Tuesday, 22 January 2013

Obama invokes Founders, inaugurates new era of collectivism

If, like me, you woke up to the sound of Obama inaugurating himself into the pantheon of great American presidents by invoking the words of the Founding Fathers to bolster his own arguments for collectivism, then you too might have wondered how he thought he could pull off what, even in that early hour when the brain is still slightly foggy, sounded like a massive logical leap. Maybe it sounded that way too to the folk in the audience, since the applause for his phony rhetoric seemed pretty spartan.

Jon Sanders notes that this is a common trope of Obama’s major speeches, especially this one in which he sought to use the Founders to make the case for collectivism.

first referencing the ideals of the Founders, then after having imitated the soaring rhetoric of past American luminaries, changing the focus to make it sound as if the next step for American liberty is to become a socialized nanny state. (Emphasis added.)

Nice, if you can (or want to) pull off the fraud. Because the man who started his address by extolling the rights to life, liberty and the pursuit of happiness being not only self-evident but unalienable—to the individual freedom those Founders were so desperate to protect—finished up by calling for collective action on class warfare, government healthcare, social-welfare programs, climate change, social spending in other countries, gay marriage, women’s pay gap, immigration reform, and gun control.

As Sanders concludes, what we heard today was not at all a ringing exhortation to bring back the America the Founders built,

but a promise of four more years of false rhetoric and real economic pain driven by ideological fervor and demonstrable diffidence.

Mikkelsen shrugs? [updated]

Golfer Phil Mickelson may call it quits due to climbing tax rates.

[Hat tip Shaun H.]

UPDATE: Golfer Phil Mickelson Is Not Alone In Fleeing Taxes

Still bad weather for warmists

While Australia swelters in temperatures not seen since the thirties* (and close to those experienced by the convicts of the First Fleet in their first years in Sydney), Europe and the States are covered in several inches of global warming—closing airports, stopping traffic from Moscow to Boston, and causing the UK’s Independent newspaper (which back in 2000 declared “Snowfalls are now just a thing of the past”!) to warn today’s Britons to “stand by for icy blasts and heavy snow.”

To repeat the mantra, it’s not about short-term weather, it’s about long-term climate.

And as even long-term warmist excitement-monger James Hansen was forced to concede this week,

The five-year mean global temperature has been flat for the last decade, which we interpret as a combination of natural variability and a slow down in the growth rate of net climate forcing.

That is to say, despite predictions there has been no warming for the last decade; indeed, not for the last sixteen years.

* The difference between this week’s “record temp” in a Sydney three times bigger than in 1939 and with vastly more asphalt was just 0.5 of a degree.

