Friday, February 24, 2012

Schadenfreude, thy name is Graham

imageA few years back, a friend’s father arrived home from a meeting to select National’s successor in the blue ribbon seat of Remuera after Alan Highet’s retirement.  Said friend’s father, “It’s always been said we could elect a donkey to stand for National in this electorate and it’d still get in. Well, that’s we’ve done this year.”

The donkey they selected was Douglas Montrose Graham, former Minister of Injustice, known to some in the past as Lord Montrose, and (after a guilty verdict in the High Court today) now known only as Inmate Graham.*

Because this mellifluous piece of human excrement, this canker on justice and bloated sack of self-importance, has today been found guilty of fraud.

Not for what he did as Minister of Injustice in the Shipley Government, when he mandated that defendants have their assets confiscated by the state, even before they’d been found guilty.

Not for what he did as Minister in Charge of Treaty Capitulations in the Bolger Government, when he took millions of dollars out of the pockets of New Zealand taxpayers to give to tribalists for things those taxpayers didn’t do.

Not for what he did as Minister of Apartheid, lecturing NZers at one point during his reign “The sooner we realise there are laws for one and laws for another, the better.”

Not because after a lifetime in the trough he retired to Tuscany to write his memoirs in Italy—and demanded a further sinecure from the taxpayer to pay for sojourn.

Not because he came out of retirement to tell taxpayers “You better keep paying your taxes” so he could be kept in his retirement in the style to which a lifetime of troughing had made him accustomed.

He was not tried in court on any of those things, more’s the pity, but the bastard did finally find himself in court for defrauding investors of Lombard Finance—his defence, ironically enough, was one of incompetence—and was tried and today found guilty.

Guilty of helping to defraud investors of $127 million. [Full judgement here.]

No, it was not for any of those many other things of which he was culpable. But it’s enough.  This is an entity who has never made on honest living, his entire wealth having come out of the pockets of unwilling taxpayers and deluded investors.  Such a life demands a deserving final chapter.

Never could schadenfreude have come to a more deserving dirtbag. The only tragedy is that hundreds of investors had to lose their life savings to make it happen.

* * * *

* He won’t be, of course. Being guilty of fraud causing losses to investors of around $227 million will never attract a custodial sentence. Jail is for people who attend a different class of social function.

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No, McCully wasn’t there

There’s been an email thread going around the advertising industry in recent weeks, started when an email from the head one big agency calling his competitors “bastards”—bastards moreover who were going to “steal his staff”—was inadvertently sent to that very bastard.

The email started as an informal internal memo telling colleagues to get down to a certain Auckland careers show before those other bastards stole the hot talent they’d just been talking about. Naturally, the abuse and the error were enough to send the email string viral, with much mirth all round at the schadenfreude involved.

And, this being the advertising industry, it was only natural that the whole thing was a complete set-up. A set-up set up by the very talent hoping to be picked up at the careers show, in collusion with the the heads of those big two advertising agencies who were sponsoring the event.

Now you’ve got to admit, that shows real talent.

But what’s it got to do with Murray McCully and his now very public emails?

Well, the little dwarf certainly has no talent, but he sure is a shifty little fuck.  Just shifty enough to make wonder whether anyone really stole them. Just the sort of devious attention-seeker who might think letting his own emails out into the wild might garner him some; with just the sort of machiavellian mind that might think numerous emails about overpaid and overfed diplomats might be a good release about the time you’re about to cut the fat out of MFAT.

After all, his (now former) opposite number in Canberra has said much worse than anything in the fairly tame emails released thus far. The rat fucker.

And the local journalists who swallowed whole the story of them being hacked, making the emails and not the cutting of diplomatic FAT the story, are no less gullible than local ad men.  Are they.

GUEST POST: Importers ask government to break strike

Guest post by Daniel Silva of the Importers Institute

The Importers Institute has today asked the government to pass urgent legislation empowering the Port of Auckland to dismiss striking port workers and contract out the work to private operators.

The Union today threatened to extend a two-week strike into three weeks. During that period, importers and exporters will have to spend many millions of dollars diverting cargo to other ports and airfreight, to keep shops and industry supplied. The exodus of shipping services from Auckland to other ports will accelerate.

