Friday, September 21, 2012

Friday Morning Ramble: No Banks. No Key. Not here.

Is there anything intelligent to say about Banks and Key? Is there anything worth saying. I think not.

You know why it’s not news.
David Cunliffe making stuff up – LINDSAY MITCHELL

I don’t agree with all of his assumptions, but this is certainly true: “The current debate about monetary policy taking place in the public makes little sense.”
Reframing the monetary policy debate: Some notes – Matt Nolan, THE VISIBLE HAND
New RBNZ PTA– Matt Nolan, THE VISIBLE HAND

“Meddling with the exchange rate isn’t a panacea for the world’s woes, Employers’ and Manufacturers’ Association chief executive Kim Campbell says.”
Alternatives to meddling with exchange rate – HOME PADDOCK

image

The most interesting “controversy” in the US presidential election this week, for me at least, was the so-called “gaffe” by candidate Romney in pointing out to supporters 47% of Americans will never vote for tax cuts, because that 47% are on the mooch.  He’s right. They’ve become a “moochocracy.” Their vote has already been “bought.”  “These are voters "who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it."  He’s right, you know—although sadly those are not his words. There was a time however (see pic above) when being a moocher was anathema
The "Bought Vote" of the 47 Percent – HISTORY NEWS NETWORK
A Defense of Romney’s “47 Percent” Comment – BASTIAT INSTITUTE
Media shocked, shocked to hear Romney state the truth – Steve Kates, CATALLAXY FILES

“Many are pillorying Romney for saying this, a few are defending him. But both his detractors and his defenders are missing what is really wrong with this statement: it ignores the role of ideas–particularly of moral ideas.”
What virtually everyone has missed with Romney's 47% comment – Harry Binswanger, FORBES

And what’s the postcode for so many of the moochers?
Washington's Riches: D.C. Area Now Boasts 7 of the Nation's Top-Earning Counties – REASON
Carney: Romney gets it all wrong on government dependency – Timothy Carney, WASHINGTON EXAMINER

“Sandra “Pay For My Birth Control” Fluke explains why “her generation” supports entitlements:  “[B]ecause our vision for the future doesn’t leave our fellow citizens behind. . . . This isn’t about not knowing how to take care of ourselves—it’s about knowing we should take care of each other.” It’s a funny argument if you think about it. If “we” can “take care of ourselves,” then why do we need to “take care of each other”?
    “What Fluke’s collectivist language is trying to disguise is that some people can and do take care of themselves—and she believes they have an obligation to sacrifice for those who can’t or won’t.”
The Entitlement Generation - Don Watkins, LAISSEZ FAIRE

However … "we’ve been asking Romney how he can cut taxes without adding US debt. Now he’s let the cat out of the bag: He can’t.”
Mitt Romney’s confession – WASHINGTON EXAMINER

image

Territorial conflict between China and Japan over a few rocks in the East China Sea? Will it mean war? How did historical military conflicts between the two play out? What is the true nature of each nation, and what effect will it have on future relations? How on earth would you know? What a good time to jump on board Powell History’s online History of Asia course—which starts this weekend with Chinese history. Join me there.
The History of China: Registration now open – POWELL HISTORY
The Dangerous Standoff in the South China Sea is About to Boil Over – MONEY MORNING AUSTRALIA
China Versus Japan: Shooting War, Economic War or War of Words? – ZERO HEDGE

American Defence Secretary Leon Panetta arrived in New Zealand this morning. While in China signing agreements yesterday, he stood beside Chinese Defence Minister Gen. Liang Guanglie while the general “made public comments about the dispute with Japan, threatening Japan with unspecified ‘further actions,’ but made no mention of the fact that the defence secretary of Japan’s closest military ally was standing next to him.  Mr. Panetta reiterated American policy that Washington would take no sides in territorial disputes across the region….”
Isn’t that how earlier wars started—most recently Gulf War I, when US ambassador April Glaspie told Saddam Hussein what he did with Kuwait didn’t bother him? With increasing cross-Pacific NZ military cooperation with the US on the horizon, as this visit seems to indicate, do we really want to be dragged into a muddle-headed Sino-American military confrontation over disputed islands like the Senkakus?

Meanwhile, the reason for Japan rediscovering its nationalism continues to emerge: it’s collapsing economically.
Japan’s Slow-Motion Tsunami – Wolf Richter, ZERO HEDGE
There’s Going To Be a Fight – Dan Denning, DAILY RECKONING

Fascinating to hear a mainstream economist, Shamubeel Eaqub, talking on the wireless about the Broken Window Fallacy in the context of Christchurch rebuilding. Notably, both the head of Christchurch’s Chamber of  Commerce and Simon Mercep have no idea what he’s talking about.
Christchurch rebuild is gaining momentum [sic] – RADIO NZ [AUDIO]

“We are so accustomed to our present currency system that it is difficult to imagine a system of more than one currency circulating side by side. However such a monetary system has existed and successfully functioned in the past in many countries, either de jure or de facto. One very good, long-lasting example is the case of China between 1650 and 1850, where copper coins and silver taels circulated as parallel currencies.
    In the 1970s F. A. Hayek ignited a discussion on the subject with the publication of Choice in Currency and Denationalisation of Money, which essentially advocated the end of the government monopoly to issue money, and that private institutions should be allowed to print money, letting the market choose the one deemed best.
    With the euro in crisis, we could learn from this analysis…”
The end of the euro - and the beginning of currency competition – Eduardo Belgrano, IEA BLOG

