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'

The Santa Claus principle

"An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund, which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself."

~ Ludwig Von Mises from his book Human Action [hat tip Joshua Mawhorter in his article '“Socialism to Me”: Definition by Wishful Thinking']

'The surest way to work up a crusade is to promise people they will have a chance of maltreating someone.'

 

"The surest way to work up a crusade in favour of some good cause is to promise people they will have a chance of maltreating someone. ... To be able to destroy with good conscience, to be able to behave badly and call your bad behaviour 'righteous indignation' -- this is the height of psychological luxury, the most delicious of moral treats.”

~ Aldous Huxley in his 1934 introduction to Samuel Butler's dystopian satirical South-Island novel, Erewhon 

'The British Empire contained its fair share of errors, failures, and evils—both innocently inadvertent and culpable. But that is only half the story.'

"[T]HE BRITISH EMPIRE ... CONTAINED ITS FAIR share of errors, failures, and evils—both innocently inadvertent and culpable. That should not surprise or horrify ...

"But that is only half the story. For ... the British Empire was among the first states in the history of the world to abolish slave-trading and slavery in the early 1800s. It then spent the second half of its life leading the campaign to suppress slavery the world over ... all during a period when the British government’s resources were but a quarter of what they are now.

"In addition, the Empire suppressed the self-immolation of widows and female infanticide in India and female genital mutilation in Africa.

"It moderated the disruptive impact of the inevitable arrival of Western modernity upon very unmodern societies in North America and especially Australia.

"It created regional peace by imposing an overarching imperial authority on multiple, warring peoples—unifying, for example, much of the Indian subcontinent.

"It promoted a worldwide free market, protected by the Royal Navy, that gave native producers and entrepreneurs in India and West Africa new economic opportunities. It made foreign investment attractive by reducing risk through establishing political stability and the rule of law. Consequently, Australia’s gross domestic product per capita became the highest in the world by 1890, and by 1914 India was the world’s fourth largest textile-producer.

"The Empire built canals in India, bringing five times as much land under irrigation as the Mughals had in the 18th century. By 1900 it had figured out how to prevent food shortage escalating into famine there and went on to fight disease in tropical Africa.

"It provided a civil service and judiciary that was generally and extraordinarily incorrupt.

"It introduced liberal ideas and liberal institutions of a free press and representative government to places that had never known them. New Zealand was the first country in the world to grant the vote to men and women on equal terms, in 1893, and by 1935 electoral democracy had been established in Indian provinces.

"From May 1940, when France fell, to June 1941, when Germany invaded the Soviet Union, The British Empire offered Nazi Germany the only military resistance—with the sole exception of Greece.

"Inspired by the ideal of the Commonwealth, it helped to plan and realise the League of Nations after the First World War and the United Nations after 1945.

"And it brought up three of the most prosperous and liberal states in the world—Canada, Australia and New Zealand—and gave birth to one more, the United States. ... 

"SO, HOW CAN WE MAKE OVERALL ethical sense of the British Empire? Can we say that it achieved more good than evil or vice-versa? No, because the goods and evils that the Empire caused, intentionally or not, are of such different kinds that they cannot be measured against one another. They are incommensurable. How much chalk is worth so much cheese? How much racial prejudice is worth so much immunisation against disease? How many unjustly killed people are worth the blessings of imperially imposed peace? How much humanitarian anti-slavery would make up for the evils of slavery? Such varied good and evils as to conclude that one set ‘outweighs’ the other. Here, as often elsewhere, a utilitarian calculation cannot be conducted rationally. ...

"What we can say, however, is that, notwithstanding its very human mixture of virtue and vice, good and evil, the British Empire did display something of a “progression in virtue”.[vii] First came the movement to abolish slavery in the late 1700s. Then came the extension of humanitarian concern to indigenous peoples in the 1830s. With the granting of ‘dominion’ status to Canada in 1867, the idea of the Empire evolving into a voluntary association of independent states began to take root, acquiring the title of the ‘British Commonwealth of Nations’ in 1917. From 1919 India was put on track to become a ‘dominion’ and by the mid-1930s it had acquired the beginnings of representative democracy. In 1939, the British Empire showed its mature, liberal character by committing itself to oppose the massively murderous, racist, totalitarian regime in Nazi Berlin. And after 1945, Britain did not use violence to resist the demand for independence in India and Africa. ...

