Monday, 15 October 2012

Benghazi murders are Obama’s hostage crisis

One thing I was struck by in the recent US Vice Presidential debates was how the candidates of both major parties seem now to both accept the fact that the attack on the US’s Benghazi embassy and the murder of the US Ambassador and three of his staff was not an over-excited protest over a YouTube clip that coincidentally occurred on the anniversary of 9/11, but a concerted terrorist attack.

As Mark Steyn points out, this concession follows weeks of lying.

There was no demonstration against an Islamophobic movie that just got a little out of hand. Indeed, there was no movie protest at all. Instead, a U.S. Consulate was destroyed and four of its personnel were murdered in one of the most sophisticated military attacks ever launched at a diplomatic facility.
   
This was confirmed by testimony to Congress a few days ago, although you could have read as much in my column of four weeks ago. Nevertheless, for most of those four weeks, the president of the United States, the secretary of state, the U.S. ambassador to the United Nations and others have persistently attributed the Benghazi debacle to an obscure YouTube video — even though they knew that the two events had nothing to do with each other by no later than the crack of dawn Eastern time on Sept. 12, by which point the consulate's survivors had landed safely in Tripoli.
   
To "politicize" means "to give a political character to." It is a reductive term, capturing the peculiarly shrunken horizons of politics: "Gee, they nuked Israel. D'you think that will hurt us in Florida?" So media outlets fret that Benghazi could be "bad" for Obama — by which they mean he might be hitting the six-figure lecture circuit four years ahead of schedule.
   
But for Chris Stevens, Sean Smith, Glen Doherty and Tyrone Woods, it's really bad. They're dead, over, gonesville. Given that Obama and Hillary Clinton refer to Stevens pneumatically as "Chris." as if they've known him since third grade, why would they dishonor the sacrifice of their close, personal friend by peddling an utterly false narrative as to why he died?
   
You want "politicization"? Secretary Clinton linked the YouTube video to the murder of her colleagues even as the four caskets lay alongside her at Andrews Air Force Base — even though she had known for days that it had nothing to do with it…
    In the vice presidential debate, asked why the White House spent weeks falsely blaming it on the video, Joe Biden took time off between big toothy smirks to reply:
        "Because that was exactly what we were told by the intelligence community."
    That too is false…

The Benghazi attack, the non-reaction to it and the lying about it, are as symbolic of American defeatism today  as was the Iranian hostage crisis in the last days of Jimmy Carter’s defeatist Presidency.

The Benghazi murders are Obama’s hostage crisis.

[Hat tip Thrutch]

MACHINEOF THE DAY: Mars Rover

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One-hundred years ago we were just beginning to leave the ground, for brief periods, in contraptions made of wood and canvas.

Now, not only do people parachute back to earth from the stratosphere, men sit at their desks on earth controlling on a far distant planet a small robotic machine designed to explore and investigate—controlling it as if they were there and sitting in its cockpit.

It’s easy to take this stuff for granted.

Which is why a new book by William J. Clancey about Mars’s robotic geologists, Working on Mars: Voyages of Scientific Discovery with the Mars Exploration Rovers, is so fascinating.

This is, in Clancey's words, "a unique human-robotic enterprise," by way of "teleoperated robots" or "telerobotic tools."
    The book is … not a
New Yorker-style profile of mission scientists in their lab at Pasadena [says my reviewer a the BldgBlog] but it nonetheless reveals the bizarre methodological requirements of working on another planet through remotely controlled machine-surrogates. From altered sleep-patterns (to keep pace with the longer days on Mars) to darkened window shades (to enact on Earth the darkness of the Martian nightfall for rovers), the actual practices of the scientists come to the foreground of Clancey's study.
It is through these practices that the humans can engage with and control—or at least efficiently keep track of—these radically off-site prosthetic extensions, the rover now understood as "a mechanism that can be 'acted through,' an extended embodiment of the human eyes and hands of the people who control its actions from Earth."
It is a remotely operated surrogate sensory apparatus—organs without a body.

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We should never lose our sense of wonder at how cool human beings can be.  We can do this!

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More pictures here.

QUIZ: Which presidential candidate are you closest to?

This quiz promises to tell you to which presidential candidate you are the closest

These sorts of quizzes usually discount presidential policies that turn you off completely in favour of those for which you’re mildly in favour—in short, they highlight every minor similarity and ignore any major difference.

But this quiz does at least allow you to write your own policies. Sort of.

Anyway, here are my results after running through twice to see if it made any difference (the second time without rewriting policies to make them closer to what I’d support). What do you come up with?

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Falling at the speed of sound!

Man breaks speed of sound…without a vehicle. For the first time in history.

Wow.

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What makes it even cooler is this breaks a record that has stood for over fifty years—and the bloke who held that record was on Baumgartner’s crew.

The previous highest, farthest, and longest freefall was made by Col Kittinger, who leapt from a helium envelope in 1960. His altitude was 102,800ft (31.3km). (His mark for the longest freefall remains intact; he fell for more than four and a half minutes before deploying his chute.)
    Col Kittinger, now an octogenarian, has been an integral part of Baumgartner's team, and has provided the Austrian with advice and encouragement whenever he has doubted his ability to complete such a daring venture.

ECONOMICS FOR REAL PEOPLE: Classical + Institutional

Here’s your note about tonight’s session at the Auckland Uni Economics Group:

Hi everyone,

We have a very interesting programme for you tonight with two—yes, two—guest presenters.
    As we all know there are a number of different schools of economic thought, and tonight’s student presenters will provide short presentations on areas of expertise or interest to them. One will present insights into Evolutionary and Institutional Economics, and the other on ideas she’s learned in reading the Classical Economists.
    There will be plenty of time for discussion so this is a great opportunity to be introduced to economic ideas that may be new to you. 
    This is what university is about so we look forward to a great discussion.

    Date: Monday, October 14
    Time: 6pm
    Location: Case Room 2, Level Zero, Business School, Auckland University

We look forward to seeing you there.

Sunday, 14 October 2012

Stand-up Capitalism

It really is all about morality, you know.

How you vote, how you live, why you visit the mall…


Yaron Brook promoting his new book Free Market Revolution
at the October 8 “Liberty On the Rocks” event in Colorado

[Hat tip Paul Van D.]

Friday, 12 October 2012

This is what trickle down really looks like

Capitalism is frequently tarred as “trickle down” economics.

Wrongly.

Because if you really want to see trickle down in action, consider government. They take money from you, by force, and give it to … who?

To people like the heads of government departments who, in the depths of recession while all around them are tightening their belts (not the least reason being to pay their frigging tax bills), have enjoyed this:

  • the head of the Ministry of Foreign Affairs and Trade John Allen was given a $40,000 pay rise despite drastic cutbacks at the Ministry, given $620-630,000 this year, up from $580-590,000 last year
  • Head of Treasury Gabriel Makhlouf was given $540-549,999 this year
  • Secretary for Education Lesley Longstone was given $320-329,00
  • the highest paid individual in the public sector is chief executive of the Guardians of New Zealand Superannuation Adrian Orr, who was handed $730-739,000
  • shamed former head of the Department of Building and Housing (DBH) Katrina Bach was paid out $81,105 in entitlements when she left the job earlier this year
  • Corrections Department chief executive Barry Matthews was paid $41,529 in entitlements when he left the job at the end of 2010. Matthews' replacement, Ray Smith, is given $420 to 429,999
  • Housing New Zealand chief executive Lesley McTurk went from $460-469,999 last year up to $480-489,999 this year
  • Ministry for Culture and Heritage boss Lewis Holden climbed from $330-339,999 last year up to $350-359,999
  • the head of chronic failure  ACC was given $570-580,000 from July to September last year, and for good measure another $390,000 to $400,000 from then to June this year
  • The head of the Alcohol Advisory Council, who pays for all those dodgy “studies,” pulled down $370-380,000.

The amounts doled out to the head of KiwiRail, now worth one dollar, and to the chairman of NZ Post Michael Cullen, who bought the dog for the taxpayer, are not reported. But we can be sure they haven’t personally lost money this year.