“Paul Krugman is famous for his stridency… But since his stridency has made him famous and won him adulation from the left, Krugman has been encouraged to emphasize this character trait to the point of comical exaggeration. He is heading into that strange netherworld where William Shatner has been living for the past twenty years. He is becoming a caricature of himself.  I don't know how else to explain his latest column, in which Krugman tries to recruit the launch of the iPhone 5 as evidence for the efficacy of government stimulus spending..”
In Krugman, Keynes Meets Orwell – Robert Tracinski, REAL CLEAR MARKETS

image

I bloody hate cables. So anyone who can set up their home entertainment system without any showing, like the setup above, has my attention.
How To Create a Cord and Cable Free Home Entertainment TV Setup — The Harpster Home – APARTMENT THERAPY

imageA story about heroes, villains and intellectual property. “Stealing magic has become a commonplace crime. Teller (right), a man of infinite delicacy and deceit, decided to do something about it.”
The Honor System – ESQUIRE

It’s a Smart Bulb!
LIFX: The Light Bulb Reinvented – KICKSTARTER

Are these really essential?
10 Essential Tablet Apps for Business – MASHABLE TECH

Myth-busting at Stats Chat: Is it safer to sit in the back of plane than the front?
They don’t reverse into mountains – Thomas Lumley, STATS CHAT

image

“Judith Thurmon of the New Yorker writes, “Rand’s ruthless supremacism, however—her stark division of humankind into ‘makers and takers’—leads inexorably to a society like the one that staged ‘The Hunger Games.’” Another critic has labeled Rand “undoubtedly one of the most lunatic shrieking sociopaths that there has ever been” and claims that her ideas would help Ryan destroy the middle class.
    One might assume from these statements that Ayn Rand’s ideas should be avoided. But do Rand’s critics accurately portray her ideas? … Consider the following passage from her best-selling novel, The Fountainhead … Does it passage look like one written by someone who thinks that people should be at each other’s throats?
Ayn Rand: Decide for Yourself – Nicholas Marquiss, THE UNDERCURRENT

You might think anyone asking this question would be severely depressed. But you’d be severely wrong—it’s the question, the answer to which, helps tell you where ethics begins.
Is Life Worth Living? – Per-Olof Samuelsson, HOUSE AT POS CORNER

“All power tends to corrupt and absolute power corrupts absolutely.” Lord Acton’s famous quote never actually meant what you think it did.
Power does not corrupt – STEPHEN HICKS

Progressive education is failing abysmally. (Could a graduate of a progressive classroom even spell the final world in that last sentence?) But does progressivism’s failure mean so-called “classical education” is the answer?
The False Promise of Classical Education – Lisa Van Damme, OBJECTIVE STANDARD

Well, well, well. As it happens, my birthday is on November 14. So, do you think I should?
Have a right royal birthday – HOME PADDOCK

Yes, stuff like this, from Oscar Brown's 1962 television program "Jazz Scene USA," was once a regular on prime-time American television.  Here’s Cannonball Adderley and his band playing their “Work Song”:

Here’s Duke Ellington playing his “Work Song”—part 1 of his “Black, Brown & Beige Suite.”

And here … well, here’s what Guiseppi Verdi makes of a work song: his Anvil Chorus from Il Trovatore, sung by the Met chorus:

[Hat tips to Jazz on the Tube, Thrutch, Geek Press, Noodle Food]

Enjoy your weekend!
PC

PS: What beer are you looking forward to most, this weekend? I’m heading to Hallertau tonight, so I foresee a Statesman in my life very soon...

image

Labels:

Thursday, September 20, 2012

Jesus married? Who the hell knows?

imageJesus married? Who knows? Why do I ask? Because

a previously unknown scrap of ancient papyrus written in ancient Egyptian Coptic includes the words: "Jesus said to them, my wife…"

And that news has made headlines, despite that being virtually all that’s said on that tiny scrap of papyrus, seen at right being cuddled by Professor King. That hasn’t stopped her making hay from her slim blade of grass:

King said the fragment, unveiled at the Tenth International Congress of Coptic Studies, provided the first evidence that some early Christians believed Jesus had been married.
    Roger Bagnall, director of the Institute for the Study of the Ancient World in New York, said he believed the fragment, which King has called ‘The Gospel of Jesus's wife’, was authentic.

I’m sure it is authentic. But one scrap is not a gospel. Or a Gospel. Not without a lot more context—as King herself admits in a more academic setting than the world’s headlines, saying in the Harvard Theological Review:

This is the only extant ancient text which explicitly portrays Jesus as referring to a wife. It does not, however, provide evidence that the historical Jesus was married, given the late date of the fragment and the probable date of original composition only in the second half of the second century.

It doesn’t really provide evidence either way, or add to very much, since extant contemporaneous texts about Jesus’ life tell us very little about it altogether.

But it is interesting.

[Hat tip Glenn Peoples]

* really just by Tacitus and Josephus.

Labels: ,

Cartoons, courage and surviving Muslim rage

imageCartoon by Bosch Fawstin

French publisher Charlie Hebdo has published nude cartoons of the Prophet Mohammed, prompting the Muslim Brotherhood to call for further restrictions on freedom of speech. In response, French authorities are not arresting him (in contrast to the former land of the free, where the videographer whose short and flaccid film became the pretext for murders, burnings and attacks on western embassies right across the Middle East was “escorted to a police station for FBI questioning”); they’re not calling for an end to free speech (like one trial balloon in the LA Times writer has) ; instead they are “temporarily shutting down premises including embassies and schools in 20 countries on Friday, when protests sometimes break out after Muslim prayers.”

image imageimage

The cartoons themselves (a few above; all of them here) are not in the league of work by the likes of, say, Bosch Fawstin, whose cartoon appears at the head of the post. But they’re humorous, and intentionally offensive, like all the publisher’s work, and he should be perfectly free to publish them.

That’s free speech.  That’s his right.

But that’s a problem, you say?

No, it’s not.

The problem is not American speech—or French speech—or Dutch speech—the problem is Islamist acts of war.

That’s the problem right there, and it won’t go away by staying quiet.

How to survive Muslim rage?  Better still, how to end it? Ayaan Hirsi Ali has some thoughts—among the uppermost being NOT to bend over backward to avoid further offense. And certainly not to further empower “the Islamic ideology of jihad, the predominant ideology in the Muslim world today.”

