Happy New Year !

I'd just like to wish my readers a very Happy New Years, and hope that you all live long and prosper.

The news cycle has been a bit slow lately, and I will speed up my blogging activities in the new year. As long as we have arrogant leftists trying to impose their will on the rest of us proles, I will have plenty of material.

And once I finish reading Rothbard's Mystery of Banking, I will post a review. It looks like the coming years are going to be a painful illustration of how the absence of sound banking creates bubbles. The one we are witnessing is much more than a sub-prime bubble bursting, but the entire property market collapsing and creating a credit crunch, with an economic downturn inevitable.

Is this part of a free society ??

I saw this poster above a urinal in the bathrooms at Telstra Dome. Somebody ought to vandalise it and show them that we the people will not lie down like sheep to be slaughtered, and that every human has the right to defend themselves.


A disarmed populace are easy prey. These kind of laws where you aren't even allowed to own weapons for the strict purpose of self defence are outrageous and belittling. We are all children now, told never to defend ourselves and take measures to look after our families and our property.

This is not such a free country after all.

Bad history repeating itself

Samizdata has the following news item posted:

"Party boss Ed "bulging eyes" Balls told a respectful yet cheerful gathering of tractor workers in Omsk that the 10-year plan to increase tractor production by 1000% between now and 2018 was achievable. "Men," he said, his voice quavering slightly as the chill Siberian wind blasted through, "we can and will produce more tractors, of higher quality, over the next 10 years. Britain needs tractors. Tractors need Britain. It is true that despite our heroic efforts, and the massive, Soviet resources spent by Comrade Gordon, that tractor production continues to lag. But let us not be downhearted. We know that tractor production in the past has been held up by the capitalist sympathisers, wreckers and revisionists working for the late traitor, A. Blair. We can and will do better over the next 10 years."

Well not quite. The story above is not quite a parody, unfortunately every detail in it is spot on correct, except for one - it refers to Soviet education, not the tractor industry.


Economics, history and politics is actually quite simple to understand in 3 steps:

1/ Early 20th century: The Russian Revolution, the communist manifesto by Karl Marx came about calling for the end of private property, the establishment of big government and no more free trade.

2/ Ludwig von Mises and other free market economists had the wisest and the most accurate forecasts when predicting not only the failure of communism and socialised industries, BUT precisely how and why they would fail the societies they were foisted upon.

3/ Throughout the 20th century, Stalin, Mao, Hitler, Castro and Kim Jong Il kept trying. They socialised every industry and killed tens of millions. Socialised education and medicine is a common feature of even Western "capitalist" economies such as the US, Canada, Britain, Australia and New Zealand.

We keep on repeating our mistakes, with no chance to build upon our successes.

Environmental double-think

Here's a quick-recap of environmental news stories:

* Al Gore and his wife Tipper arrive in Oslo Airport and do the right thing by catching a train to their hotel, making sure the press is all too aware of their eco-friendly choice.

Their luggage however, travelled by Mercedes van, leaving a nasty carbon footprint behind.

------------------------
* Tim Blair analyses Gaza's performance towards meeting its Kyoto obligations. But in a hypocritical statement, a U.N spokesperson is actually denouncing these brave efforts to reducing their carbon emissions:

"Israel reduced the supply of diesel by 49 per cent on October 28, and petrol by 40 per cent and industrial diesel for the power plant by 14 per cent,” said Mahmoud Daher, the Gaza head of the United Nations-affiliated World Health Organisation.

"This is in a situation where electricity is already in short supply and there are frequent power cuts. We know that some health facilities have zero stocks of fuel and that in several hospitals the situation is critical. The main pediatric hospital is critically low in fuel for its generators. All transport vehicles and most ambulance travel have also come to a halt."

Gaza is leading the world by example, and the international community is all too eager for Australia, Europe and America to follow in their footsteps. But is the U.N for or against more C02 emissions ? Make up your mind folks !

