Liberty Scott

Stock market bubble fueled by printed money

noreply@blogger.com (Libertyscott) — Wed, 08 May 2013 09:00:00 +0000

So the Dow Jones has hit 15,000, it was 14,000 just over two months ago, with the S & P reaching a record level, the FTSE is at its highest since 2007, and the German DAX index reaching levels not seen since before the global financial crisis.

It is like the crisis didn't happen, but oddly enough there isn't a huge amount of evidence to demonstrate that this is due to performance, rather than cheap credit.

Yes there has been a bit of a recovery, and yes some stock prices were low compared to expected revenues.

However, as Allister Heath of City AM says:

"Ultra-loose and interventionist monetary policy globally is one of the main causes of this resurgence. Pretending that it isn’t, and that economies – even those like America’s which have liquidated many past malinvestments – could immediately and easily readjust to neutral interest rates and zero intervention is a dangerous delusion.

Much of the central-bank induced madness that led to the last two bubbles is reaching ever more dangerous proportions, not least the Fed’s hubristic determination to prop up markets..."

It was the perpetual issuing of fiat money by central banks that fueled the crisis, with CPI inflation hidden by a combination of plummeting prices from Chinese imports (a scenario that has come to an end, as China no longer offers lower costs) and the inflation being largely seen in stock and property prices.

The new bubbles will be stores of future problems.

Increases in stock prices due to good performance and optimistic earnings based on improved productivity and market growth are one thing, increases due to banks, flooded with cheap money from central banks, seeking somewhere to put it, are another.

No one has learned anything.

Not all austerity is equal...

noreply@blogger.com (Libertyscott) — Wed, 01 May 2013 21:14:00 +0000

Allister Heath of City AM:

Spending cuts are austerity of the public sector (as it has to reduce its activity)

Tax increases are austerity of the private sector

Think about which one is more likely to decrease employment, and which one is more likely to reduce economic growth.

Self-driving cars could transform land transport

noreply@blogger.com (Libertyscott) — Tue, 30 Apr 2013 22:16:00 +0000

In the UK the talk is about taxpayers paying for an extensive high speed railway network between London, Birmingham, Manchester and Leeds. It would cost £35 billion to build and would lose money. It will mostly service well-heeled business people (the fares will be too high for families, who will drive, or the poorer, who will take the multiple competing privately provided coach services). 90% of its users will be those using trains now, or people who wouldn't have travelled in the first place. It will make next to no impact on domestic flights or road traffic. One of the main objectives is to free capacity on the existing lines, so that more loss making commuter services can operate on the lines close to London.

In Auckland the talk is about an underground rail loop to enable its commuter rail service, soon to be electrified, to have more capacity during the peak hours. Roughly 45,000 trips a day are taken on that system, roughly the entire average daily trips of Fenchurch Street station in London (yep that busy) (and 10% less than Wellington's network, despite Wellington's region having at least a quarter of Auckland's population. It would cost NZ$2 billion to build and would lose money.

In both cases the projects are expensive, not financially viable, and serve relatively few people.

They are 20th century solutions to perceived transport problems, but another is on its way, and it could transform land transport between and within cities.

Self-driving cars. Allister Heath says it makes big rail schemes like HS2 outdated.

The technology exists now. Cars can already park themselves, emergency brake, follow road lines and follow other vehicles and brake automatically. Several US states are already changing laws to allow for fully autonomous road vehicles, and the technology now being trialled enables vehicles to navigate safely along existing roads.

What could that mean?

Road vehicles that actively avoid collisions, both with other vehicles, and cyclists and pedestrians.

Road vehicles that operate in convoys, in close formation on major roads, increasing the capacity of those roads by a factor of three to four, rivalling railways.

Road vehicles that don't need a driver, that can be sent to be parked anywhere, called up on command by mobile phone.

Motorways that operate like trains of vehicles, except that the vehicles have the ultimate flexibility of starting and ending trips anywhere on the road network.

Traffic lights will no longer need to keep traffic stopped, but rather interweave traffic to maximise capacity.

Speeds can be faster where it is safe to do so, and better managed where there are many pedestrians.

Cars could be parked with a far higher density.

Let's not pretend there are barriers to this.

Technology needs to be refined, it needs to be secure. Nobody wants autonomous cars diverting onto footpaths and mowing people down.

Laws need to be changed, so that owners of vehicles are liable for accidents when there is no driver or active driver.

Roads need to be better managed, so lines are maintained, databases about road rules, traffic signals adapted and systems in place so the network is actively managed.

However, it can transform transport.

Buses can have the capacity of commuter railways (with the exception of high frequency metro services, which Auckland will never have).

Roads can have much more capacity, so there is far less need to build more capacity, and there is far less need to build safety into the roads with barriers and signs and speed limits that reflect driver behaviour.

Roads would be so much safer that incidents of accidents causing congestion would be rare, and thousands of lives would be saved from serious injuries, and hundreds of millions of dollars of property damage and health costs avoided.

Vehicles would be much more fuel efficient, as vehicles become more efficient anyway, reducing emissions and the environmental impacts from transport.

Roads would be more like networks akin to telecommunications and energy networks, and politicians choosing projects to expand capacity would be rightly treated as amateur fools. Who today would listen to a politician who says that a specific switch needs to be installed on a network, or a substation or that cable capacity be added somewhere?

Railways are bespoke inflexible networks that have a lot of capacity best suited for a narrow range of transport tasks. The range of those tasks will narrow even more with automated road transport.

Of course some will still choose to drive, and will have options to do so, for leisure, but probably pay much more for insurance to do so without driving assistance. What happens ought to be up to market demand, for vehicles and for roads.

Unfortunately, roads are managed by politicians and bureaucrats. If anything is going to get in the way of setting them free, it will be them.

Auckland road pricing?

noreply@blogger.com (Libertyscott) — Mon, 29 Apr 2013 21:22:00 +0000

Some questions:

- Is there a funding gap if large totemic projects that the users would never pay for themselves are dropped? (yes rail and road)

- Why does Auckland Council assume fuel tax will still exist in 30 years time when multiple states in the US and the Australian Federal Government are considering whether it has a future at all when vehicle engines become so fuel efficient that the tax would have to be very high to collect enough money at all?

- Why does Auckland Council think that two road pricing options, both highly criticised in a previous report are still worth considering, especially since technology has moved in leaps and bounds since then?

- Why does Auckland Council think that if there is user pays on the roads, directly, not through fuel tax, that there shouldn't be user pays on the railways?

- Why do options to fund transport in Auckland automatically exclude any evolution of the existing road pricing type system in the form of national road user charges? A system that now has increasing numbers of people paying through a privately provided electronic system that measures where and when vehicles use the roads, and has competitive delivery.

- Why did Auckland Council completely ignore other road pricing options used elsewhere? Is it because its consultants know nothing about them? (I very strongly expect this)

- Why does Auckland Council think roads shouldn't be run like a business? Just because Auckland Transport Blog wants to plan, tax motorists and subsidise public transport in its eager bright eyed bushy-tailed attempt to push people into doing what it thinks is best for them, doesn't mean people will comply, or that it is good for them.

- What is Auckland Council's view on the automation of road transport, including the increasing likelihood that road vehicles will increasingly be self-steering and self-driving, at least part of the time? Given this could treble the capacity of existing roads, virtually eliminating congestion, dramatically cut pollution and eliminate one of the few advantages of rail over road, why ignore it?

Syria - Time for difficult decisions

noreply@blogger.com (Libertyscott) — Sat, 27 Apr 2013 18:59:00 +0000

Let's make some points very clear.

Syria's government is reprehensible. It is a softer version of the north Korean crime family one-party state, but only in scale and depth of totalitarianism. Bashar Assad inherited the supreme leader role from his murderous tyrant of a father. That family, from the Alawite minority sect has run the place for my entire lifetime.

Bashar Assad loosened the screws somewhat, but has demonstrated the typical attitude of any dictator when challenged by his subjects. He wont step down, wont disband the secret police, wont abolish the state monopoly on media, wont legalise free speech, wont legalise competing political parties, wont hold elections.

He has spread nationalist-sectarian fear amongst Alawites, fearful that anything other than the dictatorship of his family will mean their slaughter. He has encouraged the view that anyone who opposes his "secular" rule, is an Islamist.

Assad's regime torture and executes political opponents, and it is clear that it has used its own military to attack civilian populations to repress political dissent. By no measure can it possibly be said to claim any moral authority, unless one adapts Mao's statement to claim morality comes from the barrel of a gun. Human Rights Watch estimated 17,000 people 'disappeared' in Syria in the first decade of his father's rule. In 1982 he bombed the city of Hama, slaughtering between 10,000 and 40,000 people as he suppressed an uprising by the Muslim Brotherhood. Yes, one can't argue that the Islamists would be better, but the indiscriminate oppression was brutal on a scale that Western "peace" advocates would usually decry.

Bear in mind Syria has previously invaded and occupied Lebanon, and assassinated Lebanese politicians. It is far from being a non-aggressive actor in the region, a point thrown by its supporters against Israel, but ignored in Syria.