Thank goodness then for those few among them taking an involuntary cut, among them the poor Education Review Office chief executive Graham Stoop, who went from $330,000 to $339,999 last year down to just $320,000 to $329,999.

"We want to attract, retain, and motivate suitable, highly competent chief executives,” said State Services Commissioner Ian Rennie,  whose salary was also not included in the report.

This of course is bullshit.  The only place these folk can pull down these kind of numbers is in the bureaucracy. If you paid the whole bloody bureaucracy less, as you should anyway in a recession, they’d have nowhere else to go.

Indeed, if you paid them based on the value they produce, how much do you think any of them would get?

Cycling is now drug free. It has always been drug free.

I heard this morning the head of the World Anti-Doping Agency (WADA) saying that with the release of the investigation into Lance Armstrong’s drug use, that he was now confident the dark days of drugs in cycling are over.

But I seem to recall similar comments over many years from other cycling authorities.

It reminds me a little of the way Soviet leaders talked about their five-year plans, in a five-year cycle that looked like this:

Year 1: The last five-year plan has been overturned as a complete failure foisted on the great Soviet people by a clique of reactionaries. We welcome the glorious new five-year plan that will see the great Soviet people achieve world dominance.
Year 2-4: Signs of increasing failure.
Year 5:  The last five-year plan has been overturned as a complete failure foisted on the great Soviet people by a clique of reactionaries. We welcome the glorious new five-year plan that will see the great Soviet people achieve world dominance.

Anyone who believes cycling is now completely drug free is fooling themselves.

Or working for WADA.

Maison de Varre, by Pierre Chareau

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French architect Pierre Chareau took few commissions, but those he did were all ground-breaking.  He was the architect’s architect.

maison_de_verre800px-Maison_de_verre_Chareau

His most well-known project is this one—the 1928 Maison de Verre, for the Dalsace family, “inserted” within the courtyard of an existing building—from which every fashionable loft apartment ever since has been copied. Poorly.

verre-interioreberle-grand-hall018b

Consisting of three floors, it was conceived as a total space, with a façade facing onto the courtyard completely enclosed in glass.  Its metal frame structure supported framed panels of glass. While the rooms were separated by wood or metal closet doors that slid or rotated, the structure (beams and steel beams), pipes and ducts remained visible, participating in the architectural design so as to transform the house's functional elements into decorative ones.

More here.

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[Pictures by Todd Eberle, François Halard, Ronald Zoetbroot and unknown others.]

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Thursday, 11 October 2012

Tracking risk without fixing it

The government is developing a database to track around 30,000 grammatically flawed “at-risk” children*—with those included based on measurement against around 130 “risk factors.”

What do I think about that?

Frankly, it makes me uneasy. And when I feel uneasy about something on this subject, I read Lindsay Mitchell.

The development of a database for at-risk children is a good idea....I think. When unsure about something I work it out by writing.
Yes, it's state intrusion. However, the state has a legitimate role in protecting children.

True. But will this protect them?   Lindsay gives just one hypothetical example among many that could be dreamed up, involving a child in the first year of life—their “riskiest.”  Not only are there gaping hole in identifying their risks, but “the database can't predict if, when or how severe “any incident] will be.

And the invasion of privacy involved?

If people abuse welfare and break laws intended to protect others [says Lindsay] then they give up certain rights. Yes, I imagine some people are going to also abuse the database. We've seen that sort of infringement with police and WINZ databases. Some klutz might even email its contents or part thereof to an unintended recipient!
But, on balance, I can support the database. Don't expect it to be the silver bullet though.

No. Who could.

To state the problem properly is to identify it. I suspect that most situations in which children are at risk from their parents (because, let’s face it, that’s the risk we’re talking about here) are known about by all sorts of people, but none of them are in any position—or have any legal authority—to do anything about it.  Thinking through how that is changed might have more effect than simply measuring what’s going wrong.

And I still fear the biggest cause of children being “at risk” from their parents is that money is taken from us against our will to pay no hopers to breed.  To pay children to have children they don’t want.

Until that particular root cause is tackled, the impression must remain that these sort of announcements from this Minister are more about diversionary headlines than they are about tackling the real problems.

* * * * *

* “At-risk children” is grammatical abuse. It would be grammatically correct to call them either “children at risk of X” or “children at risk from X,” but to do that one would need to specify the X. Which would not be politically correct.

‘Aurora,; by Helen Hughes

Aurora4

Whangarei artist Helen Hughes began as a potter, before discovering she had vital figures like this inside her bursting to get out…

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Buy her work at the Quarry Arts Centre, Whangarei.

Wednesday, 10 October 2012

Is #Hyperinflation About to Light a Middle Eastern Powder Keg?

The latest experiment in printing money is turning into another disaster. Someone tell Russel Norman.*

Is Hyperinflation About to Light a Middle Eastern Powder Keg?
Gues post by Marin Katusa, Casey Research Chief Energy Investment Strategist

In the third century, greed got the best of Rome's emperors. As they spent through the silver in the treasury, one emperor after another reduced the amount of precious metal in each denarius until the coins contained almost no silver whatsoever.

It was the world's first experience with currency debasement and hyperinflation. As people saw the value of their savings evaporate, society grew angry and demanded a scapegoat. Christians became that scapegoat, and Romans turned on them with incredible violence.

This pattern - currency debasement leading to social upheaval and violence - would repeat many times over.

In medieval Europe, the number of women on trial for witchcraft climbed in sync with the debasement of currency. In revolutionary France, the Reign of Terror that slaughtered 17,000 wealthy counterrevolutionaries aligns perfectly with the deterioration of the purchasing power of the assignat note.

And in the most vile example: dramatic hyperinflation in Germany in the 1920s allowed Hitler to rise to power by blaming Jews for the country's economic woes.

imageThe connection between currency debasement and social upheaval makes sense - hyperinflation only occurs in times of domestic drama. For example, in 1946 Hungary experienced the greatest episode of hyperinflation on record - in the context of a small, economically limited nation wracked by the Great Depression and then Nazi occupation in World War II. Zimbabwe earned second place in hyperinflation's record books when its dollar inflated 7.96 billion percent from early 2007 to late 2008. The cause? Robert Mugabe's land-reform policy slashed agricultural output and destabilized a fragile society.

That brings me to today... and to Iran, where that volatile mix of domestic drama and hyperinflation is pushing a fragile society to the brink of revolution.

If history repeats itself and Iran descends into revolution, the outcome is both unclear and obvious. In the unclear category: the details of the resulting regime and how far an Iranian revolution might spread through the Middle East. What is obvious, though, are the generalities: a post-revolution Iran would remain Islamist and vehemently anti-US.

Another generality is also crystal-clear. An Iranian revolution - and the potential for that to spawn a new set of Shia-based alliances across the Middle East - would be very good for oil.

And if Iran's currency continues its dramatic nosedive, that revolution - and oil-price spike - might be just around the corner.

Dark Days for Iran's Rial

On October 3, riot police converged on Tehran's Grand Bazaar. With water cannons and batons, they dispersed a large crowd of demonstrators who were calling President Mahmoud Ahmadinejad a traitor for his mismanagement of Iran's economy.

The location was significant: The Grand Bazaar is often described as Tehran's economic heartbeat, and its merchants kick-started the 1979 revolution that ended Iran's monarchy and ushered in the Islamic Republic.

The spark that lit the protest flame this time? The Iranian rial had lost a third of its value against the dollar in the three previous days.

But that was simply the latest drop in a currency devaluation that has been both rapid and profound.

The rial had been slowly losing value against the US dollar since international sanctions against the country's nuclear program took effect in mid-2011. The devaluation was gentle for the first year, but picked up speed in June. A few months later, the currency started to freefall.

On the weekend of September 8-10, the rial lost 9.7% of its value. On October 1 alone, the rial declined 17%. By the next day the black-market exchange rate reached 35,000 rial to the US dollar, marking an 80% decline in the past year.

