Tuesday, 31 January 2012

The Governor resigns. Not before time. [Updated]

_BollardIt was no surprise that news of Alan Bollard’s forthcoming resignation from the job of Reserve Bank Governor was followed almost immediately this morning by calls to “shake up the monetary policy.”

Directly out of the blocks before the starter’s gun was even trousered was Ganesh Nana from BERL, never backwards in coming forwards when it comes to being proved an idiot, who opined that the new governor “needed to be ‘actively involved'’ in all avenues of economic policy setting”—in other words, not just focussing on interests rates as a means by which to attempt to control inflation, Bollard’s replacement should be empowered to pull every lever he can find in the pursuit of every policy objective he (or Mr Nana) might think of.

This was bad enough. What was worse, however, was to hear the response of former Reserve Bank Governor Don Brash to this rank stupidity.  Not what he said about how no foreigners need apply for the forthcoming job.  Sadly, that sort of provincialism is now par for the course in this pathetic authoritarian backwater. (Just ask the receivers of the Crafar farms.)  No, it was how Brash had the boldness to say that monetary policy, when focussed only on” keeping inflation under control” by manipulating interest rates, has “worked very well.”

“Worked very well”?

Yeah right.

'Here we sit in 2012, not half-a-dozen years since an orgy of malinvestment and a world’s record housing bubble was inflated in every developed country by the policies of their central banks—the popping of which in large part caused the depression which we are still enduring—and we have a former central banker telling us that the policy that played a leading part in this disaster (a policy that, in the name of a non-existent price stability, spatchcocks together an unstable mix of rampant monetary inflation with a stuffed-shirt bureaucrat dictating interest rates) has “worked very well.”

What a crock.

That a stuffed-shirt bureaucrat is unable even to do this job well, let alone what Messrs Nana, Hickey, Morgan et al would like them to, should be apparent just from the record. But if you want to see just how far from “on top of things” these central bankers are, , just how far from being “experts” these these desiccated economic dictators are, just read the now-released 2006 transcripts of the US Federal Reserve Open Market Committee, i.e, the shysters who “oversee” the economy. These morons don’t have a clue what they’re doing. They really don’t. It’s just laughable. Page after page of “what bubble?” “aren’t we great!” and “can I get the same retirement plan as Alan.”

Or read Alan Bollard’s own book Crisis, which reveals him and his so-called “experts” permanently engaged in a game of “What the Fuck is Going On Out There?!” If there was one “expert” whose record was exploded by the global financial collapse it was surely Alan Greenspan. And if there was a chook with its head cut off during the global financial crisis, it was Alan Bollard.

The point is not that we need better experts in charge. The point is that the people in this job don’t lead the markets at all. Despite their now-exploded claims to omniscience, they just dictate to markets what they will pay for money while staying inside playing catch-up. As I’ve been at pains to point out here at NOT PC over recent years, it is their attempts to lead the market however that caused and causes such calamities as we are now enduring—and will continue to endure as long as the alleged experts continue to insists that things are “working well” [Brash], or that central-bank-based solutions to recovery can be found and acted on [Bernanke].

Not true. Not possible. As The Privateer says in his latest newsletter [hat tip Louis Boulanger],

“Before even a hint of a genuine recovery can take place, there has to be recognition of what it is that the financial world must recover from. What the financial world must recover from is a system whose vital components - money, prices and interest rates - are all controlled by edict and not by the voluntary interaction of people exchanging goods and services in the marketplace.”

I’m all for “changing the role of the Reserve Bank governor. I’m all for “shaking up the policy settings” of an economic dictator who has no place in a free market.

But what I’d like to do is give him less work, not more.  Radically less work.

And I wouldn’t even mind if it was a foreigner who was paid not to do it.

UPDATE: Libz Propose Winding Down Reserve Bank

The Libertarianz Party is asking John Key to consider postponing and possibly cancelling any replacement for retiring Reserve Bank Governor Alan Bollard, ...

Those programmers!

Those programmers! Always yammering. Always chattering.

Here’s the sort of shit those programmers area always saying. Watch until the end.

[Hat tip Geek Press]


No, apparently it’s not just me who’s wondering.

While I’ve been recuperating over the last week, a man has been thrown in jail, his property seized, his bank accounts frozen, and his business shut down—yet no evidence has been filed in a New Zealand court to assert, let alone prove, his guilt.

It seems too that up to 76  NZ police officers were involved in the raids on Mr DotCom’s home and business, “working with four FBI officers and backed by the Armed Offender’s Squad.”

What on earth is going on?

What New Zealand law(s) allows foreign officers of the law (e.g FBI) to operate within our borders like this?

What New Zealand law(s) and/or international treaties allows for an arrest warrant to be issued without any evidence against the accused even being presented to a New Zealand judge?

I’m no fan of copyright theft, of which Mr Kim DotCom and his MegaUpload site is accused, but there was a time when justice demanded that evidence be adduced before incarceration, and guilt be proved before property is seized, businesses are shut down and livelihoods destroyed.

What on earth has happened to our justice system?

I think we should be told.

[Hat tip Willy S.]

Google Ads

I’ve just got rid of Google Ads on this blog. 

The amount I was earning was worthwhile, but I got sick of advertising things I wouldn’t personally recommend.

Seeing Google Ads pushing Gareth Bloody Morgan’s bogus “investment” vehicle this morning was the last straw.  I wouldn’t just not recommend putting your money with him, I would personally recommend you didn’t—not if you wanted to get it all back.

So now I have no ads. Perhaps for the time being, or perhaps until someone makes me an offer.

What have you got?

