Jon Toogood, Shayne Carter, Ladi6 et al making music for adults. Which is no comment whatsoever on their day jobs.
(Another one-NZ-music-post-per-day for NZ Music Month.)
I'm recommending readers find fifty minutes to listen to this MP3 podcast from National Socialist Radio, a.k.a. Red Radio, broadcast yesterday on Chris Laidlaw's programme. It features interviews with two self-styled 'libertarians,' Colin Cross, a former candidate from Libertarianz and Sam Buchanan, an anarchist from Paekakariki.
This is followed there is
an explanation a discussion of libertarianism between Laidlaw and Victoria University politics lecturer Javier Marquez, including the role that Marquez thinks luminaries such as Milton Friedman, Murray Rothbard, Friederich von Hayek and Ayn Rand played in the evolution of libertarian politics.
The discussion is not always accurate, but it reveals the way the mainstream sees libertarianism in NZ today.
Naturally, my own sympathies here are with the position of Colin Cross. Colin is a longstanding member of the Libertarianz Party and former electorate and list candidate. His musings comprise the first seventeen minutes of the audio programme, in which he acquitted himself well. Most of that time was spent dealing with the usual questions and the host of straw men that are thrown up whenever someone suggests paring back the State so people can have more of a say in their own lives, and the lives of their families, whanau, friends and communities. Questions such as:
Colin answers these questions in such a calm and engaging manner he readily convinced me.
But then, I was already convinced.
Next interviewee Sam Buchanan was introduced as a left-wing or "socialist" libertarian. Frankly, juxtaposing the words "socialist" and "libertarian" is akin to mixing water and oil. The term is oxymoronic, because coercion lies at the very root of socialism. To his credit, Sam is cynical about the motives of the State and its capacity to violate the freedom of its citizens. But he also believes that private individuals, industrialists and corporations can pose as much a threat as an overbearing uncontrolled State. In particular he believes that an economic imbalance between individuals, such as often exists in the context of an employer/employee relationship, impinges on the freedom of the less economically able—which blurs or ignores the critical distinction between economic freedom and political freedom, which is the difference between the dollar and the gun.
To overcome these perceived problems, Sam proposes a “syndicalist” form of industrial ownership, which means “workers” basically seize and own the factories, ports and “commanding heights” of the economy. (If you want an image of what this would look like across whole economy, think of a country in the grip of a General Strike. That pretty much gives the picture.)
Pushed to answer this critique, and the challenge that only the already rich can succeed in the present system, Colin provides the example of TradeMe’s Sam Morgan, who did not come from old wealth but created immense riches for himself and his backers through his ideas and his entrepreneurial endeavours. The important thing to realise is that he and other similar entrepreneurial heroes (Graham Hart, Bob Jones, Peter Leitch) were not constrained in their success by their initial financial modesty.
On the other hand, anyone these days who wants to advance themselves and others does face immense hurdles put in their way by the state, which essentially does tend to calcify things in the form of the status quo. (Just imagine the many hurdles, for example, for an engineering entrepreneur wanting to harness the power of nature for the betterment of human life and profit by building a hydro-electric dam on his own property—the biggest hurdle being the Resource Management Act, an act of brute political force that stops a landowner being able to exercise his property rights. )
Buchanan likens the criminal actions of gangs to authoritarian government, which in many examples is sadly true. The IRD, for example, who hound people to death and impose arbitrary penalties for failure to pay one's tribute to them by the designated due date, frequently behave like a criminal gang.
Colin was more definite as to the role of the state: it should not protect against competition, but must be chained up to do its proper job of protecting individual rights. This is the only legitimate function of the state. Sam Buchanan on the other hand seems a little less certain about the function of government, and appeared at one point to endorse an anarchistic system of non-government such as exists in parts of Somalia. He also doesn't believe people should be able to rent out houses they own. He is clearly anti-capitalist, and that's where he loses me. He seems to be mired in the misguided beliefs in the power of robber barons, Ebenezer Scrooge and the evil inherent in the profit motive, forgetting the profit motive and selfishness inherent in anyone that gets up in the morning and goes to work.
The question to ask a "left-libertarian" is whether they would allow an enclave of free-market capitalism in their state. A free-market libertarian would certainly allow a socialist enclave within a state run under their principles, as long as no force was initiated and entry and exit from such an enclave were permitted. (As Colin pointed out early in his discussion, a feature of libertarianism is tolerance for the (peaceful) views of others.) A socialist system on the other hand could not tolerate a free-market enclave within its walls. Socialism, unfortunately, by its very nature involves an intolerance of private property and promotes its redistribution into "social" ownership. And that, I'm afraid, is not very libertarian at all.
All in all, this radio show was chock full of ideas, a lot of them good. It even dug below the surface into the philosophies from which the political expression of freedom--laissez-faire capitalism—arose. Although it blurred the distinction between libertarianism and Objectivism, and libertarianism and anarchy, although it promulgated the oxymoron of "right" and "left" wing libertarianism, it was still a genuine effort to articulate some of the principles of libertarianism, and for that I salute Chris Laidlaw and his team.
Top marks though must go to Colin Cross, who I now formally appoint as the go-to man for libertarian radio interviews and Sunday morning TV political shows. Bravo, Colin!
See you next week!
Here’s the update on tonight’s programme with our friends at the Auckland Uni Economics Group:
What is money?
What are all these bits of paper we carry in our pockets, or (if we’re lucky) we find digitally in our bank accounts?
Why is the pursuit of money so universal, and when did it start?
How is money created?
And is the pursuit of money really the root of all evil? Or of good?
To answer these questions and many more like them, we need to examine how money developed historically, how it has evolved since—and why it emerged in the first place.
Understanding the nature of money is crucial for every serious student of economics, especially since money forms one half of every transaction, appears in every price, and is implicated in every crash. And because money it is so widely misunderstood.
This week we discuss money, sound and unsound—and ask: money, hero or villain?
