NZ Herald late and lazy on Air NZ's squeeze

The NZ Herald has finally woken up to what has been mentioned by me on January 26 and by others for weeks now - that Air NZ's new economy class cabin will be a tighter squeeze for everyone NOT in a Skycouch.

What appalls me particularly is that the reporter, Grant Bradley, has done NO research whatsoever to check the claims by Air NZ's spokesman, Ed Sims, that "10-seat rows were becoming the industry norm in the new 777s. "Emirates has been operating 10 abreast for many years, as have Air France and KLM."

How hard was it for Grant Bradley to go to website seatguru.com and check that claim?

He could have looked at all of the airlines serving NZ with 777s and found out that Emirates is the only one with a 10 abreast configuration. The others (the links show the seat maps), Korean, Malaysian, Singapore Airlines and Thai Airways all have a 9 abreast configuration. How hard was that to check?

How about other operators of the 777? Well we know Emirates and Air France/KLM (which is one airline with two brands) both have 10 abreast seating. Any others?

Aeromexico - 9 abreast
Air Canada - 9 abreast
Air China - 9 abreast
Air India - 9 abreast
Alitalia - 9 abreast
ANA - 9 abreast
American Airlines - 9 abreast
Asiana - 9 abreast
Austrian - 10 abreast
British Airways - 9 abreast
Cathay Pacific - 9 abreast
Continental Airlines - 9 abreast
Delta - 9 abreast
El Al - 9 abreast
Etihad - 9 abreast although reportedly moving to 10
Eva Airways - 9 abreast
Gulf Air - 9 abreast
JAL - 9 abreast
Jet Airways - 9 abreast
Kenya Airways - 9 abreast
Qatar Airways - 9 abreast
Turkish - 9 abreast
United - 9 abreast
V Australia -9 abreast

So Emirates, Air France/KLM and Austrian Airlines, and perhaps Etihad - that's it. How is something becoming the industry norm when out of 30 airlines, 3 are doing it (and a 4th reportedly is)?

Don't ask Grant Bradley at the NZ Herald - he just reports what Air NZ tells him.

The mainstream media wonder why some people think bloggers do a better job than they do?

It isn't hard at times.

So would ACT bring down the government?

With the Nats now backing away from previous statements that a rise in GST is "not on the agenda" and is "not our policy", it appears the two parties the Nats need to govern need to make clear what their policies are.

According to Stuff:

National ally the Maori Party is nervous, however. MP Rahui Katene said the party was retaining the option of walking away from its confidence and supply agreement with National over a GST rise.

Good for the Maori Party. It knows only too well that a rise in GST will hit everyone, not just those who might get an income tax cut. Being seen to support an increase in the price of everything to offset tax cuts that may be seen to be for those on higher incomes could cost the Maori Party dearly.

However what about ACT?

Jane Clifton reports Rodney Hide saying:

"The new fiscal programme had only been made possible because of ACT, he said, and he would therefore like to thank all ACT's supporters, his fellow MPs and the members of other caucuses with whom ACT had worked so tirelessly to bring about much-needed reform."

Roger Douglas has rightly said "The spending cuts must come first. Once we have cut spending, then we can cut taxes. If we want to make the tax system more efficient, we need constitutional restraints against excessive levels of Government expenditure. It is only when we have stopped the Government from exploiting the taxpayer that we can aim for efficiency"

So it's view is clear then...?!?!

ACT either makes it clear it votes against this, and tells the Nats a flat no, or the government is brought down.

Or ACT votes for it, and risks splitting asunder.

The test is simple - is ACT a party that people voted for so that government could cut one tax but increase another?

Did China test Obama?

The recent typical furore about US sales of weapons to Taiwan should have been par for the course, but this time it provoked a particularly angry threat of outrage from Beijing.

Why?

Well for starters China sees itself as bigger, more powerful and more important on the international stage than it has ever been. Having eclipsed Japan as the world's second biggest economy, it now is flexing its power more openly. In part this is due to domestic nationalism, as can be seen by the large numbers of Chinese online willing to defend their authoritarian government, not out of love for the government per se, but out of nationalism. China is, after all, a country of considerable national chauvinism.

However, China also knows the nature of US-Chinese relations since the Taiwan Relations Act in 1979 in the US made it national policy to supply arms to Taiwan. So why now?

My view is that it is a test of the Obama Administration. The dove like instincts of the Administration are simply being tested to see if there is a change from the Bush Administration.

China's wildest dream would have been for Obama to halt the supply of arms to Taiwan or delay it. Either would have been a disaster for Taiwan, and caused a panic on the stockmarkets and among the population there.

What was done is that a package negotiated by the Bush Administration has been allowed to proceed with one major change - no submarines. Taiwan had been promised submarines by the Bush Administration, and instead will receive Black Hawk helicopters, not exactly a substitute.

Taiwan has long sought new generation F-16s, to supplement those sold under the previous Bush Administration, but these were denied also.

So the Obama Administration has not followed business as usual, rather a watering down of business as usual. It passed the "test" as China showed its outrage by cutting military ties with the US, and threatening commercial sanctions on US companies supplying Taiwan. Most of those firms will not be concerned since they do not supply China in any case, but Boeing's role in the Chinese airline sector is substantial. That is where China could inflict some pain, although Airbus would be well aware of this and price accordingly to reap the rewards of any symbolic smarting inflicted upon Boeing.

China will hope that it can scare the Obama Administration into withdrawing more from providing Taiwan military assistance, for that is what it can hope for. China has no serious plans to invade Taiwan, for it knows such maneouvres would cost it dearly in foreign investment, trade access and international relations with more than a few neighbours. However, it keeps the threat of force to "reunite the motherland" there to keep Taiwan "in its place", and it is useful for nationalist rabble-rousing in the event of the need for a distraction.

Nevertheless, Taiwan (or more legally correct the "Republic of China" government temporarily exiled in Taiwan) deserves US support to defend itself. It is today a vibrant and open liberal democracy, with the rule of law, free speech and individual freedoms widely respected. It has changed a lot since the days of Chiang Kai Shek's authoritarian rule. Beijing will continue to treat its renegade province as such as long as the Communist Party holds a monopoly on power, for now it is up to the US to continue to provide sufficient support for Taiwan's free democratic government to deter attack from the mainland.

Greece's socialism catching up

The sovereign debt crisis with Greece has a long history. It isn't just about the Greeks lying about their budget deficit.

The symptoms of Greece's current fiscal crisis tell a story of such inept economic management and performance that few should be surprised. Only those with their heads up the short term goals of financial markets (and so untrained and uninterested in the wider context), the proponents of the Euro, and what appears to be most of the Greek political class (and bureaucracy) didn't notice the progressive bankruptcy of what was the cradle of European civilisation.

The roots of the political culture behind this go back to World War 2 and the Greek Civil War. After the Nazis were pushed out of Greece in 1944, the Greek government in exile faced the communist "Democratic Army of Greece" supported by the Soviet Union through communist Bulgaria, Albania and Yugoslavia.

The subsequent five years of fighting (which played no small part in encouraging Greek emigration to the likes of Australia, New Zealand and the USA) divided Greek society enormously. The communists lost in part because of the split between Tito and Stalin that saw the Greek communists side with Stalin, which spelt an end to Yugoslavia's ample support.