Thursday, 26 January 2012

The Great Depression and the Broken Window Fallacy

Yaron Brook discusses the economics of the Great Depression, with an explanation of the broken window fallacy, the most common error in economics.

From his talk 'Why Bad Economics Won't Go Away.'

Wednesday, 25 January 2012

GUEST POST: The absence of PC explained

Dear readers of Not PC,

Peter suffered a herniated disc. He's in a lot of pain, and hasn't been able to update his blog; or do much of anything really.

Stay tuned; hopefully he'll be back online soon. In the meantime have a look at the 'REGULAR READS' links on the left of the blog for some excellent writing from elsewhere on the Web.

Julian Pistorius

P.S. I blame it on the vegetarianism.

P.P.S. There is no substance to the rumours of an assassination attempt by a rabid Ron Paul fan.

Friday, 20 January 2012

Friday Morning Mini-Ramble

How enjoyable was it yesterday to see so many bloggers and website owners going on strike yesterday over the misguided Stop Online Piracy Act. For one day, the internet shrugged at the projected imposition of security through censorship. And maybe the reptiles in Congress listened. Maybe.
In other news, I’m still waiting for my call-up to be one of the bloggers interviewed on Radio NZ’s Kiwi Summer series. No, not really. I reckon Martin Bradbury has more chance of a call-up, wouldn’t you think?
Anyway, on with the show here. A small one, this morning, of a few things that caught my eye.

  • So what is it central banks are going to inflict on us worldwide? Inflation, or deflation?
    Out of Mises’s frying pan –  Sean Corrigan, C O B D E N   C E N T R E
    How Deflationary Forces Will Be Turned into Inflation – Thorsten Polleit,  M I S E S    I N S T I T U T E
  • Speaking of central bank inflation … “It's important to watch what European Central Bank president Mario Draghi is doing rather than what he is saying, and right now he is madly printing euros out the backdoor.”
    The Dancing Draghi – E C O N O M I C   P O L I C Y   J O U R N A L
  • Bernard Hickey hasn’t got a clue about economics.  We can all agree on that. But, speaking for all of us who’ve stopped watching terrestrial TV, he can still recognise bad TV when he sees it.
    Bernard Hickey was forced to watch some TV ads during the holiday rain and was stunned with what he saw 
    – I N T E R E S T . C O . N Z
  • Food Minister Kate Wilkinson justifies her new Food Bill banning some fresh foods and giving police power to raid private kitchens without a warrant on the basis of, basically, some very dodgy figures.
    Food Bill -  O F F S E T T I N G   B E H A V I O U R
  • Reader Paul Van Dinther has made the world press with a Google Earth simulation of the path of the Costa Concordia, the cruise ship that went aground last week off the coast of Tuscany. Onya Paul!
    Track the Costa Concordia's course via a digital simulation -  L . A .  T I M E S
  • Anybody else wondering how Gareth “Captain” Morgan managed to be paid $50 to $100 million for a company handling only $650 million in Kiwisaver accounts, the fees on which are a risibly low multiple of the taxpayer-funded purchase price—as Mark Hubbard says, “as I'm going to own this business, can I please have a look at the valuation used to make the offer.” Particularly so since  a large lump of the capital being handled is his own (which he’s now threatened to withdraw whenever he has a tantrum) and his company has achieved success only in turning himself into a megaphone and other people’s capital into manure? A And will he be voluntarily paying capital gains tax on his taxpayer-provided windfall, as he demands others be forced to do? People would like to know.
    Gareth Morgan Investments Sale To KiwiBank - Some Questions – N O   M I N I S T E R
    Gareth Morgan: What the hell has happened to him? – Mark Hubbard, S O L O
    Gareth Morgan sells to Kiwibank – W H A L E  O I L
  • Egalitarian impulses will sink a struggling economy.
    Death by Wealth Tax – Richard Epstein,   D E F I N I N G   I D E A S
  • If you want affordable housing in Auckland, then it’s time to throw out the council’s Auckland housing plan. Mind you, if you don’t want affordable housing, just continue supporting the status quo.
    Throw out Auckland housing plan says Productivity Commission – D U G   A   H O L E
    The Productivity Commission Report on Affordable Housing  - O W E N    M c S H A N E
  • From the “we wish it were only in America” file: The New York Times reports that energy producers are being fined by the U.S. government for not selling a biofuel that doesn't even exist.
    Make-a-Wish Politics – G U S    V A N   H O R N
  • Sadly, one law that wasn’t written into statute.
    “Dressing psychiatrists like wizards on the witness stand” -  O V E R L A W Y E R E D
  • Universities are making it tougher for students to get into university. “Good!” says one mother whose youngster has missed entry.
    Universities raise the bar -  L I N D S A Y  M I T C H E L L
  • In case you missed it last year, U.S. economists (including, be aware, some who are just alleged economists) explain the last year in terms of their favourite charts
    Economic experts explain 2011 in charts – W A S H I N G T O N  P O S T
  • Ever thought about the morality of making a profit. In a free society, "creating value" and "making a profit" are just two sides of the same coin!
    Why Is Creating Value Good, But Profits Bad? – Paul Hsieh, P A J A M A S   M E D I A
  • This is the Montessori eucation website you’ve been waiting for.
    Aid to Life – A S S O C I A T I O N   M O N T E S S O R I    I N T E R N A T I O N A L E
  • And the article about Montessori you’ve always wanted.
    The Montessori Method: Educating Children for a Lifetime of Learning and Happiness 
    -  O B J E C T I V E   S T A N D A R D
  • Want to learn about Ayn Rand and Objectivism? Here’s the teaching website you’ve been waiting for.
    Ayn Rand Campus – A Y N  R A N D  I N S T I T U T E
  • Speaking of which, here’s a new project that tries to match students who want to read Rand with donors willing to buy the books.
  • And since Objectivism is a philosophy for living, it should come as little surprise that some of the best ways to do business are in line Objectivism's ethics and epistemology.
    SMART Goals and Philosophy – John Drake,   T R Y   R E A S O N
  • “Normal science progresses through the collection of observations (or measurements), the conjecture of hypotheses, the making of predictions, and then through the usage of new observations, the modification of the hypotheses accordingly (either ruling them out, or improving them).
    In the global warming ‘science,’ this is not the case.”
    On IPCCs exaggerated climate sensitivity and the emperor’s new clothes – S C I E N C E   B I T S
  • How did great artists become great?  By intense engagement with the great works of the great minds.
    How great artists become great – S T E P H E N    H I C K S
  • I love it when people I like recommend my favourite books…
    Trustee from the Toolroom’ Review -  Rachel Miner,  T H E   P L A Y F U L   S P I R I T
  • Don’t give up the Oxford Comma yet! "The Oxford Comma is not only stylistically necessary, it is logically necessary and its absence can lead to absurdities."
    The Logical Necessity of the Oxford Comma – Jason Stotts,  E R O S O P H I A
  • Today is the last Big Day Out. Speaking for myself, who’s never been a fan of stadium gigs, I still endured it three times. It was a mess. You couldn’t get around. You couldn’t get a beer. If you wanted to be treated like cattle, you’d come to the right place. And if you wanted the sound of your favourite music to be delivered in a manner that no music deserved, you couldn’t ask for more.  (Mind you, it did bring out the Stooges.)  Nevertheless, as an antidote to all the undeserved  the BDO nostalgia, here's Gary Steel on why he too just can't care about its death.
    BDO DOA?  Gary Steel,  W I T C H D O C T O R
  • And don’t say you’ve never wondered…
    What's the best animal to slice open and crawl inside to stay warm? – T H E   S T R A I G H T  D O P E
  • Finally, here’s a small piece of advice for New Zealand readers: Do yourself a favour. Buy a @DresdenDolls ticket.
    If you like punk cabaret; if you enjoy the music of Kurt Weill; if you like smart, sharp women; if you like music with melody and guts performed with humour, attitude and pizzazz; if you like any part of these, then do yourself a favour and get along to Dresden Dolls on Wednesday 25th at Christchurch’s Aurora Centre for Performing Arts, Friday 27th January at The Powerstation, Auckland, and Saturday 28th January in Wellington at The Opera House. And look out for ninja gigs.
    Upcoming Shows – A M A N D A  P A L M E R . N E T