The massive devaluation is fanning the flames of Iran's burning fiscal situation. International sanctions over Iran's nuclear program have accomplished one desired aim: major inflation. The Iranian government says inflation stands at 25%, but unofficial estimates put it much higher, between 50-70%.

It all translates into far higher prices on staples like food and fuel. Iranians now pay three times as many rial for meat as they did a year ago. Iran's farmers rely on animal feed and vaccines that are imported and therefore priced in US dollars, and they have to pass on the increased costs to consumers.

In the meantime, unemployment is also rising unchecked. Overall unemployment is close to 15%, while youth unemployment is almost 30%.

The Iranian Influence

Soaring food prices, deteriorating employment prospects, and heavy-handed police tactics kicked off a revolution in another Middle Eastern country not long ago. Tunisian vegetable vendor Mohammed Bouazizi set himself on fire in December 2010 to protest precisely those problems; the ensuing riots started his country down a rapid road to revolution. Tunisia's transition turned heads across the Middle East, and the Arab Spring was born.

Iran's ayatollahs are now facing a very similar situation. The rial is dying and hyperinflation is creating real potential for full-fledged economic panic. Continued protests like the one in Tehran's Grand Bazaar would represent a real threat to the ruling regime.

The response from above is easy to predict. Iran's ruling clerics did not hesitate to use force to repress the widespread discontent sparked by President Ahmadinejad's re-election in mid-2009, and used the same riot police in the Bazaar last week to silence dissidence. Bigger protests will almost certainly draw an even more aggressive response.

The regime will also likely offer up a scapegoat. Ahmadinejad is the most likely candidate - he has been clashing with the conservative elite for several years now, and his second and final presidential term ends next summer anyway.

Will a combination of repression and Ahmadinejad's head silence the masses? Maybe, maybe not. When people see their life's savings evaporate - Poof! - in a pile of worthless paper, they get really mad. And really mad people with little to lose is precisely the fuel that feeds revolutionary fires.

However, don't let Western ideals like democracy and the separation of church and state cloud your idea of a reformed Iran. A new regime in Iran would still be Islamist; indeed, the country would almost certainly remain guided first by religion and second by politics. Generations of Iranians have been taught to believe in Shia Islam above all else, with hatred of the United States coming in a close second. Those pillars of Iranian culture would remain.

As such a new Iran could closely resemble the old Iran - but in the meantime, instability could easily spill across the country's borders. Shia populations in other parts of the Middle East could well gain confidence from Iran's uprising and begin uprisings of their own, destabilizing the region's delicate Shia-Sunni balance.

Suddenly, Shia populations in eastern Saudi Arabia, Syria, Lebanon, Iraq, and Bahrain could demand greater recognition, an end to discrimination, maybe even some form of autonomy. The significance of this cannot be understated. The Middle East is a balancing act on many levels, but maintaining peace between Shia and Sunni Muslims is perhaps the most important balance of them all.

Iran, unsteady after a regime change and constrained by international sanctions, would undoubtedly reach out to these Shia populations. Shia connections around the Middle East, long held back by Sunni rulers, would strengthen. A pan-Shia block of allegiances could emerge, replacing the Iran-Syria-Hezbollah partnership with a bigger, stronger group standing against Saudi Arabian - and American - interests in the Persian Gulf.

Truly, a riled-up Shia population connected through a new, Iran-based set of allegiances stretching across the Middle East is a recipe for regional disaster.

Disaster in the Middle East is a recipe for high oil prices - and a “bull market” for the ages.

Whether the drama remains confined to Iran - where a popular revolution puts a new leader in place who blockades the Strait of Hormuz as a show of strength - or spreads to Saudi Arabia, where a marginalized Shia population finally rises up against their Sunni rulers, Iran's currency woes mean instability and infighting in the world's most important oil region.

Welcome to what hyperinflation can do.

Marin Katusa is the chief investment strategist, Energy Division, of Casey Research, publishers of the Casey Energy Speculator and Casey Energy Confidential Alert Service.
This post first appeared at the
Casey Daily Dispatch.

* Because as NZIER’s Shamubeel Eaqub observes, “Norman's “quake bond” buying policy is not QE; It's the sort of 'debt monetisation' practised by Mugabe, that will see the poor pay for quake rebuild via inflation.”

Raiding Super to buy votes?

The present Superannuation scheme is clearly unsustainable. Paying universal Superannuation to everyone over 65 for the indefinite future is guaranteed to send us the way of the Greeks. But folk nearing retirement do need to be able to plan their future.

It therefore makes prudent sense to announce that govt will at some specified time in the future begin raising the eligibility age for Super, perhaps by six months at a time ever two years.

To the credit of the Labour Party, they have this as a policy—though in their case they stop raising the age before I would.

Raising the Super age to 67 will save around $1.5 - 2 billion.

Unfortunately, no politician or lobbyist can see a sum like $1.5 - 2 billion without wanting to raid it for their favourite programme.

Enter the Children’s Commissioner, who wants the money saved spent on “developing a mix of services for children”  and increased benefits for beneficiaries with children.

Did you spot the nice sleight of hand? In other words, he wants to “redistribute” the un-wealth from retirees to beneficiaries.

This is just a trial balloon. If it arouses no great hue and cry, expect vote buyers in all parties to follow it up swiftly.

Everybody’s taking offence

Julia Gillard defended her then Speaker Peter Slipper last night by attacking the misogynism of opposition leader Tony Abbott. She took a lot of offence—about 37 times, by my count…

But it was only faux offence. Because what she was defending was this (NSFW).

Which reminds me again of Stephen Fry’s comment the end of the now famous 'Blasphemy Debate':

'It's now very common to hear people say, "I'm rather offended by that", as if that gives them certain rights. It's no more than a whine. It has no meaning, it has no purpose, it has no reason to be respected as a phrase. "I'm offended by that." Well, so fucking what?'

Tuesday, 9 October 2012

Bill O’Reilly vs, Jon Stewart: Big Govt vs. Bigger Govt

Possibly more enlightening than the other American political debate over the weekend, almost certainly more enlightening, and without a doubt a heck of a lot funnier.

[Hat tip Brian Edwards Media]

Paper Money = Despotism

Guest post by Wendy McElroy

The issue of money's quality is the thing that provides the fuel for the dreams of the folk who like to rule us. The animal also fuels the financial markets, now entering another bubble phase. It fuels the banking systems, that are solvent only on paper. Many people say that another crisis is around the corner, and who can doubt it?

Most fundamentally, the issue of sound money comes down to human liberty. There are great books on this topic. My personal favorites are Mises' Theory of Money and Credit and Paper Money Collapse by Detlev Schlichter.
imageThose two books should certainly be in your personal collection. Meanwhile, Wendy McElroy discusses what is suddenly a very topical subject.

Civil Liberties Rest Upon Sound Money
by Wendy McElroy

“FIAT” MONEY IS MONEY with no intrinsic value beyond whatever an issuing government is able to enforce. When it enjoys a monopoly as currency, fiat inevitably turns the free market functions of money inside out. Instead of being a store of value, the currency becomes a point of plunder through monetary policies such as quantitative easing. Instead of greasing society as a medium of exchange, the currency acts as a powerful tool of social control. The second harm is far less frequently discussed than inflation, but it is devastating. The personal freedoms that we know as "civil liberties" rest upon sound money.
    In his classic book The Theory of Money and Credit (1912), Austrian economist Ludwig von Mises argues,

It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically, it belongs in the same class with political constitutions and bills of rights.

    Yet the best solution to the harms caused by fiat is often dismissed even by staunch free market advocates; namely, allow the private issuance of money that freely competes with fiat as currency. This would involve removing all prohibitions, other than fraud, abandoning monetary controls such as legal tender laws and all reporting requirements. In turn, this might well eliminate the Federal Reserve, although people would be free to accept whatever money they wished.
    In his invaluable book What Has Government Done to Our Money? the Austrian economist Murray Rothbard addresses the strange reluctance to consider private currencies,

Many people, many economists, usually devoted to the free market, stop short at money. Money, they insist, is different; it must be supplied by government and regulated by government.

