One Dead (So Far) in London Riots

The riots in London over the G20 meeting have left one protester dead. Frankly, this doesn't surprise me.

The further left you go on the political spectrum, the more violent protests usually are; and in a protest as vehemently anti-capitalist as this one, events were bound to turn violent. Violent protests, far from being a form of free-speech, are in most cases just a lot of angry teenagers and twenty-somethings who:

- have never run a business, let alone the huge businesses they've been protesting against;
-have never had responsibility for their lives assumed by other people. Most protesters are not working-class people with a genuine interest in living independently -they're usually middle class.
-turn not to principles on reality, but the arbitrary to justify their assertions ("everything's relative", "you can't prove reason's relationship with reality", "one man's freedom is another man's chains" etc)
-think their ideas are "rebelling against the system". They think they're "cool" for the lack thereof.

If the protesters are really interested in the plight of the poor, they'll engage in the most noble and greatest of all human actions: the act of production- of which their reckless violence is the opposite.

Daniel Hannan

If you have not already seen him, here is Daniel Hannan, MEP for South-East England, taking on Gordan Brown over his recent economic policies... a great speaker making excellent points.

Yet More Stimulus News

On the subject of the latest Obama stimulus (only a few days ago he injected US$1,000,000,000,000 into the US economy) fellow libertarian Paul van Dinther has produced a Google Earth image showing how much area would be taken up by US$100 bills if they were all laid out side by side to make US$1,000,000,000,000.

The result just boggles the mind. (N.B.: Google Earth needed for this to work)

How Worse Will It Get?

As expected Obama and Pelosi's 1000 page stimulus package has passed both the US House of Representatives and the Senate, to be signed into law by Obama ASAP.

Let's go over some aspects of it: the bill is some +700 billions dollars of spending in various areas. First off, where will this money come from? They can take it directly from taxes -which the populace will notice directly, and not be happy about. Better to print money instead, and only notice it over a long period of time -when over stimulus can be passed. Glenn Beck shows the increase in the US money supply:



Secondly, what will the money be spent on? Rebuilding American infrastructure, economically, sounds like a good idea. But what's the point of building infrastructure if no one's going to use it? Infrastructure is built to facilitate economic growth now, when it is cost-effective. The sorry state of US infrastructure now is the result of over-enthusiastic government infrastructure building in the 50s and 60s, which couldn't all be maintained at once. Government planning in those days also centred around the suburbs, leading to unnecessary infrastructure projects.

Thirdly, is it moral to take money from those who still have it to use for projects that won't be used? To distort market signals leading to another collapse? Is it wise to take money from the producers who, like Atlas, hold up the American -and World- economy and give it to people whose only business is consuming without producing?

The answer to all these questions is a resounding: NO!

Stimulus V.2

Obama's new US$825b stimulus package passed through the House of Representatives today. Not good news.

He obviously hasn't learnt anything from the Bush US$700b (and now uncounable trillions) bailout, then!

US$5b for Breast Transplants

With the entire economy of America lined up in Washington to get handed free money from the Feds, few stories can be as downright bizarre as this: the US porn industry is seeking a US$5 billion bailout.

Larry Flynt, a spokesman for the industry, said

"The porn industry has been hurt by the downturn like everyone else and they are going to ask for the $5 billion. Is it the most serious thing in the world? Is it going to make the lives of Americans better if it happens? It is not for them to determine."

Actually Larry, no American should be forced to pay for breast implants and AO videos. He went on to say:

"It's time for congress to rejuvenate the sexual appetite of America. The only way they can do this is by supporting the adult industry and doing it quickly."

Umm, why, to both? Last time I checked, only a bed was required!

If all these bailouts are not showing Americans that their economy has been wrecked by the popular fiscal policy and quiet Keynesianism of the past half-century, I don't know what will.

The Truth About Recessions

The numerous bailouts of financial institutions and "financial stimulus" packages promised by both George Bush and Barack Obama have not stopped the financial crisis from plunging to ever-lower depths. As more and more money is pumped into the economy, the crisis grows worse.

What officials from governments in the US and around the world don't realise is that attempts to increase consumer spending are exactly what you don't want in a recession. Prices need to fall for the economy to start up again. Recessions are caused by overvaluation of products and services, by using a claim on future production to buy those products and services at current levels. Normally, this would be alright, as money would be diverted from other areas of spending to paying off debt. However, government inflation and expansion of the credit supply have led to artifically increased demand for products, and as thus, price hikes.

