Don’t look now, the govt’s just withdrawn all your money

You don’t have to live in Cyprus to find you bank account stripped by government agents.  Just ask Queensland pensioner Adrian Duffy, who emerged from a quintuple heart bypass only to find his bank had emptied his account, handing more than $22,000 to the Federal Government—the result of a move last year to strip every bank account in the country the government deems is being under-used.  The money was only returned when a newspaper took up their cause.

Governments all around the world are short of money, and they’ll do almost anything to get it.

Stealing from folk on their sickbed—and you’re not at all well when you're having a quintuple heart bypass—is a measure of how desperately they’ll grab it.

[Hat tip Michael D.]

Richard Branson to Class of 2013: Do Something Bold

Richard Branson founded and ran Virgin Records, Virgin Atlantic, Virgin Airlines, Virgin Megastores, Virgin Radio, Virgin Rail and Virgin Galactic. Among other ventures. Leaving school at 15 clearly did him little harm.  Here’s his speech to a graduating class who didn’t follow his early example.

Class of 2013: You'll Never Again Be so Unburdened; Do Something Bold

The best advice I could give any graduate is to spend your time working on whatever you are passionate about in life. If your degree was focused upon one particular area, don't let that stop you moving in another direction.

If college hasn't worked out for you, don't let that put you off. Virgin's expansion into so many different areas is borne out of my insatiable curiosity to enjoy new experiences and pursue fresh challenges.

You may decide to take a break and consider your options. I would urge you to travel, take on new experiences and draw upon those when it comes to making the decisions that will shape your future. The amount of business ideas that people pick up from travelling the world is enormous. If you don't want to reinvent the wheel, you may find a business that works in another market that could be adapted for your own.

Gap years don't only have to happen before you go to college. Actually, a good option is to travel instead of going to university. You can work and still have a lot of fun along the way: you won't create as much debt, you'll learn an awful lot and may come back with some great ideas.

Equally, if you spot an opportunity early on and are really excited by it, throw yourself into it with everything you have got. Be ambitious. There probably won't be another time in your life when you have such freedom of opportunity. Grasp it with both hands.

If you can't find an opening that fits what you want to do, why not try to create one yourself? We always enter markets where the leaders are not doing a great job, so we can go in and disrupt them by offering better quality services.

Until this week I had never had a boss in my entire life. I lasted about five hours before Tony Fernandes sacked me, after throwing a tray of drinks over him while working as a stewardess on a flight! (It was all for a bet to raise money for charity, so I wasn't too upset.)

My own transition from education to a working life was pretty straightforward. I started Student Magazine at school and was spending an increasingly large amount of time working on getting it off the ground. The headmaster gave me an ultimatum: he said if I wanted to carry on with Student, I had to stop being a student. So I left to start my adventures in business.

Being dyslexic, I never excelled in the classroom anyway and entrepreneurship wasn't encouraged. I didn't even know what I was doing was called entrepreneurship until somebody told me!

However, education is absolutely crucial to success and to the progress of the world at large. As Nelson Mandela said:

Education is the most powerful weapon to change the world.

But education doesn't take place in stuffy classrooms and university buildings, it can happen everywhere, every day to every person. I was on a panel at a University in Australia recently and it turned out the only one of us onstage who had graduated was the Dean himself!

I have been offered to do graduation speeches over the years and did accept an honorary Doctor of Technology from Loughborough University. It was strange at the time, but now we have Virgin Galactic perhaps it's not so strange! I was chuffed to receive it, having left school at 15. It was a hell of a lot easier than going through university to get it!

If you are graduating, congratulations and good luck for your future. Every graduate - scratch that - every person has the chance to reach for the stars in their chosen field.

Photos: Richard Branson
Source: LinkedIn

ECONOMICS FOR REAL PEOPLE: Planning without central plans

Here’s your invitation for tomorrow night’s meeting from our friends at the Auckland University Economics Group:

We all go about our daily lives unaware of the plans others have made for theirs, yet somehow, for the most part, our plans coordinate. We go for a beer, and the pubs have beer; we go to for hot chips and fine dining, and the city delivers. We leave the house with just pieces of printed paper and a plastic card, and fully expect all our reasonable needs to be met. (And even some of our unreasonable needs!)  And usually only notice the system that underlies this miracle when something goes wrong!

Tomorrow night at the Auckland University Economics Group we discuss this amazing phenomenon, of which our few examples here only scratch the surface. 

We discuss how price signals and the daily decisions of entrepreneurs between them coordinate the worldwide Division of Labour, and  the impetus that gives to economic progress; how planning is done without central plans, and how the various branches of business are kept in proper balance;  how 'Paris Gets Fed,' and how central planning and price controls put this at risk;  and how consumer advocates harm consumers, and how speculators do so much to help them!

All this and much more, including five simple principles to  help you understand how the market almost automatically coordinates the economic activity of every person on the planet, and why the result is order rather than an “anarchy of production.”

    Date: Thursday, May 23
    Location: Room 215, Level Two, Business School
   Time:6pm

We look forward to seeing you there. As always, all are welcome to attend.

PS: Check us out on the web at our Facebook Group

Nigel Farage on Europe

UK Independence Party leader Nigel Farage is one of the world’s few politicians who says what he thinks, and seems to mean what he says.  Even when he’s wrong—as he is when he talks about immigration.  He talks here  to the Australian Broadcasting Corporation (ABC) about Europe’s many problems, and in so doing displays some of his own:

[Hat tip David McGregor]

The known universe

Commander Chris’s space-borne rendition of Bowie’s Space Oddity has helped revive popular interest in the universe around us.

Which is so vast as to be almost incomprehensible—but not wholly indemonstrable:

[Hat tip Whale Oil]

Maturing with H.L. Mencken

Look in any good dictionary of quotes, and after Shakespeare and Oscar Wilde you’re likely to find one H.L. Mencken coming in third for the number of quotes included. Samples: “Democracy is the theory that the common people know what they want, and deserve to get it good and hard” – “Puritanism: the haunting fear that someone, somewhere is having a good time” – “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.”
Guest poster Bill Bonner argues there are more reasons to read Mencken than just his undeniable pith.

The writings of Henri Louis Mencken — the Sage of Baltimore — one of the most influential American writers of pithy prose  -- have been a constant companion for me since the start of my writing life. The brilliance, the language, the insight, the derring-do opinionating, the history, the astounding literacy — it’s all here, and it all flows seemingly without limit. All these features are combined in one mind and life, yet none of these features is the reason why it is important to read Mencken. The most important reason is that Mencken assists in the great struggle to free yourself from intellectual conventions and become a mature observer of the world.