Conversations in Cambodia

Another Guest Post by our roving Asian correspondent Suzuki Samurai, this time two conversations with interesting fellows: the first with Phakdey (pronounced Prak-a-dey) the founder of the school I’m helping out.
S: So what made you decide to build a school for poor kids?
P: When I was about 22-23 I knew that I was lucky to get an education, and wanted to do something for my village; I knew I’d do something for poor people even before that though. We were poor when I was young; that bowl [he points at my serving of a sardine-sized fish & rice] used to have to feed four of us; most of the time we didn't have any meat or fish at all; we lived on rice & pickled cucumber. It didn't occur to me that we were poor until I was at a friend’s house one night for dinner…when I was about 8. They had this piece of meat that they were sharing, but it was a very large piece of meat - about the size of my fist; I went there again a few days later and they had another piece the same size. I went home and asked my mother why they had meat and we didn’t; she told me to work hard at school and I’d find out, and be able to buy that kind of meat; and it was from that day on that I knew that I wanted something better for myself and my family. I guess it was at that time I set off on this path.
S: So why an English school? And when did you start it. P: At school & university I studied English and teaching, it seemed to me that that was the key to being rich. I was teaching at a local high school and in my spare time, I taught about 40 kids in a classroom under my house; over time more and more students wanted to join. This went on for about 8 years, with more classes filling up our weekends – there were too many kids, but we did our best [T’s wife began to teach as well]. I met a German man one day who had moved to the village with his new Cambodian wife, he’d met her in Phnom Penh and she wanted to come home for while. He came down to the school one day and was impressed by what we were doing and offered to help by contacting his friend at an NGO in Germany; within a few months the NGO had visited and agreed to help us.
S: In what way did they help? P: First they said we needed to find a bigger place, and said that once we did they could help build a school for us. My mother-in-law gave us some land she had across the other side of the river, the NGO and I agreed that they would pay for a new building; I mean they would pay for floors 1 & 2 for classrooms, and I would pay for the top floor for us to live in. That was two years ago, and now we have 8 classrooms and 400 hundred students.
S: Do the students pay fees? P: Oh yes, well most of them do; the poorest kids are paid for by the German donors.
S: How much are the fees? P: 20,000reil [$5US] per month for juniors & 32,000reil [$8US] for high school students.
S: What is the average wage here? P: Teachers at the local high school get about $50-$80 per month. Most people (farmers) earn about $30-$40 per month. People who work at the Chinese factory about 20km away get about $60 per month, but they spend about $20 per month getting to work and buying food. The top paying job around here is $100 per month working outside about 60-70 hours per weeks at the brick works - a very hard, hot job.
S: What do local people think of what you are doing? P: Some people think I’m doing a good thing helping poor people; but there are quite a few people who talk about me
behind my back complaining that we don't help them too. I try to explain to people that we can only help the really poor; and if you’re not the poorest of the poor then you have to make your own way – but people are very jealous and won't even speak to me in the village. But I really don't care about what they think; they just want something for free.
S: How do you decide who is and isn't poor enough to get access to the NGO’s donor money? P: We are very careful. We go around the village and visit people; you can see fairly quickly who has nothing to eat, and who has no furniture etc. The villagers can’t really hide anything; everyone knows who is poor and who is not.
S: Does the NGO provide anything else apart from money for fees and the building etc.? P: Yes, as you saw the other day they bought the 30 bags of rice, and they took the really poor kids shopping for clothes. Those things happen only when either some donors are visiting, or I ask directly for some extra help.
This is a conversation with a respected local, which took place over two lunchtimes. For reasons of safety, his, we'll call him ‘G.’
S: How do people see each other? I mean to say how do people view each other’s financial situation? G: Cambodians are funny people. People who are not poor look down on people who are, and often won't even talk to them. The people like this aren’t necessarily rich, or even that much better off than the very poor. I experienced this when I was a kid: I was playing with another boy from down the road, when his father came out and scolded him for playing with a poor boy, of course that poor boy was me.
S: Did that hurt? G: Not at the time, I didn't understand what I had done to get that boy in trouble – but that’s how people are; and still are.
S: What about people’s view of the rich? G: Oh, people who are not rich are afraid of the rich.
S: Afraid? Why? G: Because when you are rich in Cambodia it means you have power, power over other people’s lives and property. Money and politics are the same in Cambodia. What's it like in your country?
S: Um, well no one is afraid of the rich, many people are envious of course; but they aren’t afraid of them because they have no power as such. G: Strange. I like that.
S: What's the number one most important thing needed in Cambodia? G: Education is number one. But Government has to change; they are so corrupt.
S: In what way? G: Well if government or a large business wants to take your land for say a big road, or building a factory, they just do; and very few people get money for their land, and if they do it’s very little.
S: What about the courts? – Are they effective? G: Hahahaha, if you can afford a lawyer who is not corrupt, the courts are controlled by judges that are friends of the politicians who are friends of the business people. The price to take a case is out of reach of people, and if enough people get together to take a case; the police will just arrest some of them…what do you call them…?
S: Ring leaders? G: Yes, ring leaders; and they can spend a long time in jail on no charge or rubbish charges if they make trouble; many are beaten up, some have been killed.
S: But the laws are there right? – To protect people and their property? G: Yes of course, but who would want to complain even if they could afford a lawyer.
S: What about contract law between individuals? Is that enforced? G: Yes, that is usually settled easily, but is still expensive. Most disputes are settled before that though.
S: So what about the police then? What do people think of them? G: Everyone hates them – they are so corrupt. But being a policeman is often one of the few jobs going. Police get paid about $60 per month, and they get extra money by taking it off people for not wearing helmets, going through red lights; and of course taking it off foreigners with no license is good money.
S: So what kinds of jobs are there for people around here? G: It’s very hard for young men to get work; they may get day work from time to time for a couple of dollars per day, or they can join the army or the police. A lot of the young women work for the factories. There are many Chinese factories now; and they prefer young women instead of men. The factory workers can earn about $60-$70 per month working long hours – it’s a long way to travel for most people though; so after they spend money on travel and food, they are left with maybe $40 per month.
S: What do you think of the Chinese doing business in Cambodia; the factory must provide much needed work? G: Yes, it is good that the Chinese factories are here, otherwise there would be no work. The Chinese are also paying for that road to be built [pointing to the road behind me]. That’s a good thing, but they are mean.
S: Mean in what way? G: Well that road is being built right through some people’s property, and they paid them nothing, they just took it one morning. And you see that some shops have had the front yard ripped right off - their customers can't get into their shops.
S: Isn't it the job of the government to protect land owners? G: I told you before, the government and businesses are in it together. The Chinese don't care; why would they if the government doesn’t.
At this point G asks me a few questions.
G: Why won't more western companies come here, instead of the Chinese?
S: I guess foreign companies need to know the law works, that things are stable, that corruption won't affect them too much; Cambodia struggles to offer that. And you might not realize this but the Chinese often have another deal going on that you might not know about.
G: Like what?
S: The most recent one was the ASEAN meeting chaired by Cambodia, where all the countries present except Cambodia and China wanted to discuss the island disputes in the region - the disputes arising from the Chinese claims to most of the region’s sea. Everyone at the meeting knew that the Chinese had put pressure on the Cambodian government not to forward the motion to discuss it. In exchange China is known to give money to your government without any questions of where and who it goes to.
G: Hmmm…
S: What do you think about that?
G: As long as we get the money.
Once I’d spent a few days with G, I felt confident enough to ask about the Khmer Rouge.
S: G you’re an educated and well read man; what can you tell me about the Khmer Rouge? G: Not much.
S: Ok, what do you know about them, and what they did? G: Only what foreigners tell me.
S: Funny, I’d heard that before from a tuk-tuk driver [who became a friend of mine last time I was here]. He said that he and his friends are puzzled by foreigners wanting to go to Tuol Sleng and the Killing Fields; and that he wouldn't have known about what happened there had it not been for meeting foreigners.
Why is that? – I mean it was a monumental event in your country’s history…and not very long ago. G: We are not taught about it in school. Though I don't think anyone would really care anyway; that was a long time ago; and no one really wants to think about it.
S: What about the trials [of Khmer Rouge leaders] on TV?
G: The trials of the big four?
S: Yes.
G: Nobody wants to watch them, they are boring; anyway who are those guys…I’ve never met them, and they didn't hurt me.
S: Oh come on; you know what they did – surely you have some interest in seeing them tried and convicted? G: Yes, I suppose so. But I just never think about it.
S: Is that the same for people you know? G: Yes, no one ever talks about it. It's nothing to do with us. And anyway, people are more interested in getting enough to eat tomorrow.
S: It’s hard to argue with that last sentence.  But have you ever heard the expression: “Those who cannot remember the past are condemned to repeat it”?
G: Yes, I’ve heard that.
S: So do you think a Khmer Rouge type thing can happen here again? G: No.
S: Why not? G: Because westerners will help us and stop them.
S: Have you heard of Rwanda? G: No, why?
S: Doesn't matter, mate.
The current government has been in power since the early 80’s, formerly an avowed Marxist/Maoist party. Early in the eighties they started a publicity campaign to throw off their links with Pol Pot. They now claim to be “democratic socialists.”  There is now a semblance of a democratic political system, but opponents that get some support and worry the regime, and can't be cajoled and corrupted, have been denounced, jailed, and assassinated. The system here – if you can call it that – is not dissimilar to China’s, except  that people get to play the charade of elections.
The trials going on in Phnom Penh of former Khmer Rouge leaders has now set limits on who can be tried, and are now just for the four top remaining survivors of the regime. The Prime Minister, Hun Sen, who decreed this policy, was once a Khmer Rouge commander himself who fled to Vietnam in the late 70s for what he claims was his ‘unease’ at Pol Pot’s extreme policies. I can't help but wonder if perhaps the on-going purges might have been a factor in his leaving too. Once he’d fled to Vietnam he set about convincing the Vietnamese to invade. The Vietnamese didn't initially, but did support Sen and his band of exiles in their attempt to oust Pot. As it happened however  Pol Pot was  sufficiently stupid and evil to attack Vietnamese civilians both in Cambodia and across the border. (The previous regimes forces did this also and got pounded for it.) The Vietnamese did invade, and thankfully—by driving Pol Pot and his regime into the forest—relieved the surviving Cambodians of their most murderous regime to date. The Vietnamese gave Sen the job of Foreign Minister under the new/old regime, which he still retains.
Today, the influence of China is palpable in both what is being built and how it is being built, and in the political shenanigans that are going on. The culture is otherwise much more Indian than Chinese; the people physically look more Indian than other East Asians too; and their particular form of witch doctor worship (religion) is also derived from India.
Suzuki Samurai posts irregularly from around Asia. Check out all his posts here.

SUMMER SNIPPETS: ‘When Baghdad Ruled the Muslim World’

When Baghdad Ruled the Muslim World: The Rise and Fall of Islam's Greatest DynastyMore interesting snippets I highlighted during my summer reading, this time from Hugh Kennedy’s When Baghdad Ruled the Muslim World: The Rise and Fall of Islam’s Greatest Dynasty.

Historians of the period have preserved the text of a long [and influential] letter said to have been written by Tahir [ibn Husayn, the Abbasid caliph's governor of northeastern Persia in 821, and former power-broker in the caliph’s court], giving advice to his son about how to be a good ruler… The ruler is shown to be a benevolent despot.  His authority is absolute and he is responsible, not to his subjects, but to God.  There is no sense of popular limitations to his power, and no mention of any sanctions his subjects can make use of should he abuse it.  The ruler should behave in a benign and conscientious way because he is responsible to God and will be held to account by Him if he fails.  He should also look after the welfare of his subjects because it makes sense to do so: prosperous subjects pay more taxes and cause fewer problems.  To an extent the advice is worldly and eve cynical—being a just ruler makes you richer and more powerful—but it is also about the virtuous circle, an idea Muslim political theorists were to return to time and time again: a strong but gently tyranny brings benefits to ruler and subjects alike…
    “The emphasis on moderation in all things is also striking.  It is possible that this idea comes directly from Greek philosophy, even perhaps from [Tahir’s own] reading of philosophy…
    “There are noticeable omissions in the document.  Apart from a brief mention of the use of taxation to humiliate unbelievers, nothing in Tahir’s work would give any indication that a large proportion, probably the majority, of the people over whom he ruled were Christians.  He is only concerned with how a Muslim ruler should relate to his Muslim subjects.  There is no mention of the need to convert non-Muslims to Islam.  There is also no mention of the Jihad or holy war: the Muslim community is imagined as being at peace with itself and its neighbours.”

