Friday, August 26, 2011

Time for a stiff drink—and a one-fingered salute to the wowsers

Parliament's Committee for Wankers, Wowsers and Bluestockings has finally returned its verdict on the Law Commission's proposal to hinder access to alcohol-fuelled fun and enjoyment for you and I and your dozen closest friends.

Want a good night out that goes on as long as the craic does? Want to fill your cocktail cabinet from the store down the street? Want to load up on beer as you load up on groceries?

To all these things, the Wowsers say “No!”

Like puritans everywhere, they’re agitated at the idea that someone, somewhere, might be having fun in a way for which they haven’t got a license. So in order to push back pleasure on all fronts, they've predictably tapped into existing competitive pressures to claim some kind of public support for their lemon-sucking.

They know that supermarkets would like to shut down local liquor sales, so they’ve joined supermarkets in trying to squash local liquor stores; they know that pub owners object to both, so they've joined with the Hospitality Association in trying to squash supermarket sales and local liquor shops; and they've joined with wowsers, bluestockings and the lemon-sucking lawyers at the Law Commission in trying to shut down drinking at any place at any time that’s after Geoffrey Palmer’s bedtime.

It's a rat's nest of self-interest harnessed for political effect, with no-one of sufficient volume to speak up for you and I who just want the freedom to enjoy ourselves—and virtually no-one at all to speak up for the owners of small local liquor shops who, since one of their number was murdered, have been taking it on the chin by virtually every political pressure group around, starting with the Prime Minister.

Neighbourhood liquor store owners selling to willing buyers appear to be the chief and easy scapegoat for every alleged social harm dreamed up by the writers of fiction researchers, from bad driving to burglary to broken families to the failure of Hosea Gear to make the final All Black squad.

The quality of the arguments against them can be seen from their argument against small neighbourhood liquor stores—the opening, closing and distribution of which, say Parliamentarians,  “should be up to communities to decide.” But local communities are already deciding those matters every single day.  What these numb nuts appear never to have understood is how markets work, since in every important sense the opening, closing and distribution of every single retailer is already decided by the members of their communities, in their capacity as consumers.

The quality of other argument is no better, climaxing in the abortion of a so-called “economic report” commissioned by the Law lords on which the figures on the so-called social costs of alcohol are pulled out of the researchers’ arses derived.

But neither facts nor sound reasoning are wanted here. Political self-interest is on the prowl, and when that’s allied to the puritanism of the lemon-suckers, we’ll all end up as losers.

I think I need a stiff drink, while I can still get one.

Labels: ,

“Architecture is … “

From the howtoarchitect

Labels:

Thursday, August 25, 2011

Why we don’t need Kahunas or compulsory saving—or the c***s who promote them

Here’s a thought for those of you contemplating the self-serving proposals peddled by suits wanting more welfare for suits. (Come in Gareth Bloody Morgan and Sam “I’m Just Another Self-Serving Suit” Stubbs.)

You’ll have noticed by now that prices have been rising every year since the Reserve Bank of New Zealand was born. (This compared to a half-century of prosperity and gently falling prices in the period before  modern central banking was born.) You’ll have noticed too that they’ve been rising even in the period that “inflation” is supposed to have been tamed, rising this year at least five percent on last year’s prices, and about four percent the year before that.

If you think about it however not so much as prices rising, but as the value of money falling, you’d actually be more accurate—more accurate, since that is what is a actually happening.  Every dollar the Reserve Bank prints (or allows to be created out of thin air by the banking system) dilutes every existing dollar in your pocket or your savings account. That, in short, is the reason both for rising prices and for your dollar buying less and less every year.

Your dollar buys less every decade than it did before.  According to the CPI (which famously understates inflation) since the beginning of 2002, every dollar has lost over 20% of its purchasing power, a precipitous decline in less than 10 years—and if your savings were invested at less than the CPI rate (or less than the real rate of money dilution), you’d have lost the value of your savings each and every year.

