"The GOP must be purged of the MAGA curse. Hopefully, the 2026 midterm slaughter of that party will prove to be the bitter medicine that achieves this exorcism."

Some decent commentary on The Wipeout:

The US has no idea the world of hurt that it has ushered. It is truly soul-crushing to see some of the outcomes. My reaction is not based on partisan politics but rather a deep love and reverence for the US. Regrettably, American Exceptionalism is increasingly disappearing. I will continue fighting in the battle of ideas but I fear that this might be a fatal inflection point. May the America of the Founding Fathers eventually prevail.

~ Gad Saad

 

Far from saving Americans from socialism and the whackadoodle, economically illiterate left, Trump has fuelled their ascent to power - an ascent so quick and full that it was unimaginable just two years ago. Trump achieved this remarkable, horrible feat not by doggedly promoting free markets and constitutionally limited government but, instead, in part by revealing repeatedly to the American people that he has no use for such principles - or, indeed, for any principles at all.
    The other part of Trump's contribution to America's jolt toward collectivists-in-power is his obvious immaturity. No ordinary American would welcome such a clown as a neighbour. Every ordinary American cursed to have such an infantile bully for a neighbour would treat that neighbour as a curse, someone to avoid and to hope will soon move to another town - hopefully one far away.
    So, yes, in 2024 Trump 'had the libs.' But he, in his juvenile brain, didn't 'have the libs' in order to return America to a principled policy of limited government and free markets. He 'had the libs' as a sort of reality-show host selfishly interested only in getting a rise out of people with his ridiculous antics and schoolyard 'humour.'
    If America fifty years from now is as economically moribund as is today's Europe - not an unthinkable prospect - with property rights held in contempt and bureaucrats intruding into every aspect of Americans' lives and the Constitution a dead letter, a chief spark for this terrible fate will have been Trump. Fortunately for me, I'll not be around to witness this calamity.
    The GOP must be purged of the MAGA curse. Hopefully, the 2026 midterm slaughter of that party will prove to be the bitter medicine that achieves this exorcism. But no friend of liberty – no economically literate person – no American who understands and is committed to the liberal tradition that gave birth the the American nation – is pleased that the crop of illiberal (and indeed, in some cases openly anti-semitic) economic imbeciles who yesterday were voted into office will soon exercise power.
    But, hey, despite the collectivism enabled by Trump - and in no small part practiced by him - Americans in 2076 will have a gargantuan arch at which to gaze. So there's that.

~ Don Boudreaux

It’s more than the war: It’s Trump. The American people rejected Trump.
    They rejected Trump on the grounds of his handling of the war, yes — but moreover they rejected him (and by extension his party) for his constant distractions, distractions that everyone understood detracted from the fundamental reason that Trump got himself reelected. In 2024, Trump promised — no, he guaranteed — a return to low inflation and prosperity; he promised real wage growth; he promised cultural normality.
    Instead, the last two years have brought an air of shambolic chaos in Washington. Trump careened from 30 percent tariffs to a trade war with China to 10 percent across-the-board tariffs to a trade war on Canada to 100 percent tariffs on China to a potential invasion of Greenland to a real shooting war in the Persian Gulf. On top of all that, he called the 'affordability crisis' a hoax; he put his face on the coinage; he caterwauled about the Nobel Peace Prize; he spent an inordinate amount of time and energy on his White House ballroom and the grass on the National Mall and the trees surrounding public golf courses in D.C.; he spent the closing weeks of the campaign performatively describing the rear ends of Republican political candidates; he put internet-obsessed 14-year-olds in charge of the White House Twitter account.
    I’ve long thought that the true origins of the blue wave that crashed ashore this week were the Liberation Day tariffs of April 2025. But the issue, in my view, wasn’t tariffs per se — though the tariffs did put upward pressure on prices and that certainly didn’t help.
    I see the Liberation Day the same way that I see Joe Biden’s Afghanistan withdrawal debacle in the summer of 2021.
    Why? Afghanistan and Liberation Day were the precise moments when normie, not particularly partisan, not particularly tuned-in Americans looked up in horror and lost confidence that Biden and then Trump were capable of basic competence. Neither presidency ever recovered.
    If the economy were roaring throughout 2025, inflation was under control, and real wages were up, voters may have given Trump a little more leash on Iran and high gas prices in 2026. After all, while gas and diesel prices were painfully high, American combat troops weren’t dying in large numbers. But after the chaotic deployment of the tariffs in April 2025 and the economic shocks that resulted, voters simply weren’t going to do that.
    To be clear, the Iran war, especially the way it has been handled, especially the way that Trump constantly promised that victory was just around the corner (or was already in the bag), is not popular. But unpopular foreign wars don’t typically turn Texas into a blue state. Texas, after all, with its important oil and gas sector, has a lot to gain from consistently elevated energy prices. If the Iran war was so extremely unpopular as to come close to destroying the Republican Party as a viable electoral enterprise going forward, where were the massive street protests in the suburbs of Dallas and Houston?
    More convincingly, after eleven years as the dominant, completely unavoidable figure in the nation’s political life, the American people were sick of Donald Trump. On Tuesday, they showed him just how sick of him they were."