Further appeasement of evil is not the answer.

Labels: , ,

Wednesday, September 19, 2012

NZ third freest, but… [updated]

The United States continues to plunge down the Fraser Institute’s World Index of Economic Freedom, out today, while ironically New Zealand continues to ride high. [Hat tip Stephen Hicks]

After ranking 2nd in 2000, the U.S. falls to 18th in this year’s report. [T]he United States has fallen precipitously from second in 2000 to eighth in 2005 and 19th  in 2010 (unadjusted ranking of 18th). By 2009, the United States had fallen behind Switzerland, Canada, Australia, Chile, and Mauritius, countries that chose not to follow the path of massive growth in government financed by borrowing that is now the most prominent characteristic of US fiscal policy. By 2010, the United States had also fallen behind Finland and Denmark, two European welfare states. Moreover, it now trails Bahrain, the United Arab Emirates, Estonia, Taiwan, and Qatar, countries that are not usually perceived of as bastions of economic freedom.

The Economic Freedom Index scores countries according to a subjective scale on the size of their government; their legal system and property rights;  sound money (or not); freedom to trade internationally (or not); and regulation (and how much or little of it).  I say a subjective scale because with a whopping 9.03 out of 10 for property rights (tell that to land and business owners in Christchurch, arseholes) and 9.73 out of 10 for sound money (almost as good as gold, really) New Zealand comes in third in the world, in a top ten looking like this:

  1. Hong Kong, with a score of 8.90 out of 10
  2. Singapore  8.69
  3. New Zealand  8.36
  4. Switzerland, 8.24
  5. Australia, 7.97
  6. Canada, 7.97
  7. Bahrain, 7.94
  8. Mauritius, 7.90
  9. Finland, 7.88
  10. Chile, 7.84.

If New Zealand is nearly as good as it gets, there really is something wrong with the world. (Insert obvious comments here.) It might be more accurate to say these places are about as good as it gets, but are very far from being as good as things could be or should be. On that basis, with a more objective scale used, New Zealand might still be third, but with a score of maybe half what the Fraser Institute gives us… (insert non-obvious responses here).

Curious to note that around half of the top ten places are those in which the British came, saw and then buggered off, leaving behind them rule of law and the British legal and common law system. Thank Galt for the Brits, eh.

And notice too, as the authors did, that nations that are economically freer out-perform less-free nations in wealth and other indicators of well-being.

  • Nations in the top quartile of economic freedom had an average per-capita GDP of $37,691 in 2010, compared to $5,188 for bottom quartile nations in 2010 current international dollars
  • In the top quartile, the average income of the poorest 10% was $11,382, compared to $1,209 in the bottom in 2010 current international dollars
    Interestingly, the average income of the poorest 10% in the most economically free nations is more than twice the overall average income in the least free nations
  • Life expectancy is 79.5 years in the top quartile compared to 61.6 years in the bottom quartile
  • Political and civil liberties are considerably higher in economically free[r] nations than in unfree nations

By the way:

The scores of the bottom ten nations in this year’s index are: Venezuela, Myanmar, Zimbabwe, Republic of the Congo, Angola, Democratic Republic of the Congo, Guinea-Bissau, Algeria, Chad, and, tied for 10th worst, Mozambique and Burundi.

Look for Libya, Egypt and Syria to join them next year.

The Fraser Institute’s full report is available on the Economic Freedom Network website.

UPDATE: Liberty Scott has much, much more on this, including discussion about NZ’s place in the world rankings.

NZ might be third overall, but it is 95th on size of government (i.e., 95th smallest out of 144), which shows how highly ranked NZ is on most other measures. 
    Yet NZ was ranked far more highly on size of government recently (i.e., our government was much smaller).  In 2009, the year after the Key government stopped the Helen Clark juggernaut, we were ranked 73rd on size of government.   Now we are 95th. So National has led the growth in the state, relative to others…
image    On freedom to trade internationally we now score the lowest since the 1980s, with compliance costs on trade, foreign investment limits and limits on capital flows reducing the score.
    The overall regulatory score is the best it has been since it has been measured, but on labour market regulations NZ is ranked 9th, its lowest ranking besides size of government.
    So what does this mean?  Simple.  Any claim this National-led government is implementing radical free market reforms falls flat on the evidence—it has grown the state.  In relative terms, NZ has been retreating from such reforms for around 17 years now.  The state grows faster under Labour, slower under National.
    Yet despite slipping on some measures, especially size of government, NZ ranks well largely because others have slipped as well.   It becomes more apparent if one looks at key comparators like Australia, the US and the UK.

And this gives you some more idea of how bizarre some of the measurements are:

On monetary policy the leaders are the likes of Japan (yes really!), Portugal, Albania and the USA…

Yes. Really.

These people are professional journalists.

ROWSED BY THE BROUHAHA brewed up by “the Herald's chief political commentator” John Armstrong when he launched an attack last week on bloggers—“why do they whinge about us real journalists when we’re so much better than they are” was his refrain—“this stuff is hard; don’t try it at home” was the undercurrent—I thought I’d take a look at recent work by him and his Herald colleagues to see just what standards they live up to these days.

ARMSTRONG—SO SYCOPHANTIC ABOUT the PM I once accused him of auditioning to be John Key’s catamitehas a piece this week high on brevity, and overflowing with the bleeding obvious:   “The Prime Minister's defence of John Banks looks more ridiculous by the day,” says Armstrong before letting his hero off the hook. “Key's test of whether Banks stays or is sacked [reveals the professional journalist] has always been stacked in Banks' favour” because “this saga has always been about power - more exactly, the retention of power.”

Really? You think?  Is that truly what’s behind the PM defending the indefensible.

Phew, thank goodness we’ve got Armstrong to clue us in, eh.

This is why Armstrong gets the big bread. For” insights” like this mixed together with a few quotes from Hansard to pretend he was paying attention during parliamentary question time.