    History frowns upon that theory. Before the United States Mint issued its first coin in 1793, the 13 colonies were awash with an assortment of currencies that included both private and government-issued ones. Current fiscal reality also frowns on this. Privatizing zealot Martin Durkin calls the idea of government guaranteeing the quality of money

the sickest joke in economic history. Governments have always robbed their subjects by debasing the currency, but this abuse, in recent years, has burst all bounds of decency and sanity.

But focusing upon economics and efficiency can miss the reality of how a currency monopoly is intimately connected with the violation of traditional civil liberties.
image    A key reason Mises viewed sound money as a necessary protection of civil liberties is that it reins in the growth of government. When a government prints money without the restraint of competing currencies -- even if the restraining "competition" is a gold standard -- runaway bureaucracy results. Wars are financed; indeed, it is difficult to imagine the extended horrors of World Wars I or II without governments' monopoly on currency. A white-hot printing press can finance the soaring numbers of prisons and law enforcement officers required to impose a police state.
    Floods of currency can prop up unpopular policies like Obamacare or the War on Drugs. That is why government holds onto its monopoly with a death grip. In The Theory of Money and Credit, Mises observes,

The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard.
[Note: Mises addresses "sound money," which is distinct from private money, but both forms of currency would serve the function of putting a severe brake on a government's ability to swell.]

    Another way a currency monopoly threatens civil liberties is by permitting government to monitor virtually all transactions through the financial institutions with whom it maintains an intimate partnership. Total surveillance is a prerequisite to total control, which is what the government wants to establish as quickly as possible. For example, prior to establishing the Suspicious Activity Report (SAR) in 1996 -- a form that financial institutions submit to the U.S. Treasury -- banks were required to automatically report any transaction over $10,000. Now any activity deemed "suspicious" is vulnerable.
    The monopoly facilitates a vicious attack on privacy and has become a main building block of the American surveillance state. As libertarian Mark Hubbard stated,

Civilization is a movement toward privacy, a police state the opposite, and tax legislation has become the legislation of our new Big Brother states.

    Much of the tracking is a pure money grab, but it is also an attempt to ferret out and punish "unacceptable" behavior, like dealing in drugs or politically dissenting. Indeed, it is criminally naive to believe the government will not use these massive and valuable data to target its critics. Thus, people can be discouraged from speaking out. Controlling the information, however, means controlling the currency. Otherwise, anyone could mint gold coins in the middle of the night and release them covertly into the wild.
    Equally, a currency monopoly allows the government to impose social policies that punish and control categories of people. For example, as long as banks function as an arm of the government, they will refuse to open accounts for people without state-issued identification and Social Security numbers. Thus, the "undocumented" are effectively barred from the monetary transactions that are part of everyday life. By contrast, counterculture financial institutions often require little more than a username and a password to deposit funds. No wonder some politicians are increasingly desperate for government scrutiny of Bitcoin, as they fear its decentralised design.  
    The currency monopoly is vital to both the rise of a police state and the targeting of individual civil liberties. In arguing for a free market in currencies, it is important to claim the moral high ground by stating and restating what should be obvious: Civil liberties require sound money. And nothing ensures the quality of a commodity as surely as competition.
___________
Wendy McElroy is the author of The Art of Being Free and a member of the editorial advisory board of Laissez Faire Books. This post first appeared at Laissez Faire Today.

Here’s the good news about Russel Norman’s money printing plan [updated]

First, here’s John Clark explaining Quantitative Easing:

And now, the really, really good news about Russel Norman’s plan to print money to bring down our exchange rate was the response. Yesterday we saw a tidal wave of rational outrage at the Ginger Whinger’s insanity. 

John Key told Breakfast TV, "If printing money made you rich, Zimbabwe would be the richest country on the planet, and it's not.” He said the money plan was ‘wacky’ and could create a financial crisis. And Steven Joyce called it “a sign of panic.”

Given the number of politicians and central bankers around the prepared to embrace the wacky, this response was very encouraging to hear.

As was the response from the commentariat, despite the regular trial balloons promoting the idea launched  by popular commentators Bernard Hickey and Rod Oram. Perhaps the intellectual acumen of our commentariat is more informed than we might think.

  • Roger J. Kerr observed “the worry is that the Green Party’s economic policies generally resemble the Polish Shipyard model, which collapsed twenty years ago as it did not work.” Our currency is high because it is a commodity currency, good exporters have been hedging against the exchange rate, and in any case the dominant determinant of the NZ dollar currency value is what goes on in Australia. The immediate consequence of Russel’s money bomb, he says, would be lower real wages.
    Roger J Kerr explains why politicians should not be trusted with setting the NZ dollar currency value. – INTEREST.CO.NZ
  • NZIER’s Shamubeel Eaqub observes, “Greens' quake bond buying policy is not QE; It's the sort of 'debt monetisation' practised by Mugabe; Will see poor pay for quake rebuild via inflation.”
    The Greens’ policy for the Reserve Bank to buy bonds issued by the government to pay for the Christchurch rebuild was not the same as those policies, Eaqub told interest.co.nz.
    “It’s essentially monetising debt. It’s not even quantitative easing,” he said.
    “The idea of the quantitative easing that is happening in the US and Europe in particular is that they are trying to provide liquidity to banks to promote credit growth in the economy, through the private sector,” he said.
    “What [the Greens] are proposing is for the government to essentially monetise its liabilities through higher inflation.
    “It’s just monetisation of government debt - essentially saying that the central bank will provide credit to the government,” he said.
    In the US, while the Federal Reserve was buying up government debt through Treasury bond purchases, it was not ‘monetising’ Treasuries by buying them directly from the government with the newly created money.
    “The government of the US is still liable for that debt. But here [with the Greens' policy], you’re just going to give that money away. The Treasury bills that the Fed is buying are from the banks, to give liquidity to the banks, so the banks can then lend that money onto the economy,” Eaqub said.
    “Here they are saying [the Reserve Bank] should be buying bonds from the government. Those are two very, very different things,” he said.
  • "Putting money into the system would create a 'sugar rush' but it would quickly wear off.  When would they stop buying?" Mr McIntyre said no-one appeared to have thought of what happened to the extra money flooding around the system from governments buying up bonds when the financial crisis eased.
    Is printing more money the answer? – ODT

And on Twitter, Interest.Co.NZ’s Alex Tarrant posted:

BREAKING: Fuji Xerox approaches Green Party in early bid for printer procurement contract…

Most bloggers were horrified. Whale Oil posted this

image

David Farrar pulled out enough Zimbabwe currency to buy a small chocolate bar:

image

  • “Russel Norman is completely misrepresenting QE by saying that the recent crisis is “evidence it isn’t inflationary”.  QE was put in place to fight the fact that policy was too tight overseas, and they were trying to fight deflation – in essence the fact that inflation stayed near the “target band” in these countries is evidence that QE is indeed inflationary as you would expect … just in the way they were intending.”
    No QE free lunch for NZ – Matt Nolan, TVHE
  • “It's "only" going to be $2 billion that is quantitatively eased. And it's only to buy earthquake recovery bonds.
    Russel Norman must be daft if he expects us to swallow that. What he is proposing is simply the thin end of the wedge, and he will quickly find other justifications to print more and more money. And each time he does, inflation will rise, and life will get tougher for everyone, Green Party supporters included.”
    The thin end of the wedge – KEEPING STOCK
  • “I thought this madness died with Social Credit, but Greens (and Labour may not be far behind) have said that they want the NZ Reserve Bank to effectively start printing money. They think that NZ printing more money is a good way to increase the relative value of the US dollar. We might as well start burning our savings.”
    Greens literally believe money does grow on trees – David Farrar, KIWIBLOG
  • “Printing more money as Norman suggests , is one of the failed policies of the 70s and 80s that the late Sir Robert Muldoon might have favoured.”
    Green snake oil on sale – HOME PADDOCK
  • You can rely on Russel Norman to engage in reality evasion, but his latest attempt to introduce monetary policy into the Green Party's repertoire is laughable… Russel Norman knows that the money you hold should be worth less…
    QE has been the Keynesian response in Japan, the US, the UK and the Eurozone.  The mass destruction of value due to these bubbles popping has been filled by massive money printing, yet it has not resulted in a sustained kickstart to demand… It wasn't undertaken to improve export competitiveness.  It has demonstrably failed to boost Japan's economy.  It has created minor blips in the US economy, and nothing more.
    For The Standard to say that having a consistently high dollar is about speculators making money from New Zealand is demonstrable ignorance.  To think that, say cutting the value of the NZ$ by 25%, is good for the working poor (when it will raise prices of petrol, electrical goods, overseas holidays and any imported books, clothes), is bizarre.”
    Russel Norman says "fuck the poor" with his economic illiteracy – LIBERTY SCOTT