Date: Tonight, May 28, 2012
Location: Case Room 4, Level 0, University of Auckland Business School
Musicians aplenty have come through R0dger Fox’s jazz bands over the years, but there’s bugger all evidence about on YouTube. Still, here’s Rodger Kox’s Wellington Jazz Orchestra swinging Bill Cunliffe’s tune ‘All’s Well in Wellington’ on what looks like a Telethon.
(Another one-NZ-music-post-per-day for NZ Music Month.)
NZ reeds man Nathan Haines is already a jazz legend—especially now he’s increasingly playing more jazz and less dance music. But until recently he still didn’t feel ready to record a “real jazz record,” an “acoustic” album—one recorded live to tape and without digital trickery, just the way the masters of jazz did in the old days.
The result was ‘The Poet’s Embrace,’ for which this clip is a taster.
(Another one-NZ-music-post-per-day for NZ Music Month.)
From "The Maestro And The Diva", featuring a rehearsal performance under the great Georg Solti of ‘Frühling’ from Richard Strauss' gorgeous Four Last Songs.
Even at half-power and just in rehearsal she was amazing.
Here she is at full noise.
(Another one-NZ-music-post-per-day for NZ Music Month.)
It took four-and-a-half years to finally dribble to a close, the final result of Operation 8 and the police’s first and only use of the error-ridden Terrorism Suppression Act being a thirty-month jail sentence for the two organisers of Tame Iti’s rag-tag band of insurgents.
It was a poor return really for an operation so bungled it has exposed police, lawmakers and now the courts as embarrassing incompetents prepared to stretch the law they swore to uphold, and it is the final act of farce in long litany of them in this case.
After all the smoke has cleared—after a police operation for which justification has never properly been shown—after the Terrorism Suppression Act on which the police investigation was based was revealed as so poorly written it could never be practically used to bring any case, let alone this one—after delays so long and incompetence so thorough that the number of defendants was reduced by degrees from 20 to 16 to 15 to 14 to just four (justice delayed being justice denied and made a mockery of)—when the case finally limped to its close Iti and his lieutenant Te Rangikaiwhiria Kemara were found guilty only of handling and using unlicensed firearms and molotov cocktails. That was it. That was what it was all about.
Pathetic. Crikey, I’ve handled and used unlicensed firearms and a molotov cocktail, and I’d wager a few of you reading this have done too. I’d be awfully surprised if that on its own could justify being locked up for thirty months, and I bet you would be too. But it was supposedly for that that the sentence was supposedly handed down.
Of course, that’s not the real reason for the sentence at all. Because the real reason for the longer sentence was stated explicitly by Justice Rodney Hansen. “In effect a private militia was being established,” he said.
So Iti and Kemara were not being sentenced primarily on the six firearm charges on which the jury found them guilty, but also on the terrorism charges on which the jury found the case unproven. That, right there is the reason Iti and Kemara were locked up in Mt Eden last night. Not because of their facial furniture or the colour of their skin, but because the judge believed what the jury didn’t.
In effect, this was a law court trying to make up for the failure of the lawmakers, because this had been a jury who found the case unproven not because the evidence wasn’t there, but because the poor drafting of the Terrorism Suppression Act couldn’t make legal the way the evidence was gathered. Thus, this was one branch of government trying to make up for the failure of another.
Which is not the way law is supposed to work.
Nonetheless, from start to finish the whole operation has shown that New Zealand law does not work. It doesn’t work for defendants, who face years before having their day in court; it doesn’t work for the man in the street, who could face armed police at any time based on who-knows-what evidence cooked up under a buggered piece of legislation; and it doesn’t even work for prosecutors, who are left with very little with which to attempt to prove their case.
And in the final wash-up we finish up never knowing what really went on in those hills, whether twenty or seventeen or four should really have been charged, whether the police were justified in using the force they did in their early-morning raids, nothing—nothing at all beyond the knowledge that “pacifist” peace protestors by day can actually be gun-toting militia joiners harbouring fantasies of armed revolution.
But justice has neither been done, nor has it been seen to be done. And John Minto et al have been handed a cause on a plate with which to further sharpen their axe of grievances.
The law is an ass. Which is where it and those responsible for it deserve to be kicked.
PS: Time to recycle this magazine cover…
A government that swept into power by swallowing dead rats in its first term to deliver something better in its second should now be on notice to deliver. Expect now in the middle of that second term when you’d expect to see their programme emerge, their vision made clear, their reason for seeking power crystallised into a programme of action, we have dropped on us with a resonant thud a Budget showing that of vision, ambition or even a coherent programme there is and will be none.
What we saw yesterday of this government’s “ambition” was a man with a plan to pick our pockets and a hope to “balance the budget” sometime two or three years hence—a fantasy supported only by Treasury’s fantastic illusions about economic growth and an event horizon (2104 to 2105) conveniently placed beyond the next election.
It cannot be taken seriously, because there’s no serious intent demonstrated in this budget to make the decisions necessary to achieve it.
This was a budget that didn’t deserve to be listened to delivered by an unambitious man desperate to please everyone and no-one. It is bold only in its mediocrity and fence-sitting.
It steals more from both rich and poor—and the young—while offering nothing as any reward for the theft.
It represents neither “austerity” nor “stimulus”—just a confession that borrow-and-spend and more muddling through is the only real plan Double Dipton can devise.
It encompasses promises to both sell assets and retain them—a hint of vision mixed with a bucketful of blancmange.
It is a budget drawn up by someone not sure what he’s doing, and no ability to do it. A budget best symbolised by the plan to take $250 million from half-selling the state’s assets and give it to one of its biggest liabilities, Kiwi Rail.
It was a Budget trying to be All Things to All Men, with the result that it will be nothing to anybody. Govt will continue to spend and borrow well beyond their means for the foreseeable future and beyond, and we will keep picking up the bill for their lack of vision.
They deserve to be seriously punished.
I recall The Neighbours--with Sam Ford, Trudi Green and the legendary Rick Bryant—being a shit-hot live band around Wellington in the mid-eighties. They enlisted film-maker Gaylene Preston to “dramatise” their 1983 EP ‘The Only One You Need.’ You might wonder “why?”
