Tuesday, 21 June 2011

The Depression You Better Hope We Have… [update 2]

_Kris_SayceGuest post by by KRIS SAYCE from Money Morning Australia 

We’re often asked why hasn’t the U.S. suffered hyper-inflation… what with the trillions of dollars printed by the U.S. Federal Reserve.

The answer is quite simple.  Although we’ll admit we overlooked it at first…

With a gold standard, a nation owed money (creditor nation) by another nation (debtor nation) can demand payment in gold.

But without a gold standard, the creditor nation can only receive paper or electronic money… money created by the flick of a switch.

That’s when inflation troubles begin.

But still, it doesn’t explain why Weimar Germany and Zimbabwe had hyper-inflation whereas today the Western world doesn’t.

Here’s the key: hyper-inflation only takes hold if a nation expands the money supply much faster than other nations… and if creditors have real alternatives to the inflated money.

That’s why Weimar Germany and Zimbabwe had hyper-inflation.  And why the Western world doesn’t today.

Let me sum it up for you…

Why hyper-inflation happens

Following World War I, Germany had to pay compensation to the victors in gold or foreign currency.

But because Germany didn’t hold enough gold or foreign currency, it had to print new money to swap it for gold and foreign currency.

Clearly when your intention is to devalue the currency, working fast is critical.

Because as soon as the market gets wind of the plan, holders of the money will look to get rid of it as quickly as possible in exchange for something else.

That explains the speed of Weimar Germany’s inflation:

Source: Wikipedia

In a matter of months, one gold Mark (money convertible into gold) had increased in value from 1,000 “paper” Marks to one trillion “paper” Marks.

The story is similar for Zimbabwe.  Once the central bank began printing money, creditors stopped accepting Zimbabwe dollars – because they knew they were being devalued.

They preferred a better store of wealth – such as the U.S. dollar!

But while hyper-inflation is bad, what the Western world is experiencing is much worse.  Because there isn’t a fixed conversion for paper money into gold for any currency, all central banks and governments know they can inflate the money supply.

As long as they don’t go too crazy.

That’s the main reason many central banks publish an inflation target.

They don’t do it for information purposes.  And it isn’t to try and cap inflation.  It’s there as a form of price-signalling… showing other central banks how much they can increase their money supply without causing a run on the currency.

As long as every central bank knows the limits, they can engineer a globally co-ordinated period of inflation… without fear of causing hyper-inflation.

And boy, has it worked.

How the misery is spread far and wide

Trouble is, it punishes the whole world – not just one nation.

And because gold is demonised as a “barbarous relic”, and even blamed for past depressions, most people – even pro investors – don’t realise the value of their money is being eroded.

That’s the “good” thing about hyper-inflation.  You’re in no doubt what’s happening.  You can see your wealth destroyed right before your eyes.

But with slow burning inflation caused by central bankers, the effects are near impossible to notice at the time.  It’s only years later you wonder how you can earn three times as much as you used to, yet you’re still no better off.

You can see the difference clearly in these two charts.  First, this chart from the Bank of England showing the annual inflation rate since 1790:

Source: Bank of England

And second this chart showing the U.S. inflation rate from 1914:

File:US Historical Inflation.svgSource: Wikipedia

When gold was considered as money, you can see inflationary periods followed by deflationary periods.

Wealth erosion didn’t happen over the long run.  And purchasing power was broadly constant.

But once the monetary system removed gold and silver, there have been no periods of deflation.

Even during economic downturns, there hasn’t been deflation… only more inflation.

Why the worst is yet to come

During the past two years the U.S. Federal Reserve has created almost $2 trillion of extra money to keep the U.S. from collapsing.

And what has it achieved?  According to Bloomberg News:

“The US economy will grow 2.5 per cent this year, down from 2.8 per cent projected in April, the IMF said today, citing higher commodity prices and bad weather in the first quarter and a weak housing market.”

The U.S. economy got a temporary inflation boost.  And now the impact has gone.

If central banks want to postpone the overdue depression, it can only do one thing: and that’s print more money.  Given a choice between that and allowing the global economy to collapse on their watch we know which they’ll choose.

The fact is, as strange as it sounds, the world needs a depression.

It needs to purge the economy of all the past mistakes.  Sure, you can sit there and hope it doesn’t happen.  But that’s just accepting you’re happy for your wealth to be destroyed by slow-burning inflation…

This is much worse than the quick shock of hyper-inflation.  But the slow-burn can’t and won’t last.

Our guess is that time is fast approaching.  And that means inflation – even though it may not be hyper-inflation – is set to soar.

Kris Sayce
Money Morning Australia


UPDATE 1: A contrary opinion on the coming calamit(ies) here:

  • Permanent Gold Backwardation:The Crack Up Boom – Keith Weiner,  Z E R O   H E D G E
    ”I agree that one way or the other we will get a depression, and the sooner the less severe. But for the rest, well I published this paper on a different theory of hyperinflation…”

And … “Anyone who thinks ‘inflation’ is about rising prices, and hyperinflation is about hyper rising prices needs to read this article [as well]. It is about the increasing tensions around insolvency and what happens when a debtor cannot pay. Picture this happening to country after country, bank after bank.”

UPDATE 2: The latest Casey Daily Dispatch links to a relevant wee video.

“It's a 1933 propaganda piece promising to bring the United States out of the Great Depression with inflation. Most of our readers will find this funny - especially the part about higher commodity prices. However, this video also reminds me of propaganda's changing face. The message is essentially still the same today, but Washington has become more subtle in presenting its views.”
1933 Inflation Propaganda Video (YouTube)

US Government Inflation Propaganda - 1933

The Telecom litmus test works again [update]

Politicians’ attitude to and handling of Telecom has always offered a litmus test of their attitude to (big) business, never more so than in recent times, by the two most recent governments.