Even comments at the Herald and Stuff and on the blogs have been good:

  • "Norman has just added a new interpretation of "green" in politics. Previously it was just "green" as in environmental; now it's also "green" as in immature." – Terry
  • “More lunatic stuff from the Greens god forbid they ever get into power - the country will be sunk.” – Buster
  • “I liken this to a declaration of 'let them eat cake' indicating a profound gap in understanding economics.” – Demos
  • “Terrible idea. The impact against the US dollar may work out well for exporters, but think about how we will compare to the Australian dollar. More of our talent will move across the ditch for substantially higher wages.” – John
  • “To them money is free, it grows on trees and you just get the next generation to pay for current consumption.” – Prezzie
  • “Just when you think you can trust the Greens, they go and say something so stupid as to guarantee they will never be in charge. Printing more money is something a child would come up with.” – FMax
  • “What is quantitative easing?
    Short answer: It's an unconventional monetary tool used by central banks to stimulate the economy.
    America has been doing this since 2008. It has worked so well for them(sarcasm), that they decided to do it again and are actually deciding at the moment if they need to do it again.
    So by all means Green party, drag us down like the states, we just love to see all our hard earned cash get devalued and disappear while cost of living goes up even more.” – JW
  • “Question for Dr Norman. How much money would have to be created to reduce the overseas exchange rate by the 10 to 15 cents needed to make our exports to anywhere but Australia ( which is our main market and which takes 60% of our exports now at a reasonable exchange rate) competitive.” – Rosy Fenwicke
  • “Why are those other countries in that position. Because they printed funny money. Doubling nothing still equals nothing and it is like putting your head in the sand and pretending that the problem will go away.” – Robert Moody
  • “Playing the 'Zimbabwe' card now. You lose.” – Sylph Critical
  • “Have you actually had a look at what currency dilution has acheived for the US or the UK?
    Quantitative easing has failed again: What madness has seized our leaders! To extend Russel's "currency war" analogy from the other week, there's no point in trying to shoot when you're caught in the crossfire as we are.” – James Stephenson

Monday, 8 October 2012

Russel Norman wants to make bankers richer, and wage-earners poorer [updated]

_Russel-WagesThe world is full of monetary cranks.  Russel Norman is one of them.

If the Reserve Bank were to go out and print $2 billion of new money, as Russel Norman wants them to, are we all better off?

That is, two billion dollars of new paper money on the back of the current base of nearly four billion.

Imagine, as David Hume did years ago, that we all woke up in the morning to find an act of magic had somehow increased the quantity the number of notes and coins in our pockets, in our wage packets, in our piggy banks, and under the couch and chairs.  Everyone of us now goes about our business feeling richer. And so does everybody else—and we all of us would know it.

But have we all become richer? Has anyone? Because as even a moron would know (from which classification Norman is clearly excluded) since we all have the same increase and everyone knows about it—including salesmen—in this fantastical scenario all that increased money is just going to increase all our prices. And nothing will have changed fundamentally*.

And no-one will be better off.

This magic injection of new money [explains Detlev Schlicter in his book Paper Money Collapse] has no impact on the production of goods and services, on resource allocation, or on income distribution…

But that is only true in this magical, unrealistic situation.

Because of course, money never comes into existence in this way.

In reality, it’s very different. In our modern floating-currency paper-money economies, money is borrowed into existence on the back of “securities” like government bonds and assets like the contents of the housing bubble.  Which means when new money comes into existence, the first users of those dollars are borrowers and governments.  So what happens to prices? Well, they still go up, but since  these folk get first use they get to spend the new money before prices rise.

But can you see who misses out? Can you see who’s paying for these new riches?  No new paper notes have been put into your pocket, or into your savings accounts. The pool of real savings has not increased one iota. And no new resources have been brought into existence by the creation of this counterfeit capital.  Which means the new assets now enjoyed by borrowers and the resources distributed on the back of government bonds are simply transferred from savers and non-borrowers to governments and other big borrowers.

Oh, and also transferred to the pockets of those bankers who clip the ticket all along the way.

This is what Russel Norman wants more of.

This is what Russel Norman dreams about today.

Issuing $2 billion of “Earthquake Bonds” to be bought with printed money which will then bid up the prices of building materials and supplies, raid the pool of real savings, and make instantly poorer every wage-earner and every holder of existing dollars (which is almost all of us), making it instantly more impossible for anyone struggling to afford our already unaffordable houses (which is many of us), and transferring to Christchurch resources created by savers and non-borrowers—by means of what can only be called a stealth tax. 

At least his idea of an Earthquake Levy was up front—and would not have helped to wreck the whole price and structure and make you and I and every wage earner so much poorer (and every banker involved so much richer).

Oh, but he says this will help bring the exchange rate down! Which as I pointed out last week, will simply make fuel food and imports more expensive and all wage earners even poorer!

But, says Norman: “They’re doing it everywhere else.”

Yes, and everywhere they’re doing it, it isn’t working.  It was used by Japan for the last two decades—the two decades they call Lost. It was used by Weimar Germany and Zimbabwe. I trust even Russel knows what happened there.

Oh yes, and it’s been used over the last six years in the US, UK and Europe to produce figures showing economic growth when there’s been none.  I trust you’ve noticed with what (lack of) success. And you should perhaps have noticed it has reached a dead end.

It is not a crime not to know anything about economics. But it is to talk as if you do.

Frankly, this is the sort of fantastical pie-in-the-sky kind of monetary quackery that used to be the province of Social Credit.

Perhaps Russel should go out today and join them.

* * * * 

* Except of course for the overnight damage to the price structure and the longer run damage to the structure of bond prices and interest rates. But that’s a longer story not fully relevant to this one.

UPDATE: Liberty Scott: “It is a fundamental attack on the poor, and on those with savings on average incomes.”

Saturday, 6 October 2012

A Party of All the Talents #LibzConf2012 [updated]

UPDATE 2: Welcome Herald readers, with this clarification: No, we didn’t discuss merging with Act. But we did talk about a home for their many and increasing ex-members…

UPDATE 1: Lindsay Perigo’s speech here.

Thanks to everyone from Libz, Act, True Liberals, ALCP, Pirate Party, C&R and Auckland Now for a great conference. Here's what I said to the #LibzConf2012 conference this morning.
 

Good morning everyone.

My name is Peter. And I am a Recovering Libertarian. 

It began for me around 30 years ago. It started small. Just me and a few grams of Ayn Rand. But pretty soon I found myself with fellow addicts, gathering together to drink in John Locke, imbibe Thomas Jefferson, and to snort FA Hayek. 

17 years ago we met in a small smoke-filled room to set about spreading our addiction.

We had big plans for Project Libertarianz. 

We met, and we plotted, and we set out to make a revolution in people’s heads. 

We were hard-arses! flag-flyers. Non compromisers. Not for us the timid wimperings of focus groups too scared to frighten the horses. We plotted and planned and produced policies forged from the sterling silver of sound principle. All policies all principle all the way down the line. 
 
We planned to get these ideas and our policies into parliament, we said. By any means necessary, we said  

With a radio show, a magazine, and a small army of foot soldiers, we did. We got rid of the TV tax from outside parliament, a thankless victory but a hard-earned one. We got parties talking about one law for all; we got some of them offering a tax-free threshold. We got right-wing politicians starting to talk about decriminalising cannabis. 

