Friday, August 19, 2011

DOWN TO THE DOCTOR’S: Those Great Pretenders

_richardmcgrathGuest post by Libertarianz leader Dr Richard McGrath

The 2011 Libertarianz conference and AGM was held last Saturday, at Mac’s Brewbar in Wellington. This is the speech he delivered to the assembled throng.

The 2011 general election is now a little over three months away. As of 24 June, there were 15 political parties registered in New Zealand. Since I’ve heard it said that several of these parties claim to hold principles similar to those of the Libertarianz Party, I checked out the websites of these Pretenders to find out more. Here’s what I discovered:

  • There is the National Party, whose stated values include individual freedom and choice, personal responsibility, competitive enterprise and limited government.
  • The ACT Party describes individuals as owners of their lives, with rights and responsibilities—and the purpose of government is to protect these rights and not to assume the responsibilities.
  • The Kiwi Party supports freedom of association, speech, assembly and religious belief.
  • The Aotearoa Legalise Cannabis Party, whose candidate in a recent by-election promised to put the toke back in Tai Tokerau, believes adults have the right to exercise freedom of choice, unless that choice harms other people.
  • New Zealand First’s policies include cutting government advisers and consultancies by 50%, lowering taxes and eliminating corruption within the state sector.
  • The Democrats for Social Credit say the individual is more important than the state, that co-operative enterprise should be the basis of economic organisation, and that the current monetary system is the major cause of war, poverty, inflation and other social problems.
  • The Maori Party’s policies include stopping Maori-owned land being confiscated under the Public Works Act, making the first $25k of income exempt from income tax, dropping the GST on food, dropping company tax and stopping any rise in compliance costs for businesses.
  • Not yet registered as a political party is the NZ (Taxpayers) Tea Party, who wants smaller government with lower taxes, less regulation, and less borrowing.

The remaining seven parties don’t even pretend to be interested in freedom, or in protecting the rights of New Zealanders.

  • United Future mentions, in passing, self-reliance.
  • The New Citizen Party appears to be a race-based party, along the lines of the Maori and Mana Parties, aiming to represent Chinese New Zealanders. No values or policies are available as yet and as the party did not apply for broadcasting funding for the 2011 election, we are unlikely to learn much more about them before November.
  • The Mana Party has no stated values and one policy, wanting more money from Treaty of Waitangi settlements.
  • As of 28 July, the NZ Labour Party had no values or principles it was willing to share on its website. There is a link to a 2-minute video with Phil Goff and others talking platitudes about people caring for each other, teachers being the best they can, owning our own future, a land of our own, development of the community, obligations to provide for others, a no-nonsense attitude,  a steak on every plate, a car in every house, and to every young girl a new pony. (At least one of these I have made up.) 
    There were brief glimpses of sanity on the Labour Party website with mention of ‘focusing on achievement’ and ‘people taking responsibility for their families,’ but nowhere could I find principles or policies by which these goals could be achieved. (But high up on the Labour Party plans for that would be, I’d wager, a need for oodles of taxpayers’ money.)
  • The Green Party's values are said to be: engaging respectfully, supporting ideas on their merit, challenging oppression, and fostering compassion, a sense of humour and enjoyment in the workplace.
  • The Alliance Party believes the dreams and aspirations of individual, identifiable New Zealanders should be sacrificed to the needs of anonymous, non-identifiable New Zealanders.
  • The website for Jim Anderton’s Progressives is rather quaint, with just 3 policies mentioned – free dental care, partial alcohol prohibition and increased levels of taxpayer-sourced superannuation. Like the Labour Party, it appears devoid of principle or – more likely – too afraid to make any principles available for private consumption. (Scary things, principles.)

Thus there are, on the one hand, at least seven registered political parties, plus two as yet unregistered with one or more policies said to be underpinned by the sort of values shared by libertarians everywhere.

There are also six registered political parties in this country that fail to acknowledge in any way at all the concept of inalienable personal rights—the protection of which is the single most important (in fact, only) job of government.