Assad's regime has long been supported by the USSR and more recently Russia, and has always been anti-Western.

It is perfectly moral for Syrians to fight to overthrow this regime. It kills, torture and imprisons those who challenge it. Its apparent use of chemical weapons does cross a threshold, one of degree. As chemical weapons kill and harm over a wide area indiscriminately in a way that is almost impossible to defend against. It is a tool of mass slaughter, beyond that of conventional bombs and firearms which have very localised effects.

Providing arms or other support for the Syrian regime is being a party to this. Russia already does this, it maintains a military base there and openly supports the regime. Hardly surprising, since Russia is an authoritarian faux-democracy that arrests and imprisons its opponents, and has little compunction about using force against those challenging its corrupt corporatist crony-capitalist state.

So let's not pretend that Syria should not be subject to international intervention in its civil war, it already has it.

Similarly, Qatari, Saudi and other Arab states have been arming and funding different rebel groups. The very same states which would cite "state sovereignty" as a reason to oppose anyone interfering in their politics.

So the genie of intervention is already out of the proverbial bottle.

Should something be done?

The option of "do nothing" is popular in two circles. Libertarian isolationists and the left.

The former because they believe states should withdraw into being self-defending independent actors, and have no role in the world that they previously had a substantial role in creating and moulding. They see no role in containing other actors, in opposing authoritarians (some think all states other than libertarian states are authoritarians, although those asserting that do so in states that don't suppress that point of view) and would, in effect, be content standing by whilst another state commits genocide - Holocaust style. It would be fair for some to argue for mercenaries to do so privately, but few ever suggest that.

The left oppose intervention either because they are pacifists (so see anyone using force as being wrong, akin to letting your neighbour beat his wife and kids up, but you not being willing to use force to defend them), or because they are more insidiously supportive of any regime that is anti-Western.

However, there is a single moral argument in favour of do nothing, which is that the cost of intervention in money and lives, is not worth it to save people who do not pose a threat to us from a regime that is not a notable threat. I don't believe the cost of the right level of intervention would be high, and I certainly don't believe in replicating the Iraqi or Afghanistani regime change levels of intervention. Not because it would be wrong per se. If it were relatively easy to overthrow Assad, it would be appropriate to do so.

Yet the cost in lives and money from doing so would be excessive, and dangerous. Syrians would not respond well to such an invasion, and many would mount a counter-insurgency. I wouldn't even consider putting the lives of NATO military or taxpayers money at risk for such an adventure.

I believe there are two very sound, self-interested, reasons to intervene cautiously.

1. Showing direct humanitarian interest in Syrians being slaughtered is important. It demonstrates that the civilised world (i.e. countries that are significantly free, secular and open) does not turn a blind eye to governments slaughtering their own people. It does help to deter others, and not acting does the opposite. It gives the impression that using chemical weapons and air power to suppress civilians is ok in Syria, when the latter wasn't in Libya. Particularly given President Obama's declaration that use of chemical weapons is a "red line". If it isn't then can other belligerents really believe anything else the US says?

2. Intervention in favour of some of the rebels will demonstrate a genuine Western interest in Syrians not being slaughtered, which is more likely to support a regime friendlier to Western interests. The current regime has always been contrary to that, not just in Israel and Lebanon. Replacing it would appear to be a good thing. However, letting things "just fall where they may" is risky. It is time to support non-Islamist rebels and to remove the impression of Western lack of interest in the outcome. A Syria that is friendly towards its neighbours, that does not sponsor or train terrorists or friendly Islamists, will improve stability in the region and remove one key supporter for Iran - which itself has long sponsored terrorism against the West. It would also add to freedom, secularism and improve the standard of living for most people in the country. Most importantly, as long as it avoid sectarianism then it can help unify a country the regime (and some rebels) have been Balkanising.

What sort of intervention?

Bear in mind I am ignoring the UN Security Council. Russia has ignored it with impunity to support its direct backing of the regime, so NATO should do the same.

A no-fly zone would be relatively painless, parallel what was done in Libya and the former Yugoslavia, and largely negate any chance of chemical weapon attacks or the egregious use of Syria's ample air force against its population. It may involve some combat, as the air force is by far the most privileged and well funded part of Syria's military, not least because Hafez al'Assad was an Air Force Commander, and Syria has ample anti-aircraft capability. However, it would help support a norm that states do not attack their own citizens with air power, and be a recognisable response to the use of chemical weapons.

Providing military logistical support and supplies to non-Islamist rebels is equally acceptable, to counter Russia's intervention, and to lift the relative power of non-Islamist rebels against Islamists and the regime.

However, this is the difficult part. It is clearly not superior to have Islamists defeat Assad. It would not advance freedom in Syria or the interests of our allies. However, separating out rebels is not so easy. This is why careful judgment needs to be made.

It is highly desirable to boost non-Islamist rebels, not only to take on Assad, but to stop Syria becoming an Islamist state. That outcome is just as bad as Assad remaining in power, as it would not be pro-Western and would advance a decidedly anti-freedom, anti-secular agenda.

So it is time to work with such rebels, provide them with intelligence, arms and let Westerners join as mercenaries if they so wish. The arms embargo should be lifted for them and there should be a deliberate effort to unite non-Islamist rebels under the Free Syrian Army.

Conclusion

Western governments don't want to be involved in Syria, but they already are. They have imposed an arms embargo, which, as in Bosnia, largely benefits the incumbent government. Russia is already intervening, to protect its client regime. Arab states are intervening to support various rebels. Iran is supporting the existing regime. If the West wants what they want, then it should stand back, but I doubt that is true.

There are three clear and moral goals for Western policy in Syria:

1. Oppose egregious mass slaughter by any side, including use of chemical weapons and air power against civilians. It is indefensible, and if steps can be taken at low cost to enforce this effectively, they should be.

2. Seek overthrow of the anti-Western aggressive Assad regime. This second-rate gangster family kleptocracy has nothing to offer Syria or the rest of the world. Its people and Western allies are better off without this murderous dictatorship.

3. Avoid its replacement being Islamist. There is a small, active and well supported Islamist element to the insurgency. It actively recruits because most rebels are frustrated by lack of progress. It is fighting for a principle unified vision of the country. It would be worse than the status quo, and should be opposed.

Doing nothing appears attractive, it is cheap and it turns its back on Syrians. Yet doing so will not be easily forgotten in this country on Europe's doorstep. There is a chance to steer events in this long running dictatorship towards a regime that could promote a more cosmopolitan, more open, secular and civilised Syria, linking Turkey to Jordan, encouraging Lebanon to be, once again, a land of prosperity and civilisation, and being prepared to co-exist with Israel. A new Syria could also support the secular elements of the Palestinians, and resist Islamism and sectarianism elsewhere.

The alternative may be years of civil war, a winning Assad with ongoing insurgency, or an Islamist led revolution, that looks to the West as being indifferent to a regime that was backed by Russia - which to many Islamists isn't that far removed from the West. An Islamist Syria would bolster Hamas, would encourage Iran's ongoing campaign to groom Iraq into an ally, and would threaten Turkey, a flawed Muslim dominated country which is nevertheless secular and one of the best hopes for encouraging a Muslim enlightenment.

Of course the left will oppose it, will engage in its usual anti-Western hysteria, full of conspiracy theories about there being monetary interests involved, or secret corporate deals and the like. All nonsense, and interventions in Bosnia, Kosovo and Sierra Leone demonstrated that (and who has done well out of Iraq? What riches have come from Afghanistan?).

It isn't about "imperialism" or shameless self-sacrifice, it is about self-interest, advancing freedom and helping to turn a malignant part of the world into one more benign for modernity.

Furthermore, ignoring the Syrian government's treatment of civilians would return the world to the age of the Cold War, when grotesque mass murders by governments were ignored, for fear of sparking World War 3 (or because those that did it were on "our side").

The worst crime that any government can inflict is to attack its own people. Western governments cannot liberate the world. However, when a government blatantly wages war against its own people, it is only right to take minimal steps to prevent it from attacking them from the air and to support an alternative that is likely to be better.

Anzac Day 2013

noreply@blogger.com (Libertyscott) — Wed, 24 Apr 2013 20:08:00 +0000

Anzac Day is largely ignored in the UK.

Which is sad, given that it started by commemorating the loss of life in World War One, for Britain.

Over 17,000 New Zealanders died from fighting for the British Empire in World War One.
Over 60,000 Australians died from fighting for the British Empire in World War One.

So tomorrow I will take a moment to remember them, and all the others who died fighting. It's a day to wear a Poppy in London, causing some to be confused and some others to smile and acknowledge, for they too, have not forgotten.

Previous posts on Anzac Day are, as always, just as applicable. Here, here and here.

Robyn Malcolm - the classic ignorant Green airhead - loving a mass murderer

noreply@blogger.com (Libertyscott) — Tue, 23 Apr 2013 08:48:00 +0000

I thank Peter Cresswell for highlighting this. It may seem like a small accident to some, but airbrushing the mass murders and starvation of millions is not that.

