20 December 2011

Kim Jong Il's economic legacy

Let's test two of the great theories as to why North Korea is in poverty:

1.  North Korea has really only suffered since the end of the Cold War saw it lose markets and cheap oil.
2.  North Korea has also really only suffered due to the introduction of UN sanctions on trade with the country due to its nuclear programme.

Nonsense.  The effect of the end of the Cold War was to make things worse, but the relative decline is inbuilt in the system of rigid state socialism.

Look at this, from the Washington Post:

Source: Washington Post
Stagnation has been the norm in North Korea for 40 years.  The gap between rich and poor has been a gap between South Korea and North Korea.  From 1972 to 1987 South Korea was under the rule of a military led dictatorship and subsequently transitioned to a vibrant and very open liberal democracy.  However, South Korea's dictatorship allowed far more economic and personal freedom than North Korea.  Today the average South Korean has 20 times the income of the average North Korean, with freedoms and a way of life as distant from North Koreans as New Zealand does to Haiti.  

As the Washington Post notes.  East Germany had one-third of the per capita income of West Germany at the time of reunification.  North Korea has one-twentieth.

By contrast, South Korea is a pinup example of roaring success in economic development.  From 1953 when after the Korean War it had per capita income akin to that of Bangladesh, it is today effectively a developed country. 

Do we really need any more case studies of capitalism vs. socialism?

Kim Jong Il - A life of terror

It is difficult to exaggerate the absolute vileness of what Kim Jong Il presided over since the death of his megalomaniac father Kim Il Sung, he is perhaps only exceeded by Pol Pot, Hitler, Stalin and Mao in sheer numbers of those murdered, but the whole superstructure of the regime is such a layer upon layer of fiction that is defies easy understanding.  Almost everything about him and his regime was a lie, the reality evasion was on such a scale that millions died of mass starvation, hundreds of thousands lived and died in prison camps, including young children and the rest of the population lived under an ever present terror of facing oblivion due either to failure of the totalitarian state to deliver food and shelter, or because it would take them away.   

Kim Jong Il was born in 1941 in the USSR by his father, a small scale anti-Japanese guerilla leader who fled Korea with his wife Kim Jong Suk after a number of small successes in repelling Japanese imperialism and its cruel rule of Korea.  In the USSR Kim Il Sung learned of Marxism-Leninism and was impressed by the order and discipline imposed by Stalin.   Kim Jong Il would have been an insignificant small boy if his father hadn't been hand picked by the Red Army and Stalin's regime to be Moscow's plant in Korea.  He was brought along whilst the Red Army marched into the northern half of Korea at the end of World War 2.  Kim Il Sung had Soviet advisors and military assistance, as he set up a Korean communist party with Soviet alignment, which initially worked with and then purged and destroyed the indigenous Korean communist movement.  His ruthlessness, friendliness to Moscow and youthful charisma saw Kim Il Sung picked to lead the new state set up by Moscow to rival the UN/US backed Republic of Korea established in the south.  The Democratic People's Republic of Korea was born, and Kim Jong Il was 7 years old.

Kim Jong Il faced several childhood issues.  One was death of his younger brother to drowning, another was death of his mother in 1949 - allegedly exacerbated when she found out about Kim Il Sung's serial adultery (the "Great Leader" title not quite appearing yet though), and then the Korean War causing Kim Il Sung to evacuate with his children and new wife to be Kim Song Ae.

The world heard absolutely nothing of Kim Jong Il till 1973.  By then he had completed school and university, and was being groomed to be the successor.  Kim Jong Il had by then gained a penchant for expensive liquor, fast cars, young pretty women (he used his father's pleasure troops to recruit pretty young girls from age 13 to be trained to please him once they reached around age 15-16, in large numbers), guns and movies.   He lived the high life, drinking heavily (Hennessy especially), smoking and partying.  He never flew, and would happily arrange execution of those who displeased him.  His movie fetish became legendary.  He led establishment of a major film studio in Pyongyang, with multiple sets for different eras and countries.  He arranged kidnapping of actors, chefs and directors of Korean descent from south Korea and Japan, he also arranged for prostitutes to be brought in from various countries including Sweden.   It is notable his father died at age 82, but he couldn't manage past 70.

Yes, 70.  He is 70, not 69.

Between 1973 and 1980 he was referred to publicly in all media and books as "the Party Center" as he led day to day administrative business for his father.  In that exercise he successfully led various purges and ensured only loyal followers progressed to support him and his father, he also helped spear the unprecedented personality cult around his father, which after 1980 was duplicated for him personally.   The personality cult saw the glorification of a vacuous national ideology called "Juche", the constructions of statues and monuments across the country, and the completion of the cultural revolution that meant virtually all songs, films, books and art were focused on glorifying Kim Il Sung, the party, the state, Juche and all that was done by them.   Everything good was because of his father and later himself.  Everything that went wrong was due to the US imperialists, the south Korean puppet clique and the Japanese.

By the 1980s, Kim Jong Il had become the Dear Leader to his father the Great Leader and both operated as a pair.  Yet Kim Jong Il's high squeaky voice meant he was largely a recluse, living the high life, whilst ordering stories and tales to be written about his exploits.   Like his father it is claimed he gave "on the spot guidance" to hundreds of sites across the country.   What he did was perpetuate a system that create possibly the biggest and longest lasting prison state in history.

North Koreans have largely lived planned lives.   There is no private ownership of land, or indeed anything other than personal possessions.  Regular re-issuing of currency destroys savings.

Overseas travel was strictly prohibited, as was travel from one's own town or village.  Internal passports strictly regulated where anyone could travel, and life beyond one's home town was available only to few.  

News media was strictly under total state control.  All media reported to the people how lucky they were to live in the country and that people worldwide envied them.  They were told that South Korea was a state of slaves where Americans raped girls and kept Koreans as servants and mistreated them, starving them.  They were told everywhere else in the world was full of crime, starvation, war and deprivation.  Satellite TV was unavailable.  Foreign broadcasts were unavailable.   Radios were banned except for locally made devices with no tuning dial so that only local signals could be picked up.   The life in North Korea in the 1980s was hermetically sealed from the world.  Foreign popular culture was unknown.  Elvis Presley, Mickey Mouse, the Beatles and almost any movies, songs, fashions and brand from elsewhere were unknown, except to the elite.

Every day was planned.  Jobs included political education every day, people were constantly told to work harder and longer and never complain, be grateful and be frugal.   Every week every adult would go to criticism sessions where they must confess their own limitations and then accuse others of the same.  Every week one would fear being made a scapegoat.  Photos of both Kims were mandatory in every home, office, school classroom and public transport vehicle.  They had to be kept in perfect clean condition or punishment would be meted out.  Destroying newspapers with their images on them was forbidden.   All children were taken from their parents several hours a day into creches to learn their first words "Kim Il Sung (and latterly Kim Jong Il) is your father".  Children taught to owe everything to the Kims, and to put loyalty to them above their parents and friends.  Taught to be snitches for the leaders.  Taught to be part of the Police State.   Red Guards from their young teens, loyalty to leader and party first, and they would be rewarded if they reported on relatives and friends who were disloyal.

Kim Jong Il was a part of that and changed nothing when his father died.   When Soviet oil and aid ceased to flow, the economy was not reformed.   It remained centrally controlled and managed, entrepreneurship remained illegal, no freedoms were granted.   As a result, he continued to maintain a policy of terror.   Individuals feared that if they were found to be disloyal, they and all their relatives would be imprisoned in gulags - slave labour camps where they would work 16 hour days, 7 days a week, eating next to nothing.   Children from babies up would be included.  Abuse, sadism and torture are rife - reports have also come out of chemical and biological weapons tests being applied to some inmates.  

Even outside the gulag system the mass starvation of the late 1990s was due entirely to the failure of the entire economic system to be productive and let people respond to demand, supply and reason.  Adopting "non-juche" farming techniques was forbidden, so millions starved, desperately trying to eat wildlife, bark, soil, weeds, whilst propaganda signs urged them to "only eat two meals a day".   Kim Jong Il ate lobster, drank liquors and remained obese.