However the cost of the civil war was immense in slowing reconstruction after the previous Nazi occupation. Between the civil war and EEC membership in 1981, Greece was politically divided. The military coup in 1967 was due to some fears of a far-left wing takeover by some forces, that junta was one reason Turkey gave for invading and occupying northern Cyprus in 1975, even though the junta was overthrown some months before.

Greece's governments have been dependent on aid since the end of the civil war. The influence of leftwing politics has been strong, with the communist party coming 4th in 1974 and 1977 and 3rd in 1981 with between 9 and 11% of the vote during this time, with more moderate socialists winning power in 1981. Since then the socialists have won a majority of Greek elections, and the communists have come third in all but one of the elections in that time. In other words, Greece is used to being governed with the principles of big government and socialism. The current Prime Minister, George Papandreaou might consider how his father, Andreas, when he was Prime Minister, ran enormous budget deficits in the 1980s when he was PM. Greece has been living beyond its means for a very long time.

When it joined the then European Economic Community in 1981, it was one of the poorest new members. Its membership ushered in a period of 20 years when it, along with Spain and Portugal, got the bulk of the subsidies for infrastructure and development that the EU now lavishes upon the likes of Romania and Bulgaria. Greece was one of the biggest recipients of Western European aid. This helped to bolster Greece's addiction to debt and budget deficits.

With membership of the Euro this gave Greece a high value currency with low European Central Bank interests rates that it could borrow with. It took advantage of the ability to issue sovereign debt in Euros to continue spending up large.

Now the chickens have come home so to speak.

The current government is starting to face fiscal reality by announcing spending cuts, and of course, on cue in a country beset with socialist attitudes, the public sector is going on strike. It doesn't think it is to blame, yet it might look at how its wages and operations have been getting funded for decades - it's been a lot of borrowed money.

However, Greece's problems are not just about spending too much money. It is about the deliberate lying about its accounts, and the lack of transparency of many areas of public spending. For example, Greece has long claimed its expenditure on defence to be a "state secret". The truth is that to placate the army, and evade a risk of a coup, Greek government have taken a blank cheque approach to defence. The current level of spending might have been justified in the Cold War, when Greece was very much on the front line with Bulgaria on its doorstep (Yugoslavia and Albania were not Soviet aligned from 1948 and 1960 respectively).

The airforce has 33,000 personnel and 477 aircraft, the navy 30,000 personnel and 84 warships, whilst the army has 100,000 personnel. This is similar in number to Israel, although Greece has a smaller population. The Netherlands, another NATO member, with higher population, has only 68,000 active members of the military. 5% of GDP is spent on defence it is estimated.

Furthermore, according to Spiegel Greece rigged its accounts to hide its budget deficit, with help from Goldman Sachs, by excluding some military spending and hospital spending. Similarly, Goldman Sachs participated in off balance sheet lending, by using fictional exchange rates to engage in sovereign debt swaps. These are the actions you'd expect of a tinpot sub-Saharan dictatorship, not an EU member state in the Eurozone. Right?

This sort of behaviour should be punished, the politicians who have been a party to it held up for all to see, but also the snivelling useless public sector managers who have ignored basic practices like double-entry accounting, and have participated in enormous fraud, should be shown up for what they are - the shysters that have borrowed and wasted money on behalf of Greek taxpayers.

However, some of the EU wont want that, because they want to protect the consequences of their own failures.

When the EEC accepted Greece, Spain and Portugal it was about looking forward to countries that had only recently turned their backs on military dictatorship, with the European project to pour mountains of European taxpayers' cash into lifting their incomes to levels commensurate with others in Western Europe. The same happened with the former Warsaw Pact countries, most recently with the inclusion of Bulgaria and Romania, both countries still besotted with corruption, organised crime and distinct paucities of transparency in their government accounts. European taxpayers are plundered to subsidise enormous EU funded infrastructure projects and of course the massively inefficient and environmentally disastrous Common Agricultural Policy.

The single currency across a range of economies with wildly varying levels of wealth and development has been a disaster for the poorer economies, who face a highly valued Euro which makes their relatively lower value commodity exports (and tourism sectors) relatively expensive, whilst now also making their mountains of debt unaffordable. Greece's sovereign debt is barely above junk status. Bear in mind that France and Germany have both run budget deficits beyond the Euro rules, but then they set the rules don't they?

So there are strong expectations of some credit being offered to Greece to avoid a default, it will no doubt be at the expectations of massive reductions in the budget deficit (Greece is claiming to cut the deficit from 12.7% in 2009 to 2.8% in 2012, but none of its plans show any sign of meeting this), which will mean accepting strikes, possibly riots and enormous political cost - the cost Greece should and would have faced in the 1980s and 1990s had it not been propped up by EU aid.

Of course what SHOULD happen is that Greece should default - its foolish creditors, who took a risk on a series of lies should suffer for their foolish decision to take up Greek debt. The Greek government, unable to borrow, will then face confronting the socialism and incompetence that has bankrupted itself. The Euro would rightfully suffer, as it should bear the devaluation of one of its participants failing to meet its obligations.

Allister Heath in City AM puts it plainly:

"Regardless of which plan is agreed upon, a rescue would fill the City with joy in the short-term – but would cause huge damage over time. There should be no bailout: it is high time that countries and investors learn to live with their mistakes."

Unfortunately, when you have the ability to plunder the pockets of future generations through taxation, there isn't much incentive to do that.

That, you see, is when the phrase "taxation is theft" so clearly comes into its own.

Unless the role of the state is constrained so that it cannot ever be used to bail out foolish investments or the governments of liberal democracies that vote themselves bankrupt, the easy option - which politicians never truly even start to face the cost of (what is being voted out when you put people in debt for years?) - will be used and the only loser is the taxpayer.

John Key is being a National PM

The message is rather simple.

If you largely supported what Helen Clark and Labour did in government from 1999-2008, but just want a "cup of tea" for three years, and a few tweaks in the other direction, then National is your party. That's what this government is doing - little different.

If you largely opposed what Helen Clark and Labour did in government from 1999-2008, and want a net reduction in taxation, reduction in the size of the state, then National is NOT your party (and frankly neither are any of the others in Parliament). Only Libertarianz has done that and would do that.

If you want to grow the size of the state, so that it takes more money to spend on "public sector employment" you can choose Labour, "Maori" you can choose Maori Party and "all you can think of" you can choose the Greens.

In fact if you want the state to grow in the areas of telecommunications and roads, you can choose National.

National is a conservative party. It almost never reverses what Labour does.

The Labour Party has set the political, economic and social agenda of New Zealand since 1935.

The National Party, with the exception of trade union membership, has adopted that agenda and sat tight with very few exceptions.

So why would anyone voting National expect any significant change?

Since when does 100% = 50%?

When you read it in the Dominion Post, reporting on proposed bus fare increases in Wellington:

"One option would mean the $1 city-section fare would be replaced by an increased one-zone cash fare of $2.

That would effectively mean inner-city bus passengers were facing a 50 per cent increase in bus fares"

Hmmm, good job paid journalists are out there making sure they double check stories and are so thorough, unlike those rogue bloggers right?

So Kerry Williamson let's learn maths:

$2 = $1 + $1

$1 = 100% of $1

Therefore an increase from $1 to $2 is?

Oh and while you're figuring that one out, how about a real question, such as what is the current proportion of cost recovery from bus fares in Wellington? What is the average subsidy per trip and per km? How many services are commercial (unsubsidised)?

