"Artificial intelligence may be the most transformative technology of our lifetimes — and a graveyard for the companies built to own it."

"Artificial intelligence may be the most transformative technology of our lifetimes — and a graveyard for the companies built to own it. 

"That isn't a contradiction. It's economics. The railways remade the world and ruined the people who financed them. Aviation shrank the planet and destroyed investor capital for a century. The pattern is old and the reasons are precise: when a productivity gain becomes available to everyone, it stops being worth anything to anyone who sells it. It becomes a gift to consumers. ...

"AI could deliver staggering welfare gains and barely register in GDP — [because] 'transformative' and 'profitable' are two very different words."

~ Pedro Santa Clara from his article 'The Vanishing Value '

Tax Old People (TOP) Party surfing on a media-manufactured wave

"Journalists would be negligent if they ignored smaller parties ..., but the media have a peculiar enthusiasm for the possibility of an Opportunity Party breakthrough.

"The extensive media coverage that has preceded Opportunity’s recent surge in the polls appeared to arrive out of nowhere. ... [And] The type of coverage it is receiving is stellar. Uncritical. Top notch. The kind of stuff you can’t even pay for. ...

"The lack of critical analysis is particularly obvious when one looks at how the party’s ideological positioning is discussed.

"The Opportunity Party is routinely described as 'centrist' ... [yet j]ournalists apparently haven’t felt any obligation to explain why the label applies or whether it accurately reflects the party’s policy platform. ... [which] is calling for socialised public transport, proposing universal pocket money for all, sneering at women’s rights, and running a roster full of Green-esque candidates. Its General Manager is former Labour minister ... Iain Lees-Galloway. And one of the authors of 'He Puapua' is a key candidate for the party ... Opportunity’s flagship proposals involve new taxes, substantial redistribution, and a much more activist role for government in directing economic outcomes. ...

"Take the land tax, for example. ... [A] tax of that scale would represent one of the most significant changes to New Zealand’s tax system in decades. ... [Yet instead of analysis] we get another profile of Qiulae Wong with about as much useful information as a 'Woman’s Day' puff piece. ...

"They are a more palatable and polished Green Party with better business acumen, and an honest media would reflect that so that voters who are inclined toward that kind of politics are informed they have options. Instead I suspect we will be served more of the promotional slop that desperately tries to create an alternative kingmaker because the media loathe the influence of New Zealand First."

~ Ani O'Brien from her post 'The media isn't reporting on TOP's rise, they are creating it'

"The interesting part isn't that some people got rich. It's that most of the richest people changed within a decade."

 

"Socialists see unequal outcomes and ignore the process that created them. 

"The interesting part isn't that some people got rich. 

"It's that most of the richest people changed within a decade. 

"Capitalism doesn't freeze society into classes. It constantly reshuffles them. 

"The system they call unfair is one of the few that allows yesterday's winners to be overtaken by tomorrow's innovators."

~ Rock Chartrand

Alan Greenspan, 1926-2026: 'The Undertaker' passes away

Alan Greenspan, dubbed by Ayn Rand as "The Undertaker."  
Ultimately, he took the job that John Galt refused: economic dictator

"Alan Greenspan died [earlier this week], and the man who spent two decades inflating bubbles will be eulogised as a maestro. Fitting, because he understood exactly what he was doing. 

"In 1966 a younger Greenspan wrote an essay called 'Gold and Economic Freedom.' [In it, he states that the gold standard is essential for economic freedom.] He laid out the case with precision. The gold standard protected savers from confiscation by inflation. Welfare statists hated gold because it stood in the way of their deficits. He wrote that the abandonment of gold made deficit spending a "scheme for the hidden confiscation of wealth." He was right. He knew it. Then he took the job running the printing press.

"From August 1987 to January 2006 Greenspan sat atop the Federal Reserve and did the opposite of everything that essay defended. After the 1987 crash he flooded the banks with liquidity and taught a generation of traders that the central bank would catch them every time they fell. They named the reflex after him: the 'Greenspan put.' He cut the federal funds rate to 1 percent by June 2003 and held it there, and you watched housing prices detach from any sane relationship to income. Mortgage credit gushed. He went on television in February 2004 and suggested Americans consider adjustable-rate mortgages, roughly eighteen months before he started hiking rates into those very borrowers. The man who warned in 1966 about the hidden confiscation of wealth engineered the largest credit distortion in postwar history. 

"Then came the apology that wasn't one. In October 2008, sitting before Congress as the wreckage smoked, Greenspan confessed he had found 'a flaw' in his model of how the world worked. He was 'shocked' that lenders [licensed to print money] had not policed themselves. You don't get to spend twenty years pricing risk at zero and then act surprised when men respond to the incentives you built. Any committee of economists cannot set the price of money better than a market can. 

"Greenspan knew the answer at 40 and spent the next half century pretending he'd forgotten it. The savers he warned about in 1966 paid for that performance. ..."

"Every Fed chair since Greenspan has discovered this truth the hard way. Bernanke cranked rates to zero after 2008, then Yellen kept them pinned there, then Powell printed $4 trillion more during COVID. Each crisis demanded bigger interventions than the last."

~ Handre

 

"Greenspan was the Dr. Robert Stadler of our age: the brilliant man who knew the right principles and betrayed them, certain his own genius could control the evil he agreed to serve. 

"He was a member of Rand's inner circle. His essay "Gold and Economic Freedom" appeared in Capitalism: The Unknown Ideal. He argued, correctly, that the gold standard protected savers from confiscation, that statists hated gold because it blocked their deficits, and that abandoning it turned deficit spending into a scheme for the hidden confiscation of wealth. 