Along with the measures [designed to appeal to a constituency of Islamist hard-liners, new Caliph Mutawwakil (847AD) brought] measures against the dhimmis (protected people), the Christians and Jews.  These did not amount to active persecution or forced conversion to Islam but rather public shaming.  In 850, the caliph issued a decree that aimed to enforce discrimination in dress in a way that is unpleasantly reminiscent of the anti-Jewish legislation of Nazi Germany.  All dhimmis were required to wear yellow on their clothes… He also ordered that all renovated places of worship be confiscated, turned into mosques if big enough or demolished if not.  Christians and Jews had certainly suffered discrimination before in an irregular and patchy way—Christians in areas along the Byzantine frontier had been threatened because the Muslim authorities were afraid they mighty ally with the Byzantines—but Mutawwakil’s decrees were the first time a caliph had adopted these measures against dhimmis wherever they were and whatever their jobs were.”

The original Abbasid regime that came to power in 750…set about patronising and developing a court culture that would establish their identity as the elite, the khassa. This culture would demonstrate their refinement and sophistication: shared cultural values would provide cohesion for the new ruling class.  The leading figures in the civil administration of the caliphate at this period … also appear as the most important patrons of literature and learning: court and culture were intimately bound together…
    “The caliphs themselves were the most important patrons.  The tone was set by Mahmun, and it is clear that patronage of science of the [movement to translate Greek science and philosophy] was his own very distinctive personal contribution to the culture of the period… His successor Muhtasim was known as a military man and creator of the city of Samarra, but he does seem  to have continued something of his brother’s patronage of writers and scientists.  His son and successor Wathiq was more interested in intellectual debate. Mahsudi speaks of him as loving research and those who undertook it, and hating those who blindly followed tradition…
    “The caliph Mutawwakil did not encourage scientific enquiry in the same way… [and] none of the short-lived caliphs who succeeded  after Mutawwakil’s assassination in 861AD had much time to develop intellectual interests…  It was not until the accession of Muhtadid in 892 that the Abbasid court again became a focus of scholarship…

Without institutions [or monasteries] to offer salaries and status, scholars were largely dependent on patrons to provide them with a livelihood, and it was in the salons of the great Baghdad families that intellectual life developed…
    “One of the most astonishing and impressive products of this court society was the movement to translate ancient Greek scientific and philosophical texts into Arabic Interest in the Greek intellectual heritage and patronage of the translators became one of the most fashionable forms of elite cultural activity, perhaps all the more satisfying because of the suspicions it aroused in the more hidebound traditionalists.  It was also one aspect of the culture of the Abbasid court that was to have a profound influence on the culture of the wider Islamic Europe and Latin Europe, long after the end of Abbasid power. [You ain’t kidding it had a profound influence! This is a major part of the Greatest Story Hardly Ever Told].
    “Immediately after the great conquests of the seventh century, the Muslims had ruled over many Greek speakers and writers.  Until the end of the seventh century, Greek had remained the administrative language of Syria and Egypt, so Greek culture was  well known.  There were also many Greek works that had been translated into Syriac (a written dialect of Aramaic which was the liturgical and literary language of the Eastern Christian, that is Jacobite and Nestorian churches) during the Byzantine period.  Many of these works were now translated a second time from Syriac to Arabic.  The Muslims were interested in those products of Greek learning which they believed to be useful.  These included works on philosophy, especially logic, medicine, mathematics, astronomy, and the use of plants.  They were not concerned to translate poetry, history or drama.  Aristotle, Hippocrates, Galen, Euclid, Ptolemy and Dioscorides were all popular authors, translated and retranslated to make them accessible to the Arab reading public.  Herodotus, Thucydides, Euripides, and Sappho all remained entirely unknown.
    “Translation of Greek texts into Arabic had begin as early as Umayyad times, and there had been sporadic examples under treh early Abbasids; Salam al-Abrash … was an early but individual example.  It was the caliph Mahmun who made the translation movement fashionable in ruling circles.”

The production of translations that were both reliable and elegant required considerable expertise, and men who proved they could deliver were well rewarded.  The Banū Mūsā [brothers originally from Eastern Iran, “merchants” for whom the patronage of culture may have been a sort of money-laundering operation—shades of the Medici family’s patronage perhaps?], leading and discerning patrons of translations of scientific texts, were prepared to pay 500 dinars salary a month to top-quality workers (though it is not clear whether this was to each individual or to the group of translators who lived in their houses).  This was equivalent to the salaries of senior members of the bureaucracy, and vastly more than those of an ordinary craftsman or soldier.  [500 dinars represents about fifty ounces of gold!]  As a result, clever and ambitious people flocked to Baghdad to offer their services…  A biographer gives us an idea of the lifestyle of gentleman academic [Hunayn ibn Ishaq (d. 873) a Christian from southern Iraq who worked as a translator for the Buna Musa]:
        “He went to the bath every day after his ride and had water poured on him.  He would then come out
    wrapped in a dressing gown and, after taking a cup of wine with a biscuit, lie down until he had
    stopped perspiring.  Sometimes he would fall asleep.  Then he would get up, burn perfumes to fumigate his
    body and have dinner brought in.  This consisted of a large fattened pullet stewed in gravy with a half kilo
    loaf of bread.  After drinking some of the gravy and eating the chicken and the bread he would fall
    asleep.  On waking he would drink 4
ratls [perhaps 2 litres] of old wine.  If he felt like fresh fruit, he would
    have some Syrian apples and quinces.  This was his habit until the end of his life.”
    “When he managed to find time for work amidst this agreeable regime is not entirely clear, but he obviously did for his output was enormous and his academic standards very high…”