His attack on bloggers, by the way, ends with a threat his employers should start charging for the use by online commentators of his and his colleagues’ material. The quality of his and his colleagues’ work illustrates one reason no mainstream media outlet yet has managed to make money out of this. (Compare, for example, Imperator Fish’s post on the same topic as Armstrong’s short column, and judge for yourself which one you’d be more likely to shell out for.)

BRIAN RUDMAN CAN ALWAYS be relied upon to layer bland on bland. Like Armstrong’s, his latest is at least blessedly short—a put down of Southern mayors who complain “more than its fair share” government largesse goes Auckland’s way. “If only that was [sic] true,” sighs Rudman.

PART-TIME PUNDIT AND (these days) full-time cheerleader for a return to Muldoonism Bernard Hickey takes a break from his now-regular plea, in column after column, for the firehose of government largesse to be directed towards his favourite charities (mostly stock brokers and mortgage brokers one suspects, given his regular pleas for abundant money printing), before praising outgoing central banker Alan Bollard for not noticing his inflation of the money supply in the early- to mid-2000s had inflated the country’s biggest housing bubble, allowed finance companies led by local Bernie Madoffs to think the laws of economics had been repealed, and violently misallocated resources in the economy.   Actually, that’s what Hickey should have said; instead he pulled out all stops on his keyboard to praise the banker to the sky for his subsequent work mopping up—“the last four years has cemented Dr Bollard's reputation as one of New Zealand's finest public servants” reckons St Bernard—while allowing only parenthetically that, well, “many argue” Bollard missed the biggest build up in foreign and housing debt in New Zealand's history (oops!) and, well yes, “some believe” he helped cause it.

Nice going Bernard. Not.

AFTER THESE LACK-LUSTRE examples giving at least a few clues as to why professional journalists are being run down so easily by the amateur online commentariat—leaving mainstream hacks moaning about bloggers looking increasingly (in the words of part-time blogger and occasional pundit Damian Christie) like dinosaurs sitting in a swamp whinging about the oncoming meteorite --it was almost with relief I turned to Fran O’Sullivan, once herself accused (by Helen Clark no less) of being “a right-wing blogger.”

Sadly, however, O’Sullivan these days is now neither a blogger nor right wing—if by that position on the political spectrum is meant someone who upholds property rights—because her latest piece is a plea for the Prime Minister to nationalise the entire resource base of the country: “for the avoidance of doubt” ( a phrase she uses twice) she means “all natural resources - water, geothermal steam, airwaves, aquifers and, for the avoidance of doubt, all minerals, ironsands, magma, rare earth deposits, coal, lignite, methane and uranium in this country … the exclusive economic zone that surrounds our shores… [and] commercial use of solar power, the wind, the tides, the navigational properties of the stars and the moon. This will also include the magma and lava flows which have enriched our soils over the centuries and will do so again in coming volcanic explosions.”

_Quote_IdiotSome will say [she says] this is a step towards the nationalisation of [resources]. And indeed this is something I am giving serious consideration to, along with the wind, the stars, the moon, magma, sunlight and even the internet.

Indeed, on her Facebook page, she confirmed that is precisely what she intends by her suggestion—a hope, indeed a suspicion, the Prime Minister will be tempted to nationalise.

image

These people are professional journalists.

NB: Now, like Armstrong I could have refrained altogether from providing links to those I criticise. But to a blogger, that would be considered unprofessional.

Tuesday, September 18, 2012

Bernanke tries another moonshot

image

Bernanke’s QE3 moonshot last week--a promise to pour $50 billion a month of money created out of thin air into US mortage markets until something happens, he knows not what--has already got local morons calling for the same non-golden shower to be sprayed around markets here. In the hope, perhaps, that some of that stream will splash out on them. Who nows?

Detlev Schlicter explains a few of the many hazards of not just out and out monetary inflation quantitative easing, but the dangers of stimulus, to infinity and beyond:

There was a beautiful symmetry to last week’s policy announcement by the Fed. Precisely a week after the ECB had pledged its commitment to unlimited purchases of Euro Zone government bonds, the Fed declared that its new round of debt monetization – ‘quantitative easing’ or QE3 – would be open-ended.
   
Unlimited, open-ended. The concept of stimulus has certainly evolved since the crisis started… “We will do whatever it takes” was a phrase that was much used in the early part of this crisis, around 2008. No doubt it was meant to instil confidence, yet it is one of the scariest things a policymaker can say. If policies go wrong – or have unintended consequences, as they always do – the costs are born by society. We should be concerned if those who are entrusted with the privileges of state power declare that they will use these powers without limits – the power to tax, the power to regulate, the power to legislate, and the power to print money. On Thursday Bernanke declared that he would not stop his policy until it has the results that he believes it should have…
    The decision for unlimited QE is also a sign of defeat. QE2 had not delivered what Bernanke had told us it would…  Stimulus sounds harmless but every stimulus is intervention. And the iron law of intervention is that once you intervened you have to intervene again, you cannot just stop the intervention without undoing the results of previous interventions. QE is state intervention in the market. There is no natural end to it. Bernanke de facto admitted that much last week…
    Avoiding the collapse of the financial house of cards has been one objective of monetary policy in recent years, but simply maintaining the financial system in a state of arrested collapse is not enough. We need growth. And the Fed has only one means of creating growth, that is, by artificially cheapening credit and massaging various asset prices up and their yields down with the help of the printing press. That is obviously the same policy that got us into the crisis in the first place…
    The bottom line is this: QE is no longer unconventional. It is the new normality. The central bank not only manipulates – persistently and systematically – short term interest rates and the supply of bank reserves so that credit remains constantly cheap, it now also manipulates the shape of the government yield curve, the cost of state borrowing, and risk premiums in the mortgage market. All of this requires ongoing balance sheet expansion at the Fed and open-ended money printing. And there is no exit strategy.
    This will end badly.

image

Well, some economists

Labels: ,

QUOTE OF THE DAY: On conflict

“There is no conflict of interest among men who do not desire the unearned…”
    - Ayn Rand

image

Get your own poster here.