"He even understood that Social Security was a Ponzi fraud that would help bankrupt the nation. He knew all of it. Then he took command of the Federal Reserve and did the opposite of everything he had written. 

"The 'Greenspan put,' rates held at one percent, the housing bubble, the very confiscation he had warned of, engineered by his own hand. 

"Here is the irony. Greenspan knew 'Atlas Shrugged' intimately. He watched Rand create Stadler, the genius who lent his mind to the looters' Institute believing he could outwit them, and who lived to see his knowledge weaponised as Project X. Greenspan studied that warning at the source, from the author herself. He understood the character completely. Then he walked the identical road and became the man the novel was written to expose. 

"When the wreckage came in 2008, he told Congress he had found 'a flaw' in his model. There was no flaw in the model. The flaw was in the choice to abandon what he knew. Some men meet the virus and are consumed by it. Greenspan had the answer at forty and spent the next fifty years pretending he had forgotten."

~ The Rational Animal

"Q: Alan Greenspan passed away [this week]. Alan Greenspan was a close associate of Ayn Rand for a while, and the Chairman of the Federal Reserve … these things did not overlap, as people familiar with Ayn Rand’s ideas wouldn’t be surprised to hear. So, Keith, I’m sure you’ve read [Greenspan’s essay] ‘Gold & Economic Freedom’ many times; so let’s get your thoughts on Greenspan’s passing…

"A: For anyone who’s read that essay, which was published in 1966 as part of [Ayn Rand’s] book 'Capitalism: The Unknown Ideal,' and therefore endorsed by Ayn Rand, he had to evade everything he knew in 1966 in order to take the job at the Fed. And ultimately, he took the job that John Galt refused, which was economic dictator.

"Now … everybody is confused about capitalism … but … there is no greater area of confusion than the concepts around money. Both the critics of capitalism and of gold, and the FANS of capitalism and gold will tell you that he was 'a Maestro' — and if you ask “a master of what?’ you’ll be told he was a master of central planning of our economy, and of managing our little lives for us. …

"They’ll say ... ‘he managed a sound money regime’— and the problem with the concept of sound money they use is an anti-concept, that is, [it’s a notion] that destroys and obliterates a legitimate concept in order to smuggle something else in. And what they mean by ’sound money’ is an irredeemable fiat currency jammed down our throats by the government forcing us to use it as if it WERE money, but ‘sound’ because it’s somehow managed to avoid consumer prices going up [by no too much].

"So I’d like people to think about a simple fact, that in every industry seeking greater efficiency, that is, they want to produce more with less — with less cost, with fewer inputs, with less labour, land, physical commodities etc. — and of course that’s happening relentlessly across the entire economy in every sector (unless regulation prevents it…).

"So suppose the average across the entire [economy] is a 2 percent gain in efficiency every year, all else being equal, you’d expect consumer prices therefore to be falling comparatively across industries, as costs are falling. SO your expect consumer prices tl be falling roughly 2 percent per year.

"So imagine it it were possible as the manager of the currency to debase the currency at a matching rate. Now, this is pure fantasy [hoho!]; this is only interesting as a thought experiment … but suppose it were possible to debase the currency at a matching rate so that every company from Intel to US Steel to Rolls Royce making aircraft engines is cutting costs at 2 percent, [while] you are debasing the currency at a matching 2 percent, and the nett result is CPI = zero. Would anybody call that SOUND?

"I wrote an article called ‘Sound Money is Not What You Think It Is,’ and I had a picture that I took from Norman Rockwell [above, with customer and butcher both cheating] … and I asked if that would be considered a sound measurement of the weight of the chicken, and therefore a sound price to pay … And at best, that’s what Greenspan did."

~ Keith Weiner from Monetary Metals, interviewed on the 'Daily Objective'

"Of course you can 'speak ill of the dead' ...  After all, wrote Shakespeare, 'The evil that men do lives after them; / The good is oft interred with their bones.'

"Alan Greenspan, former chairman of the Federal Reserve System, just died at age 100. The general public wants to blame the United States president for the health of the U.S. economy, but the Fed chairman has much more influence over economic conditions. 

"Greenspan spent some time early in his career as an Ayn Rand acolyte, and in fact three chapters of Rand's book Capitalism: The Unknown Ideal, were written by the future Fed chairman.... Greenspan's opponents on the left therefore interpreted his whole career through a Randian lens, which serves to remind us how stubbornly they refuse to understand the world. 

"Had Greenspan wanted to run the Federal Reserve in such a way as to approximate a gold standard as much as possible, he could certainly have done so. Instead, he used it as an instrument for central planning, with disastrous results.

"Initially, Greenspan could do no wrong. He became known as 'The Maestro' ....  Meanwhile, Greenspan's contempt for the public was legendary: he confessed to Lesley Stahl of CBS that before congressional committees he would speak gibberish -- a tactic he called 'syntax destruction.' The next day the headlines would report two different things about what he had said, and for Greenspan that meant he had succeeded. Greenspan's policy moves (like arranging for a bailout of Long Term Capital Management in 1998) gave rise to the belief in a 'Greenspan put,' according to which investors could be assured that the Fed chairman was prepared to use the tools at his disposal to backstop the market if it should ever fall below a certain level. 

"And of course his monetary stimulus after the dot-com bust in 2000-2001, which looked to some observers at the time as a brilliant move, only delayed the reckoning, and transformed that bust into a real estate bubble (and eventual bust). When the lights of the economy should have turned red, Greenspan made them all green. That was the only recession on record in which housing starts rose rather than fell. 