For example, on average 51.5% of public transport costs are recovered from fares, is it planned to increase that, as that is the lowest level for Wellington in a four year period surveyed by NZTA?

In other words, how about some information that doesn't just involve reporting what the Greater Wellington Regional Council says?

The bureaucrats for whom freedom is unknown

I have said before that I despise smoking, I don’t like the smell and I hate walking behind smokers and don’t like walking through them outside buildings. So you might think I’d welcome what the Auckland Regional Public Health Service is calling for as reported in the NZ Herald.

ARPHS (why not say ARS) calls for what is effectively a ban on smoking anywhere but in one’s own home, which looks to me quite simply as the sort of nanny state authoritarian bullying that I thought was voted out in the last election. However, it would be a fair bet that those who “work” for that organisation are unlikely to have much philosophical truck with personal freedom.

The thought process appears alarmingly simple:

People smoke - it is bad for them - it's already illegal to allow smoking at places of employment, retail outlets and on public transport, so let's make it illegal everywhere else, except the home (that would be seen as too far).

Banning something that is bad for people is good. The very idea that perhaps it is morally wrong to do this appears to have not crossed their minds, after all it's for the "greater good" (as is the justification for all limitations on personal freedom). Fascists? Well, they wouldn't think so, they just think they are acting for the interests of others. However, they are treating the public as children. It's only one step removed from treating tobacco like an illegal drug.

So what should the response be to this?

Should it be to ask whether a study has been made as to the health benefits to non-smokers of the measures proposed? If not, why not? Why not come clean about what “public good” there allegedly is, or is there really none at all? I suspect the health benefits to non-smokers are virtually undetectable, after all the emissions from motor vehicles are in greater volumes and significantly more toxic (smokers don't die from a lung full of tobacco smoke, but you wont last long intentionally inhaling petrol exhaust).

Should it be to ask to what extent these measures are likely to reduce smoking? If not, why not? How about noting how effective these measures are at reducing illegal drug use?

Why are you not simply being honest about wanting to criminalise smoking other than in the private home? Or does that just show you up for what you are, as petty fascists wanting to change behaviour by force rather than persuasion?

Or, how about simply asking why the hell they think it is their business what adults do with their bodies on their own property or in public spaces?

Clearly the public health bureaucrats have no clue what private property means, and what private property rights mean, for long ago they surrendered the idea that you can decide whether or not to allow otherwise legal acts on your property.

However, they also seek to control public space. To have people prosecuted for smoking as a way of reducing the propensity to smoke. The idea that there are adults who voluntarily choose to smoke because they like it would bewilder them all.

How can people LIKE harming themselves? Well the joyless do-gooders who think they know best for everyone else can't grasp that not everything everyone does is “good” for them. Some people drink to excess, some people eat to excess and don’t exercise. Some people have unsafe sex. Some people take illegal drugs. Some people participate in dangerous sports.

The proportion of smokers who do not know it is bad for their health will be very low, so it isn't about that. Tobacco smoking has addictive qualities, but plenty give up smoking and the state has used other people's money for some years subsidising methods to do this. So the conclusion is that people smoke because they enjoy it.

People have freedom to choose to smoke or not smoke. Those who do should have that right on their own property or with the permission of property owners. Those who do not like it should prohibit it on their own property and not enter places where it occurs. Public (as in local and central government owned) locations should be places where people can peacefully go about their activities without initiating force against others, that includes smoking.

The only appropriate response to this proposal is incredulity.

It demonstrates the profound need for all policy proposals to government to be subject to a test of whether it enhances or detracts from individual liberty, and whether it represents the initiation of force or defending citizens from initiations of force or fraud. Such a simple test would see such proposals dumped in the inbox of the Labour, Green and Maori Parties who think that individuals are a means to an end, not an end in themselves.

While we're at it, abolishing the Auckland Regional Public Health Service would make a modest contribution to reducing the budget deficit.

Slavery, deceit, racism and the waiting game

Christopher Hitchen's latest article in Slate is on North Korea. - a "nation of racist dwarfs" he says, with good reason.

North Korea is the most odious regime on earth by an incredibly long margin. Iran, Zimbabwe and Turkmenistan are shining lights of freedom, prosperity, rule of law and moderation by comparison. Yet, for some reason, it gets precious little attention from the likes of Amnesty International, the left inclined protest movement (all too keen to care about Gaza, Iraq and Afghanistan) or indeed the international community.

Hitchens notes how much propaganda from North Korea carries racist depictions of Japanese and Americans, akin to the imagery the Nazis produced in the 1930s about Jews (this new book apparently describes the racist dimension of North Korea). North Korea also bemoans the impurity of South Korea, which allows Koreans to breed with foreigners - North Korea forces local women who are pregnant by Chinese to have abortions. Of course nationalism is always an easy refuge for the totalitarian. It was seen vehemently in the Khmer Rouge, it is still seen in China, and was long seen in the Soviet Union. The fraternity of socialism didn't wash when African Marxists visited Maoist China, or indeed North Korea, both countries where black people are both rare and seen as being inferior. The kleptocracies in Africa today accepting Chinese money for minerals don't pause to think about how they see themselves.

North Korea is a slave state, a prison society where the average height is six inches shorter than in South Korea. It is dependent upon shutting the entire population away from comparing their lives with the outside world, except for a clique around the family that runs the place. They enrich themselves enormously by selling minerals, weapons and whatever else the enslaved masses can extract for them at high cost and little benefit. It is a society where the concepts of truth, honesty and openness have been so wholly bastardised that the psychological damage is incalculable.

By what means does one live knowing that when things go wrong, there is no one to complain to, that when injustice is done, it is better to agree with it and support it, than to challenge it. That no one must be fully trusted, and everyone is expected to spy on everyone else. You included are expected to engage in this monument of telling on your fellow citizens for "crimes" that may not have happened, because to fail to do so implicates you, and you may well be the receipt of such accusations.

How do generation after generation live in a constant state of near war, constantly told attack is imminent, as is victory against forces depicted as demons (Japanese, American and South Korean). That the constant sacrifice is due to this perpetual state of war, that never actually happens, except in news reports of fabricated skirmishes and atrocities.

Where does human creativity, innovation and intelligence go when you are raised and taught to treat two men (one dead) as virtual gods, for whom you are to be grateful for everything, and who know everything and are infallible. Whilst all art, culture, literature and indeed industry are dedicated to glorifying them, and in following their guidance. When all learn that everything you create is to be shared and used by all others, and you are to get next to no credit, but meanwhile all around you struggle to eat, stay warm in winter and live in conditions unchanged for decades.

Finally, where is humanity when it is clear that those who challenge, question or are unconventional, simply disappear. Where there is unrestricted power by the state and all its forces to arrest, torture, imprison, kill and intervene in all aspects of daily life. Where whole families including babies are sent to prison camps for alleged political or economic crimes of one, and where you are constantly told you are the luckiest people on earth, and the rest of the world is in chaos, crime ridden and starving. Where compassion and mercy are only ever granted by the two official gods, and going against the unlimited list of rules, laws and taboos deems one an enemy of the state, the party, society and by necessity, neighbours and family. It is long known, for example, that no disabled people are ever seen in the capital Pyongyang. Given the record of similar regimes in treating the disabled, and given this is a state that imprisons small children in gulags, there is nothing it is not willing to engage in.