The loss is significant. Especially when you consider that the value of your dollar is around ninety-five times less than it was just ten decades ago, when the First World War blew apart the period of peace and prosperity backed by the gold standard.

You want to know why people don’t save as much as they used to? Because they noticed that their goddamn money after they’d finished saving wasn’t worth as much as it was when they started! They noticed that the grey ones were stealing from them by inflation! People aren’t stupid. Not as stupid as the pollies and the central bankers think they are. You keep diluting their money, and they’ll keep trying to get rid of it while it’s still worth something. And you keep interest rates below the rate at which their cost of living is rising, and they’ll borrow like hell—and know they’ll still come out on top.

Inflation is a killer, even at the so-called tepid rate of five percent that it’s at now. (But note that in 1971 five-percent inflation was enough to get Richard Nixon so worried his “brains trust” called for wage and price controls.)

So, instead of fatuous schemes by fatheads who lose you money (like the rum old Captain Morgan), or compulsory saving called for by the recipients of that compulsion (like the suit called Sam Stubbs), or shop talk about letting inflation fix things from Prime Ministers more interested in smiling and waving than effecting real repairs, why not just leave people’s money alone; why not stop the inflation altogether; why not stop diluting the currency, full stop, so that people’s savings actually start to mean something again.

They might even thank you for it.

Labels: , , , ,

The failure of forecasting, part XVII [updated]

I've posted before on the failure of economic forecasters to do what they purport to do best, i.e., forecasting the future (see here, here and here, for example.)

For all their high-tech mathematical models however, when it comes to it these alleged forecasters are as blind as an English referee.  Why? Because all their models do is spit out information that extrapolates existing trends, and suggests that things will always tend back to the mean.

Which is not only fatuous, it doesn’t work. Especially at times like these.

Just look at recent evidence gathered by Orewa-based commentator Rodney Dickens using NZIER research [Reviewing the Consensus Forecasts for economic growth - pdf], which compares predictions-against-performance for the so-called “top-ten” economists surveyed each quarter by the NZ Institute of Economic Research—the sort of chaps you see on the news each night being asked by newsreaders to comment sagely on what’s going to happen next. The average predictions by these chumps are called the 'consensus forecasts.'  And they’re decidedly below average.

They all got it wrong predicting GDP.  They all got it wrong predicting residential building activity. They all got it wrong predicting interest rates. They all got it wrong predicting bond yields. And most got it wrong predicting the TWI (but even a monkey on a typewriter could get it right once, right?). So in sum, they were all as wrong as Gareth Morgan’s investment advice—and the fact is they’re always this wrong, almost very time.

Why? Because the future is inherently uncertain, and econometric analysis can’t change that one whit. All it does is provide mathematical justification for going wrong with confidence.

imageNow, it’s true as economist Ludwig Von Mises say that “historians and statisticians content themselves with prices of the past,” while “practical man looks at the prices of the future”--and that econometricians pretend to use the prices of the past to predict the prices and conditions of the future.  But the fact they can’t, and never can, just reinforces the crucial role of entrepreneurs in driving economic activity: in taking risks on the future with their own money based on their own individual estimations of the future.

It’s not blind crystal-ball readers who move the world, it’s entrepreneurs. And most econometricians wouldn’t even know how to spell the word.

UPDATE: Kudos to Matt Nolan at the Visible Hand blog for taking on the challenge of defending forecasting.  His defence, really, rests on two things. He says:

  • “Entrepreneurs  … make the choices, and … they will value this type of service insofar as it helps give them information that allow them to make better informed choices”; and
  • “If it was possible to forecast the sharp rise in fuel prices, the impact of new banking regulations (with no relevant history), the global droughts, the earthquakes in Canterbury, the snow storms during lambing in the South Island, and government policy changes they would have been less wrong.”

Now it’s true that lots of things went wrong last year.  But forecasters’ failures can be seen every year, not just last year.  See what I mean. (Not to mention their signal failure to spot either the Crash of 2008 or the slide that started this latest Depression within a Depression Recession within a Recession.