"The Federal Reserve, like the government itself, has no real goods at its disposal, so while its various tricks can redistribute resources and simulate prosperity, it cannot generate real wealth. It simply arranges the economy into an unsustainable configuration that has to come apart. 

"Because of Greenspan's earlier association with Ayn Rand, and because the general public knows so little about the Fed, when the 2008 crash occurred, people generally went along with blaming 'capitalism' -- even though the Federal Reserve is a non-market institution created by act of Congress and enjoying a government-granted monopoly, and even though Greenspan's manipulations overrode what the market was trying to say. 

"Greenspan's legacy is 2008, and the undeserved reputational damage that the market economy suffered as a result."

~ Tom Woods

'The Myth of Authoritarian Efficiency'

"A spectre haunts debates about governance: the idea of benevolent and efficient dictatorship. Where democratic leaders haggle, delay, and pander, the authoritarian ruler simply acts. Where elected governments bend to lobbyists and electoral cycles, a dictator [it's alleged] is in for the long haul. ...

"Beijing officials invoke it to explain the rise of China; climate activists to argue that the planetary emergency demands that we put democracy on pause; populists to suggest that current institutions are broken and that a fresh start and setting the popular will free requires a firm and unchecked hand. ...

"However, a large body of studies of how democracies and autocracies actually perform across regions, over centuries, and in domains ranging from economic growth to military effectiveness to environmental protection have questioned this story. They do not show autocracies to be superior—on the contrary, the autocratic temptation is, in most domains, a mirage, or even a trap. Not only are democracies morally preferable because they recognise the political equity and dignity of citizens; they also tend to work better. ... 

"Countries that successfully consolidate free and fair elections face substantially lower risks of civil war ... Citizens who can kick out the opposition at elections are less inclined to take to the streets with weapons.

"[D]emocracies have been accused of weakness in warfare. ... Yet the long-term record is unambiguous: since 1815, democracies have won more than 80 percent of the wars they have fought. ...

"Democratic institutions protect property rights in a way that encourages the private investment that drives productivity. And the open circulation of ideas across universities, a free press, and competitive markets is not a distraction from growth but one of its primary engines. Studies show that, on average, democracies enjoy a modest but robust long-run growth advantage over autocracies, and that this advantage strengthens with the quality and longevity of democratic institutions.

"More telling than average growth rates, however, is the frequency with which disasters strike. Unchecked political authority not merely fails to deliver growth; rather, it periodically produces catastrophes. Mao’s Great Leap Forward between 1958 and 1962 killed tens of millions through an entirely man-made famine, a consequence of ideological fantasy insulated from the real world. The Soviet collectivisation campaign produced similar horrors two decades earlier. Comparable disasters in democratic states are virtually unknown—not necessarily because democratic leaders are wiser or more virtuous, but because they face institutional constraints and public scrutiny that make disastrous policies impossible to sustain.

"The most advanced economies in the world are democracies. The handful of countries that have joined the ranks of wealthy, high-technology societies over the past century, including South Korea, Taiwan, Israel, and Ireland, made at least the final leap under democratic governance. Singapore is the sole exception to this rule. Autocratic regimes can mobilise resources to achieve middle-income status, as China has done. But the transition to a knowledge-based economy requires the rule of law, the protection of intellectual property, and the freedom to challenge received wisdom—all of which are systematically undermined under dictatorship. ...

"At a time when open societies face serious pressure from within and without, the temptation to admire their alternatives is understandable. But admiration is not a sound foundation for political judgment, especially not when it is based on a selective reading of the evidence. The autocratic temptation promises fortitude and efficiency—but too often, it only produces chaos and mismanagement; and, occasionally, it delivers disaster."

~ Jørgen Møller from his article 'The Myth of Authoritarian Efficiency'

National's baby bonus demonstrates their ideological rot

You work. 

You earn. 

You're taxed. 

You spend from what's left. 

You save, if you can, from the remainder. 

National leader Christopher Luxon now wants to compel you to save in his chosen politically-connected savings vehicle. You're taxed by coercion, and you'll save by Luxon's compulsion.

And it starts with a Baby Bonus. For which you will be taxed to pay for other people's babies. 

Even Muldoon turned up his nose at that one. In fact, bad as National leader Robert Muldoon was, you can trace the ideological degeneration of the National Party by its reaction to variants on this one policy.

WHEN THE THIRD LABOUR Government went to the 1975 election promising cash payments to families to have children -- the payments supposedly compensating mothers for reduced contributions to Labour's compulsory superannuation scheme due to time out of the workforce -- Muldoon correctly called it a "baby bonus" offered up by the Labour Government as an election bribe.

Not many people, he said, would be fooled into allowing a baby bonus to be put into an account in [Labour's] New Zealand Superannuation Scheme. It was the biggest "con game anyone had seen." It was "just an election bribe." Mr Muldoon said.

That was then.

The National Party today should be explaining without fudging or vapourware how they propose to get the government's accounts into surplus. "But instead," to paraphrase what their former leader said then about Labour's election bribe, "all they can offer is 'Have a baby and we'll give you a couple of thousand dollars'."

Pathetic.

And who is the "we" whose cash will be doled out for this election bribe? Yes, of course, it's you and I, Joe and Josephine Taxpayer.

And as anyone still alive from 1975 might remember, the National Party created an election-winning ad pointing out that to the extent the compulsory savings grew, they would drown out voluntary savings, and their politically-driven investment eventually come to strangle the whole country. It became known as the Dancing Cossacks ad. It became infamous. But it was accurate.