  • And to finish on something completely different, here’s one of my favourite sopranos, Gundula Janowitz, singing sing the duet "Sull'aria"  from The Marriage of Figaro with Lucia Popp at the Paris Opera. Gorgeous! [Hat tip http://www.greatoperavideos.com]

That’s all from me.
Have a great weekend.
Peter Cresswell

Thursday, 19 January 2012

‘Solar Hemicycle,’ by Frank Lloyd Wright

A 1992 tour of Frank Lloyd Wright’s second house for Herbert and Katherine Jacobs—built in 1944—a house he called his “Solar Hemicycle”—with expert guidance by Katherine Jacobs herself.

Scum rises to the top

As a reward for all his sterling work in Christchurch—including barring businessmen’s access to their own property, evicting people from their own homes, shutting down the CBD while simultaneously closing off the city limits, and (as a consequence) making sure new homes are beyond the price of those who need to buy them—in other words, for pretty much everything his mailed fist has done since the earthquake to make the city worse, to do to the city and its spirit what the earthquake couldn’t, plus all his acts of self- aggrandisement in “running” a dysfunctional council, and mayoral aggrandisement in promoting Mr Parker—for these achievements and more council “Chief Executive Officer” (sic) Tony Marryatt has rewarded himself  has been rewarded with a pay rise equal to the size to which the Grand Chancellor used to tower over his city.

Now, why did I say “sic’ after the use of his officially appointed title?  Let Joe Bennett explain:

The sickness, as always, shows up in the language. Mr Marryatt, for example, is known as a CEO. But he is not a CEO. A CEO runs a competitive business that has to earn money. The council is a monopoly that does not have to earn money. It just demands money from ratepayers. So Mr Marryatt's job is merely to oversee the spending of a guaranteed income. Spending is easier than earning.
    Mr Marryatt's role used to have the more accurate title of town clerk.
    I think we should revive it. It is an honourable title but it stresses that the role is clerical. No-one pays a clerk half a million bucks.

That Clerk Tony’s pay hike is even contemplated in the current environment is reason enough for campaigning and marching against it  on 1 February.

Wednesday, 18 January 2012

KiwiBank and Gareth Morgan up a tree … [updated]

imageimageSo KiwiBank is to buy out Gareth Morgan Investments, including the Gareth Morgan KiwiSaver Scheme—a case of the politically appointed “People’s Bank” buying out the self-anointed “People’s Financier.”

KiwiBank’s CEO Paul Brock reckons “The ‘aligned values’ of the two businesses reinforced the decision to buy rather than build.”

Rarely has a truer word been spoke. Their “values”are aligned—and in more ways than one:

These are two entities clearly made for each other.

So now the directors of Gareth Morgan Investments are eager to get a payday for their consistent underperformance.  And with this buyout of industry-leading underperformers, KiwiBank has once again confirmed their own.