Labels: ,

ECONOMICS FOR REAL PEOPLE: How Economies Grow And Why They Crash (Part 1)

Due to circumstances beyond my control (i.e., me being completely forgetful) I forgot to invite you yesterday the Econ discussion with the Auckland Uni Economics Group.  But don’t panic—if you missed it, I have a solution!

First, here’s what we talked about last night:

Our next subject will be a 'two-parter', explaining the boom and bust cycle said to be a natural feature of mature economies.
     
Part 1: Hayek v Friedman: How Economies Grow
      Part 2: Hayek v Keynes: Why They Crash

We start out by explaining how economies grow, contrasting Hayek’s growth theory with that of the Chicago school economists, of whom Milton Friedman was the best known. What does growth look like? What exactly grows? And what’s the difference between growth and progress—and how do the two schools differ on this and other related questions?
Then we will look at what economies crash. Why bubbles burst, booms turn to bust, growth turns to capital consumption. And how exactly did Hayek and Keynes differ on what causes and continues downturn.
Don’t miss this two-part discussion, which should help integrate the material we’ve discussed over recent sessions.

Notice, it is a discussion in two parts, so if you get along next week you’ll get to hear the punchline.

But even better: the guts of what we talked about last night can be easily tracked down online! 

Here’s a link to a comic book explaining, well, just what the title says. (Yes, Virginia, Irwin is Peter’s dad.)

image

And here’s two of Roger Garrison’s recent lectures at the 2012 Mises University (if you’re keen, you can see all 21 lectures here), on which much of last night’s lecture was based.

So don’t fret. Enjoy!

Labels: ,

Monday, September 17, 2012

National is just managing retreat

Last week I posted a request. I blogged asking National Party supporters to tell me, after nearly a term-and-a-half in office, what they considered the Key Government’s greatest achievement. I got just 12 responses. Out of which, only three were from National voters.

Now, this might mean I have very few National-voting readers. That’s possible.  But according to my Statcounter, roughly 3,355 people read that post, many of whom must surely be National sympathisers. Yet they didn’t bother to comment.

Now, I don’t want to make too much stew from just those few onions (unlike the Australian academic who on less evidence would like us to think climate skeptics also wear tinfoil hats). But I was fascinated by the two I deemed the “winning responses”; from Simon…:

In 10 years time National will be remembered for slowing the train down for a few years before it gathers steam again under Labour and finally crashes off the tracks.

…and from Blair, who declared National’s biggest achievement to be:

Keeping Labour out of power. Not much I know…

He’s probably right on both counts. That it isn’t very much. And it is their biggest "achievement."  Not anything they've done themselves, simply what they've not allowed the red team to do.

In other words, their biggest achievement while in government is being in government.

Put one way then, it is just power for power's sake. But put another way, it's an admission of something very serious indeed—which is an acceptance of intellectual impotence: that they have neither ideas for reform nor courage to carry them out.  A recognition that the other team have all the ideas, and the best National can hope to do themselves is to be a speed hump in their road.

Very low horizons indeed for a party whose founding objectives were stated to be:

To promote good citizenship and self-reliance; to combat communism and socialism; to maintain freedom of contract; to encourage private enterprise; to safeguard individual rights and the privilege of ownership; to oppose interference by the State in business, and State control of industry. 

Very low horizons indeed—particularly when there is abounding intellectual ammunition on every one of those policy fronts sufficient not just to hunker down in a foxhole waging a war of managed retreat, but to advance boldly on all fronts.

Which tells me that the real political battle is still one of ideas. Unfortunately, while the teams wearing red and green know that, the team wearing blue still doesn’t.

Labels:

The End May Be Closer Than You Think

imageGuest post by Douglas French

We hear plenty about fiscal cliffs, the problems in Europe, and out-of-control government budgets every day. But tucked away in our comfortable homes, watching satellite TV and living the dream, these threats to interrupt our good life seem to be only abstractions.

Books about an impending financial collapse are a dime a dozen, and besides, we're already done the collapse thing. Thanks to Ben Bernanke's money geyser, we can all get cash from the corner ATM, and live happily ever after.

Don't bet on it.

The 2008 crash was just the beginning of the end, according to John Mauldin and Jonathan Tepper, authors of the readable, yet sobering Endgame: The End of the Debt Supercycle and How It Changes Everything.

Plenty of financial commentators and prognosticators want to treat this Great Recession as the average garden-variety gully washer. OK, stocks and real estate went down in price, now buy them and watch patiently while they go up. Of course, that boat has been missed in both regards. Stocks have more than doubled and house prices are bouncing.

The authors make the point that the entire world is connected. If you think Greece can collapse without repercussions on this side of the pond, you're wrong. The problem is debt. The Greeks didn't fund their own debt, the European banks did. And when that debt goes bad, so will the European banks. It will be 2008 all over again and then some.

Government debt, corporate debt, personal debt: It's all been piling up for 60 years. This debt must be liquidated. Piling on more debt on top of defaulted debt, recognized or not, will not solve the problem. Central bankers and government bureaucrats haven't figured that out yet, but investors must understand. Their financial lives depend on it. Thankfully, Maudlin and Tepper not only make their case convincingly that more trouble is ahead, but provide advice on what to do to protect yourself.

People make the mistake that the past provides a good indication of what the future will be. Aptly, the authors begin the book with a quotation from Jean Monnet: "People only accept change in necessity and see necessity only in crisis."

This goes especially for politicians, who talk about fixing the debt crisis when we all know nothing will be done until there is a crisis. After all, while they don't always act like it, politicians are human.

It takes a Minsky moment to wake the world up, and there are plenty of those coming. The economist Hyman Minsky did plenty of great work framing the causes and series of events leading up to financial collapses. The overriding Minsky message is that financial stability breeds instability, or as the authors repeat throughout Endgame, "The more things stay the same, the more complacent we get, until Bang!"