~ National Review's Mark Antonio Wright: 'It Was Trump, Stupid'

In fact, sheer exhaustion now defines the public’s responses to Trump, too. Many Americans who had a lot of tolerance for him and once found his antics entertaining are tired of it all. His silly nicknames and his petty whining haven’t gotten any dumber — they were always this dumb. But many people who thought they were funny have grown sick of them, and Trump’s sheer unseriousness now strikes some of his former supporters as inadequate to the office and the moment.
    That this exhaustion is what drove the midterm wave is crucial to understand if we want to learn some lessons from an election that harbours a lot of them.
    These lessons aren’t new, despite the scale of the outcome. There is always a tendency in the immediate wake of an election to see its results as a stark change of direction launching something wholly unprecedented. But it seems to me that the message of this election is pretty much the same as the message of all of our national elections for at least a decade now. The message is: 'No, thank you.'
    The American electorate has been repudiating the status quo again and again, but our political leaders have refused to offer something different. Trump’s election in 2016 was a rebuke of the increasingly culturally radical Democratic Party of Barack Obama’s final years. Joe Biden’s election in 2020 was a rebuke of Trump and his ridiculous approach to governing. But in its place, Biden offered a return to exactly what voters had rejected by electing Trump to begin with. So in 2024, voters rejected that cultural progressivism yet again, but all they were offered in its place was literally the return of Donald Trump. Now they’re rejecting that again, and presumably the next two years will only make them more eager to put it behind them.
    In each case, the public rendered a negative verdict on the loser, not a positive verdict on the winner. We have been living through what you might call a politics without winners."

~ National Review's Yuval Levin: 'Another Repudiation Election'

 

Vice President J.D. Vance and others in the Republican Party are reportedly trying to pin the blame for this result entirely on the war. 'The reason we lost is the war,' Vance told The New York Times on Wednesday—conveniently pinning all the blame on the one major Trump administration decision that he's questioned.
    But the tariffs are a major part of the story.
    Tariffs are Trump's signature economic policy. More than that, in fact. They have become the signature economic policy for the entire populist movement that has sprung up around Trump. The president promised a 'golden age,' and allies like Oren Cass and Peter Navarro promised a realignment that would bring working-class voters into the GOP for good.
    So how do Americans view this tentpole policy of the populist right?
    According to an NBC News exit poll of midterm voters, just 21 percent said the tariffs had helped the national economy. Even fewer voters, just 14 percent, said the tariffs had helped their local economies. Meanwhile, more than 60 percent said the tariffs had caused harm.

~ Eric Boehm, from his column 'How Did Republicans Lose This Badly? Voters Turned Against Trump's Tariffs.'

It's a wipeout

 

Yesterday's wipeout of the Republican ticket should be a message to MAGA -- that Americans have had enough of the presidential office being soiled. Of tariffs as threats, of executive power abuse, of debt soaring and liberties trampled on. Sadly, however, the MAGAts are too dumb to read the text. The Copium they're busy inhaling is that's all about petrol prices and "the Iran thing" ...

But it's still a wipeout.

More soon.

Here are the Surfaris...

Rhetoric

“Freedom has cost too much blood and agony to be relinquished at the cheap price of rhetoric.”

~ Thomas Sowell from his 1980 book Knowledge and Decisions

Don't you just hate those billionaires

A challenge here on Twitter that Chloe Swarbrick would love: to "name one time a billionaire has lowered your bills." It didn't go exactly as the troll might have hoped ....

Rock Chartrand chimes in. "Name one? How about a few?":

Rockefeller lowered the cost of kerosene through efficient refining and distribution. 

Ford made automobiles affordable through mass production. 

Carnegie reduced steel production costs through industrial innovation. 

Walton lowered retail prices through bulk purchasing and efficient logistics. 

Dell made computers cheaper by eliminating retail intermediaries. 

Kamprad made furniture affordable through flat-pack manufacturing and distribution. 

Bezos intensified retail competition through Amazon. 

Koum made international messaging practically free through WhatsApp. 

Page and Brin made search, navigation, email, and translation available without direct charges. 

And that's barely scratching the surface. In fact, it would be considerably more challenging to find a billionaire who earned their fortune through voluntary trade without lowering costs, improving quality, increasing productivity, or making something more accessible. 

That's how fortunes are generally made in competitive markets. You create value for others, and the more people you serve, the greater your potential reward. 

You don't even have to buy from these businesses to benefit. Their competitors must improve their offerings or risk losing customers. 

These clout chasers destroy their credibility daily without so much as flinching. They enjoy the accumulated benefits of capitalist innovation while confidently demanding evidence that any of it ever happened. 

The economic illiteracy would be impressive if it weren't so commonplace.

As someone pointed out, it's almost ironic that tis question is trending on the day that Nobel Prize winning economist Bill Nordhaus has passed. After all, it was Nordhaus who reminded us (in summary) that "innovators capture only a tiny share of the fruits of their innovations." 

This shows something about property rights: "If only 4% of gains went to innovators and we got so much innovation, what if property rights were tightened? What if they could appropriate 5% instead? How much more innovation would we get?"

It also shows something about envy. Just imagine if folk weren't so damn keen to slap taxes on innovators ...

If you really *must* vote ...

Here's your regular rooting-tooting-shooting all-balls-out electorate voting guide for 2026 courtesy of Liberty Scott -- who every three years issues his voting recommendations for liberty lovers.

You already know my own.

These are his.

It includes voting for Craig Renney in Wellington Bays. And a recently sacked Labour candidate. So there are a few surprises ...

"It is futile to fight against, if one does not know what one is fighting for."

"It is futile to fight against, if one does not know what one is fighting for. A merely negative trend or movement cannot win and, historically, has never won: it leads nowhere."