So to expect change from this regime is absurd, until Kim Jong Il dies and there is a coup to defeat his successor. North Korea will not give up its store of chemical, biological and nuclear weapons, it will not disarm and it will not allow transparent inspection of its nuclear facilities to enable a peace treaty with the USA, until the regime collapses or is dismantled from within.

Military action is futile and excessively dangerous, although it could never win a war against the technology, firepower and capability of South Korea, the US (and Japan if attacked), it could inflict damage on a scale that could take the lives of millions in South Korea and Japan.

It did not attack South Korea during the latter years of the Cold War, because it was so closely aligned to Moscow. Today it does not attack because it fears massive retaliation, of a kind that I would hope President Obama would be unafraid to inflict if North Korea tried.

That fear must be maintained, for a regime that has tolerated the deaths of millions of its citizens, and is willing to treat the remainder like insects. However, in the meantime it deserves to be humiliated and challenged for its treatment of its own citizens as guinea pigs and slaves in ways that would have been familiar to the Nazis and indeed the pre-1945 militarist Japanese.

This should be the number one human rights priority of all those who claim to give a damn about individual dignity, freedom and humanity. Finally, it would be nice if North Korea's useful idiots abroad were humiliated for what they are - supporters of one of the most blood thirsty cruel and dishonest regimes on the planet today. They should be ostracised like Nazi sympathisers, because in truth, they are worse - for the Nazis were defeated in 1945.

Land tax - short memories

If you ever had doubts of the degree to which the National Party could be a political whore (which the shift from Muldoonism to free market economics and the recent return to elements of Muldoonism ought to show), take this issue.

When it was previously in government, the Bolger government abolished Land Tax.

For the current government to even contemplate it, or to not hit it on the head absolutely and finally, speaks volumes about how easily swayed the National Party is to the winds.

More importantly, the idea that a party that sold itself in part on the basis of lower taxes is contemplating new taxes to offset tax cuts, tells you even more about how a vote for National is not, and (with the exception perhaps of 1990, 1993 and 2005) has never been about reducing the size of government.

Diet - Obama style

President Obama is going to freeze government spending for three years.

Wow, attention grabbing, looks like he's going to be tough on the growth of government and ensure better spending.

Well, not until you read the fine print. He's exempting:
Social security (20%)
Welfare (16%)
Medicare and Medicaid (21%) (oh but it's all private in America say the left!)
Veteran's affairs (1.5%)
Homeland Security (1.2%)
and about another 1% of spending.

Beyond that he can't cut around 5% which is debt servicing.

So about two-thirds of federal spending is untouched, and even his grand diet on spending will only slow down the growth of the deficit. So it will get fatter, a little bit slower. Because whatever cuts happen, they are more than offset by the burgeoning growth in these other areas and Obama's grand plans to invest waste money on pork barrel projects, and expanding healthcare.

So that inspired me to dream up a diet for people to lose weight the same way as President Obama proposes to bring government spending under control

Don't snack or eat high fat or high simple carbohydrate foods is how to announce it, but...

This does not apply to chocolate, fish and chips (and other deep fried food), pies, ice cream, pizza, burgers, cakes, biscuits, sugary drinks, beer, sweets and potato chips.

Call it the Obama diet, think of it as having diet Coke while you eat a double whopper burger with supersize fries at Burger King. After all, you could have had cheese with it.

(Hat tip: Not PC)

Britons wonder why young people commit brutal crimes?

Well take this case..

A thirteen year old boy attacked a 20 year old woman, in front of his two friends aged 10 and 11 (who told him to stop).

According to the Daily Telegraph "He subjected her to a severe beating then screamed at her: “Do what I say or I'll kill you”, before raping her".

The details are rather horrible, he stole her mobile phone and ipod. When he answered a call on it from her boyfriend, she bragged to him about what he did.

He now has only three years in a young offenders institution because he showed remorse. Well any good defence lawyer would have advised that. No doubt the Edlington case attackers were advised similarly, but are so psychopathic and incompetent to be incapable of following instruction.

So why did he get only three years? Well "By law, anyone under 18 years old faces a lesser sentence for rape than an adult, and for those aged 14 or under the term is reduced further".

Excuse me? So the message is, if you want to rape someone, do it before you are 18 because you'll get treated more leniently? So you can have a laugh, wreck someone's life and then get just a few years.

No. Just because you might have a smaller penis is not a reason to regard rape by someone under 18 as less of an offence. Is it because the victim is older?

You see the maximum sentence for rape in the UK is life imprisonment (which is absurd, as it means you may as well murder the victim as well). However, for a minor it is five years (worth noting that had the woman had consensual sex with the boy she would have faced 14 years).

In the UK it would appear that as long as you are under 18, you're given licence to be brutal and get a relatively light sentence, having terrorised your victim. It is one thing to give young offenders who commit property offences or minor assaults a second chance, another for premeditated attacks that are of the kind most women fear.

However, it demonstrates the dichotomy in criminal justice policy and public attitudes. At 13 when someone shows the capability and capacity to rape and commit violent assault, it also shows the capability and capacity to take an adult punishment, before being given a second chance to live a different life. Conversely, life sentences for adult rape are absurd and perverse, unless it is an ongoing process of preventive detention after someone has demonstrated recidivism.

So while the message should be that rape is unacceptable by any measure, it is warped by the subtext "unless you're an under 18 year old rapist, then it's not that bad".

Air New Zealand focuses on the premium

It is rare that a New Zealand company captures the global attention of the industry it is in, particularly one primarily state owned. Given that Air New Zealand retains minority private ownership, as is publicly listed, that has ensured that political pressure on how the airline runs its business has been very limited. However, it has also meant it has lacked capital to expand, so has focused on its core business.

The new long haul products announced today are reviewed on my airline service blog here. For economy class it is quite revolutionary for those taking the Skycouch, but is no overall advance for others in economy. in premium economy it becomes best of its class with maybe only one rival (although the legroom has been cut), whereas business premier is more of a tweak rather than a serious change.

From a business perspective what is particularly interesting is how dominant the premium cabins are becoming for the airline.

At present services from Auckland to London via LA, and some other services to Vancouver, San Francisco and LA are operated by Boeing 747s with the following configuration:
46 Business Premier
39 Premium Economy
294 Economy
= 379 passengers.

These are to be replaced with Boeing 777-300ERs, which are smaller than 747s but larger than the current fleet of Boeing 777-200ERs. However, look at the seat configuration:
44 Business Premier
50 Premium Economy
246 Economy (including 66 that will convert into couches for 44)
= 340 passengers

In essence, Air NZ is giving up mass market cheap economy class for targeting more discerning tourists, while focusing more on upmarket tourism and business travellers. Bear in mind that few know one of Air NZ’s most profitable routes is LA to London, because the fares that can be charged on that route are almost as high as Auckland to London – although it is a fraction of the cost to service. However, tourism from the UK to NZ has dropped dramatically due to the recession.

It is betting that given its cost structure is mid range among its competitors (Qantas is higher, Emirates and Malaysian are lower), it needs to pitch itself with something to attract discerning travellers. Not the bargain basement lot who are price focused and who really don’t care about legroom or food.

Still it faces a struggle for growth, given that it is undercapitalised and has missed out on realistic opportunities to plunder the Australian market (but that’s another story of corporate blunders combined with government interference).

Now is not the time to sell, but as the majority shareholder, it would be wise to consider at least some sell down of the airline ownership to get some new capital. Ultimately it will need a strategic shareholding by another carrier to have any serious hope of expansion, which means the word that too many in New Zealand politics are far too scared of – privatisation.

