Double-Think

Some interesting facts about stimulus

2010-09-21T13:16:00.002+10:00

Reason magazine have a very interesting article about the effects of stimulus. One of my main criticisms of stimulus (and the whole nonsense of Keynesian economics which gives as fictional multipliers effects, demand deficits and deflationary spirals ) is that the political leaders and supporters of stimulus never let themselves be in a position to be proven wrong. Which is the true sign of an ideologue.

If the economy continues to slump, jobs are shed, GDP falls, then the stimulus wasn't big enough.
If the economy grows, then the stimulus is said to work.

In America, the stimulus isn't working. Sometimes, very vague but optimistic predictions are made as the stimulus is introduced.. and it can be shown that they have fallen wide of the mark when looking back at the data.

My most recent analysis found that the total number of jobs the government attributed to stimulus spending as of April was 682,000. Factoring in stimulus dollars spent up to that point, the average cost of these jobs was $282,000.
That’s a lot of money. Worse, four-fifths of these jobs were in the public sector. This outcome is far afield from the administration’s original promise that the stimulus would create 3.5 million jobs over two years, 90 percent of them in the private sector.
...
....
The data released by the Bureau of Labor Statistics in June, then, were bad news. (See the chart.) They showed that since the passage of the stimulus bill, the private sector has lost 2.55 million jobs while the federal government gained 416,000.

Away for work

2010-07-21T00:20:00.003+10:00

Blogging has been extremely light lately, and I apologise.
Ever since starting a new job in Feb, there has been little spare time to devote to blogging. And there are plenty of stories that deserve attention.

From Kevin Rudd's sacking, to Julia Gillard's snap election announcement, to the myriad of stupid policies being proposed by meddling "public servants", there is no end to my daily frustration at how the government and its actions are treated as the essence of society and the definition of newsworthiness for our brain-dead media.

Socialism, and the idea that governments can and should spend a large chunk of our money on things that we need, is not a rational philosophy and is far more crazed than many perverted cults and sects. No matter how often governments prove that they are incompetent, no matter how many hundreds of billions they gather and spend on stupid things, and mismanage our wealth, squander our taxes and introduce red tape into our every day lives, the people seem to focus on who is currently PM, the head honcho of the government and not the abhorrent things that it does.

Expensive school halls, people killed by deadly insulation, a centralisation of the health system in Canberra, handouts to parents and family groups and whoever else puts their hands up, bailouts, stimulus spending, handouts to home owners.. its all just a massive waste and a tragic mess.

Right now, I am in Norway, and from today's experience, I'll guarantee that it is no socialist paradise. Five of my co-workers in the cafeteria all agreed that taxes (48% + 7.5% health levy) are too high in this country. They discourage people from working, and they didn't create equality anyway.
But this morning, my own personal experience with the Norwegian postal service, a government monopoly, got my blood boiling.

You see, I commited the *crime* of ordering a mobile phone online. It arrived in Norway, and instead of having it delivered to my hotel, I received a letter from the post office about tax and customs, and collecting it from their post centre.
I wasted 40 minutes of my time travelling there, to encounter layers of bureacracy, incompetence and extortion.

I take a number, and proceed to the counter with my letter and my passport. Guy #1 explains that VAT is payable (about $150 worth). It was 25% based on the price on my invoice, which includes postage. I asked them why VAT was payable on the postage as well as the item, and they said "yes, it is payable". He told me to proceed to the collection counter to get my item.
At the collection counter, I meet Guy #2, who goes out back and looks for my parcel for 5 minutes. He comes back, and instead of handing it over, tells me to take a number again and go back to the first counter to do the paperwork.
Back at the first counter, I meet Guy #3. He also agrees that the system is too complex, but needs my passport. He tells me to sit down for 15 minutes whilst he busily types away and enters all my details into their system. 2 other co-workers are standing around behind the counter just chatting over a coffee and having a laugh. 15 minutes later, he explains that I have to pay the VAT, but when I leave Norway, I can get a stamp at the airport to show the items have been taken out of the country. ONLY THEN can I write a letter to the customs agency with the stamp and paperwork to APPLY to get the VAT refunded. Meaning it would take a few weeks !! He stamps my papers, gives me the passport back, and I proceed to the collection counter.
Guy #2 comes out again.. He asks me if I am paying the total by card. I explained that I would pay the VAT with cash and opened my wallet to start counting. Then he drops a bombshell. There was a processing fee and a payment fee !! They added up to nearly $40. Now I knew I wouldn't over have a chance of getting this money back, so I started complaining and said that its too much, and that I shouldn't have to pay it.
I was left with only one option, to refuse to pay and have them return the item back to sender. It would be cheaper for me to post it out to Australia then deal with these pricks, and on principle, I didn't want to pay these communist technocrats for their meddling.

I let each and every one of these paper-pushing idiots know that this isn't how normal countries behave, and this isn't how you should treat people. You cannot just shake-down and extort money out of people to fund these public sector parasites.

Furthermore, this system of VAT across Europe is overly complex and ridiculous. It is extremely difficult to have it refunded, it requires 2 or 3 rounds of paperwork.

Back to the Scandinavian system... social democracy isn't perfect at all. They have very high prices, largely due to high taxes and VAT. Whenever they do repairs on their train system, there is an army of unionised workers in fluorescent vests standing round. For the entire month of July, the westbound train lines from Oslo are shutdown for track works. Each train station has replacement buses, and the platforms have been manned with at least 6 of these people who simply point towards buses and make announcements through a megaphone.

Whilst the unemployment rate is extremely low in Norway, perhaps due to their oil industry and resources boom, they have huge unemployment with migrants and huge numbers of people living off welfare. Their debt to GDP ratio is well over 50% and they squander all their wealth on wasteful government spending. Their health system, like most socialist countries, is based on rationing and queues:

Waiting Times. There are significant waiting times for many procedures. Many Norwegians go abroad for medical treatments. The average weight for a hip replacement is more than 4 months. “Approximately 23 percent of all patients referred for hospital admission have to wait longer than three months for admission.” Also, care can be denied if it is not deemed to be cost-effective

They're getting divorced you say ?? I'm serial !

2010-06-02T14:32:00.002+10:00

I blame manbearpig for this:

Former US vice-president Al Gore and his wife Tipper have told friends that they will separate after four decades of marriage.

Public health is a bottomless money pit.

2010-03-29T13:48:00.002+11:00

Public health officials and senior administrators who blame today's problems on a lack of funding should be immediately ridiculed and shouted down.

They've had their funding provided at every turn in the past decade, as Australia and many other Western nations have poured funding into their public health systems. The NHS in Britain should scare people much more than America's so-called "free market" health system.

Via Reason Magazine comes this terrific article:

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It was the tragic case of 73-year-old Mavis Skeet, said the Tory-leaning Daily Telegraph, that "came to symbolize the crisis in the NHS" during the early Blair-Brown years. After having her cancer surgery cancelled five times—it was first scheduled for December 1998; it was cancelled a fifth time in January 2000—her condition was declared inoperable. She died in May 2000.

In January 2000, as the situation with the health service worsened, Blair appeared on David Frost’s morning program to declare that NHS spending was "too low" by European standards and a request a new infusion of cash to shore up the faltering system by adding doctors, nurses, and beds.

In a 2007 interview with the BBC (for the very good documentary "The Blair Years"), Blair acknowledged that around the time of Skeet’s death he was "receiving letters from people—heartbreaking letters—about people waiting for their heart operation, their husband or their relative, and dying on a waiting list because they couldn’t get treated quickly enough."

Socialised healthcare

2010-03-26T11:49:00.003+11:00

I read somewhere that the health care bill was 2400 pages.

Why is it that the media report it as a universal health care package ? Wouldn't that just be a few pages of legislation ?

At 2400 pages, its the mother of all crap sandwiches. There is stuff in the bill forcing restaurant chains (with 20 or more outlets) to put calorie counts on their menus.

But focussing on one of the main points, the bill basically punishes Americans who don't purchase their own home insurance. Here are some lovely examples courtesy of Mike Shedlock's terrific blog:

Example 1:

Had a VERY INTERESTING conversation this evening with a CFO for a local business who employs about 100 people total..

I asked him how this health care bill was going to affect the company he works for.

He told me that he had run the numbers based upon providing health care for all of their employees and realized that he could save the company 1/2 million dollars by just paying the $2000 per employee penalty and not offering any coverage at all.

Example 2:

I ran the same simulation for the company I retired from. As a retiree, I continue to be in their group plan, at my own expense.

They can save $607,000 by terminating the health insurance plan, offset by a fine of $200,000.

One informed commenter sums up:

It is only after this bill is law for 5 or 10 years that we will begin to understand its effects. I believe they will be:

1. Costs far greater than anyone is the Government is letting us know. I challenge to name 3 government programs that cost what the government claimed they would. I can't think of one, except, I think I read, the prescription drug bill.

2. Like Mass. the costs will increase greatly on an annual basis.

3. The quality of medicine will drop drastically. Can you name me a single government program of this size that actually improves anything. Feds got into schools and they got worse, Feds got into energy and the situation is worse.

Deflation should be embraced, inflation should be rejected

2010-03-24T15:21:00.002+11:00

The Angry Economist sums up much of the misguided fear that our economic and political "experts" have towards deflation.

Deflation is defined a decrease in the supply of money and results in falling prices. Each dollar has a stronger purchasing power. And just who wouldn't want this outcome ?

Well, our poorly schooled Keynesian economists warn that falling prices cause some kind of never ending deflationary spiral and a deficit in aggregate demand. Keynes asserted that people just won't spend anything under a scenario where all/most prices fell, and there would be pressure to cut wages as the outputs of industry fell in price. The so called spiral was as follows: Start->Inventories would grow, output would contract, employment would contract, incomes would fall -> Return to Start.

Keynes actually thought the laws of supply and demand didn't apply to labour like all it did with all other goods, and that wages could never adjust downwards to clear. So he blindly assumed unemployment would result and an economy would contract. When he suggested that this was the underlying cause of the business cycle and the great depression, the politicians swallowed every word of his.

This theory should have been flushed down the toilet in the face of reality. People always need to eat, they need clothing, work tools, housing, schooling and education. Not all purchases are speculative decisions. Sure, you'd think people might postpone many investment purchases if shares or property kept falling, but deflation isn't some never ending process. And real economic activity will continue despite the fall in speculative activity.

The kind of speculative activity that thrives under inflation - like the huge credit bubble that fueled the US property market till 2006, or the share market, or other asset bubbles across the world that occurred under inflation.

But returning to the fearmongering about deflation, The Angry Economist gives a great example of how misguided the arguments are:

The common wisdom is that deflation of the currency is bad. When money deflates, it becomes more valuable, even when you do nothing. So the theory is that people won't spend their money, because it will become ever-more valuable.

That theory cannot be true.

Look at the PC market over the last 30 years. In each one of those years, the PC became more reliable, faster, came with more memory and storage. The original MDA display was one color and text only. The CGA had 16 colors and 640x200 bits. The price -- of the computer you really want to have -- has stayed constant, at about $5000.

If the story told about deflation was true, then you would always be better off delaying your purchase of a PC by 6 months. You could be confident that the PC you would buy would be a more valuable PC.

Except ... that people did that very rarely, if ever. The standard advice was always "don't wait to buy a computer, because there will always be a better computer on the horizon."

So, in a situation where people can predict a constant stream of increase in value, people STILL made the trade. Thus, I think it's safe to predict that in a similar situation, where people could predict a constant increase in the value of their money, they would spend their money as needed.

The taxman strikes

2010-02-27T18:09:00.004+11:00

I'm in a particularly foul mood, that has heightened my animosity towards government.

The Australian Tax Office has ever so kindly sent me a letter about my 2007-08 tax assessment, and my failure to disclose an interest amount I received from an Australian financial institution.

Their database matching system shows that I had only disclosed 2 out of the 3 sources that generated interest in that financial year.

Of course, it was a genuine mistake, and the letter says that no penalty will be applied but that in 28 days, I will be assessed for taxation on that income.

You know, being an enemy of socialism and having half a clue about all the theft and coercion it relies on, I see straight through their doublespeak and I simply interpret their message as follows:

" You trying to hold out on us slave ? Hand over the cash or go to jail !"

The Fed as Counterfeiter

2010-02-02T21:25:00.003+11:00

The Mises blog has a great article that explains the complicated workings behind central banking, and how despite the complex mechanisms and multiple actions/strategies, they all combine to create a scenario where the government really can just print new dollars to finance its spending.

No wonder all the governments of the world are such big fans of central banking ... it gives them the 'flexibility' to just issue more debt, which gets exchanged for newly minted dollars, whenever it needs to spend on warfare, welfare, bailouts and special interests.

The mother of all Ponzi schemes

2010-01-21T23:44:00.002+11:00

Is the modern Western welfare system.

The Mises Institute have a tragic/comic article about how today's welfare systems, social security, government backed pensions, medicare etc are completely out of hand and about as financially sound as Bernie Madoff's investments.

The money collected in taxes will simply never come close to covering the future liabilities in the form of pensions, medical coverage and government services.

And the article makes a very good point. That like all Ponzi schemes, the winners are the people who get in early. It presents this lucky lady, the first recipient of a social security cheque, as the prime example:

Social Security was a sure thing in its infancy. Just think of Ida May Fuller (1874–1975), a nonexempt legal secretary from Ludlow, Vermont. Ms. Fuller exemplifies the advantages of getting in early and getting out early. She paid a whopping $24.75 to participate in Social Security. Her first monthly Social Security check was issued January 31, 1940, for $22.54. Within three months, Ms. Fuller's investment was in the black. Over the ensuing 35 years, she would collect $22,888.92 in Social Security payments.

Andrew Sullivan - Democrat spokesperson

2010-01-18T21:27:00.003+11:00

Nothing but praise for Obama's failures.. this shows just how unprincipled Andrew Sullivan has become in the past couple of years.

My own take on this potential disaster for the Democrats is best represented by my response to an Obama supporter who is intending to vote for Brown. Vote for him in 2012. Hold your nose and vote for Coakley on Tuesday. The message is already clear to Obama about the need to pivot quickly to debt and spending (something his record already proves he can do). But losing health insurance reform now, and crippling the Obama presidency as the far right wants, would be to throw away the last chance for a decade of any meaningful change.
If you voted for Obama in 2008, don't abandon him now.

Where do I begin ? Andrew Sullivan, the so called 'conservative', supports socialised health care, and a Democratic president. He openly opposes a sound Republican candidate without offering a shred of criticism, and suggests voters "hold their nose" and vote for the disgraced Democrat candidate... the states don't matter any more, what matters for him is power and Washington.

Some conservative !

Look out America, this is what socialised medicine is all about.

2009-12-24T10:57:00.002+11:00

Socialism places equality above all else. Before prosperity. Before freedom. Before choice. Before people's preferences.

Socialised medicine isn't about helping the poor, but rather about tying the hands of the rest of society.

In Britain, the National Health Service reveals its nasty stripes in this telling encounter:

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That principle was illustrated by the case of Debbie Hirst, a British woman with metastasized breast cancer who in 2007 was denied access to a commonly used drug on the grounds that it was too expensive.

When Hirst decided to raise money to pay for the drug on her own, she was told that doing so would make her ineligible for further treatment by the National Health Service. According to The New York Times, “Officials said that allowing Mrs. Hirst and others like her to pay for extra drugs to supplement government care would violate the philosophy of the health service by giving richer patients an unfair advantage over poorer ones.” The right to health care is so important, it seems, that it can nullify itself.

Here's the elephant in the room

2009-12-22T00:27:00.002+11:00

The Global Financial Crisis has not yet begun.

The US dollar, the world's reserve currency and supposedly every central bankers favorite store of wealth, is backed by enormouse debt, and a house of cards waiting to collapse.

It won't be long till the slow Japanese style deflationary slump kicks in as the debt burden continues to grow.

Nothing can go up forever, and eventually something's gotta give. Either the people cut their spending and repay their debts, or the government prints money like Zimbabwe and destroys the currency to keep them spending.

Mike Shedlock has the following post about an interesting Forbes article on the issue nobody in Washington wants to talk about:

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Not too long ago, a billion dollars in a governmental budget was a lot of money. Then we got into hundreds of billions. People understood that this was a lot, just because of all the zeros. Now, unfortunately, the number has become small: the world "trillion," as in $1.2 trillion for health care reform, seems so tiny. But it has 12 zeroes behind it, which is so easy to forget.

The total public debt is now at 141% of GDP. That puts the United States in some elite company--only Japan, Lebanon and Zimbabwe are higher. That's only the start. Add household debt (highest in the world at 99% of GDP) and corporate debt (highest in the world at 317% of GDP, not even counting off-balance-sheet swaps and derivatives) and our total debt is 557% of GDP. Less than three years ago our total indebtedness crossed 500% of GDP for the first time."

Add the unfunded portion of entitlement programs and we're at 840% of GDP.

The world has not seen such debt levels in modern history. This debt is not serviceable. Imagine that total debt is 557% of GDP, without considering entitlements. The interest on the debt will consume all the tax revenues of the country in the not-too-distant future. Then there will be no way out but to create more debt in order to finance the old debt.

An essay worth reading

2009-12-03T23:13:00.002+11:00

The House that Uncle Sam Built is surely going to be an enthralling and worthwhile 20-page essay for me and my followers, with the following sharp and insightful opening paragraph:

The theme of “The House that Uncle Sam Built: The Untold Story of the Great Recession of 2008” is that government policy, not a failure of free markets, caused the economic trauma we have been experiencing. We do not live in a free market. We live in a mixed economy. The mixture
varies by industry. Technology is primarily free. Financial Services is primarily government. It is not surprising that the most government regulated and controlled segment of the economy, financial services, experienced the biggest problems. These problems were created by actions
by the Federal Reserve combined with government housing policy (especially the government- sponsored enterprises - Freddie Mac and Fannie Mae). Misguided government interference in the market is the real culprit in laying the foundation for the Great Recession.

Click here to download the entire essay.

Little Green Fanatics

2009-12-03T15:26:00.002+11:00

Heh..

Charles Johnson has finally confessed and written a post titled "Why I parted ways with The Right"

After 2 years of leftist hysteria, and alienating all his collegeagues on the Right, he finally acknowledges his changing philosophy.

And what better way to prove his stripes with a post that actually attacks the ClimateGate scandal as a criminal conspiracy ... by the hackers and climate skeptics !

Well at least he's half right there.. better than his average batting record.

For a closer look at his political wingnuttery and environmental fanatacism:

... the CRU theft was a criminal attempt to sabotage the Copenhagen climate summit, and the entire right wing blogosphere is complicit in the crime.

Gee was Charles Johnson this angry about the hacked emails of Sarah Palin ?

All thats left is for me to ask - Whats next ? Will LGF be cheering Castro and Chavez, Keynesian economics, the UN and other idols of the left ?

Government corruption

2009-11-26T01:32:00.003+11:00

When the government gets involved in anything, it inevibly becomes corrupt and politicised.

That is an unavoidable conclusion and the absolute truth that leads many people to distrust big government, and to try to keep the role of government as limited and consistent as possible.

When government is responsible for something as supposedly innocent as collecting statistics on unemployment, it is tempted to spin the numbers in a positive way. And Obama's job creation / recovery act tries to take credit for the non-existent recovery by tweaking the numbers:

According to a report from a shoe store in Campbellsville, Kentucky, the Army Corps of Engineers “created or saved” nine jobs when it used money allocated by the American Recovery and Reinvestment Act to buy nine pairs of work boots. The Wall Street Journal reports that the store’s owner, frustrated by the government’s confusing online forms, enlisted the help of his 42-year-old daughter, who figured nine—the number of people who would use the boots on the job—made as much sense as any other answer.

Little Green Failures

2009-11-25T23:19:00.003+11:00

Charles Johnson's crumbling and moronic blog, and his ever changing postures and politicking are starting to wear thin on me. It seems he still has thousands of readers, but I wonder how long it will last.

3 years ago, it was pretty clear where he stood on issues. Nowadays, things seem to have changed, and not subtly.

He was about as pro-interventionist as you could get, a huge supporter of conservative blogs and the Bush presidency. Now, he peddles global warming alarmism and propaganda videos by Peter Sinclair, he supports socialised health care, ridicules all lovers of freedom and liberty (especially the tea party protestors and other Obama critics) as maniacal conspiracy theorists and white neo-nationalists and religious fundamentalists.

I was just browsing over some of his very characteristic and typical posts back in 2005, which include the following snippets.. mocking Al Gore for claiming he was non-partisan, mocking all Muslim groups for crying victim to racism, debunking many claims of Israeli soldiers commiting atrocities, pointing out the dozens of Palestinian 'cease-fires' involved continuing to fire upon Israeli civilians, and dozens of posts showing the Palestinian 'death cult' mentality, all whilst showing what a farce the UN is and applauding critics of the UN such as John Bolton.

It was hard to find a single mention relating to socialised medicine, or global warming and the IPCC. But here was a gem of a post in 2005 linking approvingly to Iowahawk who ridicules claims that increased C02 levels caused hurricane Katrina.

Even as recently as June 2008, he made fun of a left wing blog that cheered Obama for threatening anybody who stop him trying to pass his health care bill. And in August 2008, he exposed some of the radical supporters of Obama's campaign, including the Communist Party of America. Charles even used the term "Obamessiah" to ridicule the candidate whom he would later fall in love with.

It didn't take long for him to cheer Obama's plan for socialised health care, support every Democrat, become a global warming alarmist and at the same time, begin ridiculing Republicans and libertarians, ignoring his core issue of terrorism and Islamic fundamentalism, and begin making enemies of every ally he once had.

It seems he has come full circle today, with his post that mocks the Republican Party philosophy listed below, and simply labelling this a "failure". I'll highlight in bold some of the ideas that Charles very recently held to show how quickly he changes his stripes.

THEREFORE BE IT RESOLVED, that the Republican National Committee identifies ten (10) key public policy positions for the 2010 election cycle, which the Republican National Committee expects its public officials and candidates to support:

(1) We support smaller government, smaller national debt, lower deficits and lower taxes by opposing bills like Obama’s “stimulus” bill;

(2) We support market-based health care reform and oppose Obama-style government run healthcare;

(3) We support market-based energy reforms by opposing cap and trade legislation;

(4) We support workers’ right to secret ballot by opposing card check;

(5) We support legal immigration and assimilation into American society by opposing amnesty for illegal immigrants;

(6) We support victory in Iraq and Afghanistan by supporting military-recommended troop surges;

(7) We support containment of Iran and North Korea, particularly effective action to eliminate their nuclear weapons threat;

(8) We support retention of the Defense of Marriage Act;

(9) We support protecting the lives of vulnerable persons by opposing health care rationing and denial of health care and government funding of abortion; and

(10) We support the right to keep and bear arms by opposing government restrictions on gun ownership; and be further

RESOLVED, that a candidate who disagrees with three or more of the above stated public policy position of the Republican National Committee, as identified by the voting record, public statements and/or signed questionnaire of the candidate, shall not be eligible for financial support and endorsement by the Republican National Committee; and be further

RESOLVED, that upon the approval of this resolution the Republican National Committee shall deliver a copy of this resolution to each of Republican members of Congress, all Republican candidates for Congress, as they become known, and to each Republican state and territorial party office.

