Popular NOT PC for Black Friday, January 2009

Phew!  It’s been a scorcher of a week here in Auckland.  Yesterday was the hottest day since 1872, and I’ll wager it wasn’t as humid on that day back then. 

It’s been seven days dominated by Waitangi, talk of “stimulus” (most of it on the economic front), and overshadowed in this part of the world at least by the tragedy in Victoria.

Here’s what proved the most popular of this week’s posts here at NOT PC, as judged by how many readers visited them.

• Waitangi Day Ramble
  A ramble through a whole bunch o’links that grabbed my eye, and obviously yours as well.
• Failure?
  My short comment on the death of Antonie Dixon seemed to attract some disagreement …
• The "John Galt Effect"
  Scientist Arthur Robinson identifies an “opportunity cost” about which many economists appear altogether ignorant, and about which economist George Reisman appears to think it’s about to be ratcheted up another stop.
• Minimum wage rise: everybody loses
  Minimum wage laws aren’t a “balancing act.”  Abolish them and everybody actually wins – unlike what happens when you raise wages in the teeth of a depression.
• Cash for conquests
  The new National Government’s approach to Treaty negotiations looks like this National-led Government is going to be as generous in doling out taxpayers’ money for imagined slights as the last National-led Government, if its promised taxpayer-funded payout to the descendants of one of NZ’s most infamous murderers is any guide.
• LIBERTARIAN SUS: Political Correctness = Fear
  There’s more than one way to exercise control, says Susan Ryder.
• Douglas offers taxpayers a ‘Conscientious Objection Option’
  Roger Douglas has been reading Libz policy again, and (with America’s National Review looking on) he’s put it at the heart of his new plan to rescue the economy and put it on the path to prosperity.

Thanks for reading and commenting. It would have been awful lonely if nobody here had shown up.  :-)
Cheers, Peter Cresswell

Beer O’Clock: EPIC takes on the world!

  First, Epic came on stream just for Cock and Bull drinkers.  Then it came for beer drinkers and bottle stores across New Zealand.  And now, with the invitation to brewer Luke Nicholas for his multi-award winning Epic Pale Ale to be one of six beers included in the International Real Ale Festival in the UK later this year, it’s now heading towards world domination – and deservedly so.

Nicholas will be brewing 100,000 pints just for this festival.  From the Epic Beer website:

    “Since launching in May 2006, Epic Pale Ale has won major beer awards and critical acclaim. Most New Zealander’s are only just beginning to discover the flavours I like to pack into my beer. It’s still quite unknown here but is gaining an international reputation as a ‘must-try’ New Zealand beer. International judges and experts that have tried it, hold it in high regard. Maybe brewing for the biggest festival in Britain will create a little profile and help Kiwis realise what they have on their doorstep!”
    Luke has amassed a history of top awards for his beers over the last decade including the unique distinction of brewing the Supreme Champion Beer of New Zealand a record three times. He is raring to unleash his beer on unsuspecting British palates.
    “Another Kiwi brewery sent the Brits a pub. Epic is sending them the brewer. They won’t know what hit them!” Luke laughs.

Get some in now, before the poms take it away for good.  And keep up with Beer O’Clock here at NOT PC so you can get in early on a good thing.

Cheers, PC

FEG’s Quote of the Month

NZ's Foundation for Economic Growth posts this as their Quotation for the Month:

At a lunch at the Bank of England, just ten days before his death in 1946, John Maynard Keynes remarked:

"I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago."

ARI outreach hits London [updated]

NOT PC readers who, like me, follow the progress of Objectivism with great interest will be very pleased to hear of the Ayn Rand Institute's new "outreach" programme.  Kenneth Irvine spoke to Ayn Rand Institute head Yaron Brook about it after Brook's talk at London's libertarian Adam Smith Institute.  He reports here that the future looks fruitful.

    ARI is engaging with think tanks, libertarian and conservative, on both sides of Atlantic as part of an outreach programme. He spoke positively about working with Cato and FEE in the US and the Adam Smith Institute and IEA in the UK. Dr Brook spoke critically of the Mises Institute, LewRockwell.com and the Independent Institute, especially on foreign policy and their anarcho-capitalist politics. [Read on for more.]

I agree this is by far the least attractive part of LewRockwell.Com and the Mises Institute, and seriously undermines the superb economic commentary both otherwise provide – which unlike their other commentary is based four-square on von Mises’s path-breaking work.

And if it’s true that this is the apparently insuperable obstacle in the long overdue rehabilitation of George Reisman in the ARI ranks, that would be very sad indeed.

UPDATE: Here's the Adam Smith Institute's write up of the event.

The main argument that Dr Brook advanced ... was that defenders of freedom must do more than just talk about economics. They also need to make the moral case for capitalism and rational egoism. Freedom to pursue your own interests must not be reduced in argument to a utilitarian system of maximizing outcomes, Brook said, but should instead be celebrated and advocated as the ultimate, moral ideal. And that, of course, is what Ayn Rand did so well.

All in all, then, an excellent evening. And despite Rand's relative obscurity in the UK, a very well attended one too.

DNA, and the presumption of power

I'm one-hundred percent in support of taking DNA from criminals.  Yes, I agree with all the proponents of the measure that it is in many important ways the modern equivalent of a fingerprint, and that the efficient use of DNA 'fingerprints' will be a boon to crime-fighting.

That said however, I'm vehemently opposed to the present proposal to take DNA from everyone police “intend to charge” with an imprisonable offence.

This is not a contradiction.  If you can't see the difference,then you probably qualify for membership of the present parliament, since it looks like barely anyone there understands the concept and importance of the legal presumption of innocence either.

There is a distinct difference between one who has been charged, or about to be charged, and one who has been convicted – between one who has been arrested (and who is still presumed to be innocent), and one who has been found to be a criminal -- someone from whom all reasonable doubt about their guilt has been removed.  There are more than enough real criminals about to make a database so big it will confound the organisational capacity of the NZ police force, without even needing to begin collecting DNA from those who aren't.

And let's make something clear. DNA collection is every bit the boon to crime-fighting it is said to be, but it’s more than just a “modern-day fingerprint”; it's your DNA -- something that's actually part of you. It's something that's not just your property, it is you.  Consequently, unless it's taken voluntarily, perhaps to clear you of a crime you know you didn't commit, then to take it by force when you're still presumed to be innocent is a violation of your most fundamental rights. It’s not just an unreasonable search and seizure, but something far worse.