Their handling of Telecom offers an eloquent demonstration of the difference between these two governments in their attitude to business: where the Clark Government did its best to nationalise and dismember Telecom  (scratch today’s Labour MPs, and you’ll still find a Marxist underneath), the Key Government is now doing all it can to turn it into a government department.

Such is the way the Key Government apparently sees business: as part of his corporate state, kept onside by subsidies and state-guaranteed monopolies.

A monopoly we would always have been better off without.

And, sad to say, instead of attacking Key’s crony capitalism Don Brash has shown he still doesn’t understand how politics works.  In accusing the Labour opposition of “sabotage” and “wanton economic thuggery” because it says it would repeal Telecom’s sweetheart fibre contract,  he is opposing precisely the position National should have taken over Kiwisaver when it was in opposition—back when it claimed to be opposed.

As I said at the time, for all their flatulent opposition at its introduction, John Key could have extinguished Kiwisaver before it was even born by one simple statement that, if elected in 2008, he would deal to this scheme as Muldoon did to the last Labour compulsory savings scheme -- by scrapping it.

That would not have been sabotage. That would have been a kindness. It would have shown balls.

No wonder he didn’t try it.

UPDATE: In Australia, opposition leader Tony Abbott has pledged to scrap Julia Gillard’s carbon tax if his Coalition wins the next election. Presumably Brash would call that, too, “economic sabotage.”

Which shows how absurd his mis-directed mini-tantrum really is.

Don Boudreaux's Open Letter to Paul Krugman

Guest post by Jeff Perren

Don Boudreaux of Cafe Hayek gives an excellent smackdown of Paul Krugman (albeit far more polite than he deserves). Krugman writes:

if you ask a liberal or a ‘saltwater’ economist, “What would somebody on the other side of this divide say here? What would their version of it be?” A liberal can do that. A liberal can talk coherently about what the conservative view is because people like me actually do listen. We don’t think it’s right, but we pay enough attention to see what the other person is trying to get at.

The reverse is not true. You try to get someone who is fiercely anti-Keynesian to even explain what a Keynesian economic argument is, they can’t do it. They can’t get it remotely right.

Or if you ask a conservative,”What do liberals want?” you get this bizarre stuff – for example, that liberals want everybody to ride trains, because it makes people more susceptible to collectivism. You just have to look at the realities of the way each side talks and what they know. One side of the picture is open-minded and sceptical. We have views that are different, but they’re arrived at through paying attention. The other side has dogmatic views.

To which Dr. Boudreaux replies, in part:

Let’s overlook your failure to distinguish conservatives from libertarians – a failure that, for the point I’m about to make, is unimportant.

You’re able to conclude that “liberals” are open-minded thinkers while “conservatives” are dumb-as-dung dogmatists only because you compare the works of “liberal” scholars to the pronouncements of conservative popular pundits [like] Glenn Beck and Rush Limbaugh ...

Because, as you claim, you study carefully the works of non-”liberal” scholars, you surely know that the late Frank Knight, Ludwig von Mises, F.A. Hayek, and Milton Friedman – influential economists whom you would classify as “conservative” – were all steeped in and treated seriously the writings of Keynes, Marx, Veblen, Galbraith, and other “liberal” thinkers.

The same is true for still-living influential non-”liberal” scholars.

 I’d be obliged to conclude that you in fact, contrary your claim, do not carefully engage the works of non-”liberal” scholars if you insist that “liberal” scholarship is ignored by conservative and libertarian thinkers such as James Buchanan, Gordon Tullock, Ronald Coase, Armen Alchian, Harold Demsetz, Anna Schwartz, Gary Becker, Vernon Smith, Leland Yeager, Henry Manne, Deirdre McCloskey, Allan Meltzer, Richard Epstein, Tyler Cowen, Arnold Kling, George Selgin, Lawrence H. White, and James Q. Wilson, to name only a few…

In short, Krugman once again has been caught peddling intellectual porkies.

The whole thing, while short, is well worth reading in its entirety, as are many of the comments.

Monday, 20 June 2011

The Odious Dr. Liu

Guest post by Jeff Perren

I'm late commenting on it (for reasons I'll explain soon) but we here in the U.S. really dodged a bullet when Republicans blocked the nomination of Dr. Gordon Liu for the Ninth Circuit of Appeals.

Apart from the damage he would have done there, that job is often considered a stepping stone to the Supreme Court. If you wonder just how big the bullet was, this 2006 quote of his from the Yale Law Journal is enough:

On my account of the Constitution’s citizenship guarantee, federal responsibility logically extends to areas beyond education. Importantly, however, the duty of government cannot be reduced to simply providing the basic necessities of life…
    Beyond a minimal safety net, the legislative agenda of equal citizenship should extend to systems of support and opportunity that, like education, provide a foundation for political and economic autonomy and participation. The main pillars of the agenda would include basic employment supports such as expanded health insurance, child care, transportation subsidies, job training, and a robust earned income tax credit.
It's a pity, actually, that Dr. Liu is allowed to return to his teaching position at U.C. Berkeley's law school, where he may be doing more long-term damage than if he were on the Ninth Circuit. But that isn't in our control at the moment.

If we're to reclaim the United States from Progressives two things must happen:

  1. the State-sponsored factory-school system must be privatized and returned to reason, and
  2. all Progressive judges must be expunged from the courts.

We're still in considerable danger from both those influences, but at least we can claim this one (temporary) victory.