But this wasn’t enough. We wanted MPs in parliament. Oh, we said we didn’t, we always said we didn’t. But we were in denial about our addiction. We knew we had to have MPs. We just found it impossible to get enough votes to have them. Or, for some reason, enough money to promote them properly.

And we found it impossible to find anyone amongst us who really wanted to be an MP. 

Partly because none of us actually even likes politics. Or politicans. 

We know deep down, all of us addicted libertarians do, that what Thomas Jefferson said is true—that whenever a man has cast a longing eye on political offices rottenness begins in his conduct. 

The only reason we libertarians are truly interested in politics is because politics can’t resist being interested in us.

Project Libertarianz began however with the explicit goal of getting Libertarianz MPs into parliament. It was right there on our brochures. Still is, as far as I know. 

But I think everyone who’s suffered from this addiction now knows the truth. 

It’s never going to happen. 

If it isn’t already obvious to you, then please remain seated while I tell you truth: Project Libertarianz has been a failure.

I’ll say that again. Project Libertarianz has been a failure. 

I say that not with any glee, only with huge disappointment. 

What we began with such promise was weighed down by the difficulty of running a never-noticed political party and beset by the never-ending problem of never-enough money.

But let’s be clear here. Project Libertarianz has failed just at the time it is most urgently needed.

We meet here now at a time when a hole the size of the ACT Party has appeared in National’s coalition partners; at a time when there has never been a more urgent need to articulate the goals of economic and social freedom. And to get that voice into parliament by any means necessary.

And I guess that we’re all here today means we understand that. 

So let’s be blunt about the reasons you’re all here. It isn’t just Project Libertarianz that’s been a failure, has it. So too has Project ACT. 

[Come on, how many recovering ACT members are there here? The first stage of any cure is accepting reality.] Project ACT has been a failure. If ACT’s lack of any real achievement hasn’t made it obvious—and I trust no-one here wants to defend the super-sized Auckland bureaucracy that ACT’s second-to-last leader delivered us-- If ACT’s lack of any real achievement hasn’t made it obvious; if the infighting and lack of direction in recent years hasn’t made it clear enough, then the size and quality of today’s ACT caucus surely has to. 

Is THAT what it was all for, all those years of effort? One super-powered mayoralty, and John Banks’s nose in the parliamentary trough again? 

Surely all those millions of dollars and all those years of effort should have delivered something much, much better.

And don’t fool yourself it will all change if you can just eject your current feral conservative from the leadership. The ACT brand is now so poisonous that instead of Don Brash dragging it up, the once well-respected man was dragged down himself by its toxic slick. 

So Project ACT and Project Libertarianz are both failures. 

And if success is measured by achieving measurable goals, then failure has unfortunately been the only thing about which the single-issue Legalise Cannabis Party has to boast.

And that’s despite virtually every MP in the New Zealand parliament happy to confess they’ve inhaled.

I think economic and social liberals from all parties—classical liberals, if you like—can learn from all our failures.

Project Act and Project Libertarianz are failures for opposite reasons.

ACT abandoned principle in favour of populism, and ended up losing both. Libz embraced principle over populism, and while we’ve succeeded in putting some of those principles on the public stage, it’s not as much as we’d hoped from 17 years of trying. 

For similar reasons, ALCP supporters have faced similar disappointment. And many convictions.  

Why the failures? 

Well, why did Project ACT fail? It’s principles are certainly sound, as they should be. they were written by the Libz founder. and I for one would have no difficulty embracing them as the foundation of a new party.

The principal object of the ACT Party is to promote an open, progressive and benevolent society in which individual New Zealanders are free to achieve their full potential.

To this end the ACT Party upholds the following principles:

that individuals are the rightful owners of their own lives and therefore have inherent rights and responsibilities; and
that the proper purpose of government is to protect such rights and not to assume such responsibilities.
 

Nothing there to argue with.

But it wasn’t that ACT’s MPs ever argued with the principles. They seemed to just forgot they were there. And where they should have been waging a battle of ideas against the enemies of their principles, instead they waged a battle of personalities within their own ranks.

And why did Project Libertarianz fail? Not because of any lack of principle, or of talent. Nor because of any lack of intellectual grunt. I still smile when I remember one journalist gleefully recounting the tale of one MP who shall remain nameless making the mortal error, as the journalist described it, of publicly engaging two lanky libertarians in intellectual combat. 

That was our reputation.

But it won us no seats. 

Our ACT critics were right. Victories like this, however delicious, were no substitute for being an MP in parliament with the one single goal of increasing freedom and rolling back the state. (The lack of such a goal being our own criticism of virtually every single ACT MP.

Why did we not get any traction? I’m sure you all have your own answers. We’ve always seen Project Libertarianz very much as a vehicle to educate people. But perhaps it is too early for people to hear what we have been saying. Perhaps, in what Lindsay fondly calls this pathetic authoritarian backwater, we always were just pissing in the wind. Perhaps we did just frightened the horses a little more than we needed to. Perhaps we scared people off.

That’s what Richard McGrath told TV3 last weekend. That our policies were too scary for most people. That they scared people off.

We were told that again during the week by someone putting up her hand to be our in-house Agony Aunt.“In the past,” said Deborah Coddington, who was once our party’s deputy leader.

the Libz narrow dogma -- total free market, wholesale selling of state assets including having all schools and hospitals run by private enterprise, the right to carry guns, and complete freedom to take whatever drugs you like so long as you accept the consequences -- have scared the bejesus out of people.

She’s probably right. We probably did. But someone did have to say those things were right, and so we said them.

And it was fun.
 
But if if I may continue her Agony Aunt column, she offers this advice: [Ahem]

Cliches are usually true,” she says. “as in there's only one way to eat an elephant: one bite at a time. So when you say you want freedom, you can only achieve it one step at a time. Don't terrify people who've been enchained for 30 years. It's like stripping them naked, when you should be persuading them they can just remove their overcoat. It will take time for some to be convinced they don't need to hold Nanny's hand.

Right again. It does. And don’t we know it.

So “finally,” she continues,

tell us what you're for, as well as what you're against. When campaigning for Act, this was a common criticism, and today when I switch on the news or pick up a newspaper, all I see are killings, crashes, our youth are all drunk, the country's broke, we're going to hell in a handcart.
How refreshing it would be for a change, to be asked to give my vote to a party with a sense of life.
 

Right once again. There is much in the present world about which to be honestly afraid. Hell, there’s enough just here at home about which to be terrified. But we need to explain simply how freedom makes things better.

If I may quote a libertarian litany from a fellow who essentially put up his hand last week to be our Agony Uncle, 

With all the this government is doing, said Matthew Hooton in last week’s NBR,

the classical liberal movement should be booming, especially with National’s support falling and the combined Labour/Green vote leading the polls. That ACT languishes on 0.5% underlines that party’s abject failure.

Government spending as a percentage of GDP has grown since 2008 and Finance Minister Bill English borrows hundreds of millions of dollars a month, mainly for welfare.

Prime Minister John Key broke his promise of further tax cuts, yet his pledges to keep Labour’s Working for Families, interest-free student loans and current superannuation entitlements remain inviolable.

Fiscal surplus is elusive. Even if New Zealand reaches balance for a year or two this decade, Treasury’s long-term fiscal outlook indicates that, without major policy change, public debt will surpass Portugal, Italy, Greece and Spain well before mid-century.

A vast new bureaucracy has been established to hand out corporate welfare while other bureaucracies work on five-year plans.

The Ministry of Women’s Affairs, the Ministry of Maori Development, the Ministry of Pacific Island Affairs, the Ministry for Culture & Heritage, the Office of Ethnic Affairs, the Ministry for the Environment, NZ On Air and dozens of other unpopular agencies and quangos continue to exist.

Efforts to expand the private sector into health, education, welfare and ACC are half-hearted at best.

Nothing serious has been done to reform the Resource Management Act, which Steven Joyce rightly points out has already held up new job creation on the West Coast for seven years – with no end in sight.

There is no true freedom to contract under the Employment Relations Act.