I've reviewed all of the product enhancements on my airline service blog:

The business case
Economy Class
Premium Economy
Business Premier
Catering and entertainment
How competitive is it?
Images of the new products

However if you want my quick summary of it all:

Economy - Skycouches are great for couples, but everyone else loses a little width and legroom. Most economy passengers are slightly worse off.

Premium Economy - A significant improvement with far more width, space and better seats, but the same recline. This isn't as good as business class used to be in terms of recline, and at 36" seat pitch it is frankly the worst for legroom in its class.

Business Premier - Business as usual, little change here, except the catering will leap ahead with freshly cooked food, not reheated.

It will first be seen on the new Boeing 777-300ER, the longer larger version of the current 777-200ER. The 777-300ER (dubbed 77W in the industry) will replace 747s for Air NZ, which means sadly losing the upper deck and nose cabins, both far more exclusive than main decks (with only one seat either side in Business Premier).

The first routes will be Auckland-LA and Auckland-LA-London. The existing 777 fleet will also be progressively retrofitted.

Some industry media coverage:
Business traveller
Flightglobal
Wall Street Journal

NZ Herald has great images of the economy seats
NBR has different coverage
Air NZ website has three press releases and a new website to reveal more in a week.

UPDATE:

Apparently Air NZ got a design company to profile passenger types - and they match Simpsons characters. I'm not thrilled to be a blend between Lisa Simpson and Mr Burns.

Full set of photos on flickr here.

Labour thinks you're too stupid to lose weight

Labour Health spokesperson Ruth Dyson says this "The Government apparently thinks people will simply be able to change their diet and exercise without any assistance or form of nutrition education"

I'm astonished. Changing your diet is impossible without the government. The carefully hidden knowledge that eating mostly vegetables, fruit, lean meat, fish and cereals, and avoiding high fat and high sugar foods helps you lose weight is something that almost nobody knows surely. In addition, without the government how COULD people go to the gym, or go for a walk or swim?

Does anything more clearly show the patronising and condescending attitude the Labour Party, and indeed many statists have for the general public than that? The idea that without the government, people can't look after themselves, don't know any better and wont change.

Ms. Dyson might wonder if one of the reasons Labour became far less popular is that people are sick of being treated as imbeciles, and sick of being forced to pay for bureaucrats to hand hold people.

If people get obese and do nothing about it, then it isn't anyone else's business. If you want to address rationing the health system, then maybe linking its provision to what people pay for it, might make a difference. Imagine, for example, if most people had health insurance and paid more every year if they were deemed to be obese. How much of a better incentive would it be if you paid more for healthcare because of your risk factors, than for some patronising do-gooder to give you nutrition education and tell you to exercise more?

Why is it that so many politicians prefer telling people what they should do than have them face the costs of their actions?

Matt McCarten wants your money

Given he believes in a bigger state, he believes in compulsory welfare, state monopoly education and health care, it is hardly a surprise.

However, he has an odd view of "fairness".

He thinks, as do most socialists, that the imperative behind those supporting the free market in wanting lower taxes is greed. They think simply that people who are relatively successful want more of their own money and to hell with everyone else. The concept that we actually are suspicious of an ever growing state, see abject failure in the state addressing poverty and social mobility, is beyond the likes of Matt.

You see he loves the state, the state for him is the embodiment of humanity. It is a democratic expression of the "people's will" and it both protects and serves. The more it does, the better we all are for it. Given Matt spent much of his political career advocating for the Alliance, an openly socialist political party, this is hardly surprising. He sees the state as an instrument to take by force from those he deems rich to give to those he deems poor - the rich implicitly having not earnt their money "fairly", and the poor, well it isn't their fault, is it?

Matt says: "We need our public services". Hold on. Who is this "we"? Most would accept that they need health care and education, but separating who pays for it from who provides it creates all sorts of problems of performance. Matt doesn't believe this though. He thinks that when people pay taxes they can keep the state health and education sectors accountable for what they receive, even though it's clear that this works rather badly. However, he has spent much of his life representing suppliers, as in workers. He hasn't ever represented consumers of services, and certainly not those paying for it.

He then goes into his favoured taxes, like capital gains tax and death duties. Then he brings up the tired old nonsense of financial transactions tax, without blinking an eyelid as to how the financial sector could avoid much of it by engaging in most transactions offshore.

He says "Most of us wouldn't even notice it. But those who buy big-ticket items would. That's why the ruling class won't do it.". If Matt put down Das Kapital for a second he might think that "big ticket items" might get bought offshore with offshore bank accounts, and there will be other useful techniques to avoid the tax. However, he's cleverer than those who seek to protect their money.

That's a phrase he doesn't understand. To Matt (and many others on the left) taxes are not the money of those who own it, but the state's money - so it can be used for the benefit of the vested interests who best convince politicians to spend it on them and then all others.

Then he makes something up: "Twenty-five years ago we were told that if we cut taxes for the rich and raised taxes on the poor then we would work harder and earn more. It was nonsense then. It's nonsense now."

Who told you that Matt? Who ever called for raising taxes on the poor? In fact, name ONE report or one person who ever supported this? It's a bright Marxist red herring, as nonsense as he says.

The bigger argument is what the role of the state should be. The welfare state in its current form has produced a culture of dependency and entitlement that is not earnt, and needs to be urgently addressed. By keeping those who pay for health and education far apart from those who deliver it, patients and parents find it difficult to influence outcomes and to ensure that those providing those services are accountable to them.

Other countries have adopted significantly more consumer friendly approaches to both health and education that are hardly radical. Sweden's voucher approach to education is difficult to rebut as a significant first step to increasing diversity and accountability for that sector. Singapore's approach to health care has also resulted in far higher degrees of accountability for service delivery, and a greater interest by individuals in their own health care.

Matt prefers the world of - you earn more, you consume less, then you pay more taxes to pay for the health, education and welfare of everyone else (few of whom are ever grateful for it). He likes state monopolies in those sectors so that the workers can command ever increasing incomes from taxpayers by organising themselves as labour monopolies, so that there are more workers, less work and more pay.

You see the very greed and so called selfishness Matt attributes to the rich is exactly what the trade union movement of which he is a part of, demands for its members.

Absolutely none of it is to do with fairness, none of it is to do with users of state provided services and certainly none of it is to do with taxpayers getting value.

It's just from each according to their ability to each according to their means for Matt.

So what would Obama's proposal have prevented?

Nothing, in the UK in any case.

Allister Heath in City AM - the UK's only consistently pro-capitalist newspaper - says:

Barack Obama’s plan to ban banks with retail arms from those activities – endorsed by shadow chancellor George Osborne – would have done nothing to prevent the crisis; not a single bank that got into trouble since 2007 would have been saved had those rules been in place.

Why?

Northern Rock, HBOS, Bradford and Bingley and the Dunfermline did not engage in prop trading. They lent to people who couldn’t repay, assumed property prices wouldn’t fall, relied on money markets for funding rather than deposits, and purchased securitised sub-prime debt as a “safe” high-yielding investment, often tucked away in off balance sheet vehicles. They held too little quality, liquid capital as a buffer against losses.

So you see it's a mirage. What about RBS?

