second—an inspiring series of stories about history’s most momentous, inspired and beneficent revolution ever, giving the sort of inspiration that can fire a whole life, and the demonstration that it is ideas that move the world.)
  • The Winslow Boy, by Terence Rattigan. Demonstrates the craft of good theatre, and the importance of standing on principle—how when you fight for a better world, you live in that world today.  (Ibsen’s An Enemy of the People would be a close second. It’s all about principle.)
  • If, by Rudyard Kipling. Because if youngsters discover they can keep their heads while all around them are losing theirs, why then they will create everything there is on earth that’s worth having. (Robert Frost’s Two Tramps in Mud Time would be a close second, with good wisdom on uniting vocation and avocation.)

8) Which party from literature would you most like to have attended?

Well if it’s a fictional party, then one of Hunter S. Thompson’s bashes might be worth the notional damage. If you could remember it.

9) What would you title your memoirs?

Mind Your Own Business.

They’d be very short.

10) If you were an actor, which literary character do you dream of playing?

Francisco d’Anconia. And I’d do a far better job than the slob in the current film version of Atlas Shrugged. But then, who couldn’t?

11) What book would you give to a lover?

Atlas Shrugged. And I’d tell them they’d be examined on it in four weeks time. (Yes, I’m kidding. I’d give them a full six weeks. Smile )
I do confess that being given Shakespeare’s Love Sonnets by a lover was quite a buzz, however, so perhaps I would return the favour.

12) Spying Mein Kampf or Dan Brown on someone’s bookshelf can spell havoc for a friendship. What’s your literary deal breaker?

What wouldn’t be good would be Someone with no bookshelves at all in the house, but shelves full of movies instead: which usually means a house full of crap and a head full of mush. But you can usually spot that long before visiting their home.
But if they did have shelves and they were full of crystal healing, homeopathy and “the facts” about how the Jews and the Masons brought down the Twin Towers, that would see me heading for the door quick smart.

QUOTE OF THE DAY: On cutting taxes

_QuoteWhen I say cut income taxes I don't mean fiddle with the tax code, I
mean abolish the income tax and the IRS and replace them with nothing.

                        - Ron Paul

Saturday, 19 November 2011

New Zealand’s spending binge

Guest post by Luke Malpass of the Center for Independent Studies

Most of New Zealand’s general election campaign is (or was) dominated by squabbling over the Crown selling a minority stake in four state-owned assets while ignoring serious issues such as the massive and unsustainable increase in government spending in the past decade.

From 2000 to 2010, government went on an unprecedented spending binge. Core Crown expenditure doubled to $70.5 billion, a real increase of 57%. Government’s core spending leapt from 29% of the economy to 35%, while its overall share of the economy jumped to 45% (actually 49.9% of GDP this year because of the Christchurch earthquake).

A lot of this extra cash went into substantially increasing the size of the big three: health, education and welfare/social security. Other costly additions included Kiwisaver, Working for Families, and a larger public sector.

But what did taxpayers get for all this massive spending?

Not much, particularly in the key indicators of health, education and welfare/social security. Overall benefit rolls have not changed greatly except for a substantial transfer of people from short- to long-term benefit rolls. Educational achievement has remained steady, and while elective surgery has improved in the past couple of years, hospital productivity remains stubbornly low and health indicators have not improved. Moreover, as a proxy for the overall health of society – the very thing that social spending is supposed to improve – crime rates have basically plateaued.

For such a massive increase, New Zealand is not a happier, wealthier or healthier place.

The Key government is facing the same problem as the Cameron government in Britain. Both followed Labour governments that had spent the proceeds of prosperity, and are facing hefty deficits into a future of far less certainty.

However, in Britain, as in New Zealand, neither government seems prepared to grasp the nettle and admit to the substantial problems, some of which have been created by massive and irresponsible increases in government spending.

It would be good to see that discussed on the campaign trail.

Instead of what was talked about over a cup of cold tea.

Luke Malpass is a Policy Analyst with the New Zealand policy unit at The Centre for Independent Studies. His new report, The Decade-long Binge: How Government Squandered Ten Years of Economic Prosperity, was released yesterday.

Friday, 18 November 2011

Temptation is always too much for cops [updated]

Former head of Scotland Yard’s Drug Squad, Eddie Ellison, used to tell new recruits at every induction to look at their colleagues either side of themselves.  "If both of them aren't corrupt in two years,” he'd say, “then you will be."   That was the expected extent of corruption in police Drug Squads, Ellison explained -- the result of a collision between low-paid law enforcement and huge amounts of illicit money. 

The money is the result of the War on Drugs. The corruption of the police is just another example of how the War destroys everything it touches

So it's no surprise to hear that two policemen were part of the group arrested yesterday for running a syndicate said to be the country’s largest supplier of the drug Ecstasy.  No surprise, because however much an erstwhile crime fighter is being paid, it's always far, far less than the amount of money washing around as the result of the War on Drugs.