It's not that she denies it, or pretends it didn't happen, she's just too ignorant to know about something she decided to celebrate.

Expecting actors to come up with pearls of wisdom about politics and history is a bit like expecting them to be competent at medicine, so I'm hardly surprised that Robyn Malcolm wished the mass murderer Lenin a happy birthday.

She said Stalin, Mao, Kim Il Sung and Pol Pot were very different from Lenin.

Brainless bint.

She is espouses the classic far left myth that Lenin's revolution was some glorious popular revolution that transformed Russia into a socialist state that was corrupted by Stalin's cruelty.

This view of history is the revisionist version that the CPSU spread after Khrushchev, as he "de-Stalinised" the country, which of course meant that instead of everyone fearing everyone else all of the time, everyone feared everyone else just some of the time.

Lenin was a monster, and airbrushing his history is a grotesque misjustice to the millions killed or starved under his misrule.

For a start, let's not forget that the Tsar was not overthrown by the Bolsheviks in October 1917, but a popular revolution in February 1917 which saw a democratically elected executive created. In October, it was the Bolsheviks that overthrew that regime.

Beyond that the story is grim:

The "Red Terror" was Lenin's campaign to "cleanse Russia of the filth" who opposed him.

December 1917 the Cheka was established, the secret police. It shut down all newspapers critical of the Bolsheviks and established a press monopoly, by force. In 1919 concentration camps were set up, to place the bourgeoisie and hold them as slave labour for the revolution. About 70,000 people were in such camps by 1923.

One shouldn't forget Lenin's famous hanging order:

Comrades! The kulak uprising in your five districts must be crushed without pity ... You must make example of these people. (1) Hang (I mean hang publicly, so that people see it) at least 100 kulaks, rich bastards, and known bloodsuckers. (2) Publish their names. (3) Seize all their grain. (4) Single out the hostages per my instructions in yesterday's telegram. Do all this so that for miles around people see it all, understand it, tremble, and tell themselves that we are killing the bloodthirsty kulaks and that we will continue to do so ... Yours, Lenin. P.S. Find tougher people

So the idea of the kulaks, the label for the hated scapegoats of the revolution popularised by Stalin, started under Lenin.

Historian Robert Gellately estimates that between 300,000-500,000 Cossacks were forcibly relocated or killed by 1920.

In September/October 1918 10,000-15,000 were summarily executed by the Cheka. Ownership of a business or a large house that you refused to surrender to the state (for no compensation) could be sufficient grounds to be liquidated.

Lenin, after confiscating farmland from landlords and giving it to peasants, then oppressed the peasants demanding any surplus after what they needed for their own "personal use" be sold at heavily knocked down prices to the state. Some peasants sold produce to the black-market, and would be executed for this. Many chose not to sell the surplus, and got it confiscated. So they chose to simply produce less, given there was little point in working harder than was necessary to feed themselves and their families. The resulting underproduction, and with a subsequent drought (and no surplus stock), saw the 1921 Russian Famine result.

At least 3 million died in that famine, ameliorated only by the end of the Civil War which saw the Bolsheviks utilising the opposition (White Russian) surpluses in grain for their own needs.

Historian Richard Pipes said that:

Lenin repeatedly said that he would sooner the whole nation die of hunger than allow free trade in grain. In short, Lenin and his comrades knew with substantial certainty that their policies would cause widespread death from starvation. Under any sensible definition of murder, this makes Lenin the murderer of millions.

Now I don't expect Robyn Malcolm knew this, given her tweet I don't expect she's spent much time with books that don't have a lot of pictures in them.

As a result, she ought to apologise, profusely, for insulting the memory of the hundreds of thousands slaughtered by this tyrant. A tyrant that spawned Stalin, and who then spawned 70 years of totalitarian terror spanning much of the world from Havana to Hanoi, Luanda to "Leningrad".

It is, as if, she accidentally didn't know about the Holocaust, and it's disgusting.

Earth Day 2013, keep it to yourself

noreply@blogger.com (Libertyscott) — Mon, 22 Apr 2013 14:55:00 +0000

I like what the Ayn Rand Institute said about it in 2009:

The lights of our cities and monuments are a symbol of human achievement, of what mankind has accomplished in rising from the cave to the skyscraper. Earth Hour presents the disturbing spectacle of people celebrating those lights being extinguished. Its call for people to renounce energy and to rejoice at darkened skyscrapers makes its real meaning unmistakably clear: Earth Hour symbolizes the renunciation of industrial civilization.

I called it onanistic vileness, as it is a childish exercise in mutual gratification amongst the self righteous who have the luxury to choose to spend a short period of their comfortable lives deprived of a light bulb, a car or maybe something else they take for granted.

Children are starving in gulags in north Korea today. Tens of thousands of them, like concentration camps, whilst most people think north Korea is a bit of a joke.

Millions of people every year get electricity to power a light enabling a child to read a book at night.

Billions of people right now are alive because electricity and man-made energy enables them to be warm, to be fed and to be sustained.

To hell with Earth Day. Yes, pollution kills. Yes, it is important to not destroy the environment that sustains us all, but that isn't achieved through the worship of non-production, non-technology and de-industrialisation.

However, those who propagate Earth Day are at best hypocrites, like the jetsetting, big house owning, big mouth propagandist Al Gore, and at worst destructive towards humanity, like those waging war against genetic engineering.

Abstain from consumption if you wish, but don't pretend that asceticism towards energy use, technology, production, mining or the like is doing anyone any good. If you want look after the environment, look after your own property and campaign for property rights to be expanded, and against the abuse of the commons because they are the commons.

For those who cite science as the basis for their policy misanthropy, are more often than not as much (if not greater) abusers of science than those they condemn.

North Korea - what's going on?

noreply@blogger.com (Libertyscott) — Sun, 14 Apr 2013 12:04:00 +0000

When I started studying north Korea it was the early 1990s, and few were paying attention. Nobody paid attention then, and few pay attention now to the horrors of the totalitarian slave state that it has been for over 60 years. The name - Democratic People's Republic of Korea (DPRK) - says much in itself. Governments that use names to deliver messages about how utterly devoted they are to "the people" are naturally quite the opposite.

The adjectives thrown about by the mainstream don't do justice to the place. Stalinist? No, the extent and efficiency of the cultural revolution, the rewritten history and the personal cult far exceed that of Stalin, and it has now gone into two subsequent generations. Dictatorship? That bland term doesn't really highlight the totality of control in the DPRK. Life there is under constant surveillance. Totalitarian? The DPRK should be the dictionary definition of it.

Much of the media coverage of the place focuses on how amusing it is to have a strongman leader, legions of soldiers goosestepping, and now how it is a bit of joke that he threatens to attack the United States. Yet the DPRK isn't that funny for those living there.

Virtually nobody has internet access, access to foreign television broadcasts or even foreign radio broadcasts. Beyond an elite in the tens of thousands, the entire view of the country is based on state propaganda, and what others tell them.

There is exposure to foreign culture, music and movies, although most of that comes from illegal south Korean DVDs, which only a few can play.

However, none of the kitsch and strangeness of the DPRK really shows off what life there is about.

There is no free speech. It is illegal to write anything that is critical of the state, party, military or the Kim family in any way. There is no independent media or press of any kind.

However, this lack of free speech goes much further than writing or media, for it means speech. You wont want to say anything political or even raise doubts about your political correctness, because every week you go to sessions of self and community criticism. There you announce what you did wrong this week and then point out the same of one of your fellow citizens.

Beyond that you're not safe, as every workplace has a political cadre and teenagers and other young people may be affiliated with the various Red Guard movements. They can report you to the various secret police, and you can be taken away, questioned, interrogated and tortured.

You see your life is not private, at all. There is no private home or land ownership. So you don't have the right to not have anyone enter "your" home, or to not be bugged. There is almost no private sphere, although reports in recent years indicate that money can buy acquiescence.

You can't challenge the official media, and cannot freely talk about what you think, you can't even travel freely as all cities and towns have border guards. You need to have an internal passport and permission to travel, so your town or city is your world - literally.

Of course the real horror, besides day to day living in a country where the state constantly lies to you, where you can't leave, you live in a home that isn't legally yours in any meaningful way and can't say what you want, is what happens if you are found guilty of a political crime.

You go to a gulag. A gulag modelled on Stalin's gulags. You work seven days a week, from dawn to dusk, sleeping on hard bunks, unheated, fed water and watery gruel (only surviving on catching insects, mice, rats), as a slave. At best.

At worst, you become target practice for soldiers, or used for medical experiments, or experiments for new weapons. If you're a woman, you may be raped, repeatedly.

However, it isn't just about you. Your parents, your spouse, your grandparents, your siblings and your children, and their children, would also go to the gulag. Children from babies up, children put into their own gulag, where they too face being slaves, being tortured, being abused, starved and existing no better than a Nazi concentration camp.

So just think a little about that.

You see what Kim Jong Un is trying to do is preserve this system.

If he has delusions of power, he will think he can attack the Republic of Korea or US military targets and get away with it.