He could have reformed his country, what he did was next to nothing.  The biggest revolution has been the introduction of a mobile phone network that pre-selected elite can use, but which is effectively allowing people to network without easy state surveillance.  He has also seen, informally, the borders become more porous, as corruption and awareness of the outside world has spread among the more privileged classes, especially as technology has slipped into the country, with very cheap CD and DVD players, and CDs, DVDs from south Korea via Chinese sources.  He stopped a military coup by raising the status of the military into the most powerful force in the country, essentially usurping the party.   

North Korea today is a military state led by a personality cult family.  Its main businesses are arms, narcotics, counterfeit currency and minerals.   Kim Jong Il visited China several times and China showed him the results of its dramatic reforms, but he was unmoved - believing that it was too risky to allow Koreans to set up their own businesses and interact freely.  The result is a dark, polluted, cold, state of terror, horror, starvation and fear.

Unlike official propaganda, and the parroted propaganda from Pyongyang's useful idiots in the Korean Friendship Association, who stick their deluded evil tongues up their figurative fundament of Kim Jong Il, he will be remembered as a short inadequate playboy murdering tyrant whose policies and approaches resulted in the deaths of millions, and suffering of tens of millions.

What is left is a country with exhausted broken infrastructure, an enormous military armed with weapons of mass destruction, unproductive agriculture, massive untapped mineral resources, a police state and a people whose lives have been wasted through ideological education and decades of lies and terror.

Reforming, modernising, freeing and re-educating this country is a monumental task.  Consider fixing East Germany to be like helping an overweight smoker to become fit and normal size, fixing North Korea is like helping a senile centenarian become an Olympic athlete with a Ph. D.

19 December 2011

Kim Jong Il's death facts and sources UPDATES

I was driving near Taupo when I heard the news about Kim Jong Il's sudden death, and missed turning off.  Perversely you might think, I have a relationship with the DPRK, given it is the most totalitarian regime the world has ever seen - and know people there.  I studied it extensively in the 1990s and travelled there.   I am overwhelmingly joyous about his passing, but am thinking a lot about those who I know are there and who are looking for reform to come, knowing there must be change.  However, I am going to be driven nuts by reporters who are going to get a lot wrong about the place.

Let's get some points clear:

1.  Kim Jong Il was 70 NOT 69.  He was actually born in 1941 in the Soviet Union, not 1942 on "sacred" Mt. Paektu whilst his father was leading the liberation from the Japanese.  The 1942 birth year is a fabrication which appeared in the 1970s in publications.  The sole reason was to match his father, Kim Il Sung's, birth year of 1912.  So when Kim Il Sung turned 60, Kim Jong Il turned 30 etc etc.  The point of his birth in the USSR (near Khabarovsk I believe) is that Kim Il Sung had fled to the country due to the Japanese takeover, along with his mother Kim Jong Suk (who died in 1949 under circumstances that have multiple versions).

2. Kim Jong Un is expected to succeed him, but reality is likely to be quite different.  There is a significant power struggle about to happen (there was one when Kim Il Sung died as his second wife, Kim Song Ae sought to overthrow Kim Jong Il), and the list of members of the National Funeral Committee is very significant (see article here).  Kim Jong Un leads the list, number two is the rather  elderly Chairman of the Supreme People's Assembly Kim Yong Nam, Choe Yong Rim is third, and is Prime Minister and an ally of Kim Jong Il and Kim Jong Un.  Those two are close allies and expected to ensure Kim Jong Un leads.  Ri Yong Ho is number four, and is effectively now de-jure head of the military as a whole, and his ability to ensure loyalty to Kim Jong Un is likely to be critical.  At 69 he is not too old to achieve that, but his name will be one to watch.  Kim Yong-Chun is alongside him and may be expected to be a challenger as head of the army.

3.  Kim Jong Il's closest living relative is his sister Kim Kyong Hui, the most powerful woman in the country.  She may well seek to shadow Kim Jong Un because she is sole remaining issue of Kim Il Sung and Kim Jong Suk.  Kim Jong Il's half sibling Kim Pyong Il is not listed in the funeral committee, and was reportedly in Pyongyang earlier year because his mother- Kim Il Sung's second wife Kim Son Ae, is terminally ill.  He may seek to challenge Kim Jong Un, but has not be around in the country sufficiently to do so.   Kim Pyong Il and Kim Kyong Hui are the two people best placed to mount a civilian challenge of the leadership.

4.  North Korea is not as isolated as it once was.  The elite have mobile phones and are extensively aware of life in the outside world, with DVDs, CDs and other material circulating among the ruling classes.  Yet, the mass of the population do not have a clue, and may think the world is mourning with them.  They haven't the slightest clue of the wealth prosperity and freedom of South Korea.  Internet access is not available to anyone except a tiny elite, satellite TV is only available to that elite and in three hotels in Pyongyang, and it is a crime to own a radio that can receive foreign broadcasts.

5.  He died TWO DAYS AGO, which is astonishing.  It is telling that so much time passed compared to news of the death of his father.  Kim Jong Un will have sought to ensure he was not directly threatened.  However, it will be far more interesting in coming months.

The latest report is that the country is under curfew, under actual visible martial law.

If you want the most useful coverage of events then you will find it hard to beat the following sites:

- Daily NK - Providing the most regular, up to date and informed coverage of events.  In English, but originally Korean.   If you use any single source to follow events in coming weeks, use this.

- North Korea Econ Watch - Russian academic Andrei Lankov's excellent blog on events in the DPRK, with many sources of those who do business, travel and visit there.  Lankov is one of the world's leading DPRK watchers, with some fluency in Korean, as well as English and Russian, and a long history of visiting the place over many years.

- North Korea Leadership Watch - Self explanatory blog by Michael Madden, includes a great Kim Jong Il family tree

North Korea's own state monopoly news agency (no others allowed, absolutely no free speech or independent media or publishing of any kind) the Korean Central News Agency is here in English.

North Korea's international radio station, Voice of Korea in English
More will be added in coming days

UPDATE 1:  No foreign delegations allowed to Kim Jong Il funeral or for mourning.   Big questions regarding existing Western tour groups in the country.

UPDATE 2: TV3's Nightline coverage (New Zealand) is sloppy.  First, Kim Jong Il has NOT been the "Dear Leader" for over 10 years, but rather "Leader".  Secondly, the "military first" policy (Songun) is not "60 years old".  It dates from 1995 although is claimed to have arisen in 1961.

UPDATE 3: Daily NK is clearly managing to get unofficial reports from the DPRK presumably through a mix of sources.  Markets closed, night curfews, people prohibited for being outside.  Particular issues in the town of Musan.

14 December 2011

Norway's butter shortage and "food security"

This SHOULD be a no-brainer.

Norway has adopted the similar kind of nationalist/socialist environmentalist claptrap supported by the Greens.  The idea that trade and agricultural policy should be focused on local supply and "food sovereignty", which of course is just another word for protectionism and rent seeking by farmers.

Norwegian farmers get a lot of that.  Around NZ$400 million a year to Norwegian dairy farmers in price, income and other subsidies.  For that they can't even produce enough to meet domestic demand.  To top that off there is a 29% tariff on imported butter, so Norway already prices imported butter away from its market. 

Yet that's not all.  You might fairly assume subsidising dairy farmers might mean there is more production than would otherwise be the case, and that the lack of demand shouldn't mean that tariffs get in the way of imports.  You're right.  Norway also restricts imports to a quota.  Only 575 tonnes of butter can be imported under its quota with a tariff of 60% on that.

You see the 29% tariff is actually the general tariff it applies, which is meaningless because of the quota.  If there was no quota, the tariff would be 29%, but in actual fact Norway restricts imports of butter and then taxes it.

If there were New Zealand journalists worth their oxygen they would be off to Norway with the Minister of Foreign Trade suggesting a free trade agreement between NZ and Norway to include dairy products (which Norway wont accept, but the media there might raise questions about its ridiculous agricultural trade policies).

There is no need for any country to have a "butter shortage".  After all there isn't a sock shortage or a TV shortage or a light bulb shortage is there?

What the lobbyists wont tell you about the Kyoto Protocol

There are three types of countries that signed up to the Kyoto Protocol (the US is outside and now Canada is too):

-  Annex 1 countries:  Those that commit to reducing their emissions, covering both "industrialised countries" and "countries in transition".  New Zealand and the UK are in this category, along with all other EU Member States, Russia, Japan and others.  Total of 41.  So they all bear the costs of reducing activities that reduce emissions, or must buy emissions allowances, or mitigate their emissions.