~ Ayn Rand from her 1967 lecture "The Wreckage of the Consensus," collected in the book Capitalism: The Unknown Ideal

Reject political tribalism

If you don't have friends with a whole range of political views, then you're doing it wrong. 

Political tribalism might be all the rage, but it's neither helpful nor hopeful. Discontented liberal Helen Pluckrose reckons you should rethink the idea that you should shun the 'other' side cos they're all evil:

"I think several common cognitive biases are in play when we regard an entire political tribe as defined by deeply malevolent qualities. ...

"It has been particularly common to attribute such absolute and blanket condemnation to the political left in recent years and for good reason ... This is not unique to the left however ...

"Why do so many choose to pay much more attention to extreme provocateurs than thoughtful commenters in the first place? Why do we form ourselves into political tribes online despite having the opportunity to access the widest range of views? And why do we feed algorithms in ways that make them feed us back a constant stream of the political narratives we already believe in? ...

"The way to address this is to make deliberate efforts to think better and engage with others in ways that facilitate [improvement] ...

"Avoid echo chambers on social media and read a wide range of media sources. Actively look for people whose philosophical, political or religious views you do not share but whose thinking you can respect. ... [T]ry to develop a more granular understanding of factions and currents on the other side and where they overlap and conflict. Practice being able to convey the stance of those with whom you disagree as they would present it themselves. ...

"[I]ndulging the cognitive biases that make reasonable and ethical people disappear also helps create cultural conditions in which unreasonable and unethical people can take power. We can all play a part in interrupting that process."

John Cochrane however reckons it might be harder to shake off the tribalism than Pluckrose and others might think. That the welfare state itself has baked it in, and we're only now beginning to feel the consequences.

For better or worse, the regulated welfare state substitutes a personal, individual relationship with the central government for the insurance once provided by family, markets, savings, community, church, charity, and local government.

It's taken nearly a century, but those close-knit relationships have been abandoned for many people --around half the country! -- for one with a government paymaster.

"This raises an interesting thought," reflects James Templeton. 

Might it explain to some degree why we seem to be living in an age of hating each other? Might there even be relevance in the onset of the age being marked by so many apostles preaching kindness?

The older the reader, the more readily he or she may agree with the proposition that personal relationships, within families or among friends, are not easy. Particularly when they involve questions of money, dependency and authority.

How much harder when our personal relationship is transferred to the state.

A dialogue with a voter

"You have to vote," they tell me.

People insist. 

"It's easy to enrol," they say (or said). 

But that's only relevant if I wanted to vote.

And I don't. I don't, because there is no one to vote for.

"But it's your duty. People fought for the right to vote."

The right to vote is also a a right not to vote. That's a vote for 'None of the Above.' And none of the above deserve my vote.

"But if you don’t choose, everyone else chooses for you."

But all the choices suck arse. So whomever everyone chooses will still suck arse.

"But you owe it to yourself and others to pay attention and make a choice!"

It's my attention to the candidates and their teams that tells me there's no choice amongst any of them worth getting out of bed for.

"But if you don't vote, the 'other team' will get in."

Things will happen that way even if I did vote. And what makes you think your team will be any better? 

"But this is the most important election in my lifetime!"

You don't think it's funny that every election is sold that same way?

"But if you don't like the government, then you have to vote against them."

You're voting against; but the team for whom you do vote for take your vote as an endorsement. As a mandate. Don't give it to them.

"But an hour of your time shapes three years of policy."

There is precisely zero chance that even three years of me voting would shape even a second of government policy. 

"But if you don't vote, you have no right to complain."

Contra that: if you do vote you're responsible for those speaking in your name. For all their theft and mendacity, all their threats and bullying, and all of their coercion and overspending. Your vote endorses all of that.

"But you can't complain about a government if you didn't vote."

Precisely wrong. It's only those who didn't vote for them who have any right to complain.

"So vote for the lesser of two evils."

The lesser of any number of evils is still evil. Why endorse that?

"But you speak for people who can’t vote. Children, the sick and the vulnerable are affected by the result but have no vote."

Then in that case they'd be better served by better candidates for office.

"But turnout is a mandate. A government elected by a bigger share of the people can claim to speak for them."

And a government elected on a low turnout might reflect that voters have refused to give them a mandate. 

"But silence reads as consent."

Precisely wrong. Silence too is a voice.

"But, but ... you have to vote."

No, you don't.

Don't vote. It only encourages them.

* * * * 

Q: Any other arguments for voting you've heard?

No wonder politicians despise freedom and free markets.

 

"A major source of objection to a free economy is precisely that ... [i]t gives people what they want instead of what a particular group thinks they ought to want. Most arguments against the free market is a lack of belief in freedom itself."

~ Milton Friedman from his 1962 book Capitalism and Freedom (Chapter 1: "The Relation Between Economic Freedom and Political Freedom")

The population of Christchurch is on welfare.

 The population of Christchurch is on welfare. Or at least the equivalent number of New Zealanders are:

"Benefit numbers are out for September," writes Lindsay Mitchell:

Up again. There are now 417,000 working age people on a main benefit.

Christchurch, New Zealand's second largest city, has a population of 411,000. Think about that.

Up until the mid seventies the percentage of 18-64 year-olds on a benefit never exceeded two. One person in fifty. Right now it's 12.9 percent, or one in eight.

Every type of main benefit is up - Jobseeker, Sole Parent and Supported Living.

This is not a sign of success. 

