Czar Sutton strangling Chch home-owners [update 3]

For months the bureaucrats destroying Cantabrians’ spirits “managing” Christchurch’s recovery have successfully avoided addressing the growing elephant in the room: there is simply not enough residential-zoned land in Christchurch.

There is not enough residential-zoned land in Christchurch because the planners have zoned the city that way—ring-fenced,  locked down tight, build only where you’re told—and won’t be letting anything like an earthquake change their tiny minds.

It was bad enough before the earthquake. But at a time when good houses and safe residential land in Christchurch have never been more in demand, it has now become disastrous. So disastrous that folk with good houses on bad land in red-zoned areas of Christchurch face demolishing their good houses--or trucking them to Dunedin or Timaru—instead of being able to relocate them on the good land that exists in abundance around Christchurch, but which the planning arseholes have deemed off limits.

All this would be thuggish and incompetent enough. The truly bizarre thing here however is that this is not news to anyone but Roger Sutton, i.e., the uber-bureaucrat appointed by Earthquake Czar Gerry Brownlee precisely to “coordinate” and cut through regulatory restrictions on recovery like this.

It turns out however that Brownlee’s favourite uber-bureaucrat wouldn’t know his arse from his elbow—or at least, claims to have never heard of problems like this. “The first I heard of [these] difficulties was today,” he told TV1’s Close Up yesterday.

The man is either incompetent or uncaring.

Get the hell out of the way.

PS: Eric Crampton has more, and in a much more measured tone. I can only commend him for his restraint.

UPDATE 1: At the Cantabrians Unite Facebook page Hugh Pavletich invites us to

compare the Roger Sutton on the Close Up clip  with the same guy back February 2011 getting those overhead powerlines through to New Brighton when he was CEO of Orion. The sad reality is that Sutton is having a very hard time indeed under Bruiser Brownlee, who has turned the CERA exercise in to a bureaucratic shambles. The focus of CERA with Sutton leading it from the outset with a small competent team (say around 6) should have been to sort out the Christchurch Council. Sadly the low wattage guys Key and Brownlee were never bright enough to see that. To understand why - one needs to read the Vanity Fair article on the failed Merrill Lynch "The Blundering Herd" - which shaped Key. Key is in essence a corporate bureaucrat himself, who couldn't solve a problem if he tried.

UPDATE 2: Yes, let’s be honest, bozos like these bastards are making every city in the country unaffordable—even without our own earthquakes! As developer Olly Newland says today, “building reasonably priced housing is a dying business, strangled by regulation.”

UPDATE 3: Bill English knows this. He told a Christchurch audience last week:

having affordable housing in Christchurch will be the single biggest determinant of the population of this city in the next 10 years because housing affordability in New Zealand is way out of line ...
    "In Christchurch we have an opportunity to create affordable housing and that will certainly attract people.
    "With respect to the business community, the planning processes, in particular up until recently, have lacked a strong focus on who actually rebuilds the city.
    "It's not the planners ... what rebuilds cities are investors who will take risks….”

He knows it. But he and his colleagues are doing nothing about it.

Portrait of a bureaucrat [updated]

“The ultimate basis of an all around bureaucratic system is violence.”
- Ludwig Von Mises, On Bureaucracy

There are two kinds 0f bureaucrats: the Jobsworths and the Born-Agains. 

And frankly, I prefer the Jobsworths. They’re less dangerous.

As today’s example, let’s look at American bureaucrat Al Armendarize, regional head of the U.S.’s Environmental Protection Agency—in other words, the top environmental official for America’s oil-rich South and Southwest region in the organisation that inspired National’s Nick Smith to start his own EPA.

This was a guy with power and a passion to use it. A guy who saw his job as shutting down, or at least emasculating, the oil-rich producers in his region.

His "philosophy of enforcement," he told his staff, went like this:

It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean. They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw, and they’d crucify them. And then, you know, that town was really easy to manage for the next few years.

It’s the same "philosophy of enforcement” followed by every government department worldwide, isn’t it, from our own IRD to America’s TSA. “Crucify them!”

At least the Jobsworths just shuffle paper. But pricks like this can kill—as the family of New Zealander Paul Jenkins recently discovered to their horror.

Now I say this “was”  a guy with power because this particular arsehole has just lost his job. Not for telling the truth, i.e., telling his staff about how things are, but because a video of him telling his staff the truth eventually found its way onto the internet—posted by someone in approval of Armedarize’s power lust.

His crime was not being too honest. It was being found out.

But worry not.  As Kimberley Strassel notes,

Al “Crucify Them” Armendariz resigned from the Environmental Protection Agency this week, for the mistake of telling it like it is. All he leaves behind is an entire administration of Al Armendarizes.

Actually, that should read “entire administrations full of Al Armendarizes.” Because they’re everywhere. 

UPDATE: In case you’ve forgotten what the local variety of thug bureaucrat is like, shown here are genuine cartoons collected from a variety of Inland Revenue offices back when they were killing Ian Mutton.

And just in case you can’t see clearly, or you think your eyes might be deceiving you, yes, that is a newsletter banner above showing a courageous IRD agent running a taxpayer through with a lance. And, yes, that is a picture of a taxpayer being hung from a meat hook.

Beautiful British bridges

“Beautiful British bridges,” a photo gallery appearing in today’s Telegraph, might sound like an oxymoronic title (something like “Australian culture” or “nomadic urban planning”), but remember Britain is where the Industrial Revolution started. And it started and was carried forward by engineers like Isambard Kingdom Brunel…

And you have gorgeous constructions like this one, the ingenious Firth of Forth Bridge in Edinburgh.

 

 

See the whole series here.

Recipe for a safe city = more immigrants

Picture a city full of immigrants, mostly illegal, the majority dirt poor, with easy access to guns and a town just over the river torn apart by drug wars and brutal killings.

What do you think: Safe, or not safe?

The answer, of course, is safe.  Very safe. In fact, the city I described—El Paso in the south-western American state of New Mexico and just over the border from a city that plays host to around 160o murders a years—is among the safest big cities in North America, and also the happiest.