- Annex 2 countries:  A subset of Annex 1 countries that also include New Zealand and the UK.  They not only are obliged to reduce emissions, but their taxpayers are required to subsidise the likes of others to reduce emissions.  This includes the "rich" EU Member States, i.e. Greece and Portugal, not Poland and Slovenia. 

- Developing countries: That is everyone else.  They are not obliged to reduce emissions at all, unless Annex 2 countries pay for them to adopt new technologies to allow it.  They can "volunteer" to become Annex 1 countries when they have developed.

The environmental movements don't challenge this.  Yet let's look at who is in the category of developing countries.  These are countries the New Zealand government, both the Clark and now the Key governments, have committed to helping subsidise to gain new technologies.

Qatar - Which has 6.8 times the per capita emissions of New Zealand and 6.2 times that of the UK, with per capita GDP (Purchasing Power Parity basis) 2.5 times that of the UK and 3.3 times that of New Zealand.  Bear in mind Qatar basically earns virtually all of its income from exporting oil, so it can earn money from "selling CO2 emission" then emit as much as it likes, and get money from poorer countries to buy new technologies. Nice.

UAE - Has 4.4 times the per capita emissions of the UK, 4.5 times the per capita emission of New Zealand, with per capita GDP 1.4 times that of the UK and 1.8 times that of New Zealand.  A similar economy to Qatar.

Bahrain, Brunei, Kuwait all have higher per capita emissions that the UK and NZ, and all but Bahrain have higher per capita GDP.   All richer more polluting economies, all making money from selling CO2 emitting energy, all expected to do nothing, all entitled to get taxes from NZ and British taxpayers to dabble in being more environmentally friendly.  Nice that.

China, Brazil and India of course are all classed as developing countries being poorer per capita, despite having significant foreign exchange surpluses and rapidly growing emissions.  You might ask quite why China is owed subsidies from Western taxpayers when it sits on a growing mountain of money it earns from exporting to those people.
A few other countries are classed as "developing" and deserving of subsidies, and able to emit all they wish, yet have HIGHER per capita incomes than New Zealand, such as Singapore, the Bahamas and Israel.

You might ask yourself quite why these little details are seen as acceptable by a government claiming to be looking after your interests.  Why you might have to pay more, whilst the descendants of oil sheikhs and Chinese millionaires need not face anything, and your taxes might even subsidise their dabbling in green technologies.

You might even wonder why nobody asked any of the major political parties those questions.

11 December 2011

What's going on in the EU? Part One - What's good

Finally, the UK government's rejection of a pan-EU treaty to create effectively an EU megastate, has started debate, albeit with many European politicians pointing fingers at British PM David Cameron for not playing ball.

Quite right, it is about time.

The tensions and politics around the EU are complex, so do try to resist the inevitable efforts of journalists across the political spectrum to over-generalise about what is right and wrong about the EU.  It isn't all bad and certainly isn't all good.  The Euro is not the key source of the problems facing the southern European states, but the EU is also not the source of peace in Europe since World War 2.  The EU does have several very good features that have promoted freedom and prosperity in Europe since the 1950s, but it also has carried some that have done the opposite.

What the terrible twosome of Angela Merkel and Nicholas Sarkozy are trying to do is paper over the tensions created by a union and project that has positively protected those governments which have embarked on decades of deficit spending.  It is seeking to combine the political goals of both Germany and France in a new EU - one that does not fundamentally accommodate the economic policies of many EU Member States and which replaces the flawed, limited but still real democratic accountability of Member States with an EU/EC/Council of Ministers led accountability.

In the next few articles I hope to present a step by step explanation of the EU - the good, the bad and the ugly, and present an alternative for the UK, and any other EU Member State that doesn't want to be part of a pact of central control, with socialism running right through it.

To outsiders the EU can look quite marvellous.  After all, if you produce goods in one part of the EU you can sell it anywhere else, with no customs barriers, tariffs or import restrictions.  Well, except for alcohol, tobacco, audio-visual services, literature subject to censorship, oh and quite a few services.  Free trade within Europe has promoted prosperity since the internal barriers to trade started tumbling down in the 1960s, and most recently the massive expansion from 15 to 27 Member by incorporating all of the former Eastern Bloc states, plus Slovenia and three former occupied Soviet Republics, has done wonders to improve competitiveness, create new markets and spur growth.   No Eurosceptics I know of want that to change, except the far left in the union movement and the British National Party.

Free movement of people has produced similar benefits, albeit with greater controversy.  Citizens of any one EU Member State can live and work in any other, creating a massive labour market and massive education market as people live, work, learn wherever they choose.  The controversy has been that this has allowed many from lower income Member States to work in higher income ones undercutting local labour.  For overpriced builders and plumbers in the UK, the arrival of hard working enthusiastic Poles has not been good for them, but it has been good for the Poles and their customers.   

Thirdly, with these measures have come the means for the European Commission to force countries to abide by rules to ensure open borders and competition between countries remains so.  Domestic markets in services such as telecommunications, bus services, banking, electricity, insurance, supermarkets, postal services, airlines and the like have been required to be opened up to create a single European market.   Low cost airlines would not have succeeded in Europe had the likes of Ryanair and Air Berlin not been able to open bases in other countries and fly from wherever to wherever in the EU in competition with national carriers.  Attempts to subsidise, regulate or otherwise interfere with some sectors have faced European Court action.  

If it all stopped there, then I'd be very happy with the EU.  Breaking down barriers and markets, enforcing deregulation and even stopping national governments from offering subsidies to protect domestic businesses (but not if the subsidies are available to any EU businesses) is a good thing.  To be fair, efforts in some of the newer Member States to tackle corruption, organised crime and the like in those countries at government levels have also been positive (although Bulgaria is hardly a model of government without links to organised crime). 

The thing is that you don't have to be in the EU to get most of that. Three European countries are not in the EU, but have free trade and free movement of people with it.  Iceland, Norway and Switzerland all have almost the same freedoms with the EU and each other, as Member States of the EU.  Their own domestic reasons for rejecting EU Membership are unimportant (protect fisheries from subsidised EU competition, protect oil incomes from funding EU transfers to poor countries, protect national sovereignty and independence), but notable for being inconvenient to EUphiles.  The European Free Trade Agreement (EFTA) which paralleled the EU, has provided a treaty bound mechanism to enjoy freedoms within Europe without the bureaucracy or the commitment to fund he EU.  Remember that, because it is important.  There is an alternative to the EU to get most of the benefits of the EU.

The downside of all of this comes with certain obligations which I will write about later.  These are:
- Welfare tourism.  Don't like the housing, health care, education or welfare benefits in your own country within the EU?  Move to another EU Member State and enjoy all it has to offer, without having had to pay for it.
- Fortress Europe.  Try getting goods or services into the EU from outside the EU/EFTA area.  Tariffs, import controls and other mechanisms means the EU has raised walls around itself as much as it has destroyed them internally.
- Common Agricultural and Fisheries Policies.  Call it, how to sustain the grossly inefficient farming practices of France and Spain (and fishing practices of Spain) using British, Dutch and German taxes, whilst impoverishing farmers from poorer countries in Latin America, Africa, Asia and Australia/NZ.   Nothing quite like having European taxpayers subsidising the properties of the British Royal Family though, especially when it is so unaffordable that farmers in the newer Member States are only offered one-third of the equivalent subsidies of those in the West.  There ARE walls within Europe, including the one that means a Greek farmer doing the same as a Bulgarian farmer gets three times the subsidies of the Bulgarian one.
- EU common regulatory framework.  The number of laws Member States must pass to meet EU wide obligations on everything from labour laws to protecting "human rights" (which are not all bad to be fair).  Micro-managing domestic legislation to iron everyone flat.
- Joining the EURO.  Other than Denmark and the UK, other Member States joined or are committed to joining the EURO.  That's a whole other story, for although it is much maligned, it is more a problem for being a transnational fiat currency than being a single currency.   Think of why Greece felt it could borrow endlessly from a high value low interest rate currency that was largely supported by German economic productivity.
- EU vanity megaprojects.  The EU has pursued more than a few large scale multi-billion Euro vanity projects to put Europe on a level with the US and other very large economies.  These have all proven to be wealth destroying political projects driven mostly by the Franco/Latin bloc of countries seeking to outdo the US.
- EU wealth transfers.  The massive set of subsidies, funds and loans from richer EU Member States to poorer ones, to lift them up to wider EU income levels without actually making them be more productive and to buy subservience from relatively low tax, open, ex. communist bloc countries to accept the socialism promoted by France and Germany
- EU arrogance.  Time and time again the European Commission and those pushing the EU project have implicitly recognised they could never get consent for the project from voters directly, so have resisted referenda or even making the European Commission or Council accountable to the European Parliament (which cannot actually initiate new laws itself).  If voters say no, the EU expects them to try again and give the right answer.  The entire project reeks of bureaucratic insistence of its own superiority over its subjects.  Those who reject what it wants are wrong and must be made to submit.   Worst, those who reject the EU are painted as wanting out of everything, as being nationalistic, narrow minded, parochial, even risking war and conflict.