To mature means to gradually let go of dependence on others and to depend on your own resources. It also means to accept responsibility for the judgments you make, and not slough them off on other people. It is the same with thinking. To mature means to break loose from canned forms of thought that you once accepted without question, and instead see the world for what it is. It is the essential step toward living a free life.

Modern democracy seems to war against this kind of maturation. Take a look at the best-selling political and financial books on the conventional lists. Their goal is to play to your biases, to bring you the comfort of having something you already think reinforced. In politics, it means cheering for party X over party Y on grounds that you accept ideology X over ideology Y. There simply is no large market for people who accept some of each or reject both.

In finance, it means believing that the world is either progressively coming together or falling apart. The evidence to support this either/or proposition is assembled in order to confirm as true what you would otherwise think.

This is the easy path. But it is not obtaining maturity. It is not thinking for yourself. It is dependence. It consists in shaping your thinking to a model forged by others. People who read only this way imagine that they are educating themselves. Actually, they are only gorging themselves on settled conventions.

If we really want to think hard and maturely, we need to encounter ideas that cause some element of discomfort. We need to leave our comfort zones and imagine that perhaps the mob is not as smart as people say. Maybe we can only find the truth of a situation in an opinion that cuts against the grain, is not represented by political party, and departs radically from settled orthodoxies. When we realize this, we enter on the road to intellectual maturity.

The thinkers and writers who can assist in this process are few. When they do appear, they disappear just as quickly for lack of champions. I fear this might be the fate of H.L. Mencken. For decades, he was there to stir the pot and work against mob opinion. This is why he opposed U.S. entry into World War I. This is why he was a literary progressive in times when most people were stuck in the past. This is why he ridiculed Prohibition when the entire Northeast religious and government establishment thought it was a brilliant idea. This is why he never shrank from flailing orthodoxies that were accepted by nearly everyone.

Throughout his career, as soon as he found a solid bloc of champions, he would lose them just as quickly. He was uncomfortable with popularity, assuming it was a sign that he needed to shake things up a bit. For example, by the late 1920s, he was the darling of the literati and the toast of the town. His attacks on the Hoover administration kept him in good graces, but then he turned his eye toward Franklin Roosevelt and ridiculed the New Deal for the monstrosity that it was. His support peeled away, and he once again found himself alone. He further dissented on the second charge for war in his lifetime and permanently fell out of favour.

Mencken was a champion of the individual, of rationality, of the human mind, in a century of collectivism of every sort. This is why he seriously doubted that individualism could triumph in an era of mass political and religious manias. As his American Credo showed, he understood American culture as few others before or since have. He loved America and its multifarious cultures, but he also saw that there was an intractable problem that would prevent America from ever achieving its hope. That flaw he summed up with the word “puritanism.” He was referring not so much to a narrow religious sect, but to an outlook on life that sought the destruction of sin and imperfection and, in so doing, warred against human volition and freedom itself.

Mencken never sought to bring comfort to his readers. He sought to disturb and dislodge biases, pointing to uncomfortable truths about the world around us. In this sense, he was one of the few truly independent thinkers of the last century. He left a mighty legacy that allows us to study under him — not so much the specifics of what he said, but rather how he thought. Everyone who seeks to live a freer, happier, and more prosperous life can now look to him as an example of what it means to exercise truly independent thinking. To be his student means to be grounded even as those around you are being buffeted about by the winds of public opinion and political manipulation.

It’s all summed up in the revolutionary idea of Mencken’s core credo: “I believe that it is better to tell the truth than a lie. I believe it is better to be free than to be a slave. And I believe it is better to know than to be ignorant.”

Sincerely,
Bill Bonner

Bill Bonner is the founder and president of Agora Publishing, and the principal author of The Daily Reckoning.
He is the co-author of the books Financial Reckoning Day: Surviving The Soft Depression of The 21st Century, Empire of Debt, and Mobs, Messiahs and Markets.
This article first appeared at Laissez Faire Today .

Harder living in Hamilton [updated]

The notion of the so-called “living wage” essentially is that employees are to be paid not for what they do, but for how many mouths they have to feed.

It’s called a “living wage,” but to the extent the wage is paid above what the wage-earner produces, the extra has to be paid for by someone—whose own living is thereby made correspondingly harder. And to the extent the wage is made irrelevant to what wage earners produce—their production being the reason they were employed in the first place—their incentive to produce  is disconnected from their incentive to earn.

At a stroke this transforms wage-earners from honest earners to charity cases.  And it transforms wage-payers from businesses into charitable arms of the government. Transforms them by compulsion.  Or, if its arms of government paying the so-called “living wage,” it further transforms all ratepayers (and rent payers) from free people into milch cows.

Odd then that those cheering the “living wage” decision by Hamilton Council like to ignore this. Because this decision to pay Hamilton Council employees a “living wage” is made at the expense of Hamilton Council’s ratepayers,  whose own manner of living (without any say in the matter) will now be correspondingly less prosperous for the compulsion from above to pay others more for less.

The decision is, in short, immoral.

And a less likely way to begin making an Affordable City for ratepayers is hard to imagine.

UPDATE: Dave McPherson told Leighton Smith this morning that the cost for these higher wages is all coming out of “existing budgets,” so therefore “this is no cost to ratepayers.” But if existing budgets can find the amount necessary to pay for this decision, they (and all future budgets) could also have been dropped by the amount of this unjustified increase. So the decision has permanently cost ratepayers the amount of that foregone decrease.

Advice for the day: Drink responsibly

Oliver Hartwich, the Euro, and the “dangerous naivety” of floating exchange rates

We’re famous!

I’m very happy to see that a debate on the Euro crisis hosted by our Auckland University Economics Group earlier in the month has now slipped into Australia’s wide read Business Spectator.

