Monday, 22 October 2012
Sunday, 21 October 2012
Saturday, 20 October 2012
Friday, 19 October 2012
Thursday, 18 October 2012
I’m sorry, but this news this morning is ridiculous.
The Waitangi Tribunal has called on the Crown to apologise to the country's kohanga reo because they have suffered significant prejudice from early childhood policies of successive governments… The report follows a claim made to the tribunal by the Kohanga Reo National Trust last year.
“Prejudice”?! Really? What sort of “prejudice”?
And a claim? A Waitangi claim? About this? Have we gone mad?
The only prejudice I can see here is race-based early childhood centres set up and paid for by taxpayers on the basis of racial prejudice.
I have no problem at all with anyone wanting to send their children to early childhood centres using whatever language or languages they like. At that age children learn languages so easily, and the learning of them is so good for their development of literacy that introducing them to a wide range of languages is ideal.
But let’s not confuse that boon with the separatist aims of these race-based schools. Their aim is not literacy, but separatism.
[The Tribunal report says however] government policies have failed to support the Maori language immersion centres and to recognise their special role.
It would be far more accurate to say parents themselves have failed to support the centres by sending their children to them in large enough numbers, and the Kohanga Reo movement has failed those parents who do send them to their centres by filling them with teachers not fit for the role.
If there’s an apology needed here, it’s to parents from the movement for failing their children.
And what “special” role do these centres have? What could possibly be so “special” about them it needs to be recognised by government, apologised for by past governments, and paid for (through the nose) by taxpayers? Here’s your answer:
Kohanga reo are so important for the survival of te reo Maori, [says the Tribunal’s report], that the Crown's obligation to protect the language extends to kohanga too.
What “obligation” is that then? An “obligation” to “protect the language”? Where does this obligation come from? Well, remember that the Waitangi Tribunal is not just a race-based talking shop. It is also a supralegal body, with its opinions not grounded not in prejudice but in law. At least in theory. So this is a legal obligation they’re talking about.
And the law they point to? You guessed it: Te Tiriti, in which the British Government promised to protect Maori property. Except since Maori had no concept of “property,” the explicit concept “property” was translated as the vague and indefinable concept “taonga”—allowing gravy-train riders ever since to define and re-define and all along the line to claim government protection (and taxpayer resources) for whatever “treasures” they feel like.
The Tribunal found that the Crown’s early childhood education system … had failed to adequately sustain the specific needs of kōhanga reo as an environment for language transmission and whānau development. These failures constituted breaches of the Treaty principles of partnership and equity.
What “breach” is this then? Of the treaty principle of “partnership”?!
But the Treaty has no principle of partnership. It neither mentioned nor implied partnership. In three short articles it simply offered the introduction of British law, and the rights and protections that were then protected by British law. One law for all, you might say.
The Treaty which was drawn up and signed talked neither about race nor culture nor any partnership between them—nor about any permanent welfare, or a tax-paid gravy train into perpetuity. Like British law itself at the time it was colour blind, and welfare-free. What it promised was not the politics of either race or welfarism but the simple legal promise of protection of the rights of all, regardless of race, creed or skin colour.
This principle of partnership supposedly appearing in the Treaty, on the back of which so much garbage has been said and so many millions given away, is a myth. A modern myth.
If they do have anything in this about which to actually apologise , they could start there.
The first job of the state, its only legitimate role, is to protect the individual rights of its citizens—to protect each individuals’ rights to life, liberty and pursuit of property and happiness.
To protect our lives.
The primary purpose of incarceration is not to punish criminals. It is not to teach them a lesson, nor to turn them around. The primary purpose is protection. Protection for the harmless, like Christie Marceau, from the harmful, like her murderer.
The state, in the person of Justice McNaughton, failed Christie Marceau when it released on bail a man who had already been charged for kidnap and assault and attempted rape—for her kidnap and assault and attempted rape.
Justice McNaughton failed Christie Marceau.
The injustice system failed Christie Marceau—as it fails all of us when it fails to prosecute with sufficient swiftness, so because of long delays in coming to trial it releases on bail, and continues to release on bail, those charged with violence.
This is unconscionable. The price is paid in the blood of innocent people.
People like Christie Marceau.
And forget this nonsense of “not guilty by reason of temporary insanity.”
Guilty is guilty. Guilt properly should not require that you know you did wrong, that you understand what a moral action looks like, or that you were or were not in the grip of voices telling you to kill. It should not require this because the primary purpose of justice is not punishment. It is protection.
Protection for innocents like Christie Marceau.
Even in the depths of the Soviet conquest of the soul, Konstanin Melnikov found a way to make inspiring architecture. This, his family home, his masterpiece, he somehow managed to get through the system.
[Hat tip Sandrine L.]
Wednesday, 17 October 2012
Amidst global economic collapse, *THIS* is what wins the Nobel Prize in Economics?!?
The world is building a tower of debt unprecedented in any prior era. The derivatives tower is estimated to be one quadrillion dollars. It has taken unprecedented government injection of methamphetamine to "stabilize" things, and every central bank and government knows they dare not reduce the drip or the patient will collapse.
"The economy is recovering,” sayeth the Fed, “and zero interest rates will continue until 2015, and we will buy $40B+ of mortgage bonds per month with no set limit," Unemployment goes down only because people drop out of the workforce and onto welfare, disability, or social security when their patience (and savings) run out.
The marginal productivity of debt--how much additional GDP does the next dollar of borrowing buy--has been falling for many decades.
Capital destruction continues to accelerate. Savers are hosed, and let's not even talk about people trying to live on a fixed income!
Keynes' theory, the bedrock of the modern economy, is in a shambles (or ought to be if people could think their way out of a wet paper bag). And the most prestigious prize in economics?
Yeah, let's award that to a couple of guys who have played with a model for central planning when money cannot be used (e.g. organ donations, where buying organs is illegal).