Che is a crap + boring movie.

2009-11-04T00:15:00.003+11:00

Thats all you need to know.

2 parts. Each one over 2 hours long.
The film sequence is totally disconnected and random. Jumping back and forth in time.
The film doesn't even hint or portray his ideals or philosophy. He's just some friendly guy.

Steven Soderbergh is a dick. He doesn't really glorify Che. He just paints him as boring and average, but also popular and humane towards his comrades and his enemies.

Not the slightest hint or mention of the executions and firing squads.

There is no explanation of the Cuban revolution, the philosophy behind it and the impact it left. In every scene, all the village people wave and cheer at the brave revolutionary soldiers. And Che simply plots strategy for his next attack against the military.

Not the slightest hint that the guy was a brutal killing machine.

Don't watch Che .. instead watch Andy Garcia's masterful The Lost City.

Mine Your Own Business !

2009-10-22T23:26:00.002+11:00

I just finished watching this interesting 2006 documentary that exposes the environmental movement's horrific anti-development and anti-growth attitude, and their complete hypocrisy.

Mine Your Own Business begins in the village of Rosia Montana, Romania, where a Canadian mining company is facing huge opposition from the environmental NGOs about their plans to develop a gold mine. The environmental movement issue statements that the villagers will suffer under this plan, the pristine environment will be devastated and that 700 villagers have been forcefully removed from their homes, and that it is deeply unpopular and unwelcome by the locals.

The documentary exposes all these claims as bald lies. The villagers were extremely eager to sell their homes voluntarily. The local environment was not quite so pristine and untouched, with polluted rivers from the era of a state run mine. And most interestingly, the villagers were very keen on having a mining industry in their local area for employment and income.

The same scenario was showed as the documentary makers travelled to 2 other mines that were opposed by environmental NGOs. One mine in Madagascar, and another in the mountains of Chile, were both welcomed by the impoverished locals, and fiercely criticised by the environmental activists.

On a technical note, the documentary is produced in a bit of a Michael Moore style, although obviously the political statement doesn't resemble anything Michael Moore has ever produced. A poor Romanian drill operator, eager to work, is taken to visit the other mines and is interviewed at length about his willingness to work and how his entire village depend on trade and commerce to survive and to be happy.

Key leaders of environmental NGOs are interviewed, and they are easily shown to be dishonest or deluded. They either claim that they "really know whats best" for the local villagers, and they even stretched the truth by claiming that that they have visited and lived in these rural villages where mining operations are being proposed, when they have never set foot in the area. They are exposed as wealthy and comfortable people who possess the delusion that they know what actually makes poor villagers happy, and one even spelled out his twisted opinion (I paraphrase here)

"We cannot measure happiness for these people the way we do for ourselves. Health, living standards, income - these aren't valid. We need to look at culture, environmental factors and their way of life"

After watching the entire documentary, this ridiculous claim is destroyed. Some terrific interviews with Deepak Lal and Frank Furedi give an insight into what drives the environmental movement, and I'd have to agree with them in viewing it as nothing more than a secular religion.

The ACCC hurt consumers yet again

2009-10-21T01:20:00.002+11:00

Courtesy of the Daily Reckoning comes this interesting report:
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Late last week the ACCC told supermarket chain Coles that it mustn't offer customers a 40 cent discount on fuel. You've probably read the news articles covering the story. But not surprisingly none of them point out the idiocy of the demand by the ACCC.

Of course, the Coles special offer had strings attached. Customers would have to spend over $300 to get the discount, but still, the chance to get your petrol at 70 cents per litre rather than $1.10 isn't a bad deal.

Sure, you could argue that Coles just inflates it's prices to pay for the cheaper fuel. If you think that then you don't have to take them up on the offer. But if you shop at Coles all the time anyway, then it's a pretty good deal.

However, according to the ACCC it's a bad deal and it had to be stopped.

Why? Here's what the ACCC had to say about the offer:

"However there is a balance to be found between providing consumers with discounts on the one hand, and on the other offering significant price cuts for sustained periods or repeated offers which might have deeper impact on competition in the long term. The ACCC is not satisfied on information currently available that this promotion struck the right balance."

Goddess of the Market by Jennifer Burns

2009-10-18T22:18:00.003+11:00

Here's a book I'll add to my shopping list - Goddess of the Market: Ayn Rand and the American Right.

The author, Jennifer Burns, was just on the Daily Show to promote her book, but rather than act as a passionate supporter of Ayn Rand, she presented her as some type of character of interest or fascination for conservatives.

John Stewart proved once again why he just doesn't quite "get it" most of the time. On the one hand, he seems to frequently tear into politicians (however the target is more often right wing ones than left wing targets) and ridicule their nonsense and broken promises. Whenever he has the attention span to fact check a claim, he usually does a terrific job of making fun of it. But it seems like he doesn't have enough attention to understand why conservatives are skeptical of big government, and instead interprets it as a shallow trick to rouse emotions and opposition to Obama.

He seems to flippantly and casually dismiss libertarians and free marketers as an angry emotional and irrational mob, whilst senior Democrats like Barney Frank and Nancy Pelosi are treated like sincere, virtuous public servants who give themselves to the greater good.

How did John Stewart describe Ayn Rand ? As an "elite", an "intellectual" who has a philosophy that works for the elite but not for the rest of us. And he mentioned that she upset the mainstream conservative movement in the 1950's with her atheism.

And immediately after, he mocked 'conservatives' Glenn Beck and Rush Limbaugh, saying that they are anything but intellectuals and therefore today's conservatives have nothing to do with Ayn Rand.

But all the while, he failed to acknowledge that the Republicans don't exactly always represent the libertarian school of thought, to put it mildly. And that those who associate themselves with the right are not necessarily traditional conservatives.

I sat aghast at the fact that the author, Jennifer Burns, sat quietly through this slanderous attack on the Ayn Rand and the conservative movement, and she allowed a TV host in the space of 2 minutes, to totally misrepresent the subject of her book, and the philosophy of liberty.

Liberty and individualism is not a system to benefit elites. In fact, communism is the only system which promotes the elites above the proleteriat.

Liberty and individual rights make sure that merit is rewarded and laziness is punished. Capitalism and free markets, as a system, doesn't "believe" in any kind of outcome. It does not promote the smart above the stupid, the strong above the weak.

It helps foster one very important outcome - that people face the consequences of their actions. And with that incentive, the capitalist economies have made people work harder, care for their families and build prosperity far more succesfully than any command economy like North Korea or Cuba.

John Stewart just doesn't get liberty, he even described it as a philosophy of extremist individualism, to be contrasted and compared with communism, another extremist ideology. And according to him ..... somehow, its up to today's talk show hosts, political pundits and talking heads to find the middle ground between freedom and totalitarianism.

I don't quite buy it.

There's corporatism, crony capitalism and then there's free markets.

2009-10-15T13:50:00.002+11:00

Mises.org has an excellent piece which sums up the idea that there is a huge difference between free market capitalism and between so called "deregulation" which ends up handing out government contracts and establishing cozy monopolies for private businesses.

I've heard far too many leftists decry huge calamities ( such as the financial crisis, Enron, the bailouts, failing education and health standards) as being due to deregulation and privatization. In the case of Michael Moore, he just blames capitalism, property rights and free enterprise as being behind the problems of the US health system or the financial crisis.

This piece rebuts that nonsense far more eloquently than I ever could.

On Education:

Consider Philadelphia's failed attempt to "privatize" education. The city hired the services of a supposedly private corporation called Edison to oversee it. All the schools were taken over by Edison and the city paid it to manage them.

With no competition in sight and a guarantee of payment by the government regardless of performance, Edison's operation was completely inefficient, and it promptly failed.

The proponents of public education were ecstatic. They could say to the world, "See — we're open-minded. We tried using the market to educate children and it failed; capitalism failed." Wrong! Capitalism didn't fail; corporatism failed.

On Enron:

And who can forget California's "energy deregulation" scheme? That fiasco began when voters passed a ballot measure mandating energy deregulation. Well, the legislature together with a handful of private corporations (including Enron) devised a system guaranteed to fail: they partially deregulated energy supply while keeping consumer prices tightly capped.

As was to be expected, energy sold on the spot market increased overall costs for suppliers, due in large part to manufactured shortages by energy brokers like Enron. Consumers gobbled up more and more wattage in the comfort of prices that government regulators kept artificially low, and the entire system began to collapse. Moreover, the government made it impossible for anyone to construct new power plants, thus ensuring that no one would be able to meet the rising demand for energy.

On the bailouts and financial crisis:

And don't get me started on Fannie Mae and Freddie Mac. These quasi-private corporations may benefit from privatized profits but their losses are socialized, creating a huge moral hazard. Where does it all end?

Whether we are discussing farm subsidies, bailouts, corporate favoritism, or licenses and privileges given to certain companies, we are in fact seeing the myriad ways that government has reared its head into the markets. Government and corporations invent scheme after scheme to ensure the superficial appearance of free enterprise, line the pockets of each, and shield the government from any blame.

Why government run health care really is scary

2009-10-05T12:41:00.002+11:00

The Mises institute have a terrific post written by Yuri Maltsev about the perils of Soviet healthcare.

Here are some key excerpts:
---------------
The system had many decades to work, but widespread apathy and low quality of work paralyzed the healthcare system. In the depths of the socialist experiment, healthcare institutions in Russia were at least a hundred years behind the average US level. Moreover, the filth, odors, cats roaming the halls, drunken medical personnel, and absence of soap and cleaning supplies added to an overall impression of hopelessness and frustration that paralyzed the system. According to official Russian estimates, 78 percent of all AIDS victims in Russia contracted the virus through dirty needles or HIV-tainted blood in the state-run hospitals.

....

To improve the statistics concerning the numbers of people dying within the system, patients were routinely shoved out the door before taking their last breath.
....

At the end of the socialist experiment, the official infant-mortality rate in Russia was more than 2.5 times as high as in the United States and more than five times that of Japan. The rate of 24.5 deaths per 1,000 live births was questioned recently by several deputies to the Russian Parliament, who claim that it is seven times higher than in the United States. This would make the Russian death rate 55 compared to the US rate of 8.1 per 1,000 live births.

Having said that, I should make it clear that the United States has one of the highest rates of the industrialized world only because it counts all dead infants, including premature babies, which is where most of the fatalities occur.

Most countries do not count premature-infant deaths. Some don't count any deaths that occur in the first 72 hours. Some countries don't even count any deaths from the first two weeks of life. In Cuba, which boasts a very low infant-mortality rate, infants are only registered when they are several months old, thereby leaving out of the official statistics all infant deaths that take place within the first several months of life.

.....

After seventy years of socialism, 57 percent of all Russian hospitals did not have running hot water, and 36 percent of hospitals located in rural areas of Russia did not have water or sewage at all. Isn't it amazing that socialist government, while developing space exploration and sophisticated weapons, would completely ignore the basic human needs of its citizens?

Charles Johnson and LGF hate freedom

2009-09-17T09:33:00.003+10:00

I've been a longtime reader of Charles Johnson's blog, LittleGreenFootballs, only to see it undergo a tragic decline to a meaningless rehashing of the days news, blind support of president Obama coupled with daily smears against all Republicans and libertarians alike.

For a clear example of how Charles Johnson tries to spin all news towards support for the president, read the following post, titled Obama Supports Extending Patriot Act:

Watch as the same people who loudly supported the Patriot Act for years suddenly start to find things wrong with it: Obama supports extending Patriot Act provisions.

The partisanship and blind loyalty to the president is astonishing. Let me just recap here. Obama broke a key election promise of his, and not only that, he did a complete backflip and broke his parties platform. Several senior Democrats have been fiercely opposing the Patriot Act and complaining about abuses committed under it for many years now. And the President not only keeps the Patriot Act intact, but extends it further.

Somehow, the focus of all this, and the biggest hypocrisy, is the fact that Republicans who once supported the Patriot Act will now start complaining ????

For months, LGF has been mocking the tea party protests by trying to associate them with the fringe of society - birthers and truthers.

The hatred of Ron Paul stemming from his non-interventionist foreign policy ideals has been perpetual. The Congressman has been portrayed as some Bircher society figure associated with conspiracy theorists, creationists and anti-semites.

Whilst doing this, he presents and links to narrow unqualified views on a range of issues on behalf of the present. From mocking creationism and promoting evolution (fair enough), to ridiculing all of the birth certificate crowd (also fair enough), he has moved towards linking to supporters of climate change hysteria, idiots who think auditing the Federal Reserve is a bad thing, and commentators that suggest Obama's health care reform is unquestionably benign.

From being a critic of the Democrats and anti-war crowd, to mocking 9/11 truthers and supporting the Republicans under president Bush, he has jumped sides.

But its not about which side you are on, its about what ideals and policies you believe in.

After moving across all issues and I predict that soon, LGF will have very little wriggle room left to move in.

Charles Johnson is an Obama lackey. For now.

Oprah's "national service" propaganda hour

2009-08-31T14:34:00.002+10:00

Oprah just a ran a celebrity love-fest for president Obama. It was pure, unadulterated, gushing praise for a president who hasn't done anything yet.
Highlights include

Renowned scholars, Ashton Kutcher and Demi Moore, explain their devotion to the Obama campaign and presidency.
A 2 minute video clip of various celebritiess, many from the "Yes We Can" video, saying that America is now one united family.
Oprah hosting Joe Biden and wife, and talking repeatedly about "national service"

This last point made me shudder..."National service" should scare the hell out of us - I'm sure quite a few dictatorships have used that exact expression in the darkest moments of the 20th century.

- I guess Oprah hasn't read Robert Heinlein or seen the movie Starship Troopers :)

Quote of the day

2009-08-23T15:30:00.002+10:00

The Daily Reckoning has a great little prediction of what lies ahead for us all in this world of big government and high taxes:

--And so we begin the inevitable path toward capital controls in America. This first step is to crack down on tax evaders. The next is to prevent capital and currency from leaving the country. When the government is starved for revenue and refuses to cut spending, they have to prevent people from switching out of dollars and into other currencies or assets.

Its never been a better time to get your guns and your gold.

Filthy Lucre: Economics for those who hate capitalism

2009-08-07T14:16:00.003+10:00

I've just finished reading this book by Joseph Heath, and the title alone should be enough to send alarm bells ringing.

Surely, we don't want to empower the fools who hate capitalism with some unjustified ideas that there are rational economic reasons to oppose capitalism.

And the first half of the book is quite a disappointment. The author says the 1st half is dedicated to dispelling right wing economic fallacies, and the 2nd half attacks left wing ideas and fallacies.

The first half seems to think that a libertarian "night watchman state" as described by Nozick has been proven unfeasable, that minimum wages do a lot more than create unemployment and that the real world has all kinds of prisoner's dillemas - situations where the individual parties do not act in the optimal sense and should be regulated by the state.

In each one of these chapters, Joseph Heath simply remarks that it is "more complicated than free market economists suggest" without really justifying why regulations, social welfare and taxes are all justified and beneficial.

The 2nd half of the book is much more agreeable, although it can be a bit long winded in making its point. One chapter that attacks the idea of "fair prices" takes aim at the Fair Trade campaigns, and shows how Oxfam asked for African coffee farmers to be paid double the market price, predictably resulting in a huge coffee glut, and then Oxfam reacted by asking the US gov't to destroy 5 million bags of coffee to keep the prices high.

Similarly, the Body Shop launched its "trade not aid" campaign in the early 90s, where they agreed to buy 6.3 tonnes of shea butter from cooperative producers in northern Ghana, at a price 50% above the local rate. The company decided to add an additional bonus to the price, which was to be invested in local schools or development projects.

What resulted should be obvious to any rational person.

...news of the Body Shop's order created a "shea nut rush", followed by an entirely predictable glut. Farmers stopped growing all sorts of crops in order ot get a slice of the shea-nut action: In the first season, the northern villages, which normally produced about 2 tonnes of shea butter a year, churned out twenty tonnes, nearly four times what The Body Shop wanted... Making matters worse, The Body Shop, after discovering it had overestimated the international market for shea-related products, quickly scaled back its orders for the next season.

In the end, the author managed to attack other bad ideas such as "profits are bad", "capitalism is doomed", "equal pay for all" and "sharing the wealth". Joseph Heath positioned himself as somebody who supports the status quo.

He should double check his blind spots - government spending is wasteful, minimum wages do create unemployment, social security creates moral hazards, and regulation is ineffective.

Why are we trying to tax carbon again ?

2009-08-03T09:32:00.001+10:00

The Broken Window fallacy

2009-08-02T16:55:00.003+10:00

You don't need to be an economist to have enough common sense to realise that pointless destruction of valuable goods and materials is pointless destruction.

In fact, only a special class of pseudo-economists and intellectuals would argue otherwise. They are fans of the broken window fallacy, which revolves around the idea that you can generate prosperity by breaking a window and paying somebody to fix it (because it keeps them employed and keeps money in circulation).

So many people have used reason, logic and sense to dispel this old myth, but it still lives on and has infected the halls of power in Washington and Canberra alike. Obama and Rudd believe in all kinds of pointless make work schemes.

Rudd believe in replacing existing school halls and playgrounds with new ones - even though the existing ones are only a year or two old, or in some cases, belong to a school with a handful of students.

A classic example of a make work program (which Keynes, Krugman, Rudd and Obama would love) involves paying thousands of people to dig holes, and thousands more to fill them in.

Pres. Obama gave the rubber stamp to the idiotic Cash for Clunkers scheme - where older cars are traded in for newer cars and the government chips in with a fat subsidy - up to $4500 per car. The older and the bigger the used engine, the bigger the subsidy.

This scheme is idiotic on so many levels, and the basic sentiment behind it is a make work / circulate money type of scheme to "stimulate" economic activity.

Failure #1 - $1 billion was allocated to Cash for Clunkers and US government forecasted it would last till November, but the funding ran out in just 6 days as thousands of car owners rushed to take advantage of this scheme.

Failure #2 - one condition for the dealership who buys the used cars, is to destroy the existing engine so it cannot be resold or recycled. Watch the following video and imagine this destructive process being repeated thousands of times across America:

Thats a good question.

2009-07-27T23:52:00.002+10:00

Mark Steyn asks:

In the mid-nineties, which climatologist and which model predicted the cooling trend of the turn of the century and the oughts? And, if they didn’t, on what basis do you trust their claims for 2050 or 2100?

(hat tip: Tim Blair)

Movie Review: Wall Street

2009-07-23T23:34:00.002+10:00

Can I think of 2 words to sum up Oliver Stone's Wall Street ?

It blows.
Get real.
Bull-s@*t
Anti-capitalist

Seriously, this movie is so childishly simple, it just doesn't make sense. I could go over the entire plot, which at times seems plausible, but instead I'll just point out the plot twists that leave any intelligent person just gasping in disbelief.

Gordon Gekko as the ruthless capitalist who is shown to never consider any long term strategies that may be profitable - i.e he flatly rejects improving / cost-cutting any business he owns for future returns, but always opts to "trade" or sell-off the assets
Bud Fox as the blind obedient lackey of Gekko, becomes an industry spy, eager to follow and monitor other big players and give the insider information to Gekko. Of course, he was eager to sell his soul and betray everybody around him, and Gekko rewards him with countless millions. Is that what Oliver Stone thinks capitalism is all about ?
The SEC as the ever present and watchful authority who trap Bud Fox on charges of insider trading in the very end... are you kidding me ? The SEC couldn't catch Bernie Madoff and with their huge resources, have never been able to uncover anything at all that wasn't handed to them on a silver platter by the media and by industry insiders !

There are many more examples of how misguided Oliver Stone's anti-capitalist brain is. The truth is that free markets are not short-sighted, and they do not require some wise and prudent government oversight to steer them towards long term prosperity. In fact, business owners and employees are far better suited to plan for long term outcomes, whilst government bureacracies are much more fickle and held sway to short term political influences.

If free markets, which are based on individuals making free choices, were short sighted by nature, then we would see people spend all their money today, never build or renovate a home, never set themselves a budget, never manage to raise children, never manage to study a degree, never devote years towards developing their careers etc etc etc.

Oliver Stone's characterisation of capitalism as short term, profit grabbing, destructive game of backstabbing is ridiculous. Gordon Gekko plays a comic book villain, at one scene confessing that he "creates nothing, makes nothing, produces nothing for anybody".

Those working in banking and finance do indeed play a very productive and important role in an economy. First and foremost, they help determine prices for a whole range of assets - stocks, commodities, energy, private debt, sovereign debt. They create financial products to hedge risk - insure against future price movements, allocate capital to the best investments, and help liquidate the worst investments.

You don't see banking and finance workers building homes or cars or gadgets, but many of those real things do require some kind of finance.

Another ridiculous theme is that Charlie Sheen becomes more rude, aggressive, dishonest, disloyal and anti-social to his close friends and family as he becomes more succesful. The idea that climbing the corporate ladder means stepping on everyone else's head is something straight out of the communist manifesto.

The icing on the cake was the scene were Charlie Sheen is humiliated in front of his co-workers when the S.E.C catch him for insider trading, and arrest him in front of his floor. The very same S.E.C who slept through every financial scam and crisis in recent history.

There is one positive thing for me out of watching this

- if Wall Street sums up the very best case that the left wing can present against capitalism and free markets, then they really ought to think it through and get back to us when they've got some real theories.

The Critics of Keynesian Economics

2009-07-17T13:24:00.003+10:00

I've finally completed reading this excellent and comprehensive book exposing the key Keynesian fallacies, first compiled by Henry Hazlitt in 1960, and as relevant as ever today.

To be honest, the author didn't have to write anything new. He simply researched and dug up roughly "some two dozen important critiques by eminent economists" and published them in one volume.

Each critique forms a chapter of this book, and I found that each economist would attack Keynes from a different angle. Some would remain very mathematical and duplicate his model, but by adjusting his narrow assumptions, found conclusions that were completely opposite to Keynesian remedies.

Jean Baptiste Say, the originator of Say's Law, (that you cannot consume that which you have not yet produced) which lies at the heart of the dispute between classical and Keynesian economists, has his full statement reproduced to prove that Keynes did not accomplish any such feat as proving Say's Law to be incorrect.

As Hazlitt explains, "It will be observed that Say's Law itself was intended as an answer to pre-existing Keynesian fallacies."

Another economist who made his contribution long before Keynes, was John Stuart Mill who elaborated and defended Say's Law.

Hazlitt helps do the subject justice by reproducing in full, John Stuart Mill's full writing under "Of the Influence of Consumption on Production" which Keynes had misinterpreted and truncated.

At this early stage in the book, I was left feeling as though Keynes had not addressed his rivals and he had simply constructed an elaborate model based on narrow assumptions, and tried to pass it off as a general theory of employment and business cycles.

One thing is for sure, by reading this book, you will get a clearer understanding of Keynesian ideas than actually reading Keynes himself, who seems to be very obscure and sometimes contradictory in his style of writing. Basically, Keynes ideas boil down to the following:

When an economy is left to the free market, it reaches a natural equilibrium where the employment level is below "full employment"
There exists a deficiency of demand in this equilibrium
Savings are a waste of capital
Deflation is a problem because wages just can't move downwards, even if the price level moves down.