However, it is far more likely that he is showing off to the military, the same military that tried to overthrow his father, before he purged it. Now he has been purging the military again, but what is key to him retaining power (with the tutelage of his aunt, Kim Kyong Hui) is to convince the senior military leaders that he has their interests at heart.

Their interests are in continuing to suck 30-40% of GDP into the military, into being able to engage in black market trading with the outside world and to be able to buy the luxury goods they want.

However, to maintain a large military you need to maintain a large threat. Keeping that illusion up is in the interests of the DPRK military-industrial complex, and in a totalitarian state, it is in the interests of Kim Jong Un as well. He needs a military that will maintain the gulags, that will sustain the totalitarian state where everyone is everyone else's, and nothing is private.

Thatcher was allied to Reagan, but never kowtowed to the USA

noreply@blogger.com (Libertyscott) — Sat, 13 Apr 2013 10:04:00 +0000

The Falkland Islands.

Grenada.

Supporting the right to first use of nuclear weapons.

Repelling Iraq from Kuwait.

On all of these, Thatcher disagreed with the US President of the day.

Why?

It was principle.

Thatcher week and then some

noreply@blogger.com (Libertyscott) — Fri, 12 Apr 2013 09:53:00 +0000

It's been huge in the UK. Paeans on one side, hatred on the other. So much to read, but today's bits are

- City AM editor Alastair Heath on how the left are wrong that Thatcher's policies led to the banking crisis and as an acolyte of Hayek, she would have disapproved of the protection from moral hazard presented by the pre-crisis regulatory and monetary policy environment (and the post-crisis bailouts).

- People are organising "Thatcher death parties" which, of course, she would say is their fundamental right. Reminding us all that to even discuss such a thing for a dead leader in the former Soviet bloc would be to risk the secret police having one, for you, without so much laughter. She might have wondered if they think their children and grandchildren would be proud of them, and who else they would hold such a party for, but finally that it says more of them than of her. Highlighted is one Romany Blythe, a drama teacher who is organising a death party saying "people danced when Hitler died" and who proudly flies the red flag.

Think the Holocaust Memorial Day Trust might invite this vapid empty head to meet some people who can tell her what Hitler was like. She's prove beyond doubt that Thatcher's biggest mistake was not to privatise education.

- The Adam Smith Institute take on current popular UK leftwing pinup Owen Jones on "something called facts", which as a child of communist parents Jones finds get in the way of a good bashing of capitalism.

Meanwhile...

Here is the intellectual depth of most of the hatred of Thatcher

Meanwhile, George Galloway, sympathiser of Saddam Hussein, supporter of "accepting" the election of Mahmoud Ahmadinejad, the man who said the Syrian people are "lucky" to have Bashar Assad as their leader (and who calls out Western intervention wherever he finds it, but is curiously silent about Russia's intervention in Syria, has done one better.

He now sympathises with North Korea with its "innocent and pristine" culture.... of locking up children as political prisoners for the sins of their family. Of course he still trots out the North Korean line that the USA started the Korean War, a piece of propaganda disproved by the opening of the Soviet archives and even more recently by a few Chinese academic pronouncements.

- Christine Lagarde and the IMF warn against what monetary policy retard Russel Norman is proposing. Money printing is creating a timebomb (City AM) warning it will be hard to reverse these policies when it is needed without there being a profound market reaction (i.e. bursting bubble)

British politics changed this week - principles are being discussed

noreply@blogger.com (Libertyscott) — Thu, 11 Apr 2013 10:11:00 +0000

Having lived only in the UK and New Zealand, I've witnessed only a few passings of political leaders. In the UK, I barely missed Ted Heath and James Callaghan's passing. In NZ, I recall the passing of Rob Muldoon and David Lange, oh and Bill Rowling (truly a footnote I barely recall).

None have been more than a fraction of the influence that Margaret Thatcher has had on the world, and because she was driven first and foremost by principle and a commitment visceral belief in freedom and resistance to communism.

The more there is of her, the more it is abundantly clear that she turned the tide of history for the UK, and that the left, with its faux compassion and peculiar attachment to central planning, only wishes it could do the same in reverse.

The media coverage of her has been wall to wall, and there is no lack of writing for and against her, but what really counts is the level of discussion. Conservative Home is perhaps the best place to find links to much of that coverage, positive and negative.

Perhaps the most poignant point made of her yesterday was in the House of Lords. Lord Tebbit, who left Parliament in 1987 for family reasons, regretted his retirement from politics saying "I left her, I fear, at the mercy of her friends. That I do regret". Men, and they all were, who will themselves be footnotes in history, floored a giant. Yes, because she made one big mistake, but none would get her to change that through principle, but for popularity. She wasn't going to have that.

Time after time, backbench Conservative MPs have paid testimony to her out of principle. Those who opposed her have shown themselves up for what they are. Socialists who think they know how to spend other people's money, whose compassion is only shown by their belief in spending other people's money, and whose decade after decade of caricature have been shown up for being false.

Portrayal of Thatcher as a warmongerer, for taking on the invasion of the Falklands by a fascist military dictatorship is simply churlish. To say she supported apartheid has been thoroughly shouted down, because she considered those fighting it to be no angels either. The claims that what she did "caused the ills of today" are treated as laughable, 23 years later. Memories of rubbish piling up in the streets, blackouts and strikes shutting down the economy, and limits on foreign currency purchases, cause some of the young to notice how far we have come. Few want to go back to a phone monopoly that took weeks to supply a new phone.

Finally, the caricature of her as a predatory heartless hater of the poor is shown to be just that - the creation of leftwing spin that could not confront her willingness to cut the blood supply of dying industries, that was draining the life from the living. She didn't cut the welfare state, she didn't privatise the NHS and nobody could accuse her of withdrawing state support for the poor. She was a conservative, not a libertarian. She believed the welfare state existed to cover people when they had bad fortune, to give them what they needed before they found or created a new opportunity. The left simply wanted all of these people to be forever dependent on the state, and the unions that destroyed businesses by demanding pay rises of 20-30% every year.

"Divisive" Thatcher won three elections in a row, with landslides, whereas the 1970s were plagued with governments of tiny majorities and a short run coalition. Indeed the late 1970s were plagued with militant union strikes under the Labour Party, as the unions thought Callaghan to be too moderate, as what they wanted was Soviet style socialism (don't believe me? Google "Arthur Scargill and Lenin").

There were 605,000 miners in 1960, 289,000 in 1970, 235,200 by 1979 and 62,000 in 1990. Far more lost their jobs under Harold Wilson than under Thatcher. Manufacturing production rose 7.5% between 1979 and 1990, smashing the lie that she destroyed industrial production. What did happen was that the services sector took off, shrinking manufacturing as a proportion of GDP.

What shines above it all were her principles, and these are like a shining light in today's politics of spin, compromise and polls... they are worth remembering.

Her fundamental belief that governments were very poor at knowing how to spend other people's money, against the implied obfuscated belief by most politicians that what they do is "invest".

The fact she recognised taxes involved taking other people's money and so it should be minimised, unlike those who regard paying taxes as a duty and as a contribution to the greater good.

Her belief that people should be unshackled by laws and regulations to pursue their dreams and build their own lives through their own effort.

Her commitment to families, communities and voluntary effort to show compassion and benevolence to each other (despite the self-serving strawman claim that she loathed people caring for each other).

Her loathing of statutory monopolies, closed shops and protectionism. She especially despised laws that made union membership compulsory. Her "anti-union" policies included such "atrocities" as mandating secret ballots for strikes, prohibiting "political" strikes that had nothing to do with negotiations on pay and conditions of employment, requiring majority mandates for strikes. She privatised state businesses and opened them up to competition, and she embraced the Single European Act believing that open borders within the EU were good for free trade. She was to resist the EEC desire for that to become a federal super state.

Her hatred for communism. Apparently the first sentence she said to Mikhail Gorbachev after a polite greeting was "I hate communism". What leader today would be so bold and honest? She knew the fight against Arthur Scargill, a man who then, and now, lauded Lenin and Stalin as heroes, was a genuine fight of good vs. evil. Those today who call her evil, may take pause to wonder if they would have preferred Scargill to win, and how long they would have tolerated going down the path Scargill wished. It was this hatred of communism that fortified her relationship with Ronald Reagan, her warmth towards Mikhail Gorbachev who was liberalising the regime and who eventually removed the imperial yoke from eastern Europe. She is loved and admired by millions in eastern Europe and Russia for that.

Her commitment to Britain and British citizens wherever they may be. The Falklands are well known, but she also angrily rang Ronald Reagan about the US invasion of Grenada, outraged that the US had not even discussed it with the UK, given the Queen was still Head of State of the nascent Marxist state. She fought hard to protect the legacy of Hong Kong although knowing it had to be returned to China.