This is not a genuine labour dispute for better pay and conditions. What the Union is demanding is quite simply a monopoly on wharf work, usurping the right of management to manage the Port. In effect, they are striking for the right to run the Port for the benefit of the Union. Their members will get nothing from this action, except for one month's lost wages and most probably redundancy.

The Importers Institute asked the Port management what the cost would be of moving the work over to private contractors without delay. We were told that is not possible. Under current legislation, a Court would probably force the Port to take back the striking workers. This is apparently something to do with the 'good faith' nonsense legislated by Margaret Wilson a few years ago.

We call it nonsense because the Union has been guilty of the utmost bad faith. They have lied through their teeth concerning the average remuneration of their members (over $90,000) as well as pretty much about everything else concerning this dispute.

The current government has had plenty of time to reverse the legislative excesses of the last government, but chose instead to smile and wave. The time has now come for the government to assume its responsibilities and prevent a bunch of industrial thugs from holding New Zealand to ransom.

We already have legislation that prohibits some forms of industrial action, for example sympathy strikes. That has not stopped the managers of the Union from going off to Sydney to ask their comrades in other countries to boycott New Zealand. The government's obligation is clear and urgent.

Daniel Silva is the head of the Importers Institute, an informal national association of New Zealand importing companies keeping members informed on topical issues of interest, and representing importers’ interests before policy makers and the public.

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Drew House, by Simon Laws

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The Australian climate offers opportunity especially for unique holiday houses. Like this one for photographer Marian Drew and family by Simon Laws of Anthill Construction for “a one of a kind campsite” in Seventy South, near Gladstone and right next to  “the most northerly surf break on the east Australian coast, at the start of the Great Barrier Reef.”

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Prefabricated housing doesn’t have to be dull.

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[Hat tip the Organic Architecture blog]

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Thursday, February 23, 2012

Slavery, secession, states’ “rights” and those who (still) defend them

Around seven-score and twelve years ago the Confederate slave states of the United States America seceded from the Union in a bid to protect their alleged right to own human beings as property, and brought about the first war of the industrial age.

The obscenity of slavery brought about a war on industrial scale that became the bloody pointer to the “Great War” and its charnel houses on the Somme, at Passchendaele, at Verdun—a war about which there is nothing to celebrate except its end—and attitudes that still taint America today.

BoganThe flag of the slave states, the Confederate ‘Stars and Bars’ Flag of War, is now largely just a symbol of the Bogan. Thank goodness. But astonishingly, there are today still otherwise learned folk about who defend the Confederacy on whose behalf troops took it into battle. Who defend the Secession. Who defend, explicitly, the state collectivism of so called “states' rights” and, implicitly, the barnyard collectivism of state-sanctioned racism.

Disgracefully, some call themselves lovers of liberty.  Unbelievably, many of them are happy to pretend the war was never about slavery. Bizarrely, many of them camp out at the Mises Institute (motto taken from Mises’ own, i.e.: “Never Give In to Evil, But Proceed Against it Ever More Strongly”) and help to poison both the name of a good man and the Institute’s otherwise excellent economic work.

Fortunately, a short and easy read by one Jonathan Blanks demolishes this posturing. If this issue is one you’ve ever followed, then I commend it to your attention:

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They are all prostitutes. Well, two of them are.

Whale Oil has done sterling work hunting down the real story behind the case of Tania Wysocki. Turns out the only real prostitutes in this story are Herald journalist Simon Collins and Labour MP Jacinda Ardern,who between them  pimped out her story  and those of many other undeserving poor in the much celebrated Herald series.

Anyway, after driving out and listening to Tania, something neither Jacinda nor Collins bothered to do, (Collins having written his story on the way and then doing more talking than listening), Whale Oil has a very different story than the one that was pimped out. Take a look:

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Ayn Rand was an “illegal” immigrant…

There’s a few things that US Republican candidates (and other antediluvian anti-immigration  bigots) can learn from Ayn Rand—one of them, reckons Shikha Dalmia, is Ayn Rand being an “illegal” immigrant…

[Sorry, video won't embed, so click the pic to watch it at the WSJ site.]

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(Bottom line of Rand’s story: you have no more reason to tell the truth to an immigration officer than you do an SS office looking for your child.)