UPDATE: Taking time today out of his busy schedule writing another book about how good he is, Gareth Morgan  responded today to criticism of his funds’ less than stellar performance (his balanced fund has returned a negative - 0.1% per annum since inception; its “growth fund a negative -3.4% p.a.; its conservative fund  faring better at a positive 2.4% p.a, which still however sees his investors losing against inflation) blaming, in order, the ignorance (of others), the financial illiteracy (of others), and the league tables produced by ratings agencies Morningstar and Fund Source—who shamefully use actual figures instead of the ones provided by the voices in Gareth Morgan’s head—before pausing to point out his funds had done brilliantly against the “benchmarks” in his head.

He also said a “key focus” for GMI with respect to its KiwiSaver funds was “wealth preservation,” at which performance he maintained anyone criticising his growth portfolio’s return of negative 13.1% just doesn’t understand risk like he does.

He then touted for KiwiBank’s Kiwisaver work, before heading off to the travel agent to book his next holiday.

#SOPA = Silence Opposition Permanently Act [updated]

The US Congress votes today on their Stop Online Piracy Act, aka SOPA, aka the Silence Opposition Permanently Act, which if passed will do as much to Stop Online Activity here in EnZed as it will in the United Police States of America.

Here’s a quick Q&A on this abomination.

Q: Is there a problem with online piracy?
A: There sure is. Every day online the creators of films, music, literature and inventions are having their property downloaded without reward, making their future pursuit of  their careers increasingly impossible.

Q: Will SOPA protect intellectual property?
A: No. The proposed six-strikes-and-you’re-arrested is a legal blunt instrument as imperfect as it is thuggish. So, since anyone determined enough to steal will still be able to do so, online piracy will continue, while a few high profile innocents are shut down or even arrested to demonstrate the Act is “working.”

Q: So what is the purpose of SOPA?
A: Government control of the internet under the guise of protecting intellectual property.

Q: What will it do to the internet?
A: It will put it in the deep freeze. By holding bloggers, programmers, web hosts and ISPs responsible for infringements about which they will not even be aware—on the basis of possibly vexatious complaints and on pain of arrest and even jail—SOPA will chill debate, mangle links and block internet activity

Q: What are the problems in law?
A: The principle of innocent before being proven guilty is totally overturned. And by giving government control of the internet to the government, the internet will be introduced to the lethal virus of censorship—especially dangerous in election periods when a simple complaint will be sufficient to shut down a political opponent .

Q: Should intellectual property be protected?
A: Yes, of course. But in damaging the case for intellectual property, as SOPA’s measures will, it will be more effectively destroy the case for intellectual property than the lame arguments put up by apologists for intellectual theft. 

Q: Should SOPA be opposed?
A: Hell, yes!

Diana Hsieh has a much fuller discussion here and links aplenty explaining why SOPA should be opposed.


NZOA: He who has the gold makes the rules [update 2]


After TV3 screened the documentary ‘Inside Child Poverty’ just three days before the last election, causing screams of horror from the ruling party*, NZ on Air** is now considering*** banning broadcasters from screening such documentaries ever again so close to election day.

The problem, they say, is that the documentary was too “politically charged” to be screened just days away from when folk would be electing their favourite politicians.

What the hell?

I didn’t have the pleasure of seeing the documentary myself, so I can’t judge whether or not it made its case****. But it would not be possible to tell the story of poverty in New Zealand without involving politics. And frankly, if a documentary about poverty is not “politically charged” then it’s not telling the whole story.

And while I know many would like to see elections being just a saccharine show of politicians with polished teeth and shiny-suited spin doctors telling you what to think*****, but if organisations are banned from telling stories like this in election week then I guess we’re well down the road to making elections just a dumbed-down ritual of bluster and box ticking; A political popularity contest with uncomfortable issues banned from the feast like pariahs, for fear of upsetting the ruling classes.

So documentaries that frighten the horse will be banned, doing to free speech what the Japanese like to do to whales.

Yes, this is censorship pure and simple. But, quite seriously, that’s what you get when the money to pay for your documentaries is doled out by government flunkies. That’s the Faustian pact agreed to by documentary makers—take this here money doled out by the flunkies, but don’t be surprised if the flunkies (and their political masters) tell you what to do with it, and when. In simpler terms, it’s the old time-honoured rule, he who has the gold makes the rules. 

When the money comes from the political process, its use is unavoidably politicised.  That means either censorship, control, or the establishing of an establishment—which is a different and even more insidious kind of censorship than the one to which most folk are already aware; one establishing a sort of “welfare state of the intellect,” doing to the denizens of culture what the welfare state does to its recipients.

So here’s the take-home message I’d invite you to contemplate: Don’t like production of your documentaries coming under political control? Then take their funding out of the political trough.

* * * * *

* NZ on Air was “spooked by political interference” reckons Tom Frewen at Scoop.

** Who, back in the day we used to call by the richly-deserved name of NaZis On Air, for what we thought were fairly obvious reasons.

*** Apparently the announcement was made by “NZ On Air board member Stephen McElrea (who, in Tom Frewen’s marvellously dry turn of phrase, ‘also happens to be John Key’s electorate chairman and the National Party’s northern region deputy chairman’) [who] has used his dual position of authority to demand answers from the funding body and, simultaneously, make implicit but forceful statements about what constitutes ‘appropriate’ policy material for such a funding body to support.” [ref: Kiwipolitico]

**** Karl du Fresne called it "a disgracefully simplistic, emotionally manipulative programme." But that’s the sort of thing the DomPost pays him to say. Meanwhile, Lindsay Mitchell corrected some of the doco’s “sensationalist” figures. And Martin Bradbury’s Tumeke! blog wrote a press release for the doco’s makers.

***** Which was the frank intent of both the Red Team’s Electoral Finance Act, and The Blue Teams’s subsequent Electoral Finance Act Lite—about which respective opponents were either incensed or disinterested, depending on which team at the time was proposing the saccharinisation .