Go the F#ck to Sleep

One of the most popular children’s-books-for-adults this month has a title you can’t use on a family blog. So here’s Samuel L. Jackson to read it for you.

IPCC sexing up more “science” [updated]

The UN’s IPCC climate panel relies only on reliable, well-researched, peer-reviewed science. Oh, and wish-fulfilment fantasies from Greenpeace.

Yes, that’s right. Turns out the UN’s favourite climate lobbying organisation (that’s the IPCC, not Greenpeace) has once again been caught fudging its figures, drawing up dodgy data, and trying to hide its decline as a serious scientific clearing house.

This time, the IPCC has been caught with its pants down “bigging up renewable energy as the power source of the future” in a report that “turns out to have been lead-authored by an activist from Greenpeace .”

That’s virtually the leitmotif of scientific credibility wouldn’t you say?

And remember “renewable energy”? That’s the kind of apologetic energy production whose working definition is that it is “energy produced by means that would be uneconomic without govt. tax breaks and subsidies”—energy that is not so much renewable as it is unreliable.

No wonder it’s so popular with the anti-industrialists.

Picture from Jo Nova's blog.

UPDATE: There is No Conflict of Interest Policy for the IPCC’s next scare-story official report, out soon. And no conflicts of interest at all. Honest, guv. Physicist Lubos Motl summarises the laughable situation:

It turns out that [disgraced IPCC head Rajenda] Pachauri also wrote a preface for the Greenpeace document that was renamed as the IPCC document. Pachauri rejected any kind of policy against the conflict of interests for the 5th report: no surprise, the whole work of the IPCC and Pachauri himself is all about the conflict of interests.

Or as Steve McIntyre puts it in accusing the IPCC of playing "Greenpeace Karaoke",

The IPCC Press Release on renewables [claims] “close to 80 percent of the world‘s energy supply could be met by renewables by mid-century …” The basis for this claim is a Greenpeace scenario. The Lead Author of the IPCC assessment of the Greenpeace scenario was the same Greenpeace employee who had prepared the Greenpeace scenarios, the introduction to which was written by IPCC chair Pachauri.


Saturday, 18 June 2011

Introducing The Center for Individual Freedom

Guest post by Jeff Perren

CFIF has some superb writers.

Ashton Ellis has penned a number of fine essays in the past couple of months, and his latest on Texas Gov. Rick Perry is in that vein.

But Quin Hillyer's recent discussion of Tim Pawlenty's misstep in not pressing Romney on ObamaneyCare during the recent GOP debates is - to use a word I rarely write - awesome.

And, for a final incentive to check it out, I offer CFIF's Question of the Week:

"How many Members of Congress have been expelled from office?"
Sadly, the options from which to choose (9, 20, 52, 103) does not contain the correct answer: Too damn few!

Thursday, 16 June 2011


_McGRathLibertarianz leader Dr Richard McGrath invites you down to his clinic for an inoculation against this week’s stories and headlines on issues affecting our freedom.

This week: The country’s biggest drug dealer

  • DOMPOST: “Pharmac: The Politics of Playing GodA 25 year old school teacher is able to access “free” treatment with a medicine that actually costs taxpayers $160 a day.

No-one would deny Sam Forward the opportunity to purchase treatment for his chronic myeloid leukemia. But the devious manner in which the State’s legalised drug broker – Pharmac - acts as the arbiter of funding for expensive medical treatment, in this case choosing to sponsor Sam’s medication (Glivec or imatinib) makes my skin crawl.
    Sam, by the way, could have taken out a loan to fund the cost of this treatment. His family and friends could have chipped in; he could have fund-raised, relying on the uncoerced benevolence of others. That would have been asking nicely.
    This news article demonstrates a certain naivety on the part of its writer, one Nikki Macdonald. She states that Sam “doesn’t pay a cent of [Glivec’s] cost.”
    Oh yes he does. Everyone does. Certainly every taxpayer does. Who doesn’t pay the National Socialist Party’s 15% GST? Sam is earning a salary, and so the IRD – like a Mafia protection racket - will be taking its cut. If Sam earns $50,000 then somewhere around $1,800 is stolen to fund the State’s bureaucratic health leviathan, including the Pharmac empire.
    That’s $1,800 Sam could have used to fund health insurance. (Sam also has to fork out $3,000 to pay doped-up uneducated degenerates to breed on the DPB; to pay able-bodied youths to sleep in because the state would rather they earned $5 an hour doing nothing than $12 an hour doing productive work; and to fund the state pension Ponzi scheme until its inevitable collapse).
    The rest of us are also taxed to pay for Sam’s treatment, and for the treatment of others on whom Pharmac bestows its “charity.”
    The existence of Pharmac is a symptom of government interference in the health and pharmaceutical industries. Its “aggressive pricing policies” are an indication of how powerful government monopolies are, when competition is outlawed and the State has the sandpit all to itself.
    The writer tells us that Pharmac (the Pharmaceutical Management Agency) was established in 1993 by the same National Socialist administration under Jim Bolger that was also responsible for the execrable Resource Management Abomination. Yep, that’s the National Socialist Party that believes in personal responsibility, competitive enterprise (yeah right) and limited government (pass me a bucket).
    There is no reason why the sort of analysis undertaken by the doctors and pharmacists that Pharmac bankrolls couldn’t be undertaken in the private sector. But that would mean deregulating the medical and pharmaceutical industries—and the National Socialists aren’t willing to do that. They prefer instead to keep a battalion of state servants warming office seats, feeling important as they disburse money to the poor serfs who earned it in the first place, and clipping the ticket on the way.
    I saw Dr Peter Moodie, medical director of Pharmac, at a GP conference in Rotorua last weekend. I paid my own way at that conference Peter; I hope the taxpayer didn’t pay for your attendance there, but I’m damn sure she did.
    There has got to be a better way than giving Pharmac all this money and power – and there is. The government should stop stealing money from people’s pay packets, just because it thinks it knows better how to spend that money. Let people plan for their health needs themselves, according to what they can afford. Allow them to spend that $1800 or thereabouts making their own arrangements. This would encourage people to take better care of themselves and to work hard and earn more money so they could afford a more comprehensive insurance or savings package to cover health catastrophes.
    The stories that Pharmac and its lackeys in the press don’t tell you are the ones about the people who take care of themselves, save hard and make provision for health emergencies, and don’t suffer lifestyle-related cancers or early heart disease and thus don’t need Pharmac’s help. The thousands of dollars these people are forced to fork out to prop up Pharmac could have been spent by these people supporting their own families. Instead of which the money is removed from them before they can see how much has been lifted from their wallets, after which they lose all control over how it’s spent.
    The “from each according to his ability, to each according to his need” credo gave us the blood-soaked legacy of communism. Its spirit lives on in Pharmac, and in every similar government ant farm endorsed by both the Labour and the National Socialists.
    The only opposition to the red/blue socialist tag-team and its enviro-loony/race-card/Winston-demagogue collectivist-populist soulmates are the Libertarianz Party and, to a lesser extent, the ACT Party (which I am hoping Don Brash can revitalize after years of neglect by - and infighting under - Rodney Hide).
    Let me stress this: John Key’s National Socialists have no intention of dismantling the massive Nanny State that Aunty Helen built up over many years. They lack the spine and the will to do so. Sure they tinker around the edges but that is just for appearances. Their agenda is the usual conservative one: don’t make significant changes or we might lose votes. Don’t frighten the horses. And for Christ’s sake, don’t rock the boat!
    The Libertarianz Party would not only rock the boat, it would privatize it and allow other boats to compete. It would probably sell the boat to the highest bidder and use the funds raised to help pay off the massive debt that the Red and Blue Socialists have amassed over eighty or so years. It would stop “taxing” Sam, and you and I, and allow New Zealanders to keep their wealth. Give people the means and the incentive, and they will beat demons such as leukemia.
    A system of taxing people into poverty and then handing back the loot in a haphazard fashion is not only immoral, but cruel and deceitful. It fools people into thinking that only government can solve people’s problems and that individuals are helpless dumb creatures, when in fact the opposite is true.