Thank goodness you might think then that Attorney General Chris Finlayson understands at least this much when, unlike previous Attorneys General, he signalled that the present proposal violates NZ's Bill of Rights.  How disgraceful therefore that he and his colleagues are prepared to ignore that fact and proceed to vote in support of it going to its second reading.

The Nats have indicated countless times both in opposition and when previously in power that they view the presumption of innocence not as a fundamental legal principle to be upheld, but as a barrier to New Zealand The Way They Want It To Be.

That’s an uncomfortable realisation for the rest of us.

Good news from ignoring bad law [updated]

SYDNEY MORNING HERALD: Fined for illegal clearing, family now feel vindicated
    "They were labelled law breakers, fined $50,000 and left emotionally and financially drained.
    But seven years after the Sheahans bulldozed trees to make a fire break — an act that got them dragged before a magistrate and penalised — they feel vindicated. Their house is one of the few in Reedy Creek, Victoria, still standing." [Hat tip Jeff Perren]

There are probably several good morals in that story that are so obvious I’ll allow you to draw them all yourself.

Would that the law-makers understood any of them.

UPDATE: Tim Blair posts the more tragic counter-example, by far more common:

Peter Mitchell applied for permission a couple of years ago to remove some trees close to his property. Permission denied. On Saturday, his house burned down. Mitchell plans to rebuild, and this time he won’t be bothering with any council permission nonsense: 

“I’m just going to cut down the trees and push the perimeter back a bit more. If I build on the same place, I have to feel I am going to be able to defend it and not play Russian roulette.” 

Electoral Finance Act still law, but ... [updated]

It started with the Labour Party changing the law to stop Bernard Darnton suing them over their 2005 pledge card, continued with their Electoral Finance Act by which they attempted to squelch free speech and hog-tie their opponents, and now after many months of shouting in the end a bill to remove that incursion into Mugabeism from our law books was introduced to parliament last night, and it looks like by this time next week it will be dead – with the exception of one clause.

And in the end, after all the months of hysterically defending the indefensible, even Labour voted for its removal, and new Labour leader Phil Goff had the grace and common sense to concede it was a mistake.

Unfortunately, reports do not record what Helen Clark’s face looked like when she was required to file into the lobbies to begin voting against the mechanism by which she hoped to achieve a permanent Premiership.

UPDATE:  Since he did so much to sterling work to bring about its imminent dissolution, David Farrar deserves a word here:

    A rare joint award to Labour and National for starting the repeal of the Electoral Finance Act.The real evil of the Electoral Finance Act wasn't so much in its substance (even though that was bad enough) but more so in the way it was drafted without any attempt at consultation with the public or Opposition political parties…
    The anger in National (and elsewhere) over the Electoral Finance Act is palpable. The Act is detested, and represents to National the closest we have come to a constitutional coup - an attempt to so skew the playing field, to the benefit of one party only. Many in National would happily sign up to an "utu" response where the EFA is not only repealed, but is inflicted on Labour in reverse.
    But wiser heads have prevailed, and National is sincerely committed to multi-party (and public) consultation over the replacement to the Electoral Finance Act.

This indicates why National’s promised repeal only gets two cheers from this quarter.  In contradiction to David’s conventional view, the real evil of the Electoral Finance Act wasn't at all that it was drafted without any attempt at consultation with the public or Opposition political parties.  (As long as a law protects individual rights then it’s not “consultation” but urgent introduction that’s necessary.)   In fact, the real evil was that the Electoral Finance Act was a total affront to free speech, and to the standards of what purport to be democracy.

Sheesh already!  The evil of the act cannot be so so simply dispelled by waving over it the magic wand of “multi-party (and public) consultation”: what it needs is the introduction of objective law to govern NZ’s elections that is clear, impartial, and that actually protects NZers’ rights to free speech and free association --which includes the right to donate however much one wishes to to whomever one so chooses.

Te Rauparaha – KL Sutherland

  The face of a mass murderer.

Nice drawing by Kenneth L Sutherland, RN. And a very nice wood block engraving. Such a shame about the subject.

It’s the killer whose genocidal rampage from Kawhia to Kaiapoia has just been rewarded with a government apology and the promise of truckloads of money to his ancestors.

How he would laugh.

Read the short story of his exploits here: Cash for Conquests.

You’ll laugh your arse off.

He would have.

Keynesia is here!

We’ve been struggling to find a replacement for the word “Helengrad” now that regime change is here.  “Helengrad” captured the mood of a decade and the nature of Helen’s regime perfectly, and the search has been on all summer for a replacement. What do we call Wellington now that Key is there?

Key-ev doesn’t cut it.  Ta-John-Key-Stan? Too much of a mouthful. John-obyl? Too much explaining to do.

So, fortunately for our vocabulary, if not for our wallets, yesterday’s spend-up announcement jogged Liberty Scott’s creative faculty into action, and out popped the obvious replacement: Keynesia – named after the patron saint of bureaucrats and Bill English.

I can see it now on sign boards all around Wellington:

Welcome to Keynesia! 

And I'm sure, like you, I look forward to the economic “stimulus” created by the erection of all those new signs.

Communist Monopoly

A new board game is sweeping the world: Communist Monopoly.  

Play it. 

Or else!

Leave CEOs alone

In the teeth of the Obamessiah’s assault on CEOs’ salaries, Yaron Brook from the Ayn Rand Institute says CEOs’ salaries are the business of shareholders, and of shareholders only.

Join the debate at the Business Week Debate Room.

The nine most frightening words in the English language

Obama’s selection of Harvard Law professor Cass Sunstein as his ‘Regulatory Czar’ threatens to turn a joke into grim reality, says Paul Hsieh at Pyjamas Media.

Hsieh characterises Sunstein’s so-called “libertarian paternalism” as the butt of Reagan’s famous joke: “I’m from the government, and I’m here to help” – what Reagan called the nine most frightening words in the English language.

Obama’s Nanny is looking forward to telling Americans how to live.  Hsieh is not.  The new nannies “actually believe that ‘they’re from the government and they’re here to help us’,” he says. “If we listen to them, then the final joke will be on us.”

Read Obama’s Regulatory Chief Believes in Paternalistic Government.

Quote of the Day: Predictions of the collapse

As if Henry Hazlitt wrote it yesterday, instead of in 1946!

“Government-guaranteed home mortgages, especially when a negligible down payment or no down payment whatever is required, inevitably mean more bad loans than otherwise. They force the general taxpayer to subsidize the bad risks and to defray the losses. They encourage people to “buy” houses that they cannot really afford. They tend eventually to bring about an oversupply of houses as compared with other things. They temporarily overstimulate building, raise the cost of building for everybody (including the buyers of the homes with the guaranteed mortgages), and may mislead the building industry into an eventually costly overexpansion. In brief, in they long run they do not increase overall national production but encourage malinvestment.”