In a later article I will also write about why things are the way they are, and what national interests and drivers motivate the biggest players, but also why it should be possible for the far more numerous others to get things to change, if they weren't all being bribed implicitly by the system that will ultimately harm their interests. 

02 December 2011

Know someone with a dog that wont leave your leg alone?

After a week or so of unbridled seriousness, some humour - except this item exists.

The perfect present has arrived. 

If you are easily offended by sexual material don't click and don't read on.  This isn't suitable for children, or those who prefer the mating habits of animals

Not a present you want in view of house guests, children, or anyone excessively sensitive.  

Not a present you want kept outside so any Tom, Dick or Rover can treat it as the town bike.

Not a present for someone who wont wash the "pink hole".

Not a present for someone who thinks such gifts for pets are a mark of the decline of civilisation.

Wait for the first owner to paint eyes and a smile on the toy, or dress it and wonder why it is no longer interesting to a real dog.

Wait for the first dog to tweet that Snoopy doesn't look how he does in cartoons.

Wait for the first comedian to  use it as a prop in stand up.  

Wait for the first animal rights activist to claim that castration of dogs should be banned, as they can be given one of these.

Wait for the first animal rights activist who will claim that anyone whose dog (not bitch) doesn't have a partner and doesn't have one of these, is having his rights infringed.  

Wait for the first A & E centre or fire brigade call from the jackass who decided to have a go himself and got stuck. 

Wait for the first images of someone actually doing that seeping its way online, as someone will somehow feel proud of what he did, in multiple positions.

Wait for the feminist animal rights activist who demands an equivalent toy for bitches.

Wait for the feminist animal rights activist who demands to know why there is only one hole.

Wait for the gay animal rights activist who demands that toys get made for gay dogs too.

Wait for the African-American rights activist who wants to know why the white poodle is humping the big black toy.  

Wait for the post-graduate thesis paper written on why the manufacturer wisely chose the smaller toy to be white and the larger one is black, and how that reflects changes in capitalism's recognition of the sensitivities created among African-American communities over structural inequalities, perceptions of subjugation, racism, sexual stereotyping, and sexist portrayals of black women.

Wait for the cat lovers who laugh that anyone thinking of making one for cats has never encountered a cat.

01 December 2011

Does tax evasion cost New Zealand?

The Press reports on research by an outfit called the International Tax Justice Network claiming that tax evasion costs the New Zealand Government more than NZ$7 billion a year in lost tax.

Let's be clear, the Government isn't New Zealand and so the loss is not akin to everyone suffering. 

It's a very simplistic view to presume that somehow this is lost sales, stolen money or anything of the sort, or that behaviour wouldn't change if people paid tax on the transactions listed.   Indeed it is quite false.

For a start, some cash jobs simply wouldn't be done if they were subject to tax.  The value generated from it wouldn't happen, and the consumer would spend the money on something else or save it, which may or may not generate tax.   In other words, tax changes behaviour and so the so-called "black" economy would be smaller if it was subject to tax.  That NZ$20 billion "shadow" economy would be less and so there would be less wealth overall.

When PWC tax partner Geof Nightingale says "If we could tax that shadow economy, we would either have more roads or hospitals or get out of deficit faster" he's quite wrong. For a start, he presumes the shadow economy wouldn't shrink significantly if it was taxed.
Secondly, it is a bold assumption to presume government would spend the money better than the people trading the goods and services.  Even if you go beyond unlimited free air travel for MPs into buying up an unprofitable railway, funding radio stations you don't listen to, paying welfare benefits to convicted murderers and subsidising businesses, government spending is far from frugal or careful enough to presume that people are not better off because they are paying less tax.  Certainly if the businessmen doing cash jobs buys things from my shop (even if I pay tax), I am better off, as are the businesses who sold me those goods, and the employees of those businesses and so on.   How does Nightingale know what is best for them? That sets aside the detail that roads are paid for by what are effectively user charges on motorists (try getting out of paying fuel tax, although RUC is easier to evade).   He could have said more cultural advisors, more planners, more policy wonks, more NZ On Air funded TV programmes, more overseas travel for bureaucrats and politicians, more assistance for hand-picked businesses, more welfare benefits so people subscribe to Sky TV more.   Why is that good?

Yet he then says "We anecdotally hear there's quite a lot of cash business going on in Christchurch these days".  You don't say?  So after the government basically told businesses down town "it's not your property now, you can't go near it" and "oops we demolished your building, forget to tell you or ask you", do you really think people in Christchurch have respect for paying taxes whilst they engage in voluntary productive exchange of goods and services?  Leave these people alone, they haven't hurt you and they are trying to rebuild their lives and businesses, businesses that create wealth, not take wealth.

In a low tax, small government New Zealand, Geof Nightingale may have to get another job, for at the most, taxation would be very low, very simple and as such few would seek to evade it, because it wouldn't be confiscating a sizeable part of your income.  It wouldn't be worth it for most businesses to bother hiring the likes of him.

Finally, it's important to point out to the IRD spokesman who said "our hidden economy and property transaction areas were showing a return on investment of $5.70 for every dollar invested" that this isn't an economic return.  It is just that for every dollar spent on a tax snoop (consider the psychology behind someone who chooses to spy on productive peaceful people to find out if they are coughing up "their share" to the state) the snoops recover $5.70 from the people they catch - catch not actually initially force or fraud on anyone, except of course defrauding the state - a state that will happily take taxes all its life from people and if you die before the age of national superannuation, not give your estate anything for your troubles.  A state that will promise one thing, and then deliver something else.  A state which when it fails to answer your 111 call, or fails to investigate the crime you're a victim of, or fails to get you healthcare when you need it, isn't accountable and wont pay you a refund. 

No.  Every dollar IRD takes is a dollar that otherwise would have been spent on a good or service someone wanted, or invested to make more dollars, or donated to help someone or something as a charity.  Because fundamentally, the difference between the money received by those in the cash economy and the money received by the state, is that in the former case, the person getting paid ASKED and couldn't use violence to demand anyone pay for whatever goods or services he offered.

When the state is small, and tax is low, the size of the so-called "black" economy shrinks (excluding the other "black" economy of banned goods or services) as evasion isn't worth it, simply because people have more of their own money.  That money isn't a loss to New Zealand, because it is part of GDP and because it circulates between consenting adults trading value freely.  The only concern comes from the government bemoaning that it hasn't got its slice of a cake that it had little to do with baking in the first place.

30 November 2011

Pay for our pensions, but don't expect to afford your own

That's the fundamental cry of the public sector unions which are going on strike today in the UK.  Around 2 million are going on strike, which most attention given to border control staff who by going on industrial action will see massive queues at airports as people arrive from international flights.  

The people going on strike are opposing having the age at which they receive their employer (read state, read taxpayer funded) pension increased to match the actual age at which people get the state pension, they are opposing having to contribute more and opposing a shift from final salary pensions (you know, the type you could only dream of in the private sector) to average wage pensions.

I like Old Holborn's proposed message to the strikers seen below:

People whose incomes and employment are dependent on the private sector generating wealth, hiring employees and paying taxes to pay for them, are wanting these same people to continue to carry the burden of paying the ungrateful sods pensions that none of the rest of us could ever dream of.   Yes, some are upset that they perform useful jobs (in schools and hospitals) and were "promised" final salary pensions when given them by previous governments.  Well here's the news, government promises are worthless - they are promising to spend money that isn't theirs, that they don't have and to pass on the bill to someone else and blame them when they can't deliver (let's call that the Labour Party).   Make your own plans for retirement, don't trust politicians to make them for you.