Oliver Hartwich from the NZ Initiative talked to our Group a few weeks back on The Never-Ending Euro Crisis - the Anatomy of an Economic Policy Disaster, in which he

covered the history and pre-history of European monetary union, Europe’s fiscal and monetary problems, the eurozone’s governance issues and their political implications.
    But in the ensuing discussion, one of the economics professors, a renowned Austrian School theorist, asked two questions that were both unbelievably simple and incredibly sharp. The first: “So what does this euro crisis really have to do with money?” And the second: “Why have you not talked much about markets in your presentation?”
    At first, I was a little startled by these two questions. After all, when you give a whole lecture on the failings of a monetary union, surely this must have something do with money, right? And secondly, didn’t the euro crisis play itself out in the markets? Isn’t that where all the drama of these past years happened? How could I not have talked about markets?
    After the initial shock, I managed to give a reasonable answer to both his questions. However, I have been thinking about them for the past few days. And the more I do, the more it seems to me that they are not only valid questions: they also provide the answers to many of Europe’s current problems.

He’s right. They do. But because he’s left himself in the intellectual straitjacket of thinking that floating exchange rates would be the only way out, he doesn’t see that answer. 

How do economies adjust?

You see, Oliver insists

without the euro currency many of the problems we now observe would have never developed… trade imbalances between European nations probably would have corrected themselves through adjustments in the exchange rate. This is how such tensions had always been overcome when Europe still had many national currencies, and it certainly would have provided temporary relief…

Temporary relief only, because as he identifies, the real crisis “is really the crisis of the countries’ respective economies” :

These are economies that are in desperate need of economic reforms. Their problems have little to do with monetary union as such; the union merely brought their problems to light. Without the escape route of flexible exchange rates, their deep-seated problems could no longer be glossed over.

Note the first and last sentence: “These are economies that are in desperate need of economic reforms… Without the escape route of flexible exchange rates, their deep-seated problems could no longer be glossed over.”

Now, remove the intellectual straitjacket, and see what happens: The problem of the single currency zone with economies in desperate need of reforms suddenly becomes the solution. If no other escape route is offered them (and herein lies the present problem) the discipline provided by the single currency encourages the reform in those economies that is so desperately needed, and gives the public a reason to demand it.

Maybe the Euro is not so bad after all

The leading Austrian theorist in Spain, Jesus Huerta De Soto makes this point in “An Austrian defence of the Euro”:

The introduction of the euro in 1999 and its culmination beginning in 2002 meant …  the different member states of the monetary union completely relinquished and lost their monetary autonomy, that is, the possibility of manipulating their local currency by placing it at the service of the political needs of the moment. In this sense, at least with respect to the countries in the eurozone, the euro began to act and continues to act very much like the gold standard did in its day.

Simply put, the “fixed exchange rates” of a Bretton Woods system, of a gold standard, or of a single Eurozone currency—in which systems, trade imbalances are corrected through adjustments in prices and interest rates—all impose monetary discipline on a government, whereas the monetary nationalism of floating exchange rates allows printing press money to let rip.

Because Hartwich still seems to contemplate the crisis through the intellectual cracked lens of floating exchange rates however, he doesn’t see this.  He still sees floating exchange rates as the only way to make the markets correct the issue.

But the big Euro problem really is a lack of market process—as our Auckland Austrian theorist above seemed to be suggesting. And the fly in the ointment here is really the central bank.  The main thing lacking in the present arrangement of the Euro currency unit—in which a central bank imposes interest rates across a whole continent—is any mechanism whereby price signals are able to work their magic.  Because if the central bank got out of the way and stopped dictating interest rates across the whole zone, there is a benevolent mechanism present in the system of (essentially) fixed exchange rates that would re-emerge: encouraging investors to withdraw marginal quantities of their money from relatively overheated areas (where prices are higher and interest rates too low), and delivering it to areas shorter of investment capital (where prices are lower, and interest rates paid to investors are higher).

And then instead of acting as a doomsday machine, the main thing that’s destroying the setup presently (the monetary transfer system) would instead become the mechanism encouraging each economy’s reform.

Fixed  versus floating exchange rates

Since this issue, of fixed versus floating exchange rates, is so little canvassed these days it’s worth making it a final postscript—in the hope, perhaps, that you too might rethink the issue.

It was Hayek who in his 1937 book Monetary Nationalism and International Stability argued

flexible exchange rates preclude an efficient allocation of resources on an international level, as they immediately hinder and distort real flows of consumption and investment. Moreover, they make it inevitable that the necessary real downward adjustments in costs take place …  in a chaotic environment of competitive devaluations, credit expansion, and inflation

Which almost exactly describes the modern world of endless currency wars, where desperate economic problems are able to be put off for tomorrow by the printing press—with all the destruction that creates.  De Soto quotes Hayek from 1975, where he summarises his argument

It is, I believe, undeniable that the demand for flexible rates of exchange originated wholly from countries such as Great Britain, some of whose economists wanted a wider margin for inflationary expansion (called "full employment policy"). They later received support, unfortunately, from other economists[4] who were not inspired by the desire for inflation, but who seem to have overlooked the strongest argument in favor of fixed rates of exchange, that they constitute the practically irreplaceable curb we need to compel the politicians, and the monetary authorities responsible to them, to maintain a stable currency. (emphasis added)

To clarify his argument yet further, Hayek adds,

The maintenance of the value of money and the avoidance of inflation constantly demand from the politician highly unpopular measures. Only by showing that government is compelled to take these measures can the politician justify them to people adversely affected. So long as the preservation of the external value of the national currency is regarded as an indisputable necessity, as it is with fixed exchange rates, politicians can resist the constant demands for cheaper credits, for avoidance of a rise in interest rates, for more expenditure on "public works," and so on. With fixed exchange rates, a fall in the foreign value of the currency, or an outflow of gold or foreign exchange reserves acts as a signal requiring prompt government action.[5] With flexible exchange rates, the effect of an increase in the quantity of money on the internal price level is much too slow to be generally apparent or to be charged to those ultimately responsible for it. Moreover, the inflation of prices is usually preceded by a welcome increase in employment; it may therefore even be welcomed because its harmful effects are not visible until later.

Hayek concludes,

I do not believe we shall regain a system of international stability without returning to a system of fixed exchange rates, which imposes on the national central banks the restraint essential for successfully resisting the pressure of the advocates of inflation in their countries — usually including ministers of finance.

In which Keynes and Friedman see eye to eye

Perhaps I could point out too, as Ludwig Von Mises did, that floating exchange rates were much loved by Keynes…

Stability of foreign exchange rates was in [big-spending governments’] eyes a mischief, not a blessing. Such is the essence of the monetary teachings of Lord Keynes. The Keynesian School passionately advocates instability of foreign exchange rates.