(Another one-NZ-music-post-per-day for NZ Music Month.)
This is brilliant. (So brilliant, you must go visit Motella to thank him for it.)
BUDGET DAY: The day when the media line-up "average" Kiwi battlers that whinge that the government isn't redistributing enough cash their way...
If an election is an advance auction of stolen goods, then Budget Day is when we hear to whom exactly the stolen goods are being given.
Feel free to post Budget thoughts and updates in the comments as this afternoon’s announcements unwind.
UPDATE: Yes, as predicted it is an eat-the-rich budget. A lolly scramble of new spending in health, education and welfare—which means new borrowing on top of existing borrowing—zero budget, my arse!—and a huge $78.5 million increase to the IRD audit goons to attempt to gouge this out of taxpayers.
Things are going to get very nasty indeed in the next few years.g.
Paul Krugman writes column after column in the New York Times arguing the current worldwide depression is due to an overall general lack of "demand," as opposed to structural imbalances in the economy. Thus, he argues, the way to "cure" the problem is for the government to throw buckets of newly printed money at it and magically things will turn around.
It is thinking like this used to justify Bill
English the Greek’s borrowing of one-hundred million dollars a week.
English the Greek, the King of Double Dipton, has been heard boasting that his budget today will “target” high-income New Zealanders.
What a knob.
This envy-ridden “eat the rich” attitude is working its way around the world. In America they’re calling it ‘The Buffett Rule’ ever since Warren Buffett reckoned he’d be happy paying more tax.
Cypress Semiconductor’s T.J. Rodgers points out this attitude stinks for everybody, every way up you look at it. It is bad, it’s wrong, and it’s immoral.
So no wonder Bill
English the Greek is boasting about it.
Daniel Hannan, if you recall, is the Euro MP who famously called Gordon Brown “the devalued Prime Minister of a devalued government.”
Listen in here.
UPDATE 1: If you like what you heard, you can hear more from Daniel tonight at the Auckland Museum in a debate on the direction of the European Union: "Eurocalypse Now?". (Me however? I’ll be up the road celebrating the appointment of an Austrian economist to a chair at Auckland University. Maybe join me after at Galbraith’s to discuss how both events went off?)
UPDATE 2: Fascinating discussion. Listen to the podcast here.
For the next seven days, you can now listen to the whole hour online archived at these links:
Don’t believe any bullshit about Bill’s Big Budget tomorrow being a “zero budget.”
The not-so-comforting fact pointed out by Auckland-based business writer Yoke Har Lee
is the country is forecast to run its largest ever budget deficit tomorrow, estimated at around eight or nine per cent of gross domestic product of around NZ$16.7 billion (RM39.8 billion) for the year ending June 2012.
Largest. Ever. Budget. Deficit. In fact, nothing a “zero budget” at all.
But maybe, compared to other less responsible governments abroad, it’s still “fiscally prudent? Um, no.
Going by the Organisation for Economic Cooperation and Development's (OECD) yardstick, New Zealand's budget deficit puts it at near the bottom of the class with countries such as Ireland (-12.2 per cent of GDP), United Kingdom (-13.3 per cent) and the United States (-10.7 per cent).
The reason the Auckland-based Lee has to point this out in Malaysia’s New Strait Times instead of our domestic media is because she points out uncomfortable facts and makes a very uncomfortable major point, that
to prevent this slippery slide from a First World country into Third World position is to plug spending in some sectors. The biggest bleeder of the government coffers is social welfare expenditure which has risen to NZ$22 billion as at last year from NZ$16 billion in 2000.
There are about 320,954 people on benefits of whom 170,000 have made this a lifestyle choice for the last 10 years. Key's government is going to spend over NZ$500 million over the next few years to help break this cycle of multiple generations of a family being unemployed.
Is this additional expenditure efficient use of funds for a financially stretched government? Key has had the last three years to institute drastic reforms for social welfare. Instead, he has left the hard decisions till now…
John Key is not the only politician in the world in recent decades to put off the hard decisions about social welfare—an avoidance of the bleeding obvious that is now going to sink virtually everyone.
But he is the only one to have told the Wall Street Journal when he first took office he intended use these last few years to “grow the nation out of recession by improving productivity.” “You Can't Spend Your Way Out of the Crisis,” he told the Journal’s Mary Kissell, and he wasn’t going to try.
What a crock.
Contemplate that tomorrow as you consider the big-spending stewardship of John and Bill and Michael and Helen and Jenny and Bill and Jim and Bill and …
In the dictionary under “wig out” it says “see ‘Stoned Guitar’ by the Human Instinct.
This is that song, from 1969. The un-stoned guitarist (yeah right) is Billy TK. He seems to have played before.
(Another one-NZ-music-post-per-day for NZ Music Month.)
The Herald reports:
A campaign has been launched for a "living wage” in New Zealand, inspired by policies in United States cities and London.
In New Zealand, Labour Department research shows that 103,800 workers under 25, and 161,000 aged 25 to 64, earned less than $15 an hour in the year to last June.
The problem is, the campaigners are starting at the wrong end.
They want the effect (higher wages) without the cause (higher productivity). So instead of wanting to increase productivity and empower business owners so they can pay workers more, they want politicians to throttle business owners and emasculate productivity .
Or to put it another way, instead of making life easier for the “one percent” they want to make it harder. And what they do not realise is that it is the highly productive and provident one percent who provides the standard of living of a largely ignorant and ungrateful ninety-nine percent.
What they also do not realise, as they rant about worker need and employer greed, is the complete and utter irrelevance of worker need and employer greed in determining wages.
(They might also wish to contemplate the connection between this post here about the ability to pay higher wages, and the post below about emasculating our production of energy.)