The Keynesian cures:

Inflation to force real wage rates down
A central bank to lower interest rates, which reduces savings.
Governments using fiscal stimulus, even running deficits, to stimulate current consumption.

Every other critic in the book seems to land a solid blow against Keynes and his assumptions.

Jacob Viner attacks his definition of involuntary unemployment and the rigidity of wages
Etienne Mantoux does an excellent job of demolishing the idea of a multiplier as follows:
"Given the definition of the multiplier, the propensity to consume therefore becomes equal to (1 - 1/k), which amounts to saying that as the propensity to consume approaches unity, the secondary effects of a primary investment would approach infinity. Remarkable !"
Franco Modigliani reproduces the Keynesian model as a set of simultaneous equations, but adopts the classical theory of the supply of labour function where wages are no longer downward-rigid... the conclusions and outcomes from this are very un-Keynesian -
"The liquidity preference theory is not necessary to explain under-employment equilibrium; it is sufficient only in a limiting case: the "Keynesian case". In the general case it is neither necessary nor sufficient; it can explain this phenomenon only with the additional assumption of rigid wages.

Many other critics nail the point home, some of them short and easily understood, like Mises and Hayek, others doing a lengthy methodical deconstruction of Keynesian assumptions and claims.

Keynes seems to be the biggest source of all economic fallacies in the modern era.

You cannot spend your way to prosperity. You cannot turn a stone into bread. You cannot pump-prime an economy perpetually, stimulate consumption, and not suffer any negative consequences. Inflation is not costless. Deflation is not an eternal spiral. Prices can indeed adjust to balance the supply and demand of labour and savings.

If only the wider public, or at least the economics profession and political advisors, would consider reading this book.

The minimum wage only hurts the poor.

2009-07-16T14:21:00.003+10:00

Courtesy of the ALS comes this excellent summary of how minimum wage laws make us feel good about ourselves, whilst they actually price poor people out of performing work.

The CIS have a terrific article about minimum wages too. Read it all.

Site Feeds up and running

2009-07-02T23:46:00.003+10:00

The blog has been updated, hopefully the RSS feed will work for users who choose to subscribe via the sidebar. Next task - I will soon update my favorite links.

Unbridled and unrestrained capitalism ?

2009-07-02T15:22:00.003+10:00

Thomas DiLorenzo has an excellent smackdown of the myth that the global financial crisis (GFC) was caused by unrestrained, unregulated American capitalism.

----------------------------------------------------------

Laissez-faire run amok in financial markets is said to be a cause of the current crisis. But the Fed alone - a secret government organization that is accountable to no one and which has never been audited - performs hundreds of regulatory functions, in addition to recklessly manipulating the money supply. And it is just one of numerous financial regulatory agencies (the SEC, Comptroller of the Currency, Office of Thrift Supervision, FDIC, and numerous state regulators also exist). In a Fed publication entitled "The Federal Reserve System: Purposes and Functions," it is explained that "The Federal Reserve has supervisory and regulatory authority over a wide range of financial institutions and activities." That's the understatement of the century. Among the Fed's functions are the regulation of

Bank holding companies

State-chartered banks

Foreign branches of member banks

Edge and agreement corporations

US state-licensed branches, agencies, and representative offices of foreign banks

Nonbanking activities of foreign banks

National banks (with the Comptroller of the Currency)

Savings banks (with the Office of Thrift Supervision)

Nonbank subsidiaries of bank holding companies

Thrift holding companies

Financial reporting

Accounting policies of banks

Business "continuity" in case of an economic emergency

Consumer-protection laws

Securities dealings of banks

Information technology used by banks

Foreign investments of banks

Foreign lending by banks

Branch banking

Bank mergers and acquisitions

Who may own a bank

Capital "adequacy standards"

Extensions of credit for the purchase of securities

Equal-opportunity lending

Mortgage disclosure information

Reserve requirements

Electronic-funds transfers

Interbank liabilities

Community Reinvestment Act subprime lending requirements

All international banking operations

Consumer leasing

Privacy of consumer financial information

Payments on demand deposits

"Fair credit" reporting

Transactions between member banks and their affiliates

Truth in lending

Truth in savings

That's a pretty comprehensive list, the result of 96 years of bureaucratic empire building by Fed bureaucrats. It gives the lie to the notion that there has been "too little regulation" of financial markets. Anyone who makes such an argument is either ignorant of the truth or is lying.

Why Krugman (and Keynes) are completely wrong.

2009-06-18T11:05:00.001+10:00

Krugman, in 2002: (hat tip, Liberty Papers)

To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble.

Capitalism is nowhere to be found

2009-05-11T13:32:00.003+10:00

The ALS have a post which show how socialism and welfare programs have captured most voters in our democracy through their entitlement programs.

Age Pension, Disability Support Pension, Carer Payment, Bereavement Allowance, Newstart Allowance (the “dole”), Sickness Allowance, Parenting Payment, Widow Allowance, Youth Allowance, Austudy Payment, ABSTUDY, Special Benefit, Service Pension, Partner Service Pension, War Widow’s & Orphan’s Pension, Income Support Supplement, Family Tax Benefit (A), Family Tax Benefit (B), Baby Bonus, Double Orphan Pension, Maternity Immunisation Allowance, Child Care Benefit, Child Care Tax Rebate, Rent Assistance, Pharmaceutical Allowance, Remote Area Allowance, Telephone Allowance, Utilities Allowance, Seniors Concession Allowance, Pensioner Education Supplement, Education Entry Payment, Work for the Dole supplement, Language, Literacy and Numeracy Supplement, Pension Bonus Scheme, Pension Bonus Bereavement Payment, Crisis Payment, Mobility Allowance, Carer Allowance, Carer Bonus, Seniors Bonus, Pensioner Concession Card, Low-income Health Care Card, and Commonwealth Seniors Health Card.

And some people are still on discontinued programs, including Mature Age Allowance, Partner Allowance, Widow B Pension, Wife Pension (Age), and Wife Pension (Disability Support Pension). Not to mention tax expenditures.

Pay your taxes or go to jail

2009-04-29T10:56:00.003+10:00

Thanks to the folks at Reason, this enlightening video about income tax and just who is already paying for the burden of government largesse:

Defamation and slander by ninemsn

2009-04-29T00:16:00.003+10:00

This article, reporting on the death of Richard Pratt, makes the following false claim:

On Monday, the Commonwealth DPP withdrew all charges because of Mr Pratt's advanced terminal cancer.

Lack of evidence.. ill health.. its all the same right ?

I hope the Pratt family get lawyered up and sue.

The road to socialism

2009-04-27T15:27:00.003+10:00

A new government intervention for Australia - lenders can now be sued for damages if they make loans that turn sour.

The uniform national law will for the first time cover mortgages, credit cards, pay day lending and other consumer credit products.

The Australian Securities and Investment Commission will be charged with enforcing the so-called responsible lending laws.

Under the laws, defaulting borrowers will be able to sue for damages as a result of being put into loans they cannot repay.
Breaches will attract fines of up to $220,000 for individuals and $1.1 million for corporations and jail terms of up to five years.

Why is it that so few people can see the side-effects and hazards of this legislation ?

Firstly, it imposes huge new costs and risks on lenders, thus making them less likely to make all kinds of loans - good and bad.

Secondly, it runs counter to other government interventions in the banking sector. Efforts to lower interest rates, boost first home owners grants, support the property market, provide a guarantee to bank deposits have all acted to expand and maintain the supply of credit to the market (much of which has been based on some fairly bad and sub-prime type lending).

Which brings me to my view of how things are shaping.

Whilst a pure dictatorship moulds and grows government to his single purpose - his limitless power and prestige - what we are seeing is a typical socialist government.

It blindly and clumsily creates new government plans, powers and agencies to maintain power and popularity and to look like it is acting in the best interest of "the society". Yet many of these agencies often have impacts that contradict each other, and the society becomes burdened with thousands of pages of regulations that limit freedom and tie everybodys hands.

No consideration is given to the existing plans, agencies and regulations that we are saddled with. As the layers of complexity and regulation build, we begin to see what I call "the crap sandwich".

And these ill conceived plans are not free:

ASIC will be given an extra $66 million and hire 200 new full-time employees to administer the laws.

Its tough being a taxpayer these days.

Conroy you dumb bastard, come here !

2009-03-23T13:13:00.002+11:00

You are the stupidest power-hungry tyrant to be empowered with ministerial responsibility in the history of Australian politics.

Come on.. I dare you. Watch this website. Monitor it closely. I know you want to. You might learn a thing or too.

The Federal Government will begin trawling blog sites as part of a new media monitoring strategy, with official documents singling out a website critical of the Communications Minister, Stephen Conroy

Private vs Public sector.

2009-03-17T11:03:00.003+11:00

Public transport is a fricking disaster.

(the above sentence applies equally for public health and education)

The latest doom and gloom comes in an Age article titled..

Hard-times just the ticket for public transport.

Most socialists need only glance at the above headline and immediately begin with their usual script full of the empty talking points which are easily demolished through logic, and repeatedly refuted through evidence and facts.

Those talking points are as follows:

Not enough funding ! The government has been and continues to deprive "the system" of sufficient resources (This talking point comes from public transport lobby groups, unions and the ABC )
Poor and dumb planning. (Usually the opposition political parties and media figures recite this one)
Unregulated free markets are to blame !! (From the ABC and the hard left)

Each of these arguments is vague and shallow. Not a single fan of public transport would care to tell us what sufficient funding is. Nor would they tell us what "good planning" is. And the 3rd falsheood is all too easy to trot out, by asserting that free markets exist everywhere and that no act of government played any role in creating or exacerbating the problems.

Yet ... history clearly and unambiguously reveals that each new decade brings about more and more funding for each public sector industry, more and more efforts placed into planning and regulation, and more pages of regulation and greater government ownership than before.

The exceptions are the success stories - when government privatised AND DEREGULATED industries like telecommunications, banking, transport, trade, commerce and hospitality.

The leftists cannot have their cake and eat it too. They cannot place thousands of regulations on a semi-privatised public transport sector, where only the train operator bids for the government contract to operate a monopoly, and then give their usual knee-jerk reaction of blaming free markets/privatisation when things go wrong.

Back to the story:

THE deteriorating economy is adding to Melbourne's public transport woes, with commuters boarding trains, trams and buses to save money.

A survey of 600 people by public transport marketing and information agency Metlink has found that 75 per cent of Melburnians are trying to save money because of worries over the economy. As a result, a third are looking to use public transport more to cut their budgets.

Read that paragraph. What is the actual news item being reported ?

More people are using public transport.

Why is this "bad" or "grim" news ? ?! Isn't this what the government wants us to do ? They tell us not to use our cars, they place stamp duty, registration, fuel taxes and parking restrictions everywhere, they tell us to catch more trains and do our bit for "the environment".

Could you imagine the same response for any single private industry out there ?
If more people buy televisions, or groceries, or go out to the movies, or go out to restaurants, would that particular industry complain ? No, they would be overjoyed and do their best to serve all these willing customers.

I think even the most hard-core statists, the advocates of socialised health, medicine, education and transport, realise deep-down some of the inherent problems in their huge plans to spend our money on their personal priorities for society, but fail to publicly acknowledge them.

The best overview of the subprime collapse

2009-03-04T12:56:00.002+11:00

An 86 minutes long video. This is it.

Boy was this crisis a failure of government regulation and socialism.

The economic boom !

2009-03-03T15:28:00.002+11:00

In troubled times, where is this safe-haven that provides high and rising wages, widespread employment and rising standards of living ?

Canberra !!

Employee Earnings and Household Incomes

Average weekly full-time adult ordinary time earnings in Canberra are approximately A$1,280 per week, which is 16 per cent higher than the Australian average. However, as noted earlier, output per capita of Canberra workers is 31 per cent above the national average.

Earnings and the high workforce participation rate are also reflected in disposable household income figures for Canberra. The gross household disposable income per capita at A$49,923 is around 61 per cent higher in Canberra than the national average.

Modern Telecommunications Infrastructure

The high quality of infrastructure serving Canberra provides many advantages to businesses. Canberra was one of the first cities in the world to introduce a broadband fibre-optic network, and the ACT ranks alongside Singapore, Finland, Sweden and the USA as having one of the world’s most IT-connected communities.

Operating a Business in Canberra

There are more than 25,000 businesses in Canberra covering almost every conceivable form of activity and business structure. They range in size from multinationals that have strategically chosen Canberra so they can be close to the Australian Government’s A$200 billion procurement decisions, right down to micro businesses servicing larger businesses, the public sector or the needs of local people.

They range in size from multinationals that have strategically chosen Canberra so they can be close to the Australian Government’s A$200 billion procurement decisions, right down to micro businesses servicing larger businesses, the public sector or the needs of local people.

Workforce

Canberra’s workforce comprises approximately 200,000 people, made up of 190,000 residents and approximately 10,000 people who commute from nearby population centres in New South Wales. About 115,000 Canberrans are employed in the Territory’s private sector, with the balance employed in the public sector. [ 200,000 - 115,000 = 85,000 public servants !]

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The chief minister of the A.C.T provides the following factoids:

the ACT record low unemployment rates - the ACT’s current unemployment rate of 2.7 per cent in May 2008 is well below the rate in any other jurisdiction;
an average weekly wage in Canberra about $180 more than the national average.
increased expenditure on health, which has almost doubled from 2001-02 to 2008-09;

Yes, Canberra, mafia headquarters, is where a lot of the stolen loot is handed out !

Stimulating our debt

2009-03-03T14:57:00.002+11:00

How can I possibly debunk each and every fallacy, idiocy and lunacy presented in the:

$42 Billion Nation Building and Jobs Plan

I think these monumental wastes of capital and destruction of wealth and savings speak for themselves:

• Free ceiling insulation for around 2.7 million Australian homes

• Build or upgrade a building in every one of Australia's 9,540 schools

• Build more than 20,000 new social and defence homes

• $950 one off cash payments to eligible families, single workers, students, drought effected farmers and others

• A temporary business investment tax break for small and general businesses buying eligible assets

• Significantly increase funding for local community infrastructure and local road projects

I've always been complaining about welfare and government spending from a moral and philosophical point of view. It is all too easy to attack welfare from a practical point of view, saying that it goes to "bludgers" and "cheats".

But the real hazards behind the system, the very essence of why an extensive welfare system is immoral, and the very rationale that is articulated so clearly by Ayn Rand in Atlas Shrugged, is the following:

That people can present their *needs* as a claim on the property and liberty of others.

And thus each and every need (including failures, mistakes and idleness) are ultimately what are rewarded and compensated by government.

Our government occasionally lets the mask slip, to reveal that this very principal and philosophy is at the core of every regulation. Every single "stimulus" measure is carefully designed to exclude the self-sufficient, and those with a good income. Every single stimulus measure rewards failure of some kind.

Build 500 new science laboratories and language learning centres in schools that can demonstrate need.
Urgent maintenance to upgrade around 2,500 vacant social house
$950 Farmer's Hardship Bonus paid to around 21,500 drought affected farmers and farm dependent small business owners receiving exceptional circumstances related income support.
$950 per child Back to School Bonus to support 2.8 million children from low- and middle-income families.

At least 20,000 low-income households will be assisted by having access to secure and affordable public or community housing.

You see my point already ?

Every dollar the government spends is forcibly taken from somebody else who earned it. They are being compelled to pay for certain things. Those certain things are all justified on the basis of need. Nothing more and nothing less.

The fox in charge of the henhouse

2009-02-24T10:59:00.002+11:00

Or otherwise - why Australia's federal budget is doomed.

Ken Henry and his band of looting socialist thugs at the Treasury have revealed their ugly stripes in a leaked report given to the PM in 2008.

THE private health insurance rebate paid to millions of Australians is "very poor policy" and should be dumped, according to a confidential briefing to Treasurer Wayne Swan.

Okay, so far, I follow you. After all, if the government was giving a 30 percent subsidy, we could have a tax cut in its place and use the savings, right?

Documents obtained by The Age reveal that Treasury, in one of its first briefings to the Rudd Government after its 2007 election win, urged Mr Swan to seriously consider scrapping the rebate. The briefing said the billions of dollars lost annually to the rebate would be better spent on public hospitals.

Bugger !

Money would be "better spent on public hospitals" ? Public hospitals who feed at the trough, fail to improve services despite their revenue doubling over a decade, and who control, regulate and ration out critical health services to the lucky few ?

How can such bad and unsound advice come from Treasury, who are appointed to spend tax-payers money ? Our budget is entirely doomed, we've already seen a couple of big states hit the financial brick wall (NSW + QLD), its easy to guess that Rudd will drive the federal government into the same situation by the time his first term is up.

But lets not worry about such things. Bless the money hole !

The latest bailout news from the People's Soviet Republic of America

2009-02-24T10:27:00.004+11:00

Mike Shedlock magnificently translates financial-speak in this latest joint statement from the Treasury and Fed:
-------------------------------

A strong, resilient financial system is necessary to facilitate a broad and sustainable economic recovery. The U.S. government stands firmly behind the banking system during this period of financial strain to ensure it will be able to perform its key function of providing credit to households and businesses. The government will ensure that banks have the capital and liquidity they need to provide the credit necessary to restore economic growth. Moreover, we reiterate our determination to preserve the viability of systemically important financial institutions so that they are able to meet their commitments.

My Comment: Clearly, the US Government will continue to bail out insolvent banks no matter what it costs taxpayers.

"We announced on February 10, 2009, a Capital Assistance Program to ensure that our banking institutions are appropriately capitalized, with high-quality capital. Under this program, which will be initiated on February 25, the capital needs of the major U.S. banking institutions will be evaluated under a more challenging economic environment. Should that assessment indicate that an additional capital buffer is warranted, institutions will have an opportunity to turn first to private sources of capital. Otherwise, the temporary capital buffer will be made available from the government. This additional capital does not imply a new capital standard and it is not expected to be maintained on an ongoing basis.

My Translation: "This new capital will not cost anyone anything. It will be dispensed by magic fairies and recovered at a later date. We cannot share exactly how this magic works because under the rules of the magic ministry, we would be stripped of our magic hats and lose the rights to dispense magic if we did. Trust us. This is the proverbial free lunch that everyone says does not exist. However, like magic pixie dust, it does exist, it really does."

Any government capital will be in the form of mandatory convertible preferred shares, which would be converted into common equity shares only as needed over time to keep banks in a well-capitalized position and can be retired under improved financial conditions before the conversion becomes mandatory. Previous capital injections under the Troubled Asset Relief Program will also be eligible to be exchanged for the mandatory convertible preferred shares. The conversion feature will enable institutions to maintain or enhance the quality of their capital.

My Comment: The market cap of Citigroup is $11.5 billion. The market cap of Bank of America is $20.3 billion. How does a Government guarantee $400 billion of Citigroup and Bank of America debt and inject another $75 billion in preferred convertible shares without costing anyone a dime and without requiring any new capital? Why, magic pixie dust of course.

The ACCC responds !

2009-02-23T15:26:00.003+11:00

To my mock-complaint made last week, about electronics retailers who offer "best price guarantees" and who sell goods "below cost price" to consumers.

Of course, I am personally satisfied, not outraged, that businesses make every effort to sell goods and services to customers. They should have every right to offer and set whatever prices they please.

But the sad reality is that Trade Practices Act, and all of its devilish detail exists, and the ACCC has been known to successfully prosecute businesses for charging prices too high, too low, changing prices quickly or simply for being a dominant market player.

The ACCC representative suggested that my accusation that these large electronic retailers were engaged in some kind of predatory pricing under Section 45 of the TPA would fail on two counts:

1/ You need to prove the seller is in an "extremely dominant market position". Harvey Norman and Clive Peeters, although both are large, are considered to operate in a highly competitive market where lots of people sell competing electronics.

2/ You need to prove that the seller is "keeping their prices below cost for a prolonged period of time with a specific intention of targeting their competition".

I explained how the legislation is quite vague and ambiguous, that is why I thought that it could be applied to just about any succesful business in Australia. The ACCC representative replied that the legislation in Australia is quite short, and the rule of thumb is to interpret case law to look at similar situations.

I questioned how the ACCC establishes the "intention of targeting a business" part - was it by guessing ? They responded that there are cases where there is evidence - giving the example of a large supermarket that continually and repeatedly undercutting a small grocery store in the same shopping centre, whilst making inquiries about its suppliers and costs.

( This is what I call normal competition - and the consumer benefits from this )

What isn't mentioned is that if, by the same token, the small grocery store monitors the supermarket prices, and responds by undercutting every price and outdoing them on every special, the legislation cannot or would not likely be used against the small player.

The way I see it, basically is that a judge, on his whim, *can* choose to punish a business under the TPA for engaging in regular trade. And the business is in extreme trouble of it is the most succesful player in its industry.

Recessions are healthy things

2009-02-19T09:47:00.002+11:00

Yes indeed, recessions are the medicine an economy needs to take before it gets better.

Certainly, it has tragic consequences for many hard workers and home owners and borrowers throughout the economy as output contracts. But the underlying theme is that so many human activities and so many resources were mis-allocated towards speculative bubble activities.

The best thing about these depressions is that it uncovers all the irrationalities, myths and misconceptions that existed during the bubble period. We just emerged from the biggest credit bubble in history. The assumption was that property and share prices would continue to soar, Asian economies would continue to grow and make things cheap, the Western consumer would never satsify his appetite to consume imports and grow their debt, and the savers of the world (Brazil Russia India China and the Middle Eastern states) would fuel America's debt forever.

THATS A LOT OF RISKY ASSUMPTIONS THERE ! I say good riddance to them.

And Obama and Bernanke think this kind of process is unhealthy ?

Whenever the crunch hits and people try to pull their money out, you see just how honest and sound some of these speculative activities were. Yet another ponzi scam was just unconvered. How many years did the SEC have to investigate these guys??

Texas financier R. Allen Stanford is accused of cheating 50,000 customers out of $8 billion dollars but despite raids Tuesday of his financial empire in Houston, Memphis, and Tupelo, Miss., federal authorities say they do not know the current whereabouts of the CEO.

Of course, you can't pull off a scam without government connections. Why doesn't an angry mob form outside Washington and demand the heads of the following politicians ?

But in addition to angry clients, Stanford, like Madoff, has many friends in Washington.

Stanford's business is headquartered on the Caribbean island of Antigua. In the last decade, Stanford and his companies have spent more than $7 million on lobbyists and campaign contributions in efforts to loosen regulation of offshore banks.

Among the top recipients: Senator Bill Nelson (D-Fla.), Congressman Pete Sessions (R-Texas), Sen. John McCain (R-Ariz.), Senator Chris Dodd (D-Conn.) and Senator John Cornyn (R-Texas), one of the members who took a trip to Antigua where he was entertained by Stanford.

Look how blatantly corrupt America has become - Washington has an ever increasing budget to spend ($1 trillion stimulus anyone ?) with growing regulatory powers each year, its no wonder every business tries to lobby and bribe politicians to get on board. How can Washington have the infinite wisdom to dish out $1 trillion of payback within a few days, in an optimal way that will stimulate economic growth ?

During the recessions, you get to re-discover reality.. it can be ugly, but society is better off without all these ponzi schemes.

Creating Jobs or Making Work ?