UPDATE 1: New links added. Picture, courtesy Scoop.

UPDATE 2: New related thread at Twitter (#NZOnAirSongs) has thrown up a few new song titles, including:

  • Don't fight political corruption, Marsha, its bigger than both of us
  • Beige Frost
  • There Is No Election In New Zealand

Tuesday, 17 January 2012

Mere desire v burning ambition

Are you burning with ambition?

Or merely harbour a desire for success in your chosen field?

That’s the difference that really makes the difference, you know—as actor Kevin Spacey explains

[Hat tip Diana Hsieh]

If you want to get things done, find an introvert

If you want to get things done, then don’t work in an open plan office.

Most of us now work in teams [notes the New York Times], in offices without walls, for managers who prize “people skills” above all. Lone geniuses are out. Collaboration is in.
    But there’s a problem with this view. Research strongly suggests that people are more creative when they enjoy privacy and freedom from interruption. And the most spectacularly creative people in many fields are often introverted, according to studies by the
psychologists Mihaly Csikszentmihalyi and Gregory Feist. They’re extroverted enough to exchange and advance ideas, but see themselves as independent and individualistic. They’re not joiners by nature.
    One explanation for these findings is that introverts are comfortable working alone — and solitude is a catalyst to innovation…

SOME teamwork is fine and offers a fun, stimulating, useful way to exchange ideas, manage information and build trust.
    But it’s one thing to associate with a group in which each member works autonomously on his piece of the puzzle; it’s another to be corralled into endless meetings or conference calls conducted in offices that afford no respite from the noise and gaze of co-workers. Studies show that open-plan offices make workers hostile, insecure and distracted. They’re also more likely to suffer from
high blood pressure, stress, the flu and exhaustion. And people whose work is interrupted make 50 percent more mistakes and take twice as long to finish it. ….
    [Creative people] many of whom are introverts, are unhappy….  Privacy also makes us productive… Solitude can even help us learn…
    Conversely, brainstorming sessions are one of the worst possible ways to stimulate creativity… decades of research show that individuals almost always perform better than groups in both quality and quantity, and group performance gets worse as group size increases.

Ground zero in junk economics [updated]

M.I.T. is a world leading university.

And no, Virginia, I’m not talking about the low-rent second-rate impostor out in Otara. I’m talking about the prestigious Massachusetts Institute of Technology in Cambridge, Massachusetts. The world-leading M.I.T.

The world-leading M.I.T. has a tale to tell that illustrates again the power of ideas to move the world, for good and for bad.

It has produced some 76 Nobel laureates, and around one-third of US astronauts, including Buzz Aldrin. It has been home to some stellar physicists, such as Richard Feynman and Murray Gell-Mann. To some explosive chemists. It’s mathematicians are as adept as their stories (John Nash) are Oscar-winning.

M.I.T. has produced some of the world’s leading hard scientists.

In economics however the story is both the same and very different.  Sure, its economics graduates are everywhere—but given the catastrophe they produced in recent years (and are continuing to produce) I don’t mean that in a good way. 

Central banking is filled with former attendees of the Cambridge, Massachusetts, university … At MIT, [Bank of England Governor Mervyn] King, 63, and then-professor Ben S. Bernanke, 58, had adjoining offices in 1983, spending the early days of their academic careers in an environment where economics was viewed as a tool to set policy. Earlier, Bernanke [now head of the US Federal Reserve] and European Central Bank President Mario Draghi, 64, earned their doctorates from the university in the late 1970s, Draghi with a thesis entitled “Essays on Economic Theory and Applications.”
    [Bank of Israel Governor Stanley] Fischer, 68, advised Bernanke’s thesis on “Long-Term Commitments, Dynamic Optimization and the Business Cycle,” and taught Draghi. Greek Prime Minister and former ECB vice president Lucas Papademos and Olivier Blanchard, now chief economist for the International Monetary Fund in Washington, earned their doctorates from MIT at about the same time.
    Other monetary policy makers who have passed through MIT’s doors include Athanasios Orphanides, head of the Central Bank of Cyprus, Duvvuri Subbarao, governor of the Reserve Bank of India and Charles Bean, King’s deputy in the U.K.

Not to mention Paul Samuelson, the writer of the textbook schooled modern Americans in the complex wrongheadedness of the Keynesian disease; New York Times columnist Paul Krugman, the man with more all-round wrongheaded advice than Mr Keynes on speed; Lawrence Summers, adviser to both Obama and Bill Clinton; and Christine Romer, head of Obama’s Council of Economic Advisers.

These are the people who define “mainstream economics”—the very “macroeconomic” theories that got us into the hole.

Their advice, then and now, is to keep digging.

Given the results of its graduates then, by which I mean the state of the world today, its clear that while M.I.T.’s hard sciences departments should be lauded for their graduates’ achievements, its economics degrees are as much a piece of junk as the bonds still being peddled by European governments.

[Hat tip Tyler Cowen. Arnold Kling comments.]

UPDATE: Peter Boettke suggests, with a bit of nudging, that one primary difference between mainstream economics and Austrian economics is that  mainstream theory “can’t handle the complexities of the real world…”

Monday, 16 January 2012

Quote of the day: Downgrade edition

In case you hadn’t heard, European government debt was downgraded over the weekend.

Not before time.

After four years of attempting government “rescues” of their respective economies by borrowing to bolster “demand”, and two years of belatedly realising that they couldn’t afford the borrowing, and the expected recovery was nowhere to be found, the mainstream rating agencies finally noticed something was wrong.

So the ratings have finally been downgraded—but not yet the economic theory on which the profligate borrowing was based. And talk still continues about , even as the causes of the economic crisis of the last few years continues to be all but ignored.