Philosopher Leonard Peikoff is online at 11:30am talking and answering questions about his new book, The Dim Hypothesis, which attempts to integrate the entire history of human thought.
Tuesday, 16 October 2012
Ahem, I have some news for you.
See, if we had my Very Special Carbon Tax, you’d all be getting a tax refund now.
Instead, we’re still hammered by Nick Smith’s Emissions Trading Scam.
Various monetary cranks in both politics and journalism continue to advise that the best way for NZ to get richer is to make our currency poorer. To make it poorer by the simple expedient of diluting its value with truckloads of new paper, to be spent on white elephants of their choice—combined with Muldoonist “capital controls” requiring the permission of the state to transfer your own money abroad.
This advice for the Greeks, appearing today at the Mises Daily, is just as much advice for these deadheads. (I have changed only pronouns, proper nouns, and some of the insults.)
Their statist advice stems from their misunderstanding of basic economics in which they views symptoms as causes.
They offer no explanation for our increasing debt burden, high cost structure, and high unemployment other than the standard Keynesian explanation of inadequate aggregate demand. Once this fallacious view is swallowed, the prescription follows axiomatically, i.e., devalue the currency to restore competitiveness vis-à-vis foreign markets, which will increase aggregate demand and reduce unemployment…
That's it! There is no need to cut public spending. Quite the contrary, because public spending adds to the Keynesian concept of aggregate demand, and aggregate demand cannot be allowed to fall…
These monetary cranks see the world upside down. In their world of aggregate demand, a weaker currency always is preferable to a stronger one, because a weak currency purportedly makes a nation more competitive in international markets. But this is pure propaganda. A weak currency not only makes necessary imports more expensive, reducing prosperity, but it also is an outright subsidy to foreign buyers of a nation's goods. As I have argued in "Value in Devaluation?" and as James Miller has argued in "Mark Carney's Zero-Sum Game," currency devaluation is merely a transfer of wealth from all of a nation's citizens to politically favoured industries, usually export industries. It is no different from giving a subsidy to any domestic producer. The subsidy is paid by all the citizens of the subsidizing country, not by the foreigners who buy the subsidized good. They get a bargain.
Furthermore, devaluation does not make a nation more competitive. It does nothing to spur increased domestic saving or external capital investment, which lead to the increased application of capital per capita, the only sources of increased worker productivity and the only sources of increased real wages. Devaluation does not reveal the onerous, wealth-destroying effect of economic regulation, not does it reveal the true costs of the welfare state, which relies on high taxes to fund present consumption at the expense of future prosperity. What the state spends cannot be saved and invested, no matter how cheap the currency.
And, contrary to statements that "improving competitiveness is at odds with the objective of reducing the debt burden," a country will never be able to reduce its debt until it does become more competitive. It may well become impossible for NZ to pay all of its debts if it continues to borrow at the current rate, but this merely reveals the dire reality of current policy; it does nothing to change that reality. The increase in the debt burden must stop! It must stop now!
…So, the cranks put forward a devalued argument for a devalued currency. And if NZers resist outright theft through devaluation, then the government must trap their wealth internally, where it can be plundered later, by using capital controls to stop transfers to safer, foreign banks. The fact that the free movement of capital was one of the pillars of free trade apparently must be sacrificed for the benefit of the state…
All tyrants love a crisis…
Monday, 15 October 2012
One thing I was struck by in the recent US Vice Presidential debates was how the candidates of both major parties seem now to both accept the fact that the attack on the US’s Benghazi embassy and the murder of the US Ambassador and three of his staff was not an over-excited protest over a YouTube clip that coincidentally occurred on the anniversary of 9/11, but a concerted terrorist attack.
As Mark Steyn points out, this concession follows weeks of lying.
There was no demonstration against an Islamophobic movie that just got a little out of hand. Indeed, there was no movie protest at all. Instead, a U.S. Consulate was destroyed and four of its personnel were murdered in one of the most sophisticated military attacks ever launched at a diplomatic facility.
This was confirmed by testimony to Congress a few days ago, although you could have read as much in my column of four weeks ago. Nevertheless, for most of those four weeks, the president of the United States, the secretary of state, the U.S. ambassador to the United Nations and others have persistently attributed the Benghazi debacle to an obscure YouTube video — even though they knew that the two events had nothing to do with each other by no later than the crack of dawn Eastern time on Sept. 12, by which point the consulate's survivors had landed safely in Tripoli.
To "politicize" means "to give a political character to." It is a reductive term, capturing the peculiarly shrunken horizons of politics: "Gee, they nuked Israel. D'you think that will hurt us in Florida?" So media outlets fret that Benghazi could be "bad" for Obama — by which they mean he might be hitting the six-figure lecture circuit four years ahead of schedule.
But for Chris Stevens, Sean Smith, Glen Doherty and Tyrone Woods, it's really bad. They're dead, over, gonesville. Given that Obama and Hillary Clinton refer to Stevens pneumatically as "Chris." as if they've known him since third grade, why would they dishonor the sacrifice of their close, personal friend by peddling an utterly false narrative as to why he died?
You want "politicization"? Secretary Clinton linked the YouTube video to the murder of her colleagues even as the four caskets lay alongside her at Andrews Air Force Base — even though she had known for days that it had nothing to do with it…
In the vice presidential debate, asked why the White House spent weeks falsely blaming it on the video, Joe Biden took time off between big toothy smirks to reply:
"Because that was exactly what we were told by the intelligence community."
That too is false…
The Benghazi attack, the non-reaction to it and the lying about it, are as symbolic of American defeatism today as was the Iranian hostage crisis in the last days of Jimmy Carter’s defeatist Presidency.
The Benghazi murders are Obama’s hostage crisis.
[Hat tip Thrutch]
One-hundred years ago we were just beginning to leave the ground, for brief periods, in contraptions made of wood and canvas.