Much loved they were too by Milton Friedman, who in this area as in so much else shakes hands with John Maynard Keynes. 

David Stockman, who in his recent book recounting the destruction of western capitalism by its supposed defenders, gives Milton Friedman the punch in his gut he deserves for his role in fulfilling the floating Keynesian dream, nailing him and US President Richard Nixon who between them put the final nail in the gold standard and instituted the modern world of floating exchange rates.

It was Friedman who first urged the removal of the Bretton Woods gold standard restraints on central bank money printing, and then added insult to injury by giving conservative sanction to perpetual open market purchases of government debt by the Fed.  Friedman’s monetarism thereby institutionalized a regime which allowed politicians to chronically spend without taxing…
    Nixonian cynicism and Professor Milton Friedman’s alluring but dangerously naive doctrines of floating exchange rates and the quantity theory of money picked up where Franklin Roosevelt left off. Notwithstanding Friedman’s aura of intellectual respectability, Nixon's crass political manoeuvres amounted to a primitive economic nationalism that harkened back to the worst of the disaster that Franklin Roosevelt had first sown in the 1930s…
    [B]y unshackling the Fed from the constraints of fixed exchange rates and the redemption of dollar liabilities for gold, Friedman’s monetary doctrine actually handed politicians a stupendous new prize.  It rendered trivial by comparison the ills owing to garden variety insults to the free market, such as rent control or the regulation of interstate trucking…
    The very idea that the FOMC would function as faithful monetary eunuchs, keeping their eyes on the M1 guage and deftly adjusting the dial in either direction upon any deviation from the 3 percent target, was sheer fantasy…

He gave more reasons for his disgust in a 2011 speech amounting to another punch to Friedman’s solar plexus.

“That the demise of the gold standard should have been as destructive as it was of monetary probity can hardly be gainsaid.  Under the ancient regime of fixed exchange rates and currency convertibility, fiscal deficits without tears were simply not sustainable – no matter what errant economic doctrines lawmakers got into their heads. Back then, the machinery of honest money could be relied upon to trump bad policy.  Thus, if  budget deficits were monetized by the central bank, this weakened the currency and caused a damaging external drain on the monetary reserves; and if deficits were financed out of savings, interest rates were pushed up – thereby crowding out private domestic investment.”

and

“During the four decades since [Richard Nixon closed off the last monetary tie to gold], the rules of the game have been profoundly altered.  Specifically, under Professor Friedman’s contraption of floating paper money, foreigners may accumulate dollar claims or exchange them for other paper monies. But there can never be a drain on US monetary reserves because dollar claims are not convertible. This infernal regime of fiat dollars, therefore, has had numerous lamentable consequences but among the worst is that it has facilitated open-ended monetization of US government debt.”

and

“So at the end of the day, American lawmakers have been freed of the classic monetary constraints.  There is no monetary squeeze and there is no reserve asset drain.  The Fed always supplies enough reserves to the banking system to fund any and all private credit demand at policy rates that are invariably low. The notion of  fiscal ’crowding out’ thus belongs to the museum of monetary history.”

and

“In fact, the United States is clocking a 10-percent-of-GDP-deficit for the third year running because this latest budgetary fling is just another episode in the epochal collapse of US financial discipline that began 40 years ago at Camp David.”

I think Messrs Stockman and De Soto might have a point.

Don’t you?

Karl Marx schools Russel Norman and David Shearer

It’s often forgotten that Karl Marx was an economist.  He got the wrong end of the stick on most occasions, but sometimes hit the nail right dead centre on the head.

For example, he said in the Communist Manifesto  that:

“The cheap prices of its commodities are the heavy artillery with which [ the profit system]…compels all nations, on pain of extinction, to adopt the [ profit]… mode of production.”

Russel Norman  and David Shearer evidently missed that passage of their bedtime reading when they claimed in their attempt to spike the Mighty River Power share float  that the government could provide power more cheaply because it did not have to earn a profit. The truth, as even Marx understood, is that  the search for profit  drives prices down.

He also schools every opponent of privatisation who thinks “we” already own these assets:

“The only part of the so-called national wealth that actually enters into the collective possessions of modern people is– their national debt.”

See, even a real communist can get things right twice a day.

[Hat tip Circle Bastiat]

Moon rise over Wellington

You can almost feel the earth move…

Full Moon Silhouettes from Mark Gee on Vimeo.

Photographer Mark Gee tried two years for the evening his opportunity finally came. Here’s how the fellow who sent it to me introduced it:

It was shot in January on a calm summer evening, as people gathered on the Mt. Victoria Lookout point to watch the moon rise.
    This stunning video is one single real-time shot, with no manipulation whatsoever. The camera was placed on a hillside over 2 kilometres from the Lookout point, and was shot with the equivalent of a 1300mm lens…
    I honestly can't say enough good things about this video - from the magnitude of the visuals, to the intimate stories playing out with the people, to the sheer humbling nature of seeing the awe-inspiring reality of this giant rock in the sky that we so often don't stop to appreciate.
    One thing I encourage you to do is watch this on the biggest screen you have - don't waste it on an iPhone screen.

[Hat tip Dale Halling]

Troxell House, by Richard Neutra

Emulating “mid-century modern” may be the latest fashion in architecture—but if the emulators were to learn from original mid-century moderns like Richard Neutra that could become a very good fashion indeed.

His “Troxell House” was built in 1956 for Sidney and Arilla Troxell and his family, sold in 2003 to architect Charles Scott Hughes who renovated and expanded it in 2005.

The house features a reflecting pool, glass walls, birch doors, radiant-heat pipes under the concrete floors, recessed lighting (and a catwalk outside the master bedroom to make it easier to clean the windows.)

Oh yes, it just sold--for US$3.55 million. Clearly, mid-century modern still sells.

More photos, and a short story here.

PS: if you follow film, you might feel only a deviant could live in a place like this…

Oyler House - Movie Villains from Mike Dorsey on Vimeo.

Bubble finance brings Australasia a new world-historical moment

You might have noticed that the mantle of Australasia’s most highly valued company has been passed from one that produces resources from out of the ground, i.e., BHP, to one that creates credit out of thin air, i.e., the Commonwealth Bank of Australia. Close on the CBA’s heels is fellow credit-creator Westpac, said to be “within a good trading session of knocking BHP out of second position.”

Just so we’re clear, this is not normal. This is historically, a very important turnaround—a new world-historical moment. The turnaround has puzzled many people, but it shouldn’t have.