[Hat tip Y. Lee]

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It’s still all Greek to some people [update 3]

You’ll have heard it reported in recent days that Greece has been “saved.” That the Greek government has been bailed out by the European Central Bank and the EU Rescue Fund (EFSF), that things will be tough for a while, but the Greeks will now be able to dig themselves out of their hole.

Nothing could be further from the truth—and the fact Gareth Morgan subscribes to this fiction (among three other fictions) is almost certain proof the outcome won’t be all rosy.

What has just happened in this second Greek bailout (remember how the first bailout was going to save things?) is another enormous tranche of borrowing lent to the Greek government to save it from its previous enormous borrowing. And if that sounds stupid, it is—but only if you think this is a rescue of Greece.

It is not a rescue of Greece.

Because it is not so much a bailout of Greece by European central bankers, but a bailout of European bankers put together by European central bankers—with German taxpayers picking up the tab.  Greece is now officially a ward of the international community—and as a ward its only job now is to make its guardians rich, or at least to provide a conduit for whatever of its mis-loaned money its guardians can claw back through good old EuroPolitik.

Face it, there was no other way European bankers were going to get any of their money out of Greece—not with Greek 1-Year Bond Yield having just hit 682%.  So when you hear bankers whooping it up because the “rescue” plan has gone through just remember to whom the lifebelt has just been thrown. And it’s not the Greeks.

Frankly, the best thing the Greeks could do now is default, and then leave the Euro Currency Zone.  And the best thing German taxpayers could do is let them—and then leave the zone themselves.

NB: Liberty Scott has an excellent summary of how things came to this pass, and how a Greek default would help:

PS: Oh, and in case you were wondering … yes, Virginia, bailing out banks is inflationary.

UPDATE 1: Mish summarises the options:

The sooner Greece exits the euro, the more likely Greece will be able to prevent still more capital flight. The smart money has already left. (Please see Germany Draws Up Plans for Greece to Leave Euro; Athens Rehearses the Nightmare of Default; Merkel's Denial Rings Hollow.)…
    The best solution would be for Germany to exit the Eurozone first, but that is not going to happen.
The next best option would be for a simultaneous bank holiday involving all Greece, Portugal. Spain, and Ireland at the same time as noted in
Why Greece Must Exit the Eurozone, How it Will Happen (and Why Portugal and Spain Will Follow); Does the Euro Act Like a Gold Standard?
That too is highly unlikely. Thus the odds of a protracted, one-by-one, and very costly breakup of the eurozone is the most likely outcome whether or not Greece survives the Ides of March.
For further discussion including an analysis of why it would be best for Germany to exit the Eurozone, please see
Eurozone Breakup Logistics (Never Believe Anything Until It's Officially Denied).

Short of a real gold standard emerging, my own opinion is that best economic outcome would see the more solvent countries (solvent only in relative terms, you understand) such as Germany, Finland, Austria, The Netherlands etc. leaving the Eurozone to go back either to their original currencies or a common one, which would quickly find their/its own value; leaving the less solvent, the halt and the lame, to soldier on under the (relative) discipline of a bargain basement Euro.

It would certainly make a southern European holiday something of a bargain.

UPDATE 2: Philip Bagus on “The Future of the Euro”:

“The problems of the eurozone are ultimately malinvestments…    even before the crisis, governments had accumulated malinvestments due to their excessive welfare spending.
    Two causes had incentivized social spending in Europe’s periphery. The first cause is low interest rates… an expansionary monetary policy by the European Central Bank (ECB) and … an implicit bailout guarantee…
    The second cause is that the euro is a tragedy of the commons.”
 

UPDATE 3: An overview on what just happened in Greece from Krazy Economy, “A Note on Greek Banks Recapitalization

As an overview, here is what we have:
The Greeks (actually you can insert any European Common Market country you want because the pattern is consistent throughout) borrowed from anywhere they could for a massive spending spree.
They required the banks to be a major lender.
They required the banks to have little or no reserves against the loans to the government.
The government can’t repay the loans.
The banks are failing.
The government, with money acquired from elsewhere because it has done stupid, insane things, is going to buy the failed [Greek] banks.
These banks are even more tied to government policies than before.
The government has ownership and control of the banks.
Does anyone think that the Greek banks will be better off?