Alex Epstein supplies the appropriate comment.

NOT PJ: Carisbroke

Bernard Darnton went to Dunedin in search of pink elephants and found a white one …

What is it with politicians and stadiums? Even those rare politicians who are only slightly profligate, when presented with an artist’s impression of a stadium they develop all the self control of a half-Irish half-Frenchman with six hours to live who’s discovered a liquor cabinet in a brothel.

Speaking of alcoholic and sexual dissolution, I went back to Dunedin earlier this week. I stepped off the airbridge and into thirty-three degree heat. I lived in Dunedin for sixteen years and I don’t think it ever got to thirty-three, even if you added all the temperatures together.

The next day it was back to the usual summertime drizzle and eleven. I don’t remember deliberately spending much time outside when I lived there so I understand why those considering a new stadium to replace Carisbrook would like a roof on the thing.

The problem is that stadiums with roofs are scandalously expensive. Dunedin’s comes in at around $200 million (that’s $400 million including cock-ups), which in a city of 100,000 means a chunky rates hike. Per capita, it’s twice the cost of Auckland’s rightly-rejected billion-dollar bedpan. The $200 million price tag assumes everything goes well, meaning the weather has to be perfect when construction starts in June. Perhaps a roofed building site should go in first.

Boosters for these boondoggles always talk about what great investments these projects are. What they don’t explain is why they have to steal the money to “invest” from reluctant ratepayers rather than raise it from private businesses who’d like to roll around in the supposedly inevitable profits.

The Carisbrook Stadium Trust talks about how the new stadium will kick-start investment in North Dunedin “in exactly the same way the Telstra Dome has in a once forgotten docklands area of Melbourne.” They don’t mention that the Telstra Dome is bankrupt.

The Trust’s website drips with cargo-cult logic: “[The stadium] will present an economically robust city to attract new businesses.” They’re just not quite barefaced enough to say, “Build it and they will come.”

How do self-stroking politicians get away with promoting these staggeringly expensive vainglorious projects?

Simply, the numbers are too big. People don’t understand the word “billion.” It sounds like “million,” which means “quite a lot,” and “billion” also means “quite a lot” – maybe a bit more. But the difference is vast. A million dollars is what you’d get earning the average wage for twenty years. A billion dollars is what you’d get if you won Lotto every week for twenty years.

With a million dollars you could buy a nice house, a decent car, and a world trip. A billion dollars would get you a Scottish castle on a hundred acres of land, a seven-bedroom fifteen-bathroom Hollywood mansion furnished by Saddam Hussein’s decorator, a Formula 1 racing car, James Bond’s Aston Martin, a Russian oligarch’s superyacht with matching helicopter and submarine, a return trip to the International Space Station, a case of French champagne every night for the next hundred years, your own weight in caviar, a divorce from Heather Mills, and a Tutankhamen-style 110-kilogram solid gold sarcophagus for that subtle finishing touch.

Politicians know they can bandy around big numbers because nobody really gets how big they are. I mean Texan-elephant-with-a-dodgy-thyroid big; Gilbert-Grape’s-mother-getting-impregnated-by-Mr-Creosote big. They also know that big numbers can be made into small numbers if you divide by the population and the number of days in the year: “The stadium’s cheaper than a can of Speight’s!” (And in the small print: per person per day for the rest of your life.) If someone demands that you buy them a beer every day for the rest of your life, you know the correct response.

When politicians suggest these grandiose schemes, I always think of Sapurmurat Niyazov, the recently dead president of Turkmenistan. He wrote his own sequel to the Koran, renamed months of the year after himself, and erected an enormous gold statue of himself in the centre of Ashgabat, the country’s capital. The statue slowly rotated during the day so that the sun always shone on his face. And it cost less than a new rugby stadium.

* * Read Bernard Darnton’s NOT PJ column every Thursday here at NOT PC * *

Dance – Henri Matisse, 1910 [updated]

Henri Matisse’s bright and deceptively simple painting seems to viewers either full of life, or full of ominous portent.  It seems to work somewhat like a litmus test.

The figures first appeared in his painting The Joy of Living -- “this musical canvas” a critic called 
it in 1906.  Dance, Matisse once said, evoked “life and rhythm.”  To the curators of NY’s Museum of Modern Art, “these are no ordinary dancers, but mythical creatures in a timeless landscape.”

Life and rhythm are what I see here – that broken circle is about to be exuberantly rejoined, not irretrievably broken.

NB 1: Read more about the Fauvist art movement, of which Matisse was a leading member, here.

NB 2: Jonathan Jones discusses the painting's fascinating history on the occasion last year of its frst visit to Britain.  Says he:

It is the most glorious work of art we will see this year. Savage and classical, ancient and modern, civilised and barbaric: Dance is all these things. Its beauty comes from a time and a place when art was being remade. It is a blazing modernist banner of desire...
    In the first decade of the 20th century, any adult - including Matisse, born in 1869 - would have grown up in the Victorian age. Even in Paris, where artists had long made a virtue of shocking moralists, sex was disreputable - it is what happened in brothels depicted by Toulouse-Lautrec. Now, suddenly, here is Matisse's Dance, a painting that declares there is no higher, no more human thing than to dance in naked ecstasy: to burn with passion.

UPDATE: Picture changed.  On reflection, I much prefer the stronger colours of this version, Dance II. And I much prefer it to the ‘war dance’ about with Ngati Toa’s tribalists are so bloody precious.

Local & offshore stimulunacy [update 6]

Do I really need to write any more on so-called stimulus packages, or the fiction of the so-called multiplier effect, just because John Boy and Billy Bob invoke these statist delusions again today?

UPDATE 1: 61 traitors voted to pass America’s stimulunacy package.  Jeff Perren has a list of just some of the pork for which American taxpayers are going to have their pockets picked, absurdities which almost make our local package look sensible, and the Wall Street Journal steps up to the plate with this cogent dismissal of error at the heart of the stimulunacy and the multiplier delusion.