Sadly it was the unions' lackeys in power - the Labour Party - that sold their members this unaffordable, unfunded pup, that they relied upon for their careers, and now face losing because it can't be afforded.  

So the anger from the strikers shouldn't be directed at the government, it should be directed at their unions and the Labour Party - they were promised something that couldn't be delivered or afforded, and which demanded taxpayers pay for something they themselves could never get.  
The enormous lie perpetuated by the unions is to pretend the UK didn't have a budget deficit or substantial public debt before the financial crisis - it did.  The unions pretend the spending cuts are to "pay for the banks".  They are not, they are to get current spending balanced, and the banks haven't been funded by the state since Gordon Brown bailed out three of them only, two years ago.  Bank bailouts aren't happening every year.

The public finances in the UK are dire.  The UK's public debt is set to reach 94% of GDP in 2014-15, worse than Germany, France or the Eurozone average, only being better than Italy and Greece - no great achievement.  Public debt is set to increase by a total of £520 billion in the life of this government.   Debt isn't being cut, the growth of it is being slowed.  The total extent of government spending cuts in the life of the Conservative/Liberal Democrat coalition will only be 3.4% in real terms (after inflation) between 2010 and 2015.  Another 1.9% of cuts are forecast for the two subsequent years.  Hardly brutal, hardly radical.  Only then will be UK budget actually be in balance.  
Those striking are following the propaganda of those who want government to borrow more and more, and hope they aren't around when Britain has a sovereign debt crisis ala Greece or Italy, either that or they want to tax the "rich", which presumes they'll hang around for the privilege.   I doubt most would, and they would take their businesses and the jobs with them.

If the private sector said "sod it" and went on strike, and stopped working, stopped running businesses and stopped paying taxes, then this lot would truly be stuffed.  That's why the government should sit quietly, make sure people know that to give them what they want, there would have to be more borrowing (raising interest rates), more taxes or less spending elsewhere.  The unions don't say what option they want - let's call them out on this, and say no. 

Piggies in the trough

Stuff reports "Goodie bags containing iPads and smartphones and instructions on how to maximise your free air travel and accommodation perks – it must be induction day for Parliament's new MPs. Goodie bags containing iPads and smartphones and instructions on how to maximise your free air travel and accommodation perks – it must be induction day for Parliament's new MPs... Posters hanging in booths outlined their new perks – "unlimited domestic travel", exclaimed one".

All of the new MPs, National, Labour, Greens, NZ First, to a man and woman, soaked it up, took what they were "entitled to", at your expense.   I bet John Banks will too.

None of those talked to expressed disgust and remorse, including those who claim to speak on behalf of the poor. None showed interest in limiting their domestic air travel to trips to and from their constituency. 

Yet most of you voted for them, so really you only have yourselves to blame right?

29 November 2011

Where to from here for those of us who believe in freedom?

ACT, Libertarianz, Freedom Party, Liberal Party, whatever name there is for the future of those at the libertarian/freedom oriented end of the political spectrum is not important right now. What is important is that those of us who share some fairly core values and principles agree to sit down and talk. The options that have been taken up till now have been somewhat spent. ACT has long been the pragmatic option, but until 2008 was never part of government. In government, many (including myself) believe it under-delivered, and certainly the strategy taken by the leadership the past few months has been an abject failure. I wont repeat my previous views on this, but needless to say ACT as a liberal force for more freedom and less government cannot limp along simply led by John Banks to the next election.  I suspect even he realises that the status quo isn't sustainable.

To be fair to Libertarianz, every election since the 2002 administrative debacle has been an improvement, both in campaigning style and result. Yet without getting virtually any media attention or having enough money to buy advertising, it struggles to get heard. Even when it had its peak in 1999, it was due to Lindsay Perigo’s leadership and presence on a nationwide radio station. Yet this end of the political spectrum has been sadly filled with the sorts of chasms and arguments that are not entirely dissimilar from that of the far left. It occasionally has been a little like the Trotskyites vs. the Stalinists vs. the Maoists. ACT has blamed Libertarianz for being too purist, Libertarianz has blamed ACT for being soft sellouts and others have said that Christians have felt excluded, along with non-objectivists, or even those who are conservatives in their personal life and have conservative values, but don't believe the state should impose them.  Bear in mind I’m an objectivist libertarian and Libertarianz member who has voted Libertarianz four times and ACT twice since MMP came along.

The bare faced truth that needs to be admitted is that there is a difference between seeking to win Parliamentary representation and influence, and to be a lobby group that seeks to influence more widely than that. Those on the left, including the environmentalists are expert in doing this, having set up a number of moderate to high profile lobby groups that focus on specific issues. Those of us who want less government, need to do more organising, less in-fighting and recognise the difference between running a successful political party, lobbying on issues and being movements of populism or philosophy. 

I agree with Peter Cresswell that those of us who are freedom lovers need to start talking. So I suggest there be a conference of some sort in that light.

The default invitees being senior members of ACT and Libertarianz, and others specifically invited by people from both parties (who may come from National or elsewhere inside or outside politics). It should be a session to think, not necessarily to decide what to do, but to spend time to chew the fat and provide the catalyst to do more thinking, before acting.  It shouldn't be a session to grandstand or for publicity seekers, but a serious closed conference.   It wont be to make final decisions, but to make substantive progress on what to do next.  It should form the basis to produce proposals for discussions with existing party members, and to reach a conclusion within a year.

The agenda should be as follows:

- Introductions ;

- What sort of objectives should exist for a political party of freedom;
o Principles and values; 
o Political goals 

- Understanding philosophy (where do our principles and values come from ((intention to understand, not debate, how different people came to the freedom/liberal/libertarian end of the spectrum));

- Key policies and issues (identifying policies that unite us, and those that divide us. Not looking for detailed discussion about tax rates, but to establish common ground and to understand clearly the issues that cause some of us problems and finding a way to address, discuss them);

- What’s right about ACT and Libertarianz, and what is wrong;

- What a successful party of freedom would look like, campaign like, and focus on;

- What to avoid (Open, frank and honest discussion about what a future party should avoid);

- Options (revitalising ACT, strengthening Libertarianz, starting from scratch, rebranding and merging) with the objective of narrowing down preferences to two;and

- Next steps (widening discussion with respective parties, another meeting to create concrete proposals). 

This should happen next year, around mid-year (so people will want to stay inside). It should be good willed, good natured and well disciplined. It shouldn’t just be a meeting of suits, or a meeting of loud mouthed angry ranters, but a meeting of good people, with good intentions, who have by and large, shared values, but haven’t been talking from first principles and objectives with each other.  Bear in mind also that what may finally come could be a two pronged strategy - one involving a political party, another involving a think tank/lobby group (or two?).

The most important thing of all, for everyone, will be to listen. 

In advance of that, those of us in ACT, Libertarianz, and indeed freedom oriented members of National, ALCP (and others if they find themselves in a less conventional political home) should sit down and talk amongst ourselves, and with each other.  It is time to rise above the morass of noise, detail and personality clashes.  Nothing should be in or out, but it should be obvious that unless there is a consistent belief in there being less government and more freedom, then we will get nowhere. 

It’s time to not be too solipsistic and realise that this election less than 1.5% of the public voted for parties that expressly espouse less government. Many of us have been doing this for some years, but we also have eager, hard working and enthusiastic young people who reject the mainstream view that the answer to any problem is automatically that the government should do more. Let’s do it for them, do it for us, do it for the country we want New Zealand to be - I believe that at the very least it means free, prosperous, optimistic, where people are judged not by their ancestry, sex or background, but by their deeds and words. A country where being a tall poppy is not something to sneer at, but something to celebrate and aspire to. 

The conservative right has got its act together, and has built a highly credible platform that could cross the 5% threshold in 2014. 

We must do the same, but better.

Who’s with me?