It was over-leveraged, bought vast amounts of sub-prime securities, lent willy-nilly to unsound borrowers and blew a fortune buying ABN Amro, suffering massive goodwill write-offs. RBS made every mistake in the banking book; it would have been doomed with or without Obama/Osborne.

The Tories are jumping on the bandwagon for political reasons. It makes them look like they aren't beholden to rich capitalists in the City of London, and helps attract the envy vote across the country. At the same time the British government, to its credit, is NOT jumping on the bandwagon. Gordon Brown, for all his faults, is smart enough to not frighten the sharemarkets even more by blundering into nodding in unison with Obama.

Funny though how those on the left who would decry the UK following in step with the US when it was Blair and Bush, now want Brown to follow Obama. Funny that it isn't about making your own decisions, but about making decisions they agree with.

A Guardian poll showed nearly 100% support for doing so, but then who reads the Guardian besides those who think the state should intervene in more, except when it comes to overthrowing nasty dictatorships in the Middle East. So of course it has articles saying "yes Obama", as does the Independent and even the Telegraph is conditionally supportive.

It is deeply unfortunate that many who understand the financial sector are typically without much knowledge of public policy or political philosophy. Indeed, the reverse is true with many political pundits, bureaucrats and journalists not understanding the financial sector.

In the meantime too many are prepared to blame anyone but themselves, and to find solutions that are about addressing symptoms not causes.

Child protection law misdirected

There should be some irony in seeing that the day it is announced that parents will be able to check neighbours, friends or partners to see if they have convictions for being a pedophile, that the two parents of the Edlington sadists have name suppression.

The children who are the victims of their children are reportedly frightened that the sadists, who have permanent name suppression and will get new identities, (thanks to the mugs who paid for them and their parents to be fed, clothed and housed), will kill them once released. The other disturbing element is that the two victims no longer wish to associate with each other, in part because the sadists forced them to perform sexual acts on each other.

Allowing parents to ask the Police to check whether an individual has a "child sex offence", seems reasonable to most parents. However, there are a whole range of serious flaws in the idea.

1. The definition of "child sex offence" isn't clear, but it is plausible that it will catch those guilty of relatively minor offences - the classic teenage "oops she was 15, I thought she was 16" situation, where there is consent and the "offender" is only a few years older. However, that person will be deemed to be a "child sex offender" as much as someone who brutally abducts and rapes small children. There is no equivalency between them, but it will greatly hinder the rehabilitation and reintegration into society of those who have essentially committed victimless crimes. Surely if it is to happen, shouldn't there be a definition that weeds out the latter cases?

2. The hysteria about child sexual offences alone has left out the obvious. Rapists and anyone who commits violent offences are completely ignored. What mother would rather know if the man they are going out with is a rapist - of women - or has served time for bashing a previous woman? Why is this not important, or is it part of the modern day hysteria that treats only those who commit sexual offences against children as dangerous. Those who beat children or rape adults are somehow not seen as a risk.

3. If there are child sex offenders in public today that pose such a risk, should they even be out? Surely sentencing should reflect danger to the public and the top priority has to be protection. In an environment when the state is seeking to cut time in prison across the board to save money, surely a better effort would be to ensure sentences of those likely to re offend are sufficiently preventive?

4. Should there not be a bigger debate about what to do with information about convicted criminals? Should everyone have the right to know who has done time for violent, sexual and property offences? Wouldn't you like to check your real estate agent for fraud, your daughter's new boyfriend for violent offences? Or does that put a serious barrier in the way of rehabilitation?

5. Doesn't allowing such checks simply produce a false sense of security? The two boys tortured in Edlington would not have been protected because their assailants were minors too. A significant proportion of child abuse happens in feral homes, committed by people who are never convicted or even charged. Does making such a check become an easy substitute for being cautious, not leaving your children with people you don't know? Indeed shouldn't the best step be to have enough communication between children and parents that when the kids don't like someone, because of what they say or do with them, that parents listen?

This sort of proposal is driven by politicians seeking to get good publicity months out from a general election, a desire to "do something" rather than consider the whole criminal justice framework around protecting children and media hyped hysteria about high profile cases.

A better response is the following:

1. Preventive detention to be used more often for multiple repeat offenders and those who are considered to present, on balance, a real danger to the community. This applies also to minors who are offenders.

2. Applying a sentence of custody denial for anyone convicted of serious violent or sexual offences (including those against children). Intergenerational abuse and criminality is a key problem, and it is about time that parents who abuse are no longer permitted to live in the same home as other children. Why are abusers allowed to breed and raise children, but not allowed to work in schools? Is it less of a concern to make your own victims?

3. Promote self defence techniques for children and the means for them to safely advise trustworthy adults (i.e. at school) if they are frightened or abused.

4. Criminal negligence charges for Police or child protection authorities who ignore multiple reports of offences against children. The Edlington case is a palpable example of this.

5. Permanently deny welfare including housing to all convicted serious violent and sexual offenders. Taxpayers should, at least, not be forced to pay to sustain those who have harmed them. Let them be at the mercy of charities who will spring up to help. Let's not allow them to populate already tragically depressed housing estates and live their lives in leisure in front of TV.

6. Consider how and whether the general public should have access to criminal records of other citizens. Sexual offences are one thing, but so are violent and property offences. Would this make people safer or would it simply result in all criminals being incapable of living lives outside prison without criminality? Would it be a deterrent or would it allow like minded individuals to find each other and collaborate?

It's important to bear in mind that neither the Edlington case, nor the Jamie Bulger case, nor the Huntley case would ever have been prevented by the measures now proposed. Edlington COULD have been prevented by the Police and Child Protection Services, as the offenders had committed multiple violent and property offences over the years.

However governments rarely point the blame at themselves, make themselves accountable personally and financially, and seek radical changes to try to prevent similar occurrences.

Feral youth require focused response

Edlington is now known in the UK as the place where two boys, aged 11 and 10 attacked, brutally tortured and left for dead two other boys aged 9 and 11. The details of the case are beyond that of most violent crimes, but demonstrate sadistic pleasure in inflicting the most horrendous pain, suffering and degradation. Having a sink dropped on your head, wounds cut to the bone and cigarettes burnt into them, with sexual assaults and left for dead. They even used a mobile phone to film their sadistic game.

Those who committed it now have preventive detention for a minimum of five years. The sentence of their victims will be for much much longer.

While many ask "why", it isn't rocket science to figure out. When asked why, one said "Don't know. Cos there was nowt to do."

The two perpetrators are sadistic psychopaths, probably without any hope of redeeming their lives. The criminal justice system should keep them securely incarcerated for many years, until - as the judge said - they no longer pose a risk to others. A children's charity has said a five year minimum is insufficient, as their victims will still be young and fearing their release. It would only be fair to at least keep them away for at least 15 years. Being granted anonymity for life and new identities is rather premature. Why on the one hand are some relatively harmless people put on the sexual offenders' registry, but these two - unreformed - will automatically be given a chance for a new start? On top of that, should not both be required to give some of their future earnings in compensation to the victims?

Whilst they are primarily to blame, the secondary blame goes to the oxygen thieves who are their parents.

The boys drank vodka and lager and smoked cannabis. Their 38 year old unemployed father would beat them and their mother. Both parents let them watch explicit violent horror films from around the age of 6, including the Chucky films. Their older brother has already been locked away for mugging a pensioner.

Their 36 year old mother is a heavy cannabis user, and has had seven children by two fathers. She said of the incident:

"It’s got nowt to do with me – they weren’t even in my care.”