Meanwhile, and this is perhaps the main point of the whole fiasco, the reality evasion in high places and low:

The failure of putting two and two together is a common theme in the entire European debt crisis. It is most blatant with the Greeks.
This week there have been more “strikes,” riots, and protests against the terms required by the agencies that would bail out the Greeks. Many of the chanted slogans and posters and banners declare that the foreigners are dictators and imperialists. The protestors want the politicians to “resist”!
    The Greeks appear like angry four year olds who have been told that they can’t have the toy on the shelf because mommy doesn’t have the money. How and what are the politicians suppose to resist? They are suppose to resist the requirement that they do not incur more debt. They are suppose to resist the requirement that they try to pay back their existing debt. They are suppose to resist the requirement that if they are given money they spend it wisely instead of like a drunken sailor (my apologies to sailors).
    The Greek protestors have no contact with reality. None. They have no idea that money has some connection to real things. That real things are made by someone who wants to be paid for their efforts. That borrowing actually means that the lender expects to be paid back.
    The Greek country is a testament to modern education and economic “thinking.”

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Wednesday, February 22, 2012

One year on, and Christchurch is still on welfare [updated]

I think I agree with Lindsay Mitchell and others who feel uneasy about the mawkishness of the widely publicised public commemorations one year on from Christchurch’s February 22 earthquake. As she says,

The commemoration of tragedy, not confined to Christchurch by any means, is starting to take on a strange religiosity in a largely secular country.

To which reaction I add my disgust at the entities grandstanding in the commemoration who have done nothing since the tragedy but get in the way of individuals trying to recover from the disaster.

The earthquake was the first disaster. It has delivered a second one: the political decisions made in the aftermath.

From day one on, the earthquake has delivered to the kind of person who feels drawn to clipboards and jackboots the power over others they could never get in real life. In fact, virtually the whole panoply of government, central and local, has been ranged against those trying to recover—from Gauleiter Brownlee and Boss Parker on down, with the clipboard wielders in the van: standing athwart individuals trying to rebuild staying “Stop!”

Folk in houses only partially damaged, or not damaged at all, are told by council thugs to “Get Out.”  “By order!”

Folk in other houses are still waiting to be told by government’s minions whether or not they will be allowed to rebuild, repair or remove themselves, or whether (or not) EQC will bother paying their repairers.

Builders have been left to sit on their hands while all this happens, since there’s precious little rebuilding going on, or allowed to go on.  Not just due to the dithering of  EQC et al. Right round the city, while people desperately seek new housing and queue for the few rentals around, there is good land to build houses on. But it can’t be built on and it won’t be built on, because the council’s overlords and underplanners have deemed it all off limits: “off limits” because to build here would violate their precious “strategic plan” for the city—after earthquakes strong enough to shake the city to the core, but not strong enough to shake a “strategic plan” drawn up long before earthquakes were even thought about, and dangerously infected even then with the poison of so-called “Smart Growth.”

IMG_0281[1]Meanwhile, those belatedly selected by the government’s mandarins to build “temporary accommodation” for Christchurch’s evicted hordes have finally coughed up around the city what can only be called refugee camps—the all-too predictable sub-standard apologies of places that will quickly become the slums of tomorrow, while helping to kill residents’ dreams of todays. [Read David Haywood talk here about his move into the spirit-killing Linwood Park “Temporary”  Earthquake Village he’s photographed at right.]

Touring around the outskirts of Christchurch one year on an outsider can only be impressed at all the energy and activity going on. Going on in all the homes and businesses located and relocated there on the outskirts, frequently over the opposition of planners who wish them elsewhere.

This is where the real business of Christchurch is now being done—in rubble used as concert chambers, garages being used as factories, in factory units being used as offices, in offices being used as shopping malls, in houses being used as shops offices, factories and over-cramped boarding houses.  But the council’s town planners and earthquake mandarins haven’t helped any of this process in any way at all; in the days after the earthquake they stopped owners demolishing dangerous buildings, and since the second they’ve done all they can to hinder these necessary and spontaneous “re-zoning” of activities within the city.  And it’s fair to say the council, CERA and Gerry Brownlee have treated business owners with property still inside the CBD with nothing but contempt.  Little wonder these business and property owners have been protesting for virtually the whole of the twelve months since the second big earthquake, and for four months before that.