Liberty means responsibility. That is why most men dread it.
George Bernard Shaw

Sunday, 12 June 2011

(I'm) Stranded

'm) I've been stranded in Melbourne by a Chilean volcano--out of which circumstances someone far better than I could surely conjure some sort of poetry, but I can only post briefly to excuse myself from blogging for another day. Or until the volcano and its ash blow themselves out, and I can get closer to the blogging equipment I'm beginning to think I should have brought with me.

So in the meantime: Go the Cats!

And here's The Saints from 1977, from another Australian town, with the best single from this and every other week (as somebody knowledgable once said).

Friday, 10 June 2011

Do-it-yourself ramble


I’m off to Melbourne this morning to join 90,000 screaming fans watching Geelong beat Hawthorn tomorrow night at the Cathedral of Sport.

So there’ll be no ramble this morning from me.

So why not take the opportunity for a do-it-yourself ramble—to post in the comments links and stories that interested you, and are sure to interest other readers.

Go to it!

And enjoy!

Thursday, 9 June 2011

NOT PJ: Taking the Mickey

_BernardDarntonThis week Bernard Darnton wouldn't steal a car, but he might download one if it was old enough.

Taking the Mickey

Outrage erupted this week as an anti-piracy video featuring comedian Rhys Darby was released to New Zealand schools. Pro-piracy campaigners announced a boycott and said they would immediately stop watching their downloaded Flight of the Conchords episodes. Darby is expected to miss out on revenues of up to $0 a week until the boycott is lifted.

There is an escalating war between the creators and distributors of films and music and the “information wants to be free” crowd who think they should be allowed to consume whatever entertainment they want without paying for it. The law is on the side of the copyright owners and technology is on the side of the pirates. Matters are foggied because the technology has myriad legitimate uses and the law is being used as a blunt weapon to bludgeon the pettiest of offenders and any inconvenient bystanders.

MickeyExhibit A: Steamboat Willie starring Mickey Mouse. This film was released in 1928. Its copyright was due to expire in 1956. Then it was renewed giving a new expiry date of 1984. Just in time, the law changed extending its protection until 2003. Yet again the horrors of public domain were avoided with the passage of the Copyright Term Extension Act, taking the date out to 2023. Ergo, according to the anti-copyright folks, Congress has been bought by “big media” and Disney is writing America’s laws.

Without wanting to fabricate complicated conspiracy stories, the steady increase in copyright protection does look odd. By rights, Steamboat Willie should have fallen into the public domain by now and the file-sharers should be allowed to share and remix this nugget of Americana to their hearts’ content.

At this point you need to put your conclusion-jumping shoes on because we’re off to the land of Non Sequitur. Steamboat Willie is 80 years old and I would be allowed to copy it if not for some shady corporate welfare deal. Therefore copyright is bollocks. Therefore I should be allowed to download X-Men: First Class, which is 8 days old, which is what I wanted to do in the first place before making up this rambling story about Mickey Mouse.
So, a question for the Rhys Darby boycott crowd: if information wants to be free, why didn’t X-Men: First Class just spring into existence by magic? Why did hundreds of people have to spend months of effort and $160 million to bring it into existence?