A recession is a large market correction, putting the prices of goods and services back at their true levels of demand. Therefore, the last thing government should do is to try to keep prices at their overvalued levels, in the interests of preserving an unsustainale economy.

Instead, with falling prices, businesses have the opportunity to rejuvenate themselves, as not only does demand for consumer goods falls, but also capital, natural and human resources. It also means that failed business and economic models can be replaced with better ideas -this is seen in the fact that many great corporations were formed during a recession. If anything, it means that people can start working from the ground, up.

Over the long term, a recession is a boon to the world economy. There is always short-term suffering (caused by the shortfalls of the inflation-induced boon-and-bust cycle), but it is far better than holding off for an even greater doomsday in the future.

Obama: New Frontiers for the Republicans?

With Obama's election result as the new President of the United States, America's taken a big leap to the Left.

However, this election result isn't about the new found sense of "hope" in American politics; it's a reaction to the smack of conservatism and a lack of willing to make proper free market reforms that have destroyed the Republican Party. It's Bush's budget deficits and Greenspan's policies of inflation, disguised as capitalism, which have triggered a reaction against the Republican Party in this election; and despite distancing himself from Bush rather well, McCain suffered for the same reasons that the NZ Labour Party is doing so.

And it's for precisely that same reason that Ronald Reagan did so much to help his party in the 1980s. America was hurting from the Oil Woes of the 1970s, and could not afford to look weak in front of the Soviet Union. Instead of following the detente policies of Jimmy Carter, he was a charismatic leader who made many substantial reforms, and in doing so made the Republican Party the party of reform.

Now, America is facing another economic crisis, high oil prices, a huge national debt, and a war on terror which has not delivered the results it promised (not that the terrorists shouldn't be hunted down and punished, but the general lack of doing so isn't helping). The Republicans have completely gone back on their principles, crying out about the "greed" on Wall Street* and how we'd all be better if we weren't unselfish. Philosophically, they are no different to the Democrats.

And that's where the problem lies.

So, hopefully, the overall outcome of this election will be good for America, as not only will Obama, providing he does try to keep his promises, prove socialism a disaster, but the Republicans will actually get back to their original principles of small government, and laissez-faire, with recent evidence and anecdotes to base the claims upon. The only question to ask now is, which politician is willing to promote the free market anymore? Best to promote socialism and the "all things to all men" policy under the guise of the free market, and do the same when socialism proves a disaster!

*Where do you not find "greed"?

Politically Incorrect Guide to Politics

Some sense on the US election and politics in general today comes from John Stossel, who does hit show "20/20" in America, from his Politically Incorrect Guide to Politics:

Part 1
Part 2
Part 3
Part 4
Part 5
Part 6

Hope you enjoy 'em! (first three from Not PC)

What's Keeping Them Behind?

Auckland Mayor John Banks is pledging, that for the 2011 World Cup, $20,000 will be put into "a development plan to manage homelessness", and $197,000 will be spent on cleaning up graffiti around the city.

First off, the $197,000 to be spent on cleaning up graffiti. How do you need $197,000 for the relatively simple job of cleaning up graffiti? The last time I checked, it only takes some cleaning materials, buckets and a few volunteers willing to put their time into cleaning the graffiti up to make a city clean again. Preferably, however, the hooligans who actually do the graffiti should, at any possible chance, be made to clean it up themselves. But rather than cleaning up only the graffiti they've drawn, make it a several day task, at multiple locations in pink overalls. Don't just let them get away with only a light warning.

Secondly, the homeless issue. $20,000 to simply keep them off the city streets during the weeks occupied by the Rugby World Cup will do NOTHING to alleviate the problem. Instead, the labour regulations keeping them from working in a productive job, even if it is for little, should be scrapped.

And even though regulation like that is a national issue, the City (and Regional) Council can do its part as well, by moving restrictive regulations such as "Urban Boundaries", which merely serve to keep house prices artificially high. Don't require buildings to need permits, scrap the RMA, and any other such legislation that makes the idea of owning a home close to work an impossibility, even for the middle class.

More government spending never helps in the long run.

That damn bailout...

The Bush-Paulson bailout, even after being rejected on Monday, successfully went through the House of Representatives on Friday, meaning that American taxpayers will now be an extra US$700,000,000,000 out of pocket (and now have over $10,000,000,000,000 of debt to pay off). The money will be going to try to prop up a flawed financial system, and to delay and magnify further economic collapse.