For the better part of the last decade, only Honolulu has had a lower violent crime rate (El Paso slipped to third last year, behind New York). Men's Health magazine recently ranked El Paso the second "happiest" city in America, right after Laredo, Texas—another border town, where the Hispanic population is approaching 95 percent.
    So how has this city of poor immigrants become such an anomaly? Actually, it may not be an anomaly at all. Many criminologists say El Paso isn't safe despite its high proportion of immigrants, it's safe because of them.
    "If you want to find a safe city, first determine the size of the immigrant population," says Jack Levin, a criminologist at Northeastern University in Massachusetts. "If the immigrant community represents a large proportion of the population, you're likely in one of the country's safer cities. San Diego, Laredo, El Paso—these cities are teeming with immigrants, and they're some of the safest places in the country."

Take that xenophobes. And understand this is no accident.

What's happening with Latinos is true of most immigrant groups throughout U.S. history. "Overall, immigrants have a stake in this country, and they recognize it," Northeastern University's Levin says. "They're really an exceptional sort of American. They come here having left their family and friends back home. They come at some cost to themselves in terms of security and social relationships. They are extremely success-oriented, and adjust very well to the competitive circumstances in the United States." Economists Kristin Butcher and Anne Morrison Piehl argue that the very process of migration tends to select for people with a low potential for criminality.

And outside a few talkback hosts and their callers, it seems most Americans welcome them.

You don't see "Latinos Need Not Apply" or "No Mexicans" signs posted on public buildings the way you did with the Italians and the Irish, two groups who actually were disproportionately likely to turn to crime. The implication makes sense: An immigrant group's propensity for criminality may be partly determined by how they're received in their new country.

Which has lessons for Europe, famously poor at integrating new migrants*.

"Look at Arab-Americans in the Midwest, especially in the Detroit area," Levin says. "The U.S. and Canada have traditionally been very willing to welcome and integrate them. They're a success story, with high average incomes and very little crime. That's not the case in Europe. Countries like France and Germany are openly hostile to Arabs. They marginalize them. And they've seen waves of crime and rioting."

A welcoming melting pot with a confident culture. That’s just another thing of which Europe is running very short.

* * * * *

* “Famously poor” does not however mean “completely disastrous.” News stories on rioting and crime make good headlines, and “good data on immigration and crime are hard to come by,” admit researchers, but suggest for a number of reasons the fact is “immigrants on the whole may not be more likely to commit crimes, but some immigrant groups seem more likely than others to be punished for crimes.”

[Hat tip Julian Pistorius]

“What ‘savage’ spending cuts?”

The Eurozone monetary ‘Titanic’ sails blithely on, with new political leaders and old prancing around the decks unaware their hull is already cracked.

Meanwhile, old leaders and new—and the media who still take them seriously—talk of “austerity” as if austerity is being practiced, as if there have been dramatic reductions in spending, as if a swathe of cuts were being made across Europe to the state budgets that are sinking the Eurozone.

Take a look at this graph. Do you see anything like that at all? 

Is it “austerity” to keep adding to your ballooning bar bill, while promising yourself that this round you will drink slower?

The chart above comes from Veronique de Rugy of the Mercatus Centre, who notes that while European voters are said to have rejected their governments’ “savage” spending cuts, the overwhelming question must surely be “What “savage” spending cuts?”:

    Spain, the United Kingdom, France, and Greece — countries widely cited for adopting austerity measures — haven’t significantly reduced spending since 2008. As you can see on this chart:

• These countries still spend more than pre-recession levels
• France and the U.K. did not cut spending.
• In Greece, and Spain, when spending was actually reduced — between 2009–2011 — the cuts have been relatively small compared to what is needed. Also, meaningful structural reforms were seldom implemented.
• As for Italy, the country reduced spending between 2009 and 2010 but the data shows and uptick in spending 2011. The increase in spending represents more than the previous reduction.

    The most important point to keep in mind is that whenever cuts took place, they were always overwhelmed by large counterproductive tax increases. Unfortunately, that point is often overlooked. This  approach to austerity — some spending cuts with large tax increases — is what President Obama has called the “balanced approach.”
    However, as I have mentioned previously, while this balanced approach may sound good and appeals to our sense of fairness and moderation, but it can be a recipe for disaster. That’s because it fails to stabilize the debt, and it is more likely to cause economic contractions…

Sam Bowman at the Adam Smith Insitute [hat tip Liberty Scott] observes of de Rugy’s chart:

It tells a different story to the popular narrative that European voters have tried and rejected austerity. In fact, they have hardly tried it at all, returning generally to 2008 levels of government spending. France has not cut at all, yet it has just elected the patron saint of mediocrity, Francois Hollande. Not that Sarkozy was much better. De Rugy comments:

First, I wish we would stop being surprised by what’s happening in Europe right now. Second, I wish anti-austerity critics would start acknowledging that taxes have gone up too–in most cases more than the spending has been cut. third, I wish that we would stop assuming that gigantic “savage” cuts are the source of the EU’s problems. Some spending cuts have been implemented in a few countries … [but] the overwhelming take away from the European experience is that a majority of governments haven’t really implemented spending cuts, large or small, and some have even continued to grow.

What European voters have rejected is the idea of austerity. The very suggestion that their governments should live within their means is, apparently, unacceptable to the majority of voters in France, Greece and, as seems likely, the Netherlands. Hollande may be a nonentity, but the National Front candidate, Marine Le Pen, polled 18%, and the far-left Jean-Luc Melenchon 11%. Both seem likely to do well in next month's parliamentary elections. Golden Dawn, Greece's Nazi Party, has just polled 7%, the Communists 8.5%.

This is worrying stuff.

Isn’t it just.

The Greek government will be out of money in June—whoever decides to take power there, with whatever resulting chaos and (let’s hope not) bloodshed. Popular wisdom (which to be fair, is usually neither wise nor popular) has it overnight that Greece will be out of the Eurozone in a month. In any case, it must either leave or be left. Others will and must follow.

Will popular wisdom ever, do you think, realise that the shoehorning together in a monetary union of countries as disparate as the PIIGS and the Germans was never going to work?  (In terms of economic freedom, the Heritage Foundation ranks Greece for example as "mostly unfree" and one of the most heavily stultified economies in Europe. Germany on the other hand is ranked as “mostly free” and is picking up the tab for the all the Euroweenies. See pic right.) Will the folk who matter realise that if you spun a globe and stopped your finger 12 times on 12 random countries, they just might make more sense for a monetary union than the euro zone?