    So there it is: Mr. Obama [and the local layabouts are] now endorsing a sort of reductionist Keynesianism that argues that any government spending is an economic stimulus. This is so manifestly false that we doubt Mr. Obama [or the local layabouts] really believes it. He has to know that it matters what the government spends the money on, as well as how it is financed. A dollar doled out in jobless benefits may well be spent by the worker who receives it. That $1 of spending will count as economic activity and add to GDP.
    But that same dollar can't be conjured out of thin air. The government has to take that dollar away from someone else -- either in higher taxes, or by issuing new debt in the form of a bond. The person who is taxed or buys the bond will have $1 less to spend. If the beneficiary of that $1 spends it on something less productive than the taxed American or the lender would have, then the net impact on growth will be negative.

 UPDATE 2: Wanna get your head around the scale of the problem created by all this stimulunacy? Simple.  Just watch Glenn Beck Making Fed Data Fun & Scary.

UPDATE 3: Paul Walker says:

    Given that the government has just announced that it will waste $500 million of taxpayers money on our very own stimulus package, it may have helped if John Key had read the recent Wall Street Journal article by Gary S. Becker, the 1992 Nobel economics laureate, a professor of economics at the University of Chicago and senior fellow at the Hoover Institution, and Kevin M. Murphy, a MacArthur Fellow, an economics professor at the University of Chicago and a senior fellow at the Hoover Institution, before making such an announcement.
    Becker and Murphy make the obvious, to everyone but the government, point that There's No Stimulus Free Lunch: It's hard to spend wise and spend fast…
    [Their] four points apply as much to New Zealand as they do to the US, so I would like to hear the government's reply to them. It is incumbent on both supporters, and opponents, of any stimulus package to evaluate each of [their] four factors. Has the government really done this? If so, what are their conclusions? If not, why not?

UPDATE 4 [revised]: Charles Anderson has done some sums for Obama’s package. At US$825 billion and an estimated 3.7 million jobs “saved” (an estimate without backup, by the way), “The cost per job created or saved in Obama's plan,” he says, “can be calculated to be US$222,973”!

The exclamation mark is my own. 

Feel free to send me your own calculations showing us how much NZ taxpayers will be paying per “job” to attempt to keep the economy inflated. You may use in your calculations either the NZ$500 million boasted about in John Boy’s and Billy Bob’s announcement early this morning, or the NZ$11 billion boasted about in parliament earlier this morning, or the NZ$35 billion Bill English told the House this afternoon is going to have to be borrowed over the next five years just to avoid cutting spending (the sort of thing Roger Douglas called “mortgaging our children for the next round of spending increases,” and Dick Armey more colourfully called “fiscal child abuse.”  You could divide these by some arithmetical sum based on the “the 170,000 people predicted by Treasury to be unemployed over the next 3 years,” the 105,000 people presently drawing the dole, or the roughly 300,000 NZers on all forms of welfare (apart from WFF).

UPDATE 5: Newstalk ZB’s Barry Soper reckons that when asked about the number of jobs he expect this package to “create,” John Boy nodded his head at a figure of about 2000.

UPDATE 6:  Here’s a question for eager young economists:  How about you explain in one easy paragraph the relationship between the Broken Window Fallacy and the jobs created and the money spent through “stimulus” packages like this.  And then send that explanation to all those so-called economists talking it up who clearly don’t have a clue what you’d be talking about.

UPDATE 7: Be thankful for small mercies, says Liberty Scott. “Be grateful the package is rather small, [which means] its damage will be relatively small.”

Locke the libertarian? [updated]

Did anyone else see Green MP Keith Locke describing himself self-contradictorily as a “libertarian eco-socialist” in  this self-serving article over the weekend?

Anybody care to comment?

UPDATE: The article was written to allow Keith to complain about being surveilled by the SIS “since he was eleven.”  Trevor Loudon opens up his Keith Locke files and says, given Keith’s loopy history, “I would be protesting if the SIS wasn't monitoring Keith Locke and would be most disappointed if they didn't continue to do so.”

Cash for conquests

We are about to get a taste of the new Government’s approach to Treaty negotiations, and it looks like this National-led Government is going to be as generous in doling out taxpayers’ money for imagined slights as the last National-led Government .

The Ngati Toa deal is instructive.  Only in modern New Zealand would copyright protection for an unpublished chant extend back nearly two-hundred years (as long, at least, as you have the right skin colour), and taxpayers’ money and an apology given to the descendants of a stone killer for the treatment of said killer.

Ngati Toa are about to be given buckets full of taxpayers’ cash to apologise for things those taxpayers haven’t done, along with an apology for the “kidnapping and detention of 18 months” of Ngati Toa chief Te Rauparaha – the “kidnapping and detention” of whom was the consequence of his having tortured, slaughtered and murdered in cold blood from Waikato to Taranaki to the Horowhenua to Kapiti to the Cook Strait to Wairau to Kaikoura to Kaiapoi to Akaroa.

He went everywhere, man, and a trail of corpses was left behind him – and the bucketfuls of cash now promised are paying for what those corpses bought him.

Te Rauparaha’s Akaroa slaughter gives you the character of this “warrior” still so revered by the tribe*.  The argument with the Banks Peninsula Maori began when Te Rauparaha exhumed and ate the decomposing body of their chieftain’s grandmother, which must have tasted grand after being dead for several months, and concluded with a carefully planned torture and slaughter of the chieftain and his family and the sacking of his pa – after which he headed home carrying “500 baskets of human flesh … destined for cannibal feasts at Te Rauparaha’s settlement on Kapiti island,”* a settlement he had stripped from the inhabitants only a few years earlier after an earlier slaughter, and on which he maintained slaves “scraping flax” to be traded for arms and ammunition for further conquests.

It should be no surprise that Te Rauparaha was an enthusiast for the Treaty – he reasoned that after his two-decade reign of terror he could use the Treaty and the protection of naive British governance to “confirm his dominion” over his recent conquests – all of which had been seized in two decades of war before the Treaty was signed, and many of which he had conquered only in order to onsell to New Zealand Company agents (who, to their disgrace, were the knowing beneficiaries of his blood lust).

Little did he know how successful his ruse would be, or for how long.  His blood-soaked “dominions” are being paid for still, just as this murderer had hoped, since for the most part it is those very lands he obtained by bloodshed for which his descendants are today being  rewarded with our largesse.

Such is modern justice in New Zealand.

Sealegs, and the business cycle

The Sealegs company, developing so-called amphibious vehicles, has been talked up by investment advisers for years.  God knows why.  Their leading product is essentially a rubber boat with a retractable undercarriage, an unattractive proposition for which they charge the whopping sum of US$75,000 for their starter model (plus postage and packing).  No wonder they struggle for buyers.