------------------------
* A climate scientist lashes out at the U.N's IPCC, and notes that "For example, Antarctic sea ice reached a record maximum coverage in 2007, and the globally averaged lower atmosphere has not warmed in the last nine years":

EcoWorld: What is your criticism of the IPCC?

Pielke: Mainly the fact that the same individuals who are doing primary research into humans' impact on the climate system are being permitted to lead the assessment of that research. Suppose a group of scientists introduced a drug they claimed could save many lives: There were side effects, of course, but the scientists claimed the drug's benefits far outweighed its risks. If the government then asked these same scientists to form an assessment committee to evaluate their claim (and the committee consisted of colleagues of the scientists who made the original claim as well as the drug's developers), an uproar would occur, and there would be protests. It would represent a clear conflict of interest. Yet this is what has happened with the IPCC process. To date, either few people recognize this conflict, or those that do choose to ignore it because the recommendations of the IPCC fit their policy and political agenda. In either case, scientific rigor has been sacrificed, and poor policy and political decisions will inevitably follow.

------------------------
* Greenie Watch looks back at the UK Met Office's catastrophically gloomy predictions for 2007 being a hot and dry year, with a very poor score-card.

The flip side of big government

"Big government" is sometimes referred to as social engineering, involves telling the masses what they should do.

In the end, it involves creating hundreds of news laws and regulations, which in turn turns many possible human actions and decisions into crimes and offences.

Driving without a seat belt, smoking, riding a bike without a helmet are now crimes. Driving over 40 km/hr near schools is a crime, no matter how cautious or skilled the driver.

But also the way we conduct business and commerce is now extremely tricky. Even if you and a customer agree on the terms of contract (which includes the price), you may be breaking the law - even more so now that there are newer tougher price fixing laws:

JAIL sentences of up to five years and hefty financial penalties could be imposed on anyone found guilty of price fixing and collusion under planned federal laws.

The draft laws, which will amend the Trade Practices Act, will cover petrol, food, clothing and a range of other consumer goods.

Price fixing is a "crime" that is very badly defined. It generally means "charging a customer more than you ought to, or normally would". Even if it were possible to perfectly identify cases where price fixing has occurred, why should it be a crime anyway if both seller and buyer have agreed on the price and want to carry out the transaction ?

Now .. the flip side of making everything into a crime in our society is that existing crimes.. the real ones that actually involve the use of violence and coercion..are not treated as seriously. Case in point:

NINE males who pleaded guilty last month to gang-raping a 10-year-old girl at the Aurukun Aboriginal community on Cape York have escaped a prison term, with the sentencing judge saying the child victim "probably agreed" to have sex with them.

Cairns-based District Court judge Sarah Bradley ordered that the six teenage juveniles not even have a conviction recorded for the 2005 offence, and that they be placed on a 12-month probation order.

I know I sometimes sound like a naive fool when I say the bleeding obvious - that we should have a small government that can be focussed on law and order, police and defence, and fighting serious crime like murder, rape, violence, assault and theft.

People here assume that our current big government does a great job already, because those things have been crimes for a long time.

But we live in an age of post-modernism and moral relativism as they say. We have a lot of activist judges and academics and regulators who seek to instill multi-culturalism on us by treating different groups in different ways. Our native Australians are treated as victims who cannot be blamed for their actions and should not be held to the same standards as the rest of us. And where social engineering is all the rage, we shouldn't seek to punish the victims, the poor and the downtrodden in society.

But those who smoke or engage in trade or seek to medicate themselves with drugs or sell concert tickets for a higher price, where there are no victims and no rights violations, are treated as criminals.

Our priorities are screwed.

Subprime rates frozen for 5 years

President Bush has enacted one of the stupidest, yet most popular, pieces of legislation ever. In recent months, foreclosures and defaults on home loans have skyrocketed as the subprime credit problems continue to emerge.