You see only three weeks before the mother got them put into foster care.

So the father should at least be charged for the violence against the boys, for supplying them with intoxicating substances and neglect. The mother is at least an accessory to all that. Both should also be denied welfare and prohibited from having custody of children for at least a decade. It is about time that such grossly reckless and vile parents faced serious criminal sanctions, and taxpayers freed for being forced to pay for them. It is also about time that such people were denied any rights to live with children for the foreseeable future.

Finally, there is substantial blame to be laid at the foot of the Police and the child protection authorities in Doncaster. Nine agencies failed on 31 occasions to take action against the two boys. I would suggest the parents of the two victims seek legal advice about suing them for compensation for their boys.

An 11 year old neighbour kept a diary about how the boys would abuse her and throw stones at her and her family. In 2006 a boy threatened a school staff member with a baseball bat, no further action was taken. There were arson attacks with no follow up. An incident involving ducklings from a public pond thrown sadistically at a wall and killed. With a constant series of incidents, clearly the relevant agencies did not connect them and did not consider them serious.

A week before this latest incident, an 11yo boy was beaten up and kicked. They were meant to appear in front of Police to explain this on the day they chose instead to nearly kill two boys.

It should be beyond doubt that Doncaster council and the local Police have failed miserably to undertake their duties to protect the public. No one has been fired because of this, but it is about time someone was accountable. Given news the parents are now being investigated, it should not be long before someone from the authorities receives a lawsuit - and only when it is a sum commensurate to the years of therapy, and the loss of enjoyment of lifestyle that the two victims will endure in coming years, will it be taken seriously.

Yes intervening in such cases is difficult, but when two children repeatedly commit violent crimes at what point is that still an excuse?

Obama's grab for populism

Commentators across much of the political spectrum have lauded President Obama's hardly coincidental announcement that he is going to regulate the US banking sector on a grand scale.

It came less than a day after voters in Massachusetts gave the Democrats, including Obama and indeed government a bloodied nose. This was largely due to the ham-fisted attempts by Obama, but most disturbingly by the indisputably corrupt forces in both the House and the Senate, to reform healthcare. Instead of taking a breath, Obama decided to go on the front foot and wage war against what has been portrayed as public enemy number one by the left - the banking sector.

The message was simple:

- The banking sector caused the recession (untrue);

- The government was forced to bail out the banking sector as a whole because of its own failings (mostly untrue)

- The banking sector is full of people who earned a lot of money doing the wrong things (partly untrue);

- Time to punish them all and stop it happening again.

What he didn't say was:

- The banking sector took risks because of the fiat money of the Federal Reserve effectively encouraging such behaviour;

- The Federal government through Fannie Mae and Freddie Mac funded a boom in housing investment including loaning to those who couldn't sustain the borrowing;

- Hundreds of thousands of Americans borrowed far too much money making foolish investment decisions;

- Bad banks could have been allowed to fail and it is time to have a fundamental review of the entire monetary system.

The crisis came about because loose money, combined with rules requiring a portion of lending to risky borrowers, saw a bubble of lousy investment in property. It was a bubble seen in many countries, and it has only partially burst. Had it fully burst there would have been hundreds of thousands of more mortgagee sales across the US, UK, Europe and elsewhere. It would have hurt those property owners, but it would have opened up enormous opportunities for many others to buy homes and engage in the sector.

No. Obama is completely uninterested in this. He is far more interested in gaining kudos from the popular masses for bashing bankers. He is "doing something" to divert attention from the Massachusetts result, whether it is right simply wont be understood by most in the media (who have little understanding of economics or finance), and 99% of the public.

So is he not justified, will his measures make a difference? Alastair Heath at City AM thinks not:

Was the financial crisis due to the fact that some banks own private equity firms? No.

Would Lehman have been saved by the restriction on size or any other of the proposals? No. Just one firm, Bear Stearns, a pure investment bank which would not therefore be covered by the new rules, was destroyed because of its ownership of a hedge fund which invested in sub-prime mortgages.

Would any of these rules have protected Northern Rock or HBOS? No.

Did the losses racked up by the state-sponsored Fannie Mae and Freddie Mac mortgage giants have anything to do with prop trading or hedge funds? No – and neither did the failure of Wachovia, Washington Mutual, Countrywide or the over 100 US banks and many others around that world that have gone bust.

In truth, banking losses were caused by bad property loans – and the purchase of this sub-prime debt by other banks and funds in the belief that they were safe. Wall Street was crippled because it was so leveraged and didn’t hold enough high quality, truly liquid capital. AIG insured packages of sub-prime debt through credit default swaps but didn’t set capital aside in case things went wrong.

Obama’s pseudo-remedies completely miss the point.

Heath believes banks should have living wills and it should be made abundantly clear to banks and to depositors that governments wont bail them out again. Banks' creditors and debtors would need to learn to pay more attention to what is behind their assets. In other words, a deal needs to be struck whereby the state turns it back.

However, this cannot be while fiat money continues to be manufactured by central banks at interest rates barely above zero. What is happening right now is a new series of asset bubbles because of it, with property picking up again in London, share prices getting an unholy boost because bank deposits offer nothing, and the cycle starting once again.

It is most telling and disturbing that Conservative Shadow Chancellor George Osborne supports Obama's proposals. A man who hasn't a clue about the banking sector seeking to show his solidarity with the "common folk" when to get votes (when in fact he has never had a real job, and lives primarily off of vast inherited wealth). City Am notes that Obama's proposals would hurt RBS, now primarily taxpayer owned, showing Osborne's foolishness in speaking in such a kneejerk manner.

However, what's being cultivated is not solutions to problems that are primarily about how individuals react to incentives, but envy. Bankers are public enemy number one, and the foolishness of some, who were paid very well, is a fertile breeding ground for hatred of the whole sector.

It's a sector that bores most, that is largely not understood, and ignorance breeds suspicion. Be sure that few politicians will point out that both the Obama and the Bush Administrations (and Clinton before) all bear much responsibility for the monetary policy, and the investment regulatory environment that inspired and rewarded irrationality.

Sadly, what all of this shows is how incapable democracy is at handling complicated public policy. Politicians are mostly clueless, the media similarly so, those who do understand are often accused to seeking to protect vested interests, and most media seeks sales based on massaging public anger. Few will dare profile the average people who took out self certified 120% mortgages at the peak of the property boom and ask them why they took such risks, yet they too contributed to it all.

However, Obama dare not ever say that banks shouldn't be forced to lend to people who are a bad risk, nor that the Federal Reserve system be subject to a fundamental review. It's blame banks, whether they received taxpayer largesse or not, were foolish or not.

The main winners from this will be those countries that don't follow in line - I expect Zurich, Geneva, Hong Kong, Singapore and Shanghai will all be looking for opportunities to attract more of the financial sector from the West.

Principles for tax reform

Following on from Not PC's excellent post, here's a simple guide to where the government should start from in what it calls tax reform:

Step One: Stop increasing spending. You don't have the money. You're borrowing money from future generations to pay for current consumption.

Step Two: Determine what the role of government is. The core functions. Be open about it, and be open about what government shouldn't be doing.

Step Three: End funding for anything inconsistent with what you determine in step two.

Step Four: Look again at the role of government, look at what incentives and impacts your involvement in any portfolio creates. End funding for anything negative.

Step Five: Change local government legislation to require it to do the same.