2009-02-18T13:43:00.003+11:00

I've stolen the excellent headline from this Reason Magazine article which poses the very relevant question to its readers. In the current media coverage of each government's bailout or stimulus package, there is repeated mention of "jobs".

For a free-market advocate, this terminology causes quite a bit of hesitation and discomfort. Not all jobs are the same, clearly. But when government spends hundreds of billions (from taxpayers of course) on short term projects to provide jobs, there are many issues.

If there were absolutely no hazards involved, government could just pay half of the unemployed to dig holes, and the other half to fill them in. Unemployment would vanish. But in truth, so would our capital, our wealth, our standards of living and productive capabilities.

Henry Hazlitt, in "Economics in One Lesson", described a raft of foolish "make work" programs introduced during the Great Depression by FDR. For example, the teamsters in New York introduced a regulation so that all truck drivers visiting New York state had to hire a local New York truck driver to sit beside them for navigation. You had 2 truck drivers doing the job of one.

Government spending has an undeniable track record of being very inefficient and costly. So we often hear the argument put forward in recent times that we need any kind of spending, no matter what, just to "stimulate" our economy.

And with the mention of the word "economy" in that context, most free marketers will once again shudder at the misuse of the word:

The beauty of Obama's dual argument is that he can say the stimulus package is all about putting Americans back to work and then, when challenged on the question of whether this is an efficient way to do that, he can say all the work needs to be done anyway. Conversely, when challenged on the question of whether all these projects are really worth the money being spent on them, he can cite the jobs they "create or save" as a backup justification.

From a technical perspective, a job is created when an employer offers a salary in exchange for a worker's labor. So even if that employer is the federal government, and the salary comes from a stream of tax revenues (or future tax revenues, or even the printing press, for all those governments getting deep into debt), then that still counts as a "job", right ?

No it surely does not.

The nature of a job surely counts. A job that is created when a private employer hires labor, paid for with his own capital, as part of a business that seeks to maximise profit is a real job. Each employer is sacrificing his own wealth, and expects something in return from the employee. Each employer seeks to maximise profits, improve productivity and innovate and grow their business over time, which is the very engine of economic growth and allows for more employment or higher incomes in the future.

The free market consists of millions of voluntarily employed people, developing their skills and applying them across a range of industries, each of which produces something that is in demand and can earn revenue. As we can see, the majority of people are employed by, and receive their income from, the free market.

The same cannot always be said of the public sector. The nature of government work is that a central planner or bureaucracy is given a budget to spend, and chartered with a responsibility to both employ people and to spend their annual budget (or else they won't receive their budget in full the following year).

I read another chapter from Milton Friedman's "Free to Choose" last night which established that when you spend your own money and your own priorities, you seek to both get good value, and to get something that satisfies your own priorities. The hazard occurs when you spend somebody else's money towards somebody else's priorities, where there is no consideration of the budget, and no consideration of that other person's priorities.

Government spending falls entirely into this category. Whilst tax cuts, especially cuts in business tax and income tax, would provide the free market much more capital to employ people in dynamic and growing industries.

It seems clear that each stimulus project is designed to be short term - building roads, highways, green energy, refurbishing schools. Now these sound like noble goals in themselves, but what happens to the workers when these projects expire ?

The private sector would deploy labor and other critical inputs in a much more sustainable way, and use them dynamically and efficiently where they are most needed.

The article concludes:

If the projects really were cost-effective, of course, there would be no need to cite the jobs they create. And if creating jobs were an end in itself, as Obama often seems to think it is, there would be no need to find projects that are worth doing because of the public benefits they deliver. In fact, it would be better to throw money around willy-nilly so as to maximize job creation, in which case we surely could get more than 3.5 million jobs for $787 billion.

Clive Hamilton - Nanny Statist

2009-02-17T15:37:00.002+11:00

The headline alone is like a red rag to a bull, and should drive most reasonable people to outrage. Go click on his scare-mongering nonsense if you dare. I've taken out one extract below:

Web doesn't belong to net libertarians
Clive Hamilton, Charles Sturt University | February 16, 2009

Some participants in the internet filtering debate do not believe that access to porn on the internet is a problem. One referred to the sorts of images I have described as "naughty pictures". Others take an extreme libertarian view that people (including children) should be able to view whatever they like.

Ahh, the attempt to win the debate through demonising and marginalising your most well known opponents. The old strawman.

All of us internet users and fans are suddenly a fringe group - extreme libertarians. But our statist opponents who want to censor and regulate the internet represent parents, children and just about everybody who cares about "the children".

Hamilton then continues:

Reflecting the influence of moral relativism, there is a common belief in the internet community that any restriction means the imposition of one set of moral values on others who don’t hold them. Any sexual practice, no matter how bizarre, is just a matter of personal choice.

Firstly.. censoring content, by the state, is nothing less than imposing one set of moral values on the entire society.

And internet usage has nothing to do with actual sexual practice. The internet is nothing more than communication, completely peaceful and non-violent.

Basically, Hamilton tries to characterise all freedom of speech concerns to sex, deviant behaviour and predatory paedophiles.

Fortunately, we do not live in the type of society favoured by organisations like Electronic Frontiers Australia. We live in a democracy where citizens ask their governments to impose restrictions on certain types of content that are regarded as harmful to individuals or to the community more broadly.

Clive Hamilton's opinions are harmful and offensive to me, yet I don't go lobbying Canberra to censor him.

But perhaps the most revealing words in the Get Up statement are "our internet". The internet does not belong to the net libertarians, who seem to believe they inhabit a cyber-nation that is beyond normal forms of social regulation. The net belongs to all of us and, like other forms of communication, is subject to our collective decisions.

Yes and should be run according to the whims of Clive Hamilton ! This thug-o-crat has no room for individual disagreements in his utopian view of collective societies living in harmony. I suppose some kind of counselling or re-education is in order for those who disagree with him .. err.. I mean "society".

The ACCC can prosecute anybody under the sun !

2009-02-17T12:18:00.002+11:00

We live in a police state. When government is big enough, and enough laws and regulations are passed, each and every one of us can easily find ourselves in breach of some statute and prosecutable. When you criminalize all kinds of behaviour (smoking marijuana, avoiding taxes, charging customers too much or too little), you create a society of criminals.

When business owners who maintain their integrity and form voluntary agreements with customers set prices, they must do so in compliance with the following mumbo-jumbo or else they may find themselves dragged before a court, charged with thought-crimes, and to face much embarassing PR (see Pratt, Woolworths, Myers, Qantas for examples).

-------------------------

TRADE PRACTICES ACT 1974 - SECT 45

Contracts, arrangements or understandings that restrict dealings or affect competition
(2) A corporation shall not:

(a) make a contract or arrangement, or arrive at an understanding, if:

(i) the proposed contract, arrangement or understanding contains an exclusionary provision; or

(ii) a provision of the proposed contract, arrangement or understanding has the purpose, or would have or be likely to have the effect, of substantially lessening competition; or

(b) give effect to a provision of a contract, arrangement or understanding, whether the contract or arrangement was made, or the understanding was arrived at, before or after the commencement of this section, if that provision:

(i) is an exclusionary provision; or

(ii) has the purpose, or has or is likely to have the effect, of substantially lessening competition.

TRADE PRACTICES ACT 1974 - SECT 45A

Contracts, arrangements or understandings in relation to prices

(1) Without limiting the generality of section 45, a provision of a contract, arrangement or understanding, or of a proposed contract, arrangement or understanding, shall be deemed for the purposes of that section to have the purpose, or to have or to be likely to have the effect, of substantially lessening competition if the provision has the purpose, or has or is likely to have the effect, as the case may be, of fixing, controlling or maintaining, or providing for the fixing, controlling or maintaining of, the price for, or a discount, allowance, rebate or credit in relation to, goods or services supplied or acquired or to be supplied or acquired by the parties to the contract, arrangement or understanding or the proposed parties to the proposed contract, arrangement or understanding, or by any of them, or by any bodies corporate that are related to any of them, in competition with each other.

TRADE PRACTICES ACT 1974 - SECT 46

Misuse of market power

(1) A corporation that has a substantial degree of power in a market shall not take advantage of that power in that or any other market for the purpose of:

(a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market;
(b) preventing the entry of a person into that or any other market; or
(c) deterring or preventing a person from engaging in competitive conduct in that or any other market.

(1AAA) If a corporation supplies goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying the goods or services, the corporation may contravene subsection (1) even if the corporation cannot, and might not ever be able to, recoup losses incurred by supplying the goods or services.

(1AA) A corporation that has a substantial share of a market must not supply, or offer to supply, goods or services for a sustained period at a price that is less than the relevant cost to the corporation of supplying such goods or services, for the purpose of:

(a) eliminating or substantially damaging a competitor of the corporation or of a body corporate that is related to the corporation in that or any other market; or
(b) preventing the entry of a person into that or any other market; or
(c) deterring or preventing a person from engaging in competitive conduct in that or any other market.

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Stop the bailout ! Senators respond to my enquiry.

2009-02-10T11:04:00.002+11:00

I've tried to "save the world" as Gordon Brown would say, and stop this ridiculous one-off stimulus package that gives money to people who haven't earned it, and drives us deep into debt for many years.

After emailing all Victorian senators, all Liberal and National senators, both independent senators and a few Labor senators, I've only received a handful of responses, but all of them seem to agree that the stimulus is a huge mess.

Senator Barnaby Joyce:

Thank you for your email and support. The current fire tragedy is front and foremost today and our efforts should be solely concentrating on this today.
The stimulus package put us on a trajectory to financial economic oblivion with a 200 billion dollar debt, and for what pink batts, boom gates.

What about real infrastructure inland rail between Gladstone and Melbourne, what about the getting the water from the north where there are floods to the southern drought and now fire, what about pensioners. And now Mr Rudd has the arrogance to say “get out of the way”.

If the emails that I am receiving in the hundreds are correct then this package is of high concern to all who will be left with the debt to grind down the economic breathing space that our nation requires.

Senator Helen Kroger:

Senator Kroger thanks you for your recent e-mail.

There are many problems with Labor’s Economic Stimulus Package introduced into Parliament this week.

The Coalition believes that the package is poorly targeted, ill-thought through and irresponsible in today’s economic climate. There is no evidence that the Government’s $10.3 billion spending package before Christmas created the 75,000 jobs Mr Rudd promised.

The Coalition believes in good public policy that will create jobs and encourage productivity.

The Coalition has decided to oppose the Government’s irresponsible package – the largest increase in Government expenditure in 35 years. We are aware that this decision will not be popular, however, we firmly belief it is the right decision.

One of the biggest problems in the Government package is the lack of measures that directly and broadly support employment – particularly employment in the small business sector.

To achieve this goal, the Coalition has suggested that the permanent tax cuts currently scheduled for 1 July 2009 and 1 July 2010 be brought forward, and backdated to 1 January this year.

By the middle of 2010 this would leave a two-income household earning $80,000 approximately $1700 better off.

Senator Nick Xenophon:

Thank you for your email to Nick Xenophon regarding the economic stimulus package. Nick will be considering all aspects of the package carefully before deciding how to act. As Nick has said, "If you are going to by a $42 billion car, wouldn't you want to have a look under the bonnet?"

Thank you for taking the time to write to Nick on this important issue, and I will forward your comments to Nick and his advisors for their information.

Senator John Williams:

Senator Williams is opposed to the economic stimulus package in its present form. He believes money should be spent on long term infrastructure not one-off short term cash payments. He is also concerned that we are loading future generations with debt plus interest.

The intellectual depth of the left

2009-02-06T10:57:00.002+11:00

Our PM:

The work came as the Prime Minister attacked Malcolm Turnbull as an agent for unrestrained greed and wanton neo-liberalism for his refusal to support the package because it would create a $70 billion debt.

Our Victorian Premier:

The package "couldn't be better-timed", Mr Brumby said.

"It means jobs, it means certainty, it means confidence, it means security."

Is there much depth to this argument ? Is it logically consistent ? Does it rely on reason ? Is it free from any premises and assumptions ?

No to all of the above. It is all self-serving propaganda.

How does saying no to years of deficits, tens of billions of dollars of spending equal unrestrained greed and neo-liberalism ?

Kevin Rudd's use of language is disgraceful Orwellian nonsense. It is Kevin Rudd who seeks more power and more authority to put the government budget into a massive deficit that will take future taxpayers years to repay. It is the opposition who stand up to this arrogance, and they are the ones accused of "greed" ?

What is "neo-liberalism" anyway ? Its communist speak for free markets and capitalism. The ideas and the actual growth of free markets and capitalism have been around for centuries. Portraying it as some scary modern phenomena to be done away with, like fast food, is downright shallow.

Don't blame capitalism for the credit crunch

2009-01-28T11:06:00.003+11:00

The number of writers and pundits, and politicians who blame "extreme-capitalism" and "greed" for the credit crisis is astonishing. And it follows that their remedy for the crisis must be less capitalism. This means less economic freedom, more taxes, more regulation and in many cases, nationalising huge industries.

Gordon Brown, Kevin Rudd, Sarkozy and Obama have all used these words. Alan Greenspan said he was surprised by the investment banks "failure to self-regulate". Krugman, Stiglitz and other Keynesians are blaming lack of regulation and unhampered free markets.

Last night, I read the opening chapter to Milton Friedman's "Free to Choose", which presebted a defebce of self-regulation and the pursuit of self-interest with one simple and elegant statement :
"self-interest does not mean myopic selfishness".

Politicians seem to blame mistakes, errors and risk taking as being something unique to capitalism. But this couldn't be further from the truth. Under capitalism, you suffer the consequences for making mistakes and errors. And you get rewarded for responding to market conditions quickly and dynamically, and changing your plans as soon as the business landscape changes.

In fact, with a proper framework, one would conclude that politicians and regulators are much more guilty of short term selfishness and mistakes than the entrepreneurs and industrialists who are captains of industry. Looking at the past 12 years, it is beyond any doubt that governments screwed up badly and created this mess.

Now you have more than a few businesses that lost spectacular amounts of investor's money by taking risks or failing to disclose their details- Madoff, Merrill Lynch, General Motors, Bank of America, Bear Sterns and more.

But so what ? Under capitalism, these businesses and their shareholders would be liquidated as punishment for their errors. The crisis would be short and sharp. What happens if government steps in, or if government was already the owner and guarantor of the business (such as Fannie Mae) ?

The losses are passed on to the taxpayer, and future generations of tax payers. And that is what we have seen with trilion dollar bailouts.

Given the global government interventions and ongoing bail-outs of the banks, it would be safe to rename Wall Street to the Federal Department of Wall Street.

In this point in history, the remedy for the crisis is surely going to be more painful and hazardous than the actual problems itself.

Every central banker - Bernanke, Paulson, Trichet, Mervyn King, Glenn Stevens - all prescribe monetary stimulus as a remedy. We also see every single treasurer fall into line, and prescribe fiscal stimulus.

Mike Shedlock aptly describes this resurrection of failed theories as the Fiscal Insanity Virus.

The British economy has a higher level of government spending and control than some of the former Soviet states did at the fall of communism.

And all these central banks that keep inflating the supply of money which creates the boom-bust cycle - since when is that part of the free market ? In fact central banks are one of the main platforms of the communist manifesto !

I say that the mainstream is entirely deluded if they think free markets caused the crash.

Government responds to my question by not answering it !

2009-01-23T16:25:00.002+11:00

Back on 30th October, I wrote a letter to the Victorian Premier explaining the new evidence that the manufacturing of solar panels actually creates greenhouse gases much more potent than C02 and could actually contribute towards global warming.

I suggested it was unwise for our State gov't to subsidise solar energy through the feed-in-tariffs. ( Whilst the Federal gov't subsidises the cost of solar panels through a rebate scheme.)

In typical bureaucratic fashion, it was forwarded to the relevant department - Department of Primary Industries. And on the 21st Jan, I received a letter in response. Basically, it doesn't provide any new information and doesn't address my concerns. 2 paragraphs were a complete re-hashing of the Victorian gov't's policy position. i.e Reducing greenhouse emissions by 60% by 2050, compared to 2000 levels, supporting renewable energy through a range of actions.

Finally, a paragraph tries to sweep the issue under the rug as follows.

"We note the news reports in relation to the use of nitrogen trifluoride in the production of solar panels, and in many other types of electronic equipment. DPI believe that concerns about reducing the use of this gas are appropriately dealt with at the national and international level. This could in future be, for example, through potential inclusion of the gas as part of those greenhouse gases regulated by the 1997 Kyoto Protocol.

It looks like my question was completely avoided ! They are basically trying to say that they believe concerns about reducing the use of this gas are *PRESENTLY* appropriately dealt with ... which in *FUTURE* could be done by taking a particular action... ?

Are they trying to say that my concerns are addressed today, because in the future some action may be taken ?

It also indicates a willingness to adhere strictly and faithfully to the Kyoto Protocol, in the face of new evidence and new data emerging.

The letter then recommends I read up on climate change at www.greenhouse.vic.gov.au and hopes that I found the information useful.

Does anybody think they have addressed my concerns ?

Australia - the next domino to fall

2009-01-21T15:04:00.002+11:00

Very sober figures, via the Daily Reckoning, show we have a problem here in Australia:
-------------
--First up is Christopher Wood, regular analyst at CLSA Asia-Pacific and writer of handy newsletter called GREED and Fear. "The ban on shorting Australian financial stocks is due to expire on 27 January," he writes. "If it is not extended, this presents a clear opportunity for absolute-return investors. GREED and Fear continues to take the view that Australian financials will be the last area of Anglo-Saxon consumer financing excess to bottom with, as in Britain and America, the seemingly inevitable involvement of taxpayer money before the end of the cycle."

--"GREED and Fear also continues to recommend, as has been recommended since March 2008, that Asia-Pacific relative-return investors maintain a zero weighting in Australian financials. Australian banks, including their New Zealand subsidiaries, are characterised by high loan-deposit ratios and low loan loss provisions."

--"Meanwhile, the household sector is extremely leveraged while the former high flying residential property market is weakening fast. Household debt to disposable income is still running at 156%, compared with 130% in America. While Australian residential building approvals fell by 32% year-over-year in November, with new home sales down 15% year-over-year."

--"GREED and Fear hears from recent visitors to the 'Lucky Country' that there is still a state of denial, which is certainly not the case in America or Britain. If so, this mentality will not last. But the good news is that reluctant Australian taxpayers will be able to afford to pick up the tab. Public sector debt is only 15% of GDP."

Obama takes oath of office.. and commits perjury.

2009-01-21T11:49:00.003+11:00

Here is the footage of Obama being sworn into office in front of a truly immense crowd of millions.

You've all heard Obama campaign for well over a year now. You've heard his speeches about healing the planet, making health care affordable, ending conflicts, defending the country from terror, forming new alliances. You've heard his pledge to get America's economy moving, to create new jobs and invest in alternative energy to end oil dependence.

And on this very platform, and on these pledges and ideals, articulated and delivered very eloquently by Obama, he was elected to the office of the president of the U.S.A.

Well today is the day he took office, and did he have to reiterate his previous pledges in order to accept the role in an official manner ? What exactly are the technical requirements for being president ?
Simple - to take the oath of the office. So let us look at that oath in its entirety to see what exactly is demanded from the office of the president.

I, Barack Hussein Obama, do solemnly swear that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect, and defend the Constitution of the United States so help me God.

And with that, he became the president. Canons fired, the President's March was played, the crowd roared with approval. Emotions were stirred.

Yet .. this is the biggest display of blind ignorance I can recall. Did anybody in the crowd even read the Constitution ? Do they realise that defending the Constitution contradicts every single speech Obama has delivered ?

Obama must realise that in order to attempt government solutions to a range of issues, he must do as previous presidents have done, and defy certain passages in the Constitution. He must grant himself new powers to tax and regulate, despite them being specifically banned by the Constitution.

Even maintaining the status quo is a gross violation of the Constitution. Income taxes, anti-drug laws, nation building, censorship and limits on speech, restrictions on firearm ownership, providing and regulating medical and education services go well beyond the defined scope of the office of the presidency as defined by the Constitution.

Today was a day where a man intentionally and knowingly commited perjury to the roar and cheer of millions. Even if you agree with Obama's intentions, you should find it deeply troubling that he agreed to take the oath which, if honoured, would tie his hands and preclude him from acting to carry out his campaign intentions. This is a sign of dishonesty and tyranny, a man who lies to obtain power. The ends do not justify the means.

(This is not a personal attack on Obama. The entire arguments above apply equally to Bush, Clinton or Carter. Certainly they apply to tyrannical presidents like FDR and Hoover)

New President today.. same old ball-game

2009-01-20T14:22:00.003+11:00

Theres some kind of 3-day rock concert / celebrity gala Washington event to celebrate the inauguration of "the one" - Obama.

Putting aside all the fanfare, there really are only 2 aspects to this story that interest me.

1/Just how little in terms of the structure of the Government of the United States of America will actually change. There really is very little breathing room between Republicans and Democrats. Both are regulatory-statists, social democrats and fans of Keynesian tax-and-spend strategies. They both know how to spend the country into deeper deficits with every year.

In order to pay $47m for extra security at the big party, the mayor of Washington actually needed Federal Gov't assistance. Soon-to-be-former President Bush was all too happy to oblige.

Get this.. he declared a national emergency to get the funding ! I'm not making this up. These kinds of powers are reserved for hurricanes, cyclones and earthquakes, but the president has no qualms invoking them on his last week in office to fund the mother of all parties in Washington.

2/ Will Obama flinch or shudder when he takes his presidential oath ?
For those who aren't familiar, all he has to do is swear to uphold the U.S constitution. Sounds simple, yet every president in modern history has desecrated this document which places a limit on the powers of governments. Each president has added more powers to government, the executive and the office of the presidency, thus removing certain individual liberties. Obama is no different, with his empty promises to tax-and-spend the country into prosperity.

Who suffers under this system ?

The taxpayer. He who works. He who spends. He who operates a business. He who earns and engages in free trade with others.
Future generations. Those who aren't even born yet will bear the burden of government debt.
Retirees and pensioners - they think that their pensions and entitlements are secure, but they are simply unfunded and they have no reason to expect to reason the full amount of their entitlements.
The sick. They think the medical system can provide for their health into the future when it really faces insolvency and a wave of unfunded liabilities.
Those who hold dollars and have savings. The bailout and stimulus guarantees inflation will arrive in the next 3 years, and wipe out their purchasing power.

Whats the end result of all this socialism and Obama's ideals ? As scary as it is, its nothing new. Socialism always produced the same results in the 20th century - people become more equal as they become equally impoverished.

Widespread unemployment, economic collapse, political instability, endless military conflicts and huge collapses in standards of living, schools, medical services, welfare and infrastructure.

These are my general predictions for the Obama presidency. Change your dog can roll in.

Prohibition is back

2009-01-16T12:36:00.003+11:00

Very disappointing news from Western Australia.

TOUGH new drinking restrictions are set to be introduced right across the north of Western Australia after a landmark decision by the state's director of liquor licensing to tackle Aboriginal lawlessness, alcohol abuse and social disfunction.

the bans will specifically target takeaway sales of beer in bottles known as "King Browns", two-litre wine casks and packaged full-strength beer.