Like every good political stoush, everyone is yelling, and everyone is wrong. Media corporations are wrong to keep lobbying for extensions of copyright, lawmakers are wrong for criminalising fair use and format shifting, and file sharers are insane for thinking that they can take products without paying for them and expect the producers to keep producing.

Lawmakers are wrong for writing legislation that assumes guilt as soon as copyright infringement accusations are made and wrong again for mandating that internet access be denied to those accused. Opposing lawmakers are wrong when they claim that internet access is a human right. (Tom Paine was silent on the matter.)

Whenever I listen to an argument on this topic I want to stick both sides in a room and reboot the lot of them.

* * * * *

Bernard Darnton boots himself into action every Thursday here at NOT PC.

Wednesday, 8 June 2011

Why do Weiner et al keep being given more power?

As yet another politician disgraces himself, this time by tweeting his Weiner to folk who hadn’t asked for it, isn’t it time to ask why so many people so readily grant so much power to such demonstrably stupid people like this?

As Tibor Machan says, it’s very puzzling.

Why, in the face of repeated scandals and corruption across the world and this country,are  there well-educated folks who continue to be confident that if only one hands a problem over to politicians and their appointees, all will be fine.

Tibor, naturally, has both an answer and a solution.

Tuesday, 7 June 2011

Double-dip? Or never-ending bust?

WillPredictRecoveryForFood“"Whether one likes it or not, it is a fact that the main issues of present-day politics are purely economic and cannot be understood without a grasp of economic theory. Only a man conversant with the main problems of economics is in a position to form an independent opinion on the problems involved. All the others are merely repeating what they have picked up by the way. They are an easy prey to demagogic swindlers and idiotic quacks.   Their gullibility is the most serious menace to the preservation of democracy and to Western civilization.”
            - Ludwig Von Mises, Bureaucracy

‘Midst expectations of a “double-dip” recession and in the light of the above,  you might be wondering “Did the (U.S) Recession Ever Really Go Away?” 

And you might appreciate  “ A Primer on the Never-Ending Bust.”

“We’re awful,” sayeth the teacher

Ann McElhinney, former teacher and now famous for her films "Not Evil Just Wrong" and "Mine Your Own Business," gives a heartfelt speech about how children are being indoctrinated by teachers.

Don’t think her stories only applies to the States.

What she’s talking about are the modern-day Comprachicos.

But the modern heirs of the comprachicos are smarter and subtler than their predecessors: they do not hide, they practice their trade in the open; they do not buy children, the children are delivered to them; they do not use sulphur or iron, they achieve their goal without ever laying a finger on their little victims. The ancient comprachicos hid the operation, but displayed its results; their heirs have reversed the process: the operation is open, the results are invisible…

[HT Robert at the Small Dead Animals blog]

Monday, 6 June 2011

June 6, 1944

June 6, 1944, is one of the most momentous days out of many in twentieth-century history.

It was the day sixty-seven years ago that the free west summoned every resource available, and gambled everything on the outcome of this one day, and one vast attack—an assault across the English Channel on five beaches in western France. It’s object: to free Western Europe from the Nazi jackboot.

This was D-Day.

The tale of Operation Overlord, a heroic assault on the Atlantic Wall launched by the greatest invasion armada the world has ever seen, has been told many times but never so well or as effectively as the sweeping story told by Cornelius Ryan in his non-fiction account The Longest Day—which became a surprisingly effective 1962 movie starring everyone at the time who held an Actors Equity card.

Don’t accept cheap imitations.  Unlike the Spielberg splatterfest which purports to portray the same momentous event, this film (and more especially the book on which it was based) shows both the context of this landmark event and its human interest stories.

Cycling around those Normandy beaches a few years ago with my copy of Ryan’s book as one of my guides, I soon discovered that when they saw the book the locals were still keen to stop me and talk about what happened that day so many decades ago.  And sometimes (since they were talking very fast, very idiosyncratic French) I could even work out what they were talking about.  Or some of it.

And I remember sitting in a pillbox on Omaha beach, imagining how it must have felt that morning to have looked out to sea and seen the whole horizon armed to the teeth and heading straight for you…

… fast forward to 3:15. And keep your buttocks clenched.

QUOTE OF THE DAY: On minimum wages

“The proposal is to make low wage earners less employable. To
steal their right to work for whatever wage they want to. To ensure
that they don't get the work experience they need in order to earn
more later in life. And most crucially of all, the increase in the
minimum wage would cement job security for those already
earning above the minimum wage. It does this by reducing
competition. That's why unions came up with the idea.”
           - Nickolai Hubble, from The Daily Reckoning Australia

Sunday, 5 June 2011

Rand on religion

See, even big government liberals can admit “Ayn Rand Wasn’t Always Wrong.” Says P.Z. Myers at Pharyngula,

    This is a video of Ayn Rand on a talk show in [1979, three years before the died]. Don't run away yet! The interesting part… [is] the audience and also the host: they seem horrified that someone has so boldly stated that they don't believe in god. And that liberal host, Phil Donahue, "tsk, tsk, tsk"s her, and you can tell he's just unable to comprehend someone denying the deity.
    We have come a long way. I don't think a modern audience would be much less annoyed, but at least they wouldn't be as surprised.

Friday, 3 June 2011

Friday Morning Ramble: Lot’s to get (un)excited about

Local politics has become almost unwatchable. So I’ve stopped watching it. For the moment, anyway.  How about you?
In the meantime, here’s a few things that caught my eye this week.