What that "bang" will look like is an open question that the authors don't exactly commit to. That's what makes Endgame such interesting reading. Mauldin and Tepper don't try to cram a point of view down the reader's throat. Will we have deflation? Or will it be inflation, or even hyperinflation?

The authors don't pretend to be clairvoyant. They make compelling cases for each possibility. What they believe for sure is that volatility will roil the financial markets going forward. Stocks for the long term -- or anything for the long term, for that matter -- is a prescription for a money-losing disaster.

The bond market will be tested, despite the world's deleveraging. Not even Japan has a homegrown source of bond demand anymore. The day will come again when cash will be dear as countries and corporations compete for funding. This will turn the notion that it is economic strength that forces interest rates on their head. Punk economies will lead to even greater strain on government receipts at the same time more money is needed to service debt.

There are two ways for governments to default: outright repudiation and inflating the debt away with central bank money creation and monetization of the debt. The latter is the modern solution for governments that can print their own currency, such as the United States. Greece doesn't have this luxury. Nor does California.

But how long can the Fed keep buying U.S. Treasuries with impunity? In a Wall Street Journal Op-Ed piece this spring, former Treasury official Lawrence Goodman wrote,

Last year, the Fed purchased a stunning 61% of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis. This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.

The Fed has taken the place of Japan and China as major buyers of Treasury debt, and in time, the results will be catastrophic.

This information comes after the 2011 publication of Endgame, and I can't help but think the author's chapter on the potential for U.S. hyperinflation might be different, given the latest information concerning Bernanke's bond-buying spree.

imageThe authors devote a chapter to Carmen Reinhart and Kenneth Rogoff's book This Time Is Different: Eight Centuries of Financial Folly. In addition to quoting liberally from that book, Reinhart and Rogoff sat down for an illuminating interview. For those who look at the Japan experience and believe America has plenty of time to work itself out its problems, the authors of This Time think differently. Even John Mauldin was shocked and scared by what they have to say.

For the most part, Maudlin and Tepper manage to stay away from debates about what should be done to fix the problem. For example, advocates of the Austrian School of economics (like this writer) say get rid of the Fed, let the banks fail and let the system cleanse itself. The authors don't have time for this sort of ivory tower theorizing. "We find that a boring and almost pointless argument."

After all, "The people in control don't buy Austrian economics," they explain. "It makes for nice polemics, but is never going to be policy."

Well, fair enough. Instead, Mauldin and Tepper use 100 pages to lay out what the end of the debt supercycle will look like in various countries and regions around the world. Unfortunately, in this section, they drift into policy suggestions that require more government, rather than less, and their claim that it was the gold standard that lengthened the Great Depression is just not true. It was instead FDR's massive government intervention that kept the economy from correcting and, in turn, reviving.

While the authors' outlook is grim, in broad strokes, they provide investment advice for both the inflation and deflation scenarios. And ever the optimists (at least they keep telling the reader they are optimistic), they end on a high note, reminding us of the many technologic advances that make our world amazing today and speculating that future advances will be just that much more incredible.

Governments cannot print their way out of this mess. The end may be closer than you think. Read Mauldin and Tepper to get ready.

Douglas French is president of the Ludwig von Mises Institute and author of Early Speculative Bubbles & Increases in the Supply of Money, the first major empirical study of the relationship between early bubbles and the money supply through the lens of Austrian Economics. It is the only book to solve the most famous bubble in history – Tulip mania.