Sure, the classical gold standard operated smoothly for nearly six decades before being blown apart by war, benevolently distributing price signals and the necessary capital around a world experiencing its first industrial revolution—tying together in effective monetary union countries that changed so much over those six decades they wouldn’t even recognise themselves!

But the monetary union of the classical gold standard was not the straitjacket of the Eurozone.  Its set up allowed economies to breathe and grow. The settings of  the Eurozone on the other hand seemed designed only to encourage bad behaviour and to make them choke. On debt.

• SEE ALSO: “Is Austerity - or Decades of Awful Governance - Responsible for Greek Suicides?” 
                         – Nick Gillespie,  R E A S O N

European ‘Titanic’ sails blithely on [updated]

"Despots and democratic majorities are drunk with power. They must reluctantly
admit that they are subject to the laws of nature. But they reject the very notion of
economic law . . . economic history is a long record of government policies that
failed because they were designed with a bold disregard for the laws of economics."
                           - Ludwig Von Mises

The economic future of Europe is now certain. It looks like this:

The sinking of the Titanic, commemorated in recent weeks, has parallels with the sinking of Europe—a process that has only accelerated in recent days with the election of governments promising voters they can eat their cake and have it too.

The Titanic hit an iceberg, took on water, and sank.  Nothing could save it--not pumps, not bailing, not wishing the huge hole in the side would go away. One by one its non-watertight bulkheads filled up with water, the great ship broke in half, and it went to the bottom taking thousands of souls with it.

The parallels should be obvious: European economies hit an iceberg and are now sinking because of the inrushing waters of their governments’ debts—debts accumulated in part because of decades of welfare and years of overspending, and in part because of a futile attempt to prop up all the bad positions exposed in the crash. They wished the reasons for the crash would go away, and hoped a mountain of government debt would fend off reality.

They were mistaken. It is the inrushing tide of government debt that will now sink them.

It has been said that in rejecting the ruling parties this weekend French and Greek and British voters were protesting the “austerity” measures adopted by their governments. But not one of these governments had even bothered to cut their over-spending (which might be defined as spending more than you take in). None had elected to begin what might have been the life-saving process of cutting their coat according to their cloth; none  had chosen to spend less than it took in.  In all these places, and in places with even greater reason to face reality rather than fake it, the most that was ever done was just to reduce the rate at which their overspending  was allowed to accelerate.

This was and is insane. When your boat is sinking by an incoming tsunami of government overspending, it is not “austerity” to begin bailing out your ship with a teaspoon.

Yet this is all those governments had ever agreed to do. And now Europeans have voted for parties promising to to take away even the teaspoons, and to effectively rip an even bigger hole in their hull.

Which means the end will be even closer than before. Because the newly elected democratic majorities’ commitment to overspending will deliver the coup de grâce to any hope of .  This is the moment when—like the Titanic—the back of the Leviathan is broken and the Eurozone splits into two and sinks..

It is still argued that the overspending was necessary. That without government borrowing and spending taking up the slack,  European countries would have faced economic disaster. Yet because the government spending allowed the malinvestments exposed in the crash to continue—allowed all the bad positions to survive—the response has effectively guaranteed that recovery will not happen (recession being loosely defined as the period whereby bad positions are extinguished and the economy exposed as being “out of whack” begins to rebalanced and re-start), and bad government over-spending has effectively crowded out what could have been good private capital spending, i.e., the type of spending that must precede any genuine recovery. The result has been a sinking ship of stagnating economies, zombie companies, and huge and increasing unemployment

This is not despite the governments’ “stimulus,” but because of it.  The governments’ responses ensured recovery could not happen—and it invited the debt tsunami that is now going to sink them.

What they were relying on—and by “they” I mean every overspending Eurozone government, whether elected in or elected out—what they were all relying on (they hoped) is that they could eat their cake and have it too.  And they hoped this  could happen because the Eurozone arrangements virtually guaranteed (they thought) that while they were eating their cake the Germans would carry on baking it for them.

But even a guilt-ridden Germany can only shoulder so much. In what Peter Schiff calls "a startlingly frank assessment of the current problems in Europe", Dr. Andreas Dombret of the Executive Board of the Deutsche Bundesbank (the German central bank) makes the problem plain:

...Exchange rate movements are usually an important channel through which unsustainable current account positions are corrected....In a monetary union, however, this is obviously no longer an option. Spain no longer has a peseta to devalue; Germany no longer has a deutsche mark to revalue. Other things must therefore give instead: prices, wages, employment and output.

The question now is which countries have to shoulder the adjustment burden. Naturally, this is where opinions start to differ. The German position could be described as follows: the deficit countries must adjust. They must address their structural problems, reduce domestic demand, become more competitive and increase their exports.

In banker speak, that means he sees no appetite for Germany to carry on baking the Southern Europeans’ cake for them unless they intend to adjust.

And since European voters are making plain they would rather sink than make any adjustment at all, that makes what happens next all but inevitable.

Glug, glug, glug.

UPDATE:

Europe’s election results remind Don Watkins of a scene near the end of Atlas Shrugged.

“…Sure, I could pretend—and I wouldn’t save your economy or your system, nothing will save them now—but I’d perish and what you’d win would be what you’ve always won in the past: a postponement, one more stay of execution, for another year—or month—bought at the price of whatever hope and effort might still be squeezed out of the best of the human remnants left around you, including me. That’s all you’re after and that is the length of your range. A month? You’d settle for a week—on the unchallenged absolute that there will always be another victim to find.”

Is this state control of reproduction? [updated]

Welfare Minister Paul Bennett has announced beneficiaries already taking the Domestic Purposes Benefit will be “encouraged” to take contraceptives to avoid having further children while sucking on the state tit—to the extent, apparently, of giving them free contraceptives which they will of course be expected to use.

It’s as if women are too dim to realise, if the state didn’t point it out to them, that having sex without protection invites impregnation—as if all that’s needed to lower the birth rate of beneficiaries is for contraceptives to fall fortuitously into their hands.

As if those women weren’t getting pregnant by choice.

So is this state control of reproduction? Well, yes it is: rest assured that those employed by the state will be offering “incentives” to beneficiaries  to cooperate with the plan—and when bureaucrats begin “strongly suggesting” to beneficiaries they should take up an “offer,” they expect their “suggestions” to be obeyed. (As former minister Marian Hobbs once explained the state’s view of “encouraging” behaviour the stale likes, “we start with encouraging, but there’s always the big stick.)