And while it’s certainly true just as Matt says that entrepreneurs take advice from all over, including from forecasters (as Ludwig Von Mises also observed* in the link I posted above) that doesn’t mean they should listen to every charlatan that comes through their inbox. 

Frankly, what’s the point if they’re consistently and abjectly wrong?

* * * * *

* Ludwig Von Mises on “The Place of Economics in Learning”:

“In fact reasonable businessmen are fully aware of the uncertainty of the future. They realize that the economists do not dispense any reliable information about things to come and that all that they provide is interpretation of statistical data referring to the past. For the capitalists and entrepreneurs the economists' opinions about the future count only as questionable conjectures. They are skeptical and not easily fooled. But as they quite correctly believe that it is useful to know all the data which could possibly have any relevance for their affairs, they subscribe to the newspapers and periodicals publishing the forecasts. Anxious not to neglect any source of information available, big business employs staffs of economists and statisticians".”
”It is obvious [however] that men are fallible, and businessmen are certainly not free from this human weakness. But one should not forget that on the market a process of selection is in continual operation. There prevails an unceasing tendency to weed out the less efficient entrepreneurs, that is, those who fail in their endeavors to anticipate correctly the future demands of the consumers.”

Labels: ,

“…just like shallow self-promoting tools” [updated]

After reading pathetic self-serving pronouncements this week by Sam Stubbs*, Sam** & Gareth Morgan***, Rod Drury**, Mark Weldon** and the like, I can only agree with Cactus Kate:

There are a new breed of weasel word corporate-welfared CEO's and Directors in NZ. They promote themselves as anti-Business Roundtable establishment, hip and new age.
They like to be liked by the public.
They are starting to look however just like shallow self-promoting tools.

No wonder we have a government happy to keep borrowing billions as the bubble is about to burst again--when there is no political opposition, and so-called “business leaders” are this bad.

* * * * *

* Kiwisaver provider calls for compulsory Kiwisaver.
** Do as I say, not as I do.
*** Rot at the centre of Gareth Morgan’s brain.

UPDATE:  Rod Drury wrote to Cactus defending himself. He shouldn’t have bothered: she ripped the bludger a new one.

Labels:

DOWN TO THE DOCTOR'S: Sack the buggers

_richardmcgrathYour weekly prescription of good hard sense from Libertarianz leader Dr Richard McGrath.

At the 2011 Libertarianz Party conference, Wellington Central candidate-to-be Regan Cutting made a brief speech in which he highlighted this pie chart of government spending.

Budget2011

If you look past the three usual suspects, note if you will which branch of government presently has the fourth-highest budget…

As Regan pointed out, more than Police, Justice and Corrections combined - yes, it's the Department of Legalised Theft, the department with the power to go through your bank account, empty your pockets, and to bankrupt more New Zealanders every year than start new businesses.

It is this department of bloodsuckers that accounts for nearly 8% of government spending. Even if you add spending on the NZ Defence Force and Ministry of Defence to that for Police, Justice and Corrections (which collectively comprise almost all the legitimate functions of government) their total still only comes to 8.01% of spending.

Meaning, of course, that virtually all the other 92% should be returned to those from whom it was stolen.
Now, none of this namby-pamby “110 positions based in the capital are to be axed” after-one-Ministry-is-“folded-back” into-the-other nonsense. Libertarianz says any responsible government would immediately get to work on reducing the government's runaway spending by trimming all  the easy stuff, getting rid of all the non-essential departments, starting with a month-long wind down of the following useless state entities:

Department                                               Current Percentage of Govt Spending
Statistics NZ                                                                     0.17
Land Information                                                          0.20
Te Puni Kokiri                                                                  0.26
Ministry for Culture & Heritage                                0.45
Ministry for Science & Innovation                          0.94
Dept of Building & Housing                                         1.22
Ministry for the Environment                                   1.33
Dept of Labour                                                                 1.75
Ministry of Economic Development                      1.94
Total                                                                                    8.09

There you go, 8% of spending - $6.6 billion - gone in the space of one month. Easy. (And to stop the buggers therein whimpering, give them a year-long holiday if you have to; no-one will mourn their absence, and it will still save us money even in the short run with all of them out of our hair.)