A company that has never made a profit, that’s been backed for years by investment capital that might have gone somewhere that might have grown investors’ capital instead of consuming it, I wasn’t surprised to see the postponement this week of their latest rights issue.  “The Sealegs board considers current economic conditions will not support an expansive business plan,” says Sealegs chief executive David McKee Wright.

Perhaps it’s fairer to say that current economic conditions mean the owners of investment capital are looking more seriously at where they’re throwing their money, and obvious malinvestments like this one are going to feel the heat.

That’s a good thing. 

Readers who want to understand the business cycle, who want to understand where all the money goes when we go into the bust phase of the cycle, should look at so-called “investment” vehicles like this one, since you can see in microcosm what has happened to the whole economy.

"Somebody had blundered," wrote F. Scott Fitzgerald in the collapse at the end the Roaring Twenties, "and the most expensive orgy in history was over."

    It was borrowed time anyhow -- the whole upper tenth of a nation living with the insouciance of grand ducs and the casualness of chorus girls.  Even when you were broke you didn't worry about money, because it was in such profusion around you.

When central banks are pumping out easy credit to create a boom then rhetoric rapidly overtakes reality.  When the whole “upper tenth” is living with the insouciance of grand ducs and the casualness of chorus girls, when money is pumped out with such profusion, then malinvestments like Sealegs and the like look mighty attractive, and real resources are wasted on phony “opportunities” based on little more than hype [see Sealegs’ share price track here].  The result is that the pool of real savings – which represents real capital -- is consumed instead of grown – burned up in the boom that the easy credit made possible, and flushed out in the bust that the easy credit made necessary.

To paraphrase Gresham’s Law, the counterfeit capital created by the central bank consumes the real capital built up by savers.

I’ll leave it as an exercise for you, dear reader, to understand the implications if the days of easy credit are continued, as governments insist they must, and if malinvestments that need to fall over continue to be bailed out – as the owners of those malinvestments plead that they should.

UPDATE:  Tyler Watts writes in the MIses Daily Article today on the importance of letting failures fail.  To quote Warren Buffett, it’s only when the tide goes out you can see who’s been swimming naked. 

Quote of the day: Reason!

“I am not primarily an advocate of capitalism, but of egoism; and I am not primarily an advocate of egoism, but of reason. If one recognizes the supremacy of reason and applies it consistently, all the rest follows.”
- Ayn Rand

Two Bridges - Erasmus and Ling-Tie

A guest post by Jeff Perren that originally appeared at his Shaving Leviathan blog.

It's easy to see why the locals call the Erasmus Bridge in Rotterdam "The Swan." But it may be too timid a metaphor. The structure's grace and beauty far outshine that creation of nature.

(Photo by Lars Mathiassen)

    The Erasmus is a design known to bridge aficionados as 'cable stayed'. A series of thick, ultra-strong steel strands reach from the tip of the pylon (the swan's 'neck') to the roadbed below, looking like nothing so much as a set of taut piano wires. Like a cross-beam on a swinging gate, those cables resist the downward forces on the road.
    Designed by Ben van Berkel and completed in 1996, the bridge is 800 meters (2,600 feet) long, about 10% of which raises to allow ships to pass under.
   
    Bridge building has undergone something of a renaissance in recent decades, thanks in no small part to the work of Dr. Tung-Yen Lin of Berkeley.
    During his seven-decade career he taught or was directly responsible for numerous innovations, not the least of which was his promotion of pre-stressed concrete in building structures, now ubiquitous.   
    He used the technique in building his own home, which featured a 1,000 square foot interior span free of supporting beams. (He used the area as a ballroom to dance with his wife.) Dr. Lin passed away in 2003 at the age of 91.
    One of his most beautiful creations is the stunning Ling-Tie bridge in Nanning, China, completed after his death. Resembling a rounded harp, it provides a fascinating design variation that combines an arch with cable stayed features.

Only two out of dozens of spectacular monuments to genius, these bridges demonstrate that the great age of building is far from over. While they get less fanfare than in generations past, they remain some of man's greatest achievements.

Douglas offers taxpayers a ‘Conscientious Objection Option’ [update 2]

Roger Douglas has been reading Libz policy again, and he’s put it at the heart of his new plan to save the economy and put it on the path to prosperity, to be announced at Orewa tonight. 

Libz have pushed for a tax-free threshold for income tax of $50,000.  Douglas is willing to allow $30,000.

Libz have for years pushed for a ‘Brian Edwards Option,’ allowing those like Edwards who advocate higher taxes to keep paying them and to keep receiving state-funded health and education, while the rest of us can opt out and in return look after our own health, welfare and education.  We call this last the Conscientious Objection Option, which over time would become the preferred option.  Douglas is allowing an “opt in” system which is not a million miles away, and not at all difficult to introduce. Says Douglas,

I believe that the only way to change our economic prospects is to radically redesign our income tax system in concert with our social welfare system. Individuals should have the ability to opt in to the new system. Individuals who like high tax rates and monopoly-run health, welfare, education, and superannuation services can stick with the old system. But if you want to opt out of that failing system, then you should be able to have a lower tax burden in exchange for taking personal responsibility over your life.

It’s not all that’s needed by a long chalk, but it’s a start.  Would that he were listened to.

UPDATE 1:  Douglas’s full speech is here, so you can pick out all the fish hooks.  Plenty of reviews around the traps, including from NZPA, NBR, Jeni MacManus at The Independent, and Audrey Young at The Herald.

UPDATE 2: The only things that travels faster than bushfires is ideas.  From Libz, to Douglas to America’s influential National Review Online in … less time than it takes for politicians to start pointing the finger.

Libertarianz: setting brushfires in people’s minds since 1996. [Hat tip New Zeal]

New blog, new voice of reason

New blog added to to the ‘Regular Reading’ blog roll is Voices for Reason, where experts from the Ayn Rand Center for Individual Rights will provide daily commentary on breaking news from the perspective of Ayn Rand’s philosophy, Objectivism.

Debi Ghate from the Ayn Rand Center says, “It is our goal to make Voices for Reason the go-to source for our unique perspective on the most important news of the day and the state of our culture. Our writers will share their insights, evaluating current events using Ayn Rand’s philosophy of reason, individualism, and laissez-faire capitalism as their guide.”

Sounds good to me!

Minimum wage rise: everybody loses

We’re in recession, moving inexorably into depression. 

Jobs are short, confidence is low, and prices and profits are falling.

Yesterday’s announcement that “the minimum wage” is going to be raised is an indication, however, that economic recovery is what politicians are eager to avoid.