  • As  Eric Crampton points out, debaters on both sides of the minimum wage argument have been making stuff up.
    Over and underestimating effects of minimum wages
    – Eric Crampton, O F F S E T T I N G   B E H A V I O U R
  • The story of New Orleans’s resurgence after Hurricane Katrina might offer some hope for struggling Cantabrians if they can get the political classes off their backs. Because Katrina’s recovery did not come from the top down. The disaster “undermined the corrupt, inept political regimes that had burdened the area for decades… After Katrina everyone was forced to become an entrepreneur. The dominant concept for the rebuilding has become one of resiliency and self-employment.”
    Let’s hope the same thing will pull Christchurch through.
    [Hat tip Owen McShane]
    The Katrina Effect: Renaissance on the Mississippi -  Joel Kotkin, N E W   G E O G R A P H Y
  • According to Suffolk University economics professor Ben Powell, the three most common immigration myths are that immigrants are a drag on the economy, they steal our jobs, and that they depress wages. The evidence for those assertions is so weak that it takes Powell less than two and a half minutes to debunk them.
    As he concludes, “Whatever your position on immigration was before, if one of these three myths was holding you back, this should push you more on the margin toward wanting more open borders, not less.” [from Bastiat Institute by Ryan Young]
  • What would the world look like if too many people spent too much time and money learning too little of anything that really matters a damn? Well, take a look around folks: we’re living in that world now.  Lot’s of folk with MBAs and PhDs, and too few to make stuff, fix stuff, and to come out weekends to repair your drains. (No, it’s not a conspiracy. It’s what happens when a market is as heavily subsidised as this one.)
  • Let’s get this straight: GDP, that measures so-called Gross Domestic Product, does not measure production. It mostly measures consumption (i.e., spending by you and me at the shops, and spending by the government buying votes). And when it does measure production, it netts it out so drastically so that what it does count is only the very small tip of a very big iceberg. So it’s neither Gross, nor a measure of Production. In fact, in recent times, what it is coming to measure most is government spending, and their expansion  of the money supply. So, with that in mind …
    ... Can We Please Stop Pretending the GDP Is "Growing"?
    - Tyler Durden, Z E R O  H E D G E [ht Keith W.]
  • How’s Australia doing? Strangely, there are still folk around that think it dodged an economic bullet. And oddly, Roger Kerr seems to be one of them.
    The State of the Australian Economy – R O G E R   K E R R ‘ S   B L O G
  • Yes, Virginia, Australia’s housing bubble has burst. “First and foremost, house prices are falling.  We’re going to use the dreaded ‘f’ word here on television.  House prices are falling.” And: “The rate of decline is actually accelerating.”
    * 5 Myths That Won’t Stop an Aussie House Price Crash
    * Why Housing Will Fall as Hard as Silver But Take Longer to Recover 
    - Kris Sayce, M O N E Y M O R N I N G A U S T R A L I A
  • And for the rest of the world? The crash radar is still on extreme.
    Why We Back Top Fund Manager’s Crash Call – Kris Sayce, M O N E Y   M O R N I N G   A U S T R A L I A
    Why the US is in Re-Recession – D A I L Y   R E C K O N I N G
  • Will the economic pain in Spain stay mainly on their plain? No, it won’t. Spaniard wanting to fake the reality they’ve voted for won’t help.
     Forex focus: the pain in Spain – T E L E G R  A P  H
  • Does New Zealand need a weak dollar?  No, we need a sound dollar. (The arguments here are essentially the same as they are in the U.S. )
    Do We Need a Weak Dollar? – Robert Murphy, M I S E S   D A I L Y
  • Meanwhile, back in the States, rather than cut their profligate spending they’re still trying to pass a bill so they can government can raise the amount they can keep borrowing without breaking the law. ‎150 horrified economists have called for responsibility, and signed a letter opposing an increase to the debt ceiling. Paul Krugman was not amongst them.
    150 Economists Sign Letter Against Increase Of US Debt; Spoiler Alert - Paul Krugman Is Not Among Them – Z E R O   H E D G E
  • Meanwhile, mainstream economists are still baffled by the US’s “slowing economy and low yields,” and that’s despite all the Keynesian stimulus they’ve had thrown at the problem. As Steven Kates implies, they’re only baffled because they haven’t learned to read more widely—like some of the folk you might read here.
    Are we still all Keynesians now? – C A T A L L A X Y

“The public debt is a double burden on the free market:
in the present, because resources are withdrawn
from private to unproductive governmental employment;
and in the future, when private citizens are taxed to pay the debt.”
- John Stuart Mill, “Of a National Debt,” as paraphrased by Murray Rothbard
[Thanks to Greg D. for the cartoon] 

  • By the way, if you’re an “app” writer (and I know some of you are), then listen up. We could be reaching a “tipping point” in apps.
    Hitting a tipping point in apps – C O D Y  W A T C H
  • “I wish I'd had the courage to live a life true to myself, not the life others expected of me.” A hospice nurse reveals the top five dying regrets of her patients.
    Regrets of the Dying – Bronnie Ware, I N S P I R A T I O N   &   C H A I
  • Would you give up Vegemite for Amanda Palmer? Tough question.
Amanda Palmer in Sydney, with her Vegemite Song
  • Here’s the world’s best Republican vibraphone player: Lionel Hampton.
Lionel Hampton and his band perform ‘Flying Home.’ Broadcast on American Television in 1957.
  • Now how about this for a treat! Vladimir Horowitz play Liszt’s piano transcription of Richard Wagner’s ‘Liebestod.’  Magic.

Have a great weekend.
I will be.

Thursday, 2 June 2011

GUEST POST: “Sorry about the sewage, we are too busy gardening in the Red Zone!”

I’m sure if you caught the news from Christchurch this morning you felt as I did.