P.S.  The reports that John Banks is talking to the Conservative Party to consider some sort of relationship, simply exemplifies the fact that ACT is finished.  LET Banks take whatever is left of ACT with him, let him go.  He'll never win Epsom under that banner.   I'd don't need to say the three word phrase that starts with "told", but I am SO glad I did not vote ACT to be represented by Banks.   It isn't schadenfreude at all, it's just frustration when this whole debacle is res ipsa loquitur.

28 November 2011

New Zealand election 2011 - Verdict 2 - how I'd advise the parties

My pre-election review of the parties set out what I thought of them and where they are placed, now I have reviewed them one by one according to what I'd advised them strictly politically, rather than philosophically.  After all, I'd be telling all but one of them to pack it in if I was being true to myself.   So I'll give them a score for result.

ACT:  Game virtually over.  Epic fail.  Loss of three quarters of your vote, which would have looked worse had turnout been better. You couldn't even get Don Brash to outpoll the Green candidate in North Shore, not that you tried.  Some will blame Don Brash for this, even Lindsay Perigo, others will blame John Banks and all those who resisted that strategy.   You know what I think, but bickering wont be helpful, digging deep into why a party that once got 7% now has 1% of the vote will be critical.  The campaign was abysmal, you couldn't control the fallout from the "cup of tea" meeting which the left were feral on (yes it has become more occupied by conspiracy theory baiting hate mongerers) and John Banks stopped you being liberal.  You now have two issues.  The first one is what John Banks extracts for his support of National.  Even Peter Dunne extracted maintaining his Families Commission and building Transmission Gully, what will ACT get?  If John Banks is just going to be another National MP then you have to wonder why you bothered?  There needs to be a new strategy, one that is consistently about less government, lower taxes, private property rights, choice in public services and rejecting Nanny State solutions to every problem.  John Banks is not the man to lead this.   I'll write more about my ideas later, but for now you need to be open, honest and discover what went wrong, and be aware how you can't rebuild based on John Banks, unless he can, chameleon like, be quite different from his past.  Time for some honest self-reflection to determine a new strategy for the libertarian/free market right.  Score 1/10 Future prospects bleak

Alliance:  For a brand that once commanded nearly 20% of the vote, you must now consider packing it in. From 1909 votes in 2008 to 1069 this time, the future is not bright. Unless you want to be a Dunedin based Marxist ginger group, you know your policies and philosophy are represented much more clearly and successfully in the Greens and Mana Party.  Hard left supporters know they can vote for either of those and make a difference.  I know far leftwing organisations struggle to acknowledge they are little more than a social club for people wishing people thought like them, if that's ok to you, then fine.   However, with the exception of Wigram and Dunedin (the former because some probably still think Jim Anderton leads you, the latter being family and friends), you have virtually no support and its been in free fall decline since 1993 without exception.  Consider this, what are you an Alliance of?  The Greens are gone, Mana Motuhake has been usurped by the Maori and Mana parties, the Social Creditors are gone, the Liberals were never really there and Labour is closer now to New Labour than at any time since New Labour was formed.  Yet its quaint that you bother, so keep the red flag flying, especially if you think the Greens going centrist mean they are revisionist capitalist roaders.  Although I am convinced your lives could be better spent in other ways.  Score 1/10 Future prospects irrelevance

Aotearoa Legalise Cannabis Party:  Once a party that gained well over 1% of the vote, it was a place people who wouldn't usually vote could cast a vote for something they cared about.   However, you seem to have reached your base, which remarkably is 9516 votes, one vote more than 2008 (although you will get a few on specials).   Yet whilst you have once hoped to get 5% you have to realise by now that most people don't vote on one issue.  I wondered if the departure of Nandor Tanczos from the Greens would have driven more your way, but it appears to have had little effect.  I expect many of those who support your issue vote Green, but there are more than a few who are on the liberal right, voting National, ACT and Libertarianz. You are more likely to be effective as a lobby group, with NORML, but that has been less than stunning in its success.  Unless you can highlight how grossly unfair the law is and get media attention for that, you're unlikely to provoke enough outrage to get enough votes on this issue.  So I think you need another strategy.  I think you need to seek the views of candidates of all parties on this issue and promote people supporting candidates (and parties) that share your view.  All Libertarianz and a few ACT candidates agree with you, but you need to shift the image of this issue from being bucolic stoners wanting to light up, to being about failed policies, reducing demands on the taxpayer and shifting police effort from cannabis to real crime.  There is no majority who will support endorsing cannabis, but you may be able to get support for those who say the status quo has failed, that it hands the product to the criminal gangs and has failed to reduce usage.   Many of you are not libertarians, have no time for free market liberals, but we actually are your greatest allies - for whilst you can convince Green party supporters, only people on the right can convince conservatives or sceptics that there is a better way to deal with drugs issues than throwing users in prison.  Reach out to those you might otherwise disagree with, and you may get more results. Score 4/10 Future prospects treading water

Conservative Party:  This has been a great start for those on the conservative right.  Colin Craig's effort has been well rewarded with a platform to build upon for next time.  The history of conservative minor parties has been poor, with the failure of the Christian Coalition to cross the threshold (I am sure many of its supporters, in retrospect, will say thankfully given the entity who led it), United Future's dabble with it, the Kiwi Party and the Family Party.  Your biggest competition is NZ First, but you do have several prospects for growth.   Peter Dunne took the Outdoor Recreation Party under his wing, which could do well to take back, since United Future's vote is ever shrinking.  NZ First is an obvious target, since it represents 21st century Muldoonism, but you have a fresher look, less personality cult and should, naturally, be able to fight on immigration, crime and one law for all.  Your hardest battle is a media keen to paint you as Graham Capill Mk. II or Brian Tamaki Mk. II.  The less you say about religion the better, the more you say about values, principles and policies, and have people who have good CVs standing for you, the better as well.  Bear in mind the media is looking for bigotry about homosexuality and hypocrisy about sex and money, if only because Capill's hypocrisy was breathtaking, and Brian Tamaki's predation of the poor and ignorant is repulsive.  Your medium term goal must to be National's next coalition partner, but you must also seek to court Pasifika and Maori votes.  Many of them are naturally conservative, and NZ First supporters.   To get further, you need to work hard,  everywhere, and find more platforms for your views and call out National whenever you can where it matters, and call out NZ First and Winston Peters.  By the way, you also need to ask that opinion polls include you too. You haven't come close to reaching your ceiling yet, but be aware of the mistakes of those before you, New Zealand is not as socially conservative as you may hope and indeed it is that matter that is perhaps the biggest impediment to the Republican Party winning office in the US.  Score 7/10 Future prospects promising

Democrats for Social Credit:  No doubt some of you think there has been a media conspiracy organised by banks, sharemarkets, multinational corporations and the like in cahoots with John Key to deny the truth of Major Douglas's amazing discovery, and if only the public knew what you knew, they'd never look back. You're probably hoping that there is global financial meltdown and the fiat fractional reserve currencies you despise go with it. While the Alliance may be a social club, I don't doubt you are.  Any of you, any at all, need to get out and have some open, listening focused conversations with economists on your own (not with other believers who will tell you that they don't understand or they do and they wont admit it because they are part of the conspiracy) and find out why not even the Occupy movement, Anti-Capitalist movements or others embrace Social Credit.  Don't be embarrassed when you find out, just move on. Yet I know many of you will be celebrating how you got over 200 more votes this time, no doubt fuelled by campaigning in a few spots, but no.   There is no future in this movement.   If you want to focus on monetary policy then look elsewhere, read Detlev Schlichter's book "Paper Money Collapse".  His answer is not social credit, but commodity backed money.  Throw away Major Douglas's work, start again, but if you want to build a political party on it then think hard.  Score 4/10  Future prospects fading away

Green Party: Around 54,000 more votes and 4 (maybe 5) new MPs, you'll be pretty stoked with that result.  However, bear in mind that it is in part due to Labour's lack of inspiration and the value of your brand that you did well.  Think yourself lucky too that you're not in government where you can easily get tainted by having to prove your policies in action and sell out others in coalition.  Still you can't be unhappy with a focus on simple messages and being positive.  You are going to have National talk to you, because it wants to lure you to the centre.  This is where you have to choose.  Do you aim to be a bigger centrist party that straddles the two major ones, or do you want to remain with your hard left roots?  Hard left roots will mean you scorn the Nats, have agreements to discuss on legislation case by case and that is it.  Centrist means you form an agreement on one or more policy areas to work on.  Big wins for you could be energy or transport, the Nats will be more likely to offer you conservation or to help on poverty issues, if you can give up asking for more welfare money.   Being seen to please your supporters with National will be valuable, but you can't offer confidence and supply to the Nats without risking Labour saying a vote for Green is a vote for National.  If you can keep your identity clear and find an area to work with the Nats, then you can play being centrist on that policy area while remaining left elsewhere.  Bear in mind your biggest electoral competition is Labour.  Score 9/10  Future prospects growing influence with National, Labour's inevitable future partner

