Greece's tragedy should be lesson to all

Greece's radical leftwing party, Syriza, has one policy I agree with - the prosecution of the politicians and bureaucrats who are the architects of Greece's current tragedy.

That is all though - the policies to "reject austerity" are so demonstrably absurd, that they will demonstrate the simple failure to learn the lessons of the past couple of decades of Greek reality evasion.

As much as Syriza, the Communist Party (truly communist, in the Marxist-Leninist - Soviet model was the way to go sense) and the fascists want to paint it, Greece is not in an economic crisis because of foreign bankers or even the European Commission.

It is in a crisis because perpetual budget deficits are unsustainable.

This will continue, even if Greece exits a fiat currency supported by large economies for one supported by its own incompetent government.  For let's be clear, Greece is no more likely to be able to reject austerity with a currency that will be as trusted as the Zimbabwean dollar than one trusted like the Deutschmark.

There is literally no alternative to austerity in one form or another.

So what are the options?

1.  Greece follows the deal previously done with it.  That means reducing its budget deficit to ultimately balance spending with revenue within the next few years.  Bear in mind this deal already includes 80% of its debt being written off by the creditors.  Not exactly wealthy bankers demanding their pound of flesh when most of what they loaned Greek governments is being written off.   Of course what this means is shrinking the Greek state, less welfare, pensions at ages similar to other EU countries,  less subsidies, privatising trading enterprises (e.g. railways, broadcasting, postal services), cutting the public sector and streamlining the tax system so that it is at a level people may be prepared to pay.    If Greece accepts a public sector that it is willing to pay for, it can stay in the Euro and live within its means.

2.  Greece rejects the deal and defaults.  That means simply being unable to pay its way.  The state can't overspend because it can't borrow (who will lend to it outside some German led guarantee?), so it stops paying wages to public servants, stop paying other bills and essentially shuts down.  It becomes interesting if the military can't get paid. In effect it is instant austerity.  Instead of the Eurozone deal lending, lending ends, so the budget deficit is wiped out - instantly - because you can't spend beyond your income if you have no credit.   In this context, the Euro takes an enormous hit because of perceptions that Eurozone sovereign debt is no longer "safe", so it devalues somewhat.   The Syriza party effectively thinks that Germany will be forced to lend to Greece to cover it - in other words that the Eurozone becomes like the United States - with the richer parts transferring money to the poorer parts.   However, if Germany refuses (why should German taxpayers prop up an ungrateful, previously fraudulent Eurozone country that doesn't think the rules apply to it), then Greece truly faces a hard time, and will be tempted to take the next step...

3. Greece rejects the deal, defaults and announces a new sovereign currency.  As easy as some commentators think this is, it is almost inconceivable.  It is option 2, but with the printing presses coming out to issue a New Drachma which would be the new state currency to pay public servants and pay bills, and new debt is issued in the new currency.  The effect will be collapse of Greek banks as Euro deposits are withdrawn en masse, and millions of Greeks open up new Euro accounts in non-Greek banks.  All Greek businesses and citizens with debts in Euro face default, but suddenly Greek exports and tourism to Greece becomes remarkably cheap because of the new dud currency.   Yet without austerity, Greece will rapidly face hyper-inflation from the government printing money to cover its deficits, plus a massive increase in the prices of imports, such as oil.  In short, Greece turns into the stereotypical tinpot third world country, with a non-convertible currency that makes the Bulgarian Lev look like a safe bet.   

4. Greece rejects the deal and gets a German led bailout with surrender of sovereignty.  It isn't far removed from what was previously agreed, but this time it will be more thorough.  The deal to keep Greece in the Euro includes direct government to government lending, but with surrender of Greek sovereignty in the meantime.  You can just guess the attitude of the Marxists and fascists in Greece to the spectre of this.

Unless taxpayers of wealthier Eurozone countries let their government bail Greece out (which I doubt they will do), Greece faces living within its means.  It will have to do so within the Eurozone or without it.  At the very worst, Greece will put its head in the sand, default, be unable to pay for the army and it will stage a coup - seeing Greece kicked out of the EU and NATO and become the new laughing stock of Europe.  Then the people of the former Yugoslav Republic of Macedonia, the people of Cyprus (especially northern Cyprus) and other neighbours might fear what a new militarised Greece will be like.   

The lesson from all this is astonishingly simple.   

Government's cannot evade reality forever.  

They cannot borrow endlessly from creditors, especially ones that have already written off many of their past debts as bad debts.

They cannot borrow from other governments, accountable to taxpayers who want to know why their money is being loaned to a government that no one else will lend to, because its taxpayers refuse to pay for the state they demand.