The ninth century was the great age of the study of sciences, with Thabit ibn Qurrra (d. 901) in mathematics and Hunayn ibn Ishaq (d. 873) in medicine being the leading lights.  The clearest example of their intellectual curiosity and practical application can be seen in their project to measure the circumference of the earth.  This is described in some detail by Ibn Khallikan [d.1282]. It is perhaps worth recounting this in detail because the account seems to encapsulate the spirit of scientific enquiry typical of the age and, especially, of the circle of the Banū Mūsā. 
            ‘Although astronomers in ancient times, before the coming of Islam, had done this, there is no evidence
    that any Muslim apart from them had tried it.  The caliph Mahmun took a deep interest in the sciences of
    the ancients and was keen to test their accuracy.  Having read in their works that the circumference of the
    globe is around twenty-four thousand miles or eight-thousand
farsakhs [in fact, the equatorial circumference
    of the earth is 24,902 miles] … He wished to test the truth of this assertion and asked the Banū Mūsā what
    they thought.  They replied that this was certainly the case and the caliph then said, “I wish you to use
    the methods described by the ancients so that we can see whether it is accurate or not.”  They enquired
    where a level plain could be found and were told that the desert of Sinjar [in north-western Iraq] was
    completely flat, as was the country around Kufa.  They took with them a number of people whose
    opinion Ma’mun trusted and whose knowledge in this area he relied on.  They set out for Sinjar and came
    to the desert.  They halted at a spot where they took the altitude of the Pole Star with certain instruments. 
    They drove a peg into the ground and attached a long cord to it.  They walked due north, avoiding, as much
    as possible, going off to left or right.  When the cord ran out, they stuck another peg into the ground and
    fastened a  cord to it and carried on walking to the north as they had done before until they reached a spot
    where the elevation of the pole star had risen by one degree.  Then they measured the distance they had
    travelled on the ground by means of the the rope.  The distance was 66 2/3 miles.  Then they knew that
    every degree of the heavens was 66 2/3 miles on earth.  Then they returned to the place where they had
    stuck in  the first peg, continued to teh south, just as they had previously to the north, sticking in pegs and 
    fastening ropes.  When they had finished all the rope they had used when going north, they took the elevation
    of the Pole Star and found it was one degree lower than the first observation.  This proved that their 
    calculations were correct and that they had achieved what they had set out to do.
    ‘   ‘Anyone who knows astronomy will see that this is true…  They then multiplied the number of degrees of
    the heavens [i.e., 360] by 66 2/3, that is, the length of one degree, and the total was twenty-four thousand
    miles or eight-thousand
farsakhs.  This is certain and there is no doubt about it.  
        ‘Then the Banū Mūsā returned to al-Ma’mun and told him what they had done and that this agreed with
    what he had seen in ancient books.  He wished to confirm this in another location so he sent them to the
    Kufa area where they repeated the experiment they had conducted in Sinjar.  They found that the two
    calculations agreed and Ma’mun acknowledged the truth of what the ancients had written on the subject.’
The account is revealing of many aspects of eth intellectual environment of the time.  The first is the respect shown for ancient science.  People of this era were well aware they had much to learn from the achievements of the classical era (much more aware, of course, than their contemporaries in Byzantium or western Europe).  But the story also shows that this respect for the ancients was not an uncritical acceptance of everything they said: Mahmun and the Banū Mūsā wished to test the figures for the circumference for themselves.  Finally, we must be struck by the commitment to practical scientific experiment, the establishment of a hypothesis, the use of experimental evidence to prove it, and perhaps the most impressive, the care shown to make sure that the experiment could be replicated…  All this demonstrates a truly scientific approach that has few parallels in the post-classical pre-modern age.”

Like the Italy of the Italian Renaissance, the intellectual world of the ninth-century Baghdad was a world where private patrons [sometimes with wealth of dubious origins] funded intellectual life and, to an extent, competed against each other for intellectual prestige.  This may account for something of the variety and originality of the scholarly life that was one of the great achievements of the Abbasid period.  Much of this freshness and vitality was lost with the development of the more formal structures of the madrasa (theological school) from the eleventh century onwards [a direct consequence of the Closing of the Muslim Mind].

Monday, 21 January 2013

Transcripts show the central bankers’ central banker is clueless where it matters

Transcripts of the US Federal Reserve Board’s 2007 meetings reveal that the man who is now experimenting with America’s (and, by extension, the world’s) monetary health—by whom I mean Ben Bernanke, the current Fed chairman who is continuously shooting adrenalin into his patient’s heart in the decreasing hope he can induce a flicker of new life—had no idea at all in 2007  that catastrophe was about to strike.  No idea whatsoever.

Despite the world being already in the Greatest Depression since the Great Depression, this bozo and his colleagues around the boardroom table never even saw the train wreck coming.  Bernanke

noted that housing was “very weak” and manufacturing was slowing but sounded an optimistic note. “Expect for those sectors, there is a good bit of momentum in the economy,” Bernanke said.
   At the same meeting, Timothy Geithner, then president of the Federal Reserve Bank of New York and now Treasury secretary, said “developments of financial markets on balance since the last meeting have been reassuring. The panic has receded.”
    By December, the economy had plunged into the recession, which would officially last until June 2009. Five years later, the economy has yet to fully recover.

_BenNote that these are not dumb people. They are not bozos because they lack intelligence; they are bozos because they think knowledge of economics gives them complete knowledge of the economy, and with that the ability to tinker with it.

They are wrong. They were wrong then, and they are wrong now.

They are wrong because they didn’t even know what they didn’t know. They never realised that, as Hayek pointed out (as translated into rap) “The economy isn’t a class you can master in college. To think otherwise is the pretence of knowledge.”

Not only do these bozos not even understand what Hayek’s point is trying to tell them, all those very same bozos who helped deliver the greatest economic catastrophe in seventy years are still in charge of the recovery.

Is it any wonder there isn’t one?

Auckland is the world’s ninth-least affordable city in which to buy a house

The 2013 9th Annual Demographia International Housing Affordability Survey has just been released (here’s the link to download a PDF copy), showing all New Zealand’s major housing markets (and more than 60 percent
of all our housing) remain “severely unaffordable”—and this situation is getting worse, not better.

Auckland continues to ranks as the world’s ninth-least affordable city in which to buy a house.

The survey covers 337 urban markets of the United States (216); United Kingdom (33); Canada (35); Australia (39); New Zealand (8); Ireland (5) and Hong Kong (China). A supplemental analysis of Singapore is also incorporated within the Survey.

The Survey is based on the “Median Multiple” – where the median house price is divided by the gross annual median household income.  In affordable and normal housing markets, house prices do not exceed 3.0 times annual household incomes.  If they do exceed this standard, it indicates that there are political and regulatory impediments to the supply of new housing that need to be dealt with (further research required on dense high rise urban environments such as Singapore and Hong Kong, to ascertain the affordability ceiling).


Houses in New Zealand are now nearly 80 percent more expensive than the historic affordability housing norm of 3.0, last experienced in the 1990s.

Auckland was the least affordable market, with a Median Multiple of 6.7. Along with Auckland, Christchurch
(6.6), Tauranga-Western Bay of Plenty (5.9), Wellington (5.4) and Dunedin (5.1) were severely unaffordable.

Three New Zealand markets were seriously unaffordable, Palmerston North (4.4), Napier-Hastings (4.5) and
Hamilton (4.7). New Zealand had no affordable markets and no moderately unaffordable markets (Table 10).


There is no mystery about the supply of affordable new housing and a simple structural definition of an affordable housing market is provided within the Survey.  Detailed analysis and commentary is provided on each of the countries surveyed – with a focus on individual urban markets – their trends and political developments. Information on important international research is also provided.

The Introduction to this year’s Survey is contributed by the Deputy Prime Minister of New Zealand Bill English.  Mr English explains why the New Zealand Government is committed to restoring affordable housing in New Zealand – and is focused on the four structural impediments – being –

  • Land supply
  • Infrastructure
  • Process
  • Construction costs

A recent New Zealand Television One Colmar Brunton Poll found that 62% of all and 75% of young (18 – 35) New Zealanders are demanding the Government allow affordable housing be provided.

Unfortunately, what Little Bill English proposes by way of improving affordability is much too little, far too late, and unlikely to make any impact whatsoever. And I suspect the Demographia team know that…

Monckton to tour NZ!

Monckton-OpenLetterGreat news! Leading climate skeptic Christopher Monckton will visit New Zealand this year for a lecture tour that is bound to put the wind up local warmists already in retreat.