And then there is the Libertarianz Party – a party that has unequivocally held to the same principles and policies for the entire 15 years of its existence.  In summary those principles are:

  • individual sovereignty & tolerance for the choices of others
  • the right to create, acquire and control private property
  • voluntary interaction & the non-initiation of force
  • limited government
  • the rule of law
  • capitalism

In essence, these are corollaries of that one single principle: the non-aggression or non-bullying principle.

Simply put it is wrong for one person to bully another, and for governments to bully their citizens. Physical violence, and the threat of it, is immoral regardless of who is threatening who.

Unlike several parties in parliament whom I could mention, the Libertarianz is a party that does not merely pay lip service to the principles of small government while daily effecting their betrayal.  Unlike them, we have an unswerving commitment to expanding the freedom of every New Zealander by rolling back the gargantuan, bloated and overbearing Nanny State.

So what distinguishes the Libertarianz Party from the pretenders, from the others who smile and say nice things about freedom—which incidentally even the most diehard socialist wants for themselves, but not for others?

Well, clearly enough we are not in parliament while they are.  But to be there while doing over and daily voting against the principles on which you claim to stand neither advances your cause, nor your principles.

The one characteristic that sets Libertarianz apart from these pretenders is: INTEGRITY. Integrity is a wholeness, a consistency, an adherence to moral and ethical principles. A virtue, in other words, that is wholly and utterly alien to every single one of our elected representatives.

  • The problem with the National Party is that despite throwing about words like freedom, choice, responsibility and limited government, it does nothing in government to uphold them. Meanwhile, it shoots itself in the foot by throwing into the mix other values such as Queen-worship, caring communities, security and capitulation to Greenwash.
  • The ACT Party has allowed itself to be distracted from promoting classical liberal values by the antics of its former leader Rodney Hide and the resulting power struggle within the party, its increasing obsession with race, and the bizarre candidacy of John Banks in Epsom.
  • The Kiwi Party wants to nationalise native animals and plants and have government interference in the media, and restrictions on freedom of speech.
  • ALCP oppose the prohibition of their favoured substance, but favour the prohibition of those they don’t favour—like alcohol.
  • NZ First, as their name suggests, want a Fortress NZ, an expansion of the welfare state (especially for over-65s) and a knighthood for Garth George.
  • The Democrats for Social Credit would promote wasteful biofuels, the downside of which includes human starvation; would ban foreign investment in farm land, which would reduce local capital; would promote a state broadcasting arm to spread government propaganda; would subsidise the disabled at the expense of the able-bodied; introduce new taxes; would tolerate a central bank; would allow a government monopoly on energy sales; ‘free’ health care; subsidy of the performing arts. The few policies that are good, such as armed neutrality and restorative justice are outweighed by multiple Nanny State policies.
  • The Maori and Mana Parties promote special rights for racial groups, thus judging people by the colour of their skin and not by the content of their character.
  • United Future believe that adults who self-medicate without harming other people should be arrested, and that people who sell medication to others should be jailed without the option of home detention.

There is thus a tendency for New Zealand political parties to promote one or two token libertarian values, but you don’t have to dig far to discover they are all closet statists. It seems clear then that at this election, as in every other, you really only have two choices: either vote for one of the statists (with whichever favoured face of authoritarianism you choose) or you vote for the Libertarianz Party, the only party whose policies are compatible with freedom, with tolerance, and with deregulating every facet of human activity while outlawing every new form of coercion.

If you are looking for a registered political party advocating limited government and maximal personal freedom with consistency and integrity, then look no further then the Libertarianz Party of New Zealand—the party I am proud to lead.

Thank you.

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Thursday, August 18, 2011

"...my purpose holds to sail beyond the sunset..."

seastead1-400x300

The great benefit of living in society is the enormous boon we all enjoy in a free society from the Division of Labour: the multiplication of knowledge; the benefits from genius; concentration on individual advantage and geographical specialisation; the productive machinery and the economies of learning and motion that emerge from that specialisation—in short, what George Reisman describes as “the general gain from the existence of others.”