Her implacable opposition to terrorism and political violence. Her attitude to the feral terrorists of the IRA was clear, and was fueled more and more by their acts against her friends (the loss of the gentle advisor Airey Neave was particularly hard to take, along with the Brighton bombing), colleagues and fellow citizens. She had little time for the internecine sectarianism that plagued Northern Ireland, but she would not tolerate the Marxist Sinn Fein, backed by the USSR, Libya and Iran, seeking to force the Protestant majority to submit to rule from Dublin, by killing civilians there and on the mainland. That opposition was seen in her contempt for the PLO, which actively engaged in terrorism at the time, and her opposition to the ANC, which was misunderstood as being support for apartheid. She loathed apartheid, but she considered that a disorderly revolution by the pro-communist ANC would do as much harm to South Africa as Robert Mugabe did to Zimbabwe.

Finally, her hatred of fakes. She loved a good argument, a good debate and someone who would argue a point, an idea, not someone who would moan, who would emote and just express outrage. She equally liked people of substance, who worked hard, who achieved and strived, who sought to better themselves, to build, produce and make a go of their lives. She despised those who thought live should be handed to them, which also included the inherited upper classes. She had little time for the faux snobbery of the wet Conservatives and the champagne socialists, the ones who were ever so sympathetic for the working classes, but wouldn't be seen dead in their towns or suburbs, wouldn't be seen dead cooking dinner late at night with the staff (which she did, and she insisted on doing many chores for herself).

She considered the "born to rule" Conservatives as being weak and having had none of the life experiences to understand those who took risks, and those who were born from modest backgrounds who looked up and beyond.

She considered the Oxbridge socialists as despicable, comfortable middle class snobs whose politics patronised and demeaned most people as not being fit to run their own lives. She had little time for spin and public relations, and considered polling and focus groups to be irrelevant. Her policies to allow people to buy their own council homes, was about embracing the aspirational working classes, and she saw the dark Soviet style estates as harbours of despair, but populated by some who looked beyond and wanted better. Those were the people she wanted to give a nudge to and encouragement. Her privatisation policies which explicitly included mass share issues to the public, were about taking public ownership in the socialist sense, and moving it to the individual - true - public ownership.

Thatcher knew what she had to do, she had an intellectual framework which she worked within, which meant she believed that ultimately people knew best how to run their lives and could create wealth, enterprise and futures for themselves if only the state could get out of the way.

Almost to a man and woman, her supporters and opponents have noted that she was principled, and stood by them, and noted she won three general elections on principle (and of course Labour fought those elections, in part on principles that the electorate soundly defeated). She was hated because she won, she took on the sacred cows and swept them to one side. She couldn't be rattled, she always had the answers at her command.

Up and coming Conservative MPs like Dominic Raab, Conor Burns, Douglas Carswell, Steve Baker and others, have shown a future that holds some promise. For they speak the same language, not just now, but regularly. There is some hope from that, in that politics may in the next generation, be more about principle. Nick Boles on property rights and Michael Gove on education, are the closest we have now. For when the left is confronted with principle, it is completely sideswiped, for its principles look far more dark.

As such, I am a little more optimistic about the future of the Conservative Party. Let's talk more about principles, about freedom, about choice, about property rights, about what "equality" means, and about how government favouring rent-seeking groups is wrong. Let's talk about why compassion can only be delivered through taxes distributed by bureaucrats, about whether parents should choose their childrens' education, but most of all - whose lives is it anyway?

Eastern Europe did it, why not Liverpool and Glasgow?

noreply@blogger.com (Libertyscott) — Tue, 09 Apr 2013 21:16:00 +0000

Thirty years ago Margaret Thatcher closed antiquated, heavily loss making industries, putting hundreds of thousands out of work in many towns in the North, Scotland, Wales and elsewhere.

Today, many of those towns and cities appear to have never recovered. It takes little for the BBC or other journalists to find groups of disgruntled people old and young, saying that Thatcher took away their jobs, their childrens' jobs and destroyed all hope. It is like without nationalised industries, they can do nothing. The GDP in many of those regions is between 55 and 70% state based still.

Twenty or so years ago, post-communist democratic governments across eastern Europe closed antiquated, heavily loss making industries (perpetuated under 40 years of the sorts of policies Arthur Scargill and the British trade union movement advocated), putting millions out of work in most cities across their countries.

Today those countries are transformed, with new industries, with new jobs, with thriving growing economies. Some with per capita GDPs at the levels of the poorer western European states. They have open competitive economies, with public sectors less than half the size of what they were when they threw off the shackles of authoritarian communist governments.

Why?

Margaret Thatcher : The not so libertarian PM who stopped the socialist slide

noreply@blogger.com (Libertyscott) — Mon, 08 Apr 2013 14:39:00 +0000

I was young when I first heard of Margaret Thatcher, and having a few relatives who were socialists, I wasn't fond of her at the time, although she was a curious figure, as I hadn't ever seen a political leader who was a woman. Certainly the mainstream media in New Zealand and most of my teachers held her in some degree of scorn. However, I learned better, one could tell from so many of those who opposed her, what she was made of - courage. Courage to take difficult decisions that caused much short term pain, for long term gain.

She was courageous, and it was difficult to be neutral between her and a tinpot military dictator seeking to take some islands full of hard working farmers and fishermen, and then difficult to side with a communist mining union, that used violence against those willing to turn against them. I became warmer towards her over time, as her opponents increasingly looked like control freaks, or deniers of economics, and she looked ever braver as time went on.

For there was, at the time, a stark choice. Margaret Thatcher, against those who thought they knew best how to run businesses, grow the economy and provide people with a living. In 1983, Labour's Michael Foot tried to sell neutrality in the Cold War, unilateral nuclear disarmament, much higher taxes, nationalisation of major industries, withdrawal from the European Economic Community (to create a fortress Europe). It nearly came third in the popular vote as it opposed fighting for the Falklands and supported unions that openly sympathised with the Soviet Union.

Margaret Thatcher against those who taught the politics of envy, the politics of moral relativism, and those who believed fervently in class warfare. Margaret Thatcher against those who thought that the UK should be neutral in the Cold War, as if neutrality against totalitarianism was the moral highground. Ken Livingstone was one of those who embraced the authoritarian left, and continues to crawl in the gutter.

She was no libertarian, but in the equation of freedom for me, she moved two out of three in the right direction, and the black marks she left on freedom do not mean she deserves the opprobrium her death is now bringing from the simple minded and the statists who despise her. For none of them have the slightest interest in individual freedom. Indeed, the reason she stirred up such venality is because she argued on principle - short term populism was not her game.

That in itself, is rare in politics today.

She gave copies of Hayek's books to her Cabinet colleagues telling them to read it. She was the political grunt behind an intellectual push to turn the tide of the Conservative Party away from "the orderly management towards socialism" that it had adopted since 1945, to actively rolling it back. She did so by abandoning corporatism, abandoning many state monopolies, and liberalising laws on trade and employment, and by dramatically cutting taxes. She got the budget under control, and turned around the economy, and after a burst of mass unemployment, as many saw their jobs under sunset industries end, employment grew and a new culture of entrepreneurship emerged. The price paid for these reforms was high for those parts of the country that had been dependent on old jobs in industries that lost much money, with old technology and little future, and perhaps more could have been done to boost enterprise in those regions. However, she turned direction towards capitalism, and she forced the Labour Party to do the same, after it lost three elections promising a return to socialism (one of which was one step removed from Soviet bloc style socialism).

She didn't abolish the welfare state, or the NHS, or indeed the state education system. In fact, whilst there were some reforms of them all, she focused attention on the economy, and the deregulation, privatisation and liberalisation of business. When she left office, there were no longer monopolies in many industries, and she sowed the seeds for the growth of the UK's export of business services, not simply financial, but also legal, accountancy, management consultancy, public relations, media and advertising.

Yet it was in foreign affairs that, with a few exceptions, she showed herself to be a formidable opponent of totalitarianism. She allied herself with Ronald Reagan after his election as US President, and was unafraid to declare her belief in freedom when she met Mikhail Gorbachev and her opposition to the dead-headed grey crushing machine of Soviet imperialism. There is little doubt that the resolve of this pair to deter the Soviet empire helped fuel its decay and demise, and the people of Eastern Europe can be grateful for that. Yes, she signed away Hong Kong to China, but the promise of 50 years of capitalism for Hong Kong will expire with China having been transformed towards capitalism. Yes she was sceptical of the ANC and of South Africa having a better future under it than under apartheid, which she loathed as well. She saw what had been happening to Zimbabwe, ignored by the left and rightfully feared that ANC rule would create simply a new corrupt ruling class of kleptocrats. Yet she supported South Africa's own reconciliation process, which surprised more than a few. The only black mark against her record was her support for Augusto Pinochet, as she was blinded by his hatred of communism, thinking his own dark record of political repression could be excused because communists could be worse. However, few remember Harold Wilson inviting Nicolae Ceausescu to the UK, as a full state visit with the Queen as host, and granting him a knighthood.

What is particularly notable about her is her background. The first woman Prime Minister of the UK is a point that most of the left-inspired feminist movement, which she largely eschewed, despise. She didn't share their state collectivist view of how the state should treat women as needing special regulatory assistance or subsidies to advance, for she didn't. That the Labour Party has singularly failed to ever elect a female leader continues to be the shameful response to that, as Thatcher became leader and advanced principles, philosophy and policies that weren't what "real women" are meant to advance.