While owners of central Christchurch property are being ordered by the government’s bureaucrats at CERA to cough up demolition plans for buildings they are aren't even allowed to visit, supposedly because it’s too risky for them, council gardeners are allowed in to central Christchurch to plant flowers—presumably to make wreaths to plant around the  businesses the council has killed.

In this Guest Post, Christchurch businessman Hugh Pavletich gives voice to some of the anger felt around the city:

“Sorry about the sewage, we are too busy gardening in the Red Zone!”
by Hugh Pavletich

Take a look at these:

    Gardening in red zone - The Press
    Gardening in Red Zone infuriates business owners - TVNZ
    Anger at red zone gardening - Newstalk ZB


    Grass in house no grounds for rates relief - The Press
    Battle grows to reopen Dux - The Press

While the Christchurch City Council was insolent, incompetent and obstructionist following the 4 September 2010 earthquake, things are now even worse after the 22 February 2011 event. Another layer of bureaucrats  has kicked in with in the newly formed Canterbury Earthquake Recovery Authority (one with neither development nor engineering expertise). It would appear the Council has pretty much “kicked the can” to CERA, this new body, and is taking an even more relaxed approach to life—even as it enforces that same relaxation on the city’s business owners, who it still largely prohibits from accessing their own buildings.

These photos  below and reports ;linked above show 6 Council City Care workers tending a garden in the Christchurch’s CBD Red Zone, from which public and business and property owners, excluded. They are surreal.

That’s a lot of workers to weed one garden of course......but hey......that’s another story (see my “Christchurch: A Bureaucratically Buggered City,” from which the important Council hyperlinks have already been disabled – why?)

Obviously Mayor Bob Parker, CEO Tony Marryatt and the “management” think weeding plant beds in an area that is vacated is more important than employing these staff replacing the destroyed and mostly obsolete  sewage infrastructure in the east.

But, hey, at least they’re visible! Quite where all the grossly overstaffed 1,300 administrative / regulatory people usually located at the redeveloped Civic Offices are is something of a mystery.

These Civic Offices, the council’s brand-new “not fit for purpose” redeveloped and excessively expensive “green” building was “knocked out” for two months following the first earthquake event (at an estimated cost of rebuilding of $5 million, excluding much larger disruption costs)  – and for some four months following the 22 February event (est. cost or re-repair $10 million, again excluding disruption costs). It will not be reoccupied until the end of June. [And for the design of this “fit for purpose” building, the architect Ian Athfield has been reward with the job of Christchurch’s architectural czar. Cool, eh. – Ed.]

clip_image001So where are they all and what are they up to? No doubt some Council staff are scattered around suburban service centres and libraries. Where are the rest? What are they doing?

This illustrates one reason the Council has insufficient money to meet its infrastructure responsibilities to the community it is supposed to serve.

It is past time to move from the current failed and bloated centralised model, to the "One City - Many Communities" one, in which elected community representatives and ratepayers might better monitor these guys.

There are two types of local government in this world – the small and the bad.

Christchurch can and will recover from these continuing  earthquake events and become an “opportunity city,” once we figure out how to get acceptable performance from our elected representatives’ and the public bureaucracies we pay excessively to serve us—and how to get them off our backs.

Hugh Pavletich


PETER SCHIFF: Markets swoon on double dip fears

Peter Schiff comments on the big U.S. stock mark sell-off, amid general weakness and fears (fears? what are we talking about: expectations) of the coming second crash—made worse by the resources consumed in the stimulus season.

So while the NZ Government bases Budgets on fantasies of “four-percent growth” over the coming year, in Australia, in Europe and in the U.S. things are heading rapidly downhill. And investors know it.

And no fear thinking China is going to pull us out of it.  They have problems of their own based on their own expansion of counterfeit capital to fake the expansion of GDP  and consequent over-production of malinvestments. And in China, even the malinvestments are bigger:


_McGRathLibertarianz leader Dr Richard McGrath offers inoculation against the nonsense appearing in recent stories and headlines

This week: Fan mail 

Rather than looking at the papers this week, I share below an e-mail recently received from a New Zealander who, like many others, is wondering just how long John Key can carry on the Smile and Wave charade before the whole pack of cards comes crashing down around his ears—a correspondent who cares that innocent people are being hounded by the same government that is meant to protect them:

I have been following your party for some time now and only voted National in the last election so we could get Labour out, as I’m sure many did. However I think its time to start promoting your party more and I have already started telling people about [Libertarianz].

The reason for my email is that I want to propose the idea of a new bill, called the Victimless Crimes Bill. Basically the idea is that if a person is charged with a crime, and they can prove there is not (or would not) be a victim, then they should not be charged. I am sick of victimless crimes in this country, it’s a disgrace.

As I said in response to him, the new boss is the same as the old boss. As Peter Cresswell has pointed out on numerous occasions on this blog, this National government continues to drive this country further into indebtedness by $300 per week per family. In every essential—and all too many of the details—they  are no different to Labour before them. And their attitude to victimless crimes is just the same.

Wikipedia, defines a victimless crime as

“an infraction of criminal law without any identifiable evidence of an individual that has suffered damage in the infraction.”

Surely the test of whether something is a crime should be whether someone was actually harmed by the actions of someone else. No harm – no crime.

The Libertarianz Party believes in the principle enunciated by John Stuart Mill in his essay On Liberty:

"[The] only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others."

Or to put it another way, government is force; and the only time that force may be exercised is to protect you from me—or me from you.  (Specifically, to prevent the initiation of force by one person against another.)  The only times a person or persons can be forced to do something against his/their will is, by extension, by right of self-defense or restorative justice (where people are compensated after sustaining proven objective harm, by the entity that harmed them).