Every beneficiary is aware of the big stick.

So it is state control of reproduction.

But that’s the deal you make when you accept government as your senior charity provider, isn’t it. Whatever they do by definition involves coercion.

Because when private charity providers can and do offer whatever incentives they are able to contrive to encourage the recipients of their charity to become more independent, those incentives are offered by private organisations in the context of offering voluntary charity. But when the state doles out charity not only is it given begrudgingly, but every incentive imposed to change or improve behaviour comes with accusation of the state meddling in people’s affairs.

Like I said, this is the deal you make when private charity is crowded out by the state. And why incentives to get off state welfare are so rarely introduced.

Because as the kerfuffle around the introduction of even this very mild form of incentivisation indicates, the very real fear of coercion in private affairs is enough to make everybody queasy. Which is just one more reason the state is not the right organisation to distribute charity.

UPDATE:  “As pathetic as it is, Paula Bennett’s attempts to encourage mothers on the DPB to use contraceptives is a classic example of the state trying to fix a problem that was caused squarely by the state,”  says Peter Osborne, Libertarianz spokesman for Social Welfare. “Ms Bennett would do better handing out her condoms to her fellow politicians, so we would no longer have to endure the next generation of their ilk.”

DOWN TO THE DOCTOR'S: More Lessons From Britain

This week,  Libertarianz leader Dr Richard McGrath has been watching the demise of British politics.

Watching the machinations of UK politics is often instructive, as they so often pre-empt events here. The weekend’s local body election result is a case in point, in which the Conservative Party lost hundreds of seat and ended up eight "percentage points" behind Labour. Their Liberal Democrat coalition partners also lost a lot of ground, and there is now serious doubt whether they should still be regarded as a major political party.

There have been already been calls after this disaster for Lib Dem leader Nick Clegg to stand down—and Tory leader David Cameron will be wondering what he can do to avoid a rout at the next general election.

Good.

It was heartening too to see the still youthful UK Independence Party (UKIP) attract 14% of the vote in the constituencies it contested.  Its leader, Nigel Farage, is a charismatic, intelligent man whose speechesin the European Parliament are always entertaining, and in national polling, they recently overtook the Lib Dems as Britain's third party.That a party calling itself "a libertarian, non-racist [political] party seeking Britain's withdrawal from the European Union" can attract support like this without either the money or profile of the other parties is highly encouraging.

But the most stunning statistic from the UK’s local elections was the overall percentage turnout of voters: a miserable thirty-two percent.

Thirty-two percent!

Yep: just sixty eight percent of voters–more than two-thirds of the electorate—refused to dignify the political process or the pygmies on offer with their participation.

This is a real milestone. To dismiss it as apathy or laziness, as many have, is nothing less than arrogance and contempt for the intelligence of voters. There are plenty of opportunities to cast early votes at an election, but when voters decide to become non-voters because the parties represented are seen as undeserving of sanction, why bother?

It is now apparent (as if it wasn't previously) that the UK’s change of government in 2010 was due to rejection of ghastly Gorgon Brown rather than any identification with out-of-touch upper class twat David Cameron. Now that the British public are fully aware of Cameron's betrayal of conservative principles, many of them have abandoned the Tories and thrown their support behind UKIP.

And with so many parties betraying what they claim to stand for, many of them have abandoned voting altogether as a waste of time. And who can blame them?

Typical of the ignorance and arrogance of the Conservative Party is the suggestion by its chairman, the egregious Baroness Warsi, that UKIP have picked up the votes of former BNP voters. In fact, you could hardly find two political parties more diametrically opposed in outlook and policy. The BNP are a bunch of socialist xenophobic racists (though, commendably, in 2009 their leader described Islam as a cancer); the UKIP are a team of non-racist libertarian individualists who want Britain to exit the European Soviet Union. Warsi's appalling ignorance is a symptom of the malaise which has has crippled the British Conservative Party and will hopefully destroy it.

There are many lessons from the stay-at-home vote, or should be.  For one, some honesty from the research companies conducting political polls is long overdue: The number of people who decline to offer preference for any candidate or political party should be listed, and percentage results for parties and candidates should be adjusted accordingly.

And when 'None of The Above' is the second highest polling option, the makeup of parliament should reflect this.  (Wouldn’t any parliament be improved if the chamber was permanently two-thirds empty. Ditto for the press gallery.)

Which sets me to thinking. Nature abhors a vacuum. So perhaps it is time for a 'None of The Above' political party to emerge here, to represent the 27% of New Zealanders completely disenfranchised by the current parliamentary composition...

See you next week!
Doc McGrath

Friday Morning Ramble: The ‘Week of Sideshows” Edition

Politics this week has been nothing but sideshows. The biggest of all being the sideshow about John Banks—as if discussing a man’s hotel bill is the most important thing a country’s politicians could be doing.
So, here’s a few things on which they might have focussed instead.

Actually, Mr Busybody, quite a few "ordinary people" kinda like buying beer and wine at the supermarket.
Business will act against liquor changes -  T V 3  N E W S

“The single biggest challenge facing New Zealand universities is that we operate with the lowest expenditure per student of any system in the developed world.”
Options - O F F S E T T I N G B E H A V I O U R

Guess what. Most of the so called “failed” polices of the 80s not only succeeded but are still serving us well.
Eighties reforms recalled – L I N D S A Y  M I T C H E L L

This has to be the funniest parody of Obama ever written. Oh, wait, I thought it was posted by The Onion …
Presidential Proclamation -- Loyalty Day, 2012 – W H I T E  H O U S E

Life is valued cheaply in Northland. No, it really is.
VSL at the bottom tail of the distribution - O F F S E T T I N G     B E H A V I O U R

Ports of Auckland’s analysis of demand behind their plans for expansion are too slight in content and too inflated in expectations to justify those plans, and the problems they will cause. “Radical change calls for lateral thinking, and integrated action,” reckons Phil McDermott.
Expanding Horizon: Rethinking Auckland’s Port Plan – Phil McDermott,  CI T I E S   M A T T E R

Smoking “costs” the Government how much? (Please show all your working.)
Can't kill a bad stat – O F F S E T T I N G   B E H A V I O U R

“As part of our wider commitment to improving access to political information,” the Green Party boast they are now the first political party in the world to translate their policies into sign language.
Apparently they don’t think deaf people can read.
Green policies translated into NZ Sign Language – Mojo Mathers,  F R O G B L O G

Isn’t it strange that consumer taxes hit the poorest the hardest, yet social welfare lobby groups remain silent or even support them?
Nudge nudge, wink wink, nanny soaks the poor to fatten the budget 
- Julie Novak,  T H E  A U S T R A L I A N

You know, don’t you, that if we don’t Keep It 18 you’ll be getting invites like this in the mail.