"THE BRITISH EMPIRE'S HISTORICAL LEGACY CONTAINS virtuous people, noble deeds, and major humanitarian achievements. To admire them is not to indulge in ‘imperial nostalgia’. It is to do them justice."

~ Nigel Biggar from his post 'Empire and Identity'

"The highest praise I can give to any politician...'

"And he is, after all, a politician, so I will give him the highest praise I give to any politician: I’m really looking forward to finding out how he will disappoint me."

~ Robert Tracinski on politician John Ossoff in his post 'We Need an Article I Election'

"What sort of wowsers have we become"

Since I've called out John Key for asking today's politicians to create another housing bubble, it's only fair I praise him when he (rarely) makes sense.

And since it's relevant, let's say the one good thing about his premiership: despite the scorn poured on him by his opponents for being (in Michael Cullen's words) "a rich prick," New Zealanders liked him for that. They saw this particular tall poppy as a good thing.

Which was a good thing. And as the primary personal beneficiary of that emotion, it's relevant to his recent observation about billionaires.

Talking during a leaders' debate about whether being a billionaire is "morally acceptable," he defended billionaires and wealth creation -- with unusual passion -- calling it "nuts" and "morally offensive" to view people as evil just because they have accumulated extreme wealth. "What sort of wowsers have we become," he said, if New Zealanders can celebrate athletes and musicians, but not successful businesspeople.

Indeed.

Ukraine just destroyed a Russian bot farm. You won't believe what happened next!

 

Yes, a US president just announced an "energy ceasefire" in Russia's invasion of Ukraine. Unfortunately, he forgot to tell the combatants. ["They agreed because I said they agree.”] Putin celebrated by sending glide bombs into a children's playground. Ukraine meanwhile destroyed four Yandex data servers in Sasovo, Kaluga, Vladimir and Mytishchi, near Moscow.

The results were immediate. Hundreds of thousands of Russian bots sourced from the Yandex server died immediately. And the results of that can almost be seen from space:

And almost immediately, those bots died -- bots pretending to represent real people, purporting to be "patriots," "veterans," or "Christian conservative fathers"  -- usually with a follower count approaching zero and a user name running into at least 7 digits -- and all those posts supporting UK's Reform, Germany's AfD, and Trump's MAGAts suddenly fell off a cliff. 

The tide went out on the scam, at least for a moment. The Kremlin intelligence psyop that has been poisoning politics is exposed, and we can see which rotten political life has been swimming naked -- . .

And this is just as London's Times is preparing to report that Russia used over 150,000 Twitter accounts to influence the Brexit referendum; sent 45,000 tweets in 48 hours to influence the vote; and a Tory PM (Theresa May) knew there was interference and told Putin but not the British people!

In one night, Zelenskyy "single-handedly improved social media more than any governments have in years of legislation." As Megham McCarthy quipped, "I would pay Ukraine a monthly fee to keep blowing up Russian bots."

In one night, the Axis of Online Upheaval died -- and with it the manufactured support for the Axis of Upheaval itself.

And for a brief time we get to see the effect of the one major weapon Russia really has: the ability to disrupt the west with disinformation.

Naturally, folk have been checking and testing. Without bot traffic, check out for example the responses to the White House's latest ludicrous announcement. And see how this test went ...

And whatever your views about Twitter, or whatever the hell the owner wants to call it now, "where else can you see a Ukrainian drone manufacturer trolling Russian internet executives after blowing up their data centres?"

"If you wish to know what a man really is, give him power."

"Nothing discloses real character like the use of power. It is easy for the weak to be gentle. Most people can bear adversity. But if you wish to know what a man really is, give him power."

~ Robert G. Ingersoll from his 1895 lecture 'Abraham Lincoln, A Lecture'

"What could the government do to make things more affordable? Start by getting out of the way."

"'Affordability' is in the news. People left and right want the government to 'do something.' ... Populist policies are hugely popular among [supporters of all parties]....

As I hope you know, the government cannot, by taxing, spending, borrowing or regulating, make anything 'more affordable' overall. All it can do is try to make someone else pay, and then often to give you something you don’t want that much and lose half the money along the way. Subsidies against fixed supply, like energy and housing, just drive prices up more. ...

"What could the government do to make things more affordable? Start by getting out of the way. A lot of policy and regulation deliberately makes things more expensive..."