Well, that’s where you can thank Dr Bernanke and the [world] banking system. For start, banks can do something mining companies can’t – banks can create money from thin air in order to create an asset.
   Mining companies however, have to beg for money from banks, other financial institutions and investors. And rather than just stamping ‘approved’ on a loan form to create an asset, resource stocks have to spend millions to obtain their assets.

Financial Services Index – blue line; Metals & Mining Index – red line
Source: Google Finance

Get the difference: mining companies have to earn money;  whereas in the “new economy” created by the central bankers, banks literally create money—and in the last few “post-financial-crisis” years of central bank rule, they’ve been told to create as much as they possibly can.

And so they have. And so we arrive at this blessed moment in time, when profits are bought not by how much value you can produce, but by how close you are to the bankers’ printing presses.

It’s the same thing powering the “record highs” in US, Japanese and European stock markets. If you think the Nikkei, the Dow  and the Dax have risen this year around 35%, 20% and 10% respectively because US, Japanese and European businesses have got 35%, 20% and 10% more profitable, then I have a bridge, some government paper, and parcel of wrapped CDOs I can sell you.

Instead, each one has ridden to new highs on the back of an avalanche of paper promises exuded by central banks like the US Federal Reserve, and extruded out of lending banks like the CBA.

The idea that a central bank can artificially stimulate an economy without side effects is naive. The 1920′s and 1930′s saw huge leaps in industrial innovation, but it didn’t stop the Great Depression and more than a decade of misery.
    One problem with central bank meddling is that it creates an uneven economy.

This problem is magnified with every profit announcement favouring money printers over money earners—and exacerbated with every investor keen to ride this new bubble to the top.

Is present monetary policy rational? Only if you think it makes sense to deliver substantial short-term windfall profits to owners of stocks, bonds, and real estate—bought at the expense of any genuine long-term prosperity.

Hey, World Vision, leave my kids alone

Schoolchildren have been doing the 40 Hour Famine since what seems forever. Guest poster Jonathan Livingstone reckons they should stop.

Going Hard Out for the Hungry?

If ever there were a reason to apply the Eternal Vigilance principle to voluntary charity, World Vision would be it.

For World Vision has cooked up the kookiest of fund-raising schemes, one where kids get to go hungry to raise money for charity. Forget the old war veteran sitting alone and forgotten in his miserable rest home, there’ll be no visit for him from these kids. Nor a helping hand for an old crippled neighbour. Not even money raised by a good old-fashioned carwash or sausage sizzle. Hell no, God forbid that kids be encouraged to do something productive, to provide a service for reward. Instead, they are sent out to shame the reluctant into sponsoring them to punish themselves. To “GO HARD OUT FOR THE HUNGRY” in the ‘40 Hour Famine.’

One teacher told me their school had rejected the ‘40 hour Famine’ for health reasons, but other schools have enthusiastically embraced it, promoting it in a quasi-curricular fashion. Some senior students even tell me that if they want to be a prefect in their school, they are “best advised” to undergo ‘the Famine.’

Apart from the flippant disregard for the physical well being of the kids, there is the sheer gutlessness of the idea. I mean, what kind of person would ask innocent children to punish themselves on account of something which is not their fault, and over which they have no control? As if someone else’s poverty is somehow their responsibility, and their suffering will cure it.

These religious cranks, who want to assuage the guilt that they obviously feel on account of hungry people, should do their own stupid fast. Don’t try to make my kids do it for them.

To top it off, and even if a kid were under some obligation to “understand” the plight of the world’s poor and hungry, it is a bloody insult to suggest that they must hurt themselves in order to do so. Just as they do not need to hurt themselves to appreciate the horror of the Holocaust. Just imagine… “Now, Children, all stick your hands in the oven to show your sympathy for the Jews.”  The Department of Children would be all over you. Eventually.

The kids who do not buy into a “No Food challenge” are encouraged to endure some other form of self-deprivation instead. Some make a mockery of the farce by locking themselves in a room with their mates for 40 hours of time-wasting silliness on a pretext of “going without technology” - I can’t make up my mind whether the healthy cynicism of these kids makes up for the sheer waste of their time. Others might give up their cell phone. And just so the Trappists don’t feel left out of the self-denial fest, and just so the parents can enjoy a little suffering too, there is the option of the kid “not talking” for 40 hours (as if). Then, just when you think it can’t get any sillier, my daughter tells me one ‘famine’ suggested by the organisers is to forgo the toilet for 40 hours. You would have to wonder, wouldn’t you? (It would be gratifying to assume that to be a joke, but I can assure you the kids took them seriously. Adios to science, eh. ).

Although the World Vision pamphlet carries an expectation that a “NO-FOOD 40 HOUR FAMINE” is exactly that, no food (sorry, NO FOOD), my kids are told at school that they can drink ‘Just Juice’ and eat barley sugar. I’ve seen someone or other’s guidelines that stipulate one barley sugar every four hours, but I’ve got my doubts that your average 14 year old will go hungry while they have barley sugars in front of them. Like that bane of parents, the sugary birthday parties, only a lot worse - at least your average party comes between regular meals. I’m picking these kids “going hard out” for the hungry will instead, when their little tummies start rumbling, go hard out on barley sugars. They will get up in the morning and have barley sugars for breakfast, then lunch, then afternoon tea and dinner.

So on through the “GO HARD OUT FOR THE HUNGRY” pamphlet, through the new-age gobbledygook, past all the tear-off tax receipt coupons and the clichés, and I get to the “HEALTH GUIDELINES FOR THE NO-FOOD 40 HOUR FAMINE.” I don’t need my magnifying glass to read that parent-friendly offering, but I surely had to get out my x10 to read the fine print that followed, which I’ve magnified for you here:

World Vision does not accept any responsibility for children’s wellbeing during a no-food 40 hour famine.

Shall we say that again? The organisation encouraging children to starve for the sake of the world “does not accept any responsibility for children’s wellbeing” during the starvation diet they’ve done so much to encourage. Yes, gutless. But then I turn the pamphlet over and suddenly it gets worse than gutless. Because World Vision isn’t just asking the kids to hurt themselves on account of someone else’s misfortune, it is asking them to do so on account of a non-existent someone else.