Given these enormous benefits, so great that they built the civilisation we now enjoy, why would you want to leave all of that behind and "Go Galt" unless the world is in a dire state?

Every few years, a different group of libertarians will emerge with a new proposal for setting up "outside the grid," either by buying an island, or starting a new country, or by sea-steading. All of them wanting to “Go Galt.”  The weakness every time has been that whatever might be gained by moving away from the grey ones is lost by also moving away from the productive geniuses and putting behind you the benefits of Division of Labour. The world would have to be in a very bad state indeed for such a proposal to make sense.

The world is in that state today.

Which is why the proposal by PayPal and Facebook billionaire and self-described enthusiast for New Zealand Peter Thiel for a new form of sea-steading might be attracting so much interest. Here for example is a recent feature write-up in Details [Hat tip Eric Crampton]:

Despite the innovations of the past quarter century, some of which have made him very, very wealthy, Thiel is unimpressed by how far we've come—technologically, politically, socially, financially, the works. The last successful American car company, he likes to note, was Jeep, founded in 1941. "And our cars aren't moving any faster," he says. The space-age future, as giddily envisioned in the fifties and sixties, has yet to arrive.

Perhaps on the micro level—as in microprocessors—but not in the macro realm of big, audacious, and outlandish ideas where Thiel prefers to operate. He gets less satisfaction out of conventional investments in "cloud music" (Spotify) and Hollywood films (Thank You for Smoking) than he does in pursuing big ideas, which is why Thiel—along with an all-star cast of venture capitalists, including former PayPal cohorts Ken Howery and Luke Nosek, and Sean Parker, the Napster cofounder and onetime Facebook president—established the Founders Fund. Among its quixotic but potentially highly profitable investments are SpaceX, a space-transport company, and Halcyon Molecular, which aspires to use DNA sequencing to extend human life.

Privately, however, Thiel is the primary backer for an idea that takes big, audacious, and outlandish to a whole other level. Two hundred miles west of the Golden Gate Bridge, past that hazy-blue horizon where the Pacific meets the sky, is where Thiel foresees his boldest venture of all. Forget start-up companies. The next frontier is start-up countries.

"Big ideas start as weird ideas." That's Patri Friedman, a former Google engineer, the grandson of the Nobel Prize-winning economist Milton Friedman, and, as of 2008, when Thiel seeded him with the same initial investment sum he'd given Mark Zuckerberg four years earlier, the world's most prominent micro-nation entrepreneur. Friedman, a short, kinetic 35-year-old with a wife and two children, maintains an energetic online presence that ranges from blogging about libertarian theory to tweeted dispatches such as "Explored BDSM in SF w/big group of friends tonight." Four years ago, a Clarium Capital employee came across a piece Friedman had written about an idea he called "seasteading." Friedman was soon pitching to Thiel, a staunch libertarian himself, the big, weird idea...

Here’s Thiel laying out the idea at a Seasteading conference back in ‘09:

Peter Thiel - The Seasteading Institute Conference 2009 from The Seasteading Institute on Vimeo.

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Thatcher on European Monetary Union

As Angela Merkel and Nicholas Sarkozy cobble together a deal that no-one believes to save a currency union that no-one respects, I figured I’d see what one of modern Europe’s great statesmen thought about the European monetary experiment at its inception.

Writing in 1989 about the prospect which now beckons of a “two-tier” Europe (PIIGS to the south, producers to the north) she asked,

“What’s wrong with that if the other tier is going in the wrong direction?”

As they have been.

    And on Britain being left out of the monetary union?

“So be it. Germany and France would have to pay for all the regional subventions.”

As they will keep doing, as long as the currency union remains.

    And on the dangers of the currency union, the idea of which was then only in its infancy:

“The Germans .. [sh]ould be worried about the weakening of anti-inflationary policies, and the poorer countries … must be told they would not be bailed out of the consequences of a single currency, which would therefore devastate their inefficient economies.”