They are not better off if they can just print money to cover spending - because people are not so stupid to believe there is real value in a currency manufactured by the government because nobody else will lend to it.

Austerity is not a policy choice on a whim, it is, as I have said before, just living within your means.

The tragedy in Greece is that the lives of millions are now being hit because past governments pretended this was not necessary, facilitated by public servants and facilitated by past creditors.  They have been hit by the fraud of the profligate deficit spending state.   They gained a welfare state more generous than most of western Europe, and state health and education systems they didn't have to pay for - and now face losing much of it all.

The real insanity is from the hard left, who believe that bankers should be forced to lend the Greek government other people's money, or the German government should force German taxpayers to do so.    They have bemoaned profligate lending by banks that needed bailing out, but now want the same banks to lend to a feckless government that can't control its spending.   They are deluded and use language that claim those demanding Greece face reality as "murderers", when it was their own welfare state philosophy that has brought Greece to its needs.

It is the peculiar brand of statist politics that has ruined Greece - the idea that government can offer more and more without producing more, without getting more money to pay for it.  The idea that better healthcare, education and more generous pensions can just be given, not saved for and earned.

The big question is not whether Greece has austerity or not - it will have it, whether it comes from choosing to cut spending, being forced to cut spending or cutting spending in real terms by shifting to a new nearly worthless fiat currency.

Hard working productive people in other countries are not going to pay for Greece's bloated state sector, and they wont do it whether it is as it is now, or some Marxist or fascist version of the same.   Greek citizens either have to hunker down and work within their incomes today, or leave.  If they choose the chimeras offered by the far left, whether they be Marxists or nationalists, then the austerity deals of today will look like paradise compared to the ostracism their country will face.

UPDATE (since I'm in NZ for now):  Idiot Savant still doesn't get it either.  How can it be a bailout for German banks when it is the Greek government that needs borrowed money to function?  This rhetoric is not dissimilar to the banker bashing that the Greek far-right/far-left is employing.  What do the reality evading statists think will pay for the massive gap between what Greek governments spend and what they collect in revenue? There is NO repayment of debt under the bailout, just a government guarantee for deficit financing.  The gap in understanding is palpable.  The willingness to excuse rampant deficit spending is surreal.   The belief in flat earth economics is expected though, because it's how Greece has been run for the last three decades.

London mayoral elections - Back Boris to kick Ken

Whilst not as dire as the French elections, it is clear that there is no candidate for the London mayoralty who supports local government doing less and getting out of the way of people.  

The line up ranges from a Uruguayan candidate for the fascist BNP, to a former public servant standing as an independent, an anti-car Green, gay former cop Liberal Democrat and then of course the two main candidates - the Marxist Islamophile Ken Livingstone (George Galloway-lite) and the bumbling Tory toff Boris Johnson.

UKIP has a candidate who is campaigning on having a tax for visitors to London, a cap on immigration, free parking and other policies that the Mayor has no legal power to implement.   All this is a plain insult to my intelligence.

What I WANT in a Mayor is some fairly clear policies based on what the Mayor can actually do.  The role has some clear powers in transport, housing, policing, economic development and emergency planning.  

For emergency planning and policing, I want competence, commitment to accountability and with policing in particular a focus on real crimes, crimes against people and property, and to promote a culture that respects the public's right to go about its business in peace, but which takes a firm line defending people from the initiation of force.  This includes assisting with national agencies against terrorist threats.   It means not letting people riot day after day, it means not letting people "occupy" private property in mobs as a "protest", it also means being accountable when members of the police assault innocent members of the public.

Beyond that, I don't see a long term role for the Mayor.  Economic development should be about getting out of the way, lobbying central government and local boroughs to get out of the way.   The Mayor should be an advocate and promoter of the city, but not be trying to plan it.   For starters the Mayor shouldn't be opposed to expansion of Heathrow (or any of London's airports if the airport owners can fund it privately).

Housing?  Well the one thing London does need is a Mayor to get out of the way and eliminate urban development limits within Greater London, and set free land for private development.   Local government housing schemes have long been breeding grounds for anti-social behaviour, attracting desperation and criminality rather than aspiration and community.  The ridiculous overly prescriptive planning rules that stifle development and inflate housing prices must be scrapped.

Then there is transport.  You'll know I could write a post about this on itself, but that needs a wholesale shift.  The tube should be privatised, bus companies should receive the fare revenue paid on buses, the congestion charge should be expanded and made more sophisticated to replace council tax funding of roads and to fund a programme of major pavement renewals, the backlog of sign and line maintenance and targeted intersection and corridor improvements.  All traffic light controlled intersections should have pedestrian crossing lights.  Finally, private enterprise should be asked to investigate new road corridors to be toll funded, for both new Thames Crossings and new arterial routes to open up south London.  