Socialism killed tens of millions in the last century. It also destroyed massive amounts of wealth, and took away all kinds of freedoms and liberties. Prohibition was a failed social experiment where crime gangs and mafia power thrived, and it ultimately had to be done away with.

Here we are in 2009 and its back in fashion. Socialism is considered too tough for us, yet we try to administer it to our indigenous population to alleviate their hardship when what they need is a good dose of freedom and capitalism.

My submission to the Tax Review

2009-01-12T17:36:00.000+11:00

I have just submitted my 2 cents (or 10 priorities if you will) to the government's Tax Review. Feedback is welcome:

--------------------

I have suggested 10 points which will improve economic growth and stimulus, cut red tape, improve fairness, foster entrepreneurship and new businesses, improve the government’s fiscal position, remove moral hazards such as welfare dependency and overall make it easier for people to understand and comply with the current the tax and welfare system.

1) Abolish all stamp duty on car and property transfers.

Firstly, this is in line with the current government’s short term objectives of stimulating and supporting the housing and auto markets. Sales volumes, car and house prices will definitely be bolstered by this move.
But more importantly, there is no rational reason for government to actively intervene in these voluntary exchanges between 2 parties, and taking a percentage of wealth out of the hands of every transaction. These transactions are economically desirable, as whenever property changes ownership, both parties have profited from their exchange (otherwise they would never have entered it) Stamp duty acts as a huge disincentive for people to make these exchanges, it makes people hold on to their current assets for longer than they otherwise would have.
It means individuals and families alike are faced with a huge penalty for changing homes and moving as their lifestyles or workplaces change. It also means that people keep old vehicles, to themselves or within the family for longer than they should, which compromises safety and risks lives. Stamp duty does nothing to enhance economic efficiency, they are simply deadweight losses.

2) Automatically index all tax brackets to CPI every year.
Inflation acts as a pernicious tax on everybody’s savings. One small way to help people cope with the impact of inflation is to move the tax brackets upwards to reflect the reality that average incomes increase over time, as do average prices.

3) Abolish the top personal income tax brackets. Bring the top tax rate down to 30%.
This will create an enormous incentive on people’s willingess to provide more labor and earn greater incomes, and it will also substantially reduce the incentives for high-income earners to accrue a large number of deductable expenses which can be offset against their taxable income. All deductions that are purchased by high income earners are discounted by their marginal tax rate, so the current system provides a 46.5% discount for them to purchase cell phones, laptops, travel to seminars and conferences and any other items which can possibly be claimed as business-related expenses.

When people direct spending towards items that they otherwise would not have bought, only to receive the benefits of the deduction, a large amount of wealth is destroyed through malinvestment. The logical and simple solution should not be to ban or limit deductions, but to substantially lower the top tax rate. After all, there is no clear way for the tax office to assess which deductions were incurred with the intention of operating a business, or with the intention of reducing the assessable tax.

4) Changes to capital gains calculations for income tax purposes.
Under the current system, both income and capital gains are assessable for tax. The income as wages that is earned over a financial year must be reported and assessed at the end of the financial year, however capital gains on assets may have been accrued over much longer periods, but the entire gain is assessable in one sudden payment at the end of the financial year.

The current 50% discount rule, on capital gains on assets held for over 12 months, helps spread the gains over the period in which they were made. An even better approach would be to remove the 50% discount and replace it with a new discount whereby capital gains are divided by the number of years an asset is held, rounded up, i.e:

assets held for 13 months – divide gain by 2 (50% discount)
assets held for 26 months – divide gain by 3 (66% discount).

5) Increase the medicare levy. Abolish the 1% medicare surcharge for high income earners without private health cover. Abolish the 30% rebate for private health premiums.
The current levy is deceptively low and misleads the entire tax-paying population as to the true costs of providing government services. It sends out a false signal to the population that the public system can be operated for only 1.5% of our GDP. This does not at all provide decent transparency and accountability for government operations.
In order to show people exactly how expensive (and not ‘free’) our public health system is, adjust the medicare levy to whatever level it needs to be to actually cover the costs of operating the entire public system (somewhere over 10% of GDP) and increase tax free threshold to compensate income earners, so it is overall revenue neutral.

The medicare levy is a pointless and harmful economic intervention. It suggests an individual places a bigger burden on the public system simply because they don’t have private health cover. It subsidises the insurance sector and forces many individuals who take the effort to look after their health into purchasing more insurance than they otherwise would. It sends out a strong signal, not for people to actually look after their own health, but instead to over-insure to cover the costs of medical procedures. When people who maintain a healthy lifestyle are punished if they do not take insurance, it leads to a huge moral hazard.

6) Allow more flexibility with superannuation accounts.
The principle behind superannuation is to encourage (or force) people to save towards retirement. To motivate this, past and present governments have made superannuation a very lowly taxed investment. It has thus become exceptionally popular and has resulted in a massive boom in superannuation funds held by individuals across the entire population of workers.

The drawback is the inaccessibility of these very sizeable superannuation accounts until a person reaches retirement age. In certain circumstances, such as medical emergencies, financial hardship and debt stress, a particular individual might be in desperate need of such funds. Rather than place a burden on our already over-burdened welfare system, I propose to allow individuals to access their super funds to pay towards medical procedures and education costs for themselves or their families.

7) Reduce the size and scope of welfare payments.
Currently a third of the entire population receives Centrelink payments (6.52 million individuals, 9.98 million entitlements). http://www.centrelink.gov.au/internet/internet.nsf/about_us/facts.htm
Roughly half of government expenditure relates to the welfare system, and this has been alarmingly increasing at a rapid pace. Centrelink’s very purpose, is “Serving Australia by assisting people to become self-sufficient and supporting those in need”. Yet after decades of spiralling expenditures, it has not succeeded in reducing the number of people who are self-sufficient, but to the contrary, has failed by increasing the number of dependant Australian’s who rely on Centrelink payments for a large proportion of their income. This has succeeded in creating a massive dependency on the welfare system, and is perhaps the biggest moral hazard creating disastrous economic loseses which current and future generations of tax payers will have to bear.

8) Eliminating long term welfare dependancy.
Currently there is no counter-incentive for welfare recipients to actually become self-sufficient. One possible method is to introduce a HECS-like repayment scheme where a certain amount of current welfare payments will have to be repaid to the ATO at a future date. Even if we allow for Centrelink to act as an emergency support for people suffering shor term hardship, there should be a time limit after which a person can no longer rely on the tax payer to fund their lifestyle which involves the choice of not working.

Perhaps a reasonable time-frame is 3 months, after which certain welfare payments will be affected in one of the following ways.

some entitlements will end completely at the end of this period to force people to become self-sufficient.
some entitlements will accrue as part of a person’s debt, and must be eventually repaid when they earn income (similar to HECS).

One way to soften this approach or slowly phase it in would be to copy HECS and for government to contribute 2 or 3 dollars for every dollar of debt accrued.

9) Simplify the tax system and make it more transparent.
The ATO should publish the number of pages of tax-related legislation on its website. It should have the goal of reducing the number of pages of legislation so that many individuals, small business owners and aspriring entrepreneurs can manage their tax affairs without the need to hire tax professionals to comply with one of the most complex areas of legislation in existence. This will also save the ATO huge administrative costs, they currently are allocated huge numbers of public servants tasked with processing millions of tax returns, and they rely upon multiple electronic databases in order to scrutinise and verify information.
Many people with honest intentions can find themselves the target of a painful tax office investigation or audit. This intrusive system which asks individuals to give up much personal privacy and be forced to account for all kinds of private matters should be scaled back to a cleaner system.

10) Remove pay-as-you-go tax on salaries
We should begin by asking why most of our taxes were introduced in the first place. The income tax and pay as you go were introduced during WW2 to pay for our war efforts. PAYG was said to be a temporary tax at the time. It seems that many taxes no longer have a justification at all.

Seeing as Australians are saddled with huge government expenditures to pay for each year, we should at least remove the pay as you go approach where every employer is forced to be an agent of the tax office and an accountant who remits the estimated income tax from each pay-cheque towards the government, before an individual can even receive it. By abolishing the PAYG system, it will act as a huge stimulus, allow individuals to retire crippling debt and to direct spending towards urgent priorities like health or education costs. It will also cut red tape for many businesses, especially small businesses, who do not have the size or resources to hire accountants and HR personnel.

Welcome to '09.

2009-01-05T15:52:00.003+11:00

I hope all readers have enjoyed their holidays, and I wish everyone more liberty and wisdom in the coming year.

Here are some quick roundups of online happenings and news bits:

The Australian Department of Broadband, Communications and the Digital Economy (did you even know we had one of those little gems ? What happened to Rudd's promise to cut the number of public servants?) has an online blog.

One post on December 12th, titled "We Hear You" announces that comments are open for the public to provide their feedback (99% of which was fiercely negative)
One post on December 23rd, titled "Thanks and so long" announces that comments are closed.

That didn't last long :)

Fortunately, other websites are still open to feedback.

The treasury is accepting online submissions (till 1 May) regarding the Tax Review. You can also view other people's submissions. ( Many of these submissions, unfortunately, are the same chain-spam from environmental groups calling for new taxes on petrol). I'm tempted to submit a very short suggestion - abolish income tax, abolish capital gains tax, half the GST and sack the politicians.

And for my under-25 readers, don't forget that the Kennard Freedom Prize awarded to the best essay in defence of freedom, is still open (till 1st February), with the 1st prize being a ticket to FreedomFest in Las Vegas.

Wow, the ACCC responded to my inquiry.

2008-12-17T13:54:00.002+11:00

I am impressed, I received a prompt response to this inquiry I made last week. Of course, the RBA is granted impressive powers that private enterprise is not allowed. And they can not be prosecuted by the ACCC.

Predictably, there is a clause to cover them - Section 51 of the Trade Practices Act states:

(1) In deciding whether a person has contravened this Part, the following must be disregarded:
(a) anything specified in, and specifically authorised by:

(i) an Act (not including an Act relating to patents, trade marks, designs or copyrights); or

(ii) regulations made under such an Act;

The person on the phone from the ACCC also explained to me that they cannot prosecute the "private" member banks if their interest rates arise from anything relating to a government body like the RBA.

So it looks like our banking cartel is entrenched, with the power to inflate and debase our money supply, fix the price of interest, and to commit fraud through fractional reserve lending.

Mystery of Banking

2008-12-17T11:01:00.003+11:00

I finished reading Murray Rothbard's illustrative primer on our modern banking system last night. (available for free download from here) The final chapter deals with the era of the Federal Reserve, since 1913.

The book was only written in 1983, yet it is more relevant than ever. Here is a paragraph that really left me wondering about where we are today.

"The Fed tried frantically to inflate after the 1929 crash, including massive open market purchases and heavy loans to banks. These attempts succeeded in driving interest rates down, but they foundered on the rock of massive distrust of the banks. Furthermore, bank fears of runs as well as bankruptcies by their borrowers led them to pile up excess reserves in a manner not seen before or since the 1930s.”

Oh yeah ! We're witnessing it right now.

I wish Rothbard were around today to tell us what he thinks of this mess.

He would definitely be drawing parallels between the efforts of the Fed, Hoover and Roosevelt and today's efforts.

Hello tax-payer ? You've been robbed

2008-12-16T18:32:00.002+11:00

Hank Paulson told tax-payers they were getting a good deal when they bought these "illiquid" assets.

Taxpayers were forcibly robbed, to buy assets that were described as "illiquid" which turns out to be a euphemism for assets that have lost half their value and that Wall Street doesn't want to sell and realise the loss.

Paulson assured the media that the public might even make a profit on these assets. Where is his apology for this ?

American International Group Inc. ... sold residential mortgage-backed securities with a face value of $39.3 billion to a facility funded by the Federal Reserve.

AIG will receive about $19.8 billion for the assets ...

Victoria: Where selling stuff to customers can be a crime.

2008-12-16T15:43:00.002+11:00

This story is concerning, because a man's life has been destroyed by criminal charges and he did not engage in violence, theft, coercion or even make the threat of violence to anybody. All he did was provide goods in exchange for money.

A PHARMACIST caught selling more than 100 cold and flu tablets to undercover police has pleaded guilty to trafficking a drug of dependence.

Noble Park pharmacist Morimer Kham, 29, was arrested in August this year after he agreed to sell 112 boxes of pseudoephedrine type medications to an undercover agent between July and August this year.

The Melbourne Magistrates' Court heard for two months Mr Kham agreed to sell the officer multiple boxes of the drugs for a cash exchange at his father's Jacksons Road pharmacy.

Senior Constable Roz O'Grady told the court Mr Kham sold the agent enough pseudoephedrine to make 196 grams of pure methylamphetamine valued at $31, 500.

Police allege Mr Kham, of Flemington, is the first pharmacist in Victorian history to be charged with a trafficking offence.

Mr Kham pleaded guilty to trafficking a drug of dependence and was convicted and sentenced to a 12-month community based order.

He was also ordered to do 150 hours unpaid community work.

Defence lawyer Phillip Dunn QC said Mr Kham had resigned as a registered pharmacist and his life had "gone down the toilet" since his arrest.

He said the son of Cambodian migrants Mr Kham had worked for eight years to acheive his goal of becoming a pharmacist and his mistake had cost him his career.

Mr Dunn said at the time of offending Mr Kham was suffering depression and post-traumatic stress disorder as a result of two armed robberies at the pharmacy.

The war on (some) drugs is entirely misguided. What people do in the privacy of their own homes, bars, nightclubs or businesses now suddenly becomes the concern of police. People have always been capable of making all kinds of stupid decisions, like eating KFC every dinner, or drinking 5 bottles of wine, and you simply cannot expect nor demand police to intrude into everybody's lives and private property to prevent self-harm.

The imminent collapse of the US dollar

2008-12-15T12:25:00.002+11:00

Peter Schiff was right (look it up on Youtube). His timing was dreadful, but his message is spot on. The folks at The Daily Reckoning have clearly summed up the inescapable conclusion of this economic crisis. The theme of the Obama presidency, no matter how the media spin it or ignore it, will have to be one thing - DEBT.

According to the latest estimates, the U.S. Treasury is expected to borrow $1.5 trillion nest year - in addition to the existing debt it rolls over. This puts a huge supply of new debt on the market. Will there be new demand to meet it? Not likely. In fact, the demand is probably going to drop. One reason: the foreigners are borrowing too - hugely - for the same reason. They want to bail out their own economies. Another reason: Americans are spending less on foreign goods - putting less money in the foreigners' hands that they could lend back to us.

Of course, the feds are ready with a solution...and as usual, the fix will make things worse. Fearing a loss of private demand, the feds are already talking about selling Treasury debt directly to the Fed. But that brings us right to the other way Treasury values can go down - the dollar can lose value too. Not only are bonds themselves subject to the law of supply and demand, so is the currency in which they are calibrated. The more dollars; the less each one is worth.

Normally, it is a no-no for central banks to buy Treasury bonds directly. "Monetizing the debt" is what it is called. It inflates the money supply directly and immediately. So, while Fed buying of Treasuries would help support the market for treasuries, it would undermine the value of the dollar itself.

Thats it. Game over.

America cannot delay its day of reckoning for much longer. It is burdened by a mountain of debt, and its credibility and ability to repay that debt will not only be brought into question, but simply destroyed as they continue to pile up new debts to bail out collapsing industries.

The only way to service such a huge debt, running into the trillions, is to make it worth less - destroy your currency and print more dollars. The only other approach would be for the American government to immediately cut spending in half and use its tax revenues to pay down debt for the next decade.

Have you ever met a politician who would cut spending in half ? Obama and his administration are looking to double it, even in the worst of times.

The ACCC fines Qantas $20m. What about the RBA?

2008-12-11T16:01:00.003+11:00

For something called 'price fixing' and engaging in 'cartel like behaviour'. In plain English, it means for "setting their own prices the way they bloody well please and ought to be entitled to do in a free society".

The Federal Court of Australia has ordered national carrier Qantas Airways to pay $20 million in pecuniary penalties for breaching the price-fixing provisions of the Trade Practices Act.

The Australian Competition and Consumer Commission (ACCC) instituted proceedings in October 2008 alleging Qantas had reached an understanding with other international airlines in relation to the imposition of fuel surcharges on air cargo across its global networks between 2002 and early 2006.

The ACCC said Qantas admitted to making and giving effect to the understanding, repeatedly exchanging assurances among airlines in the implementation of fuel surcharge increases and reaching local agreements in certain Asian countries collectively.

...

ACCC chairman Graeme Samuel said today the penalty reflected the seriousness of the contraventions and Qantas' large share of the market.
''Cartels - particularly those that are engaged in by large businesses with broad application over a period of time - have a significant effect on consumers,'' Mr Samuel said.

Wow.. price fixing is a criminal act for businesses like Qantas. So I wrote the following letter to the ACCC on their complaints website.

I recently noticed that Qantas was fined $20m for price fixing and cartel behaviour. I would like to draw to your attention that The Reserve Bank of Australia is engaging in cartel-like behaviour with its member banks, setting the price of interest for the entire Australian banking system. By setting a cash rate target and engaging in open market operations whereby it purchases securities of varying durations, it is trying to fix and control interest rates. This is plainly admitted by the RBA on their website:

http://www.rba.gov.au/MonetaryPolicy/about_monetary_policy.html

Setting interest rates is the most substantial form of price fixing in Australia's history. Interest rates are also known as the cost of acquiring money itself, and the RBA should be heavily penalised. In fact, in recent months, the RBA has been trying to force interest rates in a downward direction, by injecting money and purchasing securities. By pushing rates below the market price, they are certainly engaging in the criminal act of predatory pricing.

There is no need to guess what the RBA's intent is, they openly admit it at their meetings and all statements made by the RBA governor. Seeing as the ACCC has a responsibility to prosecute these criminal acts, it will be interesting to see if they carry this out or if they set themselves a different set of rules for the private sector whilst government bureaucracies are free to do as they please.

I eagerly await your response.

Somehow I doubt the ACCC will take on the RBA. One illegitimate bureaucracy is not going to take on another.

By the way, this is not the only approach that can be used to attack the RBA. For example, there are incredibly harsh laws against counterfeiting. I could ring the police and notify them that the RBA is continually issuing new currency. Or that banks are engaging in fraud by issuing deposit receipts well beyond their actual reserves.

It falls upon politicians with a bit of brains and backbone to abolish our central bank and restore a free market in banking. None seem to be up to the challenge.

Australia: Where communication is a crime.

2008-12-08T15:15:00.003+11:00

It seems that the Labor Party hates free speech. In Victoria, they passed draconian anti-free speech laws otherwise known as the Racial and Religious Vilification Act. Then at a federal level, they want to censor all pornography and profanity and force every ISP to implement filtering.

And in Queensland, police raided the home of a 60 year old man who had re-uploaded video footage of a baby being shaken by a man, which ends with the baby laughing and seemingly unharmed.

Chris Illingworth, 60, a father of four from Maroochydore, thought he would share it with fellow users of Liveleak, a site similar to YouTube but focused on news and current events. In two years, he has uploaded hundreds of videos to Liveleak.

His home was raided on Sunday, November 30, by Queensland Police from Task Force Argos, which specialises in combating child pornography and child groomers.

He was charged with accessing, downloading and uploading child-abuse material with the intent to distribute and is scheduled to appear in court in Maroochydore on December 18.

It is understood that he had no involvement in the creation of the video, which cannot be published on this website for legal reasons.

The baby is laughing and smiling at the end of the clip, but the video has attracted criticism from child-welfare advocates because of how vigorously the man swings the baby by its arms.

In a phone interview, Illingworth described the clip as a "common interest story" and rejected any suggestions he was a child abuser or interested in such material.

He said that since being charged he could not eat, sleep or work and was worried his children and people in the local community would think he was a pedophile.

"I've had to go down to the hospital, my blood pressure is 160/108 and I'm on blood pressure pills and valium - all because of this," he said.

"Do they realise what pain they put someone through? I could fall over dead over this. I can't even get the office work done. I'm just a zombie."

Queensland Police refused to comment, saying it would be inappropriate as the matter was before the courts.

Illingworth said his life changed the moment two officers - a detective chief inspector and a detective chief constable - banged on his door and demanded they search his house.

"I went to turn on the laptop and they got stinking mad, as if I was trying to delete something I guess, and I was just trying to be helpful," he said.

The officers plugged a small black box into his computer and proceeded for an hour and a half to analyse the contents of his hard drive in a search for child pornography.

Thanks to laws like these, we are all soon-to-be-criminals now.

Do most people think about the nature of money ?

2008-12-05T11:19:00.005+11:00

Heres the reality; Every single modern nation defines money as debt, pyramided upon a base of central bank reserves, and implemented through a private banking cartel where a central bank and its member banks are free to engage in fractional reserve lending, usually with some required reserve ratio, leading to a never ending process of inflation (growth in the supply of money) as prices steadily (and sometimes not-so-steadily) grow year over year.

It seems like a rhetorical question to ask if people think about money. Only the most hardened communists and agrarians contemplate living, trading and working without the use of money.

But the question actually is - "do you think about the nature of money ?"

I'll be adding a poll for this question in the sidebar.

We all carry those coins and notes, and keep bank accounts. We all earn dollars and spend them. And this aspect of our behaviour seems a natural and free outcome, ever since man traded food for cattle, worked hard to build things, and thought of ways to get food and shelter.

It wouldn't take much effort or thought to say that we naturally view money (notes and coins and deposit receipts with banks) as a medium of exchange, a store of value and a unit of account.

We can swap them, we can "price" them, we can store them for the future, borrow them and repay them and every party involved in the trade knows exactly what they are getting in to.

A $50 note is a $50 note. All of them do the same thing, none of them rot away, everybody accepts notes to settle payments, and they are easy to carry around.

If you don't want to carry around all your wealth with you, for practical and security reasons, we approach banks to store and safeguard our money. But banks don't quite do that, at least not for the past 200 years.

Things are more complex, as plainly admitted by one of the left's favorite economists:

"The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it (Galbraith, 15). The process by which banks create money is so simple that the mind is repelled." (Galbraith, 29)"

Your newly deposited money at a bank does not get stored in a vault or set aside in your name.

Instead, it gets used a reserve for the creation of new money when another person applies to borrow money from that bank. This process is called fractional reserve, and its been around since the early 19th century thanks to the Bank of England.

Basically, when you deposit $5000 to a bank, they issue you with whats known as a deposit receipt, saying you can redeem on demand, the $5000. But the process doesn't stop there. Banks then use that $5000 base, to lend out a few more thousand, say $4000 or $4500 to somebody else, and they issue the borrower with deposit receipts for that amount.

And you've suddenly got a bank with more deposit receipts than actual reserves. There are more liabilities than assets, and if people only demanded redemption and payment of their liabilities (i.e went to a bank to withdraw their money), then the bank would declare bankruptcy.

This is the unavoidable reality in Australia, America, Europe, Asia .. anywhere you'd care to look. Every bank is vulnerable to a bank run and every bank cannot afford to pay out all of its liabilities.

If you care to quibble or think this is outrageous, ask yourself - why is it, that banks in the news are always reported as collapsing or failing when there is a "bank run" - i.e when a large number of customers queue up to get their money ???

Simple - because they don't have enough reserves to pay them out !

The reason banks play these games, and lend more than their actual reserves, is because after years of experience, they noticed that most people leave the vast majority of their wealth in the banks. Depositors are either "confident" or blissfully unaware of the risks involved.