But it's even worse than you might imagine. As Dan Mitchell (no relation) writes: "to fully understand the level of dependency in a country, you have to know the share of people who actually produce value compared to those who live off of government."

Mitchell, D. calls it the ratio of moochers to producers. Here’s his chart for four major European nations. "In every case," he notes, "the number of people riding in the wagon is greater than the number of people (the orange bars) pulling the wagon."

The ratio in France is especially bad, which may explain why there’s a strong case that it will be the first domino when the next fiscal crisis occurs (as it almost certainly will).

Appropriate then that it was a French economist, Frédéric Bastiat, who observed way back in 1848 that "the State is the great fiction through which everyone endeavours to live at the expense of everyone else."

"It works for a while," notes Michael Arouet, "as long as markets buy more sovereign debt at reasonable interest rates. The party ends when they stop though. For France, they stopped this month, Belgium will be next."

So how do you think New Zealand ranks in this sad statistic? Answer: Better than these four, but only just. The ratio is virtually one-to-one.

This is the (welfare) state we're in. Every worker is involuntarily carrying one other person on their back. And this is long after the so-called "neoliberal experiment" we've all "endured" since the 1980s. 

Here for comparison is the same chart for NZ in the mid-sixties, long before "neoliberalism" was even a buzzword on a Jane Kelsey book subtitle:

The trend is clear. Two-to-one (roughly) has become one-to-one. Or to think of it in absolute terms, while the producers have grown just over three times since then, the number of those for whom they're providing largesse has enjoyed a five-fold growth!

Is this sustainable?

And since "the number-one goal of politicians is to retain power, and the number of voters living off the government is now virtually the same as the number of voters paying for government, it’s very likely politicians will fight to preserve the status quo." And you know what that means.  "Indeed," says Mitchell, D., "this depressing observation is why I put together my 17th Theorem of Government":

That said, there are still grounds for hope. People can wake up.  As he said to a TV audience back in 2009, "parasites should understand they need a healthy host."

* * * * 

Source for European figures Michael A. Arouet. Bibliography of sources for NZ figures:

Current NZ figures (2025–26)

1. Ministry of Social Development. Benefit Fact Sheets: National level data tables, June 2026 (via Figure.NZ, “People receiving main benefits in New Zealand”). https://figure.nz/chart/DQumSxjiCtroXlcC (working-age welfare, about 413,700, which I summed from the four benefit types).
2. Ministry of Social Development. Annual Report 2024/25: Key stats. https://msd.govt.nz/about-msd-and-our-work/publications-resources/corporate/annual-report/2025/key-stats-for-2024-25.html (NZ Super, about 941,500).
3. Public Service Commission Te Kawa Mataaho. Workforce size. https://www.publicservice.govt.nz/data/workforce-data/public-sector-composition/workforce-size (core Public Service of 63,912 FTEs; Crown entities, Police and Defence of about 132,933 FTEs; wider public sector of about 477,400; total workforce of 2,450,500).
4. OECD via FRED. Working-Age Population Total: From 15 to 64 Years for New Zealand. https://fred.stlouisfed.org/series/LFWA64TTNZQ647N (3,445,300, Q4 2025).

Mid-1960s NZ figures

5. Department of Statistics. New Zealand Official Year-Book, 1966, Section 6A (Social Security) and Section 3 (Population). https://www3.stats.govt.nz/New_Zealand_Official_Yearbooks/1966/NZOYB_1966.html(superannuation, age, widows’, unemployment, emergency and miners’ benefit counts at 31 March 1965; 1961 census population aged 15–64).
6. An Encyclopaedia of New Zealand (1966), “Staffing the State Services”, via Te Ara. https://teara.govt.nz/en/1966/government-administrative-system/page-9 (about 142,000 central government employees, 31 March 1964).
7. An Encyclopaedia of New Zealand (1966), “History of Monetary Benefits”, via Te Ara. https://teara.govt.nz/en/1966/welfare-services/page-2 (1,176,100 people covered by benefits, about 45% of the population).
8. An Encyclopaedia of New Zealand (1966), “Employment” (Department of Labour survey), via Te Ara. https://teara.govt.nz/en/1966/27974/print (basis for the private-sector estimate).

Derived numbers (calculations from published figures)

• Private sector, 2025–26: about 1.97 million, from the 2,450,500 total workforce minus the 477,400 public sector (source 3).
• Private sector, mid-1960s estimate: about 599,500, from the survey’s roughly 741,500 employees (source 8) minus the 142,000 central government employees (source 6). This is a rough lower bound.
• Welfare, mid-1960s: about 17,900, from summing the individual benefit counts in source 5. The widows’ benefit count (14,529) is my inference from the order of the yearbook text.
• All percentages and shares: simple division, using the figures above.

Who cares about parties' foreign policy policies?

"It's hardly surprising that foreign policy isn't a big issue in the New Zealand election, and to some extent it is a relief, but on the other hand it should matter -- mainly because the international environment has not been this febrile, dangerous or uncertain since the Cold War. ...

"NZ is vulnerable, not least because supply lines for everything from mechanical parts to fossil fuels to pharmaceutical, as well as export revenues, are dependent on safe shipping lanes and there being an international environment of peace and relatively open trade in goods and services. ...

"As a small country, NZ's preference traditionally has been for an international order, based on respecting the territorial integrity of nation states, and their sovereignty, to be maintained. That is increasingly difficult ...

"[T]he wider foreign policy concern is that there is just an absence of understanding that the international environment is not favourable to multilateralism anymore. ... 