IN 2007, NATIONAL LEADER John Key called Cullen's voluntary Kiwisaver scheme "socialism by stealth." 

And so it was, and is. And Key could have killed it off back then in one sentence, simply by announcing it would be cancelled under his watch. Instead, he oversaw its expansion.

He really didn't care. Muldoon didn't care who disliked him. But Key just liked to be liked.

So now, with the stage set, we see this National Party who want leader wants to introduce compulsion. For which his party give him a standing ovation, and he was granted a few brief moments of warm commentary from the left-leaning commentariat.

The intellectual and ideological rot is complete.

=>Oh, but it will "boost" household savings. 

Bullshit.

People's wont to save is already measured, and measurable. Whether voluntary or by compulsion, their preference to save and/or spend is a measure of their time preference, which is relatively constant over the medium term. Any "boost" by compulsion would undoubtedly see a proportionate decline in voluntary savings, a decline in people making their own choices about their financial future, leaving more capital in politically-driven investment vehicles instead.

=>Oh, but it's "good for the economy." say National Party cheerleaders. It will create a "surge" in investment capital, say investment bankers eager to take your compulsory-acquired savings. 

Bullshit.

As Roger Kerr patiently explained way back in 2007, New Zealand already has access to a whole "vast international pool of capital for investment at a price that is set in world markets." 

KiwiSaver cannot stimulate investment by reducing the world cost of capital. If it increased domestic savings, firms would simply use less foreign savings.

Moreover, much of any additional saving would not be invested in New Zealand. In the interests of prudent diversification, fund managers are likely to place more than 50 percent of the inflows offshore, as the New Zealand Superannuation Fund does. Domestically, they will have to put most of their equity funds into listed companies. The diversion of savings from other vehicles into KiwiSaver might reduce local funding for sectors like small business and farming. These are amongst the most innovative and productive in the economy....

Even if the funds going into KiwiSaver translated fully into additional investment and were manna from heaven, the impact on GDP would be small... The contribution of KiwiSaver to GDP is thus looking very small at best, and could easily be negative, having regard to deadweight losses and distortionary effects on savings and investment decisions. Its contribution is clearly negative compared with equivalent tax reductions. 

Again, and not for the first time, it's necessary to make the point that all the government programmes in the world can't boost productivity -- the only thing they can do help is to get the hell out of the way.

We've already seen the NZ Superannuation Fund (aka the Cullen Fund) invest in every variety of politically-driven alleged investment, from "green" energy" to an Iwi/Māori investment fund -- and as the fund grows by coercion, those calls to divert investment into political vehicles will only increase.

And on the issue of encouraging savings, the basic point to make is this: if you truly want NZers to save, then just stop taking so much of their hard-earned money. 

JIM GRANT: 'AI Is “One of the Greatest Bubbles of All Time”'

 

"Q:We heard a stat recently that if you combine SpaceX, OpenAI, Anthropic potential IPOs, inflation adjusted, these are so large, they're as big as all the IPOs in the nineties combined. What do you think about that?

"A: I think that the excitement surrounding the potentialities of artificial intelligence dwarf the excitement generated by the worldwide web and by the internet and by fibre-optic cables. And I think the dollars, of course, even when adjusted for inflation are larger today. And I think that the role of the Fed[eral Reserve Bank] is more intrusive, more problematical than it was then. And I think that a great deal is riding on the efficacy of the technology on which the world's hopes are hanging. And a great deal is also contingent on whether we collectively have correctly calculated (or miscalculated) the demand for tokens, for data centres, and for the rest of the capital that goes into artificial intelligence.

"So you know, you'd think that any technology with 'intelligence' in the very word would be up to date [on the] supply and demand [for it]. But I think there's reason to doubt that. I think there's a great deal of overbuilding, double ordering, just like there was in the late 1990s [with the Dot.Com bubble]. People thought, well, such is the high degree of organisation of all the information relevant to the marketplace that there will be nothing like the macro miscalculations of yesteryear. But it turns out that the human speculative spirit is a pretty wild thing and is not necessarily grounded by better technology.

"On the contrary, sometimes that can only incite it. So I think that [this] today is one of the greatest bubbles of all time. ...

"A guy from Uber, a COO of Uber, a CFO, was quoted the other day as saying, well, it's it's certainly a wondrous technology. We don't see it in our profit and loss. We can't really rationalise the expense just now. This is all kind of the jury's still out on this. It's wonderful -- it's not wonderful; it is hallucinating -- it is smarter than you ever dreamt ...

"What we do know is that the capital draw on AI is as great as it was on the [nineteenth-century] railroad [boom]. And the value proposition of railroads is very simple ...Now it is what? AI, augmenting human intelligence, planning it?

"We don't know. But the capital draw is immense, and there are dollars that are riding on the success of this and on the correct calculation of supply and demand for semiconductors, for data centres and the like. All this is terrifically important and also unknowable at the moment. So this makes it a time well worth living in."

~ Jim Grant interviewed on the Meb Faber Podcast on 'AI Is “One of the Greatest Bubbles of All Time”'

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What Defines an Asset Bubble? What Got Us Out of the Depression? - ROBERT MURPHY SHOW

"... some notion of irrationality or mania intrinsic to it is ... a required ingredient [of an asset bubble]. Because if you don't have that, it's not a bubble. And and that's how I use the term. 