Labels: ,

Sunday, September 16, 2012

So sayeth the religion of peace…

Reading this morning from the holy book of the religion of peace…

  • image"As for the Disbelievers, Whether thou warn them or thou warn them not it is all one for them; they believe not. Allah hath sealed their hearing and their hearts, and on their eyes there is a covering. Theirs will be an awful doom.” 2:6-7
  • "“And humiliation and wretchedness were stamped upon [Jews] and they were visited with wrath from Allah. That was because they disbelieved in Allah's revelations and slew the prophets wrongfully.”2:61
  • “The curse of Allah is on disbelievers.”2:89
  • “Then, lo! Allah (Himself) is an enemy to the disbelievers.” 2:98
  • "Fight in the way of Allah." 2:190, 2:244
  • "And slay them wherever ye find them, and drive them out of the places whence they drove you out, for persecution [of Muslims] is worse than slaughter [of non-believers]... but if they desist, then lo! Allah is forgiving and merciful.   And fight them until persecution is no more, and religion is for Allah." 2:191-2
  • Allah says that you must keep fighting until there is no more persecution and everyone on earth is a Muslim. Then you can stop killing people. 2:193a
  • But if there are any wrong-doers around after you've killed off all the disbelievers, persecutors and aggressors, then you'll have to kill them too. 2:193b
  • "“Warfare is ordained for you, though it is hateful unto you; but it may happen that ye hate a thing which is good for you, and it may happen that ye love a thing which is bad for you. Allah knoweth, ye know not.” 2:216
  • "“Lo! those who disbelieve the revelations of Allah… promise them a painful doom.” 3:21
  • "“And believe not save in one who followeth your religion.” 3:73
  • image"Soon shall We cast terror into the hearts of the Unbelievers, for that they joined companions with Allah, for which He had sent no authority." 3:151
  • "So those who … fought and were slain, verily I shall remit their evil deeds from them and verily I shall bring them into Gardens underneath which rivers flow - A reward from Allah. And with Allah is the fairest of rewards.” 3:157
  • “Think not of those, who are slain in the way of Allah, as dead."
    (Quoted by Osama bin Laden in his 'letter to America' regarding the 11 September 2001 attacks.) 3:169-171
  • Those who die fighting for Allah will go to heaven. 3:195b
  • "Sanction is given unto those who fight because they have been wronged."
    Quoted by Osama bin Laden in his 'letter to America' as a justification for the 11 September 2001 attacks. 4:39
  • "Let those fight in the way of Allah who sell the life of this world for the other. Whoso fighteth in the way of Allah, be he slain or be he victorious, on him We shall bestow a vast reward." 4:74
  • "Those who believe fight in the cause of Allah…" 4:76
  • "They but wish that ye should reject Faith, as they do, and thus be on the same footing (as they): But take not friends from their ranks until they flee in the way of Allah (From what is forbidden). But if they turn renegades, seize them and slay them wherever ye find them; and (in any case) take no friends or helpers from their ranks." 4:89
  • "“Ye will find others who desire that they should have security from you, and security from their own folk. So often as they are returned to hostility they are plunged therein. If they keep not aloof from you nor offer you peace nor hold their hands, then take them and kill them wherever ye find them. Against such We have given you clear warrant.”4:91
  • "Not equal are those believers who sit (at home) and receive no hurt, and those who strive and fight in the cause of Allah [jihad] with their goods and their persons. Allah hath granted a grade higher to those who strive and fight with their goods and persons than to those who sit (at home). Unto all (in Faith) Hath Allah promised good: But those who strive and fight [jihad] Hath He distinguished above those who sit (at home) by a special reward." 4:95
  • image"And be not weak hearted in pursuit of the enemy; if you suffer pain, then surely they (too) suffer pain as you suffer pain..." 4:104
  • "The punishment of those who wage war against Allah and His messenger and strive to make mischief in the land is only this, that they should be murdered or crucified or their hands and their feet should be cut off on opposite sides or they should be imprisoned; this shall be as a disgrace for them in this world, and in the hereafter they shall have a grievous chastisement." 5:33
  • Allah will test believers to see if they are afraid. Those who fail a second test will suffer a a painful doom. 5:94
  • Let the idolaters kill their children. It is Allah's will. 6:137
  • "Taste the doom for what ye used to earn." 7:39
  • "We cut the root of those who denied Our revelations and were not believers." 7:72
  • "How can I sorrow for a people that rejected (truth)?" 7:93
  • "Why preach ye to a folk whom Allah is about to destroy or punish with an awful doom?" 7:164
  • Those who deny Muhammad's revelations are like dogs. 7:176
  • Those who deny Muhammad's revelation are evil. 7:177
  • "I will cast terror into the hearts of those who disbelieve. Therefore strike off their heads and strike off every fingertip of them." 8:12
  • "O ye who believe! When ye meet those who disbelieve in battle, turn not your backs to them. (16)Whoso on that day turneth his back to them, unless manoeuvring for battle or intent to join a company, he truly hath incurred wrath from Allah, and his habitation will be hell, a hapless journey's end." 8:15-16
  • Those that the Muslims killed were not really killed by them. It was Allah who did the killing. 8:17
  • "And fight with them until there is no more fitna (disorder, unbelief) and religion should be only for Allah." 8:39
  • "If thou comest on them in the war, deal with them so as to strike fear in those who are behind them, that haply they may remember." 8:57
  • "And let not those who disbelieve suppose that they can outstrip (Allah's Purpose). Lo! they cannot escape.  Make ready for them all thou canst of (armed) force and of horses tethered, that thereby ye may dismay the enemy of Allah and your enemy." 8:59-60
  • "O Prophet, exhort the believers to fight..." 8:65
  • A prophet may not take captives until he has made a slaughter in the land. 8:67
  • "So when the sacred months have passed away, then slay the idolaters wherever you find them, and take them captives and besiege them and lie in wait for them in every ambush..." 9:5
  • Those who submit and convert to Islam will be treated well. (Those who don't submit will be killed. See previous verse.) 9:6
  • Treat converts to Islam well. (Kill those who refuse to convert. See 9:5) 9:11
  • "Fight them, Allah will punish them by your hands and bring them to disgrace..." 9:14
  • Fight against Christians and Jews "until they pay the tribute readily, being brought low." 9:29
  • The "Religion of Truth" (Islam) must prevail, by force if necessary, over all other religions. 9:33
  • If you refuse to fight, Allah will afflict you with a painful doom. 9:39
  • "Go forth, light-armed and heavy-armed, and strive with your wealth and your lives in the way of Allah [jihad]! That is best for you if ye but knew." 9:41
  • imageFight the disbelievers and hypocrites. Be harsh with them. They are all going to hell anyway. 9:73
  • Non-muslim who pretend to believe (so they won't be killed by Muslims) are unclean and will go to hell. 9:95
  • "Allah hath purchased of the believers their persons and their goods; for theirs (in return) is the garden (of Paradise): they fight in His cause, and slay and are slain: a promise binding on Him in truth, through the Law, the Gospel, and the Quran: and who is more faithful to his covenant than Allah? then rejoice in the bargain which ye have concluded: that is the achievement supreme." 9:111
  • "O you who believe! fight those of the unbelievers who are near to you and let them find in you hardness." 9:123
  • "His doom cometh unto you as a raid by night." 10:50
  • "And when We wish to destroy a town, We send Our commandment to the people of it who lead easy lives, but they transgress therein; thus the word proves true against it, so We destroy it with utter destruction." 17:16
  • Parable laying the theological groundwork for “honour killings” [sic], i.e., “an innocent soul slain who had killed no man” because “his parents were believers and we feared lest he should oppress them by rebellion and disbelief. And we intended that their Lord should change him for them for one better in purity and nearer to mercy.”  18:65-81
  • The people cried out for mercy, but Allah killed them anyway. 20:15
  • Whoever thinks that Allah will not give Muhammad victory should go hang himself. 22:15
  • "Therefore listen not to the Unbelievers, but strive against them [jihad] with the utmost strenuousness..." 25:52
  • Stay away from poets. The erring follow them. 26:224
  • "If the hypocrites, and those in whose hearts is a disease, and the alarmists in the city do not cease, We verily shall urge thee on against them, then they will be your neighbors in it but a little while.  Accursed, they will be seized wherever found and slain with a (fierce) slaughter." 33:60-61
  • Those who challenge the revelations of Muhammad will have a painful doom. 34:5
  • Allah hates those who ignore his messengers. 34:45
  • Only the "single-minded slaves of Allah" will be saved from the doom. 37:127-8
  • In whatsoever ye differ, the verdict therein belongeth to Allah." 42:10
  • image"Those who reject Allah follow vanities, while those who believe follow the truth from their lord.  Thus does Allah set forth form men their lessons by similitude.  Therefore when you meet in battle those who disbelieve, then smite the necks until when you have overcome them, then make [them] prisoner.” 47:4
  • "Be not weary and faint-hearted, crying for peace, when ye should be uppermost [Shakir: "have the upper hand"] for Allah is with you." 47:35
  • If you refuse to fight for Allah, he will punish you with a painful doom. 48:16
  • "There is no blame for the blind, nor is there blame for the lame, nor is there blame for the sick [that they go not forth to war]. And whoso obeyeth Allah and His messenger, He will make him enter Gardens underneath which rivers flow; and whoso turneth back, him will He punish with a painful doom." 48:17
  • But if you're willing to fight for Allah, he will provide you with lots of booty. 48:19-20
  • "Muhammad is the messenger of Allah. And those with him are hard (ruthless) against the disbelievers and merciful among themselves." 48:29
  • "Surely Allah loves those who fight in His way." 61:4
  • "He it is who has sent His Messenger (Mohammed) with guidance and the religion of truth (Islam) to make it victorious over all religions even though the infidels may resist." 61:9
  • "O ye who believe! Shall I lead you to a bargain that will save you from a grievous Penalty?- That ye believe in Allah and His Messenger, and that ye strive (your utmost) in the Cause of Allah [jihad], with your property and your persons: That will be best for you, if ye but knew! He will forgive you your sins, and admit you to Gardens beneath which Rivers flow, and to beautiful mansions in Gardens of Eternity." 61:10-12
  • "O Prophet! Strive against the disbelievers and the hypocrites [jihad], and be stern with them. Hell will be their home, a hapless journey's end." 66:9