~ John Cochrane from his post 'Affordability Part 1'

A gentle reminder...

 

[Hat tip Mary Ruwart]

PS: "Why?" ... "Because if they didn't vote for a lizard, the wrong lizard might get in..."

You know it's a close election when it's time to demonise the unemployed [update]

You know it's a close election when it's time to demonise the unemployed.

On Wednesday, welfare campaigner Lindsay Mitchell pointed out that what's missing from this election campaign is any sensible discussion about welfare.

And then bang, just like that, discussion turned yesterday to Louise Upston wanting to drug-test the unemployed. Red meat (she hopes) to National's voter base. 

Two things.

First, you may think I might agree with Upston, which is why I needed to write this, especially since I quoted Lindsay in this morning's post (set it up to automatically post, in fact, before Upton opened her gob yesterday). So let me quickly explain that Lindsay is saying that the silence about welfare is a silence about long-term welfare dependence. That welfare dependence is now generational. That this really is the massive social problem New Zealand needs to grapple with.

Upston doesn't deal with that -- her proposal is, she hopes, simply a quick fix for a bigger electoral return. (Yes, she does say "they don't want young people wasting their lives on welfare, and for some drug use is a barrier to work," but we all know this is no fast-fix cure to that.)

So, second, if she were truly genuine about lifting up the unemployed, she'd recognise that for the most part (aside from the likes of departing Reserve Bank governors and should-have departed MBIE chief executives) unemployed folk have no responsibility for the parlous state of the job market. And, therefore, any decent politician might instead focus on creating the conditions for private job creation and for reducing long-term welfare dependency, rather than moralising against the jobless themselves. 

It has been one of Javier Milei's positions since he took over the presidency in Argentina -- resisting demonising those who bear no responsibility for the dire state of employment, and instead bearing down on getting the hell out of the way of employers.

That might work better for all of us.

PS: Yes, this is the same Louise Upston who was dunning the taxpayer $1000 per week (on top of her minister's salary) to live in her own Wellington apartment. Did someone mention bludgers?

UPDATE:

Lindsay Mitchell has her own take on Upston's five-point welfare plan, whose headline item is drug-testing for Jobseeker/Work Ready beneficiaries.  In short, "while sounding good in theory, it's a not a sound plan," says Lindsay. "It ignores the problem of inter-generational, sole parent driven dependency, and it will move people around in the benefit system rather than out of it."

Read her detailed objections here.

Chronic welfare dependence "is markedly missing from 2026 election campaign issues."

"Welfare is markedly missing from 2026 election campaign issues. ...

"Super isn't sustainable.

"But what of working-age people? ...

"[A]mong physically capable people, long-term and inter-generational dependence is growing fast. ... Why? Is the shortage of paid work that severe? ...

"Work-aversion is learned and handed down. Children in long-term dependent homes have no working role model. Nearly three quarters of all beneficiaries up to age 25 had a parent on welfare while they were a child.

"At the end of 2025 over a quarter million children were dependent on benefits. ... Many of these children will spend their entire childhood and teenage years in an unemployed household, mostly with a 'single' parent. This impacts strongly on their life chances in respect of not just health and education, but security and safety. Of all children who had a finding of maltreatment by the age of five, 83 percent were on a benefit before age two. There is significant overlap between the Work and Income cohort, Oranga Tamariki and Corrections.

"So back to the election campaign.

"While much-needed fiscal savings could be made by tightening Super eligibility, it cannot be claimed that reliance on a pension at the end of one's life is damaging in the way chronic welfare dependence is, growing up and thereafter. That is the massive social problem New Zealand needs to grapple with.

"So why aren't political parties talking about this?"

~ Lindsay Mitchell from her post 'Welfare missing from 2026 election'

“It is Treaty principles that have allowed the treaty document to move from an historical text into enforceable modern legislation."

"The report finds that 115 [Waitangi] settlements have now been made, with the total financial redress paid by taxpayers amounting to over $5 billion by June 30, 2026.

"[The report's author] explains, 'What gradually became apparent, while looking at this for months, is that without the treaty principles there would be no historical breaches of the treaty by the Crown, no financial redress totalling $5 billion, no way to mandate co-governance, and no way to direct authorities to cave in to specific Maori claims and requests.'