A year after Osama Bin Laded was killed, and nearly eleven years after they killed thousands on that well-remembered September morning, Al Qaeda are still alive and well, and planning atrocities.
A Year after Osama bin Laden’s Death: Al-Qaeda Alive and Kicking -  T H E  F O U N D R Y

And they have developed some interesting fellow travellers.
"Occupy" Movement In Cleveland Bridge Bombing Probe -  S M O K I N G   G U N

Occupy Wall Street was back for May Day. And guess what we found? Their soul.
The Soul Of Occupy Wall Street - L A I S S E Z   F A I R E

“Robert Spencer performs a super detective service for the West in ‘Did Muhammad Exist? An Inquiry into Islam’s Obscure Origins.’ He examines virtually every aspect of the composition and history of Islam and its purported founder, Mohammad."
Conclusion: “Islam has swindled its faithful, its communicants, its followers, its believers. All the possible evidence points to the fact that Islam's substance and veracity comprise a theological and historical fraud.”
Islam: A Will-o'-the-Wisp of Political Faith  - Edward Cline,  R U L E   O F   R E A S O N

To the extent inequality is a problem in America, it’s because some significant part of that inequality is created by government. “The relentless expansion of credit by the Fed creates artificial disparities based on political privilege and economic power.”
How the Fed Favors The 1%: The Fed doesn't expand the money supply by dropping cash from helicopters. It does so through capital transfers to the largest banks. - W A L L   S T R E E T   J O U R N A L

Bolivia continues its spiral down the communist plughole. Something only Bernard Hickey  could celebrate [read the moron’s comments on his Item 1].
Bolivia govt seizes control of power grid -  S T U F F
Another nationalisation - Bloomberg reports -  Bernard Hickey, I N T E R E S T

Talk about lying with statistics! “The bottom line is that figuring out who pays how much in taxes is really, really hard. We should be skeptical whenever we hear pronouncements about how much this or that group is paying.”
How to lie with statistics – John Cochrane,  T H E  G R U M P Y   E C O N O M I S T

I was getting myself frothed up about the recent idea that  "speculators" are behind the recent gas price increase.  Have we learned nothing in the centuries of witch hunts for "speculators" "middlemen" and "money changers"?
Speculation and gas prices - John Cochrane, T H E G R U M P Y E C O N O M I S T

Q: What keeps our food safe? A: The profit motive, of course.
The Great Salad Microbe Hunt, California Style – N P R
Capitalist Secrets: Laissez-Faire Fosters Safe Food and Drugs – Don Watkins

“We know that: windfarms ruin the ocean view of Cape Cod homes; are shredding birds to smithereens like carrots in a Cuisinart; and are too intermittent and unreliable as a stand-alone energy source so need back-up by awful fossil fuel sources.
“But do they also cause global warming?”
Just Because Windmills Don’t Cause Global Warming Doesn’t Mean They Don’t Suck
 -  B A S T I A T   I N S T I T U T E

The green movement is designed to hurt mankind. Shortly put, they love nature but hate people.
 Forget Halloween: It's the Greens That Scare Me - Jonathan Hoenig, S M A R T   M O N E Y

Here’s a case in point
Luddites -  O F F S E T T I N G   B E H A V I O U R

Here’s another.
UK Climate Policy Helps Fund Forced Sterilisation Of India’s Poor – CA N A D A   F R E E  P R E S S

And here’s another, a top official at the American environmental bureaucracy the EPA once described its philosophy of regulating oil and gas producers this way: “It was kind of like how the Romans used to, you know, conquer villages in the Mediterranean. They’d go in to a little Turkish town somewhere, they’d find the first five guys they saw, and they’d crucify them. And then, you know, that town was really easy to manage for the next few years.”
Top EPA official resigns after 'crucify' comment -  F O X  N E W S

And one more: “We know who the active [climate] denialists are—not the people who buy the lies, mind you, but the people who create the lies. Let’s start keeping track of them now, and when the famines come, let’s make them pay. Let’s let their houses burn. Let’s swap their safe land for submerged islands. Let’s force them to bear the cost of rising food prices.”
I guess that’s better than the wishing death on all of humanity, which is a recurring theme among the greens.
Climate Alarmist Calls For Burning Down Skeptics’ Homes- I N F O W A R S

Not that the results can’t be amusing sometimes: “Oregon officials try to get EPA permission to kill an endangered bird that’s eating an endangered fish.”
Oregon asks to kill salmon-eating birds -  E AS T  O R E G O N I A N

Environmentalism and multi-culturalism are so prevalent in preschools today! Proper or improper?
Political agenda at preschools – Kate Yoak,  P A R E N T I N G   I S . . .

“May Day is the day of the year that socialists celebrate
that they work. Which is why they want to get the day off.”
                        - Oliver Cooper

Arseholes worry about privatisation by the back door? How about excluding a not inconsiderable section of the population from routine surgery on the premise that—for currently fashionable reasons—they should be denied benefit from their taxes?
They worry about privatisation by the back door? -  M I N D   T O   M A T T E R

Justice? “After years of denying entry to Africans and with their economy now suffering, many Portuguese are trying to immigrate to Africa, only Africa isn't so eager to take them.”
Who Will Take Americans? – Kelly Valenzuela,  M O T H E R   O F   E X I L E S

Word up from the New Progressives. "There’s nothing progressive about forcibly confiscating other people’s wealth. Real progress comes from respecting people’s rights and banning coercion—the initiation of force—from social relationships."
Progress Means Respecting People’s Rights – Ari Armstrong,   F R E E   C O L O R A D O

Did you know the only car in the world so fuel efficient it can be driven across the US with only one stop for fuel cannot legally be sold there? It makes you contemplate what other technological wonders never see the light of day because of bureaucratic bossiness.
The Case of the Missing Low-Mileage Car – Jeffrey Tucker,  L A I S S E Z  F A I R E  T O D A Y