While SOEs are not being privatised, management of Te Urewera National Park will be, as part of a Treaty of Waitangi deal with a tribe that didn’t sign it.

Rogue spy agencies are intercepting New Zealand residents’ communications and passing their business secrets to foreign powers.

The nanny state is re-emerging in welfare, including the requirement to enrol children in early childhood centres, seen by some as peddlers of socialist doctrine.

And now National is flirting brazenly with NZ First's Winston Peters…

  It is quite a list.

And, as he says, faced with that, the classical liberal movement should really be booming.

It should be a gift to parties like ours.

But they’re not booming, we’re dying.

And the faces of the alleged classical liberal parties today, if we don’t put something better out in the field ourselves, will be John Bank. And Colin Craig. And, if the United Future Party is successful in changing the name of his party to the Liberal Democrats, Peter Dunne-Nothing—the Minister of Internal Revenue.

Which is why Aunty Deborah and Uncle Matthew and many others like them in the media are just quietly beginning to realise that “Libertarianz representation on councils and parliament would undoubtedly be good for New Zealand.”Better especially than the much less liberal alternative of Colin Craig.

But like them, we must know that achieving that will not be easy.

THERE IS INDEED MUCH about which to be honestly afraid . Our job however is to tell people how more freedom can drive away the fears; how less government will makes their their petrol cheaper, their jobs more plentiful, their houses more affordable and their lives inside them better.

How refreshing it would be for a change, to ask people to give their vote to a party with a sense of life.

But there is opportunity from ACT’s collapse, from Libz realisation of failure, and from National’s desperation for new “partners.” Opportunity for a Party of All the Talents attracting like-minded adherents from all parts of the political spectrum. A party firmly based on sound principles, promoting a small suite of popular policies that get us there one principled step at a time.

Politics is the art of the possible. Does that mean compromise is necessary? Not a bit of it. Look again at that advice from our Agony Aunt. We’ve been trying to eat the whole elephant. But the best way to eat an elephant is one bite at a time. 

Even though we’d been snorting Ayn Rand, we hadn’t realised that Ayn Rand would not even agree with our approach. 

It’s too early for politics, she said fifty years ago. It still is. Too early to be standing at the goalposts demanding that everyone play towards us—which is what, with our all-or-nothing policies, we were doing.  

Ayn Rand talked instead about a “Party X” that wouldn’t just wave at everyone from the goalposts saying “up here,” but would dive into the ruck in the middle of the park and start moving the ball in the upward direction. 

Of course, Rand never used that metaphor. I doubt she ever saw a rugby game, But she did offer a brief prescription for her’ Party X,’ one that rolls back the state even from opposition : A party that uses its principles not as a set of handcuffs, or as something to be banished from its website. Rand’s Party X would use its principles as a weapon.

Party X [she said] would oppose statism and would advocate free enterprise. But it would know that one cannot win anybody’s support by repeating that slogan until it turns into a stale, hypocritical platitude—while simultaneously accepting and endorsing every step in the growth of government controls. 

Party X would know that opposition does not consist of declaring to the voters: “The Administration plans to tighten the leash around your throats until you choke—but we’re lovers of freedom and we’re opposed to it, so we’ll tighten it only a couple of inches.” 

Party X would not act as Exhibit A for its enemies, when they charge that it is passive, stagnant, “me-tooing” and has no solutions for the country’s problems. It would offer the voters concrete solutions and specific proposals, based on the principles of free enterprise. The opportunities to do so are countless, and Party X would not miss them.

No, it wouldn’t .

For example, every political bullfrog and his legrope is presently all afire about child poverty, about mothers being forced out to work, and children being forced into child care by an uncaring Paula Benefit. A Party X wouldn’t miss a challenge of that kind. It would proceed to demonstrate to everyone who would listen that early childhood centres survive on subsidies—which just barely covers the cost for the ever-increasing number of regulations they have to follow. It would point out to everyone that the salary of one parent in every couple is spent just paying their tax bill. That one partner in every couple is effectively going out to work just to pay their tax bill. 

Our Party X would demand to know why, say, the couple can’t even get a tax credit for any money spent on the education of their children, or for those children whose education they might choose to sponsor. And Party X would offer this proposal to voters: a tax exemption for the educational expenses of all citizens.

And Party X would also declare that if people really wanted to put other people first they might begin by taking their hand out of other people’s pockets.

For another example, every hand wringer and his box of tissues likes to wail about the problem of affordable housing. But they have no idea of how to make housing affordable. And they wail about it while doing all they can to make housing even more unaffordable. 

Now I rejoice in the fact there are now many more people already singing from our songsheet—about rolling back the planners’ power over land and building that makes our overregulated housing more than four times the build-cost of freer markets. 

But their proposed changes will take time. A Party X would want to know why councils couldn’t have small consents tribunals for projects under, say, $300,000. As former Federated Farmers president Charlie Pederson observed, "it's little, not large, that suffers most RMA pain." These tribunals, charged with using common sense and common law to make quick decisions, would fix that. 

And Party X would also declare the wider principle that when the productive have to ask permission from the unproductive in order to produce, then you may know that your culture is stuffed. 

I want us to be that Party X.  

And something more. 

We who understand the power of genuine freedom to deliver real prosperity might even realise we can spike the guns of our opponents, to silence those who are only too eager to put us in the ashcan of being “right wing”, by declaring that we are the party of affordability. Because only real economic freedom can make things that are genuinely affordable.

WE might even, if we were to stand for local govt in the likes of Auckland or Ashburton next next year, develop a sort of franchise, calling our loose franschise as necessary, Affordable Auckland, Affordable Ashburton and so on. 

Of course, our Party X would recognise the only way Wellington would ever be affordable would be the erasure of whole govt departments. 

And the only way Christchurch will ever be affordable again, or even a real city instead of a welfare project, will be if it can be made an enterprise zone.  

And we will say that. 

Face it, there are no shortage of opportunities.  

Our only choice should be which particular battles to fight. About which more later.

Let me tell you first what I mean by using our principles as a weapon. 

To start with, let’s realise that eating the elephant one bite at a time doesn’t mean compromise. Let’s realise that right now.  

We certainly have to recognise the realities of what’s politically possible, but that’s no reason at all to withdraw from a commitment to removing the leash from around our throats. Quite the opposite. 

What it does means is that we direct our work as far towards our final goals as possible, and wok fervently for every small gain we can get --- and we formulate our policies on principle to reflect that. Writer Robert Tracinski gives us the big tip:

In judging a measure, he says, one cannot hold it responsible for all aspects of a mixed economy - only for those aspects it changes.  

These changes can be evaluated by a straightforward application of the principle of individual rights: Does the reform remove some aspect of government control or does it add more control?...It is not a compromise to advocate reduced government control in one sphere even if controls in other spheres are left standing. It is a compromise, on the other hand, if one seeks to purchase increased freedom in one area at the price of increased control in another.

Clear enough: Start with what you find, and don’t take responsibility for it. Then design the means to work towards your goal one baby step at a time, without ever purchasing increased freedom at the expensed of increased coercion.  

This is what is meant by the phrase ‘ratchet for freedom.’ 

This approach gives us a real weapon if we can make it into parliament. It would be a game changer.  

We could spurn altogether any idea of coalition, which has killed every minor party who embraced it. Instead, we could give every party in the house the firm commitment that we would vote for every single measure just as long as it removed some government control, just as long as it advanced freedom, just as long as there were no new element of coercion. 

And how could anyone object to that? 

And just think. No need for made-to-be-broken coalition agreements, because any party who needed it would have our cast-iron commitment to vote with them on every measure removing some government control, as long as there were no new element of coercion—which means supporting every budget that removed spending, just as long as there was no new increased burden on anybody. 

Just imagine it. Every politician in the house will be hurrying to understand what the words more freedom and less government actually mean. 

Just think about it. Every journalist in the country who wants to talk up votes in the house will be doing our job for us, because to understand how our votes would be committee—if we get to parliament—would require them, too, to understand what the words more freedom and less government actually mean. 

A principled opposition of course – our putative 'Party X' -- would also promote such policies. An intelligent opposition would design such policies to be picked up and passed around. 