Now, not only do people parachute back to earth from the stratosphere, men sit at their desks on earth controlling on a far distant planet a small robotic machine designed to explore and investigate—controlling it as if they were there and sitting in its cockpit.
It’s easy to take this stuff for granted.
Which is why a new book by William J. Clancey about Mars’s robotic geologists, Working on Mars: Voyages of Scientific Discovery with the Mars Exploration Rovers, is so fascinating.
This is, in Clancey's words, "a unique human-robotic enterprise," by way of "teleoperated robots" or "telerobotic tools."
The book is … not a New Yorker-style profile of mission scientists in their lab at Pasadena [says my reviewer a the BldgBlog] but it nonetheless reveals the bizarre methodological requirements of working on another planet through remotely controlled machine-surrogates. From altered sleep-patterns (to keep pace with the longer days on Mars) to darkened window shades (to enact on Earth the darkness of the Martian nightfall for rovers), the actual practices of the scientists come to the foreground of Clancey's study.
It is through these practices that the humans can engage with and control—or at least efficiently keep track of—these radically off-site prosthetic extensions, the rover now understood as "a mechanism that can be 'acted through,' an extended embodiment of the human eyes and hands of the people who control its actions from Earth."
It is a remotely operated surrogate sensory apparatus—organs without a body.
We should never lose our sense of wonder at how cool human beings can be. We can do this!
More pictures here.
These sorts of quizzes usually discount presidential policies that turn you off completely in favour of those for which you’re mildly in favour—in short, they highlight every minor similarity and ignore any major difference.
But this quiz does at least allow you to write your own policies. Sort of.
Anyway, here are my results after running through twice to see if it made any difference (the second time without rewriting policies to make them closer to what I’d support). What do you come up with?
Man breaks speed of sound…without a vehicle. For the first time in history.
What makes it even cooler is this breaks a record that has stood for over fifty years—and the bloke who held that record was on Baumgartner’s crew.
The previous highest, farthest, and longest freefall was made by Col Kittinger, who leapt from a helium envelope in 1960. His altitude was 102,800ft (31.3km). (His mark for the longest freefall remains intact; he fell for more than four and a half minutes before deploying his chute.)
Col Kittinger, now an octogenarian, has been an integral part of Baumgartner's team, and has provided the Austrian with advice and encouragement whenever he has doubted his ability to complete such a daring venture.
Here’s your note about tonight’s session at the Auckland Uni Economics Group:
We have a very interesting programme for you tonight with two—yes, two—guest presenters.
As we all know there are a number of different schools of economic thought, and tonight’s student presenters will provide short presentations on areas of expertise or interest to them. One will present insights into Evolutionary and Institutional Economics, and the other on ideas she’s learned in reading the Classical Economists.
There will be plenty of time for discussion so this is a great opportunity to be introduced to economic ideas that may be new to you.
This is what university is about so we look forward to a great discussion.
Date: Monday, October 14
Location: Case Room 2, Level Zero, Business School, Auckland University
We look forward to seeing you there.
Sunday, 14 October 2012
It really is all about morality, you know.
How you vote, how you live, why you visit the mall…
Yaron Brook promoting his new book Free Market Revolution
at the October 8 “Liberty On the Rocks” event in Colorado
[Hat tip Paul Van D.]
Friday, 12 October 2012
Capitalism is frequently tarred as “trickle down” economics.
Because if you really want to see trickle down in action, consider government. They take money from you, by force, and give it to … who?
To people like the heads of government departments who, in the depths of recession while all around them are tightening their belts (not the least reason being to pay their frigging tax bills), have enjoyed this:
- the head of the Ministry of Foreign Affairs and Trade John Allen was given a $40,000 pay rise despite drastic cutbacks at the Ministry, given $620-630,000 this year, up from $580-590,000 last year
- Head of Treasury Gabriel Makhlouf was given $540-549,999 this year
- Secretary for Education Lesley Longstone was given $320-329,00
- the highest paid individual in the public sector is chief executive of the Guardians of New Zealand Superannuation Adrian Orr, who was handed $730-739,000
- shamed former head of the Department of Building and Housing (DBH) Katrina Bach was paid out $81,105 in entitlements when she left the job earlier this year
- Corrections Department chief executive Barry Matthews was paid $41,529 in entitlements when he left the job at the end of 2010. Matthews' replacement, Ray Smith, is given $420 to 429,999
- Housing New Zealand chief executive Lesley McTurk went from $460-469,999 last year up to $480-489,999 this year
- Ministry for Culture and Heritage boss Lewis Holden climbed from $330-339,999 last year up to $350-359,999
- the head of chronic failure ACC was given $570-580,000 from July to September last year, and for good measure another $390,000 to $400,000 from then to June this year
- The head of the Alcohol Advisory Council, who pays for all those dodgy “studies,” pulled down $370-380,000.
The amounts doled out to the head of KiwiRail, now worth one dollar, and to the chairman of NZ Post Michael Cullen, who bought the dog for the taxpayer, are not reported. But we can be sure they haven’t personally lost money this year.
Thank goodness then for those few among them taking an involuntary cut, among them the poor Education Review Office chief executive Graham Stoop, who went from $330,000 to $339,999 last year down to just $320,000 to $329,999.
"We want to attract, retain, and motivate suitable, highly competent chief executives,” said State Services Commissioner Ian Rennie, whose salary was also not included in the report.
This of course is bullshit. The only place these folk can pull down these kind of numbers is in the bureaucracy. If you paid the whole bloody bureaucracy less, as you should anyway in a recession, they’d have nowhere else to go.
Indeed, if you paid them based on the value they produce, how much do you think any of them would get?
I heard this morning the head of the World Anti-Doping Agency (WADA) saying that with the release of the investigation into Lance Armstrong’s drug use, that he was now confident the dark days of drugs in cycling are over.