Planning is already under way, under the expert guidance of Esther Henderson from Climate Realists, and will see him take in virtually the whole country over most of April in his Climate of Freedom Tour—so every one of you will get the chance to hear him, and (if you’ve a mind to) to challenge him.


Don’t miss out.

PS: If you’d like to bone up on his style, you could do worse than start with his 2009 Open Letter to John Key: Part One on the science of so called Climate Change, and Part Two: The Policy Responses.

Not everyone is convinced by Kim DotCom [updated]

Internet pirate Kim DotCon has managed to seduce most of the chattering classes and the commentariat, many of whom joined the oaf on the weekend to sip his cocktails and consume his canapés at the launch of yet another website to host stolen property.

John Barnett of South Pacific Pictures is one of the luvvies who’s mercifully free of the misplaced love for the convicted fraudster.

South Pacific Pictures chief executive John Barnett says the [new] site will undermine New Zealand's creative industries and encourage piracy.
Mr Barnett said he has seen nothing to suggest the new site will be any better for those who own content that may be illegally shared.

He failed to say he’d seen nothing in the character of the man already convicted of share scams, fraud and embezzlement to suggest he has any interest in running a legal operation. But he might have.

UPDATEHard News’s Russell Brown is not entirely convinced either about the oaf’s forthcoming music-share service, Megabox,

which is fundamentally based on depriving one unwilling party of revenue in order to pass it on to another, on an as-yet-unclear basis.
    The US prosecution of Dotcom and his former business Megaupload is symptomatic of the excesses of copyright enforcement. It has been improper and unjust in a number of ways. Dotcom himself is kinda fun to have around. But I don’t think we should fool ourselves into thinking that either of those things makes his grand ideas for content creators in any way fair or sustainable.

NZ Unis plunge down world rankings

The latest world university rankings by the Times Higher Education Supplement sees New Zealand Universities continue to slide precipitously.

The Times Higher Education rankings for 2012/2013 has put Caltech (California University of Technology) at #1 spot for the second year in a row (Caltech was #1 in 2011/2012 and it came at #3  spot in 2010/2011). 

Auckland University is ranked #161 on that list and that's the highest from any NZ University. They (Auck Uni) have been sliding downhill from a few years ago when they achieved a rank of  #48.  The friend who sent me the link (thanks, Si) reckons that the slide coincides with Auckland Uni’s embracing the philosophy of “degrees for everyone” and its rapid expansion into the delivering utterly useless and banal courses in departments like Maori, Pacific studies, Film, Multimedia & TV studies, etc, taking energy and probably funding away from areas of real learning. I suspect he’s right.

No other New Zealand University even made the top two-hundred. And the likes of AUT and Unitech didn’t even make the full list of four-hundred. And, out in Otara, another alleged tertiary institution continues to commit fraud on the education-buying public by using the initials of a top-five university to give itself a glimmer of prestige it neither deserves nor has earned. I suspect only the total laughability of its claim to the acronym M.I.T. stops a successful law suit from the real thing.

Here are the world’s top ten ranking universities, followed by the local also-rans:

1. California Institute of Technology    United States   
2. University of Oxford    United Kingdom   
3. Stanford University    United States   
4. Harvard University    United States   
5. Massachusetts Institute of Technology    United States
6. Princeton University    United States   
7. University of Cambridge    United Kingdom
8. Imperial College London    United Kingdom
9. University of California, Berkeley    United States
10. University of Chicago, United States

161. University of Auckland
242. University of Otago
274. Victoria University of Wellington
302. University of Canterbury
346. University of Waikato
376. Massey University

Sadly, while the proportion of the population with a university degree has never been higher, the quality of those degrees has never been lower—and, conversely, the number of qualified tradesmen here has never been lower.

It’s about time the higher education bubble popped here as well.

Thursday, 17 January 2013

“The biggest shake-up since the end of six ‘o’clock closing…”

Bars, restaurants and alcohol shops fear new licensing restrictions will send them out of business in a shake-up billed as the biggest since the end of six o'clock closing. [AUDIO, RADIO NZ]

But advocates for the new licensing restrictions are cock-a-hoop at the new powers it gives them that the new licensing gives locals a say in when and where liquor outlets can open.

What the report linked to above doesn’t say—and neither do the advocates for restriction recognise this—but locals already have a say in when and where liquor outlets can open. In fact, they have virtually complete control. 

Let us suppose, for example, that there are parts of South Auckland in which there were a bottle store on every corner (and I use South Auckland since, as these restrictions are another elitist measures to control the working man’s simple pleasures, South Auckland is the place where they will be most controlled. If there really were a bottle store on every corner (there are 350 bottle stores in Manukau, but many more corners) then that would in fact be a sign that this is precisely what “the community” does want—because the customers of those bottle stores, who come from “the community,” are the very people who are keeping all these bottle stores open, demonstrating as clearly as you can that this is precisely what “the community” does want.

They already have a say in where and when outlets are open—having a say by voting with their wallet every time they make a purchase.  Buy readily, shops stay open. Don’t frequent the shops, the shops close.  This is the power of the consumer to direct the activity of retailers.

So what the control freaks should admit, and what you others who’ve given the control freaks the power should understand, is that the control freaks don’t want communities to have a say; they simply want power to say “this is not what I want.” “The community, c’est moi.”

Because these new restrictions do not at all give a say to communities. Because everyone in the community is having their say every day—every time they choose to visit, or not, their friendly local bottle store. Who it gives “a say” to is council planners and bureaucrats. To the self-anointed guardians of other people’s morals. To those opposed to the working man’s simple pleasures. To the wowsers. The teetotilatarians. People without a life who want to make your life less colourful and less enjoyable, and with less access to the ingredients that make your private life more enjoyable. And in giving a say to the busybodies, they are taking it away from the communities themselves.

Fuck ‘em.

A holiday in Cambodia

Guest post by our roving Asian correspondent Suzuki Samurai
As some of you may know, I’ve now moved in from China to Cambodia—to a place about 2 hours north of Phnom Penh though only 40km away, which tells you something about infrastructure here. It’s a very dusty and poor little village straddling a highway that’s been still-in-progress since progress first began. I’m here for two months.
I’m working for a German NGO that contributes funds to a school for the poor; the only subject being ‘taught’ is English. The students, all 400 of them, come from desperately poor households; their parents are mainly subsistence farmers who eke out barely enough to eat—mainly rice. If they produce any meagre surplus they exchange it for meat, flour, or veges with their neighbour or local stall holder. The kids are grubby, but somehow their parents still manage to keep them in crisp white school shirts. These kids are the most charming little buggers that I’ve ever had the pleasure of being around.
My job is to show the local state teachers—who teach at this school in the afternoon—how to teach English as a Second Language (ESL) more effectively. Normally this would be simple enough. Given however that English is a second language to the teachers themselves, and the classes contain anywhere from 25 to 45 students, it makes the task of training them to any degree at all nigh on impossible, though I shall endeavour regardless.
The Germans arrived today.  That is, some of the honchos and a number of donors of the NGO arrived today. They took about 18 kids from the poorest families to the local market and bought them all clothes & shoes. They also bought $1000 dollars worth of rice, which will feed the same poor families for about a month. Oh, and there is to be a graduation ceremony at the school on the 27th of January.  To support that, the good Germans bought (as lucky-dip giveaways for said graduates) school bags, badminton sets, dictionaries, and 3 brand spanking new bikes.
Typical Village Scene with a UWS School Ratanakiri CambodiaTomorrow, I present a report on how to improve our teaching. The report will also include expenditures they’ll need to make on such things as making the place safer—and, no, I’m not talking about cotton-wool safe as is the norm in our own over-the-top, padding-on-everything kids’ environments, but simple things that Cambodians don't seem to see, such as: live, exposed electrical wiring; hot cooking fat on a wonky table in a space where kids play; reinforcing steel and other  sharp pointy building materials smack dap in the places kids use to run laps; and toilets that, while completely unsanitary, are still not quite as bad as Chinese school toilets.  And as there will be Cambodians in the meeting as well, I’ll have to be at my sensitive best.  So it will be interesting to see how that goes.
Anyway, that’s me at the moment.
[Picture shows a UWS school in rural Cambodia, not necessarily that in which Suzuki is working]