Rather than allow the free market to correct these mistakes and interest rates to rise, the US government is hampering the market in 2 ways. Firstly the Federal Reserve continue to push the interest rates down to "help out" borrowers and prevent massive foreclosures. And now the President is forcing lenders themselves to lock in these rates for 5 years, even though billions of dollars of loans were meant to be reset in the coming months.

This isn't a social welfare issue of helping out the poor and overstretched borrowers. This is a massive economic blow that doesn't allow the bad debts to be liquidated and written off, and drags the problem on for years rather than allowing the free market to solve it quickly and sharply. It also punishes responsible people who managed to save and not push themselves into massive levels of unmaintainable debt.

Darren McKinney, 48, a renter in the District, said he has been waiting for housing prices to fall so he can buy a condo without resorting to a dubious loan. He turned down an opportunity to buy his 600-square-foot apartment for $310,000 in late 2004 because he thought it was “absurdly overpriced.”

Now the government is rewarding people who made irresponsible decisions and bought homes beyond their means, he said.

“There are those of us who purposely sat on the sidelines during the course of the last three years while the senseless frenzy was going on, and we presumed the free market would be allowed to correct itself,” McKinney said. “The government is now meddling in the market and looking to prop up lenders and borrowers alike, and those of us who wisely bided our time get screwed.”

(hat tip: The Liberty Papers)

War on drugs claims another scalp

The media are applauding the Australian government's identifying a "drug dealer to the stars" who was apprehended in Amsterdam airport and is going to be extradited back home.

The 40-year-old man cannot be identified because his name has been suppressed by court order.

Victoria Police Drug Taskforce Detective Inspector Steve Smith said the arrest was the result of a joint effort between the AFP and Victoria Police, with help from Interpol.

He said the man had absconded while on bail in 2003.

I'm going to come straight out and say that the war on drugs is a massive waste of effort and police resources. This guy didn't do anything wrong, other than trade voluntarily with people who were willing to buy his goods.

Whether you support or oppose people taking drugs, and despite the fact that they can be harmful, you have to ask yourself about why the police should be spending half their resources chasing drug dealers when there are serious crimes that actually do infringe on the rights of individuals - theft, assault, rape, murder and vandalism.

Put it this way.. if your neighbours are smoking marijuana or taking ecstacy pills, do you agree with the idea of using your taxes to make their behaviour a punishable crime ?

I don't.. its their own problem, its their own lives. Whether it be medicinal marijuana or hard drugs, I really don't see why the police have to get involved and meddle in their lives. In the US, millions of individuals are clogging up the prison system because of drug related crimes. Prisons are not cheap, and can cost more than some 5 star hotels apparently. So I don't feel the need to pay taxes to criminalise drugs, nor do I feel the need to pay more taxes to pay for prison facilities.

This is not about good behaviour and bad behaviour, or morals. It is about priorities and decisions, like everything else in life. I don't want people taking drugs and getting out of control.
But would you spend your own hard earned money on such a grand project to enforce your preferences on society, or would you live your own life ?

Gun massacre in Nebraska shopping mall

Terrible ! Horrific ! What can government do about it ?

Why is it that human beings always think of the 3rd question in response to something dangerous, shocking or frightening ?

Sometimes its the victims of road accidents and gun crimes (or their families) who are the most vocal and prominent campaigners when it comes to asking for new laws to be passed to prevent a repeat of such a tragedy.

And in such a climate, who would dare debate someone who lost a family member ? A victim has the moral high ground, even if the arguments he puts forward are stupid, thuggish, pointless and meddle in the lives of thousands of others.

Back to the story at hand - there was a horrific gun massacre in a shopping mall in Nebraska that killed 8 people. What should government do about this? My answer is short and simple. Make sure there are laws in place to protect the rights of individuals only as far as treating violence, murder and theft as the most serious of crimes.