But I seem to recall similar comments over many years from other cycling authorities.
It reminds me a little of the way Soviet leaders talked about their five-year plans, in a five-year cycle that looked like this:
Year 1: The last five-year plan has been overturned as a complete failure foisted on the great Soviet people by a clique of reactionaries. We welcome the glorious new five-year plan that will see the great Soviet people achieve world dominance.
Year 2-4: Signs of increasing failure.
Year 5: The last five-year plan has been overturned as a complete failure foisted on the great Soviet people by a clique of reactionaries. We welcome the glorious new five-year plan that will see the great Soviet people achieve world dominance.
Anyone who believes cycling is now completely drug free is fooling themselves.
Or working for WADA.
French architect Pierre Chareau took few commissions, but those he did were all ground-breaking. He was the architect’s architect.
His most well-known project is this one—the 1928 Maison de Verre, for the Dalsace family, “inserted” within the courtyard of an existing building—from which every fashionable loft apartment ever since has been copied. Poorly.
Consisting of three floors, it was conceived as a total space, with a façade facing onto the courtyard completely enclosed in glass. Its metal frame structure supported framed panels of glass. While the rooms were separated by wood or metal closet doors that slid or rotated, the structure (beams and steel beams), pipes and ducts remained visible, participating in the architectural design so as to transform the house's functional elements into decorative ones.
[Pictures by Todd Eberle, François Halard, Ronald Zoetbroot and unknown others.]
Thursday, 11 October 2012
The government is developing a database to track around 30,000 grammatically flawed “at-risk” children*—with those included based on measurement against around 130 “risk factors.”
What do I think about that?
Frankly, it makes me uneasy. And when I feel uneasy about something on this subject, I read Lindsay Mitchell.
The development of a database for at-risk children is a good idea....I think. When unsure about something I work it out by writing.
Yes, it's state intrusion. However, the state has a legitimate role in protecting children.
True. But will this protect them? Lindsay gives just one hypothetical example among many that could be dreamed up, involving a child in the first year of life—their “riskiest.” Not only are there gaping hole in identifying their risks, but “the database can't predict if, when or how severe “any incident] will be.
And the invasion of privacy involved?
If people abuse welfare and break laws intended to protect others [says Lindsay] then they give up certain rights. Yes, I imagine some people are going to also abuse the database. We've seen that sort of infringement with police and WINZ databases. Some klutz might even email its contents or part thereof to an unintended recipient!
But, on balance, I can support the database. Don't expect it to be the silver bullet though.
No. Who could.
To state the problem properly is to identify it. I suspect that most situations in which children are at risk from their parents (because, let’s face it, that’s the risk we’re talking about here) are known about by all sorts of people, but none of them are in any position—or have any legal authority—to do anything about it. Thinking through how that is changed might have more effect than simply measuring what’s going wrong.
And I still fear the biggest cause of children being “at risk” from their parents is that money is taken from us against our will to pay no hopers to breed. To pay children to have children they don’t want.
Until that particular root cause is tackled, the impression must remain that these sort of announcements from this Minister are more about diversionary headlines than they are about tackling the real problems.
* * * * *
* “At-risk children” is grammatical abuse. It would be grammatically correct to call them either “children at risk of X” or “children at risk from X,” but to do that one would need to specify the X. Which would not be politically correct.
Wednesday, 10 October 2012
The latest experiment in printing money is turning into another disaster. Someone tell Russel Norman.*
Is Hyperinflation About to Light a Middle Eastern Powder Keg?
Gues post by Marin Katusa, Casey Research Chief Energy Investment Strategist
In the third century, greed got the best of Rome's emperors. As they spent through the silver in the treasury, one emperor after another reduced the amount of precious metal in each denarius until the coins contained almost no silver whatsoever.
It was the world's first experience with currency debasement and hyperinflation. As people saw the value of their savings evaporate, society grew angry and demanded a scapegoat. Christians became that scapegoat, and Romans turned on them with incredible violence.
This pattern - currency debasement leading to social upheaval and violence - would repeat many times over.
In medieval Europe, the number of women on trial for witchcraft climbed in sync with the debasement of currency. In revolutionary France, the Reign of Terror that slaughtered 17,000 wealthy counterrevolutionaries aligns perfectly with the deterioration of the purchasing power of the assignat note.
And in the most vile example: dramatic hyperinflation in Germany in the 1920s allowed Hitler to rise to power by blaming Jews for the country's economic woes.
The connection between currency debasement and social upheaval makes sense - hyperinflation only occurs in times of domestic drama. For example, in 1946 Hungary experienced the greatest episode of hyperinflation on record - in the context of a small, economically limited nation wracked by the Great Depression and then Nazi occupation in World War II. Zimbabwe earned second place in hyperinflation's record books when its dollar inflated 7.96 billion percent from early 2007 to late 2008. The cause? Robert Mugabe's land-reform policy slashed agricultural output and destabilized a fragile society.
That brings me to today... and to Iran, where that volatile mix of domestic drama and hyperinflation is pushing a fragile society to the brink of revolution.
If history repeats itself and Iran descends into revolution, the outcome is both unclear and obvious. In the unclear category: the details of the resulting regime and how far an Iranian revolution might spread through the Middle East. What is obvious, though, are the generalities: a post-revolution Iran would remain Islamist and vehemently anti-US.
Another generality is also crystal-clear. An Iranian revolution - and the potential for that to spawn a new set of Shia-based alliances across the Middle East - would be very good for oil.
And if Iran's currency continues its dramatic nosedive, that revolution - and oil-price spike - might be just around the corner.
Dark Days for Iran's Rial
On October 3, riot police converged on Tehran's Grand Bazaar. With water cannons and batons, they dispersed a large crowd of demonstrators who were calling President Mahmoud Ahmadinejad a traitor for his mismanagement of Iran's economy.