Step Six: Remember that when some areas of the economy are taxed less than others (e.g. property) that means that you should cut taxes in other areas. The lower, the flatter the taxes, the less distortions.

Step Seven: When you run out of ideas to cut spending, look at Hansard from 1999 to 2008. You voted against just about every spending increase Labour introduced, why don't you show some damned backbone and convictions, and reverse the lot. By simply doing that you'd eliminate the budget deficit and have enough surplus to cut taxes.

Step Eight: When you run out of backbone, remember this....

TAXES ARE NOT THE GOVERNMENT'S MONEY, THEY ARE LEGALISED THEFT

Say this every single night 100 times

It might just help you realise who your employers.

Massachusetts shrugged?

For Scott Brown, a Massachusetts lawyer and state senator - and Republican - to take the Senate seat of Massachusetts that was vacated when Ted Kennedy finally went into oblivion, is quite something. With 52% against the Democrat candidate Martha Coakley on 47%, it is a clear mandate.

You see in 2006 Ted Kennedy won the seat with a healthy 69% majority. For the Democrats to bleed almost a third of that support in such a short time will be a shock. However, what does it reflect on?

Did Brown campaign better than Coakley and was clearly the better candidate?

Probably yes, but not by THAT much. He travelled by pick up truck, painted himself as the outsider who was fiscally conservative and opposed to Obama's health reforms. Coakley by contrast seemed to assume she'd inherit the seat from Kennedy. His social views put him more in the middle of the Republican Party. He supports civil unions, but opposes gay marriage. She was far more socially "liberal", moreso than Obama. She wants US withdrawal from Afghanistan, supports heathcare reform, but has also been involved in a number of controversies as state attorney general. She played a negative campaign against Brown claiming he wanted hospitals to turn away rape victims, misconstruing his belief that religious hospitals can choose not to offer emergency contraception if they so wish. Coakley was close to trade unions, but they were clearly not decisive in Massachusetts.

However, whilst she wasn't much of a candidate, that shouldn't have meant she would get defeated on that alone. Surely Ted Kennedy personally wouldn't command an extra 20% of votes?

Was there a poor turnout, as Democrat supporters stayed home?

Apparently not. The total vote turnout in 2006 was 2,165, 490 votes. This time it is 2,249,026, a slight increase. It could be argued Republicans turned out this time because they knew they'd have a better chance, but then Ted Kennedy was a polarising figure. It is quite likely many Republicans would have wanted to vote against him on principle, even though the odds of removing him were not high.

Is this an endorsement for the Republican Party?

Well not really. After all, there is no effective Republican leadership at the moment. Mitch McConnell as Senate Minority Leader, and John Boehner as House Minority Leader are hardly household names. Sarah Palin remains one of the highest profile Republicans, but she wasn't seen (thankfully) on this campaign. The Republicans are a rallying point for opposition to the Obama Administration, but really that's about it. It is still a party pulled in different directions by evangelicals (who can't win an election), conservatives and small government liberals (in the classical liberal not US leftwing liberal) sense. Scott Brown is a blend of the last two.

Is this a rebuke of Barack Obama?

Perhaps a little. Obama won Massachusetts by 62% to 36% to McCain, so you'd think most of his supporters would vote for the woman he endorsed. Clearly not all is well with independent ly minded voters.

However, it's worth noting that neither Obama nor McCain won their party's primaries here. Hilary Clinton beat Obama 56% to 41% for the Democrat nomination. Mitt Romney beat McCain 51% to 41% for the Republican nomination. So Massachusetts is a little different from other states. It may well be that the Presidential elections reflected more disenchantment with McCain than Obama as second choice.

Obama's health care reforms have clearly rattled many voters. Given the vast majority of Americans have health care coverage, and see the looming budget deficits under the Obama Administration, there is some serious fear that they may have to pay more and get less because of it. Brown has campaigned clearly on the fact that a win for him would enable the Republicans to filibuster bills in the Senate, including health care. In other words, this very election means that Obama's health reforms will at least be delayed, at most could be seriously compromised. Brown campaigned that the Democrats wont consider tort reform to reduce healthcare costs because they are beholden to the legal fraternity, this perhaps struck a chord.

Furthermore, it has become increasingly clear that the grand promises of "change", and taking a different approach to government, have proven rather feeble. Yes, Bush is gone, but Obama has become beholden to the vast range of special interests and lobby groups that Democrats are in the pay of. It's just a change of personnel, not a change of technique. Pork barrel politics remain as much as they ever were. The hype has not met expectations. Obama is simply another politician.

Is this a rejection of big government?

I'd like to think it is, of course, and it would seem, in part that this is what it is about. Evangelical Republicans may want to pay special attention, as it is NOT social issues that have motivated the change, but it is money.

The amounts of money the Obama Administration is looking to pour into subsidising compulsory health insurance are substantial. Indeed, the Obama Administration has shown virtually no real appetite for fiscal conservatism, with the so-called "stimulus" package often going into consumption and poorly planned projects.

American taxpayers see the bailouts, see the willingness to engage in all sorts of new government projects as an unwillingness to face up to the need to cut spending. In the US, there is a particular degree of wariness about how well government can spend your own money. This is something the Obama Administration doesn't even start to understand, and it is a movement that has been catalysed by the proposals on health care. Bear in mind that nothing in the health care package would cut the burgeoning costs of Medicare and Medicaid, both of which comprise half of all US health spending. Yes - the government's health care plans have poor cost control, so why wouldn't Americans fear state run health care?

Massachusetts interesting has a public health care plan run by the state, which effectively subsidises health insurance for those on low incomes and penalises, through the tax system, those who don't have health insurance schemes. It means 4.1% of people don't have health insurance, which represents those preferring to pay the tax penalty and those who are still unwilling to buy insurance with low incomes. So do the people of Massachusetts simply not want an additional federal healthcare plan, or is it simpler than that?

Conclusion

Coakley might not have been the best candidate for the Democrats, but she didn't lose because of that. Brown might have been quite a good candidate, but he didn't win just because of that. The election was a judgment on the growth of government by the Obama Administration, particular fear of what health care reforms could mean for individual health insurance schemes and for taxation.

Ed Rollins, former political director for Ronald Reagan said on CNN:

Mr. President, don't run away from or misinterpret Tuesday's results. Don't let the Chicago sycophants surrounding you in the White House tell you this defeat had nothing to do with you or your health care legislation or your style of governing. It did big time, and every poll said it did.

You have three more years before the next inaugural. It may be yours or it maybe someone else's. But don't let your team convince you that this loss was only about Martha Coakley being a lousy candidate. (She was.) But she was good enough to win the state attorney general's job three years ago with 73 percent of the vote. She was good enough to trounce three other candidates, including a sitting congressman to win the primary a few weeks ago.

By contrast, House of Representatives lead Marxist with a silver spoon Nancy Pelosi couldn't have lied better than what she said: "We heard, we will heed, we will move forward with their considerations in mind, but we will move forward".

No Nancy, you heard, you're ignoring. This year there are mid-term elections. After two years of Bill Clinton and Hilary trying to introduce more government healthcare, Americans voted in droves to turn both houses of Congress Republican. The Republicans are not consistently small government fiscal hawks, and they are by no means great believers in slashing the size of the state, but if Massachusetts is a sign of wider discontent, the mid-term elections could cauterise Obama's plans on health care and his budgetary ambitions over the next three years.