Tuesday, 15 January 2013

SUMMER SNIPPETS: ‘Migrations & Cultures,’ by Thomas Sowell

Migrations And Cultures: A World ViewMore interesting snippets I highlighted during my summer reading, this time from Thomas Sowell’s Migration & Cultures, part of his Race & Culture trilogy.  (Send a copy to Tariana Turia.)

Cultures are not merely customs which people have a sentimental attachment, or badges of “identity” which permit them to engage in breast-beating. Cultures are particular ways of accomplishing the things that make life possible—the perpetuation of the species, the transmission of knowledge, and the absorption of the shocks of change and death, among other things.  Cultures differ in the relative significance they attach to time, noise, safety, cleanliness, violence, thrift, intellect, sex and art.  These differences in turn imply differences in social choices, economic efficiency. and political stability.  Though cutures transcend race, particular cultures are obviously often associated particular racial or ethnic groups. Australians are Europeans, regardless of what geography may say…”

There is no reason to doubt that individual mental capacity was as great as ever, or that as many potential geniuses were born during the Dark Ages in Europe as during its eras of the most shining achievements. What was lacking was an ability to “avail themselves of the great bank and capital of nations and ages,” as Burke phrased it in a different context.  The institutions of such cultural transmission were simply gone with the collapse of Roman society.”

It may sound noble to say that cultures are merely different, not better or worse in any way, and that it is all a matter of perceptions and preferences.  But this argument contradicts itself by saying that one way of looking at cultural difference is better—the way of cultural relativism preferred by a fringe of of contemporary intellectuals, rather than the way preferred by the vast majority of other human beings around the world and down through the centuries.
    “These cultural differences do not matter only if cause and effect do not matter…”

SUMMER REPRISE: Cue Card Libertarianism -- Constitution

jeffersonIn case you hadn’t noticed, the government has a committee working quietly under the aegis of Pita Sharples and Bill English towards entrenching the Treaty of Waitangi in a constitution a “constitutional review.” The committee, comprising a number of government and tangata whanua toadies, has been examining “the role of the Treaty of Waitangi within constitutional arrangements,” “how New Zealand's legal and political systems could better incorporate Maori,” and “whether New Zealand needs a written constitution.”

I doubt, if one emerges, it will be one that Thomas Jefferson would recognise.

An appropriate time then to re-post (with new links!)my Cue Card on what a constitution is for.

Cue Card Libertarianism -- Constitution

Why do we need a government at all? James Madison puts the argument in a nutshell:

If men were angels no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.

Here’s the essential argument against anarchy, and for a constitutional republic: Because men are not angels, and government does need to be controlled.

But how?  That’s the question.

Let’s start with the purpose of government.  Government in essence is like a guard dog*: to protect us from being done over by others. However, if that dog is badly trained and it gets off the chain, we can be badly savaged -- more than we would have been without the dog.

A constitution is our means of chaining up the government and training it to act only in our protection.

As I’ve said already in these Cue Cards, the task of government is to protect us against physical coercion and its derivative, fraud. Good government is the means by which retaliatory force is brought under objective control. A good constitution, properly written, brings the government itself under objective control.

Such a constitution was the intent of America’s Founding Fathers, a clear and understandable document delineating a government that protects individuals’ rights, but after nearly two-hundred years the success has been only partial. Building on the success of the US Constitution and seeking to close the loopholes exploited since its introduction, New Zealand libertarians have written what we call A Constitution for New Freeland summing up what a good constitution should look like, and why:

  • The job of government is to protect our rights—a ‘Bill of Rights’ clearly outlines the rights to be protected.
  • The job of government is not to infringe the liberties of its own citizens without due process of law—a ‘Bill of Due Process’ clearly outlines under what circumstances and in what manner those liberties may be breached, and for what purpose.
  • The US Constitution has suffered from interpretations that have often been at odds with the declared intentions of the Constitution’s authors—the Constitution for New Freeland puts the intentions of its authors on the record in the ‘Notes on the Bills of Rights and Due Process.’
  • To prevent monopolisation of political power, a good government should have its powers separated—a formal statement is included as to how the rigorous separation is to be ensured, and each of government’s three branches – legislature, judiciary and executive – is given some specified veto power over all the others. The imperfect separation of powers in our present NZ constitutional arrangements shows the dangers of being without these essential checks and balances on political power.

Every good constitution relies on one further, crucial, restraint on the growth of Omnipotent Government: significant public understanding and support for the constitution and its protections, without which politicians and advocates of a ‘living constitution’ can pervert the constitutional protections as easily as the simple agreements given in the Treaty of Waitangi have been perverted.

Further, the task of constitutional law is to delineate the legal structure of a country’s law; it must therefore be superior to all other laws, and law stepping outside the bounds of what is declared unconstitutional must be able to be struck down – an accessible Constitutional Court makes this possible.

The superiority of a constitution to all other law is both a good thing and a bad thing. What’s good is that once a watertight constitution properly protecting individual rights is in place, it acts to chain up the guard dog and to keep it on its leash for good. What’s bad is that once in place, a poor or anti-freedom constitution is very difficult to get rid of.

imageAs history demonstrates -- and the constitutional conference of 2000 and a previous Select Committee review of NZ’s constitutional arrangements foreshadows – a bad constitution poorly written can give the erstwhile guard dog control of the back yard and the house, and before you know it it’s chewing off your leg and attacking the baby. Rather than protecting us, it has no impediment at all to doing us over.

Liberty, as Thomas Jefferson suggested, requires eternal vigilance.

This is part of a continuing series explaining the concepts and terms used by libertarians, originally published in The Free Radical in 1993. The 'Introduction' to the series is here.

* Yes, you really do have to watch your spelling!

Monday, 14 January 2013

The Fiscal Cliff: An Opportunity Avoided

Guest post by Bud Conrad of Casey Research on the so-called “fiscal cliff” - perhaps it was a bullet dodged in the short run, he concludes, but in the real long-run an opportunity was missed to hit the real target: runaway spending, which is now clearly out of political control.

The Fiscal Cliff: An Opportunity Avoided
By Bud Conrad

The label "the fiscal cliff" evoked the fear that something terrible was about to happen if the US Govt’s previously legislated spending cuts and tax increases came into effect. From my point of view, America’s deficits and debt are growing at an alarming rate and need to be cut back. The reason these laws were enacted was to offer markets some hope that the US Govt would eventually work toward eliminating our serious deficits. But the prevailing and wholly mistaken opinion that such drastic decreases in the deficit would slow the economy and bring recession created the impression that this "cliff" must be avoided.