Which brings me to the Quote of the Day, from page 8 of L. Albert Hahn’s 1949 collection The Economics of Illusion:

As far as government interference itself is concerned, one should never forget that serious economic disturbances are the consequences of basic maladjustments. The effect of correcting or not correcting such maladjustments is infinitely greater than any artificial creation of demand by government in an economy that, in most sectors, is still free. Therefore an economic policy that concentrates on artificially filling up an investment or spending gap rather than on fostering adjustments – and thus creating demand in a natural way – is doomed to fail in any severe crisis.

Don Boudreaux has more.

Climate models “yet to demonstrate an ability to confidently predict climate change”

As I blogged last year, temperature “predictions” by alleged climate scientists have failed over recent decades to match the measured surface temperature record. “Predictions” from 1990 for example expected a temperature trend of between 0.2 to 0.5 degree C per decade—a rate that has quite simply failed to materialise.

The record is even worse when compared to the satellite temperature record over the last 33 years—which, unlike the surface measurements, measures temperatures in the upper atmosphere, precisely where the “predictions” say most warming should occur. The thirty-three year temperature update, released in December, shows temperatures well below computer model predictions.


The end of November 2011 completes 33 years of satellite-based global temperature data… Globally averaged, Earth’s atmosphere has warmed about 0.45 Celsius (about 0.82° F) during the almost one-third of a century that sensors aboard NOAA and NASA satellites have measured the temperature of oxygen molecules in the air [explains John Christy, professor of atmospheric science and director of the Earth System Science Center (ESSC) at The University of Alabama in Huntsville, where the satellite record is recorded and maintained].

This represents a global climate trend since Nov. 16, 1978 of just +0.14 C per decade. Says Christy:

   This is at the lower end of computer model projections of how much the atmosphere should have warmed due to the effects of extra greenhouse gases since the first Microwave Sounding Unit (MSU) went into service in Earth orbit in late November 1978, according to satellite data processed and archived at UA Huntsville’s ESSC.
    “While 0.45 degrees C of warming is noticeable in climate terms, it isn’t obvious that it represents an impending disaster,” said Christy. “The climate models produce some aspects of the weather reasonably well, but they have yet to demonstrate an ability to confidently predict climate change in upper air temperatures.” …
While year-to-year temperature variations measured by the satellite sensors closely match those measured by both surface thermometers and weather balloons, it is the long-term warming trend on which the satellites and the surface thermometers disagree, [Christy’s colleague] Roy Spencer said, with the surface warming faster than the deep layer of the atmosphere. 
    If both instruments are accurate, that means something unexpected is happening in the atmosphere.
    “The satellites should have shown more deep-atmosphere warming than the surface, not less” he said. “Whatever warming or cooling there is should be magnified with height. We believe this is telling us something significant about exactly why the climate system has not warmed as much as expected in recent decades.”

“Something significant” for which climate models are signally unable to account.

Read the whole analysis here.

[Hat tip Jeff Perren]

Thinking positive

There’s plenty of reasons for a person to feel negative about life in Christchurch. Or not...

Friday, 13 January 2012

Don’t try this at your next lecture

"How (not) to communicate new scientific information: A memoir of the famous Brindley lecture."

[Hat tip Geek Press]

Golfing on top of the world

If you’re going to play golf, then this is probably the way to do it.

Like Rory McIlroy. On top of the Burj al-Arab.

Education as an aid to life

Here’s a recommendation from our friends at NZ’s Maria Montessori Education Foundation:

Dear Friends and Advocates for Young Children.

The new website Aid to Life is now on-line and it is superb!


It is primarily a resource for parents, guiding them through how to support their young child’s development from 0-3 years. A wonderful parent resource!

There is information about movement, independence, dressing, and more—complete with videos to help parents.

Highly recommended. Please pass this it on!

Kind regards,
Carol Potts

I have.  Smile

Thursday, 12 January 2012

No blogging


No blogging today.

I’ve been assassinated by a crazed Ron Paul supporter.

Wednesday, 11 January 2012

What would entice them back?

Recovery authorities are asking business, property owners and customers what would entice them back into Christchurch's quake-stricken CBD.

An Enterprise Zone would.

But never in a million tears would they consider that…

Ayn Rand Campus

The Ayn Rand Institute’s ‘Online Campus’ has just gone live, a major new educational initiative promising “free courses on Ayn Rand and her ideas in an innovative and interactive learning environment!”

That’s what it says on the label, and it’s looking pretty good.

Initial course offerings include: 
•       Ayn Rand: A Writer's Life
•       Ayn Rand: Radical Thinker
•       The Ayn Rand Bookshelf
•       Anthem
•       We the Living
•       The Fountainhead
•       Moral Virtue
•       Philosophy of Education
•       Philosophy: Who Needs It

New courses will be added regularly—the first release post-launch will be an in-depth look at the novel Atlas Shrugged, taught by Dr. Onkar Ghate and appearing in February. The full, public launch of ARI Campus is slated for September of 2012.

Looks like a great online resource!

Organon Architecture’s 2011 Top 10

imageYes, I know it’s 2012 already. But 2011 ended so busy for me I didn’t have a chance to do my semi-regular Top 10—i.e., in the spirit of Epic Beer’s own Top 10, listing the top ten things we achieved at Organon Architecture did in 2011:

image1. New offices!
2011 started badly for me, for reasons many of you know. But productivity picked up in July when I opened my new office on Dominion Road—about halfway down, as it happens.  Safely sequestered therein, we’ve produced a mountain of work and lots to celebrate.
And being about 400m from Eden Park, it wasn’t a bad location from which to enjoy the World Cup!