Prescient stuff.

    Writing much later, in her memoirs, she reflects

“there is one lesson to be learnt from the economic development of the period of 1987 to 1990 [when the European currency union was being constructed], it is that that contained in the phrase I used in the House of Commons … : “there is no way in which you can buck the market.” I might add that if you try to do so, the market will buck you. The belief that the laws of economics and the judgement of markets can be suspended by clever people … is a perpetual temptation to folly.”

The lesson is being learnt again.

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Wednesday, August 17, 2011

Making shit up for fun and profit

Yet more numbers emerges from the Making-Shit-Up file, this time from a report on “fast broadband” written by BERL at the instruction of the Auckland and Bay of Plenty Councils. 

The report purports to show that “early roll-out, adoption and uptake” of “fast broadband” will make us all rich. But as Eric Crampton points out, this is based on some heroic, not to say nonsensical, assumptions about the sort of productivity increased by filing reports at 10 mbps rather than 500 kpbs.

Read A number I don't believe  - O F F S E T T I N G   B E H A V I O U R

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Watch What the Rich Do, Not What They Say

_Kris_Sayce_headshot_thumb[2]Guest post by Kris Sayce of Money Morning Australia

“Back in the 1980s and 1990s, tax rates for the rich were far higher, and
my percentage rate was in the middle of the pack. According to a theory
I sometimes hear, I should have thrown a fit and refused to invest
because of the elevated tax rates on capital gains and dividends.”

– Warren Buffett, op-ed, New York Times

Mr. Buffett says the U.S. Congress should raise taxes on the rich.

He says he’s so rich he should pay more tax.

Then why doesn’t he?

According to the U.S. Treasury, during the 2010 financial year $2.8 million was donated as “Gifts to reduce debt held by the public.”

That’s right. Americans who choose to can make voluntary contributions to the U.S. Treasury to cut the national debt.

Trouble is the U.S. has a national debt over USD$14 trillion.

That meant, in 2010 the U.S. Treasury’s interest expense was a whopping USD$413.9 billion.

Put another way, the $2.8 million donated reduced the national debt for…3.5 minutes… before interest costs wiped it out!

This financial year the donation wipe-out will take even less time. The interest expense is already at USD$412.5 billion… and will likely increase by another USD$50 billion over the next two months of the fiscal year.

It’s no wonder so little is raised through donations.

Buy an investment or pay more tax?

Certainly Mr. Buffett and his rich pals see little point. With all their wealth, they’d surely donate more than USD$2.8 million.

After all, Mr. Buffett could double the amount donated to the U.S. Treasury each year by handing over just 0.007% of his personal wealth.

Or, if he’d prefer, he could get his listed firm, Berkshire Hathaway [NYSE: BRK-A] to make the donation. It’s not as though his firm is short of a few bob. According to Bloomberg News, Berkshire Hathaway has “$47.9 billion of cash”.

Or, he could have donated to the Treasury rather than buying 1.5 million shares of U.S. listed firm, Dollar General [NYSE: DG]. A stake that would have cost his firm over USD$40 million – 14-times the sum donated each year to the U.S. Treasury.

What point are we making?

First, it gives you another example of how stuffed the U.S. economy is. And why you should be wary about getting suckered into this one-week suckers’ rally.

For all the talk overnight about markets rallying on the back of takeover activity, the U.S. economy is just as stuffed today as it was two weeks ago.

But second, it highlights how you should pay more attention to what big investors do rather than what they say.

If Buffett’s real concern was paying more money to the federal government then he’d just do it. Making a gift to the U.S. Treasury to pay down the debt is simple: write a cheque and send it off to Parkersburg, West Virginia. (Amusingly, the Treasury also accepts credit card donations!)