Labour Party:  Quarter of a million voters abandoned you this time, less than half of them went to the Greens and NZ First, the majority stayed home.  The focus on asset sales wasn't inspirational enough to anyone but the faithful, the simple point is you don't yet look like a government in waiting.  You have lost the party vote in most electorates and have little presence in Auckland or the provinces, and your rump in Wellington and Dunedin is not enough.  Capital Gains Tax was a loser as was your policy detail overall.  Not enough clear simple messages on things people care about.  The Greens got an easy ride from the media, but also exploited their brand and were optimistic and issue focused.   You needed to argue party vote Labour was the only way to change the government, and chip away at a few of the Green policies that would scare the mainstream, like attitudes to the Treaty of Waitangi and the hectoring desire to tell people what to do.   However, you're probably confused moreso about NZ First.  Wakeup.  New Zealand is not seen by unionists and academics, but lots of hard working ordinary people who eschew the politically correct measured language used by you.  Winston plays them easily and you need to bring them home, by having them not feel alienated by you.   Have a leadership battle, make it a time for self-reflection and be careful to pick people who your provincial hard working core might relate to.  Meanwhile, bear in mind the next three years could be very hard for any government, be grateful it isn't you and be ready to be there if it gets so bad, you're a shoo in by default.   You also need to work on Maori voters.  You might be winning the party vote, but you need to combat the Mana Party's radicalism and the Maori Party supporting National in consecutive elections.  Score 2/10  Future prospects the only way is up, but it depends on the new leader and the economy for now

Libertarianz:  Nearly 300 more votes than last time is proportionately not a bad result, but Libertarianz still faces a series of very difficult barriers.  The wasted vote syndrome (especially with ACT's presence offering a watered down alternative), almost complete absence of media exposure and the inherent fear of radicalism by so many.   A party with good people that was once beset with infighting and being its own worst enemy by its lack of willingness to be more measured in its use of language and more focused and optimistic.  This campaign was actually quite good for what it was worth and the demons of the past are largely behind it, but with 1400 party votes it is still the "members plus family, friends and a handful" club.  Noticeably, in electorates the candidates typically do far far better than the party vote.   I will write about this later, but I believe Libertarianz and the liberal wing of ACT need to sit down and talk, and determine how to move forward.  There is a bigger constituency for having less government and to pull the Nats towards their principles.  However, those who think that way have been unwilling to throw away their votes on a party that rarely appears in the polls, and have gone elsewhere with their votes.  Spend a weekend talking about objectives and options, and look to rebuild, merge, create something new or dissolve.  The Conservative Party shows how a clear philosophy, consistent team (and some money) can achieve results.  We can do so as well. However, it is not a time to gloat, point score or be closed minded or to reject those who are less ambitious.  Think Gramsci.   The left didn't succeed by insisting on a communist party as the source of all its efforts. Score 5/10  Future prospects if it can bring on board some of ACT, be open minded and inclusive, a chance for a step change rather than a step forward.

Mana:  Given you'll see me as part of the Pakeha colonial conspiracy of capitalists, you will think I'm out to get you with this.  However, you've done ok to get 1%, but you must have hoped you'd pick up Annette Sykes's seat and some more votes. You've bruised the Maori Party and created solidly leftwing credentials beyond the Maori vote.  You can point at the Maori Party doing deals with National and be comfortable on your patch, and you can blame Labour for not embracing the poor as much as you want.  Obviously you have a core now and you can build on it, but it need to be more than Hone and needs to woo Maori Party members and supporters more and more.  You know you'll only have real effects when Labour needs you to govern, but you know Labour has some sympathisers within.  At a time of global economic crisis you can always play the anti-capitalist card louder than any others and grab the hard-left vote consistently, bearing in mind if the Greens move further to the centre, you'll pick up some of them too.  Your cleverest move is to look wider than a Maori party, but to avoid some of the more outrageous comments of some of your leading candidates being held against you, and to avoid being seen as a one man band.  Score 6/10 Future prospects Disturbingly bright if it can nurture the Maori nationalist ideology that has been getting pushed through some educational institutions.  Labour's possible coalition partner that might push the Maori Party into oblivion.

Maori Party:  Lost more than half of your vote, two thirds seem to have gone to Mana, the rest to Labour or didn't turn out.  Hone has taken your radical wing, which is a positive for you in terms of future relations with the major parties, but you need to keep focusing on policy and seeking to be different.  Supporting National again is pragmatic and may get you some wins, but they must be sold to your voters many of whom wont want the idea that it is you keeping National in power.  National didn't need you last time, but this time is almost certainly will.  Unlike most minor parties, you can be presented as being focused on serving the interests of your voters rather than a philosophy.  Bear in mind you need to convince voters you'll support Labour if it will deliver for Maori, or National if it will.  Take on Hone when he preaches separatism and expresses outrageous and divisive views, and always be optimistic and forward looking.   Yet remember your core is the Maori seats and you need to have candidates who will inspire against strong challenges from Labour and Mana.   You need Tu Tangata candidates in their own right that can position you against being part of the larger Labour party and against the divisive Mana Party.  Score 3/10 Future prospects Hard work not being seen as National's patsy, and also fighting radical attacks from Mana.

National:  You'll all be gloating, but don't be too smug.  You have 50,000 less votes than before and was only really saved by mass defection of ACT voters to National.  You now need not only ACT and United Future but also the Maori Party.  Imagine if you needed NZ First.   Now you need to focus on message and communicating to more ordinary people.   Labour is in disarray for now, but will be back. You lost 1-2 seats to the Conservative Party, so you might think about how to appeal to some of the issues of that party.  However, in an MMP world you need coalition partners, you may prefer to leave some room for them to flourish.   Prove the part-privatisation is no big deal.  Do a deal with the Greens on conservation and energy efficiency, but be ready to attack the Greens when they are so obviously hysterical or quite separatist on Maori matters.  It's up to you, if you don't attack the Greens, nobody will.  The left attacked you through attacking ACT.  You doing the same hurts Labour, don't expect you can woo the Greens to the centre, because you wont - it is fundamentally a leftwing party, not an environmentalist party.  Winston will make a lot of noise, but you have little choice but to ignore him as he scrambles for issues, but bear in mind it is your voters he is after.  You can't cover all his conspiracies and stories, but you can say a vote for him is a vote for the Labour party.  Finally, your success is in part due to being seen to be competent with the economy.  The more waste and failure that can be found, the more you play into the hands of your opponents.  Score 8/10 Future prospects Reasonably good if the economy holds up, but a third term will depend even more on coalition partners and wooing back voters from NZ First.

NZ First:  Yes yes, bugger the pollsters.  Don't be too smug, there is the issue of your constitution and the rules.  I'd worry about that first if I was you. You might not have your Dear Leader anymore.  Otherwise, do you really think there is a future in this personality cult?  I know for some of you this is the best job ever, but it wont last.  You'll be widely laughed at for three years.  Have you figured out what life is like after Winston? No? It's called oblivion.  Your success depends on Labour remaining incapable of winning an election, but since you don't want to go with National ever again, you're rather trapped in no man's land, which is where Winston likes it I think.  However, surely you have something better to do than remain an Opposition minor MP for three years don't you? Yes you can grow by playing the one law for all card, the bash an immigrant card and reintroduction of capital punishment as well, but is that really you?  Score 9/10 Future prospects  Up to the Dear Leader baiting people's prejudices and the media going on about him.