"The US has decided to abandon Europe's defence ... and to appease Russia ... and to treat personal relationships as a substitute for principle and rule of law. ...  The international trade environment has seen the WTO be gutted by both the Trump Administration, and the likes of China, the EU and India, all of which are responding unilaterally.  

"So where do the political leaders see NZ going in defence? Who knows? 

"How would they respond if China attacked Taiwan? Who knows?

"What's their view on the USA as an ally? Not clear.

"Do they think NZ should contribute more to the collective defence of the South Pacific? Maybe.

"Do they think Israel's right to exist is worth defending loudly? Maybe.

"Do they fully support Ukraine remaining within its internationally recognised boundaries? Probably.

"Do they think that the main meaning of the 'independent foreign policy' is being antagonistic to other liberal democracies, including our allies? Who knows?

"I suspect Hipkins and Luxon don't know or care very much about foreign policy, except (in Labour's case) where it grabs votes from more radical rivals.

"But then given NZ is not directly exposed to the consequences of the breaking world order, not many care either."

~ Liberty Scott from his post 'New Zealand election - a dud on foreign policy'

I'm a word+music stan

The phrase "bucket list" comes from a 2007 movie. The origins of the words or phrases "mullet," "material girl," "jingoism," "grandfather clock," "rose-coloured spectacles," "pie in the sky," "spam," (to mean unwanted shit in your inbox) and "stan" (to mean an extremely dedicated (and sometimes problematic) fan) all come from songs -- that last one from the song "Stan" on a 2000 Eminem album. 

Chris Dalla Riva has plunged into what these origins tell us about ourselves.

I think the origin of “stan” is a good example of what I was trying to get [with that]. The fact that we turned a character from an Eminem song into a common noun and a verb, reveals that we needed a word to describe crazed fandom of the 21st century. Songs, in short, not only have the ability to shape the way we think and act, but can point us to deeper trends.

Much, much more of this at Chris Dalla Riva's post, including info on where words like "hip hop," "zydeco," "and "reggae" emerged to describe whole genres of music. And on that, here's Toots ...

The economics of Magical Money Trees (MMT)

Underlying many of the wildest spending promises made by the most irresponsible political parties this election is an idea popularised by so-called Modern Monetary Theory, aka Magical Monetary Theory. This is the idea (as articulated by Chloe Swarbrick yesterday) that "the right-wing mythology around a government budget being the same as a household budget is exactly that, a mythology."  

According to MMT theory, government budgets differ different to normal household budgets (to over-simplify just a little bit) in that the money for government spending literally grows on trees.

If you need more, just print more.

To be perfectly fair, there's a little more to it than that. But not much. And for politicians promising billions of dollars of overspending, for whom the seduction of easy money is irresistible, anything close enough is good enough.

So what more is there? For a government like New Zealand that uses its own currency, MMT argues that government spending does not depend on first raising revenue through taxation or borrowing. Why? Because:

A monetary sovereign creates the dollars by spending and then those dollars disappear when taxed or are transformed into government bonds when the government runs a deficit. The government, therefore, is not financially constrained. MMT proponents argue that government deficits are private-sector surpluses, public debt is private wealth, and big government programs shouldn’t be limited by questions such as “How will we pay for it?” The real constraint, they insist, is the availability of labour and other resources.

So keep printing until all labour and resources are on fire. And then stop. 

"Stopping" is just one of the many political problems with the economic argument: there's barely a politician in the known universe who can stop (over)spending once started.

So it's fortunate that Jonathan Newman has enlisted several luminaries to explain in a new book, from an Austrian perspective, what the MMTers get wrong. [FREE DOWNLOAD HERE of an advance PDF copy].

Newman is also giving a chapter-by-chapter summary on Twitter of the main points, often engaging there with the theorists of MMT -- insofar as they're able to. These are some of the highlights...

Chapter 1 dismantles MMT’s foundational myth that money originated with the state. ...

Chapter 2 diagnoses the “spending illusion” that infects MMT. Joseph T. Salerno shows that MMT is “the unwanted stepchild of the neoclassical quantity theory” ... The spending illusion not only persists in MMT but is put on steroids, resulting in bizarre claims about how the state institutes money and policy prescriptions that “will inevitably distort prices and interest rates, divert resources from those uses that best serve consumer preferences, precipitate inflationary booms and asset bubbles, and generate financial crises and economic depressions.”

In chapter 3, Robert P. Murphy refutes the claim of MMT proponents that government debt represents private sector wealth. The so-called sectoral balance approach ["their debt is your money" say MMTers] is employed by MMT proponents in misleading ways. They imply that the only way the private sector as a whole can save and invest is if the government accumulates debt. Murphy exposes their faulty assumptions and sins of omission. Importantly, government debt is repaid with both explicit and implicit taxation (money creation), meaning that government debt service ultimately comes at the expense of the private sector. ... 

In chapter 4, Patrick Newman demolishes the idea that government spending can ever be productive. ... Government spending ...  should be considered consumption and not investment. Newman reviews the concerns held by Simon Kuznets [the inventor of GDP analysis] about the inclusion of government spending in aggregate production statistics, and then evaluates the growth-inhibiting consequences of government spending in light of its true nature: waste.

In chapter 5, Karl-Friedrich Israel exposes the faulty premises of MMT’s inflation management aspirations. MMT acknowledges that price inflation is an important constraint on government spending. [The author shows that] attempts to measure and respond to price inflation are bound to fail however ... [Furthermore] MMT has no dependable guide for determining if, when, and where government spending is pushing beyond productive capacity [or whether politicians would ever have the capacity to stop spending once started].