Things aren’t like they used to be. “New Dutch laws to stub out the sale of cannabis to foreign dope tourists kicked in Tuesday — and were met with defiance from southern coffee shops including in Maastricht.”
Marijuana tourism in the Netherlands takes a hit, draws protest with new ‘cannabis card’ law 
– N A T I O N A L   P O S T

Fear not. Humor and business can mix!
Don’t Fear the Silly – Diana Hsieh,  N O O D L E   F O O D

“People Before Profits”? “While such sentiments paint profit as the enemy of rights, justice, and people’s well-being, in fact profit in a capitalist system embodies all those things.”
Contra Occupiers, Profits Embody Justice -  Ari Armstrong,  T . O . S .   B L O G

For the last year or so, Yaron Brook from the Ayn Rand Institute has been traveling around the States debating David Callahan, a senior fellow at Demos. The debates have focused on the fundamental issues underlying politics and economics: individualism and collectivism, capitalism and government intervention, democracy and limited government, and so on. Here’s the videos from our latest event, which took place in Chicago.
Yaron Debates: Is Government the Problem Or The Solution?  - L A I S S E Z  F A I R E

Debating inflation, monetary policy, monetary history, the role of the Federal Reserve and more, the (Ron) Paul versus Paul (Krugman) debate has everybody talking.
Ron Paul Vs. Paul Krugman: Inside The Debate Video That Pits Paul Vs. Paul – I B T
Ron Paul vs. Paul Krugman: Fed ‘Reckless’ to Allow High Jobless Rate, Say Krugman; "Mission Impossible" says Mish – M I S H ’ S G L O B A L E C O N O M I C T R E N D A N A L Y S I S
Ron Paul vs. Paul Krugman Video -  D A I L Y  C A P I T A L I S T

In one fell swoop, Krugman (Paul) exposes his ignorance on money, on investment, and on economics itself.
Krugman: More Economic Destruction Needed To Revive Economy 
– William Anderson,  D A I L Y   C A P I T A L I S T

Try not to be intimidated by what the supposed experts say; rather, think about the following sentence using logic and critical intelligence: “Cutbacks in government spending… will eat into growth.” This statement of seeming ironclad truth was pushed in an editorial in The New York Times…
In fact, the opposite is true.
If Government Spends Less, Are We Sunk? – Jeffrey Tucker, L A I S S E Z F A I R E T O D A Y

The financial crisis has fully exposed the intellectual bankruptcy of the world’s central bankers.
"Central Bankers Are Intellectually Bankrupt" – Ron Paul,  Z E RO   H E D G  E

These technocrats all believe in the same basic economic ideas:

1. That they as technocrats can manipulate money supply for the good of the economy.
2. They confuse price changes resulting from supply and demand with “inflation.”
3. That money printing can create wealth and thus, real economic growth.
4. They admit they can’t affect employment directly but that they can create a stable environment for the creation of jobs.
5. The Fed has no role in the creation of boom-bust business cycles.
6. The Fed can prevent economic collapse.
7. They can implement an exit strategy to drain the economy of excess money supply.

Yet none of these assumptions is correct. Oh, and QE3 is back on the table….
The Fed Speaks To The Daily Capitalist* – D A I L Y  C A P I T A L I S T

“The paper dollar is now the single most important source of systemic risk to the financial system, the world economy, and the security of the American people.”
How Ben Bernanke’s Paper Dollar Embodies Systemic Risk – D A I L Y   R E C K O N I N G ,  A U S T R A L I A

Credit is not…a magic piece of paper that reverses cause and
effect, and transforms consumption into a source of production.
                  - Ayn Rand

If you’re thinking the world is “out of recession,” think again. We’re like “the man who jumps off a 25-story building and as he's hurtling by the sixth floor he says 'don't worry, nothing has happened yet'.”
Zuckerman To CNBC: "The Recession Never Ended" -  Z ER O   H E D G E

“Comparing wages across countries can be difficult, but one economist has come up with a way to track people doing identical jobs to make an identical product all across the world: McDonald’s employees.”
Number of the Week: Using Big Macs to Compare Wages – R E A L  T I M E   E C O N O M I C S

Mind you, now that governments realise these Big Mac measures are being used, they’re not above insisting on some price fixing. Enter, stage left, some unintended consequences—and something called a Triple Mac!
Big Macs, Subatomic Particles, and Unintended Consequences- N E W   H A M P S H I R E   W A T C H D O G

There are many problems with it, but since 1995 the Heritage Foundation, a conservative think tank in Washington, D.C., has put together the Index of Economic Freedom to “track the march of economic freedom around the world.” Editor in Chief Matt Welch sat down with economist Jim Roberts, who co-authored the 2012 edition of the survey. They discussed reasons for optimism about China, reasons to worry about the United States, and the general state of economic liberty around the world.
Ranking Economic Freedom in the U.S. and Abroad -  R E A S O N

Heard about “herd immunity”?

Skeptic Lawyer proves property is power.
Ode to property law – S K E P T I C    L A W Y E R

Henri is a French cat suffering from existentialist boredom….
Henri, French Existentialist Cat -  N O O D L E   F O O D

For those of you needing twenty good blogs to bookmark…
20 Top Objectivist Blogs – T H E  N E A R B Y  P E N

The days of Duckworth-Lewis ruining one-day cricket games may soon be over. We may soon be throwing things at two Chch academics instead
Cricket formula fairer – S T U F F

“Most corporate employees complain about the endless meetings and work protocols that stand in the way of their productivity. But anyone who works for herself will tell you that, even when all the corporate noise is stripped away, it’s still hard to get things done. Maybe even harder.”
8 Rules to Stay Productive When You Work for Yourself -  F O R B E S

So much teaching has become so compressed, that like pasteurisation most of the goodness has been squeezed out.  “I think we need to better understand the processes involved in digesting learning, so that we can experiment and find faster "transmission speeds" for learning—the training program equivalent of going from the 56k modem to high-speed cable.”
The dangers of pasteurised learning – David Rock, A . S . T . D .