That's just one reason that law enforcement officers like Ellison are now part of Law Enforcement Against Prohibition.

And ironic that while local police are crowing about this drug bust (which simply opens the market up to this group’s competitors to grab the profits from the much higher prices they can now demand) Eddie Ellison’s colleagues in London are calling for Ecstasy to be downgraded to just being a Class B drug, and the whole War on Drugs to wind down. In fact,

Metropolitan Police Commander Brian Paddick told the MPs that arresting people for possessing ecstasy was a "waste of valuable police resources."

Given his views, one wonders what Commander Paddick would think then about the recent use of New Zealand’s valuable police resources?

Here's Heaven 17.

QUOTE OF THE DAY: Perigo on the media

"Freedom" is too abstract a concept for the retards who occupy positions once held
by journalists. They think it means the right to tape conversations without the
consent of the taped, and the right to spew their inane witterings about nothing ad
Overarchingly they think it means the right to help yourself to the fruits of others'
labour.  Thus the resurgence of socialism and its endless promotion in the media. Key
is popular not because he's anti-socialist (he isn't) but because he's "cool"—i.e. he
speaks as the retard quackers speak, literally, mangling vowels and consonants—and
with the arrested inflections of a five-year-old—and doesn't frighten the morons.

                                        - Lindsay Perigo, "Freedom" and the media

How to shoot yourself in the foot [updated]

Back in April,  I said then what everyone from Chris Trotter to Lindsay Perigo are essentially saying now, i.e.,  that whoever runs in ACT’s anchor seat runs the party, that you can’t credibly present yourself as a liberal fiscally responsible party when you have a big-spending bigot running in your anchor seat, and that as a consequence Brash’s clinical take over of the ACT party

has been poisoned at birth by Don Brash’s bizarre insistence that Minister-of-Rhyming-Slang John Banks be given the post of Act’s anchor in Epsom.

That there was any way anyone thought things might be different, that somehow Banks’s involvement would turn out any other way than it has, just really beggars belief.

UPDATE: Knutz suggests the shot wasn’t through the foot …


Thursday, 17 November 2011

DOWN TO THE DOCTOR’S: Campaign Trail Report

_McGrath001You can’t keep a good doctor down. Here’s another update from the campaign trail in Doc McGrath’s Wairarapa electorate, where he received 453 votes at the last election.

The Wairarapa election race is “hotting up' as some would say, with 3 candidate meetings on consecutive nights this week.

On Sunday, all six contenders faced off at the Masterton Community Church before a relaxed and courteous forty-strong crowd (yes, courteous!); Monday night was a Greypower-organised encounter in the Masterton Town Hall; Tuesday saw the whole electoral caravan head up to Martinborough, where being wine country we at least had plenty to slake our thirst.

Election meetings in town halls are sparsely attended these days, and I predict next time around most meetings will be held in pubs. As I can attest from the meeting last week in Featherston (and as anyone who has watched Backbenches on TV will tell you) pub meetings are raucous, relaxed (once you've had a beer or two) and a lot of fun. So no wonder they attract a decent sized mobs of spectators—and hecklers. It’s like old-style campaigning on the stump.
Monday night saw us grilled before an audience of about sixty. Former Dompost editor Karl du Fresne sat in the back row taking notes, but sadly he bolted as soon as we finished the meeting.  The Labour Party Muppet Corps were once again in attendance--with a fair share of patsy questions for their candidate—so perhaps the prospect of rubbing shoulders with the muppets during the after-match cup of tea didn't appeal to Karl.
LiberaceMcGrathTuesday night in Martinborough was more sparsely attended, and we lacked local resident Deborah Coddington reporting for the NZ Herald as she did in 2008.  Unfortunately the rather frail looking chairman introduced me as hailing from the Liberace Party! I responded by asking if anyone had a piano I could use. 

Mind you, maybe he was on to something? Liberace was enormously popular with a certain type of punter.
Casting those thoughts aside, I used my allotted time to point out that there were three categories of party on show: the Big Government parties of National, Labour and the Greens; the Wanna-Be reformers of ACT and the Conservatives; and the real reformers - Libertarianz.

To loud applause, I described Epsom candidate John Banks as a bigot, a bully and a millstone around ACT's neck. And John Key’s.