So to see all these various lackies and sawdust caesars standing up on their hind legs today spouting about their good works keeping Christchurch on its knees is too much for me to stomach.

One year on Christchurch continues to struggle. What the earthquake couldn’t do, governments central and local have done instead. The first disaster was the earthquakes. The second disaster is the political decisions made in their aftermath.

Give people back their lives. Give them back their property rights. Discard this pathetic idea that only government can do things—when all it does do is either tax, ban or subsidise. Take Christchurch off its knees, take it off welfare, make it an Enterprise Zone for Galt’s sake …. and then get the hell out of the way.

That’s my advice for the mandarins one year on. Just get the hell out of the way.

UPDATE:  Auckland council without an earthquake is considering doing what Christchurch council after an earthquake is not considering, i.e., relaxing (albeit only very slightly) the planners’ ring fence around the city.

But even these baby steps are beyond the pale for Christchurch’s planners.

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Stephen Fry, Steven Joyce and Government broadband

imageHe loves gadgets and he’s tweeted from many places around the world, but Stephen Fry was less than satisfied with government broadband here in EnZed. And he reckons we EnZedders should rise up and take on those responsible.

“You wouldn't put up with potholes in your roads,” he says, though we do, don’t we, “so you shouldn't have to put up with Third World broadband standards as well.”

But we do, don’t we.  We not only put up with it, you vote for it.

So who’s responsible for the potholes in local broadband? Well, it’s fashionable to blame the private telcos, of course.  But consider that around six years ago, right when those private telcos were considering plans to roll out the next generation of broadband across the country, Labour’s David Cunliffe began dismembering Telecom—to the loud applause of  Labour hacks, National stalwarts and Telecom’s competitors—and announcing plans to “roll out” government fibre.

Would-be private investors in next-generation broadband began quietly reconsidering their own investment plans. Why put your own head in the noose when you could reap the benefit of a taxpayer “investment.”

Then around four years ago in a throwback to its Think-Big Muldoonist past the incoming National government began announcing that it would be they who would be “rolling out” the next generation of high-speed, bells-and-whistles broadband, the “roll out” of which would be a flagship policy of their first term.

Potential users and rival telcos alike waited with bated breath while nothing continued to happen. And now that the former promoter of National’s next generation of high-speed, bells-and-whistles broadband Steven Joyce has moved on to bigger, better and brassier things, the non-roll out has been left to first-time minister Amy Adams—who instead of being photographed in front of new high-tech equipment sits in her new office writing press releases boasting :

The Government has set aside $1.5 billion for ultra-fast broadband, and aims to have the service reaching 75 percent of New Zealand in the next 3 5 7 10 years… contracts had been locked in, the rollout was under way, and competitive wholesale prices had been secured, but it was up to the industry to ensure New Zealanders got the quality and performance they expected at prices they could afford…

Or in other words, “we’ve spent lots of your money already with only paper promises and electioneering hype to show for it. But stop whining, because you’ll get it when you get it.”

At least she recognises, if only partially, that government itself delivers nothing. That in the end it is still “up to the industry.” But perhaps she and other EnZedders might reflect that the industry might have done better and much earlier—that big private investment might have been directed into this area much sooner—if big government hadn’t been flexing its muscles for the last six years in the hope of  a political windfall.

After all, it looks like up to $33 billion could be the real return to NZ from the investment, if it ever comes to pass, some of which would have rubbed off on private investors. But when any private investment would have been drowned out by government and (no doubt) damned by luddite nationalists in every party, and when NZ’s largest telecommunications company is being dismembered and partially nationalised as a reward for owning and having rolled out the last national network, it’s no wonder no private investor wanted to take the risk.

As a blogger who’s now left the building once said:

If telecommunications companies think someone is going to steal their networks,they won't build any more of them! It's really simple. Now we are stuck with waiting for the government to waste my tax money building something that every private interest is now too scared to.