I say “they” do not realise any of these things, but of course but they do—and by “they” I do not mean the largely ignorant and ungrateful thirty-nine percent* whose futures are being hocked off by those organising this campaign, I mean the campaign’s strategists themselves. I believe they do know what they are doing: they do know that raising labour costs without increasing productivity decreases employment. They do know that wage levels are not set by either need or greed but by competition among employers to acquire the necessary talents with which to drive their productivity profitably forward—or in other words by the competition of the buyers for the limited supply of labour offered for sale.:
The rational self-interest of employers, like the rational self-interest of any other buyers, does not lead them to pay the lowest wage (price) they can imagine, but the lowest wage that is simultaneously too high for other potential employers of the same labour who are not able or willing to pay as much and who would otherwise be enabled to employ that labour in their place…
The payment of higher wages [when they are affordable] is to the self-interest of employers because it is the necessary means of gaining and keeping the labour they want to employ.
The key phrase here being “when they are affordable.”
I believe the campaign’s strategists are not totally ignorant of these points. It’s not that they don’t know and don't care. They just don’t care about those they claim to represent—or at least they don’t care about those that are thrown out of work or excluded from working because their wages have been forced above what they are able to produce. And they don’t care because as far as they’re cynically concerned this is a “wedge issue” on which they have traction, so for them it’s just full-speed ahead and damn the consequences for those hundreds of thousands of young folk and marginal workers priced out of the market!
Because if they were serious about raising wages they would realise that to raise wages at the margins we have to do more than wish for it or legislate for it. They would realise we actually have to raise productivity right across the board. And if they did realise that they would not be seeking more ways by which to get government onto the backs and into the pockets of the productive, but the opposite.
I look forward to that happening no time soon.
* * * * *
* Add together young folk and marginal workers already priced out of the market because of the minimum wage to the even greater number who would be further priced out because of this so-called “living wage”—to which you can add those hundreds of thousands on other welfare because of the culture of malaise created—and imagine how many more could be employed if the productivity of this half-million sized cohort were producing rather than sponging, then you are talking about a sizeable number of New Zealanders whose lives would be squandered by this nonsense.
Raybon Kan’s rape jokes at the Comedy Festival offended a few people. It got them upset. It made them write posts like this one at The Hand Mirror: “Dear comedians... we need to talk about rape.”
There are some basic rules of thumb about what is and isn’t funny, says the post, and rape isn’t on the funny side of those rules.
Trouble is, comedians disagree with her. George Carlin, for instance:
Lots of groups in this country want to tell you how to talk.
Tell you what you can't talk about. Well, sometimes they'll say, well you can talk about something but you can't joke about it.
Say you can't joke about something because it's not funny. Comedians run into that shit all the time.
Like rape. They'll say, "you can't joke about rape. Rape's not funny."
I say, "fuck you, I think it's hilarious. How do you like that?"
I can prove to you that rape is funny…
You may have heard about the cancellation of a hydro electric project on the Mokihinui River in the Buller Gorge—what would have been an 85MW station, enough to power several thousand homes or several dozen places of production. (Remember production? It’s that thing that puts food on the table and pays all the bills.)
But like virtually every other large energy project planned in recent years—Project Aqua, Project Hayes, Project Every-Other-One-You-Can-Think-Of—it’s not going ahead. It’s not going ahead because folk who fly into the remote valley in helicopters to walk it objected to it being built, objected to it enough to make Meridian pull in its heels, drawing the now obvious conclusion from energy producers that this now represents
What now then?
Well, if I may continue a well-worn theme of previous posts over several years (No Power; No power, again; Still No Power; 'More power!' says India. 'No power,' says NZ; Power outrage ) and remind you of several famous power outages (such as Auckland 1998, 2006, 2009 … ) this news and that conclusion above simply confirms what should have been obvious years ago: in this country the lifeblood of production, energy, is running out.
Not because New Zealand is short of resources with which to produce energy. But because politicians and earth-first worshippers have declared we are not allowed to use them.
We are essentially enfeebling ourselves.
Hydro is now over in this country. The Resource Management Act and the Conservation Act between them make the building of new hydro dams impossible.
And coal is never going to power another new power station. Nick Smith’s RMA and Emissions Trading Scam have between them put paid to that.
So with coal and hydro out, we’re left with windmills—which need hundreds of thousands of acres of space, a population disinterested in the landscape, and coal and hydro stations as backup when the wind doesn’t blow.
In other words, in the same position as Germany after putting its eggs in the oxymoronic basket of “renewable energy”—by definition politicised energy, with the emphasis on the “politics” rather than the energy—and Japan are after shutting down their nuclear power stations—but without any of the good reasons Japan had for cutting their generating capacity.
You can’t say I never warned you.
Bill English’s buggering around with budget numbers is bad enough—expect from him tomorrow the sort of sleight of hand used by other governments in a similar debt hole—but I hadn’t realised the Greens were ready to join the big budget liars. But with their commissioning of BERL to lie for them, they’ve made a bid for the big league.
The commissioned report purports to show that the government can somehow magically earn more for itself by not selling half of the assets they propose to—and will no double now be waved by economic illiterates to say (rather as they have with other reports): “Look, even the dismal scientists agree partial-privatisations are piss poor.”
Eric Crampton explains the simple process however by which BERL’s Ganesh Nana throws up exactly the result which the Greens ordered: the magic dust Nana sprays around is all the assumptions he starts with, not one of which holds water.
Garbage in. Propaganda out.
And another large cheque for a consultant happy to lie for a living.
UPDATE: “Present discounted value, explained slowly.”
Music this afternoon by Tauranga’s own Maximum R’n’B outfit Brilleaux!
“Pictures of the Queen,” words and music by Brilleaux
“I Can Tell,” words and music by Ellis McDaniel (aka Bo Diddley)
“Riding on the L&N,” words by Dan Burley, music by Lionel Hampton
(Another one-NZ-music-post-per-day for NZ Music Month.)