The Conservatives, I noted, seem to want to have it both ways - angling for the Christian vote while not being a Christian political party as such. I challenged local candidate (and best speaker of the evening) Brent Reid on this, and pointed out their policies were still work in progress with less than two weeks before election day.
Speaking on National’s abject inability to spend within their means, I got a promise  in front of the audience (for what it's worth)that National MP John Hayes would resign if New Zealand’s books did not return to surplus by 2015 as his party keeps promising. I reminded the audience that Phil Goff's Greek calculator really belongs to Bill English, and that Bill should cut up his Bank of Athens credit card - the one he flogs to the tune of $80 for every man, woman and child in NZ every week - the profligate spending that the Dipton Double Dipper reckons will result in rampant prosperity within four years.

I'll believe that when I see it. And I bet John Hayes retires from politics in 2014, so he won't have to resign in 2015 when BlueLabour's policies of borrow and spend have their inevitable destructive effect on the economy.
I was reacquainted with a young man in the audience at the last two meetings who I think has a future in local and national politics, with all that implies: Kieran McAnulty from the Labour Party. Still only in his mid 20s, it's only a matter of time before he is offered as a candidate for the Reds. It will be an interesting prospect if we end up crossing swords in the future, as he was a patient of mine in his younger days before he left Wairarapa for university studies.
imageAnd I have to thank Labour candidate Michael Bott for rescuing me from a Rick Perry moment, as I was relating what branches of government would survive a Libertarianz open season on bureaucrats. I had mentioned the Defence Ministry, but do you think I could remember the other two? After a second's pause, Michael chipped in with "Police." I added "Justice," and noted that at least Labour would leave all three alive (though the Clark government nearly starved the Defence Force to death).
At other meetings I've rattled off the three legitimate branches of government in a flash. But funny things can happen when you're at the podium with all eyes fixed on you. Readers should try it some time!
I will miss the final candidate meeting for the week on Thursday, at the RSA in Carterton, to attend the annual Porritt Lecture at Whanganui Hospital instead. A muppet-free evening will make a nice change.
So that’s just my news of the week, readers.  Other Libertarianz candidates are tearing new exhaust holes in the opposition candidates at evening meetings up and down the country, while carrying on their regular paying work during the day. Hopefully this will be reflected in the party vote in nine days time.

But what's more important is that our message of small government is getting out there, our rivals are listening, and they respect us for our principled views--even if they rarely agree that freedom is something to be truly valued; even if they posit (as one candidate did) the bizarre view that a bit of slavery via the income tax system, like a little bit of sewage in the town water supply, is somehow acceptable.
To the other Libz candidates out there: Keep it up guys, and as one of our stalwarts in the 'Naki would say, rev shit out of the bastards!
Once more into the breach, dear friends!
See you next week.
Doc McGrath

QUOTE OF THE DAY: On voting National #votenz

“If you're happy and you know it, tick National.  If you don't like change and you
thoroughly approve of the
confiscation of private property and the grotesque
mismanagement of Christchurch
since the earthquake, then tick National. 
Frankly if you claim to be pro-business, pro-property rights and small government
and you vote National you're either a fucking hypocrite or a fool.”

                         - Liberty Scott reviewing the parties in the 2011 NZ election

Wednesday, 16 November 2011

Yes, we do have a class structure in NZ…

… as demonstrated in this two-storey outhouse.


QUOTE OF THE DAY: Nobel Prize winner on minimum wage increases [updated]

_Quote4The inverse relationship between quantity demanded and price is the core
proposition in economic science, which embodies the presupposition that human
choice behavior is sufficiently rational to allow predictions to be made. Just as
no physicist would claim that "water runs uphill," no self-respecting economist
would claim that increases in the minimum wage increase employment.
Such a claim, if seriously advanced, becomes equivalent to a denial that there is
even minimal scientific content in economics, and that, in consequence, economists
can do nothing but write as advocates for ideological interests. Fortunately, only a
handful of economists are willing to throw over the teaching of two centuries; we
have not yet become a bevy of camp-following whores.”

                          - Nobel Prize winner James Buchanan

Who knew he had integrity?

STUFF: Prime Minister John Key has refused to answer reporter’s questions about the ‘tea tapes’ and stormed out of a press conference in Wellington…

A shame he didn’t do that five days ago when this nonsense first came up.

Says Farrar:

it would be nice if the media actually [asked questions] on policies and how France is about to get downgraded due to its history of deficits and debt.

Yes, it would.

But did he say France?  What about us, David?

Enough hyperbole!

Enough hyperbole! Here’s Gene Callahan on the eviction from Wall Street’s Zuccotti Park last night of the #OccupyWallStreet mob:

Should the protesters have been evicted? I don't know. Did the police sometimes use too much force? Most likely. But is evicting the protesters a "Gestapo" tactic? Only in the most fevered of imaginations. These people were continuously breaking the law for two months. The place was filthy, the protesters were disruptive to neighbors and small businesses in the area, cabs could not pass through lower Manhattan, and so on. After two months of law-breaking, the police came and told them to leave. Only if they refused were they arrested.
That is one really restrained "Gestapo"!