Over the past few weeks, you undoubtedly would have been hearing, from all political groups and figures, from Sarah Palin to Winston Peters that this collapse has been caused by "greed", capitalism and spectators. Similarly, no one actually tackles the proper root of the problem (artificial credit expansion) and instead advertise great new systems of regulation and government interference. In other words, more power to politicians.

However, in a free market, banks only have so much money to lend out (and if bank prints their own money such as in America pre-civil war, it can quickly become worthless), and are accountable to the people who deposit their money in the bank. Low interest rates signal that people are more willing to take risks for business expansion and economic growth, and that the bank has a lot of money to lend out. High interest rates mean that people want to be more conservative with their money.

Under a free market, interest rates set by banks go up with inflation (as the money gets devalued with time). However, in today's mixed economy, governments set official interest rates. And as thus, they also set inflation at a steady pace, to ensure there's always money on hand to lend out, to ensure economic growth (which is what we've seen during these two decades, with the dot-com bust as an interval).

Unfortunately, this artificial economic growth does not encourage proper, responsible investment, and this can be seen in middle-class America -and New Zealand- with the rise of the McMansion (although many regulatory policies are involved there). The building and buying of McMansions is generally hard work, but, from hearing stories about loans worth hundreds of thousands of dollars with 0% deposits, it's happening alright.

The inevitable result of stupid business decisions is business failures, job losses, and share market crashes, such as we've seen with Lehman Brothers, AIG, Fannie Mae & Freddie Mac, and many New Zealand finance companies. What this current collapse signals is a market correction, caused by governmental inflation. Also to consider, is the fact that money gets devalued by inflation, which is a double-whammy for everybody.

Wall Street "Crisis"

No one doubts that Wall Street has been going through some tough times in the last few days, with some major collapses, bail-outs, and bankruptcy claims. Therefore, it is important to re-affirm that, in a free market, people and companies (especially the latter) need to be flexible.

The truth of the matter is, in recent times, both consumers and business owners have been protected, to some degree or another, by a safety net (for instance, the welfare state, or the recent bail-outs of Fannie Mae and Freddie Mac in the US). The safety net, by "guaranteeing" economic security, has destroyed the basic need to be flexible; which is one of the most important traits a person or a business could have in a free market. It has also removed much of the need to make intelligent investment decisions (hence, the sub-prime mortgage crisis).

In a time such as ours, when events that happen half way around the world can be known here within seconds, and economic circumstances are constantly changing, more rapidly now than ever. Companies have to continually adapt to the changing circumstances to survive.

This is what we're seeing on Wall Street at the moment. Instead of proper, if drastic, market correction taking place, more and more financial institutions are being bailed out. However, financial assistance only helps to delay the eventual collapse-and magnifies it, as it now impacts the government and its expenditure. Having taxpayers money go to inefficient banks and financial institutions is a waste of money.

There's also interest rates. For a number of years, the Federal Reserve kept interest rates artificially low, which artificially bolstered the home loans market and, as thus, magnified the recent collapses.

The solution to all this madness, is, of course, to get the government out of the way of business, allowing them to succeed and fail based on their merits. By doing that, businesses will be forced to:

a) make smarter investment choices;
b) look for solutions in other areas for their problems, rather than making decisions under the pretense that the Government will bail us out;
c) force consumers to make smarter decisions in which companies to deal with;
d) stop irresponsible lending to people who can't pay it off.

All in all despite the stress that many people will have to endure during the market corrections going on at the moment, government intervention can only magnify the problem.

Socialism: LA Style

The City of Los Angeles, in yet another attempt to move America closer to socialism and state control, has put a one-year moratorium on all fast food outlets in South Los Angeles, with the stated goal of lowering obesity levels in the area, which are around 30%.

Will it lower obesity levels? No -most people in the South LA area live in some degree of poverty, so going to cheap fast food outlets scattered throughout the area usually save fuel and time, as opposed to going to better restaurants in other parts of town. More fuel, time and car use would be the outcome, which would result in less productive as more time and money is used trying to get something to eat.

Instead, a better idea is to make these people productive, or more so. Slash business regulations which prevent poor people from starting up their own businesses. Cut down employment regulations so people on the bottom rung of the economic ladder can have more job opportunities at their disposal. Also, provide proper protection for people in these areas, who have been inflicted more by crime, both property crime and violent crime, than any other group of people in any other area of LA.