For this year’s ‘Famine’ is raising money for the ‘hungry’ in Bougainville. An easy sell right? That natives, by definition, must be hungry? The problem is, it is not possible to be hungry on Bougainville, not unless all you eat is polar bear meat or something.

It is no accident that Bougainville was the darling of colonial planters. It has an almost identical population density to New Zealand (around 17 people per sq km), except that its climate is many, many more times more bountiful. I worked on Bougainville for a couple of years. I lived in a remote area but travelled all around the island, and I never ever saw a hungry person. Every village had plenty of land for gardens and ready access to a sea teeming with fish. Then there are the pigs, chickens, dogs, birds and so on, the thousands of acres of edible ferns, the flying foxes and the myriad of other edible species which thrive there. My house was surrounded by an uncontrollable overgrowth of papayas from seeds which I had casually tossed out the window while I was eating breakfast. The climate is so life-friendly there is an imported vine which is said to spread a mile every year. And every mile or so there is a stand of coconut palms, whose water alone contains sufficient nutrients said to sustain human life indefinitely.

Meantime, you’ve got to hand it to World Vision, it has managed to beat even Lloyd Jones at his own game of fiction. For not even Lloyd in Mr Pip, his beautiful tale set in Bougainville during the ‘crisis’*, could conjure up hunger.

Yes indeed, were I to believe in God (as World Vision says it does), then I would say that Bougainville is His Own Tropical Paradise. Not surprisingly, Bougainvillean Helen Hakina agrees:

I think Bougainville Island is a blessed island, we have so many things, even during the crisis there was no hunger. We had enough food to eat, even if we didn't grow it, there was food in the bush that we can collect, and there was nobody that we can say was hungry during the crisis.

But it gets worse. Not content to invent just hunger, World Vision takes the cake with a teary tale about Bougainvillean children who are forced to drink seawater. Really? Excuse me, World Vision, just because they are black, doesn’t mean we think Bougainvilleans must live in the Sahara Desert. The annual rainfall of Bougainville invariably ranges from 2 1/2 to 4 1/2 metres per year, and the rivers that flow from the mountain range at regular intervals along the coast never run dry. Anyone drinking seawater in Bougainville doesn’t need my children to starve themselves, they need to walk along the coast a bit to the nearest river, or collect some water next time it rains. Or drink some nutritious coconut water.

Hey, World Vision, stop giving voluntary charity a bad name, and … leave my kids alone.

* Bougainville’s tragic battle for independence from Papua New Guinea, and the civil war it engendered. Approximately 1988 - 2000

FRIDAY MORNING RAMBLE: The boring bloody budget edition

Anyone have links to good Budget commentary? Because I struggled to stay awake throughout Bill’s self-justifying dirge, so failed to post my own. (And I’m betting I’m not the only one who so struggled.) How about you add good links in the comments, if you have any, and I’ll add them up here as I see them. In the meantime, while Americans were sleeping…

One measure of today’s housing crisis: Remember when a new subdivision wasn’t national news?
New subdivision gets green light – RADIO NZ

Here come more cowboys.
State houses checked for WOF – Mike Butler, BREAKING VIEWS

10 Questions for Loopy Len on his backtracking Unitary Plan.
Planning Parrot: 10 Questions for Len Brown – WHALE OIL

He’s right, you know.
Open the Door to Migrants – Luke Malpass, NZ INITIATIVE

And the real danger to opening the golden door is … ? “A US border security expert who won a Fulbright and decided to write his thesis on New Zealand’s border security … concluded the major threat to New Zealand’s borders was not terrorism but a biosecurity breach.”
Burn after reading – DIM POST

Just who would society be better off without? A disabled son, or someone saying he should be killed off “because of their cost to society?
Better Off Without You – AUTISM AND OUGHTISMS

You know, any politician could do the same today. < cough > cannabis < cough >
The Real Reason for FDR's Popularity – Mark Thornton, MISES DAILY

Allegedly.
The 25 hardest things about living in New Zealand – BUZZFEED

The truth about the death in Benghazi of US ambassador Chris Stevens and his colleagues is slowly emerging—with the Obama Administration delaying it at every step.

Andrew Bolt offers “10 signs that the death of the global warming scare are unmistakable. Now it's time to hold the guilty to account.”
10 Signs that warming scare is all hot air
Where are Gore’s hurricanes?
Green energy: keeping warm by burning billions of dollars
Are the satellites lying about poor, drowning Kiribati?
Look at this other drowning island, the Global Mail writer insisted. So I did…
Robyn “100 metres” Williams comes up 99.3 metres short

Windows 8 is only the beginning of Microsoft’s problems, and maybe the start of understanding creative destruction?
Microsoft blues – ECONOMIST

“Unemployable” head of BP Tony Hayward finally lands a temp job.
Ex-BP boss Tony Hayward gets life back with new job at Glencore Xstrata – HERALD SUN

A free chapter from David Stockman’s superb new book, The Great Deformation – The Corruption of Capitalism in America
New Deal Myths of Recovery – LEW ROCKWELL

A new book by every modern economists and central bankers’ hero.
How I Printed So Much Money in Zimbabwe That the Country Experienced Hyper-Inflation – EPJ

See what I mean: “Paul Krugman just endorsed the mad money printing that has been launched in Japan under the rule of the new Prime Minister Shinzo Abe…”
More For the Krugman File – EPJ

Don’t believe Chinese data, especially when it’s good.
China's Data Manipulation In One Chart, And Why The Real Data Implies Weakest GDP Growth In Over 20 Years – ZERO HEDGE

Do believe European data, especially when it’s this bad.
France Double-Dips As European Recession Is Now Longest On Record – ZERO HEDGE

A Capitol Hill briefing on copyright by a group of free-market economists, lawyers, lecturers and entrepreneurs.
CopyRIGHT: Can Free Marketeers Agree on Copyright Reform? - CEI Video

What say you, Bitcoin boosters?
US Government Begins BitCoin Crackdown – ZERO HEDGE

Yes, you too can make your own Periodic Table of Spices (above).
Magnetic Periodic Table of Herbs and Spices – INSTRUCTABLES

Did you know you can attend this July’s “Objectivist Summer Conference” in Chicago wherever in the world you are by webcast? With some great sessions in the offing—from The Politics of Pretend to Convincing the Intellectual Property Skeptic to Frank Lloyd Wright to 1910: “The First Golden Age”—you really should check it out:
Livestreaming – OBJECTIVIST SUMMER CONFERENCE, 2013

Recent historical analysis of the toxin America’s founders left subsequent generations to clean up.
Thomas Jefferson's Nightmare – HISTORY NEWS NETWORK

You know you can download whole books free at the Mises Institute, right? Like this collection of essays by Hayek, for example, including his classics like ‘The Use of Knowledge in Society’ and his contribution to the calculation debate.