In chapter 6, Per L. Bylund points out [that] ... MMT proponents entirely ignore the wealth-creating, resource-economising market process—entrepreneurship and economic calculation are wholly absent from MMT analysis. Instead, they reason from accounting tautologies ... and assume that policymakers can effectively and efficiently manage scarce resources without market prices and the profit-and-loss mechanism.

In chapter 7, Joshua A. Mawhorter shows that MMT prescribes policy from a “privileged position,” taking for granted the laissez-faire preconditions for monetary sovereignty, and instead proposing policies that would undermine it. [Ayn Rand called reasoning like this as committing the Fallacy of the Stolen Concept.] It is this monetary sovereignty, according to MMT, that opens the door for deficit spending, debt monetisation, and government control of resources ... [yet a]chieving monetary sovereignty requires quite the opposite: limited government, sound money, and a flourishing private market economy based on capital accumulation. The US is the MMT proponents’ “monetary sovereign par excellence,” but its economic history exhibits institutions and policies condemned by MMT.

Chapter 8 is the chopping block for the MMT job guarantee proposal [reflected in the Greens's own $8 billion "green jobs guarantee"]... MMT overlooks the fact that apparently idle resources are in such a state for a reason. Resources may have no known valuable use or may be held idle temporarily because the owner anticipates a valuable use in the future. Labourers may withhold their services because they value leisure more highly or as a negotiating tactic in a labour strike. A ... job guarantee programme [financed by printed money] would not reduce idleness in the way MMT proponents desire but merely redirect valuable resources and labour away from productive and economising uses and toward wasteful projects chosen by central planners who are inherently unable to engage in economic calculation.

As you'd expect, the book is filled with countless examples illustrating the arguments. 

It's out officially in December, but fortunately you can download a PDF advance copy now just in time to send a copy to your favourite politician ...

Lies

So how do you know a politician is lying?

A: Their lips are moving:

STUFF: ‘That’s a lie’: We fact-check the fiercest claims from the Stuff Leaders’ Debate...

"In short, this claim is misleading...."

"He later said he had misspoken...."

"Luxon’s office said at the time that the correspondence mischaracterised his position...."

"False. Hipkins is referring to ..."

Does it matter what he is referring to if his lips are still moving?

Reminder

"The moral case for capitalism is that your life belongs to you. Your work, your savings and your plans don’t become somebody else’s property because they have a moving speech about how they’d use them."

~ tweet by 'hamsters'

A debate might have been revealing. I'd like to have seen one.

AFTER THE "LAST DEBATE" LAST last night, I'm still yet to see the first.

That's because we seem to have forgotten what a debate is, how it's structured, how to ensure that one party doesn't continually talk over another party ...

A debate is an event in which participants address the issues and each other, moderated only a person holding a bell. Or an alarm clock. And certainly not a clipboard full of their own questions. 

They don't need to ask their own questions, or to challenge the speaker, because that's what the other speaker is supposed to do -- when they are given their time to do that. And they know their time will come, and they need to be prepared. (Each proper debate has a given time for rebuttal, starting and finishing by that bell.)

In a real debate, all that a good moderator says is things like "fifteen seconds to go," or "time's up." And the candidates themselves get to challenge each other, and we see whether or not they're able to, instead of the fellow with the clipboard trying to do it for them.

Sure, the moderator can set the topic, perhaps saying it's about health, or cost of living increases; and they can even show some figures and give some context. But after that, a moderator should wind up his alarm clock, or prime his bell, because he knows he's not involved. He's not on stage himself. Because this is a debate, not an interview. (And, yes, candidates can talk over the bell, but then it becomes obvious to everyone, including themselves, that they're an arsehole.)

LET'S SAY THAT AGAIN IN case you missed it: A debate is not an interview, which is what we had last night, and have had for the last several weeks: a two-headed or multi-headed interview conducted by a lacklustre over-talking interviewer who too often confuses himself (or herself) for a participant, perpetually injecting themselves into the discussion and too rarely allowing any actual debate to continue. 

It's not a debate. It's an unscripted two-way interview with pre-coached leaders doing their best to say nothing of any substance. 

An un-debate. 

A kind of managed “reality television” in which important issues are safely ignored in favour of the hype, fluff, bluster and insults which are breathlessly reported as evidence that one one of the candidates "won," and the others were looking "tired." (As if it matters how things are said rather than what they were trying to say, if anything.) 

That's why the debaters' lecterns are set up to face the "interviewer," instead of each other, with that interviewer often framed in the foreground, and in the middle of shot.

And so we learn about as much from the interview as we do from every interview over which the over-talking fellow (or fellow-ess) presides.

Oddly enough, the only election debates I've seen that came close to being genuine debates (as in: I'll start the clock and you each have one minute to speak) are the Tamaki and Mt Albert electoral debates hosted by 95bFM. bFM's moderators know more about allowing debate than the so-called professional broadcasters (if indeed that's a label befitting Mr Gower). 

A debate, an actual debate, gives us some idea of opponents' ability to choose their topics, to focus their attacks, to challenge their opponents' flaws or errors -- and something about their character which, in an election in which most policy is "me-too!" is about all you have as a point of difference. 

A debate is not an interview. I'd like to have seen one. It might have been fun -- and even revealing. 