Then you'd start to see a real change.

Another Assault on Kiwi Education

Another Assault on Kiwi Education is on its way with Labour's recent legislative maneuver to raise the legal school leaving age to 18, unless the student attends Polytech or University. In response, 15 High School Principals on Auckland's North Shore have said that, should the act pass, they will deliberately violate it.

It is not hard to understand why. Why would a school principal want to keep students who have already expressed an intention to leave school -usually to go into the workforce- and who would simply cause violence if they were kept back? Why would a school want to waste money on the hiring of new teachers, adjusting wages to compensate for the extra stress put on already-existing teachers, extra school teaching material, and new classrooms for students who don't want to learn?

On top of that, keeping students in school prevents them from getting productive jobs out in the workforce, where they could truly be productive. Jobs and apprenticeships also provide the best education for more hands-on students looking for a career in the trades -which can provide an excellent source of income, but the current Labour Government believes that education can only be done in big, monotonous buildings, at little desks, subject to whatever the teachers says. It's this failure to differentiate between schooling and education where Labour fails miserably. What it all comes down to, is more resources required from a less productive economy.

As thus, the responsibility falls onto the parents and taxpayers to pay for the extra students, who don't to be there, and get no value out of the education system. Parents and taxpayers are getting more for less -and the strain on schools could jeopardise their own child(ren)'s education.

The same deluded principle has also been applied to Universities. For various reasons, the Left has taught New Zealand that everyone has a right to go to University. As a result, more people have come out of the University system with degrees which are worth nothing to an employer, thanks to everyone else having one. More money is being used to fund students who go and produce less, on the whole, and who would be more successful in the trades -where New Zealand has a major deficit.

However, University is hardly compulsory -whereas this current proposal will make school attendance compulsory.

In the end, all this stupid proposal boils down to is election-buying, and trying to pretend that education under Labour has not been pitiful. As proof, John Key is also supporting the proposal. Now try to argue that it ISN'T election buying!

Carbon Emissions Trading Scheme

Earlier today, I listened to a debate on the Fox News Channel over a proposed Bill in the US Senate over a potential Carbon Emissions Trading Scheme in the US.

Here's why I'm not supporting it: According to this debate, the trading scheme is expected to cost the US taxpayer US$45,000,000,000,000 (45 trillion USD) over its lifetime.

Scary enough, huh?

Boycott the Government!

This is a chain email that I've started, to raise awareness in New Zealand about the true culprit of the high price of oil in New Zealand:
___________________________________________________________________

To the citizens of New Zealand:

Recently, you may have received an email or two telling you to boycott big oil companies, that they are the cause of today's pains at the pump. Think for a second: are they? Is it they who take 50% of you petrol costs without your consent, stuffs it into their pocket, and then walks away without you knowing, or having agreed to the "transaction"?

NO.

Who claims to use 50% of your petrol money for roading -on continually congested Auckland streets only?

Who claims to use the money to buy a train system costing over $690,000,000 -when NASA can land a probe on Mars for over $200,000,000 LESS?

Who claims to use the money for new infrastructure, when every other week we hear of an old lady or family FORCED out of their home for a motorway that NEVER gets built?

Think about it: Your GOVERNMENT is the real thief here. Your GOVERNMENT takes HALF of your petrol money -and ends up using it on BUGGER ALL to help New Zealand!

Government is supposed to be representative of New Zealand citizens -but is this TRUE representation? NO!

The quick answer to rising petrol costs is: BOYCOTT THE GOVERNMENT! Don't believe government propaganda and election promises -what it really wants is YOUR MONEY!

If you want true representation, for the government to truly listen to the voices of the New Zealand people, boycott governmental lies and control! Take back YOUR life and YOUR liberty!

PASS IT ON!

America: Take Note

I've come across some very interesting statistics from a new blog I've started reading, Kramjam Reiterates, by Mark in OC ("OC" being Orange County, a nice area of 3 million people south of LA and where Disneyland is located). He says:

"A little over one year ago:
1) Consumer confidence stood at a 2 1/2 year high;
2) Regular gasoline sold for $2.19 a gallon;
3) The unemployment rate was 4.5%.