But helping out the federal government isn’t his real concern. Bloomberg News gives away what’s really on Mr. Buffett’s mind:

“Berkshire’s equity portfolio was valued at $67.6 billion as of June 30, with 40 percent in consumer products firms and 37 percent in financial firms such as banks and insurers. The rest of the portfolio was in a group Berkshire labels ‘commercial, industrial and other.’”

In other words, you’re looking at a portfolio of economically sensitive stocks. Stocks that rely on an economy not going into recession.

Why higher taxes won’t help

But here’s the biggest flaw in Mr. Buffett’s plan. In his op-ed for the New York Times (where else, it’s like expecting the Age to print an op-ed calling for tax and spending cuts) he makes the point that the income of “the highest 400 [wealthiest people] had soared to $90.9 billion.”

Of this – he calculates – USD$19.5 billion was paid in taxes.

But here’s the thing, Mr. Buffett doesn’t reveal how much more taxes these people should pay. Think about it, an increase in taxes to USD$30 billion would mean an extra $10.5 billion and cover just 2.3% of the interest cost of outstanding U.S. debt…

Or wipe just 0.00007% off the federal debt.

Perhaps he thinks his rich pals should be taxed at 100% of their income? But even so, it would cover just 20% of the interest expense or wipe a measly 0.0006% off the federal debt.

Now, we can’t speak for the rich, but we’re pretty sure a tax burden of 100% would cause them – in Mr. Buffett’s words – to throw a fit and refuse to invest.

If you’re taxed 100% of your salary this year, what are the odds on you bothering to earn anything next year?

The simple reason more people don’t donate money to governments is because they know it’s not an effective use of capital. Mr. Buffett and his rich pals know for a fact if they invest money rather than donate it to government, everyone’s a winner.

The rich guys hopefully get a return on their money… the people the rich guys bought the investment from make money… the people that work for the firm they bought get to keep their jobs and perhaps more people will be given jobs… and consumers who use the goods or services produced by the company continue to get the goods or services they want.

Contrast that to government services which are things people either don’t want, or want but don’t want to pay for.

The fact is – and Mr. Buffett of all people should know this – government is a handbrake on any economy. It’s not the throttle.

Creating innovation from destruction

Economies are built on innovation and individual entrepreneurial spirit. An economy isn’t built on a democratically elected dictator swiping wealth from individuals to use as bargaining chips to secure election or re-election.

If Mr. Buffett was concerned about the future of the American economy he should call for a wind-back of the state. And with it, lowering the tax burden on entrepreneurs and successful businesspeople. That’s a simple way to increase wealth for everyone.

Instead, like all people in powerful positions and influence the goal isn’t to spread the wealth – it’s to keep theirs and make sure others spread their wealth.

Because winding back the tax burden and cutting regulations is the last thing an existing businessman or woman wants. Companies that are brand leaders and market dominators (the kind of firm Mr. Buffett invests in) also happen to be the direct enemy of the entrepreneur.

Entrepreneurialism and creative destruction are the true drivers of economic progress. But they can only drive progress if given the chance. Wealthy people calling for higher taxation on other wealthy people won’t do a darn thing to help.

All that will happen is the Feds will keep spending while the wealthy find new ways of avoiding a higher tax bill… and that means a bigger burden on the middle classes, more debt, bigger government and less innovation.

But don’t expect anyone in a position of influence to figure this out anytime soon.

Cheers.

Kris Sayce
Money Morning Australia

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The “first casualty” was truth

As much of the country lies blanketed in several inches of global warming, the result of the coldest day ever recorded in these parts (with snow even on the hills of Dargaville!), it’s worth noting that among the “first casualties” of global warming have been truth and scientific integrity.

Not to mention reports of the imminent extinction of the polar bears, of Himalayan glaciers and of coral reefs—and Tuvalu’s ten-thousand climate refugees.  You can’t mention them, because they’re not there. The extinctions, that is. These are just a few of the many “first casualties” of global warming that weren’t.