Not only are these laws in place, but Nebraska already has strict gun laws banning people from carrying concealed handguns. And therein lies a clue - how did one person manage to wound at least 5 and kill 8 people before he could be stopped ? Its the same answer to the question "How did 19 males without guns manage to hijack 4 large aircraft on 9-11?".

Relying on police to get to the scene and do something is going to take some time. When you put security in the hands of the state, and don't take steps to protect yourself, this is what you get. If there were armed civilians and security guards, he may have been stopped sooner, as has been the case on a US college campus where an alert young trainee police officer with a firearm in his glove-box managed to stop and handcuff a crazed student about to begin a gun rampage.

So one direction could be "government should do less to stop people from protecting themselves and taking care of their own security". Then .. theres the other direction. The one that is so popular these days. The "WHAT ELSE can government do?" direction. Well, let's look at the details of this massacre:

A 20-YEAR-old high school dropout who walked into a suburban shopping mall in Nebraska and gunned down eight people before killing himself had just been fired from his job at McDonald's and broken up with his girlfriend, his landlord says.

Let me say in my most leftist voice - What else could we have done as a society to stop this ? Easy answer - ban girlfriends from breaking up with boyfriends.. and then ban employers from firing employees. Or at least introduce new laws that require anybody who suffers the termination of employment or a relationship to go to counselling. [/sarcasm]

Why don't we just accept that this is a tragedy, and that they do happen, and no system can stop tragedies thus we should not try to regulate everybodys life in some small effort to prevent the unexpected, but instead leave it up to individuals and give them as much freedom as possible to look after their own health and safety.

In Victoria, the government is about to pass new "safer booze laws" that give police new powers to patrol party-spots, and shut down nightclubs for 24 hours if there are fights or disorderly behaviour, and also to ban the offenders from entering these night spots again. And the key campaigners for these laws are relatives of victims of violent crime that happened near night spots:

Families of young men injured and killed in street attacks lashed out last night at the delay sparked by what they described as Liberal Party nuisance tactics.

Bill McCormack, whose son Shannon died after being struck outside a Melbourne nightclub, attacked MPs for sitting on their hands.

"Politicians are paralysed by their indecisions," Mr McCormack said.

The mother of a second victim said she was gobsmacked that politicians could quibble over such important laws.

Of course, the lobbying power of these relatives is extremely powerful, the lazy Herald Sun journalist simply reprints their quotes with no countering viewpoint:

Mr McCormack -- whose son Shannon, 22, died in June a week after being assaulted in Southbank -- said he was appalled at the delays.

"They don't have the courage and the guts to stand up for Victorians," he said.

"No one should have to stand by their son's hospital bed for 24 hours a day, seven days a week and watch him slowly die.

"I wouldn't wish that on my worst enemy. I wouldn't even wish that upon the kid who hit my son, it's that awful."

Susan Hucker, whose son John was in a coma for weeks after an incident outside a Lorne hotel during schoolies week last year, was angry about the delay.

"The safety of people far outweighs the political rewards of stopping these laws from being introduced," she said.

"It's totally out of hand and it's very disappointing that other families may now have to go through something like we've been through before the laws are changed."

It looks like a fight or drunken behaviour at a club can ruin the night for everyone.. the police can waltz on in and declare the party over, no matter how much everybody else is enjoying themselves or how well behaved they are.

This is the opposite of liberty and destroys our freedom of association and freedom of movement. It doesn't make people more sober, less violent, and more responsible citizens. It doesn't even relate to the issue of drunk and violent mobs using violence and killing people.

We have courts and police to deal with homicide and assault, and the perpetrators are going to end up in prison for a long time to come. We don't need surveillance cameras and more police powers, and it hasn't worked in Britain. Less regulation, leave it up to the clubs to decide. After all, nightclubs do not want violence and drunken behaviour because over the long run, they lose females and other patrons, and their business loses revenue.

But whilst the relatives of the victims speak for more laws, common sense will get no microphone and no public hearing.