The whole banking system and economy is based on confidence/ignorance these days. Firstly, people do not carry around a big portion of their wealth as notes/coins to carry around with them or lock up at home in a safe. Customers with savings leaving most of their money in the bank, and they've lived most of their lives comfortably and practically using electronic banking and demand deposits to pay their bills and transfer funds.

So here's the question - what do we do about it ? The system "works" after all, doesn't it ? Well for practical purposes, and as far as the eye can see, it has indeed worked so far. But you'll have to apply your mind a bit and go beyond what is visible. The argument that "if it aint broke don't fix it" must be done away with, because unseen aspects to the money and banking system are no less real or tangible than the plainly visible ones.

For example, if I ran a hidden printing press in my basement and printed myself millions of dollars, that would "work" too, and to most people's eyes, the system would still function. But it would be a gross form of theft for me to counterfeit money that wasn't earned through productive efforts of mine. If everybody did it, then there'd be a lot of money going around, which would dilute the value of every existing dollar, yet not a single ounce of extra wealth, goods and services is created (good old Scrooge Mcduck explains this in a fun youtube video).

Well today banks do just that. They conjur into existence, new demand deposits when a person applies for a loan. They put an entry into their accounts which is a new liability, yet they don't have a corresponding asset. This is how new money is created. The supply of money is a lot more than coins or notes, its also deposit receipts with banks. These days we use our bank deposits for the most part, to pay bills and transfer funds. So if you woke up tomorrow with an extra zero in your bank account balance, then its as if you'd counterfeited real notes and coins.

Counterfeiting money is plain theft - from everybody else who has money. You dilute the value of their holdings. Yet our entire banking system has been doing it for decades, acting as a cartel, expanding the deposit receipts and liabilities, a major part of the supply of money. Its no wonder
that we see prices rising. Goods and services are hardly more scarce than they were 20 years ago, after all, our economy grows and we become more productive and efficient at producing things. But there is so much more money chasing those goods and services.

The supply of money in Australia more than doubled between 1996 and 2006. And we saw shares and real estate prices follow.

Another issue to consider - if all these deposit receipts are created when new loans are made, what happens if everybody repaid their loans instead of just carrying them for decades and re-financing them ? ? The answer - huge amounts of money would be destroyed.

This leads to another phenomena, passionately investigated by the Austrian economists, known as the Austrian Business Cycle Theory. All this new money creation profits certain people at the expense of others, which leads to the cycle of booms and busts. And we've certainly seen our fair share of them in the last century, since the Federal Reserve bank was created in 1913. So perhaps this theory has some substance to it.

Read more here. Or print out a free copy of Murray Rothbard's "The Mystery of Banking".

The Age cartoonists are mentally ill

2008-12-01T10:48:00.005+11:00

(via Slattsnews) - yesterday's Sunday Age had this dreadful piece of garbage from Age cartoonist Matt Golding, who believes that the 2003 invasion of Iraq gave birth to Al-Qaeda and Jemmah Islamiyah.

I expect this cartoon would have been under their "Insight" section.

Those 1993 bombings of the World Trade Centre, and attacks throughout Africa and the Middle East by Al Qaeda were done in response to the 2003 invasion of Iraq.

Its as if all leftists, especially those working for Fairfax newspapers, believe terrorism didn't exist until the point in time where Western governments started responding to being attacked (basically 9/11 for most of us, but since the 1972 Munich Olympics for the Israelis).

And their line of reasoning goes as follows - if responding to the initial acts of terrorism causes further terrorism ( even the initial acts of terrorism were caused by the response !!), then we shouldn't respond to terrorism to end further terrorism.

Is your brain bleeding yet ? This is like Orwell's 1984 - war is peace, freedom is slavery. Keep repeating the doublespeak through your mind and you too may be enlightened enough to draw cartoons for The Age.

United States of Funny Money

2008-11-26T10:35:00.002+11:00

Zimbabwe here we come !! Right back where I started from:

Weimer style hyper-inflation is a heartbeat away !

Bailout pledges have reached a maximum limit of $7.7 trillion US !

No scratch that !!

The Fed just pledged another $800b in new schemes to bring the grand total to $8.5 trillion !

Where does all this money come from ?

a/ The printing press
b/ Taxes

See those greenbacks in your pockets and bank vaults that you worked so hard for ? Either Americans will be taxed directly (which could pay for a small part of this) or the easier option, is the Fed will run the printing presses and send the supply of money soaring, which makes every existing dollar lose its value.

This has precisely the same impact as a tax for dollar-holders, but with the added benefit of the public being mostly unaware of whats going on until its too late and prices start soaring.

The only guaranteed way to avoid the tax is to dump your dollars early and buy gold.

Un-Change

2008-11-24T15:24:00.003+11:00

President-elect Obama now promises the same kind of 'change' that Bush delivered after Clinton.

He promises to get rid of all that harmful 'Bush-era deregulation' that caused the crisis. The only problem with that idea is that Clinton actually delivered more deregulation in the 1990's, whilst Bush added strict accounting regulations for Wall St after the collapse of Enron.

For those clueless pundits (most of them working for the ABC and Fairfax) who still think Bush and Republicans somehow represent 'extreme market based capitalism', maybe they should google "Sarbanes Oxley" and see how the heck more regulation = deregulation.

These same clueless pundits mistakenly assume that the US somehow represents a free market and capitalism in all industries, like health, education, welfare and foreign policy. It would be equally wrong to assume China still represents pure communism.

Reason Magazine has a great piece titled "Obama's Clinton Problem"

When it comes to overall regulation, as my Competitive Enterprise Institute colleague Wayne Crews notes in his study "10,000 Commandments," the Bush administration has set records with the tens of thousands of pages it put in the Federal Register. So to the extent that Obama has said he would reverse financial deregulation, what he would largely be overturning are the financial modernizations Bill Clinton signed into law and that Clinton administration officials agree led to the ‘90s prosperity.

....

To the extent that Obama's campaign attacked the specific deregulation policies that McCain backed, Obama ended up doing more than just running against McCain and his advisers, such as the much-vilified former Texas Sen. Phil Gramm. Obama was also campaigning against Bill Clinton, Robert Rubin, Larry Summers and virtually all of the Clinton administration's economic officials. The same folks, it's worth nothing, that now often surround Barack Obama.

When governments build cars

2008-11-21T11:16:00.006+11:00

Watch out. The Soviets tried it. Crappy cars had to be rationed out to the citizens, whilst people in West Germany were enjoying new BMW and Mercedes cars.

As much as Lenin decried the materialism of Western capitalism, and as much as the elite intelligentsia always (and still do) tell people that the pursuit of happiness is not a noble goal, or that happiness can only be acheived if you follow their plans of one big totalitarian government ruling over all of us... people always fled towards free capitalist economies for the opportunities and prosperity.

Decades have passed and our brains have turned to mush. American car companies like GM, Ford and Chrysler are dying. The Congress approved a $700bil bailout package for the banks, and now senior Democrats Pelosi and Frank want the money to be used to bailout (i.e nationalize) the car industry.

The same thing just happened in Australia under Rudd. Taxpayer funds were thrown at failed enterprises so that these walking zombies can continue to roam the earth and employ workers in their existing role. With strings attached of course - car companies are going to need to build efficient or "environmentally friendly" (a.k.a inefficient to produce and inefficient to convert fuel to energy) cars.

Iowahawk has the best parody of this madness - the Pelosi Lemon

It's in the way you dress. The way you boogie down. The way you sign your unemployment check. You're a man who likes to do things your own way. And on those special odd-numbered Saturdays when driving is permitted, you want it in your car. It's that special feeling of a zero-emissions wind at your back and a road ahead meandering with possibilities. The kind of feeling you get behind the wheel of the Pelosi GTxi SS/Rt Sport Edition from Congressional Motors.
All new for 2012, the Pelosi GTxi SS/Rt Sport Edition is the mandatory American car so advanced it took $100 billion and an entire Congress to design it. We started with same reliable 7-way hybrid ethanol-biodeisel-electric-clean coal-wind-solar-pedal power plant behind the base model Pelosi, but packed it with extra oomph and the sassy styling pizazz that tells the world that 1974 Detroit is back again -- with a vengeance.
We've subsidized the features you want and taxed away the rest. With its advanced Al Gore-designed V-3 under the hood pumping out 22.5 thumping, carbon-neutral ponies of Detroit muscle, you'll never be late for the Disco or the Day Labor Shelter. Engage the pedal drive or strap on the optional jumbo mizzenmast, and the GTxi SS/Rt Sport Edition easily exceeds 2016 CAFE mileage standards. At an estimated 268 MPG, that's a savings of nearly $1800 per week in fuel cost over the 2011 Pelosi.

Even with increased performance we didn't skimp on safety. With 11-point passenger racing harnesses, 15-way airbags, and mandatory hockey helmet, you'll have the security knowing that you could survive a 45 MPH collision even if the GTxi SS/Rt were capable of that kind of illegal speed.
But the changes don't stop there. Sporty mag-style hubcaps and an all-new aggressive wedge shape designed by CM's Chief Stylist Ted Kennedy slices through the wind like an omnibus spending bill. It even features an airtight undercarriage to keep you and a passenger afloat up to 15 minutes -- even in the choppy waters of a Cap Cod inlet. Available a rainbow of color choices to match any wardrobe, from Harvest Avocado to French Mustard.
Inside, a luxurious all-velour interior designed by Barney Frank features thoughtful appointments like in-dash condom dispenser and detachable vibrating shift knob. A special high capacity hatchback holds up to 300 aluminum cans, meaning fewer trips to the redemption center. And the standard 3 speaker Fairness ActoPhonic FM low-band sound system means you'll never miss a segment of NPR again.
Best of all, the Pelosi GTxi SS/Rt is made right here in the U.S.A. by fully card-checked unionized workers and Detroit's famous visionary jet-set managers. Even if you don't own one, you can enjoy the patriotic satisfaction that you're supporting the high wages, good benefits, and generous political donations that are once again making the American car industry the envy of the world.
But why not buy one anyway? With an MSRP starting at only $629,999.99, it's affordable too. Don't forget to ask about dealer incentives, rebates, tax credits, and wealth redistribution plans for customers from dozens of qualifying special interest groups. Plus easy-pay financing programs from Fanny Mae.
So take the bus to your local CM dealer today and find out why the Pelosi GTxi SS/Rt Sport Edition is the only car endorsed by President Barack Obama. One test drive will convince you that you'd choose it over the import brands. Even if they were still legal

Where's my bailout, dude ?

2008-11-17T11:18:00.004+11:00

2008 is a year of bailouts.

First the banks, then the insurance companies, then the car-makers, even some childcare centres. And this is before the first year of the depression is over !

Here is a simplified illustration (hat tip: Liberty Papers) of the concept for your education:

Attention Australia :Don't install solar panels !

2008-11-07T16:14:00.002+11:00

Solar energy is, at least for now, nothing more than a feel-good alternative where you don't actually generate any decent amount of electricity after paying tens of thousands to install expensive equipment in your home.

Firstly, if you live in a city area, you cannot install solar energy as a stand alone option. It is banned, and besides, you would not have any electricity when it is dark (and barely any during the day).

Secondly, you need to install 6-16 expensive panels on your roof, and connect them to an inverter which feeds the solar energy into the grid. You never actually use the energy you create, you always buy and source your energy off the existing grid.

Thirdly, a recent report shows that manufacturing of solar panels creates global warming:

Atmospheric concentrations of nitrogen trifluoride — a gas used in the manufacture of liquid crystal flat-panel displays, thin-film photovoltaic cells and microcircuits — are at least four times higher than previously estimated, reports a new study published in the journal Geophysical Research Letters.

Fourth, the solar panels don't last forever. Here in Australia, they come with a 10 year warranty, but they aren't expected to last for more than 20-25 years.

And last but not least, the inverters they use actually consume power themselves, as revealed with wind energy (via Greenie Watch ):

The October edition of Which? Magazine [in the UK] reported on domestic wind turbines in an article entitled 'Wind turbine blows cold.' Which? installed one in a house and monitored it from December 2007 to June 2008. The result was that it used more electricity than it generated. This is because the turbine includes an "inverter" that converts the energy into electricity to go into the mains, and the inverter needs power which it draws whether the wind is turning the turbine or not. If the 'greens' want to 'save the planet' with domestic wind turbines, then they will have to make sure that they live somewhere very windy. Given the energy used and costs involved in manufacturing, installing, maintaining, plus eventual decommissioning - there may not be anywhere that is windy enough!

Central planning for failure, bad forecasts and bad decisions

2008-11-06T12:55:00.002+11:00

I keep laughing/crying at the irony of it all. The more that central planning fails, the more that the "planners continue to plan" (to paraphrase Reagan).

In a time where budget forecasts are proven to be wildly inaccurate, where the governments plans have to finally be revised, and where the public get to see how wrong they were, it seems that Kevin Rudd is boastful and proud. Only days ago, he promoted the idea of central planning on the radio.

To summarise the latest developments:

FUTURE tax cuts, major road and rail projects and the reform of federal-state relations are on the budget chopping block as the world financial crisis strips $40billion from Rudd government revenue.

Only pensioners will be spared in next year's budget, with the Government's commitment to raise payments to them threatening to push the budget into deficit.

Now if you take a look at past budget's, especially 2005-06 and 2007-08, you can see all kinds of reports that were eagerly reproduced in the media, predicting a steadily growing budget surplus. Those forecasts aren't worth the paper they're written on, yet Canberra plans to splurge $200b a year based on them.

And when the forecasts fail, governments never slash welfare or spending on arts, culture, sports, but instead they abandon the tax cuts and spending on areas which even I approve of, like roads and rail,

Treasury estimates that the surplus will drop from a budgeted $19.7 billion next year to just $3.6billion, and will fall to $2.6billion in 2010-11.

"If international conditions were to deteriorate further, then there could be more to come," Mr Swan said.

Reagan himself told Americans that they were forced to choose, between self-government and between a system where we elect a group of elites in a far-distant capital to make decisions for us. Central planning is a dirty word. It is the reason the Soviet states all collapsed after 30 years of experimenting with it (and it had nothing to do with a lack of elections or democracy).

Ask yourself, are you too stupid to decide for yourself ?

Change your dog can roll in

2008-11-05T16:39:00.002+11:00

Obama wins. I really don't care.

Since WW1, America has been growing its government.

You want more government, you're going to get more government.

See you at the polling booths in 4 more years where you vote for the next person to grow government.

The word democracy is about as substantial as mini-umbrellas in your cocktail. Democracy does not correspond with liberty.

If you want to study a great example of capitalism and free markets in the real world, you'll have to start reading the history books.

Fact of the day

2008-11-05T10:37:00.003+11:00

For people watching the economic collapse unfold who have a sudden interest in markets, exchange rates, economic indicators and historic trends, there has been a change in people's understandings.

We no longer accept the 'conventional wisdom' of the earlier part of this decade:

Property doesn't "always go up"
Shares don't "always go up over the long run" (i.e long run = 20 -30 year periods)
Governments can't fix, manage or guide an economy to produce economic growth and stability.

Here's some wisdom from the folks at Daily Reckoning, who continue to promote their "trade of the decade" otherwise known as: Buy Gold on the dips, Sell Stocks on the rallies.

In 1982, briefly, you could have bought every one of the stocks in the Dow index for a single ounce of gold. But by the time the stock market finished its epic rise, in January 2000, (while gold was doing an epic fall!) you would have needed 44 ounces of gold to buy the Dow. Now, that ratio has come down considerably. You only need about 13 ounces of gold to buy the Dow. And as stocks come down, the ratio is likely to fall below 5...and eventually back to 1 to 1 (at which time, remember, it will be time to sell gold and buy shares).

How to reduce your carbon footprint to zero

2008-11-03T14:54:00.004+11:00

Buy a gas powered car:

The businessman thought that he was saving money and the environment by switching to a car that ran on liquid petroleum gas, which is cheaper and less polluting than petrol or diesel.

And reduce your carbon footprint:

... his gas-powered car exploded when he lit up at the wheel. Peter Tidbury, 50, had a "miraculous" escape when his Peugot 607 blew up after he lit a cigarette.

A suspected leak in the vehicle's pipes led to an explosion that blew the windscreen 50ft down the road and forced the evacuation of nearby houses. The incident happened after Mr Tidbury, who works for an energy-saving company, stopped at a service station in Barnsley to fill up with gas. He said: "I was doing about 30mph and as I lit the cigarette there was an almighty explosion. The windows went out, the bonnet went up and the boot went up just as you see in the Hollywood movies."

Mr Tidbury, who was treated for flash burns at Barnsley District Hospital, is now looking for another car. It will be a diesel.

The big government mess in Victoria

2008-10-30T14:53:00.004+11:00

Today saw over 300 reports filed in State Parliament, which must be some kind of record. The opposition are describing it as a joke. The reports cover all kinds of issues, from ambulances, to police corruption, to water usage.

Let me start by gloating - this is what you get with big government. If you think government can manage, regulate and improve things better than the individuals could do it, just remember that governments have to make decisions for the entire population.

If you think government is generally sound and sober, is responsible and well informed, in its decision making, then just look at all the reports that are generated by the institutionalised departments and bureaucracies ! Ask yourself - how can any human analyse this information and make a decision for the entire 'public system' (i.e the whole population) ??

If you think elections determine what kind of government and policies you get, then you better check your premises. Look at all these things that are done by the state government, and ask yourself - were these all clearly presented as part of the election promises or are they now permanently built in to our system of growing bureaucracy, always adding new regulations but never getting rid of old regulations, more public servants and more departmental mess ?

Under free markets, all the individuals analyse the information to the best of their abilities and make a snap decision based on their preferences. This applies from what you eat for breakfast, to the house you live in and the car you drive, and the job you work in.

Under central planning (Kevin Rudd's favorite word), the government starts taking away your responsibility and freedom to make many decisions that it considers too important - like whether you use plastic bags for groceries, whether you should not install expensive solar cells on your roof, how the entire medical system has to run, how to run a grand prix once a year, what should be taught in schools etc etc.

Warning - this is going to be a long post, I'm going to list all of the "etc,etc" that the government decides and regulates for us - and this is just at the state level !! Enjoy:
---------------------