imageAnd then there’s the Hadith, i.e., the alleged anecdotes of Mohammed and his fellow founders of Islam…

  • Allah's Apostle said, "I have been ordered to fight the people till they say: 'None has the right to be worshipped but Allah'.  And if they say so, pray like our prayers, face our Qibla and slaughter as we slaughter, then their blood and property will be sacred to us and we will not interfere with them except legally." Bukhari, 8:387
  • Allah's Apostle said, "The Hour will not be established until you fight with the Jews, and the stone behind which a Jew will be hiding will say. "O Muslim! There is a Jew hiding behind me, so kill him.” Bukhari, 52:177
  • The Prophet... was asked whether it was permissible to attack the pagan warriors at night with the probability of exposing their women and children to danger. The Prophet replied, "They (i.e. women and children) are from them (i.e. pagans)." Bukhari, 52: 256
  • Allah's Apostle said... “I have been made victorious with terror.”' Bukhari, 52: 220
  • The Prophet (peace_be_upon_him) said: Three things are the roots of faith: to refrain from (killing) a person who utters, "There is no god but Allah" and not to declare him unbeliever whatever sin he commits, and not to excommunicate him from Islam for his any action; and jihad will be performed continuously since the day Allah sent me as a prophet until the day the last member of my community will fight with the Dajjal (Antichrist).” Abu Dawud, 14:2526
  • imageThe Prophet said: Striving in the path of Allah [jihad] is incumbent on you along with every ruler, whether he is pious or impious.” Abu Dawud, 14:2527
  • The Messenger of Allah said: I have been commanded to fight against people so long as they do not declare that there is no god but Allah." Muslim, 1:30
  • The Messenger of Allah said: “I have been commanded to fight against people till they testify that there is no god but Allah, that Muhammad is the messenger of Allah.” Muslim, 1:33
  • Abu Dharr reported: I said: Messenger of Allah, which of the deeds is the best? He (the Holy Prophet) replied: Belief in Allah and Jihad in His cause..." Muslim, 1:149
  • He (the Messenger of Allah) did that and said: There is another act which elevates the position of a man in Paradise to a grade one hundred (higher), and the elevation between one grade and the other is equal to the height of the heaven from the earth. He (Abu Sa'id) said: What is that act? He replied: Jihad in the way of Allah! Jihad in the way of Allah!" Muslim, 20:4645
  • The Messenger of Allah (may peace be upon him) said: “One who died but did not fight in the way of Allah nor did he express any desire (or determination) for Jihid died the death of a hypocrite." Muslim, 20:4696
  • The morning after the murder of Ashraf, the Prophet declared, "Kill any Jew who falls under your power." Tabari, 7:97
  • imageAnd Mohammed said, "Killing Unbelievers is a small matter to us." Tabari, 9:69
  • Allah said, “A prophet must slaughter before collecting captives. A slaughtered enemy is driven from the land. Muhammad, you craved the desires of this world, its goods and the ransom captives would bring. But Allah desires killing them to manifest the religion.” Ibn Ishaq/Hisham, 327
  • And Mohammed said before a raid, “Fight everyone in the way of Allah and kill those who disbelieve in Allah." Ibn Hishaq/Hisham, 992

Yea verily, these are the revelations of the religion of peace.  Yesterday in Sydney, we saw some more of its fruit:

image

[Hat tip Skeptic’s Annotated Quran, and Religion of Peace]

image

PS: So perhaps you’re saying, “Oh, violent jihad is only one interpretation of Islam.” Yes, it is: Mohammed’s interpretation.

PPS: And I bet some of you are saying, well, at least the Bible isn’t as violent. Not true.

But at least the West enjoyed an Enlightenment, where we could begin to break free of its shackles.

Labels: , ,