When there’s blood in the streets, a globe choked with debt and the world’s eggs are being broken in a Hellene handbasket it’s time to get to grips with some rational economics. Actually, it was time about sixty years ago when the Keynesian poison first began being mainlined…
There has never been a time since the rise of laissez-faire capitalism* when economic systems were entirely free of turmoil. Bubbles, panics, crashes and depressions have come and gone with the regularity of floods and hurricanes. This is not surprising, because the underlying dynamics of economics, rooted in human nature, are always at work. Yet the new scientific economics promised better. Economists promised that through fine tuning fiscal and monetary policy, rebalancing terms of trade and spreading risk through derivatives, market fluctuations would be smoothed and the arc of growth extended beyond what had been possible in the past. Economists also promised that by casting off the gold standard they could provide money as needed to sustain growth, and that derivatives would put risk in the hands of those best able to bear it. However, the Panic of 2008 revealed that the economic emperors wore no clothes… With few exceptions, the leading macroeconomists, policy makers and risk managers failed to foresee the collapse and were powerless to stop it except with the blunt object of unlimited free money.
- James Rickards in his book Currency Wars: The Making of the Next Global Crisis
The twin tragedies are that the emperors of failed economic theory have learned nothing and revised nothing; the politicians they advised to make promises that could not be cashed are retreating into grander promises that will never be cashed; and all those leading macroeconomists, policy makers and risk managers who failed to foresee the collapse and were powerless to stop it are now in charge of the “rescue.” A “rescue” whose cure is proving worse than the disease.
* * * * *
* Which has been expiring by degree due to lack of interest since at least August 1914.
New Zealander Simon O’Neill is now one of the world’s leading Wagnerian tenors. And I bet most of you didn’t even know that.
Here he is singing “Wintersturme,” from Act I of Richard Wagner’s Die Walkure (part of Wagner’s famous “Ring Cycle”), sung at the 2008 Ravello Festival in Italy. The woman he’s making love to is the amazing Waltraute Meier; conducting him is Daniel Barenboim; and playing for him is the West-Eastern Divan Orchestra—an orchestra made entirely of musicians from both Israel and Palestine.
Not a bad place to be be for a boy from Ashburton.
(Another one-NZ-music-post-per-day for NZ Music Month.)
PS: Here’s Part 1 of a short doco on Simon done when he was understudying Placido Domingo at The Met a few years ago in the role he’s now singing around the world as lead. Naturally, it’s called ‘The Understudy.’
Kyle Bass made headlines last year when he talked about making money out of financial crises—especially in Japan and Europe. (As if making money for your clients when there’s blood in the street is a bad thing.). Things haven’t quite hit the skids yet, but he’s positioned when they do.
Japan is the next in line to face a sovereign debt crisis, says Bass, and very soon the markets’ focus will turn on it. He expects monetary deflation that will lead to a correction in equity prices because such economic shock will spread to the world economy .. leading to a stock market correction of 40-50%….
He mentions that Japan is next after Europe … and it depends on Japan and Europe, how long time USA has until a debt crisis. In his opinion it is 3-5 years away.
Here are his thoughts (from late last year) on the reason for the crisis: the total unsustainability of government debt in Europe and Japan. Japan, he argues, “is the most complex spring-loaded situation in history.”
Exciting news this week from our friends at the Auckland Uni Economics Group, with two events to put in yoru diary—including a public celebration for the very first Austrian economist to be appointed to a chair at Auckland Uni!
This week we have two events. Tonight is our weekly meeting, as per usual. On Thursday night, however, we are attending Antony Endres's Speech: The international financial system in the age of complexity. The details for both events are below.
Please note: If you want to come to Professor Endres’s Inaugural Lecture, you must RSVP. This is very easy to do, just click on the link provided in the description below.
Event #1. Econ Group Weekly Meeting: “What’s in a Firm?”
What really and truly is the nature of a business? An enterprise. A firm?
And how does the Socialist Economic Calculation Debate help us answer the question?
Last week we discussed the economic calculation debate—which shows how the price mechanism plays a central role in the success of any economic system, and the chaos that results without it. It turns out that understanding the signal importance of the price mechanism also gives insight into further questions, including (who knew?) many questions within The Theory of the Firm such as:
- Why do firms exist?
- Why do firms not just grow and grow until one day there is just one large firm in the whole world?
The ideas used to answers these questions shaped many of the economic reforms that we saw during the 1980s and 1990s, especially in New Zealand.
In tonight's seminar we shall see that the Economic Calculation Problem is fundamental to a proper theory of the firm.
This seminar will broaden your understanding of an important real-world economics problem.
Where: Room 321, Level 3, Business School Building
Date: Tonight, Monday, May 21
Event #2: Professor Anthony Endres’s Inaugural Speech: “The international financial system in the age of complexity”
The viability of the current financial system is being questioned. We only need to look at Europe today to see this. Is a new blueprint needed?
This coming Thursday evening the University of Auckland presents a lecture to celebrate the appointment of Anthony Endres to a full professorship. Professor Endres specialises in the history of economic thought and is highly regarded worldwide. This will be a fascinating lecture—not just for students of economics but for anyone seeking to understand events in the world today.
Don’t miss this opportunity to hear one of the very best academic economists from this part of the world.
Abstract of the lecture:
International financial manias, panics and crises have raised doubts about the viability of the present international financial system. Is it in fact a "non-system" in urgent need of a new blueprint or at least more extensive regulation?
Professor Anthony Endres will answer this question in his inaugural lecture by discussing the nature of crises, the problem of financial contagion, international creditworthiness, currency competition, big player effects and the "too big to fail" problem. In this discussion New Zealand will feature as a small player.
When: Thursday, 24 May at 6pm
Where: Business School: OGGB 5, Level 0.
PLEASE NOTE THAT YOU MUST RSVP TO ATTEND!
To RSVP and for further details, go to:
Guest post by David Galland of Casey Research
For pretty much everyone, no matter where they are located in the economic strata, few if any questions are more germane to making plans for the future than whether the US and other major global economies are in recovery.
Getting the answer to that question right is of special importance to investors and businesses.
Stating the obvious, if the broader economy really is in recovery, then investors would be well served by investing in the equities of solid companies positioned to take advantage. Similarly, those very same solid companies would be rewarded by increasing their productive capacity through investments in the plants and people necessary to meeting growing demand.
On the same side of the ledger, bond investors would want to begin shorting up their durations or leaving the bubbly bond market altogether, in anticipation that the flood of funds into fixed income would reverse, sending rates higher (and bond prices lower).