2. ‘Art & Architecture Afternoons’
The new offices, corner of Valley and Dominion Rd, now play host to informal Friday afternoon ‘Art & Architecture Afternoons’ from 4pm every Friday. The “art” part is supplied chiefly by local artists Jasmine Kamante and Jesper Sundwall, whose studio is fortuitously just up the road, and between us we have a few plans for presentations in 2012—starting on the 20th. Feel free to drop in and chat.

3. Orders!
Order books are still full, with some exciting new work and renovations going on—and not every architecture practice can say that this year!

image4. Bungalows!
In the words of Paul Litterick, “Man is born free, yet everywhere is in villas.” And this year again, no one’s asked me to renovate a villa—folk are getting more excited instead by California Bungalows. Good news, and a very healthy trend indeed. That said, there was one reluctant sale by a client of a very special California Bungalow (right)—news made better by the sale price which more than covered our fairly extensive renovations.

5. Kebyar
I’m still really enjoying my Kebyar membership, which keeps me in touch with like-minded architects overseas (since there’s few enough of them locally).

imageimage6. Home Show
Thanks to my sister, a landscape architect, I was persuaded to share a stand at the Whangarei Home Show—the first time I’ve tried that method of promoting the practice. It was fun, and from it came two delightful clients and the prospect of a few very interesting things emerging…

image7. Topping out
I was delighted that a project first begun back in 2003 (right) is finally seeing the light of day, with topping out on the top storey all but complete in the last days of 2011. It’s all set now for completion in 2012.

8. New website
Yes, I know, I’ve been promising this for years—pretty much since the year I first cobbled it together--but this year it’s not just long, long, loong overdue (one client suggested if I don’t update it I should just unplug it) but will actually emerge.
Or so I’m promised.

9. New logo
With the move to new offices, I was persuaded by hotshot graphic designer Graham Clark from Clark Design & Marketing that I should change my logo. Quite frankly, I think what we came up with is pretty damn striking.
You can see it at the top of the page.

If you like it, give Graham a call and he’ll do something just as sharp for you.
Tell him I sent you.


10. Good Work
Not that I’m one to boast, but I think 2011 finished with good variety and some pretty good work in the bag—both renovations and new work.  Here’s a small selection.









So it didn’t start too well, but in the end not a bad year at all, really.

I look forward to topping it this year.

Hope you had a good year too. Keep enjoying the good life--and don’t let the bastards grind you down.

Peter Cresswell

[Cross-posted at my Organon Architecture blog]



Horrors!  I’ve gone through nearly this whole holiday period without a post on beer!

My apologies, gentle readers. Let me remedy that now.

Let me remedy that by talking about affordable beer. And “by talking about affordable beer” I mean talking about what someone else has said about affordable beer. About affordable good, tasty beer.

In fact, let me just quote that someone else, who from hereon in I will call Kevin---chiefly because that is Kevin McLellan’s name. So let’s talk about good beer value, and New Zealand’s best value beer: and Kevin’s detailed, meticulous, rigorous study of this critically important subject.

I enjoy drinking quality beer [says Kevin]. That doesn't mean that I need beer brewed by a silent Belgium monk and costs as much as a pint of saffron… I need to pay the mortgage and I need to know that the beer in my fridge is value for money.
    So how do I know that I'm getting value for money? Up until now it has been calculated on-the-fly based on experience, gut-feel and some badly applied maths. I was having a bit of a slow day recently so I decided to devise the beer value formula. I had no idea how this formula would work. All I knew is that it would need to prove that Epic Pale Ale is the best value beer that money can buy in New Zealand…
    I worked out a standard cost - $per/100ml – … [and] added a new column to show the Ratebeer overall score. Seeing that Epic scored 97/100 and Heineken 7/100 I knew I was onto something. Now for the formula - I simply divided the Ratebeer score by the cost. The result of this division is effectively how much quality is bought with every dollar spent.

A good start. And what he found—Hallelujah!—is at least half-a-dozen easily available, good value, tasty bottled beers to help the daily restocking of your fridge, with the aforementioned Epic Pale Ale (which took no manipulation whatsoever to achieve top spot with a score of 95.1) and Little Creatures Pale Ale, 82.4, on top spot, and Yeastie Boys Pot Kettle Black (co-brewed by former NOT PC beer columnist Stu) holding up third place with a score of 77.0.

And with shops full of Coopers’ Sparkling Ale (65.6) and Original Pale Ale, and a new local $2.50 “craft” beer hitting the shops since Kevin’s definitive, scientific, peer-reviewed study, there’s no shortage of ways to keep your fridge fully stocked.

It’s summer. So why not start your restocking this afternoon?

PS: My own beer of choice over our holiday break was fill-your-own flagons of Leigh Sawmill Pale Ale, collected regularly direct from the brewer. Good value with a score of 76.1—and, if you’re in Auckland, available in fill-your-own flagons at the Herne Bay Cellars in Jervois Road.

Tuesday, 10 January 2012

“Let them eat bonds!” Before they eat themselves.

Despite conventional wisdom, government bonds are not a good investment. The endgame for government bonds is either default or default—either outright default or default by central bank-created inflation.

And as the Euro crisis (really a govt debt crisis) plays out, it’s clear enough that endgame is coming soon.

“The government bond market is still skating on thin ice,’ says Detlev Schlicter, and with it “the entire financial system.”

Read about it here at Detlev’s ‘Paper Money Collapse’ blog.

And learn about his thesis here, in his recent talk to London’s Adam Smith Institute, described by 'Libertarian Home’s Andy Janes as “very impressive, if terrifying.”