She also did not come from the upper class privileged background that now has significant leadership in the Conservative Party, indeed she became leader primarily because she was seen as an interim figure, who didn't offend the two wings of the Conservative Party and wasn't thought of as being electable. She was to some of those "born to rule" toffs, unelectable. Her modest background made her, she didn't tolerate inherited privilege, she embraced ideas and grit. She has disdain for the compromisers, the "wets" at her Cabinet table, who preferred short term popularity to long term commitment to ideas and end results. You can see only a few flickers of that today in the likes of Michael Gove, whose passionate commitment to reform of education is a nod to Thatcher. You do not see it in the Conservative's peculiar embrace of localism.

Thatcher despised local government more than central government, seeing it as a place where petty authoritarians saw fit to control businesses, homes, land and behaviour, and to waste taxpayers' money on their preferred rent seekers. She saw local Conservative politicians as not having the gumption to take on the hard left at the local level.

It's worth also noting that she was one of the first politicians to acknowledge the possibility of anthropogenic climate change, although she rightfully was sceptical of the statist interventionism that embraced trendy solutions to this, rather than letting technology and entrepreneurs find the path forward. She would have taken a decidedly different approach to this issue from those who think the answer is to tax, subsidise and regulate, given she embraced nuclear energy, road building and property rights.

However, for all she did, her main achievement was to turn around an old rusty ship that was sinking to the left, she gave it momentum, that Tony Blair harnessed, Gordon Brown overloaded and stopped, and which David Cameron can't seem to kickstart. She also turned around some of the beliefs, that the state exists to preserve the jobs and industries of the past, that individual effort and achievement should be sacrificed to the grand plans of those who want to use other people's money.

Her failure was in not changing the culture of envy, dependency and worship of government that pervades much of Scotland, Wales, Northern Ireland and the North of England. Those who think the solution to economic malaise is to spend money on totemic projects, or to regenerate an area populated by no-hoper welfare dependents, or to create new nationalised industries to soak up the unemployed paid for by taxes on private business, or on the unborn (through debt).

That legacy remains, and has been cultivated by the hard left of the union movement, which still mourns for the Soviet Union, mourns for the dirty, dark, dangerous industries of post-war Britain, mourns for jobs that required minimal formal education and initiative, whilst stamping on any who dared step to one side and want to challenge their orthodoxy. It is they who today who are joyous at the death of the woman who took them on, and by and large won. For they know that despite what she achieved, there remains, in the country that worships the most socialist healthcare system in the free world, in the country that pays for some people to have homes in one of the most expensive cities in the world, in the country that is now pursuing a massive loss making totemic national project for political reasons, a great love for statism.

It was too much for one Prime Minister, leading a party filled with centrists and wets, to take them all on, and her misguided attempt to introduce the poll tax finished her off. She reversed direction for long enough that it is still a long way to slide back, in economic freedom terms, before Britain reverts to the basket case it was in 1979.

It will take a next generation Margaret Thatcher to make the next leap forward, but today I am grateful for the one we had.

Why is the peace movement so quiet about Korea?

noreply@blogger.com (Libertyscott) — Wed, 03 Apr 2013 21:23:00 +0000

North Korea threatens to start a war with the United States, threatens with bellicose rhetoric to attack with nuclear weapons, to wipe out the enemy.

What do you get from the so-called "peace" movement and the political parties which so rabidly go on about nuclear weapons?

Nothing.

The Green Party is completely silent about north Korea. Just imagine if it were the United States, or even the UK or France threatening to attack another country. Just imagine if any nuclear weapons state was happily and gleefully testing nuclear weapons, to show off that it shouldn't be messed with.

The leftwing blogs similarly have largely little to say. The Standard ignores it. Real estate agent Martyn Bradbury's outlet ignores it. Idiot Savant ignores it.

Tim Selwyn thinks that the regular US/ROK military exercises are a "provocation", as if close allies facing a proven holder of all types of WMDs shouldn't make a show of strength as a deterrent. In fact he just wants New Zealand to not be involved, even though New Zealand fought bravely with the UN-led forces in the Korean War to defeat north Korea's attack on south Korea. He appears to grant moral equivalency to US and DPRK forces, while criticising the DPRK for being crazy, he doesn't think it is "ok" to support a close ally and major trading partner, the ROK, in deterring Pyongyang. His rabid anti-Americanism gets in the way of him supporting New Zealand willing to oppose one of the worst dictatorships in modern history.

Internationally, Greenpeace is silent.

I don't believe most on the left support the DPRK, for it would be akin to supporting the Khmer Rouge, Mao, Stalin or Hitler. The regime is reprehensible, and commits acts against its own citizens that are sheer horror. Find another regime that imprisons small children in gulags for the political crimes of their family.

Yet it is that sheer horror that should unite them in opposition to the regime. There should be protests outside DPRK embassies, there should be peace marches, there should be effigies of Kim Jong Un burnt in the streets.

But nothing. Surely the left aren't sympathetic to this slave state?

No, I am sure most are not, but they are fickle because the DPRK wants to take on the great Satan - the USA. So it doesn't really matter if warmongering dictators threaten to attack US targets, for the so-called peace movement presumably thinks they are "fair game".

What happens if the bluff is real? What happens if there is an attack, will the left claim it is ok for the US to respond? What if a north Korean nuclear, chemical or biological warhead is released on south Korea? Will the left/peace movement believe it is ok to respond in kind to utterly destroy north Korea's military capability?

I doubt it.

Why so neutral in the face of unspeakable evil? Most on the left and in the peace movement accept it was right to fight Nazism.

Why is it not acceptable to deter totalitarian socialism, and to fight it when it attacks?

Is it just because hatred for the United States is stronger than anything?

Financial Transactions Tax fails the test of reality... again

noreply@blogger.com (Libertyscott) — Tue, 26 Mar 2013 10:35:00 +0000

Financial Transactions Taxes (also known as Tobin taxes) are the fond friend of the banker-bashing left, believing that there are vast fortunes of money swirling around the ether that, if only they could take a tiny cut of it all, they could save the world.

It has been advocated widely by the likes of Paul Krugman, Bill Gates, Resource intensive ~~fat capitalist dickhead hypocrite~~ Michael Moore, Greenpeace, Oxfam, WWF, Occupy Wall Street and Fidel Castro

So the EU proposed one, and it has been getting introduced in 11 EU Member States.

It appears to be failing to deliver ... and the Swedes would rightly say, having been there before, "told you so".

City AM reports the record so far:

- Hungary's 0.1% FTT raised only 13 billion Forints (US$54.6 million) in one month, less than half what was projected.

- France's 0.2% FTT on sales of shares of major firms raised 200 million Euro in three months, not the 530 million expected.

- Italy's FTT starts this month, and trading volumes in the country have already dropped 38%, whereas German and Spanish share trading volumes proportionately increased.

So, quite simply, people rearrange their affairs to minimise their tax liability.

Of course this will bolster support for the world government universal tax lobby, that thinks it is just immoral that people try to protect their own money. The simple point to this is that FTT is fine for any country that wants to decimate its financial sector.

Cyprus bail out - the good, bad and the ugly

noreply@blogger.com (Libertyscott) — Tue, 26 Mar 2013 09:57:00 +0000

Cyprus has a stay of execution, I say that because its banks will never be the same again. Indeed, if ever there was a case to allow full reserve banking (whereby loans = deposits, albeit with precious low returns if any), this is it. Cypriots will want banks that exist purely to protect their money from being stolen, not banks that risk just that.

Allister Heath has pointed out that there are some good dimensions to this deal, it is a lot better than how it was looking a week or so ago.

The Good

- All deposits of 100,000 Euro or less are safe. Given this was an ECB guarantee across the Eurozone, and the ECB has ensured this elsewhere, this was a minimum responsibility. It may not be the wisest promise, but it was that. This will, at least, mean that most Cypriots have their savings protected, although plenty of businesses will get hit.

- As only two banks are in trouble (albeit two of the biggest ones), depositors for banks other than Laiki and the Bank of Cyprus, have their deposits untouched altogether. Good. It was a nonsense to effectively "nationalise" all bank deposits, including those of banks that are not having difficulty meeting their obligations.

- Shareholders of Laiki bank lose the lot, and bondholders get their bonds replaced by equity, as low as that will be.

- Taxpayers are no longer solely responsible for bailing out the banks, but rather there is an orderly wind down of Laiki back, with depositor accounts transferred to an inheritor bank - the Bank of Cyprus.

In short, instead of a tax on all deposits, only depositors above the insured threshold of banks that need bailouts, get hit.

The Bad

- Actual deposit insurance is not being triggered, rather there is just an exemption for those under 100,000 Euros (and larger cuts for those above it). It saves taxpayers (as insurers), but it does disproportionately hit depositors when there is insurance that could be used to offset that. Still, the state shouldn't be insurer anyway. Allister Heath reckons it would have been better to wind down the banks completely, figure out a flat percentage of deposits across all accounts needed, and then used the insurance to recompense those under 100,000 Euros.