The location was significant: The Grand Bazaar is often described as Tehran's economic heartbeat, and its merchants kick-started the 1979 revolution that ended Iran's monarchy and ushered in the Islamic Republic.
The spark that lit the protest flame this time? The Iranian rial had lost a third of its value against the dollar in the three previous days.
But that was simply the latest drop in a currency devaluation that has been both rapid and profound.
The rial had been slowly losing value against the US dollar since international sanctions against the country's nuclear program took effect in mid-2011. The devaluation was gentle for the first year, but picked up speed in June. A few months later, the currency started to freefall.
On the weekend of September 8-10, the rial lost 9.7% of its value. On October 1 alone, the rial declined 17%. By the next day the black-market exchange rate reached 35,000 rial to the US dollar, marking an 80% decline in the past year.
The massive devaluation is fanning the flames of Iran's burning fiscal situation. International sanctions over Iran's nuclear program have accomplished one desired aim: major inflation. The Iranian government says inflation stands at 25%, but unofficial estimates put it much higher, between 50-70%.
It all translates into far higher prices on staples like food and fuel. Iranians now pay three times as many rial for meat as they did a year ago. Iran's farmers rely on animal feed and vaccines that are imported and therefore priced in US dollars, and they have to pass on the increased costs to consumers.
In the meantime, unemployment is also rising unchecked. Overall unemployment is close to 15%, while youth unemployment is almost 30%.
The Iranian Influence
Soaring food prices, deteriorating employment prospects, and heavy-handed police tactics kicked off a revolution in another Middle Eastern country not long ago. Tunisian vegetable vendor Mohammed Bouazizi set himself on fire in December 2010 to protest precisely those problems; the ensuing riots started his country down a rapid road to revolution. Tunisia's transition turned heads across the Middle East, and the Arab Spring was born.
Iran's ayatollahs are now facing a very similar situation. The rial is dying and hyperinflation is creating real potential for full-fledged economic panic. Continued protests like the one in Tehran's Grand Bazaar would represent a real threat to the ruling regime.
The response from above is easy to predict. Iran's ruling clerics did not hesitate to use force to repress the widespread discontent sparked by President Ahmadinejad's re-election in mid-2009, and used the same riot police in the Bazaar last week to silence dissidence. Bigger protests will almost certainly draw an even more aggressive response.
The regime will also likely offer up a scapegoat. Ahmadinejad is the most likely candidate - he has been clashing with the conservative elite for several years now, and his second and final presidential term ends next summer anyway.
Will a combination of repression and Ahmadinejad's head silence the masses? Maybe, maybe not. When people see their life's savings evaporate - Poof! - in a pile of worthless paper, they get really mad. And really mad people with little to lose is precisely the fuel that feeds revolutionary fires.
However, don't let Western ideals like democracy and the separation of church and state cloud your idea of a reformed Iran. A new regime in Iran would still be Islamist; indeed, the country would almost certainly remain guided first by religion and second by politics. Generations of Iranians have been taught to believe in Shia Islam above all else, with hatred of the United States coming in a close second. Those pillars of Iranian culture would remain.
As such a new Iran could closely resemble the old Iran - but in the meantime, instability could easily spill across the country's borders. Shia populations in other parts of the Middle East could well gain confidence from Iran's uprising and begin uprisings of their own, destabilizing the region's delicate Shia-Sunni balance.
Suddenly, Shia populations in eastern Saudi Arabia, Syria, Lebanon, Iraq, and Bahrain could demand greater recognition, an end to discrimination, maybe even some form of autonomy. The significance of this cannot be understated. The Middle East is a balancing act on many levels, but maintaining peace between Shia and Sunni Muslims is perhaps the most important balance of them all.
Iran, unsteady after a regime change and constrained by international sanctions, would undoubtedly reach out to these Shia populations. Shia connections around the Middle East, long held back by Sunni rulers, would strengthen. A pan-Shia block of allegiances could emerge, replacing the Iran-Syria-Hezbollah partnership with a bigger, stronger group standing against Saudi Arabian - and American - interests in the Persian Gulf.
Truly, a riled-up Shia population connected through a new, Iran-based set of allegiances stretching across the Middle East is a recipe for regional disaster.
Disaster in the Middle East is a recipe for high oil prices - and a “bull market” for the ages.
Whether the drama remains confined to Iran - where a popular revolution puts a new leader in place who blockades the Strait of Hormuz as a show of strength - or spreads to Saudi Arabia, where a marginalized Shia population finally rises up against their Sunni rulers, Iran's currency woes mean instability and infighting in the world's most important oil region.
Welcome to what hyperinflation can do.
Marin Katusa is the chief investment strategist, Energy Division, of Casey Research, publishers of the Casey Energy Speculator and Casey Energy Confidential Alert Service.
This post first appeared at the Casey Daily Dispatch.
* Because as NZIER’s Shamubeel Eaqub observes, “Norman's “quake bond” buying policy is not QE; It's the sort of 'debt monetisation' practised by Mugabe, that will see the poor pay for quake rebuild via inflation.”
The present Superannuation scheme is clearly unsustainable. Paying universal Superannuation to everyone over 65 for the indefinite future is guaranteed to send us the way of the Greeks. But folk nearing retirement do need to be able to plan their future.
It therefore makes prudent sense to announce that govt will at some specified time in the future begin raising the eligibility age for Super, perhaps by six months at a time ever two years.
To the credit of the Labour Party, they have this as a policy—though in their case they stop raising the age before I would.
Raising the Super age to 67 will save around $1.5 - 2 billion.
Unfortunately, no politician or lobbyist can see a sum like $1.5 - 2 billion without wanting to raid it for their favourite programme.
Enter the Children’s Commissioner, who wants the money saved spent on “developing a mix of services for children” and increased benefits for beneficiaries with children.