"So, for example, as opposed to a boom. ...  like if they got rid of the IRS ... and we're sure it's not coming back. I think that would lead to an economic boom, but that wouldn't be a bubble. Okay, there might be a bubble involved if it overshoots ... I wouldn't call that a bubble because a bubble's going to pop. Like that's the whole point. That's why they call it that ...

"I would say for it to be a bubble where it unmoored from the fundamentals, and people kind of know it is. ...[that] at some point, this is going to crash hard, but as long as you think you can get out, it can keep going. And so, to me that's clearly a bubble. And again, I think a necessary ingredient of that is there some element that people know this is unmoored from reality.  ... 

" I'm going to say I don't think loose money or government interference or whatever is a part of the definition. ... [T]here could be a bubble even in An-Capistan if there could just be a mania. That could happen, but I think it would be relatively modest, other things being equal, for the same amount of irrationality and willingness to take a gamble or whatever ...

[H]aving a Federal Reserve Bank thrown into the mix is only going to allow that irrationality to get multiplied... So, the biggest bubbles are necessarily going to go along with a central bank."

"There is a great, basic contradiction in the teachings of Jesus."

"There is a great, basic contradiction in the teachings of Jesus. Jesus was one of the first great teachers to proclaim the basic principle of individualism--the inviolate sanctity of man's soul, and the salvation of one's soul as one's first concern and highest goal; this means one's ego and the integrity of one's ego. But when it came to the next question, a code of ethics to observe for the salvation of one's soul--(this means: what must one do in actual practice in order to save one's soul?)--Jesus (or perhaps His interpreters) gave men a code of altruism, that is, a code which told them that in order to save one's soul, one must love or help or live for others. This means, the subordination of one's soul (or ego) to the wish-es, desires or needs of others, which means the subordination of one's soul to the souls of others.

"This is a contradiction that cannot be resolved. This is why men have never succeeded in applying Christianity in practice, while they have preached it in theory for two thousand years. The reason of their failure was not men's natural depravity or hypocrisy, which is the superficial (and vicious) explanation usually given. The reason is that a contradiction cannot be made to work. That is why the history of Christianity has been a continuous civil war both literally (between sects and nations), and spiritually (within each man's soul).

"The solution? We have a choice. Either we accept the basic principle of Jesus—the pre-eminence of one's own soul—and define a new code of ethics consistent with it (a code of Individualism). Or we accept altruism and the basic principle which it implies—the conception of man as a sacrificial animal, whose purpose is service to others, to the herd (which is what you may see in Europe right now [at the end of a World War]—and which is certainly not what Jesus intended)....

"One may approach my philosophy from either one of two angles. If we assume that man was created by God, then man must live on earth according to his nature and to the rational faculty which God gave him as his distinguishing attribute and his only means of survival. Therefore, accepting an Individualist code of ethics, one would carry out God’s will and be a truly religious and moral person. Or we may assume that there is no God, that all we know is that we are men, we are here on earth, and it is up to us to enjoy it or to destroy ourselves. Then we still must live according to our nature and our rational faculty, and accept the highest perfection of man (defined by our reason) as our standard of morality. My code of ethics will apply and will hold in either case."

~ Ayn Rand in a letter to a fan, July 9, 1946, collected in Ayn Rand Letters

#WealthTax: "Turning capital into consumption must destroy the capital that produces consumption."

"[There's a] difference between wealth and consumption. The poor wish consumption. Turning capital into consumption must destroy the capital that produces consumption. Taxing wealth in the name of inequality will make the world, including the poor, much poorer. ...

"[T]he vision of high lifestyle amid destitution imagines great inequality of consumption. The current outrage, and demand for confiscatory taxation, is over inequality of wealth. (And that, largely mark-to-market wealth driven by high prices.) There is a big difference.

"The hard fact: Our billionaires, and now trillionaire, own wealth that is almost exclusively stock in companies they created. That wealth is almost entirely left reinvested in those companies. And the companies produce great products, innovate, and employ thousands. ...

"Musk’s trillion is not the ready inventory of a huge grocery store that can be handed out to feed people. And if it were, once the store was empty, the poor would be hungrier again, and there would be no store to buy from. ...

"The world’s rich consume very little of their wealth. The worlds’ poor consume a lot of whatever they have. Being poor is not fun. If we split up Musk’s $1 trillion and gave about $100 in Tesla stock to each of the world’s nearly 10 billion people, it’s a good bet they would not be content to consume only 1/10 of a cent extra per year.

"There are plenty of other reasons wealth taxation will not help. Even the billionaire’s wealth, even if it could be transferred and consumed without destroying the seed corn of our economy, is trivial. ...

"The biggest reason it will not work is the simple one: incentives. If you tax wealth, you tax the activities that create wealth. ...

"I too would love to raise the prosperity of the world’s poor. The goal is not the issue. The issue is whether the wealth tax will help or hurt.

"What helps? This graph from Max Roser at Ourworldindata makes the point beautifully..."

The x axis is GDP per capita, not time. 

The y axis is the share living in extreme poverty. 

What helps the poor? Growth. Capitalism and growth. 

Degrowth and wealth taxation will push us right back up that slope.

~ John Cochrane from his post 'Wealth tax equilibrium accounting'

“But let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn belongs to you - and why?”

~ Walter Williams, from his book All It Takes Is Guts: A Minority View

"When Trump insisted the war would only end with ‘unconditional surrender’ it never crossed my mind he meant his own."

"The US has circulated its version of the Memo of Understanding with Iran to G7 leaders in France. It’s as bad if not worse than expected. 

— The moment it’s signed (Friday) sanctions on the export of Iran oil are lifted. So the regime can start replenishing its coffers immediately. 