Read A short history of climate science hysteria -  A S I A   C O R R E S P O N D E N T . C O M

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Tuesday, August 16, 2011

Quote of the Evening: Sun Tzu refutes Keynes (& Krugman) [updated]

"What is essential in war is victory, not prolonged operations. No nation has ever benefited from a prolonged war." - Sun Tzu

UPDATE: Let's compare and contrast the common sense and sound reason of Ludwig von Mises to the dangerous hyperbolic fantasies of the Super-Krugman and his mentor Keynes (to whose intellectual influence virtually every politician and every mainstream journalist are slaves, whether they know it or not).

Mises:

"In proportion as armaments increased the sales of munitions plants, they reduced the sales of all other industries.” [writing in Omnipotent Government]
"All the materials needed for the conduct of a war must be provided by restriction of civilian consumption, by using up a part of the capital available and by working harder. The whole burden of warring falls upon the living generation.” [writing in Human Action]
"At the breakfast table of every citizen sits in wartime an invisible guest, as it were, a G.I. who shares the meal. In the citizen’s garage stays not only the family car but besides, invisibly, a tank or a plane. The important fact is that this G.I. needs more in food, clothing, and other things than he used to consume as a civilian and that military equipment wears out much quicker than civilian equipment. The costs of a modern war are enormous." [Writing in Defense, Controls, and Inflation]

Krugman, on CNN this week:

"I mean, probably because you want to put these things together, if we say, 'Look, we could use some inflation,’ … which is, of course, anathema to a lot of people in Washington but is, in fact, what the basic logic says. It's very hard to get inflation in a depressed economy. But if you had a program of government spending plus an expansionary policy by the Fed, you could get that. So, if you think about using all of these things together, you could accomplish, you know, a great deal.
If we discovered that, you know, space aliens were planning to attack and we needed a massive build-up to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better." (http://bit.ly/nqrXjO)

Keynes, in his General Theory:

"If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing."

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Buffett goes gaga

Even the front page of the Royal NZ Herald’s Business section went gaga this morning over Warren Buffett. Why? Because the billionaire is calling for bigger taxes on billionaires like him and Bill Gates.  Tim Carney reminds us however:

As most of the media goes gaga over Billionaire Obama fundraiser Warren Buffett calling for tax hikes, (like he did in 2001, and 2004, and plenty of times in between), let’s remember a few things. 

Buffett Profits from Taxes He Supports
Buffett regularly lobbies for higher estate taxes. He also has repeatedly bought up family businesses forced to sell because the heirs’ death-tax bill exceeded the business’s liquid assets. He owns life insurance companies that rely on the death tax in order to sell their estate-planning businesses.

Buffett Profits from Government Spending
Buffett made about a billion dollars off of the Wall Street bailout by investing in Goldman Sachs on the assumption Uncle Sam would bail it out. He also is planning investments in ethanol giant ADM and government-contracting leviathan General Dynamics.

If your businesses’ revenue comes from the U.S. Treasury, of course you want more wealth.

Buffett can give great advice on how to make money. His advice on how to steal it should be put where the sun doesn’t shine.

[Hat tip Economic Policy Journal]

ECONOMICS FOR REAL PEOPLE: “Democracy & the Tragedy of the Commons”

UoA-DavidSeymour

Here’s the note from our friends at the UoA Economic Group about tonight’s seminar, featuring another guest speaker:

Hello Everyone.

Hope you’re surviving the wintery blast.  Speaking tonight we have David Seymour, a Senior Policy Analyst and Director of the Saskatchewan Office of the Frontier Centre for Public Policy.  He will be talking about think-tanks and examining the claims that “Capitalism has failed”—and (as a former resident of one of the coldest places in Canada) answering timely questions on how to survive when the snow is thigh-deep.  Here’s what he plans to cover:

"Two years ago we were told again and again that capitalism had failed.
    “Now it seems that the welfare state is failing in a much more profound way. In the United States, Italy, Greece, and to a lesser extent New Zealand, the political systems produce expectations around taxes and entitlements that do not balance, leading to deficits, debts, and disruption.
    “I will argue that these expectations are the logical consequence of leaving too many decisions up to political process. Drawing on public choice economics, ecology, and the history of collapsed societies, I'll argue that our current democratic process is a case of the tragedy of the commons. Like environmental commons tragedies, the solution is to return more decision making to the private realm."