Conversely, if the recovery is a head fake, then an entirely different course of action is called for. For instance, one would want to adopt a cautious attitude about common stocks. And because of the nature of the crisis – crushing levels of sovereign debt – one would want to take advantage of pullbacks in precious metals to buy more, along with other so-called "tangibles." That way they would have some measure of protection against the inflation that fiat-currency powers make all but a certainty.
In addition, reducing personal and business spending in order to conserve rainy-day cash would be advised.
And what about US bonds in the no-recovery scenario? A sound case can be made for including them in a portfolio as that puts you in lockstep with the government's desperate need to keep interest rates down – or, better yet, have them fall further still. Given the highly politicized nature of our economy, that seems reasonable – and anyone who has been long bonds over the last few years has done very well, indeed.
While you'll have to make your own call on bonds, my own enthusiasm is curbed by looking at the charts of the upwards-spiking interest rates on the bonds of Spain, Greece, Italy, and so forth. When Mr. Market ultimately becomes disenchanted with the fiscal excesses of the sovereign deadbeats, he can express his ire most energetically. When the current bond bubble here in the US ultimately bursts, as it must, it's going to be a bloodbath.
Of course, there is much, much more at stake to coming to the correct answer on the recovery, or lack thereof, than that.
For instance, poor economies make for poor re-election odds for political incumbents. And when it comes to maintaining a civil society, the lack of jobs inherent in poor economies often leads to a breakdown in civility. On that note, overall unemployment in Spain is now running at depression levels of almost 25%, and youth unemployment at close to 50%. How long do you think it will be before the citizens of this prominent member of the PIIGS will refuse being led to the slaughter and start taking out their anger on the swine (governmental and private) seen as bearing some responsibility for the malaise?
Meanwhile, back in the United States, the commander-in-chief is striding around the deck of the ship of state trying to look like the right man for the job in the upcoming election, despite the gaping hole of unemployment just under the economic water line. His future prospects are very much entangled with this question of recovery.
So, what's it going to be? Recovery… no recovery… or worse, maybe even a crash?
We all have a lot riding on getting the answer right.
The Quest for Confidence
Ultimately, the purpose of searching for the truth about the recovery isn't about either fear or greed. It's about confidence.
If you really knew what's coming, then the right moves to make become obvious. You could then make those moves with the calmness of spirit that comes from certain knowledge and get on with your life. While others struggle or miss an opportunity by betting on the wrong future, you'd have set up your affairs to survive and prosper.
Of course, given that we are talking about a complex system – the economy – total certainty is never completely possible. But for reasons I'll share, the nature of the current crisis paradoxically allows for more certainty than would normally be the case.
And so I want to share my conclusion about how I believe things will unfold from here, followed with some support for that conclusion.
While, as readers of any duration are well aware, we at Casey Research foresaw the current crisis years in advance and have remained firm in our conviction that the recovery is a charade… based on my own readings, and after spending the last two weeks in the company of a couple dozen very plugged-in economists, top-performing money managers, and top financial analysts, my conclusion is thus:
The world's largest economies, including the US, Europe, Japan, and China are speeding for the equivalent of a brick wall. In short, I believe that before this crisis is over, we will experience the Greater Depression my dear friend and business partner Doug Casey has long anticipated.
In case that conclusion fails to communicate my current view sufficiently clearly, I will condense it as follows:
The world's largest economies are screwed.
And I will even set my conclusion to music, in the form of the song Somebody That I Used to Know by Gotye, which seems appropriate because the economy that we used to know won't be back again for many years to come.
Trust me, stating an opinion on the direction of the economy in such unequivocal terms troubles me. For starters, I wish my conclusion could be otherwise because no one likes to be a harbinger of doom. Mostly, however, I have long resisted adopting a set-in-cement position on something as wiggly as the future. In my experience, anyone who absolutely, totally buys into a particular future is almost always proven wrong by time.
Yet, as my quest for certainty unfolded, I could come to no other conclusion than that the world as we know it is headed for an economic catastrophe.
Allow me to explain.
The quest started with our Casey Research Recovery Reality Check Summit, April 27-29, in Weston, Florida. We took our mandate of getting to the bottom of this matter of recovery seriously, including faculty members with a variety of perspectives to see if an overarching conclusion about the recovery could be ascertained.
In addition to our own team of Doug Casey, Bud Conrad, Terry Coxon, Louis James, Marin Katusa and Jeff Clark, included in the faculty were: Lacy Hunt, former economist with the Dallas Fed and the world's most successful bond manager; Jim Rickards, money manager and author of Currency Crisis; John Mauldin, best-selling author of Endgame and the just-released The Little Book of Bull's Eye Investing; John Williams of ShadowStats fame; Porter Stansberry, founder of Stansberry Research; Michael Lewitt, editor of The Credit Strategist; Gordon Chang, China analyst; Harry Dent, author of The Great Crash Ahead (who also debated James Rickards on the question of inflation or deflation); Andy Miller on real estate; Greg Weldon of the Weldon Report; John Hathaway of the Tocqueville Funds; resource market guru Rick Rule of Sprott Asset Management; Caesar Bryan, a senior portfolio manager for the Gabelli Fund group; and David Stockman, the head of the Office of Management and Budget during the Reagan administration.
(Plus, on the taking-action front, there was a special panel on international diversification as well as panels where a dozen or so experts on everything from gold stocks to uranium, to rare earths, to graphite, to technology, to energy gave their best picks.)
In other words, a full program.
Then, immediately following the conclusion of our summit, Olivier Garret, Casey Research CEO and partner, and I climbed on a plane for California and John Mauldin's Strategic Investment Conference.
John's event was geared more for hedge fund and very-high-net-worth investors and, as such, included a more mainstream slate of speakers, but what a slate it was.