— The US commits to doing nothing to undermine or destabilise the Iranian regime (it started the war to remove it). 

— The US specifically commits to ending its blockade of the Strait of Hormuz but Iran does not commit specifically to returning the Strait to toll/fee free transit exactly as before the war, with no Iranian control/regulation whatsoever . 

— All sanctions against Iran will be dropped should phase two negotiations go well. And America will withdraw its forces from the region. 

— The US ‘undertakes’ to work with Iran and Gulf allies to create a $300 billion reconstruction package for Iran. So America will now become a partner with the tyrants of Tehran, who Trump only recently wanted to overthrow, in rebuilding their economy. 

— All matters related to Iran’s nuclear capabilities are kicked into the ‘final agreement’ in 60 days time (or longer if necessary). 

— No mention of Iran’s ballistic missile capabilities or its financing of terrorist proxies. 

"And that’s just about it. When Trump insisted the war would only end with ‘unconditional surrender’ it never crossed my mind he meant his own."

~ Andrew Neil

#250YEARS: "A country of money..."

"To the glory of mankind, there was, for the first and only time in history, a country of money — and I have no higher, more reverent tribute to pay to America, for this means: a country of reason, justice, freedom, production, achievement. For the first time, man’s mind and money were set free, and there were no fortunes-by-conquest, but only fortunes-by-work, and instead of swordsmen and slaves, there appeared the real maker of wealth, the greatest worker, the highest type of human being — the self-made man — the American industrialist.

If you ask me to name the proudest distinction of Americans, I would choose — because it contains all the others — the fact that they were the people who created the phrase 'to make money.' No other language or nation had ever used these words before; men had always thought of wealth as a static quantity — to be seized, begged, inherited, shared, looted or obtained as a favour. Americans were the first to understand that wealth has to be created."

~ Ayn Rand from her 1953 essay '“The Meaning of Money” collected in her book For the New Intellectual

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"The truth is that across all the pages of history there have been two fundamental antagonists who have been variously venerated and eviscerated: the trader, and the warrior -- the former the bringer of peace, the latter the bringer of violence. The man of peace, and the man of war. The man who relies on voluntary exchange to mutual advantage, and the man who loots and plunders. The man who produces value, and the man who destroys it. The bringer of peace and prosperity, and all the benighted horsemen of the apocalypse."

=> The three horsemen of non-apocalypse - NOT PC, 2010

"A quarter of a million children now need an income from the state to feed, clothe and house them."

"It's appalling that a quarter of a million children now need an income from the state to feed, clothe and house them. ...

"More than a third of all Maori children were dependent (36.5 percent) ...

"Over two thirds of the children rely on a single parent. Half of the children depending on Sole Parent Support are Maori. ...

"[S]since December 2017 (when Jacinda Ardern made herself Minister for Child Poverty Reduction) the ... number of under 18-year-olds dependent on a main benefit has risen by 31.2 percent.

"Jacinda's prescription for solving child poverty [of raising benefit incomes and reducing the margin between work and welfare] was wrong.

"New Zealand's 'child poverty' problem will not be solved while high numbers of children [still] live in unemployed households. ... [N]ormalis[e] benefit dependency for children and the habit becomes inter-generational. ... 

"This country's approach has to change."

~ Lindsay Mitchell from her post 'Quarter of a million children are now dependent on welfare'

"Just because the Left is hateful, doesn't mean that Musk is rational, a heroic producer, or a good guy."

"The Left is out in force attacking the very existence of a trillionaire. Their nihilism and envy are on naked display.
    "So it's tempting to defend Musk as [some kind of hero of] Capitalism. He's not.
    "He has not only lobbied for subsidies, but promoted the global warming rubbish as part of the Narrative to justify the policy of promoting alternatives such as electric cars (also for another of his companies, Solar City which he had Tesla buy at an overvalued price to bail out himself and his cousins). And promoting the rubbish economics of taxing one company to subsidise another, from which he gained ill gotten loot.
    "He has committed securities fraud. That's when you lie to investors for the purpose of getting them to buy your stock (he said he was taking it private and had lined up the financing--his own Board of Directors was forced to come out and say he's lying). He got a slap on the wrist from the SEC, but any other CEO would have gone to prison.
    "He has committed consumer product fraud, claiming 'full self-driving' since 2017. The Federal Trade Commission told him to stop calling it that, it doesn't work without human attentiveness at the wheel.
    "He has lied to promote a total grift: Hyperloop. These lies were gobsmacking in their mendacity.
    "He is now promoting a collectivist utopian dream of 'making humanity a multi-planetary species' to mask his grift of a trillion dollar NASA contract to send a dozen people to Mars and back. ...
    "The list goes on.
    "Just because the Left is hateful, doesn't mean that Musk is rational, a heroic producer, or a good guy.
    "P.S. when he was in charge of DOGE, he [also] helped himself to all sorts of govt data without any controls or even audit trail. ..."

~ KW

"It will go down as one of the greatest strategic blunders in US history."

"After a war that has cost an estimated $30bn, killed thousands and destroyed hundreds of millions of dollars worth of US military hardware, have any of Trump's declared objectives been fulfilled?

"Five big nos:

• No on Iran's nuclear programme ... It remains far from obliterated.
• No to changing the regime: Ayatollah Khamenei and a slew of top-ranking commanders have been killed but have been replaced by even more hardline figures, apparently in no mood to compromise.
• No to helping the Iranian people who rose up against their government. ...
• No to destroying Iran's ballistic missile arsenal. ... 70% of Iran's missiles remain serviceable.
• No to reining in Iran's proxies. These are not part of any deal ...