She’s right, you know.
Breaking news: Stuffed Rape Culture – HAND MIRROR

An exploded view of a Frank Lloyd Wright classic…
Usonia at SCJ – WRIGHT IN RACINE

The importance of knowing your history.
Ten Things Romans Used for Toilet Paper – ROMAN MYSTERIES & WESTERN MYSTERIES

Not really the right day to be thinking about it, but if you are…
Tips for Bike Commuting to Work – BLISS TREE

Here you go:

Had enough of hearing how hard composers and musicians’ lives are? So was Rimsky-Korsakov.
Rimsky-Korsakov on the “hardship” of the composer’s life – STEPHEN HICKS

If you liked yesterday’s Ralph Vaughan-Williams, then you’ll love this:

All sorts of great things are appearing on YouTube, including long forgotten TV broadcasts of the magnificent Count Basie band like this 1965 example from the BBC, which almost on its own justifies its existence. Almost:

Oh yeah, it’s NZ Music Month. Anybody else head along to see “old timers” Danse Macabre and Penknife Glides at King’s Arms?

Brazier Noir:

[Hat tips Peter Longfield, Jazz on the Tube, ewald engelen, Geek Press]

Thanks for reading,
and have a great weekend!

PC -

DOWN TO THE DOCTOR’S: “Oh teachers are my lessons done? I cannot do another one.”

This week, Libz leader Dr Richard McGrath wonders what about registering a teacher makes them safe?

Boyish Labour MP and teachers' pet Chris Hipkins seems convinced that if teachers in charter schools aren't registered, children will be at risk and the sky will fall. 

I thank him for his concern. We can all be reassured that where a teacher is registered and under scrutiny of the Teachers Council, our children will be secure...

Registered teacher James Parker admitted at least 74 charges of sexual offending young boys. He is still on the register of teachers.

On January 16 this year, registered teacher Douglas Haora Martin pleaded guilty to making upskirt videos of 17 unsuspecting young women and girls. Despite resigning from Lincoln High School on January 24, the Teachers Council kept him on their register until April 13..

Registered teacher Andrew Loader paid to watch two teenagers having sex, breaking the law because one of them was only aged 16. Could this be the same Andrew Loader who is still listed on the Register of Teachers with expiry in September 2015?

Registered teacher Nova Camp stole $40,000 from Takapuna Grammar Rowing Club, and remains on the Register of Teachers until February 2015.

A registered teacher who tried to arrange to have per school principal “capped”- and whose identity the Teachers Council won't reveal - is considered safe to continue to teach children.

Being a registered teacher did not prevent former deputy principal Norman Foote from sexually abusing a girl from the time she was a child.

A registered teacher - again with name kept secret by the teachers disciplinary committee - admitted having sex with one of her male staff members, signing off the bill for a phone from which he used to ring the TAB, and endorsing his registration despite knowing he was being investigated by CYFS for alleged assault..

Registered teacher Kevin Fraser Keys admitted sexually assaulting and photographing a boy under the age of 16. Oh look, he's still on the Register of Teachers until January 2015. 

Registered teacher Damian Christopher Gillard was charged last year with sexual offences against seven young women.

Registered teacher Rene Alan Chalmers, alleged to have stolen more than $800,000, remains on the register 'subject to confirmation' until June 2015.

And these are just the teachers who didn’t make it into parliament on the Labour list…

So I'm confused. Could Chris Hipkins please explain again just why it is so vital that teachers in charter schools be registered?  How does he think merely being placed on a state register guarantees their safety.

Because it seems the Register of Teachers is beginning to resemble Deborah Coddington's Paedophile and Sex Offender Index more than anything on which any decent person would wish to rely. It's beyond me why Hipkins or anyone else should want to protect these predators and deviants from competition.

Could it be because of some tie-in between teacher unions and the Labour Party? If so, in accepting contributions from teacher unions, the Labour Party is being financed indirectly by kiddy-fiddlers, rapists, would-be murderers and peeping toms. That's real class.

See you next week!
Doc McGrath

‘The Lark Ascending,’ by Ralph Vaughan-Williams

Performed here by soloist Tamsin Waley-Cohen, it’s been voted the most popular classical piece ever:

Inspired by a poem by George Meredith:

He rises and begins to round,
He drops the silver chains of sound,
Of many links without a break,
In chirrup, whistle, slur and shake.

Hear it live with the NZSO this Friday (in Wellington) or next (in Auckland), and points in-between in between.

Prohibition Caused the Greatness of Gatsby

New film The Great Gatsby, a lesser version of an earlier classic rework of F. Scott Fitzgerald’s “Great American Novel,” prompted today’s guest poster Mark Thornton to recall the history on which the book was based…

Baz Lurhmann’s up-to-the-minute adaptation of F. Scott Fitzgerald’s The Great Gatsby is a good movie, but it is no indictment against capitalism, as some may contend. It is rather an implicit condemnation of government prohibition.

When I read the book in high school I did not like it. I found it hard to read, not because it was overly complicated or poorly done, but because of the subject matter. The book (as well as the movie) dwells on decadence, licentiousness, promiscuity, and recklessness, or what was called “luxury” in the old days. I have an aversion to all that, and there was only so much I could take.

There is an important difference between wealth and luxury (in the modern sense) on one hand and the type of riotous over-the-top behaviour on display in movies like The Great Gatsby, Moulin Rouge!, and Leaving Las Vegas.

Having written my dissertation on the economics of prohibition, I now understand the value of The Great Gatsby much better. The decadence on display serves, not merely as titillation for the reader/viewer, but as an object lesson in the evils of prohibition.

The whole plot is intimately tied to the prohibition of alcohol accomplished by the 18^th Amendment to the Constitution. In particular, many aspects of the plot are driven by the black market that developed in the 1920s.

Prohibition made alcohol illegal, but it did not eliminate it. Illegal producers known as moonshiners sold their illegal product to illegal distributors known as bootleggers, who in turn sold it to illegal retail establishments known as speakeasies. Everything had to be secretive. The process was overseen by organized crime syndicates and street gangs who paid bribes to corrupt politicians and law enforcement. Respect for the law sank to an all-time low.