- There still isn't a legal place for basic "safe" banks to operate outside the fractional reserve banking system economically. Many people would be happier, especially now, to have money sitting in a zero or near zero interest rate bank account that didn't face these risks. These events ought to have accommodated that.

The Ugly

- Capital controls. I said enough about that yesterday. When removed, there will be grand capital flight.

- With what is about to happen, it will kill off Cyprus being a financial hub for a generation. Just as well the country has good beaches and olives. Maybe it will think again about rejecting the UN brokered deal to reunify the country with the Turkish occupied north. That, along with Turkey being an obvious trading and investment partner (although the Greek Cypriot community may fear being overwhelmed), could help revitalise this country. Many will lose jobs and find themselves floundering as a result, but they will pick themselves up.

- The rhetoric around "Russian money launderers" will haunt the EU and the ECB for many years. It is one thing to have concerns and beliefs, another to air them without presenting evidence and without taking regulatory steps to address them. To sweepingly act as if Russians with money in Cypriot bank accounts are all criminals is an unwarranted slur. If there is substance in this, and the ECB cares, then there should be Eurozone wide directives to cover this.

- Cypriot public debt will be at 100% of GDP by 2020 at best, given it is borrowing 10 billion Euro from the Eurozone to cover all of this.

- Cyprus has agreed to increase corporation tax to 12.5%, reducing its competitiveness.

Capital controls - the tool of the statist

noreply@blogger.com (Libertyscott) — Mon, 25 Mar 2013 09:27:00 +0000

"An economic and political disgrace" is how City AM editor, Allister Heath, describes it.

I call it theft.

Capital controls, a euphemism for banning you from taking more than a sliver of your property out of a particular country.

They are motivated by concerns over the "public good", over "the long term stability of the economy", when in fact the mere fact of introducing them speaks volumes about the latter, and is contrary to the former.

It is the logical end point of the moral turpitude of statists, whose fundamental belief is that private property, really, doesn't exist, but is tolerated and can be confiscated, controlled and shared as long as it fits the big picture, the grand plan.

The plans of politicians who think they know best how to run your life.

Cyprus has no future as a financial hub. Confidence is utterly destroyed, as depositors, regardless of whether they individually will lose part of their savings as part of the bailout, will abandon its banks.

It's over. Runs on banks happen because people panic about their property and their savings. That money is their's, and they frequently worked hard and took time to make that money.

They rightfully seek to protect it, withdrawing it from institutions that might take it from them, because money is an extension of the self. It is the product of people's minds and labour, translated into a universal medium of exchange, and a means of storing that value.

Being able to take it out of a country is an extension of the right to leave, the right to take your life includes taking your possessions, includes your bank account.

Of course, banks are not foolproof. In a free market, people rightfully take a risk in deposits with banks, particularly given virtually all banks engage in fractional reserve banking, lending much more than they take in deposits. If a bank fails, then depositors should become unsecured creditors effectively being a segment of the new shareholders of the bank.

However, it is quite another thing for a sovereign state to do this, to restrict ALL capital flows out of a country.

You see the primary reason why a government does that is because it knows it has lost the confidence of its people, because it is about to steal from them in one way or another (in this case not through devaluation/QE of the kind propounded by Paul Krugman, Russel Norman and Robert Mugabe).

It is a sign of failure, the tool of the statist and the act of a scoundrel.

Ed Miliband is an economic and moral vacuum

noreply@blogger.com (Libertyscott) — Sun, 24 Mar 2013 17:04:00 +0000

The UK Leader of the Opposition is empty. His One Nation rhetoric is the antithesis of what he offers, which is a vision of "them" (the rich, which curiously excludes himself) and "us" (people on welfare, people working for government).

The man who offers envy, class hatred, regulation of private enterprise and more state housing to an economy lumbered by public debt that he denies is the fault of his very party when it was in power.

The man who uses terms of utter lies, like "bedroom tax" (there isn't one) and "tax cut for millionaires" (there isn't one, there isn't a tax on wealth), and fuels disdain and anger against entrepreneurs, private enterprise and success, by pandering to beneficiaries and state employees.

Cyprus in a nutshell

noreply@blogger.com (Libertyscott) — Fri, 22 Mar 2013 10:08:00 +0000

This is my go at summarising this. Obviously, if someone spots something fundamentally wrong with my analysis, please leave a comment. I don't profess to be an expert on the Cypriot financial sector.

Cyprus took a light regulatory touch to financial services, so its sector grew.

It gained a reputation for providing only the minimum level of scrutiny needed to comply with European banking rules, hence it tended to attract substantial deposits from Russians keen to keep their money away from Russian authorities.

Cypriot banks grew from this, but invested heavily in Greek public debt as a “safe” investment.

Greece approached bankruptcy, and the Eurozone (Germany) and Greece agreed on a bailout plan that meant its bond holder (those who lent money to the Greek government) would take approximately a 50% cut in their bonds. This shared the burden between Greek taxpayers and Greece’s creditors.

Cypriot banks have been hit by this “haircut” in their investments, effectively being on the edge of folding without ongoing liquidity support.

The ECB is willing to provide some of this, but is demanding that investors in Cypriot banks take their share. However, Cypriot banks issued few bonds, so simply demanding Cypriot bondholders take a cut wouldn’t be enough. So the suggestion was made to take a cut from those who loaned money directly to Cypriot banks – in the form of depositors.

This runs contrary to the pan-Eurozone guarantee for depositors up to 100,000 Euros.

The reason given for wanting to confiscate Cypriot depositors is because “most of them are Russian” and “we don’t know where their money came from”. Concerns that never translated into legal action, and which are at worst racist suspicions.

So now the Cypriot government faces its financial system collapsing. It is happening now because the previous, communist led, government kept its head in the sand until the election it knew it would lose.

The Cypriot government itself does not have high public debt or a serious budget deficit. It is not due to rampant overspending, but rather a banking sector that can’t cope with the bailout package for Greece demanding it write off substantial assets.

The Cypriot government is looking to the Russian government to save it, which from the ECB’s point of view means it wouldn’t be willing to provide ongoing liquidity, which means a real risk of a Euro exit, unless Russian support is substantial indeed (to the point where Russia would be the central banker for Cyprus, just think about that for a moment).

To get ECB support, it needs to find money from somewhere and could get it from a levy on deposits over 100,000 Euro.

If no solution is obtained by Monday and the ECB stops providing liquidity, Cypriot banks will collapse and the Cypriot government may choose to print its own currency to cover spending, meaning a disorderly exit from the Euro by a country that – in itself – did not have a budget.

Conclusion?

Cyprus’s financial sector is finished, regardless of what happens. Local and foreign depositors wont trust its banks in most scenarios.

1. If Russia saves Cyprus, and it remains in the Euro, then it will likely mean a substantial withdrawal of deposits from Cypriot banks. They will shrink, and Cyprus will have a bunch of effectively Russian owned banks operating within the Euro. It is hard to see the ECB being willing to support this.

2. If Russia saves Cyprus, and it is forced to exit the Euro, then Cyprus will have a nearly worthless local fiat currency that does far more harm to depositors than a levy on Euro deposits. It is over for Cyprus’s financial sector, but it will become remarkably cheap to holiday and buy land in Cyprus.

3. If the ECB saves Cyprus, along with Russia (providing the Cypriot share), then Cyprus will have a shrinking financial sector. Russians will be looking elsewhere to put their money.

4. If the ECB saves Cyprus, with a bank deposit levy, then Cyprus will see a massive run on its banks, and the financial sector will be effectively finished.

5. If neither the ECB nor Russia bail out Cyprus, the banks will default, depositors may lose most of their money, it will be forced out of the Euro, and faces considerable civil unrest.

Who to blame?

- Greece, for being fiscally incontinent and being unable to pay back its debts.

- The Eurozone, for being unwilling to guarantee to Cypriot depositors what they guarantee to other Eurozone depositors, on grounds that it was never willing to address in the past.

- Cypriot banks, for being profligate lenders

- Cypriot depositors, for trusting the Eurozone and its government to ensure they avoid moral hazard.

- Authors of the Euro, for not anticipating the inevitable credit bubbles a pan-economic fiat currency, driven by German economic performance, would fuel.

What to watch?

Monday. The Cypriot Parliament and the ECB.

My bet is that Cypriots will be dealing entirely in cash in a week's time (they already increasingly are).

The Prodigal Greek has a great summary of the measures taken or soon to be taken, that will ensure this.

Things to do during Earth Hour

noreply@blogger.com (Libertyscott) — Thu, 21 Mar 2013 22:08:00 +0000

I loathe Earth Hour. I called it "onanistic vileness" or rather the act of utter wankers who have the luxury to claim moral superiority, because they can stop using electricity.

In 2009 I said:

Oh yes, the sheeple in the relatively free rich world (and even the relatively unfree middle income world like China) will have a jolly ol' time switching off our lights for an hour. Makes you feel better a bit of enforced poverty doesn't it?