For the better part of three days, Olivier and I hunkered down to hear presentations and meet with the likes of: David Rosenberg, the star analyst of Gluskin Sheff; H. "Woody" Brock, an economist with some of the deepest credentials in the business (you can Google any of these guys for bio info); economic historian and best-selling author Niall Ferguson; Marc Faber of the Gloom, Doom and Boom Report; David McWilliams, the popular and very erudite Irish economist; David Harding of Winton Capital Management; Jeffrey Gundlach of DoubleLine Capital; Lacy Hunt again… and my favorite for this conference, Mohamed El-Erian of PIMCO fame.
In other words, for the better part of two weeks, I was immersed in presentations and one-on-one discussions with truly some of the smartest, best-studied people in the world today on economics and investment markets – with the primary topic being whether the so-called recovery is real, and the consequences if it falters.
While the speakers used a variety of methodologies to approach the topic, when all was said, the only conclusion that could be reached was that the world is headed for a very challenging period.
That conclusion was for the most part derived from three aspects of the many presentations:
[Me] "All of the speakers, you included, point to the current trend of higher debts and deficits and say they are untenable, and so the big economies will hit a wall in the not-too-distant future. Yet hardly anyone actually then defines what hitting the wall will look like."
[Him] "Yes, well, things will likely get a bit messy if the politicians can't pull together to address the structural problems in the economy."
"But wouldn't you agree that, given the nature of our democracy, the odds of the politicians taking action before we hit the wall are almost nil?"
"Not at all. If everyone in this country would read my new book, they would understand the situation and rise up to force their elected representatives to take the right action."
"Seriously? The only way to avoid the next leg down is if everyone in the US reads your book? That's it?"
At which point – I kid you not – he picked up his plate and changed tables. (There's a reason I am only rarely allowed out in public.)
But the fact remains that other than perhaps Doug Casey and a small handful of other presenters at our conference, almost no one even attempted to anticipate just what happens when the crisis swells up to its full height and then comes crashing down.
Or, specifically, what the consequences are likely to be when the world's largest economies all hit the wall at more or less the same time. For the record, I have compiled a list of the ten largest economies in the world, and a reasonable assessment of their current situation follows in descending order by size of GDP:
United States – screwed
China – really screwed
Japan – massively screwed
Germany – pretty screwed, especially in that export economies take a big hit in a crisis
France – le screwed!
Brazil – somewhat screwed
United Kingdom – blimey, screwed too
Italy – properly screwed
Russia – hardly screwed at all (lots of resources and next to no government debt)
Canada – pretty screwed, eh?
As concerning as it is to see how many of the world's largest economies are in trouble, the biggest problem of all is that the central bank reserves of virtually every country in the world are stuffed with US government IOUs masquerading as tangible assets.
So, what happens when the world's reserve currency enters collapse and the dollar turns into a hot potato? Don't know, but I'm pretty sure we'll find out in the not-so-distant future.
Remember this? Midge Marsden, Murray Grindley from the Underdogs (and countless TV jingles) with the late great Stevie Ray Vaughan roped in to set the song afire.
Not bad for a TV ad!
Another one-NZ-music-post-per-day for NZ Music Month.
Welcome to another end-of-the-week ramble. Here’s some stuff to check out over lunchtime—or maybe over the weekend.
Not exactly busy, are they.
The Ministers respond to the Christchurch housing crisis… – Holly Walker, F R O G B L O G
Winston is going gaga? Or Winston always was gaga? No matter, the evidence is now more clear.
Lunch with Winston Peters – Stephen Stratford, Q U O T E U N Q U O T E
Dunedin’s “stimulus” stadium continues to weigh them down. (It’s like the sovereign debt crisis in microcosm.)
Stadium blew budget by millions - S T U F F
Every time the NZ Parliament passes a new act it costs the country an average of $3.5 million, according to a new study. And even just a piece of regulation costs around $530,000. They included the cost of Parliamentary time and the cost of the policy analysts’ time. What they didn’t include was the effect of every piece of new legislation, and every new regulation, in slowing down and making it harder for the folk who actually get things done to get things done.
Cost of legislation – V I S I B L E H A N D O F E C O N O M I C S
Despite his many errors as a commentator Brian Gaynor is without doubt one of the country’s most successful fund managers. So when he notes the widespread impact of the Commerce Commission’s wealth destruction, it’s worth listening.
Shaky telco regulation spooks investors – Brian Gaynor, N Z H E R A L D
Set up by Roger Douglas, the culture of the
Communist Commerce Commission needs to change. And the simplest way to change it is to close it down.
Sadly, a slap is all it gets.
Auditor General letter slaps Commerce Commission – W H A L E O I L
The Green Party took forty years to gain currency. Lesson for those who choose to take it: in politics, ideological victory is a marathon, not a sprint.
Beyond Today: a values story, and the Greens’ story - Claire Browning, F R O G B L O G
There is no such thing as ‘rational’ debate. Well, certainly not at the Labour Party blog The Double Standard.
"There's no such thing as 'rational' debate!" – T H E C O N T R A R I A N
“Sin taxes” on cigarettes and alcohol are not designed to create abstinence. “Taxing goods which are price inelastic, especially those which are addictive, is far more likely to impoverish consumers than it is to turn them into abstainers.”
Sin taxes – Paul Walker, A N T I D I S M A L
Just in case you didn’t realise: “Sin taxes” on cigarettes and alcohol are not designed to improve public health; they are designed to boost revenue.
The Wages of Sin Taxes: The True Cost of Taxing Alcohol, Tobacco and Other "Vices"
- P I N F A C T O R Y B L O G
I hear folk screaming about the undue influence of Murdoch et al on politics. “What I am suggesting though is that those screaming about how awful it is that a private sector company should try to suck up to those with political power is, well, what the fuck did you expect? Your permission to run a newspaper business is dependent upon those politicians. Your spectrum allocation is dependent upon those politicians. How much domestic shite you’ve got to pump out over that spectrum is dependent upon those politicians. Which sporting events you’re even allowed to bid for is determined by those politicians. Whether you’re allowed to buy out the other shareholders in a company you already have management control of is determined by those politicians.”
When legislators decide what can be bought and sold…. – T I M W O R S T A L L
In the USA we don't have a dictator controlling thought; we have a
culture of conformity that gets people to censor themselves.