Former Telstra Australia head Sol Trujillo said much the same when similar threats were directed his way from the Australian government. He:

derided Kevin Rudd's election-promised "partnership" to build an across-Australian broadband network, calling it a "kumbaya, holding hands" theory. It might have been an election promise, but looks like no- one stopped to ask the company supposedly being partnered. Said Trujillo: "We are only going to participate in the things that we own and control."
    Mr Trujillo, firmly backed by chairman Donald McGauchie, said Telstra was happy to invest $4 billion or more of its own money rather than the taxpayers' - but only on its terms and pricing…
Australia needs a fast, modern telecoms infrastructure [says Trujillo]. And the quickest way to get there is to allow unfettered competition. Mr Trujillo says that America and Europe learned long ago that “to foster competition the government cannot control the levers, it must let the market work. Virtually every other country has moved towards less regulation in telecoms” …
    Worried that giving rivals a free ride would undermine his profits, Mr Trujillo is threatening not to lay the fibre: “My duty is to our shareholders—including 1.6m ordinary Australians. I will only invest where I can earn an economic return.”

So when private investors aren’t able to earn a return? Or they are (falsely) led to believe they can be given an unearned free ride on someone else’s network? Then you end up where you are today. As our late friend Anna Woolf said back in 2008: Remove the Red Tape, the Fibre Optics will follow. Or don’t, and it won’t.

So when you’re complaining about your broadband service today, it’s government broadband you’re complaining about.

Potholes and all.

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Tuesday, February 21, 2012

DOWN TO THE DOCTOR'S: A Book Worth Buying

imageLibz leader Dr Richard McGrath returns with fire in his belly, his regular column, and a book you just have to buy…

Nanny State has had it good recently, what with the censorship of “disgusting” images of Piri Weepu bottle feeding his infant daughter; the blanking out of “horrific” footage of signage advertising Coca-Cola and fried chicken; and the hysterically defensive reaction following revelations fewer people have been out cycling, and more of them are suffering injury, since cycle helmets (i.e., knob hats) were made compulsory. 

Thank goodness for people like James Bartholomew, who documents the far-reaching and almost unerringly negative consequences of state interference in our lives. Along with commentator Lindsay Mitchell, I had the pleasure of dining with James in Wellington a few weeks back during his brief visit conducting research for a new book he is writing. His pet topic is the welfare state in all its forms, and to prepare for James' visit I ordered a copy of his chronicle of Britain's decline from a once great nation to the 'sick man of Europe', entitled The Welfare State We're In.

It was a great, if sobering read.

Published in 2004, the volume traces the origins of the welfare state to the time of Henry VIII and his seizure of monasteries previously functioning as charity hospitals and emergency welfare providers. Bartholomew reveals the increasingly coercive nature of the State in funding and providing health care, unemployment and disability compensation, education, housing and social support.

Unfortunately, as is plainly evident to anyone who cares to look, in each and every area in which the government has intervened - albeit often with compassion and a desire to work side by side with private providers and charities - the result has been the crowding out of the voluntary sector, and an increase in death and misery for the intended beneficiaries.

In other worlds, state welfare is not welfare.

Neither is state education education. After decades of state-funded 'education' in the UK and more than a hundred years of compulsory education, one in four adult Britons is functionally illiterate (sound familiar?). Yet before the advent of government welfare and state education, about 85% of industrial workers in the UK were already members of friendly societies providing welfare and support for members and their families. Since that time, the working class has been taxed into poverty, with many of them unable to make provision for a pension and purchase unemployment insurance.

A pervasive and recurrent theme throughout the book is that the welfare state was not needed in the first place! Where people had the means and the necessity to provide for down times, they did so, and gave huge amounts of their disposable income to the less well-off.

Bartholomew likens the avoidable deaths in Britain's National 'Health' Service to 'a train crash every day,' estimating over more 15,000 souls dying annually than the mortality that would occur under a system of non-government hospitals and primary care.  (Sound familiar?)

He documents the terrible results of laws that encourage broken families, and the often horrific consequences when the offspring of solo parents are placed in the care of non-biologically-related males. Most telling are the examples that highlight a general decline in public morality ('the falling off of decency') as a result of intergenerational unemployment and a breakdown in the passing down of values such as hard work, thrift and personal responsibility.

The author relates low levels of taxation to high rates of growth, using the example among others of the World's Greatest Ever Bureaucrat and his hand in creating the world's freest country. James' description of Britain's underperformance in every facet of human advancement - including medical research - since the rise of the welfare state, makes sad reading.