The Ayn Rand Institute rightly points out how perverse it is to celebrate extinguishing light:

Earth Hour presents the disturbing spectacle of people celebrating those lights being extinguished. Its call for people to renounce energy and to rejoice at darkened skyscrapers makes its real meaning unmistakably clear: Earth Hour symbolizes the renunciation of industrial civilization.

I've seen a city that has a constant earth hour - Pyongyang. Dark, with lights in a few buildings, focused on the grotesque statues of the city's past Big Brothers, on the railway station and one or two other pockets of light. It is dismal and dire. To celebrate replicating this is unspeakably wrong.

Pity those who have no choice but to "celebrate Earth Hour".

Donate to LiNK - Liberty in North Korea. Help people fleeing the darkness to experience light, heat and civilisation.

Otherwise, keep the lights on or maybe go for a drive. Celebrate that a century ago, electric lighting was a delight, for being safer, brighter and opening up the evenings to more socialising, to reading, to enjoying more of life. Celebrate that today, electric lighting is more reliable, safer and uses less electricity than ever before.

The future is not with those who would turn the lights out.

I bought the Sun today

noreply@blogger.com (Libertyscott) — Thu, 21 Mar 2013 09:59:00 +0000

I don't usually, but this is almost a work of art. A damning indictment on a government that has failed to do enough for the economy, and is seeking to regulate the press. Commentary and sarcasm that is all too clear.

UK budget - not one for growth

noreply@blogger.com (Libertyscott) — Wed, 20 Mar 2013 23:25:00 +0000

I wanted this being big tax cuts, funded by a serious capping on the welfare state, cutting of wasteful state spending and bureaucracies, supported by some privatisation.

We got this.

Small tax cuts on companies and on beer, a worthwhile increase in the income tax free threshold to £10k. Small tax increases on other alcoholic drinks, owning a car, catching a flight and elimination of some tax credits and a mini Fanny Mae type mortgage guarantee scheme, and subsidised loans for home buyers. There were some new exemptions on climate change obligations for some sectors, which is promising.

Overall, nothing much to see at all. Public debt growing to close to 100%, budget deficit at levels higher than any OECD country and economic growth forecast to only be 0.6%.

No, the Conservatives wont be winning in 2015 at this rate, and no Labour offers nothing more than a bit more borrowing and a bit more money thrown at public housing and railway projects.

Launching my UK blog

noreply@blogger.com (Libertyscott) — Tue, 19 Mar 2013 05:00:00 +0000

Yes, I have had enough of maintaining a dual existence in one place. I have decided to put all of my writings on UK politics in one place, largely because that is where much of my focus now is.

Of course I am still following New Zealand politics and will write on them, and more widely here. I will also still post short links to the UK posts here, but will not be clogging this up with UK focused material that NZ and other readers are uninterested in. I simply couldn't go from writing about north Korea, then the NHS to whether Auckland should have an underground railway and think I had a consistency of target audience there!

So please go visit. My latest post is on the cross-party agreement on press regulation in the UK, and the excellent editorial by City AM Editor Allister Heath, who is the UK's best and only libertarian newspaper editor. Even if you are not interested in business and financial news, reading his editorial every day is a warm reminder that belief in capitalism, free markets and freedom more broadly, is not just held by a few.

Heath made some core points worth summarising here:

- Consensus in politics is a disaster. "Conformity stinks, it leads to freedoms being curtailed, pockets being picked and a conspiracy against the public interest";

- "There is no way that Britain's new framework would ever be possible in the US";

- The criminal behaviour of journalists was and is criminal, there is no need any new laws;

- "The many are paying for the sins of the few";

- "we have fallen out of love with freedom";

- "Freedom, ultimately is indivisible; the only reason why regulation of the media didn't happen any sooner was because newspapers were too influential. Now that their power is waning, they are fair game, like everything and everybody else".

Cyprus is far too important to get wrong

noreply@blogger.com (Libertyscott) — Mon, 18 Mar 2013 10:08:00 +0000

One of the claims constantly touted by enthusiasts of the European Union is the much exaggerated claim that the EU and its predecessors "kept the peace in Europe" after two major wars. There is an element of truth in that, simply because countries and people that trade more, travel more and do business with each other in ever increasing frequency, are less likely to tolerate the sort of mindless aggressive nationalism that is the hallmark of so much war. There can be little doubt that free trade and movement of people and goods within the EU is good for that (although overwhelmingly it was NATO that has kept the peace in Europe, and both it and the EU failed demonstrably to do this in the former Yugoslavia in the 1990s).

That peace prize is looking a bit fractious, as the actions over Cyprus in the past few days have indicated.

Let's be clear, I think taxation is legalised theft, in any case. More insidious is the legalised theft of state sanctioned inflation and regulated interest rates, which are currently effectively stealing savings from the public in the UK. 13% of the value of Pound Sterling has been eroded in the UK alone, by inflation, about double that if you compare it to the US$.

The British Labour Party and Liberal Democrats both believe in a wealth tax, taking money from you because you own a particular asset over a set value.

Now the EU, having promised that the first 100,000 Euros of deposits of everyone's bank accounts are protected by government deposit insurance, is going back on that and pushing for the confiscation of 6.7% of bank accounts located in Cyprus up to 100,000, and 9.9% on deposits above that.

Consider what you would do if that happened to you.

You'd be angry, very angry, and some of that anger might be directed towards whoever you thought was responsible. Banks, officials, politicians.

The wealth tax is to bail out the Cypriot banks, which overextended themselves, particularly being used by many larger depositors from Russia seeking to avoid scrutiny over transactions that may be illegal in other jurisdictions.

Of course the real answer to this would be to led the banks fail, then the deposit insurance scheme would kick in and those with deposits over 100,000 Euros would lose it all. Which is the right thing to do. However, the problem is that Germany, indeed the Eurozone believe it must bail out banks within the Eurozone. This effort is a clumsy attempt to put some of the cost upon Cypriots, especially clumsy because it is unique to Cyprus (Greek, Spanish, Portuguese and Irish depositors haven't had to pay), and because it sets a new precedent.

Who now believes bank deposits are safe in Greek (who believed it before?), Spanish, Portuguese or Italian banks? There is ever chance of a run on bank deposits in some if not all of those countries, and in the Euro itself, putting those banks in jeopardy and devaluing the Euro some more.

One claim is that the basis for this proposal was that Cyprus didn't want to upset Russia, by letting the banks fail or claiming the bailout by a far larger clawback from large depositors. I doubt whether Russian depositors will be trusting Cypriot banks from now on in any case.

A run on the banks will expose not only the lack of liquidity in banks to give you back your money, but the inherent risk in fractional reserve banking. That being that banks issue credit for which they have no deposits, to an order of several times the value of deposits. When those borrowers can no longer repay their debts, consider how that affects your ability to recover your deposits.

What next?

The law of unintended consequences may unravel in the coming days, as banks in the Eurozone periphery start to see a panic appear, as people start to take out their savings, in fear Greece, Italy, Spain or Portugal could be next, or Ireland. Once people see queues at banks in those countries, they will join them, and there will be a snowball effect. Their own national politicians may not be trusted, certainly the ones in Brussels wont be. The more they get told it wont happen to them, the more they will point at Cyprus and say "actually myself and my family are more important than your empty promises", the more it will get worse and worse.

I believe the only way this can be stemmed is either to honour the 100,000 Euro deposit guarantee (and slam deposits above that level), or for Cypriot citizens to be guaranteed that amount alone (leaving foreign holders of accounts to take the hit). The price for that would be paid by Eurozone taxpayers elsewhere, and I'll let them decide how to treat the politicians who decide better to thieve from northern Europeans than from southern Europeans. There is only so much of this Germans will take as perpetual penance for a war that most of them were born after.

Resolution of this issue must happen within the next day or so. Imaginations will wander, rightfully, after that. Bear in mind Italy doesn't have a government.

Otherwise it becomes unthinkable. Long lines of Europeans outside banks that close due to running out of banknotes, a general public becoming anxious that their savings are inaccessible. How long before a brick is thrown, or a firearm brandished, and people demand access to vaults and safes?

In other words, how long before the average, law abiding, middle income citizen discovers what an abject fraud it is to trust their politicians, and those in Brussels to look after them, rather than to protect people from failure?

Meanwhile, the damage is done to Cypriot banking. Who now would place a deposit into a Cypriot bank? What Cypriot is taking a cheque or cash and putting it into a local bank? How many Cypriots are now changing their future banking arrangements to banks elsewhere (and how many are not in a position to readily do so?)?

Stepping back, how's that protection of peace in Europe looking now, when a small but sizeable proportion of Greeks embrace fascism it is easy to ignore, but when confidence in the Eurozone banking system plummets, does Brussels have reason to continue to prance about with this hubris about all the good that it has done?

UPDATE: The Cypriot Parliament, which must vote on this law, wont do so until Friday. Cypriot banks will remain closed until then. Will this trigger panic more widely? What would you do?