And parenthetically, this is what responsible governments do in a recession—and did do, successfully, in every recession until Mr Keynes came along.

And those other government departments listed in the pie chart above? Well, they could literally abolished overnight—gone by lunchtime. Or if any were doing anything at all commercial (fat chance) privatised within four weeks.

This would, of course just be the start of massive tax cuts, a freeing up of the economy and an end to the rampant and out-of-control spending made fashionable most recently by those partners in fiscal recklessness Bill English and Michael Cullen.

We haven't even started on the Ministries/Departments/Offices of 'Yoof' Development,  Ethnic Affairs, Archives, National Library, Tourism, Pacific Island Affairs, Women's Affairs, Consumer Affairs,etc. I'm guessing these could be wound down or denationalised over 3 months, to give them some time to sort out their own affairs.

The Result? Billions of dollars back in taxpayers' pockets, thousands back in your own pocket—and businesses free to run their own affairs without a bullying paper-shuffler hanging around their neck.

Because your “refund” actually belongs to you anyway, and you should have a choice about the destination of your dollars. Politicians shouldn't be able to bully you and tell you where it must be spent. You have the right to make that choice, because it's your goddamn money, right?

Only one political party respects that right, and Regan Cutting will be representing it in the coming election, in the Wellington Central electorate. Good on you, Regan.

And, on an unrelated topic, a salute to my elder son Andrew 'Bloodbath' McGrath (as he was promoted on the event programme) who retained his undefeated status over five rounds of full-rules kickboxing at the Lower Hutt Town Hall last Saturday night. Way to go, Andrew!

See you next week!
Doc McGrath

Labels:

Tuesday, August 23, 2011

ECONOMICS FOR REAL PEOPLE: Great Myths of the FIRST Great Depression [updated]

276464_137539366339987_1226509_nHere’s what’s being presented at tonight’s UoA Economics Group meeting. It could hardly be more topical:

Hello all,
The history of The Great Depression grows more relevant by the day, yet very little is known about it today--at least, very little that is true.
Tonight, we look at a few of the many myths around the Great Depression: was the Depression a Crisis of Capitalism; did margin trading bring on the Crash; did the Fed do too little to help; did Herbert Hoover sit back and do nothing; did Franklin Roosevelt and Michael Savage set everything on the right track; did World War II bring on the Recovery?
Join us tonight as we examine these stories and many more about The FIRST Great Depression.
Date: Tonight, Tuesday, August 23
Venue: Case Room One, Level Zero, University of Auckland Business School
Time: 6pm

UPDATE: For those who are interested, who couldn’t make it last night, here are the Recommended Readings—all of them (relatively) short and pithy. Since there were six phase to the (First) Great Depression, there is at least one reading on each:

And here, hopefully, is a copy of the Lecture Guide:

LECTURE-Great Myths of the First Great Depression

Labels: ,

Polls, uugh

I don’t usually comment on polls, the mainstay of political blogs and commentators who have nothing much to say.  So I don’t know why I’m bothering now—unless it’s because I hate stupidity as much as I loath the errant certainty that folk always feel about their favourite polls.

Anyway, for all the triumphalism and rending of both garments and alliances over recent polls (the reaction depending entirely on your party perspective, of course), few seem to have observed that even if Phil Goff’s own party does as poorly in this Election as the pollsters expect—as poorly even as Bill English’s did a few years back—the Red Team as a coalition is only a dozen or so seats away from the Blue Team, which has fewer and lesser partners.  And there has never been a time under MMP when a party has scored more than fifty per cent of the vote on election night.