Mainstream economics in a nutshell

Today, the Reserve Bank of Australia decided to leave interest rates unchanged. This has bought about the usual wave of economic commentary from the media. Your average pundit keeps seeing the same themes repeat themselves, with the same underlying assumptions, and assumes the following is all you need to know about economics:

1/ The Reserve Bank does its best to keep inflation in the 2%-3% bracket. Inflation is a "key risk" that needs to be contained above all else. The RBA sets the cash rate , which in turn affects the rate that banks lend money at.

2/ Tax cuts are only as interesting as the impact they have on inflation. In fact they can be bad because they are believed to be inflationary. The head of the RBA even calls these tax cuts "fiscal spending".

Nobody in the media discusses where inflation comes from, or what the correct definition is. The media uniformly accepts CPI as the best index for inflation, and then every effort is made to agonise, analyse and forecast what the next CPI estimate will be and what action the Reserve Bank will take in setting the cash rate.

I'm not sure which one of these assumptions is more aggravating and misguided to come across.

Assumption #2 is infuriating as hell, because it typically comes from left-wing pundits who look for any excuse to justify more taxes and more government control of our money. We are already being taxed to hell and beyond, we are paying more taxes per person than ever before, and every year we pay more in taxes because of economic growth, inflation and bracket creep. As I've mentioned before, the Federal Government could have abolished the income tax entirely, and it would still have as much money to play with as in 1996 !

But assumption #1 is extremely infuriating because it is based on a whole heap of assumptions itself:

• That we need a central bank to begin with
• That inflation should be targeted
  
• That CPI is the perfect and only way to measure inflation.

Our economic commentary is all fine and dandy until you start to question any one of the above assumptions. I am currently reading Murray Rothbard's "The Mystery of Banking" and I don't accept these assumptions any more.

In fact, I strongly believe the presence and actions of a central bank are causing the inflation. And that inflation can be measured by monetary aggregates, not CPI. CPI is used as a method to understate and camouflage the devastating and rampant inflation that we are experiencing.

UPDATE: The Daily Reckoning has an article which covers this exact topic nicely:

Economists of the Austrian School of economics define inflation differently than much of the mainstream of the economics profession. The typical mainstream intermediate macroeconomics textbook defines inflation as “[a]n increase in the overall level of prices” (Mankiw, Macroeconomics 5th Edition, 530). The eminent Austrian economist, Ludwig von Mises, suggested otherwise:

What people today call inflation is not inflation, i.e., the increase in the quantity of money and money substitutes, but the general rise in commodity prices and wage rates which is the inevitable consequence of inflation. (Mises, Planning for Freedom, 79)

Greenies now against CF light bulbs

I'm shocked I tell you. First we are forced to buy these light bulbs by the Australian Government. Now it turns out they can be quite deadly because of the presence of mercury. Perhaps its time somebody sued the government ?
-----------------------------------------------------------

Al Gore says switching from incandescent light bulbs to compact fluorescents can help save the planet from global warming. California, Canada and the European Union are so persuaded he's right, the three governments are in the process of banning the sale of incandescent light bulbs, following the trailblazing paths of Fidel Castro in Cuba and Hugo Chavez in Venezuela. Even the U.S. Environmental Protection Agency is on board, urging American citizens to do their part for the environment and switch to the twisty little CFL bulbs that last longer and use less electricity.

But opposition is building among other environmentalists who say the threat of mercury contamination as a result of hundreds of millions of broken CFLS, each containing about 5 milligrams of the highly toxic substance, outweighs any benefits from a switch from Thomas Edison's trusty old invention. One new voice weighing in against the tide is Andrew Michrowski of the Canadian-based Planetary Association for Clean Energy: "I feel it's very important to warn people these 'green' bulbs contain mercury, which will end up in landfills throughout the country if we make the switch to them. In addition to filling our landfills with mercury, if the bulbs break you will be exposed to the mercury they contain." He says consumers shouldn't buy them - even though they are now showing up in stores all over America.