The chart below indicates the size of the federal government's budget deficit. The blue bars reflect what would have happened if there were no legislative changes, and the harsh measures of tax increases and spending cuts occurred. The red bars reflects potential tax increases, the green spending cuts, and the purple is additional interest paid on the expanded debt as a result of bigger deficits. The cliff is seen in the rapid drop of the deficit in the first few years of the blue bars.

(Click on image to enlarge)

The result so far of government (in)action on this front is that tax cuts have been extended for families making less than $450,000 per year (for individuals, it's $400,000). Spending cuts have been delayed for two months, and the debt ceiling will have to be raised at that time. Compared to last year's structure, the main result is a relatively modest increase of $650 billion in taxes on the rich. Spreading this over 10 years means that the budget is roughly $65 billion less per year because of the higher taxes. In essence, after all the political discussion and finger-pointing, the politicians did what I expected: they kicked the can down the road and made very little change compared to last year.

The next chart shows the same baseline blue bars with the rather large extension of Bush-era tax cuts to the lower-income households, plus some small additional spending items. Since the blue baseline includes the expectation of sequestering of spending, it is my expectation that the actual deficits could be higher when no cuts are made with some future exercise of government can-kicking. While this chart appears to have lower deficits than shown in the previous range of possible outcomes, the more accurate conclusion is that we are still facing huge deficits, and the politicians really achieved very little in managing our long-term deficit problem. When they get back to meddling, the final deficits could be a lot worse than this analysis.

After the markets closed on Friday, January 3 (when we were less likely to be watching), the Congressional Budget Office released an updated calculation on the size of the cost of the new legislation: it is now $600 billion worse than discussed. They left out the accounting for paying interest on the increased debt for the period of the calculation. I've included the interest-rate cost in the chart below where I estimated it as being larger in the later years of the chart. $600 billion turns out to be only a modest addition. It will turn out to be higher when rates rise.

(Click on image to enlarge)

Here are a few more details on what was decided:

  • Employees will have up to $2,000 more taken out of their paychecks annually due to the expiration of the temporary payroll tax cut
  • The estate tax will increase from 35% to 40%, with the first $5 million worth of property exempt from being taxed
  • Capital gains and dividend tax rates will increase from 15% to 20% for higher-income earners
  • Alternative Minimum Tax will be raised to affect only higher-income households
  • Doctors will not see big cuts for treating Medicare patients
  • Unemployed workers will receive extended benefits

It is also sad to report that Washington has been operating as business as usual, including extending many strange programs like support for NASCAR racetracks, rum import duties, and even special support for buildings in New York City near the World Trade Center. While deplorable, these items are small in the macro picture. One new emergency-spending measure that was not included is $60 billion for hurricane Sandy relief, which will surely be added to the deficit soon. The beat goes on, with the inevitable result that the deficit continues. Fiat currency systems have no built-in limit.

World markets applauded this relatively modest package, because it confirms the short-term positive results of government deficit spending. The Dow Jones Industrial Average was up 300 points the day after the crisis was "eliminated." That means that the Federal Reserve will back up the federal government with more QE to keep the government rolling for the time being. Another result should be further downgrading of the US government debt by the rating agencies. Can you see a progression over another cliff? Downgrading raises the interest rate required by investors on US Treasuries; that increases the cost and the deficit. See the purple in the above chart? When rates rise it will get worse, much worse, than the Congressional Budget Office is letting on.

I had been trying to ignore the massive, blanketed coverage by our media of this political circus. I knew ahead of time what the result would be from this deficit-cliff exercise. When it comes to holding the line against more government deficits, spending, and taxing, our government is dysfunctional. This event is more seminal than the results indicate: we can expect the politicians to repeat this process in a couple of months, and another couple of months, and so on and so on until there is finally and inevitably a major loss of confidence in the dollar. There will be no return to fiscal responsibility. My point is simply this: we are already beyond the point of ever returning to a sensible, balanced-budget system. We may be distracted by wars, some crazy or false-flag terrorist event, or by even a natural disaster, but the conclusion is already inevitable: The US dollar will be toast; Treasuries are a dangerous investment; interest rates will start rising; and even the massive Federal Reserve manipulation supported by the banking cartels will be unable to overcome that. We will likely start in a slow fashion his year and will escalate out of control in the decade ahead.

We need to understand the implications of this recent event, and - as this small step confirms - that promises of future fixes will be complete shams. Remember when President Johnson said that there would be no repercussions from removing silver coins from our currency? A silver quarter alone is now worth around $5.50. And that's not because silver is different; it's because dollars are heading into the toilet. Protect yourself!

In the long run, the fiscal-cliff deal should not be celebrated as if it were a positive event. It is far from balanced, considering the much bigger government-debt problems that we face as a nation. In essence, this action was an opportunity to take real measures to curb our deficits, but the action taken has drifted us further along the path of fiscal irresponsibility.

Author of the new book Profiting from the World's Economic Crisis, Bud Conrad holds a Bachelor of Engineering degree from Yale and an MBA from Harvard. He has held positions with IBM, CDC, Amdahl, and Tandem. Currently, he serves as a local board member of the National Association of Business Economics and teaches graduate courses in investing at Golden Gate University. Bud, a futures investor for 25 years and a full-time investor for a decade, is also a regular lecturer for American Association of Individual Investors. In addition, as chief economist at Casey Research, he produces original analysis for Casey Research, including unique charts and research on the economy and investment markets.

DOWN TO THE DOCTOR'S: The land of the sinking sun

_McGrath001Libertarianz leader Richard McGrath takes the new Japanese Prime Minister into his clinic for a once-over.

Japan Pumps More Money Into Economy - The Japanese government has a bold new blueprint for the economy that will create over half a million jobs. At least, that’s what the headlines tell us.

What a cunning plan! It's never been tried anywhere before. You see, they've come up with this great idea where if you fire up the printing presses and make lots of money tokens, everyone will be richer. There will be a vicious cycle of spending and an upwardly spiralling standard of living, an unstoppable chain reaction of wealth creation until the whole Japanese population are living like the Sultan of Brunei.

I hate to break it to the Japanese government but this won't be the first time governments have tried to "stimulate" their country's economy by producing money tokens. President Obama tried it with QE1 and QE2 - and is trying it on an ongoing and indefinite basis with QE3. Any recovery the United States makes will come at the expense of a collapsing U.S. dollar, and eventually the nightmarish prospect (for some) of the greenback being supplanted as the default world currency.

In fact, it’s not even the first time the Japanese government has tried to “stimulate” their economy with phoney money and phoney “stimulus.” They’ve been doing it for two decades since their economy first fell into a hole, and the result of their “stimulus” has only been to make matters worse. In fact, it’s not even the first time this Prime Minister has tried it: in his previous (short) term as PM he kept the printing presses going, as it was held by his economic advisers a good PM should.

Much of these new Japanese money tokens however will be used on rebuilding after the tsunami and earthquakes-- which wouldn't be an issue if all property was privately owned and responsibility for insurance lay with owners; on 'support for regional economies' (read pork-barrelling and cronyism); and on 'investment’ in education (why not let the private sector, and the pupils and their parents, provide their own solutions to educational demand in the affected areas?) and on social security (if you can possibly call that “investment”--probably needed for those who have paid taxes all their lives and are thus reliant on a government pension, especially once the govt chews through their savings, but what about making a start to liberalising Japan’s tumescent welfare system by stopping payments for people who don't work?).