I’m just sayin’…

Google, Motorola Mobility and the Patent Wars

Guest post by patent specialist Dale Halling

Google agreed to acquire Motorola Mobility for $12.5 billion.  Most people believe the main motivation for Google was to acquire Motorola’s patent portfolio of over 17,000 patents and patent applications.  The comments on this deal encompass all the insanity around the  Patent Wars.  Below I will discuss some of these issues

Business Deal
Is this a good deal for Google?  Does it make economic sense?  In buying Motorola, Google gets a company that has been in the forefront of mobile communications since its inception. 
    The biggest risk is that Motorola is a bit bureaucratic.  They were slow to develop CDMA phones in the 90s and never completely recovered.  Motorola has been hardware focused, when the industry is clearly being driven by software advances now. 
    The main reason for acquiring Motorola is to get their patents and leverage them into freedom of action in the Android market space.

Innovation and Paying for Patents
There are numerous people complaining that Google’s $12.5 billion is being spent on patents instead of being spent on engineers and products.  Actually, spending money on patents IS spending money on engineers.  Engineers created the inventions and the patents just provide legal title to the inventions.  When companies spend money acquiring patents they are spending money for the development of inventions and therefore engineers. 
    If inventions are not protectable, companies do not spend more on engineers they spend less.  They just take other people’s inventions, rather than paying for internal or external development. 
   In fact, you can trace engineering salaries and employment to strong patent laws.  Countries with weak patent laws either have very few engineers or their salaries are fairly low or both.
    New products are the result of inventions.  Increases in our level of technology are what make us wealthy.  When people pay for patents (inventions) it does not discourage innovation, instead it encourages other people to innovate.

Too Many Overly Broad Patents being Issued?
There has been a lot of wailing about too many over broad patents being issued.  This whining is coming from the same people who complained about Amazon’s one click patent, which was upheld after numerous challenges.  Why did Barnes and Noble get a 10x increase in online sales (after copying Amazon’s one-click technology) if the one click patent was not innovative?
    All objective measures of patent quality have been increasing for years.  For instance, the metrics of GDP-per-patent, R&D-dollars-per-patent, and number-of-citations-per-patent have all been on the increase.  For more information see my post Patent Quality Nonsense.
    Do some bad patents get issued?  Absolutely and some of my clients have been affected by this.  However, most people making the claim that there are too many bad or overly broad patents do not even know that the scope of a patent is determined by its claims.  They do not know that claims cannot be read like prose, they have to be read like an equation where every word has to be given meaning.

Litigation Explosion
   
Many people see this acquisition as just another outgrowth of the numerous frivolous patent cases being filed.  However, the facts do not support this point of view.  Judge Michel, former head of the CAFC, the court which hears all patent appeals, points out that the number of patent suits filed each year has remained constant at less than three thousand.  Only about 100 of these suits ever go to trial.  In a technology based, $14.5 trillion economy with over 300 million people and 1 million active patents- THIS IS A TRIVIAL NUMBER.

Solutions
Are there any problems with our patent system?  Absolutely.  The underfunding of the patent office causes inventors to wait years and even up to a decade to receive their patent
    But, more specifically to the Google/Motorola case, the wireless smart phone space needs a more efficient method of clearing patent rights.  I suggest a non-profit entity similar to ASCAP, which clears copyrights for musicians and composers.  For more information see my post Patent Wars a Market Solution.
    Finally, for those worried about the poor, small company who had a great idea for an app and are now scared they may find themselves embroiled in a patent lawsuit- GET A PATENT CLEARANCE OPINION before you develop.

Dale Halling is an American patent attorney and entrepreneur, and the author of the book The Decline and Fall of the American Entrepreneur: How Little Known Laws are Killing Innovation.
Read his regular thoughts at his
State of Innovation blog, and his other Guest Posts here.

Labels: , ,

Quote of the Morning: On Libya [updated]

Picture from http://blogs.aljazeera.net/liveblog/Libya

Few will mourn the passing of Muammar Qaddafi, but does that mean we should already be celebrating the winners? I don't often agree with him, but I'm with Matt Yglesias when he says:

"...let’s wish the best of luck to people of Libya. Part of the problem with this intervention has always been that the fall of a dictator seems to me just as likely to lead to a bloody civil war or a new dictatorship as the emergence of a humane and stable regime. The effort to build a better future really only starts today."