"Iran has acquired leverage through this war that it never enjoyed before. Its control of the Strait of Hormuz gave it a grip on a fifth of the world's oil supply. It can wield that power at will in the future.

"It is likely, therefore, to be even less accommodating in these negotiations.

"Attacking Iran turned out to be a massive miscalculation ...

"It has cost America's standing in the world dearly and left Iran potentially stronger.

"It will go down as one of the greatest strategic blunders in US history."

~ Dominic Waghorn from his op-ed 'Trump just admitted defeat on Iran war after historic blunder'

"Does history's diplomatic record know a more consummate moral swindle?"

 

 

"Inciting a people to rise up, abandoning them to the slaughter, then making deals with their executioners: does history's diplomatic record know a more consummate moral swindle?"

~ Emmanuel Ruimy (translated from the original French)

 

"Wealth exists, somehow ... "

"... the political left has long had a remarkable lack of interest in how wealth is created. As far as they are concerned, wealth exists somehow and the only interesting question is how to redistribute it." 

~ Thomas Sowell from his 2002 book Controversial Essays

"The Australian green and gold represents a landscape of 'boundless plains to share.' The victory celebrated today is one of an Australia produced by migration."

"We are a soccer house: we are diehard Socceroo (and Matildas) fans, we are jumping on the furniture with joy at Australia’s 2-0 victory over Türkiye in their opening men’s World Cup game today ...

"It’s a proud day for Australia, but it’s not one that 'anti-migrant' or 'anti-refugee; locals get to share with the rest of us.

• 8 of the present squad who just played the most disciplined, meticulous game in our men’s World Cup history were born overseas - three of those in refugee camps. 
• The 26 players come from 15 different cultural and ethnic backgrounds. 
• That amazing first goal? Scored by Nestory Irankunda (#17) who was born a Burundian refugee in Tanzania. 
• [And just in case we forgot him, coach Tony Popovic's parents migrated from Croatia.]

"When Australia gives opportunity, it’s repaid in talent. It’s repaid in joy. That’s the real story of this country. Every wave of migration brings more of the amazing world we live in to us, making all of us more capable and courageous in engaging with that world, whether our endeavours are in sport or art, business, research, or anything else.

"So I want to say this to everyone jumping on the 'anti-migrant” bandwagon, and everyone making excuses for themselves as they sidle up to those who do:

"The Australian green and gold represents a landscape of 'boundless plains to share'* with anyone from anywhere who chooses this place and chooses to be Australian.

"The victory the rest of us are celebrating today is one of an Australia produced by migration. 

"If you can’t grasp that, I can’t help but wonder what team you’re really on. "

~ Van Badham

* These words are in the Oz National Anthem. Look it up.

 

Thoughts on Prosperity from a Hipster Coffee Shop

This article was written by a 26 yr old American college student by the name of Alyssa Ahlgren who, back then (seven years ago), was in the middle of an MBA. "My Generation," she reckons, "is blind to the prosperity around us!"

I'm sitting in a small coffee shop near Nokomis (Florida) trying to think of what to write about. I scroll through my newsfeed on my phone looking at the latest headlines of political candidates calling for policies to "fix" the so-called injustices of capitalism. I put my phone down and continue to look around. I see people talking freely, working on their MacBooks, ordering food they get in an instant, seeing cars go by outside, and it dawned on me. We live in the most privileged time in the most prosperous nation and we've become completely blind to it. Vehicles, food, technology, freedom to associate with whom we choose.

These things are so ingrained in our American way of life we don't give them a second thought. We are so well off here in the United States that our poverty line begins 31 times above the global average. Thirty One Times!!! Virtually no one in the United States is considered poor by global standards. Yet, in a time where we can order a product off Amazon with one click and have it at our doorstep the next day, we are unappreciative, unsatisfied, and ungrateful.

Our unappreciation is evident as the popularity of socialist policies among my generation continues to grow. Congresswoman Alexandria Ocasio-Cortez recently said to Newsweek talking about the millennial generation, "An entire generation, which is now becoming one of the largest electorates in America, came of age and never saw American prosperity." Never saw American prosperity! Let that sink in. When I first read that statement, I thought to myself, that was quite literally the most entitled and factually illiterate thing I've ever heard in my 26 years on this earth. Many young people agree with her, which is entirely misguided. 

My generation is being indoctrinated by a mainstream narrative to actually believe we have never seen prosperity. I know this first hand, I went to college, let’s just say I didn’t have the popular opinion, but I digress.

Let me lay down some universal truths really quickly. The United States of America has lifted more people out of abject poverty, spread more freedom and democracy, and has created more innovation in technology and medicine than any other nation in human history. Not only that but our citizenry continually breaks world records with charitable donations, the rags to riches story is not only possible in America but not uncommon, we have the strongest purchasing power on earth, and we encompass 25% of the world’s GDP. The list goes on. However, these universal truths don’t matter. We are told that income inequality is an existential crisis (even though this is not an indicator of prosperity, some of the poorest countries in the world have low-income inequality), we are told that we are oppressed by capitalism (even though it’s brought about more freedom and wealth to the most people than any other system in world history), we are told that the only way we will acquire the benefits of true prosperity is through socialism and centralisation of federal power (even though history has proven time and again this only brings tyranny and suffering).