To be picked up and passed around (and to be worth passing around) every policy should pass The Test of the Three Ps: it should be Practical, it must be Principled, and it will have been designed to be arse-grabbingly Provocative.  

Provocative enough to be passed around; Practical enough to be work; Principled enough to move the game in the right direction. The principle with each policy must be clear: More freedom with no new coercion. 

Now I know there are policy wonks in this very room who if we let them would talk enough would all say which specific policies we should promote and why. 

But I’m going to say we shouldn’t sweat the specific policies now. Not yet. Not this afternoon. I say if we get broad agreement now on our general approach, we can put ACT's principles at the top of the page, and meet early next year to thrash out the main policy platform arising therefrom. 

One think I think we can agree on now is that we keep it simple, stupid. 

Here’s what I mean. At the last election, the Greens had great success from promoting just three basic policies. Sorry, three “priorities.” If you recall, the three “priorities” were green jobs, clean rivers and child poverty. It worked. 

Now without commenting on those priorities themselves, I think we’d all say it worked. They found a small number of areas on which there’s huge popular support, and articulated their positions with all the energy and taxpayers’ money they could command..

I think we can learn from that. I’d like to think however that our target voter is smarter than the Greens’s. I’d like to think that. So I think we can do better than three. I reckon we should promote five major policies, a “tight five” of priorities, promoted over and over again until we’re bored with talking about them—because only then will others start to notice. 

So which five do we promote?  

That’s the sixty-million dollar question, isn’t it.  

The populist way for a party to capture support is to find people’s itches and scratch them. Ours is a harder route, but with greater long-term payoff. 

Political parties must first of all capture support, so their policies do have to be popular. But they also have to continually expand the market for their ideas, (something ACT failed to do) so every policy also has to teach.  

Remember, if we’re going to be successful we need to attract the support of around 100,000 people. So I’d suggest the test for being in our “tight five” should be these five points:

  1. Select those policies that clearly demonstrate our principles;
  2. Select those policies for which we estimate there are already 100,000 people in the country who agree with us; and
  3. Select those policies for which those 100,000 will vote for us instead of anyone else.
  4. Reject policies too closely associated with past failure.
  5. Accept those policies that promote the benevolence and sense of life of freedom.

NB: All five points are important.

Selecting those policies that demonstrate our principles keeps us honest, and it helps educate others. (Promoting affordable cities, for example, allows us to teach people that only by making people freer can our cities become more affordable.)

Without popular policies we’re wasting our time. (Promoting marijuana legalisation, for example, which we already know has large support—and tells anyone who needs to know that this is not a right-wing party, it’s one serious about freedom.)

Without policies for which we alone have a competitive advantage, we’re spending time promoting policies for which other parties receive the rewards. (there’s little point in us spending time promoting law and order, for example, because the Nats will lap up that support, not us.)

We have to learn from the sad career trajectory of Don Brash that anything publicly associated with ACT (and possibly everyone associted) is now poison for most people. So that means policies directly and publicly associated with them will be too (which means, unfortunately, that one law for all must be out.)

For too long we’ve rained on everyone’s parade by scaring them about Nanny State and telling them what we’d like to abolish, what we’d like to take away. And that’s scared them. How about we tell them all them instead all the benefits of freedom, like prosperity, like affordability, like choice. Yes, that will be much harder, but I think the sugar pill will prove more palatable to more people.

There is one policy however which by necessity violates this last guideline of being positive.

Let’s face it. Economically, the world is in a mess. I’m convinced that we need to promote balanced budgets and hard money. The payoff for this will be when the unfortunate GFC 2.0 crash happens, and (unlike the other parties) we will be seen to know what we're talking about, just as the likes of Peter Schiff, Detlev Schlicter, and John Allison had their reputations enhanced by warning of the coming of the last calamity.

There is yet another reason to keep our suite of policy themes to a minimum. 

And that’s because not all of us in this room agree on everything.

That’s both the strength and the weakness of a party of all the talents. 

I draw inspiration from the Ministry of All the Talents formed in Britain during the Napoleonic War, and again during the Second World War, that drew on talents from across the spectrum, coming together with the one aim of winning the war.

Our divisions are fewer than those between, say Nai Bevan and Winston Churchill. But with their aims limited to specific goals, they could find agreement.

So can we.

WE have a mission. We have a goal. We share an understanding, I think, of how to get there.

Now, to the extent that we are successful in attracting large numbers, we’ll all be running into people we’ve had run-ins with before. To that I say “suck it up.” That’s a good thing, it will be one early sign of our success—that we’re drawing in people who have left the lists for other things and have now returned to the battle. If it happens, as it should, embrace it. And as long as we’re honest with each other, and all our aims are the same, we can agree and get on with it.

OUR IMMEDIATE AIM must be to give a home to ACT's disenfranchised libertarians and social liberals, along with like-minded souls from Libz, ALCP, socially liberal Young Nats and elsewhere. 

AND OUR LONG-TERM AIM must be to produce by education and activism a “freedom bloc” in parliament of intelligent, articulate, knowledgeable advocates of freedom. A principled and powerful Party of All the Talents that regenerates itself by continual education of members and MPs.

(And for those who do read Matthew Hooton, let me assure you that doesn’t mean re-education in the art of romantic realism. Well, not necessarily.)

** AIM OF FREEDOM BLOC: The aim is obviously to be in Parliament within six years. 

Let’s not think that will be easy.It’s certainly possible. But it’s not going to be easy. 

If we’re going to do it, we have to be credible. We have to be financial. And we have to be active.

Outside parliament and struggling for attention, what we really need here is a constant campaign--a permanent revolution, if you will. Not just a three-week burst in some far-distant November, but an ongoing concerted campaign to capture attention for the party, and teach the ideas. 

Q: How many of you are really up for that? How many of you are willing to back that.

The opportunity exists for us to Take advantage. But how many of you value it enough to get behind it. Because this is where it all gets that much harder.

**FUNDING?

Campaigning costs money. Campaigning credibly costs big money.

We have a wealth of ideas. But do we have wealth and funders sufficient to bankroll us?

On that, I bow to those more qualified to answer. But I do know that being credible attracts big money. And I know that some of you know how, and from whom, to extract it.

And we are also going to need grassroots financial support.

I reckon no party with the goals that we have can be taken seriously, or can do the job we need to do, unless there’s regular and decent funding from the membership. Unless there is serous money not just at election time, but all through the electoral cycle. Unless the leader of the party, the man or woman who (like it or not) is going to be the party’s face, is at least getting an honorarium for all the time that doing the job properly will take.

Whatever we choose to call it, if we’re going to do it properly this new project will demand a lot of our time, and cost a lot of money.

So to those who are thinking of applauding me now I’ve finally concluded, just let me say this.

Don’t clap. Just throw money. 

Because if we’re not just pissing in the wind, we’re going to need it. 

* * * * * 

POSSIBLE TIGHT-FIVE POLICIES?

  • Small Consents Tribunals – accept RMA but insist that Small Consents Tribunals are set up, something like Small Claims Tribunals, to deal with projects under $300,000 on the basis of a Codification of Common Law. At one very easy stroke you make more low-cost housing much more affordable for many more people.
  • Iwi then Kiwi – accept ToW, insist only that all property involved (which, let’s face it, is the only way we’re going to see any real privatisation this decade) is individualised and transferrable. And call it what it is. Privatisation. At one simple stroke you have the biggest political power bloc in the country, the Browntable, behind privatisation.
  • Balanced Budget
  • Legalise cannabis
  • Voluntary euthanasia
  • Abolish Search & Surveillance Act, 2012
  • Abolish Maori seats
  • Enterprise Zone for Christchurch
  • Affordable Cities
  • 40/15 tax: $40k income tax free threshold, 15% GST
  • A Very Special Carbon Tax: linked to temperature rise in troposphere at equator
  • Eco UnTaxes
  • Putting Property Rights in the Bill of Rights.
  • Replace zoning with “Coming to the Nuisance”
  • Tax credits for education