So it does. And for many rebels, that future seems to hold sharia...

UPDATE 1: And, like Perry de Havilland at Samizdata, now that Qaddafi is on the skids “I cannot help but hope the dirty secrets now emerge of how overseas politicians aided and abetted Qadaffi over the years, in particularly the disgusting deal over [Pan Am bomber Abdelbaset al Megrahi. It would be wonderful to see the polities in England and Scotland take one in the face if the unlovely details eventually come out.”

It will also be interesting  to watch details emerge about all the nasty little deals done by businesses seeking favour from the corrupt thug. For instance, a friend in Uganda tells me this morning about a juice processing plant in Kampala owned by Qaddafi and sons, which is happily churning out juice for Coca Cola. Perhaps, wonders my friend, Qaddafi is already holed up in the five-star hotel in Entebbe he also owns with his sons…

UPDATE 2: Steve Negus at The Arabist has been watching how the rebels established their authority in Benghazi over recent months, and has some pluses and minuses about what we might expect to see in the wider Libya. Meanwhile, former Aussie diplomat Philip Eliason sees dark days ahead for Libya. “He is not optimistic — the rebel movement is not coherent (expect fighting to continue even after Qadhafi escapes, is captured or killed) and has shown worrying signs that it will seek retribution against its enemies.”  [Hat tip Macrobusiness.com.au]

Labels: , ,

Monday, August 22, 2011

Help harried home-buyers! [update 2]

Residents of Kaiapoi and Canterbury contemplating taking the government's payout face the dire prospect of paying far more for a new home than the payout for their old damaged one, even with the inflated 2008 prices residents are being offered.

There is a reason for that, and not a good one. At a time when building new houses has never been more important, the cost of building a new home has never been so high.

There was once a successful model by which New Zealand builders built thousands of speculative homes--"spec homes"--at a small profit to themselves, yet cheaply enough to be bought by thousands of New Zealanders. They bought land cheaply, built a house inexpensively, which was bought gratefully by a New Zealand family eager to move in.

Everyone was happy.

But that model is now broken.  The price (land + building cost) has exploded because of planners and regulators. The cost of building sites has gone through the roof because planners have been restricting the supply of land, and hitting developers with ever-increasing development levies . The cost of building has gone through the roof because government has whacked builders with gold-plated building regulation, and council’s have whacked them with ever-increasing fees and building levies. Meaning that the small profit that once existed for those former builders of spec homes has long since disappeared—as have many thousands of builders themselves, many of them to Queensland. The result, all round this country, is that new homes are simply not being built in the numbers needed.

And the result in in Kaiapoi and Canterbury is that residents facing forced eviction from their damaged homes face paying much more for a new one--even with the payout for their old home at the inflated 2008 prices. The model for building spec homes is broken. And the supply of affordable homes won't be fixed until that model is fixed. Hugh Pavletich expands the point:

Offer to Christchurch earthquake red zone owners a disgrace: The sad reality is that the Christchurch City Council has DELIBERATELY NOT ALLOWED new fringe lots / sections at $50,000, to be put in place for years.
  
Christchurch housing is currently “severely unaffordable” at 6 times annual household incomes. It should not exceed 3 times – refer 2011 Demographia International Housing Affordability Survey and extensive other material on this issue at Performance Urban Planning.
   
Due to the incompetent governance of the Christchurch City Council over many years (refer recent Pavletich interview “Christchurch earthquakes: Council stalled recovery” ), the earthquake events costs are likely $8 - $10 billion more than they should be. The problems of the displaced people from the “red zones” are part of these massive and unnecessary costs.
   
House and land packages of $200,000 ($50,000 lot / section - $150,000 house construction) should have been available on the fringes for these people well before now – near 12 months following the first major earthquake event on 4 September 2010.
   
Politicians don’t give a toss – as they are more interested in protecting the interests of Bankers (PM Key’s mates), so that these people from the “red zones” are conned in to excessive mortgages, or forced financially to relocate from Christchurch. As though they haven’t suffered enough.
   