At all other times, the government—to whom the power of retaliatory force is delegated by the individuals it serves—should turn the other way, even if some people find what other people are doing distasteful.

Lack of taste is not an initiation of force.  Which means:

  • Homosexuality itself harms no-one, in the same way that heterosexuality is not inherently evil. There should be no laws that interfere in the peaceful interaction of adults.
  • Cultivating, consuming and trading in cannabis (a natural plant) is another victimless “crime”, between adults and with the consent of all parties who take full responsibility for the consequences of their freely chosen actions.
  • The same principle applies to the producers of erotica, to prostitution, to gambling and to other activities in which people are not forced to participate or actively support. As long as no coercion is involved, the State should let people do what they want. Once force is used by one party to violate the individual rights of another, however, that is where the State should step in to enforce compensation for damage or other loss.

This country needs fewer laws, not more of them. Yet while the National Party is in no hurry to remove the laws that prosecute victimless crimes, and persecute innocent New Zealanders, it is spending virtually every waking moment preparing and writing new laws to be passed under urgency.

On the other hand, the Libertarianz Party has always maintained that such laws—laws without victims—should be repealed. Immediately. That would be the beginning of paring the threat from government down to size.

In the meantime, and as healthy start on this road, my correspondent suggested a Victimless Crimes Bill be drafted. Damn good idea! The Libertarianz Party will get on to it. And who knows, there may be a libertarian-leaning party with MPs in the next parliament via whom such a bill might see the light of day, by Private Members ballot or otherwise.

Incidentally, who would have thought that blackmail is a victimless crime?

See you next week!
Doc McGrath             

Wednesday, 1 June 2011

This is tomorrow calling

There’s a little graph that started doing the rounds yesterday that someone’s tricked up to show that government debt here in NZ is just ten percent of GDP and falling.

It’s not.

The person who tricked it up is bullshitting you.

Government debt in New Zealand is over thirty percent of GDP and increasing—as we can see just by checking Dominique Strauss-Kahn’s website here:

26.164% of GDP in 2009, to
31.024 of GDP in 2010, to
32.653 of GDP in 2011, to
something even bigger in 2012 and beyond.

The simple fact is that this Government is borrowing over $300 million every week to cover the shortfall between its big taxes and its even bigger spending.  That's a new $300 debt added to the account of every New Zealand family, every week—and that figure is not falling, it’s growing.

We are in a crisis, and “politics as usual” is not going to get us out of it.

So why would the faker who tricked up the graph want to bullshit you?


PIGSBecause, like Bill English, and like John Key, they too want the government to keep faking reality and keep right on spending as if there were no tomorrow. Just as they did in Portugal, in Ireland, in Italy, in Greece, in Spain, in the UK, in the US … in pretty much every jurisdiction where the virus of welfarism has taken hold and convinced nearly everyone in them that the world owes them a living—and that they can vote themselves riches to make it happen.

But tomorrow is calling—and really very loudly. There is a worldwide sovereign debt crash coming, and when it does it won’t be pretty.

And just because the ratings agencies aren’t worried about it now, that doesn’t mean a thing. Those blind imbeciles were busy just a few short years ago giving A++ ratings to debt based on mortages given to unemployed homeless Americans—just before that particular world came crashing down.

Here’s Bryan Ferry & Chris Spedding.

Tuesday, 31 May 2011

ECONOMICS FOR REAL PEOPLE: The Socialist Calculation Debate

Here’s what our friends at the Auckland Uni Economics Group will be discussing this evening.


In this Tuesday’s seminar we turn to what is referred to as the Socialist Calculation Debate.
    In 1956 Soviet leader Nikita Kruschev banged his shoe on the podium at the U.N., and told the west: "History is on our side. We will bury you in fine [goods]. You hear that? Quality!"
    In 1971, he told an American president, "In 7 years we will reach the level of America. When we catch up and pass you by, we'll wave to you."
    In 1989, however, the whole of Eastern Europe collapsed, and the economy and environment of the Soviet Union were exposed to the world as a complete and utter basket case. It was a defining moment in twentieth-century history. "Scientific socialism," which started in Utopia and was continued midst bloodshed and famine, was revealed not as a miracle of production (as many mainstream economists seemed to think) but as a complete and utter bust.
   The reasons for the collapse were explained all the way back in 1920. The Utopians "invariably explain how, in the cloud-cuckoo lands of their fancy, cooked chickens will somehow fly into the mouths of the comrades," observed Ludwig Von Mises. "but they omit to show how this miracle is to take place."
    In fact, despite all their rabid inventive, neither Karl Marx nor his followers had written even one word explaining how a socialist economy would actually work in the real world. And nor could they. Because as Mises pointed out, there is one fundamental economic flaw in the socialist Utopia that means the system can never produce anything but misery--and after decades of debate in 1989 he was finally conclusively proved right.
    No wonder Soviet economists eventually insisted a statue to Ludwig Von Mises be placed in a prominent place in Moscow.
    Join us tonight to discuss that flaw and some of that history, as we discuss the Socialist Calculation Debate--including several lessons from it for us today.

Date: Tuesday 31 May
Time: 6pm
Room: University of Auckland Business School, Owen G Glenn Building, Room 219 (Level 2)

Monday, 30 May 2011

Perigo for Brash [updated]

Don Brash isn’t the only one who’s just recently joined ACT. So too has Lindsay Perigo.

He explains his reasons here.

UPDATE:  If you want to see why the opinions of the blogosphere can be so readily dismissed as brainless slop, please refer to the comments on this very topic at both Kiwiblog and Dim Post.

Of intelligent life, there is none.

Mind you, they haven’t been much better over here, have they.