We’re in a hole, and all they want to do is keep digging.

Let me explain that point.

When the prices producers can get for their produce are going down, as they do in a recession, then producers themselves need to cut costs if they're going to survive.  That’s a law of reality that affects everyone from car-makers to Christchurch prostitutes.

It’s serious.  When the prices for goods and services are below the cost of producing those goods and services, as they so often are in a recession, then producers either cut their costs or go under.

What happens to those marginal businesses (and to economic recovery) if they can’t cut their costs?  I’ll leave that question as an exercise for you.

How can governments help? Well, a responsible government could help this process of recovery by cutting their own spending and removing any legal impediments to letting prices fall -- which, crucially, includes the price of labour. Allowing viable producers to cut costs in the face of falling prices, especially the cost of labour, is what leads the economy into a genuine recovery.

Conversely, prohibiting cost cutting delivers the opposite result. By meddling and over-spending, by keeping prices high and setting ‘price floors’ that make it hard for marginal producers to survive, they either delay or kill stone-dead any genuine recovery.

Yesterday's decision by the National/Act/Maori Government to **raise** the minimum wage in the face of falling prices and falling production confirms that this Government intends to take the latter route.

The minimum wage is a price floor below which staff are not legally allowed to work.  The result of setting the price for labour above the market clearing price is to put labour out of work.

It’s as simple as that.

If the National/Act/Maori Government knew what they were about they wouldn’t be raising the minimum wage, they’d be abolishing it.

Prices don’t need to be fixed or kept up – at the present time they urgently need to fall.  One man’s price is another man’s costs.  As the likes of Pigou and Haberler and Patinkin have argued, “falling wages and prices would increase the real value of money holdings, and the spending out of those real cash balances would restore the economy to full employment” -- and while monetary wages might fall, as they need to, as productivity increases and the purchasing power of every dollar increases, then real wages will actually rise. 

It’s not a balancing act: Everybody actually wins.

But this benevolent process can only come to fruition if the politicians and the union reps get out of the way first.

The sad thing about yesterday afternoon’s announcement however is not just the number of people it will throw out of work and the businesses it will throw out of business, it’s the clear indication that the actions of this government will not be determined on the basis of economics, but instead on ordinary politics. And that ladies and gentlemen is the problem.

Despite the comments from so-called economists this morning, this is not good economics.

There are so-called economists arguing that a hike in the minimum wage will help recovery by inducing an increase in consumer spending.  These are people who think money grows on trees.  They are utterly ignorant of where this “extra spending” is supposed to come from, which is from the earnings of producers – earnings that are now severely reduced.  This is not even economics, it’s just stupidity.

There are so-called economists who’ll insist that the derisory “tax cuts” delivered last week should be enough to fund today’s cost increase.  These are people who one can only assume have never seen a balance sheet, nor grasped the extent of today’s problems.

And there are so-called economists who argue that wages are inherently “sticky downwards,” that lowering the price of labour is inherently impossible so don’t even bother trying.  Now, it’s certainly true that wages are going to have trouble falling in the context of minimum wage laws and the refusal of unions and policy-makers to let wages decline – and the insistence of so-called economists that they don’t need to.

But sadly for these theorists, their theory is contradicted by cases such as this one, and by the history of depressions past.

Remember the Great American Depression of 1920?  No?  There’s a very good reason for that: there wasn’t one.  Unlike the Great American Depression of the thirties, when the US economy went into a tailspin and President Hoover did everything he could to keep prices and wages high, in the recession of 1920, prices and wages were allowed to fall, allowing things to get back on an even keel, and within a year the economy was booming away again.

The same thing happened in New Zealand in the early thirties.  While FDR was meddling away trying to keep prices high (prolonging the American depression for nearly a decade), New Zealand’s political leaders allowed wages and prices to fall, and by 1934/45 the New Zealand economy was back into recovery mode.

These are the lessons from economic history that honest historians, economists and politicians should be learning, and talking about.

Sure, you can listen to the likes of Sue Bradford and Phil Goff and Helen Kelly and the boys at the Double Standard who demonise private enterprise and spout economic illiteracy.

There are important lessons from history they do need to learn.  In the context of economic recovery they need to learn that the demonisation of private enterprise is counter-productive, especially to the low-paid people they clam to be speaking for. They need to learn it just as much as American president Barack Obama needs to learn it, as Lew Rockwell explains:

    With his rhetoric and policies, [Obama] has decided to demonize private enterprise, just as FDR did, as a way to present government as the great savior. Now, think about this. If there is a way out of the recession, it will have to be provided by private enterprise. It will come by new businesses, business expansions, entrepreneurship, new technology, and this will be the source of lasting jobs and prosperity.
    You cannot make a country rich by looting taxpayers and paying people to pound nails into siding at public schools! These activities amount to capital consumption. They are not sources of investment. You can say that they are stupid tasks or wonderful tasks, but it is not a matter of ideology as to whether such public projects will make us all wealthier. They will not. They drain the sources of wealth from society. They represent a cost, not a blessing.

Neither jobs nor spending grows on trees.  That’s not ideology: that’s reality.  Private enterprise is the engine of both new jobs and any real recovery we’re ever going to see – it is the solution to recovery, not the impediment.  Responsible governments understand that. 

Does this one?

LIBERTARIAN SUS: Political Correctness = Fear

There is more than one way to exercise control, says Susan Ryder (originally published in the Franklin E-Local).

“I disapprove of what you say, but I defend to the death your right to say it.“  This aphorism has long been attributed to French philosopher Voltaire (born Francois-Marie Arouet, 1694-1778), although some believe it the work of SG Tallentyre in her biography The Friends of Voltaire, where she summarised his attitude toward another writer’s controversial book. No matter who is actually responsible for the line, the phrase accurately defined Voltaire’s philosophy of individual liberty.

Central to this philosophy is freedom of speech, something we in the western world take for granted. New Zealanders turning seventy this year were born the year the Second World War started, which means that most of us here today have no experience of that dark time and no concept of living in a country where freedoms are severely restricted or unknown.

My own personal experience of totalitarianism is limited to a visit to Bulgaria and Yugoslavia in the early 1980s. The Berlin Wall was several years from falling and the Iron Curtain appeared as fortified as ever. My Bulgarian visa was valid for a mere forty-eight hours with strict instructions as to where I stayed and went.