Even the EPA, which is cheerleading the mania for the switch to CFLs, offers bone-chilling warnings about the dangers of mercury - if you search for them. "Exposure to mercury, a toxic metal, can affect our brain, spinal cord, kidneys and liver," says the agency.

When a CFL breaks, the EPA cautions consumers to open a window and leave the room immediately for at least 15 minutes because of the mercury threat. The agency suggests removing all materials by scooping fragments and powder using cardboard or stiff paper. Sticky tape is suggested as a way to get smaller particles. The EPA says vacuum cleaners and bare hands should never be used in such cleanups. After final cleanup with a damp paper towel, the agency warns consumers to place all materials in a plastic bag. "Seal and dispose of properly," says the EPA. "Wash hands."

But disposing of properly might be a tough thing to do, because CFLs never should be thrown in the trash like their old-fashioned incandescent predecessors. They need to be turned into recycling centers, which are few and far between. When laws banning incandescent bulbs take effect, so do the mandatory fines on consumers and businesses that dispose of the new CFLs improperly.

The "European Model" of Public Transport stinks

The socialistas at The Age website were having a furious debate about our train and tram network, sparked by the upcoming price rise in tickets.

They correctly point out the obvious problem - prices rise, but standards and services are still very deficient and lacking.

But then as expected, dozens of Age commenters claimed we needed to adopt the European approach and cited London and Paris as good examples where the trains are supposed to be reliable, efficient and popular.

The ideas being suggested were that Melbourne should invest more, operate more services, create more stations, hire more staff and even build new stations and lines. These were often put forward with another strategy - to stop building roads and make it more unpleasant or expensive for car owners. Force more people onto public transport and voila - London !

This is the most idiotic argument from inner city dwellers and it needs to be stopped. Firstly, London is a city of over 10 million people living in very dense dwellings. As is Paris. The government in the UK has legislated the whole "green belt" nonsense where no new land is released for development around the outskirts, pushing up property prices and forcing people to live in more confined dwellings.

I recently returned from Paris, having seen firsthand what their Metro system is like during the strikes, and it is no utopia. Many of the stations are dark, outdated and smell of urine. And quite a few of the trains were severely overcrowded - and I mean overcrowded to a degree I've never seen in Australia and are more likely to see in Bombay or New Delhi. Perhaps this is due to the strikes, but that in itself is a strong argument against public servants operating the trains, and a good argument for private operators who do not need to hire unionised thugs and lazy workers who love to strike simply because their retirement age is being changed from 55 to 60, to be in line with the rest of the French population.

Another thing to note is that the Metro system in Paris is actually quite small geographically. It covers an area that geographically, isn't even as big as Melbourne, but is far more densely populated and has a higher number of stations and lines. So if we were to emulate Paris, we would be removing all lines and stations outside of the inner city (i.e Zone 1 ).

Another issue to consider is the trams we are burdened with in Melbourne. Not only are they slow and expensive compared to buses, but they require expensive infrastructure (tracks and power lines) and they cause massive traffic congestion because they cannot be overtaken easily and they occupy the middle of the road.

Buses would be much more preferable than trams, except perhaps in the crowded Melbourne CBD. We've seen the proliferation of expensive new tram "super-stops" that cost over $100,000 each, as councils struggle to spend their booming annual budgets of $200 million.

But there are some spend-happy bureaucrats who will claim that trams are part of our heritage (so are horse + carriages!) and thats reason enough to let them clog our roads !

Here are some unavoidable facts about transport. People strongly prefer cars and roads. Mass transit is usually only popular in dense and heavy traffic areas for commuting to work or to big events.

We already tax the heck out of petrol, cars, insurance, stamp duty and then ration out parking spaces as well as imposing lots of fines and penalties for speeding and driving whilst talking on a phone.

You can easily make life even more miserable for motorists, but why would you want to ?