In the world of this black market, property rights were protected with machine guns rather than judges and juries. The stigma against young women drinking in bars at night was displaced by the allure of an exciting night out on the town drinking and listening to jazz. Instead of these profits going to competing entrepreneurs, the money was going into the pockets of thugs and wannabes. Social order was replaced by chaos. This cultural decay was the ironic fruit of the puritanically-motived prohibition movement.

The central character of the story is Jay Gatsby. Gatsby comes from a dirt-poor family and is a big dreamer, as well as a big risk taker. He keeps his past shrouded in a web of lies and half-truths as he sets out to remake himself into a person of wealth and prominence. This is the ideal personality for making it big in black markets.

The mysterious Jay Gatsby indeed does become “filthy” rich by selling illegal booze. During Prohibition doctors could prescribe “medicinal liquor” for their patients for literally dozens of ailments, including alcoholism. Gatsby sees this as an opportunity and establishes a chain of drugstores with the help of organized crime and corrupt politicians.

Alcohol has been an effective remedy for treating a variety of medical problems throughout the centuries. During Prohibition, doctors were paid well for writing the prescriptions and drug stores were also very well compensated for selling “medicinal alcohol.” I could not find records of how many prescriptions were written, but the one I have framed in my office is number E362545 which was issued on 8/13/31 and cancelled in 1932. Here is an image of a prescription from Wikipedia.

This was the heyday for pharmacies. The Walgreen’s chain of drugstores started in the 1920s with 20 stores in the Chicago area, but ended the decade with over 500. I have to believe that it was not so much their great milkshakes, but the pints of Old Grand Dad that they were able to sell at high prices that contributed to its success.

The thing about legal outlets for otherwise illegal products is that there tends to be “diversion.” In other words, a drug store that can legally acquire and sell alcohol can also sell their products illegally to speakeasies which would then resell the alcohol to their customers by the drink. This was clearly happening with Gatsby’s drug stores.

Prior to prohibition most Americans were accustomed to drinking their whiskey “straight” or with water. However, much of the moonshine and bathtub gin that was produced during Prohibition was of high potency, but poor quality. The diverted whiskey, during the Roaring 20s, would therefore have fetched high prices making enormous profits for drug store owners like Gatsby.

To deal with the high potency, bad taste, and sometimes bad smells, the speakeasies experimented with “cocktails,” which combined alcohol with juices, dairy products, and food items. As a result, thousands of different cocktails were invented as the speakeasies competed against one another for the customer’s money.

The Age of the Cocktail might be the only silver lining to come from Prohibition,* other than Fitzgerald’s The Great Gatsby—a testament to how twisted society can become, and how the Jay Gatsbys of the world can reach the stars, with the help of government prohibition.

Mark Thornton is a senior resident fellow at the Ludwig von Mises Institute in Auburn, Alabama, and is the book review editor for the Quarterly Journal of Austrian Economics. He is the author of The Economics of Prohibition and the editor of The Quotable Mises, The Bastiat Collection, and An Essay on Economic Theory.
If you enjoyed this might also enjoy his video lecture,  Prohibition Through the Eyes of Homer Simpson - A Talk by Mark Thornton.
This post first appeared at the Mises Daily.

* Well, apart from the hot jazz pouring out Harlem nightclubs financed by pouring hot booze inside, seen here in another Spike Lee’s joyous depiction of the time, set to Lionel Hampton’s romp Flying Home …

… and in Francis Ford Coppola’s Ellington-fuelled film about the granddaddy of  corrupt clubs, The Cotton Club.

‘Death of a Moa’ by Trevor Lloyd

Here’s a NZ landscape painter from the 19th Century with a sense of humour: Trevor Lloyd. (Do you see it?)  The Auckland Art Gallery apparently has a huge collection of his work, but rarely let it see the light of day.

About this one they say:

Made for the enjoyment of his family, this unique fantasy painting is one of Lloyd's most ambitious works. The last giant moa has fallen, its body watched over by a gathering of native birds and patupaiarehe, mythic Maori fairy folk. The cacophony of squawks and cries is almost audible. Lloyd captures the personalities of the various birds: the pukeko, a little stand-offish, looks on inquisitively; the gregarious kea shares the news with a late arrival still in flight; and the kakapo, notoriously shy and retiring, sits on the outer edge of the group. ('Enduring Nature: Hoki Atu Hoki Mai,' 2004)

Angelina Jolie’s breasts

Never has the disappearance of two breasts caused so much comment, so much of it so completely unhinged.

(Add together celebrity + breasts +cancer and I think you approach the formula for madness.)

Out of many, many candidates, I think this might be the most pathetic:

If true, I believe satirising that sort of ridiculous celebrity worship was part of the point (and, yes, there was one) of this song by late-lamented Australian band TISM. Enjoying this may perhaps be the most appropriate way to mark this inauspicious occasion:

Target your enemies

Just a week ago I talked about Richard Nixon’s Enemies List, and how New Zealand law has been moving towards making it ever easier for the well-connected to target their political adversaries.

As always, America is already far ahead of us…

Castro’s decade-long exercise in brutality

I saw a headline at The Age decrying “Castro’s decade-long exercise in brutality,” and quietly gave thanks that his oppression of Cuban people is finally being recognised by a mainstream media more likely to lionise Castro and Che than recognise their inhumanity.  But even as I clicked the link, I was wondering why it was talking about “decade-long”…

Of course, it wasn’t talking about Fidel Castro’s decades-long imprisonment of the Cuban people, but the decade-long imprisonment by his near-namesake of three women (now released) in his Cleveland, Ohio, basement.

The facts of the latter case are indeed horrific, and horrific on a scale that’s easy to grasp and report. Three women locked since their teenage years in the basement of a monster. Perhaps that’s why the media are all over this horror, one they can easily understand and deplore, whereas the Castro family locking the entire population of Cuba in the basement of their broken dreams has barely warranted a mainstream media mention for years. *

The much larger-scale horror going on in Cuba just continues to pass them by.

* * * *

* It’s even worse. The most recent mainstream mention of the Cuban Castro clan was a puff piece in the newspaper of record about “Mariela Castro, the daughter of President Raúl Castro and Cuba’s premier sexologist,” visiting the Liberty Bell in Philadelphia. The report doesn’t mention whether the crack in the Liberty Bell got bigger.