My favourite living artist has been busy.
Interiors, up and running – N E W B E R R Y ‘ S   B L O G

Come on, you know you’ve been wondering about it.
The Etymology of “Boob” -  P H I L O S O P H Y   I N  A C T I O N

Who knew that angles, asswholes, and manors were so funny?!?
Top 10 Most Unforgivable Twitter Spelling Mistakes – B U Z Z F E E D

Some interesting statistics on…
The rise of e-reading -  P E W  I N T E R N E T

Here’s an article  on the depth of Amazon’s ground-breaking innovations in the book industry and how The New York Times and others are leading a charge to punish this successful American company, on which many authors now depend for book sales.
The Luddite-Statist Attacks on Amazon – Gen La Greca,  G E O R G E   R E I S M A N ’ S  B L O G

Two stories of “hit the ball out of the park” self-publishing suggest if old publishing model aren’t dead yet, then they’re at least starting to smell that way.
A Self-Publishing 'Rocky' Story – Robert Bidinotto,  P . J .  M E D I A
"Who fucking cares about the charts? I have music, love and support" -- Amanda Palmer on her Kickstarter success and a new music business model –  B O S T O N   P H O E N I X
Amanda Palmer: The new RECORD, ART BOOK, and TOUR -  K I C K S T A R T E R

I’m not saying this is the best rendition of it, but if you think you know any better male duet in all music then I have to tell you you’re very, very much mistaken.

‘Au fond du temple saint ‘ (Before the Temple of the Saints’) from ‘The Pearl Fishers’ by Bizet

I’ll wager you never realised Edward Elgar wrote music like this:

And finally, ‘tis the time of the year for fresh-hopped (or wet-hopped) beers! Fresh-hopped beers are brewed “using the cones within 24 hours of picking”—creating “a celebration of flavours and aromas, but not particularly hop bitterness.”
It seems that “fresh hop beers are about subtle nuances” using “base beers that are hop centric, but not extreme.” Bugger.
Fresh hop beers – Fritz Kuzuck & Maria Grau,  N E L S O N  M A I L
Pic of the 8 Wired drop Fresh Hopwired courtesy A Girl & Her Pint

[Hat tips and thank yous to Daniel Gross, Great Opera Videos, Ann McElhinney, Eric Crampton, Yaron Brook, Don Watkins, Iowahawk, Berend de Boer, Home Paddock, Geek Press]

Thanks for reading,
and have a great weekend!
PC

Some questions for today

When head of US Homeland Security Janet Napolitano arrived in New Zealand yesterday, was she given a full-body scan at the airport so she’d feel at home here?

Do you think Fletcher Building got good value from its political party donations last year?

Is the real reason Banks was brought into ACT because the cash-strapped party wanted a candidate who could pay his own way? Does Banks now think his $75,980 was a good investment? And would that be $75,980 ACT would have been better off without?

Where does Gareth Morgan get off telling everyone else their business when his Kiwisaver business is the worst performing business of them all?

If 18-year-olds are old enough to choose which politicians get to ruin the country, why aren’t they old enough to choose  whether or not they have a drink?

What does Housing Minister Phil Heatley have to hide in Christchurch?

Is it any wonder housing prices are starting to look stupid again when the Reserve Bank is losing control of the money supply again?

Is it true that warmists are the real climate change deniers?

Is the “green economy” just another expensive bondoogle?

Do environmentalists love nature but hate people?

Immigrants are a breed apart

I was thinking thoughts like those posted below a couple of weeks ago when I attended a citizenship ceremony at the Auckland Town Hall to watch a close friend “get the operation,” as we say. (That’s the picture on the right.)

I’m not at all a fan of state ceremonies, but this one—held four times a year, for around 400 people—left me with a huge smile on my face for the reasons so well articulated below.

I thought of them again when I read John Key’s plans to save this nation of four-and-a-half million people from the tremendous dangers posed by a boatload or two of desperate and wretchedly poor brown people, in the unlikely event they ever reach here. (And I thought of Key and his fellow travellers with something akin to disgust when they characterised what are good, solid people yearning to breathe free—when the only words they can think of with which to describe them—is with the dismissive epithet ‘boat people.’)

So I thought of Jason Lockwood’s post a few times. So I figured I’d post an excerpt here, and commend all of it to your attention.

Those of us who choose to become immigrants are a breed apart. Not only do we uproot ourselves, leaving behind everything familiar and comfortable, but we do it with aplomb. We are adventurous souls in search of a better life, fully aware we may not find it, but fearless enough to light out anyway.
In the debates about immigration in Australia, [New Zealand] and America, the one thing left out of the discussion is actual immigrants and what they bring to their new countries. In Australia, [New Zealand] and America, immigrants are viewed as parasites at worst or unimportant at best.  ‘We don’t need more people,’ is the common refrain. Due to decades of welfare statism and environmentalist propaganda, immigrants are no longer welcomed as those who will enrich the societies they move to, but rather native-born locals view them with suspicion or, dare I say it, derision. It may be true that some immigrants are layabouts only seeking to live off of others, but I believe the vast majority are resourceful and hard working.
Think about it. To make the enormous effort to plan and then move to a new country, often without knowing much about the place he will call home, an immigrant must be more independent than the average person. When he arrives in the new country, he must begin the work of getting to know his way around, finding a place to live, meeting new friends, and the list goes on. The last thing on the mind of a new immigrant is how he can ‘game the system’ so he can sponge off of others. Even the dreaded ‘boat people’ (a term I find profoundly insulting to those who endure extreme hardship to find a better place to live) are far more virtuous than given credit…

Every person who came off the stage at the Town Hall was beaming. Everyone had come here by choice. Every one was, quite literally, consciously starting a new life.

As would be anyone so desperate as to struggle to these shores by boat.

John Key seems willing to demonise the non-problem of desperate people simply to divert attention from his government’s problems.

He is scum.

The Reserve Bank: Lock the doors and leave the building to the four-legged rats

The US central bank recently hosted two of its fiercest critics, inviting them to deliver their judgement on The Fed and the theory behind its actions and existence.

This is not because The Fed has adopted a policy of open debate. As Robert Wenzel’s account of his recent visit makes clear, that’s very  far from the case—it’s just that their might be one or two within the building who favour it. And it’s not like they know anything about Austrian economics—or want to.

Anyway, I reported Jim Grant’s visit a few weeks back, where he gave them a serious piece of his mind. For example…

In the not quite 100 years since the founding of your institution, America has exchanged central banking for a kind of central planning and the gold standard for what I will call the Ph.D. standard. I regret the changes and will propose reforms, or, I suppose, re-reforms, as my program is very much in accord with that of the founders of this institution. Have you ever read the Federal Reserve Act? The authorizing legislation projected a body “to provide for the establishment of the Federal Reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper and to establish a more effective supervision of banking in the United States, and for other purposes.” By now can we identify the operative phrase? Of course: “for other purposes.”