“'It is Treaty principles that have allowed the treaty document to move from an historical text into enforceable modern legislation. They have transformed law, enabled the treaty settlement process, and imposed a bicultural structure on the public sector where "partnership, participation, and protection" are the foundational buzz words. In short, these principles have created the situation we have today.'

"He explains that once claims back to 1840 were permitted by an amendment to the Treaty of Waitangi Act in 1985, the Waitangi Tribunal wrote extensive reports that reframed everything that had happened since 1840 in terms of Treaty principles compiled by one of their members.

"By reframing history through these invented principles, everything the Government had done since 1840 as New Zealand’s sovereign authority was able to be reinterpreted as a Treaty breach requiring massive financial redress.

"As [the author] says, 'A giant treaty rort? It’s over to you to decide'.”

~ Muriel Newman in her post 'The Battle Over the Waitangi Tribunal,' commenting on Mike Butler's new report Treaty Transparency – 1975 to 2026: 

"This book directs a similar challenge to atheists, to reject a final baseless posit of religion..."

“Richard Dawkins has popularised the idea that most people have no trouble denying the existence of gods for which there is no evidence…. He urges them to go ‘just go one god further.’ This book directs a similar challenge to atheists to reject a final baseless posit of religion: the worship of self-sacrifice.

"It’s time for the secular world to fully grow up and break free from the bonds of religious morality. This is the only path to self-conscious, rational progress in the field of morality, and to the civilisational progress it will enable.”

~ Ben Bayer from the free-to-read Preface to his new book Breaking Free From Faith-Based Morality

Hope

"Czech statesman, author, poet, playwright, dissident, and first president of democratic

Czechoslovakia Václav Havel would have been 90 today. He was a one-off, too bad 

we don’t have more like him today in Central Europe, and beyond."

It's an irony of history that in the same week we remember the horror of October 7 (Lest We Forget!), we should also acknowledge the birth of Czech statesman, author, poet, playwright, dissident, and first president of democratic Czechoslovakia Václav Havel with his message of hope -- who would have been 90 this week.

The kind of hope I often think about (especially in situations that are particularly hopeless, such as prison) | understand above all as a state of mind, not a state of the world. Either we have hope within us or we don't; it is a dimension of the soul; it's not essentially dependent on some particular observation of the world or estimate of the situation. 

Hope is not prognostication. It is an orientation of the spirit, an orientation of the heart; it transcends the world that is immediately experienced, and is anchored somewhere beyond its horizons. 

Hope, in this deep and powerful sense, is not the same as joy that things are going well, or willingness to invest in enterprises that are obviously heading for success, but, rather, an ability to work for something that is good, not just because it stands a chance to succeed.

Horror [updated]

Yes, that's Boy George, reminding you not to forget: 'We Will Dance Again'

UPDATE: "I can’t stop thinking about them: the women and girls of the Israeli kibbutzim, who were raped on 7 October... Raped so brutally and so repeatedly that in some cases their pelvises broke from the weight of so many men. And then their throats were slit or they were shot in the forehead. I can’t forget the semi-naked corpse of Shani Louk, paraded around Gaza on the flatbed of a truck, as hordes of men cheered on her rapists and crowded around the jeep to spit on her body. I can’t forget the young woman, arms bound behind her back, hobbling from a slit Achilles tendon, a large bloodstain blossoming across her jeans where she was bleeding profusely from her vagina and anus, being led away, a prisoner of her rapists.

    "I’m still in mourning for them....
    "Some people have condemned the rapists’ actions. Some people have spoken out firmly and clearly. Thank you. And some people have condemned them in their hearts. Thank you, too. I oppose compelled speech. I don’t expect friends and relatives to post about this on their social media; I don’t want some kind of catechism to be imposed on ordinary people. We shouldn’t police each other’s hearts; we shouldn’t demand demonstrations of each other’s humanity.
    "But there are organisations whose job it is to speak up when injustice is done. And most of them have been either silent or worse—much worse...."

~ Iona Italia from her Nov 2023 piece 'The Women of 7 October'

Three years since October 7th.

Three years.

Three years ago today (our time) more than 1500 people were raped, tortured, brutalised, mutilated, kidnapped, murdered -- that's about 1200 murdered, 250 kidnapped, and uncountable number tortured, mutilated, raped.

The stories are still heart-breaking. Most I can't read. And I know I couldn't watch some of the worst of the horror. 

These are just a few --a very few -- of some of the least horrifying ...