The road to serfdom is paved with good elections

"The long march towards democracy has been to free men from the abuses of the sovereign’s whim. Alas ... democracy contains within it two toxic seeds. ...

"The second is what French economist Frédéric Bastiat observed in 1848: 'the State is the great fiction through which everyone endeavours to live at the expense of everyone else.'

"The longer we have had democracy, the greater demands electors have made on those elected. ...

"We are now several generations into an experiment on dependency so profound that this election we look for politicians who can fulfil central government’s promise to educate our children, pay for our entertainment, supply the news, cover our medical bills and even address our mental health issues.

"These are not the demands of a free people.

"These are the expectations of serfs."

~ Damien Grant from his column 'We escaped the whims of kings. Did we just create a new kind of dependence?'

"Freedom is not empowerment. ... Anybody can grab a gun and be empowered. [Freedom i]s not entitlement. An entitlement is what people on welfare get, and how free are they? It’s not an endlessly expanding list of rights — the 'right' to education, the 'right' to health care, the 'right' to food and housing. That’s not freedom, that’s dependency. Those aren’t rights, those are the rations of slavery — hay and a barn for human cattle."

~ PJ O'Rourke from his 1993 'Liberty Manifesto'

"Remember this if you plan to vote for a party that promises you 'free' stuff..."

"In the country I'm from, we have a saying: 'Free cheese can only be found in a mousetrap.' And it couldn't be more accurate. Please remember this if you plan to vote for a party that promises you 'free' stuff."

~ Ira P.

French youth are rioting about the wrong thing

Parisians are right to protest. But they're throwing rocks at the wrong thing.

In Paris they're rioting again about the price of bread -- against hardship in schools and the rising cost of living. Their target this time: the capitalists who (they say) are making the cost of living unbearable.

And yet, as French entrepreneur Brivael Le Pogam reminds us in this Guest Post, "capitalism is the force that drove down the price of almost everything it touched." And at the same time the state is the force "that blew up the price of almost everything it captured." So why are young people are out in the streets blaming the first for the crimes of the second -- vilifying billionaire producers while demanding more of the same from the state?

French writer Brivael Le Pogam (author of The Shifting Wall) points out the strange the disconnection, here and elsewhere, of young activists from the causes they protest...

French youth are rioting about the wrong thing

by Brivael Le Pogam

On my way to the office this morning, I passed a group of young people protesting, a Palestinian flag draped over their shoulders. 

And I asked myself a question I can't shake: why does this generation always fall into the same trap? No matter the history. No matter the context. Even the ones from wealthy families, who went to the best schools, who were dealt every good card. Always the same trap. 

I don't think it's stupidity. I think it's a mechanism. And a mechanism can be taken apart, piece by piece. 

A. The observation: everything the state touches becomes unaffordable. 

Look at economist Mark Perry's famous chart below, the one people call "the chart of the century." It tracks US prices since 2000. 

At the top, what explodes: hospital services, college tuition, textbooks, childcare, housing. Increases of +100%, +150%, up to +250%, far above general inflation. 

At the bottom, what collapses: TVs, software, phones, toys, clothing. A TV today costs a fraction of what it did in 2000, for an infinitely better product. 

And then look at what separates the two groups. It isn't technology. It isn't complexity. It's one variable, and one variable alone: how much the state is involved. 

At the top: sectors that are subsidised, regulated, shielded from competition; where the state funds demand and blocks supply. At the bottom: sectors where companies fight every single morning to serve you better and cheaper. 

B. The mechanism: why it's systematic. 

When the state subsidises demand without freeing supply, prices rise. Every time. Guaranteed student loans, and universities raise tuition. Housing aid [incl. accommodation supplements] plus blocked building consents, and rents and prices skyrocket. Administered healthcare, and bureaucracy eats the budget before it ever reaches the patient. 

In France it's even more vicious, because the price doesn't disappear: it hides. You never see the hospital bill, you pay it through payroll contributions. [In New Zealand you simply pay it through your taxes.] You never see the cost of school, you pay it through taxes. [In New Zealand you simply pay it through even more taxes.] Public spending at 57% of GDP, one of the heaviest tax burdens in the world, more than €3.4 trillion in debt. And the result? Overflowing Emergency Rooms, falling PISA scores, young people who can't afford to live in the city where they work. 

The market didn't fail in these sectors. It was never allowed in. 

C. Suffering demands a culprit. 

A 22-year-old lives all of this in their bones. They can't find a place to live. Their degree either buries them in debt or opens no doors. The future feels blocked. That suffering is real, and one can't deny it for a second. 

But human beings can't stand suffering without a culprit. They need a face. A scapegoat. 

And this is where everything is decided: who taught them how to read the world? 

D. Whoever tells the story picks the villain. 

Schools are public. Universities are public. Culture runs on grants. Film goes through funding committees. Public broadcasting shapes the narratives. The people handing down the interpretive framework are, overwhelmingly, paid by the very system that creates the problem. 

Do you really think that system is going to name itself as the culprit? No. It names the capitalist. The boss. The landlord. "The rich." The billionaire. The multinational. The commercial West. Same role, same casting, every time. 

E. One lens, a thousand causes. 

And this brings me back to that flag. A generation taught to read every situation through a single lens, oppressor on one side, rich, Western, capitalist, oppressed on the other, will apply that lens everywhere. To housing. To climate. To conflicts on the other side of the world. The cause changes, the lens stays. That's why the trap is always the same: it's not the cause that draws them in, it's the way of thinking that was installed in them. 