Did you spot the nice sleight of hand? In other words, he wants to “redistribute” the un-wealth from retirees to beneficiaries.
This is just a trial balloon. If it arouses no great hue and cry, expect vote buyers in all parties to follow it up swiftly.
Julia Gillard defended her then Speaker Peter Slipper last night by attacking the misogynism of opposition leader Tony Abbott. She took a lot of offence—about 37 times, by my count…
But it was only faux offence. Because what she was defending was this (NSFW).
'It's now very common to hear people say, "I'm rather offended by that", as if that gives them certain rights. It's no more than a whine. It has no meaning, it has no purpose, it has no reason to be respected as a phrase. "I'm offended by that." Well, so fucking what?'
Tuesday, 9 October 2012
Possibly more enlightening than the other American political debate over the weekend, almost certainly more enlightening, and without a doubt a heck of a lot funnier.
[Hat tip Brian Edwards Media]
Guest post by Wendy McElroy
The issue of money's quality is the thing that provides the fuel for the dreams of the folk who like to rule us. The animal also fuels the financial markets, now entering another bubble phase. It fuels the banking systems, that are solvent only on paper. Many people say that another crisis is around the corner, and who can doubt it?
Most fundamentally, the issue of sound money comes down to human liberty. There are great books on this topic. My personal favorites are Mises' Theory of Money and Credit and Paper Money Collapse by Detlev Schlichter.
Those two books should certainly be in your personal collection. Meanwhile, Wendy McElroy discusses what is suddenly a very topical subject.
Civil Liberties Rest Upon Sound Money
by Wendy McElroy
“FIAT” MONEY IS MONEY with no intrinsic value beyond whatever an issuing government is able to enforce. When it enjoys a monopoly as currency, fiat inevitably turns the free market functions of money inside out. Instead of being a store of value, the currency becomes a point of plunder through monetary policies such as quantitative easing. Instead of greasing society as a medium of exchange, the currency acts as a powerful tool of social control. The second harm is far less frequently discussed than inflation, but it is devastating. The personal freedoms that we know as "civil liberties" rest upon sound money.
In his classic book The Theory of Money and Credit (1912), Austrian economist Ludwig von Mises argues,
It is impossible to grasp the meaning of the idea of sound money if one does not realize that it was devised as an instrument for the protection of civil liberties against despotic inroads on the part of governments. Ideologically, it belongs in the same class with political constitutions and bills of rights.
Yet the best solution to the harms caused by fiat is often dismissed even by staunch free market advocates; namely, allow the private issuance of money that freely competes with fiat as currency. This would involve removing all prohibitions, other than fraud, abandoning monetary controls such as legal tender laws and all reporting requirements. In turn, this might well eliminate the Federal Reserve, although people would be free to accept whatever money they wished.
In his invaluable book What Has Government Done to Our Money? the Austrian economist Murray Rothbard addresses the strange reluctance to consider private currencies,
Many people, many economists, usually devoted to the free market, stop short at money. Money, they insist, is different; it must be supplied by government and regulated by government.
History frowns upon that theory. Before the United States Mint issued its first coin in 1793, the 13 colonies were awash with an assortment of currencies that included both private and government-issued ones. Current fiscal reality also frowns on this. Privatizing zealot Martin Durkin calls the idea of government guaranteeing the quality of money
the sickest joke in economic history. Governments have always robbed their subjects by debasing the currency, but this abuse, in recent years, has burst all bounds of decency and sanity.
But focusing upon economics and efficiency can miss the reality of how a currency monopoly is intimately connected with the violation of traditional civil liberties.
A key reason Mises viewed sound money as a necessary protection of civil liberties is that it reins in the growth of government. When a government prints money without the restraint of competing currencies -- even if the restraining "competition" is a gold standard -- runaway bureaucracy results. Wars are financed; indeed, it is difficult to imagine the extended horrors of World Wars I or II without governments' monopoly on currency. A white-hot printing press can finance the soaring numbers of prisons and law enforcement officers required to impose a police state.
Floods of currency can prop up unpopular policies like Obamacare or the War on Drugs. That is why government holds onto its monopoly with a death grip. In The Theory of Money and Credit, Mises observes,
The gold standard did not collapse. Governments abolished it in order to pave the way for inflation. The whole grim apparatus of oppression and coercion, policemen, customs guards, penal courts, prisons, in some countries even executioners, had to be put into action in order to destroy the gold standard.
[Note: Mises addresses "sound money," which is distinct from private money, but both forms of currency would serve the function of putting a severe brake on a government's ability to swell.]
Another way a currency monopoly threatens civil liberties is by permitting government to monitor virtually all transactions through the financial institutions with whom it maintains an intimate partnership. Total surveillance is a prerequisite to total control, which is what the government wants to establish as quickly as possible. For example, prior to establishing the Suspicious Activity Report (SAR) in 1996 -- a form that financial institutions submit to the U.S. Treasury -- banks were required to automatically report any transaction over $10,000. Now any activity deemed "suspicious" is vulnerable.
The monopoly facilitates a vicious attack on privacy and has become a main building block of the American surveillance state. As libertarian Mark Hubbard stated,
Civilization is a movement toward privacy, a police state the opposite, and tax legislation has become the legislation of our new Big Brother states.
Much of the tracking is a pure money grab, but it is also an attempt to ferret out and punish "unacceptable" behavior, like dealing in drugs or politically dissenting. Indeed, it is criminally naive to believe the government will not use these massive and valuable data to target its critics. Thus, people can be discouraged from speaking out. Controlling the information, however, means controlling the currency. Otherwise, anyone could mint gold coins in the middle of the night and release them covertly into the wild.