Accident Compensation Conciliation Service - Report, 2007-08.
Adult Community and Further Education Board - Report, 2007-08.
Adult Parole Board of Victoria - Report, 2007-08.
Alexandra District Ambulance Service - Minister's report of receipt of 2007-08 report.
Alexandra District Hospital - Report, 2007-08 (three papers).
Alpine Health - Report, 2007-08.
Altona Memorial Park Trustees - Report, 2007-08.
Ambulance Service Victoria - Metropolitan Region - Report, 2007-08.
Architects Registration Board - Minister's report of receipt of 2007-08 report.
Austin Health - Report, 2007-08.
Australian Grand Prix Corporation - Report, 2007-08.
Bairnsdale Regional Health Service - Report, 2007-08 (two papers).
Ballarat Health Services - Report, 2007-08.
Barwon Health - Report, 2007-08 (two papers).
Barwon Region Water Corporation - Report, 2007-08.
Bass Coast Regional Health - Report, 2007-08 (three papers).
Bayside Health - Report, 2007-08 (two papers).
Beaufort and Skipton Health Service - Report, 2007-08 (three papers).
Beechworth Health Service - Report, 2007-08 (two papers).
Benalla and District Memorial Hospital - Report, 2007-08 (two papers).
Bendigo Cemeteries Trust - Minister's report of receipt of 2007-08 report.
Bendigo Health Care Group - Report, 2007-08.
Boort District Hospital - Report, 2007-08 (two papers).
Casterton Memorial Hospital - Report, 2007-08 (two papers).
Central Gippsland Health Service - Report, 2007-08 (two papers).
Central Highlands Region Water Corporation - Report, 2007-08.
Cheltenham and Regional Cemeteries Trust - Report, 2007-08.
Child Safety Commissioner - Report, 2007-08.
Chinese Medicine Registration Board of Victoria - Minister's report of receipt of 2007-08 report.
City West Water Limited - Report, 2007-08.
Cobram District Hospital - Report, 2007-08 (two papers).
Cohuna District Hospital - Report, 2007-08 (two papers).
Colac Area Health - Report, 2007-08.
Coliban Region Water Corporation - Report, 2007-08 (two papers).
Commissioner for Law Enforcement Data Security - Report, 2007-08.
Community Visitors - Report, 2007-08.
Confiscation Act 1997 - Asset Confiscation Operations, Report to the Attorney-General, 2007-08.
Consumer Affairs - Report, 2007-08.
Corangamite Catchment Management Authority - Report, 2007-08.
Country Fire Authority - Report, 2007-08.
Dandenong Development Board - Minister's report of receipt of 2007-08 report.
Dental Health Services Victoria - Report, 2007-08.
Dental Practice Board of Victoria - Minister's report of receipt of 2007-08 report.
Disability Services Commissioner - Minister's report of receipt of 2007-08 report.
Djerriwah Health Services - Report, 2007-08 (two papers).
Dunmunkle Health Services - Report, 2007-08.
East Gippsland Region Water Corporation - Report, 2007-08.
East Grampians Health Service - Report, 2007-08.
East Wimmera Health Service - Report, 2007-08.
Eastern Health - Report, 2007-08.
Echuca Regional Health - Report, 2007-08 (two papers).
Edenhope and District Memorial Hospital - Report, 2007-08.
Education and Early Childhood Development Department - Report, 2007-08.
Emerald Tourist Railway Board - Report, 2007-08.
Emergency Services Superannuation Board - Report, 2007-08.
Emergency Services Telecommunications Authority - Report, 2007-08.
Environment Protection Authority - Report, 2007-08.
Essential Services Commission - Report, 2007-08.
Fawkner Crematorium and Memorial Park Trust - Report, 2007-08 (two papers).
Fed Square Pty Ltd - Report, 2007-08.
Geelong Cemeteries Trust - Minister's report of receipt of 2007-08 report.
Gippsland and Southern Rural Water Corporation - Report, 2007-08.
Gippsland Southern Health Service - Report, 2007-08 (two papers).
Goulburn Valley Health - Report, 2007-08.
Goulburn Valley Region Water Corporation - Report, 2007-08.
Goulburn-Murray Rural Water Corporation - Report, 2007-08.
Grampians Wimmera Mallee Water Corporation - Report, 2007-08.
Health Purchasing Victoria - Minister's report of receipt of 2007-08 report.
Health Services Commissioner - Report, 2007-08 (two papers).
Hepburn Health Service - Report, 2007-08.
Heritage Council - Minister's report of receipt of 2007-08 report.
Hesse Rural Health Service - Report, 2007-08.
Heywood Rural Health - Report, 2007-08.
Human Services Department - Report, 2007-08.
Infertility Treatment Authority - Minister's report of receipt of 2007-08 report.
Inglewood and Districts Health Service - Report, 2007-08 (two papers).
Innovation, Industry and Regional Development Department - Report, 2007-08.
Judicial College of Victoria - Report, 2007-08.
Justice Department - Report, 2007-08.
Keilor Cemetery Trust - Report, 2007-08.
Kerang District Health - Report, 2007-08 (two papers).
Kilmore and District Hospital - Report, 2007-08 (two papers).
Kooweerup Regional Health Service - Report, 2007-08 (two papers).
Kyabram and District Health Service - Report, 2007-08.
Kyneton District Health Service - Report, 2007-08 (two papers).
Latrobe Regional Hospital - Report, 2007-08.
Legal Practitioners Liability Committee - Report, 2007-08.
Legal Services Board - Report, 2007-08.
Legal Services Commissioner - Report, 2007-08.
Lorne Community Hospital - Report, 2007-08.
Lower Murray Urban and Rural Water Corporation - Report, 2007-08.
Maldon Hospital - Minister's report of receipt of 2007-08 report.
Mallee Catchment Management Authority - Report, 2007-08.
Mallee Track Health and Community Services - Report, 2007-08 (two papers).
Manangatang and District Hospital - Minister's report of receipt of 2007-08 report.
Mansfield District Hospital - Report, 2007-08.
Maryborough District Health Service - Report, 2007-08 (two papers).
McIvor Health and Community Services - Report, 2007-08 (two papers).
Medical Radiation Practitioners Board - Minister's report of receipt of 2007-08 report.
Melbourne and Olympic Parks Trust - Report, 2007-08.
Melbourne Convention and Exhibition Trust - Report, 2007-08.
Melbourne Health - Report, 2007-08.
Melbourne Water Corporation - Report, 2007-08.
Members of Parliament (Register of Interests) Act 1978 - Cumulative Summary of Returns, 30 September 2008.
Metropolitan Fire and Emergency Services Board - Report, 2007-08.
Metropolitan Waste Management Group - Report, 2007-08.
Mildura Cemetery Trust - Minister's report of receipt of 2007-08 report.
Moyne Health Services - Report, 2007-08 (two papers).
Mt Alexander Hospital - Report, 2007-08 (two papers).
Nathalia District Hospital - Report, 2007-08 (two papers).
Necropolis Springvale Trustees - Report, 2007-08.
North Central Catchment Management Authority - Report, 2007-08 (two papers).
North East Region Water Corporation - Report, 2007-08.
Northeast Health Wangaratta - Report, 2007-08.
Northern Health - Report, 2007-08 (two papers).
Numurkah District Health Service - Report, 2007-08.
Nurses Board of Victoria - Report, 2007-08.
Office of Police Integrity -
Report on the Armed Offenders Squad a case study.
Report under section 30L of the Surveillance Devices Act 1999, 2007-08.
Omeo District Health - Minister's report of receipt of 2007-08 report.
Orbost Regional Health - Report, 2007-08.
Optometrists Registration Board of Victoria - Minister's report of receipt of 2007-08 report.
Osteopaths Registration Board of Victoria - Minister's report of receipt of 2007-08 report
Otway Health and Community Services - Report, 2007-08 (two papers).
Parks Victoria - Report, 2007-08 (two papers).
Parliamentary Contributory Superannuation Fund - Report, 2007-08.
Peninsula Health - Report, 2007-08 (two papers).
Peter MacCallum Cancer Centre - Report, 2007-08.
Pharmacy Board of Victoria - Minister's report of receipt of 2007-08 report.
Physiotherapists Registration Board of Victoria - Minister's report of receipt of 2007-08 report.
Planning and Community Development Department - Report, 2007-08.
Podiatrists Registration Board of Victoria - Minister's report of receipt of 2007-08 report.
Police Appeals Board - Report, 2007-08.
Police - Office of the Chief Commissioner - Report, 2007-08.
Port of Melbourne Corporation - Report, 2007-08.
Port Phillip and Westernport Catchment Management Authority - Report, 2007-08.
Portland District Health - Report, 2007-08 (two papers).
Premier and Cabinet Department - Report, 2007-08.
Preston Cemetery Trust - Report, 2007-08.
Prince Henry's Institute of Medical Research - Report, 2007-08 (two papers).
Public Prosecutions Office - Report, 2007-08.
Public Transport Ticketing Body - Report, 2007-08.
Queen Elizabeth Centre - Report, 2007-08 (two papers).
Queen Victoria Women's Centre Trust - Report, 2007-08.
Radiation Advisory Committee - Report, 2007-08.
Regional Development Victoria - Report, 2007-08.
Roads Corporation (VicRoads) - Report, 2007-08.
Robinvale District Health Services - Report, 2007-08 (two papers).
Rochester and Elmore District Health Service - Report, 2007-08 (two papers).
Rolling Stock (VL-1) Pty Ltd - Report, 2007-08.
Rolling Stock (VL-2) Pty Ltd - Report, 2007-08.
Rolling Stock (VL-3) Pty Ltd - Report, 2007-08.
Rolling Stock Holdings (Victoria) Pty Ltd - Report, 2007-08.
Rolling Stock Holdings (Victoria-VL) Pty Ltd - Report, 2007-08.
Royal Botanic Gardens Board - Report, 2007-08.
Royal Children's Hospital - Report, 2007-08.
Royal Victorian Eye and Ear Hospital - Report, 2007-08 (two papers).
Royal Women's Hospital - Report, 2007-08.
Rural Ambulance Victoria - Report, 2007-08.
Rural Finance Corporation of Victoria - Report, 2007-08.
Rural Northwest Health - Report, 2007-08.
Seymour District Memorial Hospital - Report, 2007-08.
Shrine of Remembrance Trustees - Minister's report of receipt of 2007-08 report.
Small Business Commissioner's Office - Report, 2007-08.
South East Water Limited - Report, 2007-08.
South Gippsland Hospital - Report, 2007-08.
South Gippsland Region Water Corporation - Report, 2007-08.
South West Healthcare - Report, 2007-08.
Southern and Eastern Integrated Transport Authority - Report, 2007-08.
Southern Cross Station Authority - Report, 2007-08.
Southern Health - Report, 2007-08.
Special Investigations Monitor's Office - Report, 2007-08.
St Vincent's Health [incorporating the financial statements of Caritas Christi Hospice Limited, St. George's Health Service Limited and St. Vincent's Hospital (Melbourne) Limited] - Report, 2007-08 (four papers).
State Electricity Commission of Victoria - Report, 2007-08.
State Owned Enterprise for Irrigation Modernisation in Northern Victoria - Report, 2007-08.
State Services Authority - Report, 2007-08.
State Sport Centres Trust - Report 2007-08.
State Trustees Limited - Report, 2007-08.
Stawell Regional Health - Report, 2007-08.
Surveyors Registration Board of Victoria - Minister's report of receipt of 2007-08 report.
Sustainability and Environment Department - Report, 2007-08.
Swan Hill District Hospital - Report, 2007-08.
Tallangatta Health Service - Report, 2007-08 (two papers).
Templestowe Cemetery Trust - Minister's report of receipt of 2007-08 report.
Terang and Mortlake Health Service - Report, 2007-08.
Timboon and District Healthcare Service - Report, 2007-08 (two papers).
Tourism Victoria - Report, 2007-08.
Transport Accident Commission - Report, 2007-08.
Transport Department - Report, 2007-08.
Treasury and Finance Department - Report, 2007-08.
Treasury Corporation of Victoria - Report, 2007-08.
Tweddle Child and Family Health Service - Report, 2007-08 (two papers).
Upper Murray Health and Community Services - Report, 2007-08 (two papers).
V/Line Passenger Corporation - Report, 2007-08.
V/Line Passenger Pty Ltd - Report, 2007-08.
VicForests - Report, 2007-08.
Victoria Law Foundation - Report, 2007-08.
Victoria Legal Aid - Report, 2007-08.
Victoria State Emergency Service Authority - Report, 2007-08.
Victoria Trade and Investment Office Pty Ltd - Report, 2007-08.
Victorian Civil and Administrative Tribunal - Report, 2007-08.
Victorian Electoral Commission - Report, 2007-08.
Victorian Equal Opportunity and Human Rights Commission - Report, 2007-08.
Victorian Funds Management Corporation - Report, 2007-08.
Victorian Government Purchasing Board - Report, 2007-08.
Victorian Health Promotion Foundation - Report, 2007-08 (two papers).
Victorian Institute of Forensic Medicine - Report, 2007-08.
Victorian Institute of Forensic Mental Health - Report, 2007-08.
Victorian Institute of Sport Trust - Report, 2007-08 (two papers).
Victorian Institute of Teaching Council - Report, 2007-08.
Victorian Managed Insurance Authority - Report, 2007-08, together with 2007-08 Financial Statements for Housing Guarantee Claims Fund and Domestic Buildings (HIH) Indemnity Fund.
Victorian Rail Heritage operations Pty. Limited - Report, 2007-08.
Victorian Rail Track - Report, 2007-08.
Victorian Skills Commission - Report, 2007-08.
Victorian Veterans Council - Minister's report of receipt of 2007-08 report.

UPDATE (3/11): There seems to be confusion (from The Age writers) whether it is 300 or 200 reports that were released.

Letter to our meddling politicians

2008-10-29T10:57:00.003+11:00

The following letter was sent to the Dept of Primary Industries Victoria, Dept of Environment and Dept of Climate Change.

I would like to bring to your attention another piece of evidence that the solar rebate should be abandoned. The manufacturing of solar panels involves the use of the compound nitrogen trifluoride which is a greenhouse gas 17,000 times as potent as carbon dioxide. Thus the entire rationale for using solar energy is proven to be completely wrong and even counter-productive for those who want to reduce greenhouse gases.

The Australian government should certainly not be subsidising a product which contributes to global warming. I hope you consider this information and end all solar rebates.

It does not seem prudent, fair or just to use taxpayers money to fund a rebate for the few homes that install solar energy.

Ultimately it should be up to each individual to judge their own energy needs and balance them with their concerns for the environment. And as shown in this case, it is best that each individual is left to make their own judgement rather than allowing government to judge for the entire population, seeing as governments can make mistakes just like people.

-------------

Potent Greenhouse Gas More Prevalent
in Atmosphere than Previously Assumed

Compound used in manufacture of flat panel
televisions, computer displays, microcircuits, solar panels
is 17,000 times more potent greenhouse gas than carbon dioxide
....
....

Emissions of NF3 were thought to be so low that the gas was not considered to be a significant potential contributor to global warming. It was not covered by the Kyoto Protocol, the 1997 agreement to reduce greenhouse gas emissions signed by 182 countries.

The gas is 17,000 times more potent as a global warming agent than a similar mass of carbon dioxide. It survives in the atmosphere about five times longer than carbon dioxide.

Bail-outs are bad for you and me

2008-10-24T11:51:00.003+11:00

When politicians and central bankers of all stripes and nationalities rush to provide "liquidity", and "secure" or "stabilise" the economy, it is best that you don't take their word for it.

These rushed emergency measures always involve giving new powers to the central bank, transferring taxpayer wealth to financial markets, or transferring some of the risks from financial markets onto the taxpayer.

In March, Bear Sterns collapsed - due to their balance being sheets full of derivatives ($13.4 trillion!) and they had a leverage ratio of 35 to 1.

On March 14 2008, JPMorgan Chase, in conjunction with the Federal Reserve Bank of New York, provided a 28-day emergency loan to Bear Stearns in order to prevent the potential market crash that would result from Bear Stearns becoming insolvent.[23] Two days later, Bear Stearns signed a merger agreement with JP Morgan Chase in a stock swap worth $2 a share or less than 10 percent of Bear Stearns' market value.[24]

This sale price represented a staggering loss as its stock had once traded at $172 a share as late as January 2007, and $93 a share as late as February 2008. In addition, the Federal Reserve agreed to issue a non-recourse loan of $29 billion to JP Morgan Chase.

The Fed intervened to broker the acquisition by JP Morgan of Bear Stearns for $10 a share, and made a non-recourse loan to JP Morgan of $29b. This was secured by $29b of so called 'assets'.

Idiots like Christopher Cox from the SEC always suggest the deal is necessary and wise. The typical 'crony capitalists' (who are not capitalists in any sense of the word!) always support these bailouts, they put out the line that taxpayers might stand to profit from these deals because the assets should be worth more in the future! Hank Paulson and Bernanke themselves used this reasoning when putting forward their proposal for the recent $700b bailout package.

But they aren't serious, and there is no way they would put their own wealth behind their words.

Calculated Risk was very astute to observe that American tax payers just lost $2.5b this week as the Fed wrote down the value of Bear Sterns assets from $29.5b to $26.8b.

I will end this post with one last request.

Whenever you hear presidents, prime ministers and central bankers reassure you that providing guarantees, liquidity and bailouts are a good thing, just remember Henry Hazlitt's words about credit, from his book "Economics in One Lesson".

Government "encouragement" to business is sometimes as much to be feared as government hostility. This supposed encouragement often takes the form of a direct grant of government credit or a guarantee of government loans.

....
....
But there is a decisive difference between the loans supplied by private lenders and the loans supplied by a government agency. Each private lender risks his own funds. (A banker, it is true, risks the funds of others that have been entrusted to him; but if money is lost he must either make good out of his own funds or be forced out of business.) When people risk their own funds they are usually careful in their investigations to determine the adequacy of the assets pledged and the business acumen and honesty of the borrower.

If the government operated by the same strict standards, there would be no good argument for its entering the field at all. Why do precisely what private agencies already do? But the government almost invariably operates by different standards.
The whole argument for its entering the lending business, in fact, is that it will make loans to people who could not get them from private lenders. This is only another way of saying that the government lenders will take risks with other people’s money (the taxpayers’) that private lenders will not take with their own money. Sometimes, in fact, apologists will freely acknowledge that the percentage of losses will be higher on these government loans than on private loans. But they contend that this will be more than offset by the added production brought into existence by the borrowers who pay back, and even by most of the borrowers who do not pay back.

Socialist America

2008-10-23T14:38:00.002+11:00

We already know America has socialised banking, socialised education, socialised disaster relief and emergency response, and of course, the very expensive socialised foreign policy and warfare.

Don't forget that America is a textbook example of socialised medicine. The government spends 14% of GDP on healthcare. Yet Australian socialists seem to point out that all the obvious failures of the American health system are evidently because it is a 'user-pays' system.

Forget any efforts to analyse the policy regime in the U.S.....If America was really a user pays free market, then how can this happen ?

In the US, we don't have prices, and so don't have a market.

The following is a transcript of conversations I very recently had with some U.S. health care providers, written down during or immediately after each conversation:

Conversation with Stanford Hospital:

Me
My wife needs a colonoscopy: Could you give me a price on it?

Stanford Hospital: (businesslike tone)
Twenty five hundred to thirty five hundred.

Me
You do this all the time. Can't you give me a specific price?

Stanford Hospital: (cooler tone)
Sorry

Me
Is $3500 the all up, all included price to both myself and my insurance?

(Previous research shows that mystery surprise additional charges are usually around a thousand dollars)

Stanford Hospital: (businesslike tone)
It only includes the doctors fee, and does not include any additional services

Me
So after I have this done, any number of people could then charge me any fee they like in addition to the thirty five hundred?

Stanford Hospital: (distinctly chilly tone)
I am afraid so.

O'Connor Hospital

Me
My wife needs a colonoscopy: Could you give me a price on it.

O'Connor Hospital
Do you have a primary physician.

Me
Yes, my primary physician has advised this procedure, but it seems expensive. I am looking for a price.

O'Connor Hospital (indignantly)
We don't give out prices.

Mercy General Hospital

Me
I am looking for a price on a colonoscopy.

Mercy General Hospital hangs up without a word.

Saint Joseph's medical center of Stockton:

I am transferred to financial counselling, who
transferred me to "Estimates" The estimating lady
appreciated my problem and made sympathetic noises.

She then asks me for a CPT code. I then research what CPT codes are, and discover that a colonoscopy can result in any CPT, and any number of CPTs. I discover that no matter what CPT I give, it is unlikely to be correct or sufficient, that additional CPTs can show up any time. A CPT would only be useful if it was possible to know in advance what CPTs would result from a colonoscopy, but the CPTs are only decided after the colonoscopy, usually long after the colonoscopy.

A better example of a free market in health is Singapore, which only spends 1.3% of GDP

Alcohol is a drug

2008-10-21T14:05:00.003+11:00

Yes, from a public policy viewpoint, the effects of alcohol on society are pretty similar to some banned narcotics.

Obviously some substances are more harmful than others, and quantities/doses are a huge factor as well, as is so often mentioned with alcohol.

Some moralisers and public do-gooders are unsatisfied with heavy taxes on alcohol, and suggest we treat alcohol the same as banned narcotics.

They're half right. Sure they both should be treated in a similar manner, but that doesn't mean they both should be prohibited. We all know about America's short-lived disastrous experiment with prohibition in the 1920's, but in case some people need a reminder, take a look at Russia's wonferful experience:

Gorbachev's original theory was that the socialist system was in good working order, but the people, the cogs in the communist machine, had taken to laziness, drunkenness, and were accumulating "dishonest income" in violation of socialist ethics. His first reform was to call for "a restructuring of people's thinking."

The anti-alcohol campaign began right away. Party bosses sternly announced that they didn't want any "drunks" in their country. Their enforcers began a concerted effort to discover anyone with the smell of alcohol on their breath and haul them into the police station. When the police stations became overcrowded, it became routine practice to drive thousands of people about fifteen miles out of town and drop them in the cold and dark. Nearly every night, you could see armies of so-called drunks walking miles back to town in the middle of winter.

Over 90 percent of liquor stores were closed. The Party bosses did not anticipate what happened next: sugar, flour, aftershave, and window cleaner immediately disappeared from the shelves. Using these products, the production of moonshine increased by about 300 percent in one year.

The nanny-statists have to acknowledge the reality - that people ultimately are going to need to employ their judgment, as to which substances and which quantities are safe to use.

Even with a tax on alcohol, and barbaric laws against drugs, people use and abuse them.

Police have better things to do with their time.

Prisons are expensive to fill.

Legalizing drugs and removing taxes from alcohol does not actively encourage a single person's decision making process. It won't encourage increased drug abuse or alcoholism.

So its time to end the war on drugs and the war on booze.

'Public health' is an oxymoron

2008-10-21T12:43:00.002+11:00

The Liberty Papers has an excellent and thorough post highlighting all the problems with using the state to provide health to the public, instead of the free market.

The only valid criticism of the free market approach is that those who cannot afford health services ( without enough assistance from families or private charities) will not have access to them.

The valid criticisms of public health seem to outweigh the problems with private health.

We can see that far from being heartless, the supporter of free markets is really attempting to make medical care cheaper and more widely available, and that the advocate of government involvement is inevitably arguing for a system that is inefficient, not innovative and that in the long term will do a poor job of extending quality care to the poor who cannot afford it today. While in the short term, the state can commandeer impressive resources and make massive strides towards acheiving some goal, in the long term such actions can be very detrimental.

Go and read the full article.

Our public servants and world leaders are lying fools

2008-10-15T14:46:00.005+11:00

Rudd:

Prime Minister Kevin Rudd today blamed "extreme capitalism" for the global crisis and said the seed for the economic meltdown was sewn in the United States' reaction to the bursting of the dotcom bubble at the beginning of the decade.

Rudd is officially the most arrogant misguided socialist around, except for Chavez and Castro.

Governments look for any excuse to grant themselves new powers in a crisis, that they themselves caused. How did capitalism (i.e freedom) cause this crisis ? Since when does capitalism consist of:

a central bank setting the price of money for the entire economy?
a banking system based on fractional reserve lending ?
a compulsory medium of exchange for the entire economy?
massive financial and accounting regulations which change with the whim of each government ?
government endorsement or outright compulsion to invest in share markets for retirement purposes (401ks, superannuation) ?
American GSEs to sponsor home-ownership ?
The US gov't passing the CRA to pressure banks to take on risky loans.
Australian state governments, and the UK gov't, heavily restricting the use of land for new property development thus massively increasing demand and prices for existing homes ?
Generous welfare programs throughout the entire western world to attract millions of new migrants further placing pressure on the existing supply of housing ?
Australian grants and subsidies to first home buyers ?

Get government out of society, let it enforce contracts and uphold rights, and let people solve their problems.

As John Galt said in Atlas Shrugged - "Get out of my way !"

Sometimes Labor is more liberal than Liberal

2008-10-14T16:40:00.003+11:00

I hate the Labor party manifesto, and its general attitude towards seeking out "a balance" and compromising between thieves who want to steal your money to help the poor, and thieves who want to steal your money to help families, and thieves who went to steal your money to help Gaia.

But I'll always give credit where it's due. Hawke-Keating made some great achievements, by cutting income tax and deregulating our economy for the better. Howard wasted a decade fiddling around.

The new NSW Labor Premier Nathan Rees has seen the looming bankrupcty of their state, as predicted by the brilliant ex-treasurer Michael Costa in recent months, and has decided to stop the rot and cut off the looters from the public purse:

A FIFTH of NSW public service fat cats face the axe as NSW Premier Nathan Rees struggles to drag the state budget back into the black.
Mr Rees told a budget estimates committee hearing this afternoon the Government will slash 117 senior executive positions in the state's public sector, saving $120 million over four years.

...

Last month, Mr Rees announced $1.9 billion worth of payroll tax cuts, promised in the June state budget, would survive the mini-budget process, despite a projected $1 billion turnaround in NSW finances courtesy of the sluggish property market.

The public sector job cuts announced today amount to 20 per cent of NSW government senior executive positions.

Good.

Quote of the Day

2008-10-08T14:15:00.000+11:00

From economist Arnold Kling:

"Instead of thinking of the pending bailouts and financial regulation as a new era of government supervisions of markets, think of it as preserving the system in which a Harvard elite controls other people's money. In fact, very little is likely to change. Reading the news stories about how Secretary Paulson plans to implement the bailout, it seems as though the same people will be in charge of the money. Print some new business cards, change the logo on the front from "Goldman Sachs" to "U.S. Treasury," and everything else continues as it was. It's just that it becomes a lot more difficult for ordinary people to opt out of using the elite's money management services."

The Wisdom of Reason Magazine

2008-10-07T13:52:00.001+11:00

From Ron Bailey, editor of Reason Magazine:

Europe Under-Regulated Too?

As European stock markets tank, the Irish government guarantees bank deposits, the Benelux countries nationalize Fortis bank, Germany bails out Hypo Real Estate Holdings, and Denmark also guarantees bank deposits and dismally so forth, the question arises: Who knew that Europe, of all places, was so under-regulated?

Or maybe de-regulation is not the chief cause for the outbreak of financial chaos? Just wondering.

Our Prime Minister hates liberty

2008-10-06T10:31:00.003+11:00

The sad reality has dawned on me. Kevin Rudd is much worse than John Howard.

During his 10 year as Prime Minister, Howard actually made very little moves to enhance freedom, deregulate and lower taxes, and he was actually responsible for establishing new bureaucracies, new welfare payments and doubling the number of public servants.

Perhaps he deserved to be thrown out after so long because he was just playing with the existing system and not cutting taxes or deregulating seriously. I could safely suggest it was because of our alarmist and hysterical media and opposition who predicted an apocolypse at any move towards freedom and deregulation. Howard faced the fiercest opposition for some small moves like privatising Telstra and trying to de-regulate (re-regulate) industrial relations slightly with WorkChoices.

But at least he never went about expanding the regulatory powers of ACCC, introducing FuelWatch, FoodWatch and other price controls, introducing new environmental regulations and carbon taxes. And despite not getting rid of the income tax, he would at least make big budget day announcements about reducing it gradually.