Finally, I want a Mayor who will reduce council tax, who will shrink his role to policing, emergency services and advocacy.  For whom planning means property rights and transport means getting from central government enough of the share of motoring taxes paid from using London roads to pay for their maintenance and to maintain spending commitments to public transport upgrades.

Nobody comes near any of that.  Given the UKIP candidate doesn't even remotely dabble in any of this, it comes down to whether there is a qualitative difference between the two leading candidates.

Boris Johnson is the incumbent.  His mayoralty has been characterised by pet projects for bikes, buses, a cable car, giving everyone over 60 free public transport and building "affordable homes". 

On the plus side he has taken a tough line on crime which has achieved some results, even though early management of the riots was disastrous.  He's improved management of utilities digging up roads and put some money into improving traffic management more generally.  He cut wasteful spending on media, froze council tax and gave up first class air travel (Ken liked a first class trip to Cuba when he was Mayor).  Finally, he is proposing a 10% cut in council tax over the next four years, it's not much, but it is in the right direction.

Ken Livingstone is trying to regain the Mayoralty from Boris, having had it from 2000-2008.  Livingstone is promising a public transport fare cut to be funded from the surplus in the Transport for London accounts that has resulted from deferred capital spending on new tube trains.  A surplus that will disappear in one year, but he insists it can be afforded.  He is promising to resell electricity bought by the Greater London Authority to Londoners at a huge discount, as if running a massive retail utility is without cost.  He wants to set up a government real estate agency, and even introduce a welfare benefit for young people who stay at school.   Ken loves being the big man for outside politics he is nothing.

Ken is an expert at spending other people's money.  He spent £10,000 a year on subscriptions to the communist newspaper the "Morning Star" and spent money on first class junkets to Havana and Caracas to visit Marxist dictators.  He is warm towards both regimes, ignoring the Castro brothers' use of mental hospitals to incarcerate political prisoners or Hugo Chavez's bullying of media and supporters of the opposition.  His use of the London Development Agency as Ken's "bank" to back causes he supported, his support for Lee "black people can't be racist" Jasper, who also said Anders Breivik has similarities to Boris.

I couldn't care less about the allegations of Ken using a company to reduce his tax liability, except of course it proves his hypocrisy, as does his continued use of private healthcare whilst being a strong advocate of the NHS.  I do care about his embrace of Islamist hate preachers and wanting London to be a "beacon of Islam".  If Boris wanted London to be a beacon of Christianity wanting all non-Christians to understand the religion, he'd be laughed at for being some US Republican style religious zealot.

Ken Livingstone seeks to court the votes of gay and lesbian Londoners, and claims to care for the rights of women and the oppressed, but then worked for Press TV - the overseas propaganda TV channel of the Islamic Republic of Iran -  a regime that executes homosexuals and rape victims.  Even Labour stalwarts like Sir Alan Sugar are opposing him, following Livingstone saying he didn't expect rich Jews to vote for him.

Ken cites "achievements" of his time leading London in the early 1980s - when he called capitalists "filthy" as recently as 1992.  

He makes it too easy.  Vote for Boris to keep this vile little man out of power.  Boris is no libertarian and far from perfect, but he is promising less local government and he wont be appeasing Islamists, communists or funding his radical racist mates.  Finally, Ken has said he wont stand again if he loses this time - let's hope that's a promise he can keep.  Besides, who wouldn't prefer Boris at the Olympic opening ceremony quoting Latin and bumbling his way informally through it all, over the nasal whiny forked tongue envy peddling friend of George Galloway.

Anzac Day 2012

Not PC's take on it

My past post's here, here and here

France in denial on its long path of stagnation

The Economist got it right when it had its cover page with the very title “France in denial” and today City AM’s Allister Heath said it more clearly about the French Presidential election:

“The useless Nicolas Sarkozy was given a bloody nose; the awful, economically illiterate Francois Hollande is in the lead...there is no pro-capitalist, pro-globalisation, low-tax, Eurosceptic, outward looking party in France... what passes for the centre-right in France is social democratic and fanatically pro-EU”. 