He argues that the present financial crisis is far from over; generally misunderstood and misrepresented, it is far from being a ‘crisis of capitalism’. Detlev traces the history of failure of paper money systems and lays out why present policies pursued by various governments and institutions are misdirected and counterproductive.

Thank Galt for warming, eh.

A reader (thanks Greg) has spotted the warmists’ latest spin, trumpeted by no less than their favourite outlet the BBC.

They are now not trying to hide the decline [notes Greg]. In fact they admit that things are getting colder--but now the spin is that global warming [sic] is slowing down an ice age. This is somewhat like Obama claiming that while unemployment under his watch has sky-rocketed under his administration, it would have been worse if not for him.

So now that the warmists’ religion is collapsing under patently transparent nonsense, what’s going to replace it as the chief weapon in the anti-industrialists armory?


‘Body and Soul’

Could this be the greatest jazz solo of all time? The good folks at Jazz on the Tube sure think so.

Coleman Hawkins, ‘Body and Soul’

Monday, 9 January 2012

Ron Paul

I’ve had to discuss Ron Paul frequently over the holiday break. Not because I brought him up. For some reason, friends wanted to talk about him. Here below are links saying a little of what I tried to say about him in response, summarised by those more knowledgeable about the subject than I.

Short summary? Ron Paul is not a libertarian. He

  • rejects the Jeffersonian principle of a "wall of separation" between religion and government;
  • is anti-immigration (“to the right of most Republicans” says Vodka Pundit Steve Green);
  • is anti-abortion (Paul describes "the rights of unborn people” [sic] as “the greatest moral issue of our time," and "abortion on demand" as "the ultimate State tyranny");
  • “plays footsie” with racists and kooks;
  • is a hypocritical supporter of pork-barrel earmarks for his own congressional district;
  • is opposed to free-trade agreements (like NAFTA); and
  • is appallingly “blame-America-first” on  foreign policy.

In addition, he is a Creationist—a point of view disqualifying the holder from intelligent discussion of, well, virtually everything.

In short, then, and to repeat, he is not a libertarian: he is a “states-rights” religious conservative, with all the intellectual confusion that implies—yet his growing public prominence as a self-proclaimed spokesman for the ideas of liberty gives grave concern for the fate of those ideas.

UPDATE:  Clearly, Ron Paul is far from the secular freedom lover many would like him to be. Argues Gus Van Horn,

   he functions as a Trojan horse for the religious right even as he pretends that personal freedom is as obviously good and uncontroversial as breathing on a regular basis. (Personal freedom is good, but this is neither obvious nor uncontroversial.)
So what then about his claims to being a lover of freedom? What exactly is Paul's vision of "a free society"?  On that subject, this Open Letter to Ron Paul is an eye-opener, written by one Duncan Bayne in response to this article by Paul criticising the 1993 BATF & FBI assault on the Branch Davidians in Waco. Says Bayne:
   While I agreed with many of your criticisms of BATF and FBI tactics & strategy, it became apparent to me that your article was not primarily concerned with those criticisms: the main thrust of the article was to whitewash the monstrous evil committed by David Koresh and his followers. You wrote:
‘The community of faith that once lived at Mount Carmel in Waco, Texas, believed the promise of a free society.’
“This is the "community of faith" that sacrificed twelve-year old girls to Koresh so they could serve as his 'wives' - some of whom bore his children. If that level of barbarism - a religious community complicit in the slavery and rape of young girls - represents anything approaching your idea of what is a ‘free society,’ then I don't want you having any say in how society operates.

    Too true. There is no need to defend the barbarism and paedophilia of Koresh’s supporters in order to attack the BATF and FBI goons who killed them. Yet Paul is happy to embrace the barbarity, and in doing so demonstrates the Objectivist argument against irrational libertarianism.  Without a rational philosophical foundation, argue Objectivists, without a decent "philosophical infrastructure," politics becomes a dangerous pursuit of empty words, floating abstractions, and range-of-the-moment compromises. How can you call libertarians allies in freedom, ask hardcore Objectivists, when libertarians such as Ron Paul can't even agree on what the word "freedom" stands for?  And how can you call someone an advocate of freedom at all when their vision of a "free society" apparently includes the the freedom to rape twelve-year-old girls?

It's clear, just as Van Horn charges, that freedom is neither obvious nor uncontroversial. In fact, personal freedom can and does (and must) be predicated on the base of reason, not of subjective whim.  As Michael Berliner points out in this article on Ayn Rand,

    She understood that to defend the individual she must penetrate to the root: his need to use reason to survive. ‘I am not primarily an advocate of capitalism,’ she wrote in 1971, ‘but of egoism; and I am not primarily an advocate of egoism, but of reason. If one recognizes the supremacy of reason and applies it consistently, all the rest follows.’ This radical view put her at odds with conservatives, whom she vilified for their attempts to base capitalism on faith and altruism. Advocating a government to protect the individual's right to his property, she was not a liberal (or an anarchist). Advocating the indispensability of philosophy, she was not a libertarian.
The point could hardly be clearer. Van Horn concludes:
   The fight for freedom is, as I have pointed out, a war on two fronts: the political and the intellectual. Of the two, the intellectual is the more fundamental, and cannot be lost. The longer enemies to freedom like Ron Paul can masquerade as friends, the longer it will take for people to become aware of the actual requirements for a society that respects individual rights.

That he can masquerade as a friend to freedom at all demonstrates how far the intellectual battle for freedom still needs to travel.

Because the harsh fact about Ron Paul is that on the few occasions he takes off the tinfoil hat and talks Austrian he’s damn good. But when he’s wearing the tinfoil headwear, as he does the rest of the time, he’s rotten.