Equally, a currency monopoly allows the government to impose social policies that punish and control categories of people. For example, as long as banks function as an arm of the government, they will refuse to open accounts for people without state-issued identification and Social Security numbers. Thus, the "undocumented" are effectively barred from the monetary transactions that are part of everyday life. By contrast, counterculture financial institutions often require little more than a username and a password to deposit funds. No wonder some politicians are increasingly desperate for government scrutiny of Bitcoin, as they fear its decentralised design.
The currency monopoly is vital to both the rise of a police state and the targeting of individual civil liberties. In arguing for a free market in currencies, it is important to claim the moral high ground by stating and restating what should be obvious: Civil liberties require sound money. And nothing ensures the quality of a commodity as surely as competition.
Wendy McElroy is the author of The Art of Being Free and a member of the editorial advisory board of Laissez Faire Books. This post first appeared at Laissez Faire Today.
First, here’s John Clark explaining Quantitative Easing:
And now, the really, really good news about Russel Norman’s plan to print money to bring down our exchange rate was the response. Yesterday we saw a tidal wave of rational outrage at the Ginger Whinger’s insanity.
John Key told Breakfast TV, "If printing money made you rich, Zimbabwe would be the richest country on the planet, and it's not.” He said the money plan was ‘wacky’ and could create a financial crisis. And Steven Joyce called it “a sign of panic.”
Given the number of politicians and central bankers around the prepared to embrace the wacky, this response was very encouraging to hear.
As was the response from the commentariat, despite the regular trial balloons promoting the idea launched by popular commentators Bernard Hickey and Rod Oram. Perhaps the intellectual acumen of our commentariat is more informed than we might think.
- Roger J. Kerr observed “the worry is that the Green Party’s economic policies generally resemble the Polish Shipyard model, which collapsed twenty years ago as it did not work.” Our currency is high because it is a commodity currency, good exporters have been hedging against the exchange rate, and in any case the dominant determinant of the NZ dollar currency value is what goes on in Australia. The immediate consequence of Russel’s money bomb, he says, would be lower real wages.
Roger J Kerr explains why politicians should not be trusted with setting the NZ dollar currency value. – INTEREST.CO.NZ
- NZIER’s Shamubeel Eaqub observes, “Greens' quake bond buying policy is not QE; It's the sort of 'debt monetisation' practised by Mugabe; Will see poor pay for quake rebuild via inflation.”
The Greens’ policy for the Reserve Bank to buy bonds issued by the government to pay for the Christchurch rebuild was not the same as those policies, Eaqub told interest.co.nz.
“It’s essentially monetising debt. It’s not even quantitative easing,” he said.
“The idea of the quantitative easing that is happening in the US and Europe in particular is that they are trying to provide liquidity to banks to promote credit growth in the economy, through the private sector,” he said.
“What [the Greens] are proposing is for the government to essentially monetise its liabilities through higher inflation.
“It’s just monetisation of government debt - essentially saying that the central bank will provide credit to the government,” he said.
In the US, while the Federal Reserve was buying up government debt through Treasury bond purchases, it was not ‘monetising’ Treasuries by buying them directly from the government with the newly created money.
“The government of the US is still liable for that debt. But here [with the Greens' policy], you’re just going to give that money away. The Treasury bills that the Fed is buying are from the banks, to give liquidity to the banks, so the banks can then lend that money onto the economy,” Eaqub said.
“Here they are saying [the Reserve Bank] should be buying bonds from the government. Those are two very, very different things,” he said.
- "Putting money into the system would create a 'sugar rush' but it would quickly wear off. When would they stop buying?" Mr McIntyre said no-one appeared to have thought of what happened to the extra money flooding around the system from governments buying up bonds when the financial crisis eased.
Is printing more money the answer? – ODT
And on Twitter, Interest.Co.NZ’s Alex Tarrant posted:
BREAKING: Fuji Xerox approaches Green Party in early bid for printer procurement contract…
Most bloggers were horrified. Whale Oil posted this
David Farrar pulled out enough Zimbabwe currency to buy a small chocolate bar:
- “Russel Norman is completely misrepresenting QE by saying that the recent crisis is “evidence it isn’t inflationary”. QE was put in place to fight the fact that policy was too tight overseas, and they were trying to fight deflation – in essence the fact that inflation stayed near the “target band” in these countries is evidence that QE is indeed inflationary as you would expect … just in the way they were intending.”
No QE free lunch for NZ – Matt Nolan, TVHE
- “It's "only" going to be $2 billion that is quantitatively eased. And it's only to buy earthquake recovery bonds.
Russel Norman must be daft if he expects us to swallow that. What he is proposing is simply the thin end of the wedge, and he will quickly find other justifications to print more and more money. And each time he does, inflation will rise, and life will get tougher for everyone, Green Party supporters included.”
The thin end of the wedge – KEEPING STOCK
- “I thought this madness died with Social Credit, but Greens (and Labour may not be far behind) have said that they want the NZ Reserve Bank to effectively start printing money. They think that NZ printing more money is a good way to increase the relative value of the US dollar. We might as well start burning our savings.”
Greens literally believe money does grow on trees – David Farrar, KIWIBLOG
- “Printing more money as Norman suggests , is one of the failed policies of the 70s and 80s that the late Sir Robert Muldoon might have favoured.”
Green snake oil on sale – HOME PADDOCK
- You can rely on Russel Norman to engage in reality evasion, but his latest attempt to introduce monetary policy into the Green Party's repertoire is laughable… Russel Norman knows that the money you hold should be worth less…
QE has been the Keynesian response in Japan, the US, the UK and the Eurozone. The mass destruction of value due to these bubbles popping has been filled by massive money printing, yet it has not resulted in a sustained kickstart to demand… It wasn't undertaken to improve export competitiveness. It has demonstrably failed to boost Japan's economy. It has created minor blips in the US economy, and nothing more.