The country was bleak, grey and poor, there was virtually nothing to buy and the people were reluctant to engage in conversation. Yugoslavia was different in that though its people still endured a markedly lower standard of living than their western counterparts – the daily sight of long queues for basic food items will stay with me forever - it was not a member of the Soviet-led Warsaw Pact. The late President Tito had long defied Moscow by allowing his people certain freedoms, e.g. to travel outside its borders and to engage in limited private enterprise. Having said that, the people I met, although considerably more outgoing than those in Bulgaria, were still mindful of what they discussed with strangers.

A better example was one related in the late 1970s by a family friend who travelled to the former West Germany annually on business. One year he had the opportunity to visit East Berlin for the first time, where his contact invited him home to meet his wife and family, the latter of which consisted of two teenage sons and his elderly parents. Our friend – let’s call him Bob – always carried a few family photos and upon request brought them out to show his hosts, particularly the boys, who were keen to know about faraway New Zealand. They enthusiastically commented that “your government provides wonderful homes and vehicles!”

As diplomatically as possible, Bob explained that he and his wife saved up for their house and cars over time, buying them personally. He tried to lighten the situation by joking that they certainly lived more modestly in the earlier days of their marriage. The teenagers flatly refused to believe him, while
their parents, Bob’s contemporaries, also looked askance at the concept of private ownership. At that point the grandparents leaned over and addressed him for the first time, nodding quietly. They well
remembered the days before German communism and the Third Reich, but their children and
grandchildren simply wouldn’t listen.

Thirty years on, that story still horrifies me. That a government in modern times could wield so much power as to blatantly deceive its population, so much so that younger citizens firmly disbelieved any contradictory viewpoint held by close elder relatives.

So what has that to do with political correctness? In a word, control.

Freedom and control are diametrically opposed. The measure of a country’s freedom lies in how far the balance tips either way. Thomas Jefferson, third US President and principal architect of its Declaration of Independence said that the natural progression of things is for liberty to yield and government to gain ground. In other words, the struggle for freedom is ongoing and hard going.

Once upon a time, people controlled other people via the club, the mace, the spear and the arrow. It was brutal and effective. Centuries later, weaponry has developed to include the gun, the bomb and the nuclear warhead. They are brutal and effective.

But today, in more peaceful parts of the world, there is a more subtle, cheaper form of civil control. It is much less messy, but remains powerfully effective and yes, its effects can be brutal. It is, of course, the placing of restrictions upon free speech, thereby interfering with one’s right to hold opinions without fear of persecution. Political correctness, as I have said before, dictates thought and behaviour by the imposition of certain beliefs to which everybody must adhere or be ridiculed or punished. It conjures images of an angry mob of finger-pointers towering over a cowering individual for committing the cardinal sin of speaking her mind. It is ironic that those who scream against intolerance are themselves so often guilty.

And for those who would defend the process by suggesting that political correctness prevents Peter from making derogatory remarks against Pita or Peta, I again refer to Mr Jefferson. In his lifelong defence of the rights of the individual, he eloquently said that errors of opinion may be tolerated where reason is left free to combat it. He understood that respect for free speech automatically includes the toleration of dissenting viewpoints. He rightly saw that two wrongs did not make a right, that censorship of the individual to stop incivility was precisely the wrong way to go about it. That, in fact, in order to combat it, freedom of expression was paramount.

Voltaire would have cheered.

* * Read Libertarian Sus every week here at NOT PC * *

Rain, Steam, and Speed - J.M.W.Turner [updated]

If you had a problem with the Monet the other day – if Impressionism just isn’t your bag – then Turner’s work, which inspired Monet and his contemporaries, will give you heartburn.

It does me.

There is a whole wing of London’s Tate Gallery dedicated to the work of Turner, described as “a painter of light.”  And with this piece, The UltraOrange blog seeks to draw you into his web with words and music and the power of the image.

See if you fall prey to the seduction.

UPDATE:  Douglass Montrose-Graem invites you to get seduced by J.M.W. Turner by visiting www.turnermuseum.org/galleries for a feast of Turners. Says he, “See our latest shows ‘Matisse and JMW Turner’ and the vortex essay ‘J.M.W. Turner and the Sublime’ by Isis Marina Graham.

“Way Down in the Hole” [update 3]

If you're in the 'this-recession-won't-be-so-bad' camp, then have a look at this graph comparing American job losses in the two most recent recessions with job losses so far in this one.

Sobering, huh? That figure down there that the arrow is pointing at? That’s 3.6 million so far.

Does this matter for us down here in NZ? Says TVHE,from whom I stole the pic (after they borrowed it from The Big Picture)

Well the US accounts for 10% of our merchandise trade, and they are a major driver of economic activity in Asia - an area which accounts for another 35% of our exports …

UPDATE 1: Be aware of a few things in this graph, not least the stamp “Office of the Speaker” in the corner. As a Cafe Hayek commenter says, “After all these years, Pelosi's reputation precedes her, and that stamp automatically makes the plot highly suspect.” Nonetheless, says Andrew Sullivan, “Pelosi's graph is not that misleading.”

UPDATE 2: The Calculated Risk Blog has a graph allowing you to compare in percentage terms the pace of unemployment growth in this latest panic to unemployment growth in recessions going all the way back through Carter’s recession of 81/82, to Nixon’s of 74/75, and Eisenhower’s of 60/61.

UPDATE 3: The latest Peter Schiff video backs up that lovely employment graph above [hat tip RW].

The "John Galt Effect" [update 2]

Molecular biologist Arthur B. Robinson, who has obtained the signatures of more than 31,000 scientists to his 'Oregon Petition' opposing the theory of climate change, has identified what he calls a "John Galt Effect" at work in the US elections and "the national events that preceded them."

Named "in honor of Ayn Rand's famous character in Atlas Shrugged.... it is occurring to a very significant extent," he says. It is an "opportunity cost" about which economists are utterly ignorant, but shouldn't be. Read about it here [hat tip Ellen Stuttle].

UPDATE 1: George Reisman reckons the Age of Show Trials, with Capitalist Defendants in Shackles is already imminient -- and the likes of New York Times columnist Maureen Down "will be there, perhaps with knitting needles, in the role of a modern-day Madame Defarge, the Dickens character who knitted while watching aristocrats being guillotined during the French Revolution."

UPDATE 2: An economist (one of the good ones) smacks me down. Responds Eric Crampton,

Economists utterly ignorant of the John Galt effect? It's called the tax elasticity of labour supply. And, surprisingly enough, economists have studied it. In fact, the world's top expert in the effects of tax policy, Joel Slemrod, who visited Canterbury last year to give the Condliffe Memorial Lecture, edited a book on it, available at Amazon called "Does Atlas Shrug? The economic consequences of taxing the rich." There's also plenty of work that's been done showing the horrible consequences of the kinds of top marginal tax rates we had in the 50s-70s.