I recommend this book to all readers. It is packed with facts, memorable anecdotes and killer quotes, and is a valuable historical reference. One comes away with a much greater appreciation of the root causes of the United Kingdom's current malaise. In many senses, the origins date back centuries. But it was David Lloyd George and Winston Churchill (who would have guessed?) that really got the ball rolling in the early twentieth century. Once Labour took power in 1945 Britain's fate was sealed, but the die was already cast.

Couldn't happen here, could it? 

Dr Richard McGrath is a Masterton GP and the leader of NZ’s Libertarianz Party. When threatened with extreme violence he can sometimes be made to write a column.

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Monday, February 20, 2012

Unaffordable housing? No wonder!

_HickeyONCE AGAIN BERNARD HICKEY offers the insalubrious example of a commentator who knows something is wrong, yet knows nothing about how to fix it. Nothing that is beyond yelling “Something Must be Done!” And by “something he means “someone.” And by someone, he means the government.

First, the problem:

Auckland and Christchurch now have massive shortages of waterproof and undamaged homes that regular families can afford to own…
    The Department of Building and Housing forecast this month that New Zealand needs to build around 20,000 to 23,000 housing units a year over the next five years to keep pace with population growth. Meanwhile New Zealand has been building at a rate below 15,000 a year for the last three years…
    The crisis has intensified since 1999 with the introduction of the Metropolitan Urban Limit and the revelations that an entire generation of homes is leaky and will have to be either reclad or rebuilt…
    This crisis is playing out in a variety of ways.
    There is, of course, a rise in homeless numbers. But the more obvious increase is simply in the price of homes and rents. Both are rising quicker than the wider inflation rate and price rises outside of Auckland and Christchurch. There is an inevitable reaction to this, which is for young Auckland and Christchurch workers and families, those who are not property owners, to simply give up.

He is right that rents are rocketing and new homes are becoming less and less affordable.  The annual Demographia study has shown for years that even during this Great Recession house prices as a proportion of income in New Zealand’s cities are among the highest in the developed world—and increasing*. And the Productivity Commission (from whom Hickey got his figures) point out that “for younger people and those on lower incomes there is a missing step on the property ladder, particularly in Auckland. The chances of them ever purchasing their first home are decreasing.”

He is right, too, that while would-be home-owners burn, governments in Auckland and Wellington continue to fiddle—with train sets in Auckland, and with a pathetic, partial, poorly-done privatisation programme in Wellington.

The problem then is this: what is to be done? And the problem with Hickey is, he has no bloody idea.

So like every simple statist who Wants Something Done, he simply cries that Gummint Should Do Something!

“Government-owned land would need to be opened up and town planners overruled,” says Hickey, getting it half right, before heading down the route of statists immemorial in calling for “taxpayer money … to be invested and lots of it.” Presumably building those affordable houses that the government has made it unprofitable for private builders to build, using resources that will cost more than the sale price.

imageIt’s the same “solution” put forward by Fran O’Sullivan (left) a few months back when she called for private land to be nationalised—expropriated outright by the grey ones—newly stolen land on which the Gummint Should Do Something.

Like O’Sullivan, Hickey is a business columnist. Yet just like her he has no idea how business works.

And they both write and talk about politics. But neither apparently have any conception of how politicians have caused the very “market failure” they describe. Because while calling for government to fix the problem by doing more, they never even bothered to ask themselves this fundamental question: whether it is government activity itself that has largely caused the problem.

And it has.

IN A NUTSHELL, THE big problem is that government has gone beyond right: it has passed laws giving the Reserve Bank the power to print money, bureaucrats the power to prescribe the methods and materials by which houses are built, and  planners the power to control and restrict people’s land.

Let’s look at these one at a time.

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Sunday, February 19, 2012

QUOTE OF THE DAY: “Creating a job is easy. Creating a remunerative job is not.”

 

The 'Consumptionist' Dead End
Jonathan Hoenig:  Why the persistent belief that the economy will grow as a result of government spending is flawed.
If you keep repeating a lie long enough, people eventually start to accept it as truth. So even as government debt hit new record highs and bankrupt entitlement states like Greece collapse, how else to explain the persistent belief among many politicians and policymakers that … the economy grows as a result of government spending….

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