Sound interesting?  Come along and find out.

Date: Tuesday August 16th
Time: 6pm
Location: UOA Business School.  Case Room 1, Level 0

Check us out on the web at http://uoaecongroup.wordpress.com/.

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Riots on the streets of London [updated]

I’ve read a lot of cant about the “riots” in the UK [and Philadelphia and Washington DC and…]. So I had to post a comment of my own.

The most apposite comment I’ve seen however came from one of the rioters themselves, a young woman who said they’d all seen everyone getting their bail-outs from someone, so why shouldn’t they get out and take theirs.

It’s not about “poverty,” as the bank accounts of many of those arrested goes to show. Instead it’s a very simple equation: it’s the moral hazard of bankers’ bailouts times the entitlement-culture squared, which equals everyone taking from everyone else, forever.

It’s the fag-end of sixty-five years of welfare, in which everybody’s property is fair game.

The rioting, thieving and looting was carried out by a generation who has seen and endured and been “given” by government more than any other. Govt housing, govt welfare, govt projects, govt handouts, govt schools. Govt, govt, govt. The result, here and elsewhere, has been more dependence, less responsibility and  increasing illiteracy. And min the last few years, what they’ve watched and seen has been more govt bailouts for more and more failures—all of them“too big to fail.'”  Society’s biggest failures being rewarded for stuffing up big time, and taking us all down with them.

They’ve seen everyone getting something for nothing; they’ve seen government steal from one group to give to another; they’ve seen everyone say that’s okay … so why wouldn’t the governments’ biggest failures not want to “get theirs” in the same way when they see their opportunity? And break as many windows as they need to in the process.

It’s not like they’ve seen the moral lessons anywhere to tell them it’s wrong. Or the education to enable them to articulate their rage in any other way.

Just over thirty years ago teenagers saw the mess their parents had made of the world and, made just as inarticulate by public education to clearly voice their rage, called incoherently and in three chords for “anarchy,” “destruction” and chaos.

It’s not so very different now, is it. Only this time, instead of safety pins and bondage trousers the villains are all wearing brand-name hoodies.

Here’s The Clash:

White Riot by The Clash Lyrics: White riot - I wanna riot White riot - a riot of my own White riot - I wanna riot White riot - a riot of my own Black people gotta lot a problems But they don’t mind throwing a brick White people go to school Where they teach you how to be thick An everybody’s doing Just what they’re told to An nobody wants To go to jail! All the powers in the hands Of people rich enough to buy it While we walk the street Too chicken to even try it Everybody’s doing Just what they’re told to Nobody wants To go to jail! Are you taking over Or are you taking orders? Are you going backwards Or are you going forwards?

UPDATE: One commentator who’s been making sense on the riots is old friend Liberty- Scott, who points out the rioters are simply “engaging in socialism - without the middle man of the state.”

Read his recent posts here.

Image over reality

From a government that increasingly believes in style over substance comes two announcements making clear that image is more important, to them, than reality. At least in their minds.

We have the report from the Gnats’ weekend conference that—at a time when around 450,000 adult NZers are on welfare—the Tories plan only to get “tough” on around 1600 16- and 17 year-old beneficiaries too young to vote; on young folk who were first made unemployable by government schools, and then priced out of the market by this government having removed Youth Rates.

And we had the report yesterday that despite the inept Judith “Crusher” Collins’s grandstanding about getting “tough” on street racing by crushing cars, not one car has yet been crushed. (Asked to comment on this failure, the Non-Crusher points to a 15% drop in street racing, apparently oblivious to the fact that way more than 50% of the Christchurch streets where most racing was done are now impassable.)