Since voting in a Democratic Congress in 2006 we have seen:
1) Consumer confidence plummet;
2) The cost of regular gasoline soar to over $3.50 a gallon;
3) Unemployment is up to 5% (a 10% increase);
4) American households have seen $2.3 trillion in equity value evaporate (stock and mutual fund losses);
5) Americans have seen their home equity drop by $1.2 trillion dollars;
6) 1% of American homes are in foreclosure.

America voted for change in 2006, and we got it!
Remember, it's Congress that makes law not the President."

Which I find very interesting. Although two years is a rather short amount of time, few of the economic problems facing America -and the rest of the world- existed before the Democrats got into power in Congress.

A warning to America: don't be fooled by talk of "change" -often, it's change for the worst.

A Tale of Two Budgets

Two budgets were released on Wednesday this week. One was the typical tax-and-spend budget promulgated by Helen Clark and Michael Cullen, promising a "tax cut" of $16 a week that will be eaten up shortly by inflation and the rising cost of living; the other was the Libertarianz Alternative Budget, that was put out by Libertarianz Leader Bernard Darnton. (A full spreadsheet outlining the budget in detail can also be downloaded from that page.)

Libertarianz will cut government spending and give back public money in the form of a true tax cut, $220 dollars per week. Libertarianz will slash the regulations and taxes on our economy, allowing New Zealand to truly surpass Australia in living standards and a growing economy; and help the poor and disadvantaged in society -by giving them back the money that was took from them, and regurgitated out in the form of "benefits."

Libertarianz will also enable New Zealand to defend itself properly, by buying new military equipment, such as brand new fighter jets. Libertarianz believes that a free nation should be able to defend itself, and works towards that end.

Libertarianz will paying no-hopers on the welfare state to breed, allowing voluntary charity and a work ethic to take its place. By legalizing victimless crimes, Libertarianz will put more resources into fighting real crime, and getting New Zealand away from the #1 spot in sexual assault, property crime and child abuse, in the world.

As well as the things mentioned above, Libertarianz will create, within a few years, one of the most dynamic, diverse and flexible economies in the world being able to adapt to changing market conditions rather than stumbling behind the rest of the developed world in GDP.

It's enough to make you vote Libertarianz!

How to Lower Petrol Costs!

The price of petrol has gone up again, which in part has led to the rise in prices in other areas, notably food. The left is complaining about how petrol companies are keeping prices sky high, with their profits as proof of that.

But little of the total price of petrol in New Zealand goes to the coffers of oil companies. 50% of NZ's petrol cost is paid in taxes -and the government is getting more than the oil companies! According to a BP report card on NZ fuel costs (courtesy of Sus):

Average breakdown of a NZ litre of 91 Unleaded in April 2005:

03.3% Operating costs, wholesale and retail margins

03.6% International shipping costs

45.8% Crude Oil and refining costs

47.4% Taxes

Similarly, other countries with high petrol taxes also have the highest costs. Petrol in Europe, especially the Scandinavian countries, is 2-3 times higher than the cost in the US, where taxes are relatively few.

Want a quick way to cheap fuel? Abolish taxes on fuel.

Food Crisis: Some Suggestions

There has been much hoo-haa recently around the world, especially in poorer countries, over the large rises in food prices recently.

But New Zealand, as a country, stands to gain A LOT. We have excellent farming land, advanced technology, and animals by the truckload. New Zealand could potentially make a huge deal of money out of this.

To ensure New Zealand's eventually triumph in the upcoming years in food production, here are some suggestions:

1) Remove "green" regulations to the production of food. Remove GM hysteria over food production. Invest in new technologies and capital for the most efficient food production in the world. Allow for more intensive farming. Issues such as water pollution caused by animal excrement and chemicals on the farm can be sorted out by privatizing basic bodies of water, such as rivers and sections of lakes. (This has worked very well in Scotland.)

2) Deregulate the market on a world scale. New Zealand has done very well by promoting its food products around the world, facilitated by free trade. This doesn't concern NZ, at least as much as the EU, which prevents the crucial development of African farmers from getting them to produce their food in the long term, independently. The same applies to the United States (and Canada?).

3) Slash other regulations to production. Slash limits on how much food can be produced at what price, what amount, etc. Important issues such as quality can be sorted out primarily by the market and organizations such as consumer watchdogs, with government interference only after an act of force or fraud has been committed.

There you go, some suggestions for the upcoming food crisis. Let's see whether basic principles of market economics are followed, and if not, how well the situation turns out otherwise.