Howard always spoke favorably of all moves towards free trade, deregulation, lower taxes.

Rudd has never done such a thing. He has grudgingly endorsed cutting the number of public servants and deregulation, but in effect, he hasn't outlined one single way he will acheive this.

Today, he has revealed his socialist stripes in full activist mode, and blasted capitalism as a "greed is good" ideology. This is one of the most offensive speeches to come from a world leader, and is worthy of a thug-in-chief like Castro or Chavez:

------------------------------------------------------

We’ve seen the triumph of greed over integrity; the triumph of speculation over value creation; the triumph of the short term over long-term sustainable growth,” Mr Rudd said.

“It is perhaps time now to admit that we did not learn thefull lessons of the greed-is-good ideology. And today we are still cleaning up the mess of the21st-century children of Gordon Gekko.”

Mr Rudd said such ideologues always argued that the market knew best except when there was a crash and then “the self-same ideologues argue, having privatised their profits, we should socialise their losses - and, by the way, having demanded lower and lower taxes all the way through”. [ !?!? just exactly which part of capitalism requests that private losses are socialised by the tax payer ?!?!]

“This culture was never challenged by a political and economic ideology of extreme capitalism,” he said. “And this crisis bears the fingerprints of the extreme free market ideologues who influence much of the neo-liberal economic elite. [ And of course government hasn't left its fingerprints on this mess and has made no mistakes at all ?!?!]

“Free market ideologues who have a naive belief that unrestrained markets are always self-correcting and that markets left to themselves will always achieve optimum outcomes.” [ Since when is the U.S Housing market, and the banking system unrestrained and regulated l ?!?!]

Just how socialist is America ?

2008-10-03T11:57:00.002+10:00

I'm not sure what the "Freedom Index" is based on, but where else in the world does the government grant itself the power to run financial markets ?

And this is despite the restraints clearly spelt out by their constitution, which forbids government from doing just about everything it gets away with today.

This bail out will be the nail in the coffin for American liberty. You could call it the New New Deal, a profound change in the nature of American markets, a severe blow to the principles of free markets, the emergence of widespread moral hazards, corruption and conflicts of interest in Washington.

Reason Magazine has a devastating summary of what shall come to pass once the bail out has been approved, and the sheer recklessness of the current crop of American politicians who are backing it, including both Obama and McCain. This first paragraph alone will have you reeling in shock:

The Senate is overly fond of referring to itself as the “world’s greatest deliberative body.” Barely 48 hours after the House rejected the Treasury’s bailout plan, the august body took a previously passed House bill mandating that insurance companies cover mental health benefits, added in the core $700 billion bailout, laced in money for rural school districts and disaster relief, expanded FDIC deposit insurance coverage, and topped it off with over $150 billion in old and new tax breaks for businesses, individuals in high-income states, individuals living in states without an income tax, and various interests such as wooden-arrow makers and film production crews. GOP Leader Mitch McConnell, almost choking back tears after the Chamber passed the 451-page monster, said it was the Senate “at its finest.”

The Age of Pericles this ain’t.

Now I'm usually the last person to claim conspiracy and corruption behind unwise or unpopular government actions, especially in Western democracies. I would have typically suggested incompetence, inability and a misunderstanding of economics is behind the abysmal state of public education and health.

But the banking and finance industry has no right to call itself a free market. It is a cartel, operating through lobbying efforts, political favors and by institutionalising their interests and profitability in government (see The Fed, the Community Reinvestment Act, the FDIC, the SEC, the NRSRO).

We are definitely approaching "peak insanity":

Let’s remember, this is one of those rare cases where the “victims,” the bankers and investment bankers, are the very people who made the mistakes. It is possible that, absent government intervention, we can get through this upheaval with no one else actually getting hurt. This isn’t like the former Enron employees who lost their life savings through no fault of their own. This is financial institutions failing because of the very specific mistakes they made.
....
Remember, wrongdoing at Enron wasn't uncovered by regulators. It was uncovered by the market, as analysts realized that much of the company’s story was fiction. Markets with free flows of information are the best guard against meltdowns. The slightly less free market we are entering will make them more common.

Also, while I have no real reason to question Hank Paulson’s motives in his rampant cheerleading for a bank bailout, I would feel a whole lot better if he weren’t sitting on a few hundred thousand options to buy shares in Goldman Sachs.

Blog List added in sidebar

2008-10-01T16:06:00.000+10:00

I will build the list up when I have time later.
Enjoy !

Yeah, what he said !

2008-10-01T15:59:00.002+10:00

I try to keep a cool head and clean language when writing. But Tex at WhackingDay deserves recognition for his excellent summary of the hyped-up presidential elections:

--------------------------------------
My message to the world: shut up and get a fucking grip will you?

In the worst presidential choice Americans have faced since Nixon diced with McGovern, Sarah Palin gets picked as McCain's veep candidate, causing complete and utter derangement in leftists the world over.

Meanwhile, conservatives are hyperventilating themselves to death over Obama supposedly going to turn America into the USSR.

For fucks sake you tools: calm down . Does anybody with an ounce of common sense think McCain is remotely capable of being an effective president? Do any of you Obama-The-Messiah crowd actually have any idea on how this "change" bullshit will manifest itself?

Here's the horrible truth people, and there's no way out of it:

Both of these morons will fuck the USA royally in their upcoming term.

Either way, we're going to get an economically incompetent clown who will do nothing to reverse Dubya's appalling financial direction, and someone who will fight the war against terror in a completey half-arsed manner which will achieve little except costing the USA a lot more money and soldiers' lives.

But hey, let's not worry about this stuff eh? It's clearly much more important to talk about Obama's stage props at the convention, or who Trig Palin's real mother is, or if Obama is "really a Muslim", or all those non-existent books Palin didn't ban, or some 5-second soundbite of some candidate saying something stupid. You partisan types can wank yourselves to death over believing this choice in November actually matters.

So, blogosphere and media, unless you have something substantial to say about how the candidates actually differ, in actual real policy and results terms, then SHUT THE FUCK UP you fucking tedious useless arsecunting wankers.

I'm sick and fucking tired of listening to your idiot, insubstantial, blithering, childish partisan crap about nothing. There are real issues at play in an American presidential election, so why do all you fucking fools concentrate on the goddamned circus as if it actually matters?

Bailout was defeated by Congress ! Suck on that Rudd !

2008-09-30T12:59:00.002+10:00

Victory for free markets today, as the proposed $700b Wall St bailout was voted against by Congress.

This is despite many meddling world leaders, eager to look concerned and discuss government actions and put forward new interventions and proposals at each concerning development, put forward supportive statements suggesting the bailout is vital to stability.

One typical example is our dud PM, Kevin Rudd, who was disappointed by the fact that American tax payers were not robbed of a further $700b USD. An online video just showed him looking "deeply concerned and distressed", so my mood is further improved at seeing this thieving bureaucrat have his hands slapped as government was blocked from picking yet another pocket.

Stock markets have obviously been hammered, but this is going to speed up the recovery instead of prolonging it. Bad investments were made over the past decade, we must live with it and liquidate them before moving on. This means pain in one way or another. Government cannot, and should not even think about, waving its magic wand to "stimulate or stabilise financial markets".

Its a shame so many people were caught unaware by this collapse, people who had their life savings and superannuation in shares (down nearly 40% in the last 12 months) or property (only starting to come down now). But we live in a financial system where the central bank is a monopoly, and sets the rule of the game.

And here is the problem with the system:

They tell us we can only use Australian dollars as a medium of exchange, to settle payments and debts, to save money, to bank, to earn, to trade with.

Central banking, via fractional reserve, accomodates the banking cartel to expand credit at a sharp pace, and the supply of money continues to double every decade. This is concealed sneaklily by government engineered statistics relating to CPI and GDP, to reassure us that the economy is healthy when a terrible storm is brewing.

And it should be no surprise that as the storm strikes, it is central banks and the US government who make the biggest noise and try to rush through legislation to give them new expanded powers. I guess its a way of distracting attention from the serious issues that should be discussed, and the media are all too happy to dance to their tune.

The New New Deal, socialism wins in America

2008-09-29T10:13:00.003+10:00

The US government is doing the unimaginable and going ahead with a $700b+ bail-out package of troubled Wall St giants. The cost will actually go into the trillions, as the $700b limit is on the rolling size of the fund, which can be used to purchase up to $700b of mortgage related, "illiquid" (i.e garbage) assets at a time, and then sell them off on the market.

Basically, the U.S taxpayer has to open their pockets and fund the loss on these crappy assets that sit on the balance sheets of a whole lot of banks who made the stupid decisions in the first place.

This is the biggest nationalisation in American history and is an affront to freedom, capitalism and the constitution (where does it mention Congress having the power to buy mortgage related assets)

How did this come to pass ? There was a massive public uproar over this proposal and it looked like a few brave congressman and senators would resist this unprecedented expansion of government. But of course, the Dems could easily be bought by inserting their populist agenda into the details of the bail-out package. Just staple on some limits on CEO salaries, a moratorium on foreclosures and other sweeteners for home owners and presto, it looks like a "balance was struck".

The idiotic media commentary has been enthusiastic for this scheme, and as usual, very myopic and focussed only on the hear and now. Here are some problems, and predictions I have about this disaster, that the media should take heed of.

This is not going to end the credit crunch. This is going to cause it to spread, so that even the credit rating of the US government will be brought into question. Sovereign US debt has never been backed up by any tangible assets like gold bars, its always been resting upon "the full faith and credit of the US government". And there is no way that such an empty guarantee will maintain a AAA credit rating in the coming years.
This will boost the sharemarket - for the coming week. Volatility will remain, many more companies will collapse. The bear market is far from over.
This will absolutely destroy the US dollar. Where is the US government getting the trillions of dollars to fund this scheme when they are already running a massive deficit ? Creditors will soon question the ability of the US government to repay its obligations and dump their holdings of US dollars.
This will be very inflationary, as the Fed and Treasury will try to expand the supply of money and credit, and the price of all real assets, in terms of $US, will shoot up. Watch gold in particular. Oil may suffer downwards effects of an impending global economic slowdown, but gold will only go up in inflationary environments.
This will NOT be the last bail out, this will NOT bring stability to financial markets.
The US government will be unable to pay for its massive budgets, and will need to slash expenditure. Abolishing social security and medicare are the only viable options, as well as cutting back on their military expenses, which include operating bases in 130 different countries.

The parallels with this story and with Atlas Shrugged are too strong to ignore. Socialism is here and the U.S.S.A will collapse as a super power if they do not end the statism in Washington and return to their tradition as a free, capitalist society.

No new road regulations ! A letter to VicRoads !

2008-09-25T11:36:00.005+10:00

VicRoads is the Victorian government authority in charge of roads, road laws, speed limits, regulations and traffic signal timing. There has been a huge protest over the State Government's proposal to extend clearways in commercial areas to 6am-10am, and 3pm-7pm.

Angry traders and residents took to the streets at Bridge Rd in Richmond, High St in Armadale, Toorak Rd in South Yarra, High St in Prahran East and St George’s Rd in North Fitzroy around 9am.

The latest protests come as the Herald Sun revealed VicRoads received 783 submissions about their plan to extend clearways. Only 20 or 2.6 per cent, declared support for the State Government's proposal.

I encourage all readers to leave VicRoads a complaint on their feedback form.

Let them know that the roads are already over-regulated, that we need less restrictions, less parking and speed regulations, and certainly congesting the road with more mobile barriers (a.k.a trams) is not going to alleviate congestion.

VicRoads use false reasoning to suggest that extending clearways will benefit half the galaxy:

Clearway changes will benefit over 300,000 tram and bus passengers and over 250,000 private vehicle road users in Melbourne every day – this is not reflected in the submissions received.

Thats it.. thats the only reason provided for the clearways which has angered so many local businesses and traders. Here is my letter to VicRoads.

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I am writing to express my strong opposition to the proposed extension of clearways. The reasons given for the extension of clearways are very superficial, they are based on assumptions that do not hold up to scrutiny and they do not present a strong case for the new regulations.

On your website, the only defence of the clearway extension was as follows:

http://www.vicroads.vic.gov.au/Home/RoadsAndProjects/RoadAndTrafficManagmement/KeepingMelbourneMovingClearwaysUpdate.htm

"Most submissions were critical of the decision to change clearway times, but it is important to note that the ‘silent majority’, who may be pleased with, or indifferent to, a particular issue, may not be motivated to respond to a call for submissions. Clearway changes will benefit over 300,000 tram and bus passengers and over 250,000 private vehicle road users in Melbourne every day – this is not reflected in the submissions received."

Firstly, those figures and the benefit they convey are grossly overstated. Will every single motorist and public transport user, regardless of what time of day they use the roads, benefit ?

And what is the value of the benefit ? Is the reduction in travel time significant ? Is it negligible due to other bottlenecks in the road system ?

Secondly, it is downright dishonest to assume and declare that the silent majority are most likely supporters of whatever legislation is being implemented.

There is not one public statements where VicRoads has even acknowledged the costs of this new legislation.

Obviously there is the loss of revenue to traders and businesses. There is also the cost of new signage, additional parking enforcement and probably some advertising costs in some "public awareness campaign" to explain the changes.

Then there is the cost to motorists who are looking for parking during these extended times, as well as the threat of being penalised with huge fines at specific times of the day, even if they make an informed judgement that there is very little traffic flow and that parking would be a good use of the public land. The hardship and burden placed on many motorists alone would outweigh the small benefits in travel times.

As it stands, our roads are already over-regulated.

Another aspect that shows that the legislation will not accomplish its so-called intention is the focus on supporting trams and increasing the number of trams in service as a method of reducing congestion. Common sense dictates that trams cause massive congestion, perhaps more than any other vehicle. Trams effectively occupy 2 lanes of traffic, especially when they stop or when they turn corners. They never travel at a speed that matches the flow of traffic, and they seem all too keen to observe the timetable regulations and arrive at a specific time, even if it means travelling at half the speed limit when no traffic is in front of a tram.

The amount of congestion that can be seen behind a tram is astonishing, and I cannot see how more of these mobile barriers can solve congestion when they are the problem itself.

Putting aside the astronomical cost of tram infrastructure, tracks, electrical cables and stops, there is absolutely no justification for the continued use of trams except perhaps in the Melbourne's inner CBD.

The glaring reality is that every single tram can be immediately and easily replaced by a bus service, with not one significant drawback to any commuters.

Buses do not cause congestion, are cheaper, do not require tracks and overhead grids, and do not cause massive blockages when stopping for passengers.

I hope somebody in VicRoads does a serious consideration of these suggestions, and that they consider simplifying our road system, removing trams, and allowing a free community where commuters use their own discretion and judgment to determine the when/how and where of each journey they undertake. Parking restrictions have absolutely no benefit, and a huge cost to society. The idea that employing an army of public servants to impose fines on parked cars, and that society is more prosperous as a result, is yet another underlying assumption that needs to be examined.

Economics in one lesson

2008-09-21T22:28:00.002+10:00

Austrian economics is right.

I've never read such an impressive body of knowledge with such good foresight and prediction, as the Austrian economists.

I'm reading Henry Hazlitt's "Economics in One Lesson", written back in 1962. He warned about the perils of socialism again and again, and in the last week, as a result of all the doomy predictions that have come to pass, the American government has brought about even more socialism.

The individual, the tax-payer is the biggest victim of our times. I thought it very interesting and relevant to post a key section from the book:
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Chapter VI:
Credit Diverts Production;

"Government encouragement to business is sometimes as much to be feared as government hostility. This supposed encouragement often takes the form of direct grant of government credit or a guarantee of private loans."

"But there is a decisive difference between the loans supplied by private lenders and by a government agency. Each private lender risks his own funds. When people risk their own funds they are usually careful in their investigations to determine the adequacy of the assets pledged and the business acumen and honesty of the borrower.
If the government operated by the same strict standards, there would be no good argument for its entering the field at all. Why do precisely what private agencies already do ? But the government almost invariably operates by different standards. The whole argument for its entering the lending business, in fact, is that it will make loans to people who could not get them from private lenders. This is only another way of saying that the government lenders will take risks with other people's money (the taxpayers') that private lenders will not take with their own money."

And this summary should also serve as a warning to our financial alchemists:

"There is a strange idea abroad, held by all monetary cranks, that credit is something a banker gives to a man. Credit, on the contrary, is something a man already has. He has it, perhaps, because he already has marketable assets of a greater cash value than the loan for which he is asking. Or he has it because his character and past record have earned it."

Austrian economics was right !

2008-09-19T15:53:00.005+10:00

Here is a poster of Lehman's boss, Dick Fuld, which has been autographed personally by the disgruntled former employees who now have to find somewhere else to work.

Most amusing is the quote up top in the middle - "Austrian economics was right !"

This issue to me, the issue of whose theory of economics holds up to rational inquiry, to the historical evidence, is the most important issue of our time. Austrian economics correctly and accurately predicted the implosion of communist economies back in the 1920's. It has a superb track record and in my opinion, it deserves some serious consideration.

We've seen the problems with big government, with socialism, with Keynesian economics, with fractional reserve lending and central banking.

Many people would be well served by reading up on some Rothbard, Hazlitt and von Mises. The von Mises blog is an excellent source of analysis and insight into today's affairs from an Austraian perspective. Today's article has a great summary of the turmoil swirling around the financial markets:
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What's Behind the Financial Market Crisis?

Daily Article by Antony Mueller | Posted on 9/18/2008

The financial crisis is not over. Neither tax rebates nor low interest rates nor higher or lower exchange rates can do the job of reviving an economy that is burdened by debt loads that are too high. On the contrary: the policy measures that the US authorities have been applying will prolong the agony. Be prepared for the challenges of extended financial turmoil and economic stagnation.

Early this year, the US central bank decided to manage the debt crisis in the light-hearted belief that a few aggressive rate cuts would "unfreeze" the banking system. Yet as of the end of the third quarter of 2008, the arteries of the financial system are still cluttered, and the financial system has moved even closer to total collapse.

Those banks and brokerages that haven't yet failed have been kept alive by emergency monetary transfusions from the US central bank. The Fed has cast away all restraints of economic rationality and is acting in a purely political way. The Board of Governors of the US Federal Reserve System is pursuing the goal of getting the financial system through the mess — at least until the end of the year, no matter how high the costs will be thereafter.

The American central bank has adopted the financial equivalent of the military strategy of scorched earth. The economic philosophy of the current chairman of the US Federal Reserve System can be summarized in the slogan, "No depression under my rule!" He resembles a military leader who stubbornly declares, "No defeat under my rule!" the more the chance of victory is slipping away, and defeat can be denied no longer.

The current economic disaster is the result of the combination of negligence, hubris, and wrong economic theory. For decades, an economic and monetary policy has been practiced based on the illusion of, "It doesn't matter." At first it was, "Deficits don't matter." From that, the policy of "it doesn't matter" got extended to money creation, the credit expansion, the stock-market bubble, and the housing boom. Now, we're being told that buying financial junk by the central bank to beef up banks and brokerages also doesn't matter.

John McCain's dishonesty

2008-09-18T09:52:00.010+10:00

I am no fan of Obama (Change you dog can roll in !) , but John McCain is one of the most dishonest people around today, he repeatedly contradicts himself and his very own viewpoints from only a few years ago.

John McCain is really abandonding all his past principles and positions in his run for the presidency.

Heres a gem of a story:

The lawsuit, filed by a Republican Party official in Cumberland County, PA, sought to remove Barr's name from the ballot—contrary to promises made by John McCain during his first bid for the presidency after then Texas Governor George Bush tried to have McCain blocked from the New York primary ballot. "I would never consider, ever consider," McCain said during his 2000 campaign, "allowing a supporter of mine to challenge [an opponent's] right to be on the ballot in all 50 states."
McCain went on to call such tactics, "Stalinist politics."

Also, his foreign policy views seem to have shifted from non-inverventionism (during Clinton's presidency) to pro-interventionism during the Bush presidency:

Don't blame the markets !

2008-09-18T09:52:00.005+10:00

...for the credit crunch and global financial crisis.

This is not a symptom of capitalism.

It is a predictable outcome from government regulating the American banking system.

I have just started reading Henry Hazlitt's famous work "Economics in One Lesson" where he always points out government regulation has unintended and unwanted consequences.

Read this article to see one of the biggest examples in history:
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The government compels banks to make loans in poor neighborhoods even if the applicants are not considered prime borrowers. You may not know about that because the Community Reinvestment Act is not exactly a household (excuse the pun) name.

But the commercial banks do know about it. They have a CRA department. They get a CRA rating. They know that the way to get a high CRA rating is to make loans to poor applicants or in poor urban neighborhoods regardless of the financial prudence of the loans.

They know that if they don't do this, they will be punished severely by the regulators when they try to make any major change which is dependent on regulatory approval. And they know that pretty much every major change a traditional bank makes is, in fact, subject to regulatory approval. So, they grit their teeth and stamp a big inky "yes" on an application which they know, according to traditional financial standards, deserves a "no."

Up until 1995 the Community Reinvestment Act was largely a requirement to support "community groups" in poor neighborhoods. Of course, this often meant left wing groups like ACORN, etc. But after 1995 the scope of the law was dramatically increased.

Over the strenuous objections of the banks themselves and some Republicans in Congress, CRA was renewed and modified in such a way that it gave far more power to the federal government to punish banks for not lending more widely in poor neighborhoods.

The classic "fair housing" laws from the Martin Luther King Jr. era of civil rights were deemed insufficient. Under CRA, not only were realtors required to sell to qualified buyers regardless of race, which they should have been, but banks were accused of a new kind of "financial redlining" if they didn't provide the funds. Income, credit history, assets, debts were out. Urban neighborhoods were in. The Home Mortgage Disclosure Act pushed things along too by requiring banks to ask about and disclose the race of its mortgage applicants. In effect, banks were forced to provide the evidence of their own alleged discrimination.

Subprime loans to minority applicants exploded ten fold in the mid-1990s as a result. In fact the Clinton administration found a rapid increase in subprime loans in minority neighborhoods. Their principle worry was that, even then, not enough lending was going on in these communities. More was needed. And they got what they asked for.

Under New Deal-era regulatory rules of Glass-Steagall, commercial banks and investment banks were separated. When that act was repealed as part of banking deregulation in 1999, commercial banks and investment banks were able to merge, subject to approval by regulators.

However, the banks' CRA rating was taken into account in the decision. This meant that a high CRA rating became an important prerequisite for mergers, which increased the pressure on the banks to make these risky loans. The banks also were given permission to put these loans into packages of securities that could then be sold into investment markets.

Last week, a front page Wall Street Journal article set off a national debate about the legacy of Alan Greenspan. Critics have been taking the former chief of the Federal Reserve to task for failing to see the alleged excesses of the marketplace and neglecting to issue new diktats to punish those excesses accordingly.

But it is not Mr. Greenspan's fault that Congress substituted identity politics for financial prudence, although his easy money in 2003 didn't help much. If anything, Mr. Greenspan regulated too much.

The fault lies with the small army of hard left political hustlers who spent the early 1990s pushing risky mortgages on home lenders. And the fault lies especially with the legislators that gave them the power to do it.