- William Greeley
“The nature of the regime created by Hamas in Gaza, and its strength and durability, has received insufficient attention in the West… An Islamist one-party quasi-state has been built in Gaza over the last half-decade. The prospects for this enclave and its importance in the period ahead have been immeasurably strengthened by the advances made by Hamas' fellow Muslim Brotherhood branches in Egypt and elsewhere in the region.”
A Bracing Look at the Reality of Hamas - Jeffrey Goldberg, T H E A T L A N T I C
The use of private prisons continues to increase. No wonder. Private prisons have a very simple blueprint for success: more lobbying, less security.
Private prisons' blueprint for success: more lobbying, less security – D E N V E R W E S T W O R L D
Why is Louisiana the “prison capital of the world”? Simple: A majority of Louisiana inmates are housed in for-profit facilities, which must be supplied with a constant influx of human beings or a $182 million industry will go bankrupt.
Incentives matter: prison file – Paul Walker, A N T I D I S M A L
A plea from a European supply-sider: Couldn’t every economy be more like Germany's - by embracing radical supply side reforms?
The importance of the supply-side – Ryan Bourne, C E N T R E F O R P O L I C Y S T U D I E S
"[T]he present breakdown of America is not the failure of Capitalism,
but the result of men abandoning the principles of Capitalism...."
- Ayn Rand
Statisticians really will do anything to follow the government’s line, won’t they.
U.S. Government Spending Has Shrunk…When You Ignore 44 Percent of Government Spending
- M E R C A T U S C E N T E R
“Do reduced banking controls always equate with free market?” A free-marketeer makes a principled case for more regulation in the banking sector.
Does JP Morgan’s massive loss favour the argument for more controls?
– Frank Shostak, C O B D E N C E N T R E
Political leaders are always saying we should follow Sweden. This is what happened in Sweden following the GFC under Premier Anders Borg: “His ‘stimulus’ was a permanent tax cut. To critics, this was fiscal lunacy — the so-called ‘punk tax cutting’ agenda. Borg, on the other hand, thought lunacy meant repeating the economics of the 1970s and expecting a different result…. He continued to cut taxes and cut welfare-spending to pay for it; he even cut property taxes for the rich to lure entrepreneurs back to Sweden. The last bit was the most unpopular, but for Borg, economic recovery starts with entrepreneurs.,,
Three years on, it’s pretty clear who was right.”
The Swedish model – Steven Kates, C A T A L L A X Y F I L E S
Want to end financial repression? Then end the rule of the central banks.
Leave Money Production to the Market – Jeffrey Herbener, M I S E S D A I L Y
How Central Banks Are Delivering A Financial Repression
– M O N E Y M O R N I N G A U S T R A L I A
“Senior politicians must realise that hard work cannot produce prosperity without the right institutions. In addition to Adam Smith’s “peace, easy taxes and a tolerable administration of justice”, hard work must be rewarded with honest money which holds its value, not money which the commercial banks and the [central bank] can produce at the touch of a button.”
Hard work needs honest money – Steve Baker, MP, C O B D E N C E N T R E
“The economics and politics of the West are being ruined by the 101%, that brigade of citizens who feel it is their right to consume at least 101% of the value of the taxes they have themselves contributed. And, of course, we are not really talking about a mere 1% above their contributions but vast amounts beyond anything they have contributed themselves.”
The 101% - Steven Kates, C A T A L L A X Y F I L E S
If there is one thing about which to be happy: at least Greece is not Japan.
Japan's WTF Chart – Z E R O H E D G E
Greece's tragedy should be a lesson in reality evasion - there is no alternative to living within your means.
Greece's tragedy should be lesson to all – L I B E R RT Y S C O T T
As its “bad bank” becomes worse, Europe’s fourth-largest economy very publicly hits the skids,.
The Pain In Spain Is Mainly, Well, Everywhere - Z E R O H E D G E
Rearranging the New World Order - Bill Bonner, D A I L Y R E C K O N I N G , A U S T R A L I A
If you think this will be the first time there is a break-up in Europe, think again.
“Serving others, I believe, is the highest calling for a person in our society.” Bollocks. Don’t serve: create.
Obama might yet regret making up his little state-worshipper, Julia.
What would Chicken Littles do if enough resources existed to fuel the world for a thousand years even with our present technology? Better not tell them about methane hydrates then.
The World Is Running Out Of Energy Scares – Stephen Milloy, J U N K S C I E N C E
Meanwhile … last winter, on several occasions, Germany escaped only just large-scale power outages. Next winter the risk of large blackouts is even greater. The culprit for the looming crisis is the single most important instrument of German energy policy: so-called “Renewable Energy.”
Germany Faces Energy Disaster Next Winter – Stephen Milloy, J U N K S C I E N C E
Disobedience is not an issue if obedience is not the goal.
- Daron Quinlan
From an interview with a safecracker:
Q: How realistic are movies that show people breaking into vaults?
A: Not very!
Interview With A Safecracker - G E E K P R E S S
Life’s too short to read some books. Like this latest piece of excrement by Sam Harris.
Life’s Too Short to Read Some Books - T H E P U R P O S E F U L R E A D E R
Book porn. No, seriously.
B O O K S H E L F P O R N
You want good food? Do ya?
Where do you get yours? (Food Edition) – Russell Brown, H A R D N E W S
Answering the vexed questions of the modern-day world: how to give Power Point presentations on your iPad:
Giving iPad PowerPoint Presentations Just Got a Lot Better - R E A D W R I T E W E B
The Auckland Philharmonia were immense last night playing Dvorak’s New World Symphony. Best I’ve heard them. But the Vienna Philharmonic are no slouches either.
Donna Summer has died. She did one sixteen-minute song every teenage boy loved, whatever his musical persuasion—supposedly containing the sexiest "simulated" orgasms ever found on vinyl.
Your NZ Music for today is “Humanised,” by Sola Rosa (although Tommy Dorsey would recognise the main riff):
Cheers, and thanks for reading