To which I can only add that the protestors were complaining last night about the rights in “their” property being abused, while for the last two months their occupation has taken away the rights of the park owners.

Whatever the veracity of their ideas < cough > < cough >, their consistency is admirable.

“Best practice” = the best excuse for mediocrity

The Dilbert cartoon series is at the bottom end of mediocre. But, very occasionally, it strikes gold:


[HT Julian D]

It inspired me to repost my popular piece on the practice of so called “best practice”:

“Best practice” is bad practice

I DON’T KNOW ABOUT YOU, but I’ve grown heartily sick at the number times I've encountered wankers waffling on about "the importance" of following something called "best practice"—a practice by which everyone in a profession or industry is encouraged to copy the practices of those whom the wankers deem to be “best.”

It’s not just bad grammar, it’s bad for business.

It is, of course, simply a recipe for encouraging mediocrity and box-ticking, discouraging entrepreneurial experimentation and innovation.  For banishing competition and difference. To substitute conformity for innovation, and “conventional wisdom” for independent thought. To establish an establishment.

Until recently, wankers like this were a danger only to themselves and to know-nothings who paid for their advice and could be safely ignored. (Wankers like this always charge for their advice--and the more worthless it is, the more they charge. As Greek philosopher Thales was supposed to have observed around 2,500 years ago, the most difficult thing in the world is to know oneself; the easiest is to give advice to others. The wankers always charge the most for the least.)

But with the government increasingly trying to put every professional's head into one noose--and with the grey ooze of bureaucracy increasingly covering every part of the country, ignoring this stupidity is becoming increasingly difficult. With the onset of compulsory occupational licensing for everyone from drainlayers to financial advisers, pretty soon we will see the elevation of “conventional wisdom” into law, to be ignored only at the risk of expulsion from one’s chosen profession.

“Best practice” is a recipe for the calcification of industry, and the banishment of the very entrepreneurial experimentation that drives production and technology improvements.

JUST IMAGINE IF HENRY FORD had followed these now widespread exhortations to place the practices of others over your own independent judgement. Henry Ford found the automobile a rich man’s toy, and turned it into a possession of everyman. He didn’t do that by following “best practice.” He did it by improving the quality of automobile while improving everything about their production. And he did that by continuously introducing new improvements and reducing costs, even as his rivals began emulating his innovations.

The higher profits, naturally, went to Henry. To the innovator. And the benefits went to everyman. But at no stage could Henry sit back on his haunches and simply do what he had always done. As George Reisman outlines, what drives the new levels of achievement so essential to furthering our lives is not following “best practice” but pursuing bigger profits.

_QuoteWhat was good enough to once make a high rate of profit, ceases to be good enough as soon as enough others are able to do the same thing. In order to go on earning an above-average rate of profit,one must continue to stay ahead of the competition.  By the same token, any business that stands pat is necessarily finished in a free economy, no matter its past successes.
    For the technological advances of any given time are further and further surpassed as time goes on. Think how absurd it would be in virtually any industry to try to make money today by producing with the most advanced, most profitable techniques of 1900, 1940, or even 1980 [or 2000], and not bothering to adapt to the changes that have happened since then [and take them even further]. [Capitalism, pg. 176]

The advocates of “best practice” completely discount the importance of entrepreneurial activity as a driver of excellence—mostly because they don’t understand its importance as the primary driver of all economic activity.

So too do they underestimate the power of profits.

_QuoteIt cannot be stressed too strongly that under the freedom of competition, innovations must be adopted not only to make exceptional profits, but to be able to make any profits whatever. They must be adopted merely to remain in business at all.  This is true because sooner or later, as the result of the freedom of competition, virtually all cost cuts are translated into price cuts, and whoever does not produce with the lowest [possible] methods cannot cover his costs. [Capitalism, pg, 177]

Every producer is always looking for an edge—a means whereby to distinguish themselves from their competitors. Copying them isn’t good enough. What is needed is to beat them.

The constant rule that confronts every businessman every day, in short, is “innovate or die”—just one reason unleashing  entrepreneurs is so important.

But the advocates of “best practice” are down on innovation. They would like instead to substitute  substitute conformity.  And they’re very much down on entrepreneurs.  They would instead much prefer to deal with box-tickers—partly because the box-tickers are more likely to ask for their advice.

NOW ODDLY ENOUGH, I WAS thinking thoughts like this over the summer when I came across an astonishing article in an unlikely source. I was reading a copy of NZ Education Review when I came across an article by Professor Stephen Cummings from Victoria University of Wellington arguing that

_Quotethere’s a move away from copying best practice toward seeing each organisation as a particular and unique collection of capabilities to be developed. You can’t be a leader by following “best practice.”’

Too right.

You can read Professor Cummings’s article here: Facts and fads affect strategic management.

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