Read on here for more.

One-eyed idiocy

While Australia burns and the world's economies plummet, Britain is in an uproar because Jeremy Clarkson called Gordon Brown a "one-eyed Scottish idiot." Poor lamb.

The Sun reports:

Jeremy Clarkson said sorry yesterday for calling Gordon Brown a “one-eyed
Scottish idiot” — EXCEPT for the IDIOT part.

Call that a catch?

American sports media has made much of Santonio Holmes's Superbowl-winning catch.

Tim Blair puts that catch in perspective.

Take a visit and see what a real catch looks like.

Tragedy [update 3]

It's a tragedy in Victoria. Over 100 dead. Horrifying stories. Worse than Ash Wednesday. Worse than Black Friday.

Just tragic.

UPDATE 1: From Andrew Bolt: "[Historian] Geoffrey Blainey says there have been bigger fires in Victoria’s history, but none deadlier."

UPDATE 2: Tim Blair has updates.

UPDATE 3: The Australian Greens play pseudo-science over the corpses. Says the shroud-waving Senator Bob Brown, leader of the Australian Green party,

summer fires would get worse unless Australia and other nations showed more leadership on reducing greenhouse gas emissions."It's a sobering reminder of the need for this nation and the whole world to act and put at a priority our need to tackle climate change," he said.

Clearly he hasn't taken any lessons in not talkng your book before people have even been able to bury their dead. And all too clearly, neither has he been following either history or the news from the Northern Hemisphere. Summarises Andrew Bolt:

Fact: Cold, not heat, is what really kills people, as we see now in Britain.
Fact: A warming world would save countless lives, not cost them.

Fact is, heat waves can and do kill people. And bush fires can and do kill people. But let's put this in historical context before hysterical over-reaction makes it impossible.

In 1939, for instance, 438 people died in the Black Friday heat, not including
the 71 Victorians killed by the fires.
The temperatures back then were higher than those in Victoria and South Australia last week, but the heat this time hung around for longer. Yet despite our much greater population today, no more than 50 people died from heat, a fraction of the 1939 toll.
What changed? Mostly our ability now to stay cool -- most obviously through
airconditioning.

And the news from up north -- what does that tell us? Well, Britain (to take just one Northern Hemisphere example) is now having its coldest winter in 13 years. The result?

So vulnerable are the elderly to cold that a World Health Organisation report
last year estimated that 40,000 Britons died every winter, and these "excess
winter deaths are related to poor housing conditions -- insufficient insulation,
ineffective heating systems and fuel poverty".
That's right: 40,000 Britons die each year in the cold, often because they're too poor for warming.

The evidence is that excessive cold is a far bigger killer than excessive heat.

So tragic as the bush fires are, they are neither evidence of global warming nor the "sobering reminder" that Senator Brown so crassly contends. What his comments are evidence for however is that politicians like Mr Brown will leave no stone unturned, no matter how distasteful, to peddle their particular brand of bilge.

Stimulus: Because all economies have performance issues [update 2]

This year, Australian taxpayers will receive, from their Government, an Economic Stimulus Payment. A shopping subsidy. This is a very exciting new programme that can be explained using the Q and A format:

Q. What is an Economic Stimulus Payment?
A. It is money that the federal government sends to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. Only a smidgen.

Q. What is the purpose of this payment?
A. The plan is that you will use the money to purchase a
High definition TV set or a new computer, thus stimulating the economy.

Q. But isn't that stimulating the economy of China?
A. Um.

Q: Well, how on earth does it stimulate the one whose taxpayers are paying to be stimulated?
A: It's all about the "multiplier."

Q: The "multiplier"?
A: Yes, the "multiplier." Every dollar the government "injects" into the economy creates an even larger increase in national output -- a multiple up to one-and-a-half times the original spend-up. The money the government is giving away goes to retailers, which then goes to producers, which then goes to other producers and so on. The net result of the spend-up, as the theory goes, will be new jobs and an overall increase in the nation's income.

Q: So the government is giving me back a smidgen of my own money, and this smidgen is multiplied several times to create a "stimulus?
A. You've got it.

Q: And it keeps prices up?
A: We hope so.

Q: But don't prices need to fall in a recession to get real production going again?
A: Well, yes.

Q: And it's not even backed by real demand, is it?
A: Well, no.

Q: So how long can such an artificial stimulus last, then?
A: Um, the theory is that it's only temporary at best.

Q: And what sort of stimulus would it have created if I'd been able to keep that money myself, and either spend it or save it?
A: Well . . .

Q: Or if producers had been able to keep their own money?
A: Um . . .

Q: So it would be fair to argue that "not only does the increase in government outlays not raise overall output by a positive multiple; but, on the contrary, [it actually] leads to the weakening in the process of wealth generation in general.”
A: But . . .

Q: And this is the whole theory? This is all you economists can come up with?
A: Well, that's about it, yes.

Q: So it's a bit like when "a carnival magician produces a quarter from behind a child's ear," isn't it. "The 'magic' of the multiplier is mere illusion."
A: Hush your mouth. People are listening.

Q: No answer?
A: Sorry, we're a bit busy right now shovelling money out the door.

* * * * Stimulus: Because all economies have performance issues * * * *

[Hat tip (and pic) Tim Andrews & Sus]

UPDATE 1: Courtesy of Greg Mankiw [with a hat tip to Anti Dismal], here is John Maynard Keynes of 1942 six years after The General Theory, showing he was still wrong about his general theory, but moving towards being right on specifics:

Organized public works, at home and abroad, may be the right cure for a chronic tendency to a deficiency of effective demand. But they are not capable of sufficiently rapid organisation (and above all cannot be reversed or undone at a later date), to be the most serviceable instrument for the prevention of the trade cycle.

UPDATE 2: Subsidies for everyone? If we all have to endure the "stimulus" packages of politicans, then how about a stimulus package for bloggers? The excellent 14-point case for prudent profligacy [hat tip TVHE] concludes,

This is an important campaign. Your comments of support ... help make the case to government...
With sufficient momentum we can make sure the stimulus is not wasted on filling in freshly dug holes, fixing the environment or building bridges to nowhere - all things that the market is perfectly capable of doing by itself. Instead of Bridges to Nowhere, what this economy really needs is a serious infusion of Blogs about Nothing.

Amen to that. May I forward you this humble blogger's bank account details? ;^)