The recovery cannot start until these issues are dealt with. Why are we STILL waiting Gerry and Bob?

‘Public sector land use’ ... turns out to be barracks, canals, railway sidings, and turf owned by the National Health Service (NHS) or by local councils. Here we are asked to scrape the bottom of a very small barrel. In effect, the [government] searches for the public sector bits of the 5.5 per cent of England’s surface that is brownfield land.

In effect, as Woudhuysen says, this amounts to little more than a little massaging of existing "ultra-restrictive land provisions" in the addled expectation it will have some effect. It won't.

The hope is that a tiny relaxation of planning constraints will encourage the private sector ... and numerous hybrid housing vehicles, state monoliths and quangos to build more homes, especially homes that are ‘affordable.’
    That approach won’t work. It will mean some extra homes are built, but it will not make proper home ownership cheap.
 

No, it won’t. It won’t bring New Zealand builders home from Queensland, and it won’t do enough to lower land to Hugh Pavletich’s $50,000 per site.  Something more radical is needed.  Woudhuysen has such a proposal, one on which both Gerry and John boy should sit up and take note.  I paraphrase his proposal for a New Zealand audience:

Real homes will only become affordable if, in principle, everyone can go to a farmer, buy an acre of land for $30,000, and freely build a house there at a cost, perhaps, of just $100,000. That kind of transaction would lead to significantly lower prices than the $414,261 average asked for a home in NZ today.
    The state should stop preventing deals like this from being done. It should step back, and instead provide the infrastructure to let that house-on-a-freely-bought-hectare thrive.
    That such deals can't be done, and won't be done as a result of either Clark's or Key's announcements is a measure of the overbearing powers of the state in relation to the land.
    Ever since the Town and Country Planning Act of 1927, to buy that $30,000 hectare of land and build on it has been illegal. The nanny state, not the popular will, determines who may build where. The state essentially retains a complete monopoly over what land can be developed for housing and what cannot. To end house price inflation therefore, Britain must end its state-imposed scarcity of land.
    The lack of affordability that characterises Britain’s housing market is not about too many people – single-person households, divorced families, immigrants and their children – chasing too few homes. It is not simply an economic question of supply and demand. The housing market is profoundly distorted by the political intervention of the state, which imposes drastic limits on land that can be developed upon.
    Only a similarly drastic counter-attack on state controls, amounting to a veritable bonfire of National's Resource Management Act and the country's forty-odd District Plans will allow housing in NZ to acquire a semblance of either rationality or efficiency.

What's needed in other words is neither massage nor spin, but the full-blooded planning revolution the destruction of NZ’s second-largest city should have encouraged; one that sees the country's planners joining the growing queues of the unemployed—and by their inclusion, shorten them.

UPDATE 2: I can already hear the whining of anti-development zealots that such a common-sense dispensation as Woudhuysen proposes would see the whole country blanketed in houses.  Bullshit.

As a simple back-of-the-envelope calculation would tells you, there would be no problem with sprawl if the ring-fencing were relaxed: New Zealand's existing urban areas account for less than 1 percent of the total country, one quarter of that in the Auckland region. Even if all of NZ's 1,471,476 existing households were to be rebuilt on an acre of land -- which was the sort of thing proposed by Frank Lloyd Wright in his Broadacre project (right)—we'd all of us fit in an area less than one-quarter the size of the Waikato.  (And just think how easy it'd be to thumb a lift out to Raglan!). 

There’s more than enough room to go around. Especially out there on the Canterbury Plains.

Labels: , , ,

Sunday, August 21, 2011

Thought for the day: On suffering…

‎"Men have been taught that their first concern is to relieve the suffering
of others. But suffering is a disease. Should one come upon it, one tries
to give relief and assistance. To make that the highest test
of virtue is to make suffering the most important part of life…
The creator is not concerned with disease, but with life. Yet
the work of the creators have eliminated one form of disease after
another, in man’s body and spirit, and brought more relief from
suffering than any altruist could ever conceive…"

            - Ayn Rand, The Fountainhead

Labels: ,