The Japanese government, by the way, has already foisted upon its people the world's highest debt relative to GDP (at 236% in 2012) and the second highest absolute debt in dollar terms. Interest payments alone, even at the historically-low current rates, take up around half of the government’s current tax receipts.  The IMF can see no option other than raising the consumption tax to relieve Japan of some of its debt, but even this is much to little and far too late. And from a Keynesian point of view, won't that tend to depress so-called “aggregate demand”? Oh dear!

The classical liberal approach to the mess in Japan would be to stop government from intervening in the economy altogether—let  the market sort out its delinquent traders, allow them to be liquidated and their assets redeployed into more profitable ventures. Let prices fall to a sustainable level so folk can make use of the little real money they have left, and businesses can get going again properly on sustainable and more profitable footing.

Instead of which, the government’s  'support for regional economies' will prop up failed enterprises and allow them to continue to operate with an unfair advantage over their competitors (about which, when it happens in NZ, the Anti-Commerce Commission does nothing). And prices will continue to be propped up, putting them above what they need to be to make businesses pay.

In any case, the state should not need to print money—private banks are quite capable of doing this, as they do in Hong Kong and other jurisdictions where they produce real (asset-backed) money. Printing money tokens however that debase the currency and destroy the livelihoods of those on fixed incomes should be an offence worthy of imprisonment for any politician that tried it, not the basis for knighthoods and other rewards.

See ya next week!  
Doc McGrath

I’m a sexist.

According to this Listener survey, I’m a “hostile sexist.”

The survey’s “reasoning” seems to be if you distrust feminists, then you must necessarily be a misogynist.

SUMMER REPRISE: Cue Card Libertarianism -- Common law

Another post from the archives, made topical again by my summer reading.

Common law arose in England almost by accident, but much of the English-speaking world has benefited from its property-rights based solutions to otherwise complex problems.

What began in the late twelfth-century as a formalisation of existing customary law, was to become by the end of next century later (mostly because of King Edward I, known as Edward Longshanks) a way of dealing in an ordered, uncomplicated way with the legitimate concerns of his subjects.

What Longshanks was trying to solve was what we might call ‘The Problem of the Chickens.’ Traditionally, subjects would petition the king in person over their grievances, which were mostly about their neighbours. Edward, also known to his friends as The Hammer of the Scots, preferred to be up north hammering Scots rather than sitting at home surrounded by his subject’s chickens, about which an inordinate number of complaints were commonly raised.  (“My neighbours chickens ate my crops.” “Go ‘way with you, of course they didn’t! Just look at their innocent faces…”)

Edward reasoned that a system of courts common throughout the land could easily sort such complaints using principles of customary law common to them all. For instance, the easiest way to resolve disputes about neighbours’ chickens damaging a plaintiff’s vegetable garden was to determine 1) whose chickens; 3) whose garden; and 3) what damage.

Thus was born the simplicity and beauty of the common law system. Common law became property-based, and was focussed on specific harm or damages – it focussed on determining the rights in a property, and on finding remedies to damage caused by specific nuisance or trespass. Common law held that those who had rights in property were entitled to the quiet enjoyment of that property; that a man’s land and his house were his castle, and that protecting it from harm was his right.

Common law was also case-based rather than statute-based, and was tied by precedent: decisions made in cases using these guiding principles (which were held to be the ancient and customary law of the land) were made common to all similar cases by the principle of stare decisis (Anglo-Latin pronunciation “starry disSISus; literally “Let the decision stand”), so that decisions were consistent across the country, and over time.

Common law was simple enough that the principles determined in these cases were quickly codified by writs that allowed property-owners easy access to the protection of law for common causes of action. By the eighteenth-century the laws of nuisance and trespass were already highly sophisticated, and were to become more so as the Industrial Revolution and the railway age took shape.

Rights to light, to air, and to support were widely recognised as being a part of the peaceful enjoyment of land; rights associated with water and protections against noise, smell and other pollution were clear and in place; remedies for trespass and nuisance were well-known and based on the principle that a defendant should acquire no value thereby.

The valuable principle of ‘coming to the nuisance’ was established (and then sadly in some jurisdictions dis-established); as was the principle of a ‘bundle of rights’ being associated with land, and some of those rights being acquired over time by ‘prescription.’

Easements over land and voluntary restrictive covenants that attach to land in favour of particular neighbours were also recognised, offering (as did the ‘‘coming to the nuisance’ doctrine) a peaceful way to negotiate neighbourly relations without the ruler needing to do anything other than file papers. Easements are registered with titles, and can be traded and removed: You might for instance agree to protect a neighbours’ view over your land (a ‘view easement’) in return for the neighbour keeping a large tree on his that you like (by either a restrictive covenant or ‘conservation easement’). In this way a ‘net’ of rights is voluntarily built up reflecting the values of the right-holders rather than that of the legislators.

Much of the apparent confusion in the common law was made simple by eighteenth-century legal scholar William Blackstone, who with a few simple principles explained “the mass of medieval law” in England. Blackstone’s Commentaries on the Law of England were to become the bible of English-speaking law for more than a century. In the late nineteenth century for example a young circuit lawyer in rural Illinois wrote the only law books he needed to carry in his saddlebag were a copy of the Constitution, and his volumes of Blackstone. That lawyer’s name was Abraham Lincoln .

The objection is sometimes raised that as common law is ‘judge-made’ law it is consequently somewhat arbitrary, and open to judicial abuse.  Blackstone for one would disagree.  He held that judges’ responsibility was not to make law but to find the law; that is to say that with the facts laid out before them, it is the job of judges to determine the relevant principles in the matter, and apply them. Thereafter, when the context of subsequent cases was the same or similar, the principles applied would (by the principle of stare decisis) be the same. And when the context was a new one (as was with so many cases as the Industrial Revolution took off) the job was to see how the leading principles applied in this new context

Many aspects of common law are now regularised as a part of Tort law (and the best way to see them is to pick up an early twentieth-century book on the Law of Torts), but the explosion of statute law in the last fifty years has meant that duties imposed by statute now encumber and complicate what was once the simple but remarkably sophisticated realm of common law.

Common law is not just simpler than statute law, it is also relatively immune to political hijack – one particular reason for its  unpopularity with big government advocates. Rights are protected in practice rather than just proclaimed on parchment, and ignored thereafter.

Further, unlike statute law, common law always has a plaintiff or victim – there are no ‘victimless crimes’ under common law. Finally, it is the pre-eminent law to protect both environment and property, and unlike zoning laws, anti-pollution statutes and the Resource Management Act it has over seven-hundred years of sophistication in actually doing so.

English common law brought real property rights into the world and made all Englishmen equal before the law – in doing both it helped make England and her colonies wealthy and free. Noted Adam Smith in his Wealth of Nations: “The security of the tenant is equal to that of the proprietor.” He concluded that

Those laws and customs [of the common law], so favourable to the yeomanry, have perhaps contributed more to the present grandeur of England than all their boasted regulations of commerce taken together.

Unfortunately the “boasted regulations” of today have turned Smith’s insight on its head, and removed many of the rights that common law once protected. Not least among those rights are property rights.

This is part of a continuing series explaining the concepts and terms used by libertarians, originally published in The Free Radical magazine in 1993. The 'Introduction' to the series is here.