Why then, with all of the overwhelming evidence around us, evidence that I can even see sitting at a coffee shop, do we not view this as prosperity? We have people who are dying to get into our country. People around the world destitute and truly impoverished. Yet, we have a young generation convinced they've never seen prosperity, and as a result, we elect some politicians who are dead set on taking steps towards abolishing capitalism. Why? The answer is this: my generation has ONLY seen prosperity. We have no contrast. We didn't live in the Great Depression, or live through two World Wars, the Korean War, The Vietnam War or we didn't see the rise and fall of socialism and communism.

We don't know what it's like to live without the internet, without cars, without smartphones. We don't have a lack of prosperity problem. We have an entitlement problem, an ungratefulness problem, and it's spreading like a plague.

With the current political climate giving rise to the misguided idea of a socialist utopia, will we see the light? Or will we have to lose it all to realize that what we have now is true prosperity? Destroying the free market will undo what millions of people have died to achieve.

My generation is becoming the largest voting bloc in the country. We have an opportunity to continue to propel us forward with the gifts capitalism and democracy has given us. The other option is that we can fall into the trap of entitlement and relapse into restrictive socialist destitution. The choice doesn’t seem too hard, does it?

Hat tip Michael Reddell Joseph Mooney, who reminds us that for all our own problems eager to be "fixed" by the political classes, New Zealand's own poverty line, measured on similar terms, still begins 25 times above the global average ...

RELATED: Jimmy Carr: “Life has never been objectively better, and subjectively worse”.
Every day we’re here is a stroke of fortune in the grand scheme of time, so appreciate it fully."

We’re living better than 99.9% of humans who ever walked the earth, hot showers, modern medicine, endless entertainment, kids that actually survive infancy, yet so many of us feel miserable. He calls it “life dysmorphia.” We get used to how good we have it (the hedonic treadmill), then compare ourselves to everyone else and tank our own happiness. As he puts it: happiness = quality of life minus envy. Marcus Aurelius put it perfectly: “Very little is needed to make a happy life; it is all within yourself in your way of thinking.” When was the last time you caught yourself feeling unhappy despite objectively having it pretty damn good?

Production IS Profit

 

"[Observe] such meaningless phrases as 'production for use and not for profit.' ... Production is profit; and profit is production. They are not merely related; they are the same thing. They are not merely related; they are the same thing. When a man plants potatoes, if he does not get back more than he put in, he has produced nothing. This would be obvious if he put a potato in the ground today and dug up the same potato tomorrow; but it is all the same if he plants one potato and gets only one potato as a crop. His labour is wasted; then he must starve, or someone else must feed him, if he has no reserve from previous production. 

    "The objection to profit is as if a bystander, observing the planter digging his crop, should say: 'You put in only one potato and you are taking out a dozen. You must have taken them away from someone else; those extra potatoes cannot be yours by right.' If profit is denounced, it must be assumed that running at a loss is admirable. On the contrary, that is what requires justification. Profit is self-justifying."

~ Isabel Paterson, from her 1943 book The God of the Machine (p. 221).

Here's one price control I can agree with.

Price controls never control prices in the way the controllers wish.  Instead, they 'control' quantities demanded, either increasing demand (with a price cap) or diminishing it (with a floor), but in neither case can markets clear. Short-term net result is market chaos; longer-term result is withered markets.

This is generally a bad thing.

But there might be one exception. And the European Union may have just found it:

Any price cap increases demand while reducing producers' ability to meet the supply demanded. Short-term result is undersupplied markets, black markets, and reduced quality. 

But what about when it's only a notional market anyway?

Notes David Turver:

"Capping carbon prices is a small step in the right direction, but scrapping the ETS altogether would be better because paying carbon taxes to the Government won't change the weather."

Authoritarian regimes actively target personal autonomy

"Every despotism has a specially keen and hostile instinct for whatever keeps up human dignity, and independence. ... [T]o de-personalise man, this is the dominant drift of our epoch. ....

"What is threatened to-day is moral liberty, conscience, respect for the soul, the very nobility of man.

~ Henri-Frédéric Amiel, Amiel's Journal, June 17, 1852

"Marxism has never died. It has mutated."

"Here are four things every serious anti-communist should understand about Marxism: 

    "First, Marxism is not primarily a set of economic policies. It is a complete philosophical system built on the claim that private property and markets are the root causes of human oppression and alienation. This is why communist regimes did not simply make economic mistakes - they systematically tried to abolish the foundations of voluntary cooperation. 

    "Second, Marxism focuses heavily on social structures and class forces while leaving very little room for individual choice and moral responsibility. Individuals are treated largely as products of their class position rather than as autonomous agents capable of shaping their own lives. This deterministic outlook underpins both Marxism’s repeated predictive failures and its readiness to justify coercive social engineering. 

    "Third, the authoritarianism, terror, and centralised control seen in every communist state were not distortions of Marxism. They were logical consequences of attempting to impose a total transformation of society (and Mark understood that). Once private property and markets are rejected, coercive state power becomes necessary to enforce the new order. 

    "Fourth, Marxism has never died. It has mutated. Much of today’s identity politics, critical theory, and institutional “equity” activism draws directly from Marxist frameworks - simply replacing economic class with race, gender or other identity categories while retaining the same oppressor-versus-oppressed logic."

~ Creative Deduction

"There is simply no such a thing as a 'cost-push' inflation."

"[I]n the strict sense, there is simply no such a thing as a 'cost-push' inflation. Neither higher wages nor higher prices of oil, or perhaps of imports generally, can drive up the aggregate price of all goods unless the purchasers are given more money to buy them."

~ Friedrich Hayek from his 1976 book Denationalisation of Money