F. The perfect inversion. 

Here's the irony. Capitalism is the force that drove down the price of almost everything it touched. The state is the force that blew up the price of almost everything it captured. And yet young people blame the first for the crimes of the second. 

It's like blaming the firefighter for the fire because you saw him at the scene. 

G. The ballot box confirms it. In the US, a few weeks out from the midterms, a large share of urban young voters is getting ready to vote Democrat for more state, more spending, more regulation. New York elected a self-described socialist mayor, carried by young voters, on promises of rent freezes and city-run grocery stores. Rent freezes, the policy that has made housing scarcer everywhere it's been tried. The cure that worsens the disease.

Here in New Zealand, a large share are preparing to vote Greens; to demonise billionaires, soak the rich, and demand more regulation and rent control; and to load a $230 billion tax bill onto New Zealand taxpayers over the next parliamentary term.

In France, it's the same play in two acts. Part of the youth votes for the radical left, which promises more state. Another part votes for the centre, which promises to "manage" the state well, and has dug the debt deeper than ever. Two different ballots, one shared assumption: that the problem is the market, and the solution is the state. 

H. The way out. 

These young people aren't stupid. They're right to be angry. They're just aiming at the wrong target. 

The day they understand that their rent, their tuition and their hospital are expensive precisely because the state runs them, their anger will change direction. They'll stop protesting against those who create. They'll start protesting against those who capture. 

That day, the greatest intellectual scam of our time will be over.

* * * * 

Brivael Le Pogam is a French tech entrepreneur, founder of founder of French AI company Argil and the author of 'The Shifting Wall: Why the West Thought It Had Won in 1989 and How to Get Back to Work. He tweets here. This guest post has been lightly edited for a New Zealand audience.

"...and some of that agenda actually makes the poor worse off."

 

"Those who are primarily concerned about the well-being of the poor are likely to discover over time that much of the agenda of the left does not really do much good for the poor, and some of that agenda -- environmental extremism, for example -- actually makes the poor worse off."

~ Thomas Sowell, from his 2000 column 'Poverty and the Left'

"Capitalism has created the highest standard of living ever known on earth. The evidence is incontrovertible. The contrast between West and East Berlin [or South and North Korea] is the latest demonstration, like a laboratory experiment for all to see. Yet those who are loudest in proclaiming their desire to eliminate poverty are loudest in denouncing capitalism. Man's well-being is not their goal."

~ Ayn Rand from her essay 'Theory and Practice,' collected in her anthology Capitalism: The Unknown Ideal

"Have people in the creative world ever talked like this?"

"A few days ago, David Ellison took control of Warner Bros for $111 billion—and is now merging it into Paramount (which he acquired back in 2024). ...

As a result, this son of a Silicon Valley CEO is now the most powerful person in Hollywood. So I watched with interest when David Ellison appeared on CNBC to talk about his plans for the future. ...

"You might think that Ellison would talk about making great movies or bringing audiences back to theatres—or, at a minimum, creating entertainment for the masses, if not something more artistic.

"But that’s not what he has in mind.

"Instead Ellison boasts: 'We are positioned to win in every single vertical that we operate in….We have the greatest content engine with marquee intellectual properties. You’re immediately getting to scale in streaming' he adds; and then there’s his 'incredibly profitable linear portfolio.'

"Of course, it wasn’t easy to get to this point. Ellison recalled his previous visit to CNBC. 'We launched the hostile on your show,' he tells the host, 'so coming full circle today is quite remarkable.”

"Have people in the creative world ever talked like this? Did Picasso win in every vertical? Did Shakespeare brag about his 'content engine'? Did Beethoven ever achieve a 'profitable linear portfolio'?

"But those saps were losers by today’s standards. Maybe they should have launched a hostile, instead of wasting so much time on their craft. ...

"[The] world of magic and inspiration is under attack now, assaulted by the over-rationalisation of the overseers. So you will look in vain for an entertainment industry CEO who embraces the 'sweetness and humility' that actually define the creative process.

"But I can’t just blame David Ellison, because he’s not alone. Business and finance jargon is now the only language spoken among the people who make the final decisions on almost every aesthetic or artistic matter.

"So when the head of Warner Bros music gets asked about AI, he describes it as “an incredible value creation opportunity.” Say what? But at least that’s better than the CEO who praised AI’s ability to “eliminate lower-value human capital.”

"The brutal reality is that we have reached the stage where artistry can be discussed without any consideration of the artist—who is now an inconvenience in the value chain. ...

"The old-time power brokers at least understood that artists paid everybody’s bills with their creativity—without them, film studios and record labels and publishing houses don’t exist.

"Nowadays the decision-makers have other priorities. They have verticals to dominate. If they could, they would do it with bots instead of artists.

"We deserve better stewards for our creative culture.... [We] need to educate the tech people invading our world. My guidance here comes from a simple proverb (from Confucius): 

“'The beginning of wisdom is calling things by their right names.'

"So when the new bosses talk like technocrats, we must remind them, again and again, that artists aren’t content engines. The work of art is not a brand franchise. And the magical source of inspiration can never be reduced to a vertical.

"And, hey, if that doesn’t work, we can always try launching a hostile. We may not have deep pockets or billionaire dads. But there are other ways to win a battle. If it comes to that, I wouldn’t bet against the creative folk. Because, let’s face it, they are the value chain."

~ Ted Gioia from his post 'Don’t Trust People Who Talk Like This'