United Future:  Oh dear Peter it is down to you more and more.  Come on, you know it's going to be like Jim Anderton's Progressive Party, it will go when you retire.  Unless you get leverage on any wider issue than Transmission Gully or the Families Commission, you'll be stuck in the middle with nothing interesting to offer.  Pray you get a chance at another worm and get seen as moderate and sensible again, otherwise sit tight and focus on Ohariu,  Score  4/10  Future prospects Comfortable retirement, but oblivion for the party

27 November 2011

New Zealand election 2011 - Verdict 1

Whilst National is savouring victory and Labour nursing its wounds, far too many commentators still think in First Past the Post terms.   It looks like a landslide, yet it is not.  National is barely able to pull together a government, and if special votes go to the Greens (as overseas Kiwis disproportionately like voting for an image that they don't need to pay for), the Nats could face needing the Maori Party.  

National gained two seats, but ACT lost four.  This isn't a great victory, it is in fact a bleeding of support to the left, with the winners being the Greens and New Zealand First.   National's gain is mostly due to ACT supporters abandoning what they perceived as a sinking ship that may not make it.  National gained precious little from Labour, and lost more to the Conservative Party, easily costing it 3-4 seats (and the Conservative Party ate in a little to United Future, much more and Peter Dunne would be an overhang MP).   

So the truth is not that plain.  It is quite likely National faces government needing the Maori Party on confidence and supply, and that is a party that also has not had a good election.   It lost two seats, with Labour picking them up, but with the votes going to the Mana Party.  That is in part because Hone Harawira has taken the radical Maori nationalist/socialist vote, but also because of perceptions that the Maori Party is too close to National.   Let's be clear, there is no prospect for a credible government that is not National-led at this point.  It is difficult to envisage the mess that Labour-Greens-NZ First-Mana-Maori would look like as it too would also need Peter Dunne.  
So expect the Maori Party to demand more, even though by numbers, it ought to be able to demand less.  However, that is what MMP brings up, the leading party by miles is now more than ever needing support by a party that had its support halve.  

So those hoping for "steady as she goes" may find it isn't quite so steady, and that Pita Sharples and Tariana Turia will be seeking a bigger pound of flesh for their constituents.  Yet don't think National isn't aware of what it must do in the next three years.  A key long term strategy of National is (or logically should be) to woo Maori voters.  The demographics of the country are such that this is critical and the Maori Party is one vehicle that the National Party hopes to do this through.   No longer are Maori votes balkanised in four seats, but are nationwide in every electorate through the party vote - although it is notable that the Maori Party still gets more support concentrated in Maori seats than in the party vote overall.   

National will also look to do a deal with the Greens.   The obvious areas for this could be energy, conservation or transport.  So expect that you might have higher power prices, that mining on conservation land stops or suddenly a motorway is stopped for an underground rail loop.  Pulling the Greens away from Labour has to be a core strategy for National, but the Greens will be wary about that going too far, given that it will instantly scare off many of their supporters.

The Labour Party will feel hurt, but it need not be too concerned.  It is 6% higher than National was in 2002, and it is obvious where its support went.   Its loss of support roughly matches the gains of the Greens and NZ First, in short Labour needs to improve its marketing and focus, but also cater for its base of "working class" voters.  NZ First's support comes from those who see National as a party of suits, but Labour a party of academics, teachers and politically correct liberals.  These are the people that want a hardline on crime and have little time for singling out initiatives for Maori or other groups.

MMP was strongly supported by left wing political activists and supporters because they knew it would deliver for them, at least in stopping any further liberalisation of the economy.  It has done so, in spades.  In 1996 it meant National had to embrace Winston Peters and his agenda of halting asset sales, which gave Labour time to reconcile its differences with the left embodied by Jim Anderton, so that in 1999 a thoroughly tired and discredited National and NZ First gave way to a Labour-Alliance coalition, with the Greens scraping through.   This led to three terms of leftwing Labour government, with the Alliance replaced with the Greens to the left of Labour, although Labour preferred to embrace the floating centre which went to NZ First and United Future at different times to fully embracing the Greens and spooking floating voters to National.   In 2008 National could have had a term of free market reformist government with ACT, but knew it needed a wider base over time so embraced the Maori Party.   Now it needs the Maori Party, and is to court the Greens.   National's true home as the natural party of government and being inherently conservative (as in do not much) is where it is.   Labour need only wait until enough voters are seeking change, and have a leader who can sell it, for NZ First and Green voters to "return home", and quite possible wipe out the Maori Party.

For those who embrace centrist politics, the next three years will be a celebration.  It wont be radical, it wont see the size of the state grow or get cut, and taxes wont change overall.  The left's hysteria about partial privatisation will be shown up for what it is when it happens, as nobody will notice much difference.  There was nothing else they could attack National for, as no other policies were much different.

Indeed, the Greens, NZ First and Labour must quietly fear that if National can "get away" with part-privatisation, that the bogey of this issue - whipped up by economic illiteracy, fact absent legends about past privatisations and old fashioned xenophobia - will have been neutered somewhat.

The future of left-wing politics may be seen in whipping up fear of the current economic uncertainty and some class warfare - which can be seen in some blogs (e.g. Tumeke, the Standard) and the rhetoric of the Greens and Mana.  The Greens barely campaigned at all on environmental issues, as the brand Green already delivered that as a presumption.  However, while left-wing activists  are always disappointed that the people they claim to speak about rarely are motivated or interested enough to vote for them, it remains that they have the upper ground when it comes to rhetoric, political discourse and media attention.  Consider the attention Winston Peters (who I consider left-wing as he is Muldoonist left-wing) and Hone Harawira got from the media compared to Colin Craig of the Conservatives, or the attention any ACT slogans or policies got.  

The Gramscian approach to political philosophy, seen in media and inculcated somewhat in the education system, has worked, for the commentators and as default position for many.  The only reason it doesn't deliver a solidly leftwing government is that the "masses" are apathetic, indeed it has almost always been that socialists are disappointed that the people who they claim to be motivated about are themselves people lacking motivation for anything more than instant gratification - which is, in one part, why they are in the circumstances they are in. 

Yet the free market libertarian "right" has little hope at the moment too.  National barely talks the talk on personal responsibility and less government interference in people's lives.  It isn't in its blood, and unless Labour takes a swing to the left, National will see little traction in talking about freedom.   ACT had so much noise around it about Epsom, John Banks and the recording, that it couldn't get off the block on it.  Moreover, the media and most commentators only have a couple of reference points for talking about less government - Rogernomics and the USA.  It is an uphill battle, but despite the hysteria of the far left, this government wont be "selling all our assets", operating for the "interests of bankers and the rich" or seeking to take money from the poor - they only wish it was, for without the legend of the right the left doesn't have a scapegoat or bogeyman to point to, so that voters can trust their vision.

Curiously, Maori voters are now split three ways.  A significant proportion of those in the Maori seats now support a radical separatist and neo-Marxist vision for New Zealand that would divide the country.  The rest support engagement in the current political system.  Mana's 1% seems insignificant, yet the question is what it bodes for the future.

Most New Zealanders wont be too upset about the election.  Those on the left will be disappointed, yet the Greens will still be partying as they will think they are pushing Labour over a bit.  The NZ First faction is small, but it will be thinking they have cocked a snook at the media - when the media delivered for them.  However, the left does have a solid bloc of support of around 45% that it can tap and the fact National plays on the turf of the left in terms of rhetoric, objectives and debate shows that things have not changed that much.

The conservative right will be happy, as Colin Craig has set aside the demons of the Kiwi Party, Family Party, Christian Heritage, Christian Democrats et.al to form a single conservative right wing party of some standing.  Indeed it did better than ACT, Maori and Mana combined in terms of party votes.  Targeting NZ First voters may be fertile ground to help cross the 5% threshold, as will aiming at a single constituency (although Rodney looks promising it may need to be somewhere else).   National may want to quietly encourage this.   

The liberal right of course are not happy.  ACT is finished and most of those who believe in less government ticked the boxes for National.  Hopefully those of a conservative persuasion in ACT will go to their logical new home (as above), and those of us who are libertarian need to sit down and figure out where to go to from here.

It isn't a significant election as it does, as I said before, look like a pattern whereby when the likely result is predictable, the vote for the second party dissipates to the minor parties.  National had this happen, with United Future and ACT doing well in 2002.  Now it is Labour's turn with the Greens and NZ First.   Yet the balance is still fairly slim between the centre-right and centre-left, so you might pardon for not getting too excited.