For The Standard to say that having a consistently high dollar is about speculators making money from New Zealand is demonstrable ignorance. To think that, say cutting the value of the NZ$ by 25%, is good for the working poor (when it will raise prices of petrol, electrical goods, overseas holidays and any imported books, clothes), is bizarre.”
Russel Norman says "fuck the poor" with his economic illiteracy – LIBERTY SCOTT
Even comments at the Herald and Stuff and on the blogs have been good:
- "Norman has just added a new interpretation of "green" in politics. Previously it was just "green" as in environmental; now it's also "green" as in immature." – Terry
- “More lunatic stuff from the Greens god forbid they ever get into power - the country will be sunk.” – Buster
- “I liken this to a declaration of 'let them eat cake' indicating a profound gap in understanding economics.” – Demos
- “Terrible idea. The impact against the US dollar may work out well for exporters, but think about how we will compare to the Australian dollar. More of our talent will move across the ditch for substantially higher wages.” – John
- “To them money is free, it grows on trees and you just get the next generation to pay for current consumption.” – Prezzie
- “Just when you think you can trust the Greens, they go and say something so stupid as to guarantee they will never be in charge. Printing more money is something a child would come up with.” – FMax
- “What is quantitative easing?
Short answer: It's an unconventional monetary tool used by central banks to stimulate the economy.
America has been doing this since 2008. It has worked so well for them(sarcasm), that they decided to do it again and are actually deciding at the moment if they need to do it again.
So by all means Green party, drag us down like the states, we just love to see all our hard earned cash get devalued and disappear while cost of living goes up even more.” – JW
- “Question for Dr Norman. How much money would have to be created to reduce the overseas exchange rate by the 10 to 15 cents needed to make our exports to anywhere but Australia ( which is our main market and which takes 60% of our exports now at a reasonable exchange rate) competitive.” – Rosy Fenwicke
- “Why are those other countries in that position. Because they printed funny money. Doubling nothing still equals nothing and it is like putting your head in the sand and pretending that the problem will go away.” – Robert Moody
- “Playing the 'Zimbabwe' card now. You lose.” – Sylph Critical
- “Have you actually had a look at what currency dilution has acheived for the US or the UK?
Quantitative easing has failed again: What madness has seized our leaders! To extend Russel's "currency war" analogy from the other week, there's no point in trying to shoot when you're caught in the crossfire as we are.” – James Stephenson
Monday, 8 October 2012
If the Reserve Bank were to go out and print $2 billion of new money, as Russel Norman wants them to, are we all better off?
That is, two billion dollars of new paper money on the back of the current base of nearly four billion.
Imagine, as David Hume did years ago, that we all woke up in the morning to find an act of magic had somehow increased the quantity the number of notes and coins in our pockets, in our wage packets, in our piggy banks, and under the couch and chairs. Everyone of us now goes about our business feeling richer. And so does everybody else—and we all of us would know it.
But have we all become richer? Has anyone? Because as even a moron would know (from which classification Norman is clearly excluded) since we all have the same increase and everyone knows about it—including salesmen—in this fantastical scenario all that increased money is just going to increase all our prices. And nothing will have changed fundamentally*.
And no-one will be better off.
This magic injection of new money [explains Detlev Schlicter in his book Paper Money Collapse] has no impact on the production of goods and services, on resource allocation, or on income distribution…
But that is only true in this magical, unrealistic situation.
Because of course, money never comes into existence in this way.
In reality, it’s very different. In our modern floating-currency paper-money economies, money is borrowed into existence on the back of “securities” like government bonds and assets like the contents of the housing bubble. Which means when new money comes into existence, the first users of those dollars are borrowers and governments. So what happens to prices? Well, they still go up, but since these folk get first use they get to spend the new money before prices rise.
But can you see who misses out? Can you see who’s paying for these new riches? No new paper notes have been put into your pocket, or into your savings accounts. The pool of real savings has not increased one iota. And no new resources have been brought into existence by the creation of this counterfeit capital. Which means the new assets now enjoyed by borrowers and the resources distributed on the back of government bonds are simply transferred from savers and non-borrowers to governments and other big borrowers.
Oh, and also transferred to the pockets of those bankers who clip the ticket all along the way.
This is what Russel Norman wants more of.
This is what Russel Norman dreams about today.
Issuing $2 billion of “Earthquake Bonds” to be bought with printed money which will then bid up the prices of building materials and supplies, raid the pool of real savings, and make instantly poorer every wage-earner and every holder of existing dollars (which is almost all of us), making it instantly more impossible for anyone struggling to afford our already unaffordable houses (which is many of us), and transferring to Christchurch resources created by savers and non-borrowers—by means of what can only be called a stealth tax.
At least his idea of an Earthquake Levy was up front—and would not have helped to wreck the whole price and structure and make you and I and every wage earner so much poorer (and every banker involved so much richer).
Oh, but he says this will help bring the exchange rate down! Which as I pointed out last week, will simply make fuel food and imports more expensive and all wage earners even poorer!
But, says Norman: “They’re doing it everywhere else.”
Yes, and everywhere they’re doing it, it isn’t working. It was used by Japan for the last two decades—the two decades they call Lost. It was used by Weimar Germany and Zimbabwe. I trust even Russel knows what happened there.
Oh yes, and it’s been used over the last six years in the US, UK and Europe to produce figures showing economic growth when there’s been none. I trust you’ve noticed with what (lack of) success. And you should perhaps have noticed it has reached a dead end.
It is not a crime not to know anything about economics. But it is to talk as if you do.
Frankly, this is the sort of fantastical pie-in-the-sky kind of monetary quackery that used to be the province of Social Credit.
Perhaps Russel should go out today and join them.
* * * *
* Except of course for the overnight damage to the price structure and the longer run damage to the structure of bond prices and interest rates. But that’s a longer story not fully relevant to this one.
UPDATE: Liberty Scott: “It is a fundamental attack on the poor, and on those with savings on average incomes.”