What we have here is a reliance on image (getting “tough”) over the disastrous reality the Gnats refuse to either confront or acknowledge. Add to that their insistence on continuing to borrow $300 million per week rather than confront the reality of their over-spending, and you have a recipe for a government who prefers doing headlines to doing the hard stuff.

That they think they can get away with it is due only to a media and opposition who are as inept as each other in being able to hold them to account.

Economics in snow-time

Expat Canadian Eric Crampton—from a place where they get real snow—muses on supply and demand in a time of snow.  Where are all the rosy-cheeked youngsters when you need them to shovel the stuff?

Read “Snow pro tips for Kiwis” – O F F S E T T I N G   B E H A V I O U R

“Roll out the bunting. Tomorrow is the 40th anniversary of the modern global economy.” [updated]

“That's right: come Monday morning we will have managed to survive four decades of fiat money – though, given the chaos in markets in recent weeks, it is anyone's guess how much longer it will last…”

Read: “Abandoning the gold standard was a seminal moment, and one we're now all paying for.” 
            – T E L E G R A P H

UPDATE:  I give you the man who gave us our modern crises economy, Richard Nixon, the man who was forced to divorce the US dollar from gold back when it was tied at $40/ounce. Who forced him? It was those speculators, you know.

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Bring on the Space Alien Stimulus, says Nobel Stimulunatic [updated]

As the world's economies slip into the Greater Recession from which they had “emerged” only by massaging their numbers, the man who called for a housing bubble to "fix" the American economy during its last Recession  in 2001 demonstrates that mainstream economics has learned nothing since--has not learned that it is not credit creation and mindless consumption that drives economic activity, but genuine savings and real production!

Speaking not on The Onion but on CNN,' Krugman calls for space aliens to attack earth requiring massive defence build-up to stimulate economy. Yes, really:
"If we discovered that, you know, space aliens were planning to attack and we needed a massive build-up to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren't any aliens, we'd be better –"
Is this the dead end for mainstream economic “fixes” for the crisis their failed theories have caused, exacerbated and extended?

[Hat tip Liberty Watch]

UPDATE: Any Keynesians reading this will snicker quietly to themselves and say things like “But didn’t World War II rescue America from the Great Depression? No, schmucks, it didn’t.

As Dr. Robert Higgs has more than ably shown, the Great Depression continued, and deepened, throughout the New Deal and throughout World War II. The World War II years were a time of shared privation, with virtually every item that we take for granted today either rationed: e.g., meat, gasoline, sugar, clothing; or not available at any cost: e.g., new cars, appliances, etc. The American standard of living throughout World War II remained at an excruciatingly low level that no 21st century American would accept. Meanwhile, unemployment disappeared simply because 16 million able-bodied people were sent to war, paid below-market rates and subject to danger, death, and maiming they may not have preferred to unemployment.
  As [Mary Theroux] earlier detailed in “One More Time: World War II Did Not Bring Us Out of the Depression,” the Great Depression ended in 1946, when 10 million individuals were returned to the ranks of the unemployed, and federal spending plunged 40% in the aftermath of FDR’s death and the abandonment of the New Deal.
If Dr. Krugman would quit reading Keynesian theory and start reading history, he could earn his Nobel and look for salvation not from aliens but from the creative engine fueled by free individuals unencumbered by regime uncertainty and widespread diversion of productive resources to government programs.

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'Stopping By Woods On a Snowy Evening,' by Robert Frost

Whose woods these are I think I know.
His house is in the village though;
He will not see me stopping here
To watch his woods fill up with snow.

My little horse must think it queer
To stop without a farmhouse near
Between the woods and frozen lake
The darkest evening of the year.

He gives his harness bells a shake
To ask if there is some mistake.
The only other sound's the sweep Of easy wind and downy flake.

The woods are lovely, dark and deep.
But I have promises to keep,
And miles to go before I sleep,
And miles to go before I sleep.

- Robert Frost, New Hampshire, 1923

Watch a video of Robert Frost reciting his poem. - Posted by PC

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