Grant crucified The Fed, explained why a gold standard is their best option, and suggested opening “the Fed’s first Office of Unintended Consequences.”

Well, Robert Wenzel just went one better, inviting his audience to join him in

walking out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats.

I highly recommend reading the whole thing. It’s both glorious and well-considered.

Send a copy to Alan Bollard with a cover letter offering the same advice.

Spending, “austerity,” and starting to grow again

 AFTER YESTERDAY’S FISKING OF David Cunliffe’s speech launching his bid to be this generation’s Jim Anderton, I was asked a question about “spending.”

It was a good question. At least, it demanded a good answer.

Cunliffe had written:

CUNLIFFE: When you start closing down your government services and firing your workers, those people have no money to spend. Because they have no money to spend, the local businesses suffer. So they start firing staff. And so the economy goes into deep recession, with no easy way out.

This is a common Keynesian notion. It’s also complete bollocks.

In a quick response to his argument I said this:

PC: Spending doesn’t stop when you start closing down government services. It just changes its form: the money that was taken to buy government waste and pay back government’s debt is left in the producers’ hands and spent instead on private production and capital formation. So instead of spending it on arseholes to play with paperclips, the money can be spent instead on new capital goods—on production instead of consumption—on industry not on bureaucracy.
This is what actually produces wealth (as Adam Smith could teach Cunliffe) and why cutting government leads not to recession, but to prosperity.

Misunderstanding my point, my interlocutor responded thus:

Spending doesn’t stop when you close down your government services? I sure hope that it does! Because we're borrowing what - a couple of billion every week to flush that money straight down the toilet of benefits! [I believe the figure is $300 million a week, at the last count!] …
That's NZ's problem in a nutshell: spending that NZ cannot afford, taxing high-value Kiwis at a marginal rate of 60%+, and still borrowing massively to plug the "shortfall" of funds that are immediately flushed down the toilet.
NZ must stop borrowing!
NZ must stop taxing!
and above all - NZ must stop spending!

I agree with my questioner.  Government borrowing does need to stop. Government spending does need to stop. But my point is that this does not mean spending in the economy stops too.

LET’S ASSUME THAT INSTEAD of borrowing to shore up the government’s balance sheet (which these days means shoring up the balance sheets of banks stupid enough to lend to governments) that government spending were instead to drop by one billion dollars per year. (We wish!) 

Does that mean that there are now one billion fewer dollars being spent in the economy?  No, it doesn’t.

What Cunliffe and Keynes assume is that government spending just falls out of the air like manna from heaven, expending its blessings in similar manner. Their ignorance is brilliantly summed up by Dave Barry:

See, when the Government spends money, it creates jobs; whereas when the money is left in the hands of Taxpayers, God only knows what they do with it. Bake it into pies, probably. Anything to avoid creating jobs.

You see, government itself produces nothing. It only consumes. So every dollar government spends must first have been taken from someone else. From someone else. From taxpayers.  Whether the govt spending comes from taxes, inflation or borrowing, their spending sources is you, me, your uncle, your aunt, your friendly local industrialist and your friendly local entrepreneur.

So if government is not spending one billion dollars that was being previously being taken from you, me, your uncle, your aunt, your friendly local industrialist and your friendly local entrepreneur, then you, me, your uncle, your aunt, your friendly local industrialist and your friendly local entrepreneur will now be spending it instead!

You see my point?

Now, if you, me, your uncle and your aunt carry on spending that money that’s now in our pockets, then to that extent the level of consumer spending is the same. (Yes, Virginia, all government spending is consumer spending.)

But if your friendly local industrialists and entrepreneurs start spending the money that is now back in their pockets, then it’s more likely they’re going to spend it on new investment and on new factories, on new capital goods (which raises wages) instead of consumer goods (which depletes them). On new production (which grows the wealth) instead of consumption, which consumes it. (Yes, Virginia, that’s why it’s called consumption).

So spending is not one billion dollars less, but in the first year it will be almost precisely the same—yet in the second and subsequent years this spending will be increased by virtue of the new productivity that has now entered the economy.

And jobs? The number of jobs in the economy will be at least the same, because the same amount of money is being spent—but in this and subsequent years wages would grow higher as the amount of capital goods available increases.

This is a good thing. A very good thing. This is in fact how economies grow: by investing and reinvesting in new capital goods and new innovation, which raises and continues to raise real wealth and wages.

And instead of an economy crammed full of bureaucrats and arseholes with clipboards, we move towards one crammed full of producers—and with people who earn those rising wages.

Now, it might be objected that even if you and I don’t bake it into pies, we might—just might—put our money into savings instead of into our local Harvey Norman. Is this a bad thing? Far from it: because consumption is not the engine of economic growth, never was; and in fact 0ur pool of real savings provides the fertiliser for producers who borrow it. Because saving doesn’t subtract from spending it just changes its form. The more we save, the bigger the pool of real savings from which producers can borrow to expand their production.

The more we save, the more we grow. That’s a good thing, right? In the current environment, it’s the most likely way we’re ever going to get ourselves out of this hole.

AND WHAT ABOUT AUSTERITY? Well, let me say a final word about “austerity.”

Consider that governments around the world have borrowed and spent around 100 trillion dollars in the last decade.

100 trillion dollars!

And they may as well have gone ahead and baked it into pies for all the good it would have done. Unless you’re Gerry Brownlee, pies would have done far less damage.  (Just imagine what genuine producers could have done with 100 trillion dollars!)

So governments have borrowed like all hell in a five-year-long fit of foolishness, and apart from a very few examples (Estonia, Sweden) none have actually cut their spending at all. None have given it back to taxpayers. Some have slowed down the growth in their spending. (Which muppets like Cunliffe call “austerity.”) All are in thrall to the wreckless irresponsibility sponsored by John Maynard Keynes, endorsed by David Cunliffe et al, and demanded by voters who finally discovered how easily (they thought) they could vote themselves benefits from the public treasury.

That so many of them are now in the streets protesting the bailouts of the very banks to whom their governments are in hock is perhaps the final irony.

And when you understand that it is to the local variety of these know-nothings that the would-be next Labour Party finance minister is making his pitch, you will begin to understand just how nasty the next decade in this country might be.