 Quite. A look at the candidates for President says it all. If I was French I couldn’t stomach any of them. Of the ten candidates, three are communists (Melenchon, Poutou and Arthaud), one is fascist (Le Pen), another a conspiracy theorist/quasi-fascist (Cheminade), two are liberal socialists (Hollande and Joly), one is a soft "moderate" socialist (Bayrou) and the other two are conservative "Gaullist" socialists (Sarkozy and Dupont-Aignan). What a choice! It's about "how would you like your more government sir, with a red flag, black shirt, green banner or just some more tax and protectionism?" 

Whether they embrace the EU or reject it (and there are plenty in that group rejecting it, because they see the EU as a free market capitalist project), they all support an economic nationalist fortress France, they all support more taxes (Sarkozy’s “austerity” programme has been mostly about tax increases and he embraces financial transactions tax), they all reject free trade - the free movement of goods, services, capital and people. They all, to a greater or lesser extent, paint the bogeyman not overspending governments that can’t keep their fingers off of the credit cards to bribe voters with borrowed money, but the new scapegoat “the bankers”. They all paint any alternative involving less government as “failed Anglo-Saxon” policies, despite the fact that manufacturing as a share of GDP is the same in the UK as in France, it is just the UK industries are more numerous and smaller than the grand state owned or subsidised industries that are national champions. 

The French story is one of despising capitalism, but as the Economist points out, it is rather contradictory:  

The French live with this national contradiction—enjoying the wealth and jobs that global companies have brought, while denouncing the system that created them—because the governing elite and the media convince them that they are victims of global markets. Trade unionists get far more air-time than businessmen. The French have consistently been told that they are the largely innocent victims of reckless bankers who lent foolishly, or wanton financial speculators, or “Anglo-Saxon” credit-ratings agencies. Mr Sarkozy has called for capitalism to become “moral” so as to curb such abuse. Mr Hollande has declared that his “main opponent is the world of finance”. Few politicians care to point out that a big part of the problem is the debt that successive French governments themselves have built up over the decades.  

The forthcoming contest between Sarkozy and Hollande is really a matter of how much more socialism do you want for France? Bearing in mind that part of France’s socialism, its molly-coddled rural sector, is actually funded by German, British and Dutch taxpayers through the EU. If Sarkozy wins, and he unilaterally implements a financial transactions tax, he will chase the financial sector from Paris to London and Zurich tout suite. If Hollande wins, he will do that and more, with a new 75% top tax rate (at 1 million Euro) just to make sure the message is clear – France doesn’t want really successful entrepreneurs (which of course, the 250,000 or so French expats in London already know), and he is looking to lower the pension age, just when it is clear how big a demographic problem France has in paying state pensions in the future. 

What both offer is a different speed of the process that Portugal, Spain, Italy and Greece followed for the past couple of decades, of growing the state, growing spending, growing taxation and pretending that this works. France’s GDP per capita ranking in Europe has slipped in recent years, now between the UK and Spain/Italy. It hasn’t run a budget surplus for nearly 40 years, and its visibility in the international marketplace for services is low, despite it being the largest component of the economy. Public debt is 90% of GDP, it has the largest state sector in the Eurozone at 56%. It has banks chronically exposed to bad debts in the Eurozone periphery which are grossly undercapitalised. Its labour costs are 10% higher than Germany’s, but French unemployment is 10%, Germany’s is 5.8%. France hasn’t had unemployment less than 7% for 30 years – putting a lie to the socialist myth of how caring a big state is with strong labour rights. The Economist suggests neither of the two leading candidates will address these structural problems: 

 “If Mr Hollande wins in May (and his party wins again at legislative elections in June), he may find he has weeks, not years, before investors start to flee France’s bond market. The numbers of well-off and young French people who hop across to Britain (and its 45% top income tax) could quickly increase. Even if Mr Sarkozy is re-elected, the risks will not disappear. He may not propose anything as daft as a 75% tax, but neither is he offering the radical reforms or the structural downsizing of spending that France needs.” 

 Furthermore, if France embraces an agenda of protectionism, closing borders, higher taxes and more subsidies within the EU, it will clash with the German, British, Dutch and Danish visions of what the EU should be. It will, fundamentally reveal what has long been the underlying tension in the EU – those who want to use it as a shelter and as a super-government to fund their own national rent-seekers, and those who see it as part of a project to break down borders of trade and travel (a third group see it as a source of money to milk while their economies are relatively poor - yet French farmers get three times the subsidy per capita as Polish farmers, as part of a compromise because expanding the Common Agricultural Policy to pay for 12 new states would have bankrupted the EU).

Germany calls the shots in the EU today and can be expected to block such nonsense, but what is next for France? 

Five years of Hollande chasing away business, with more stagnation, more credit rating drops and disappointment that he can’t mould the EU in the image of nationalist socialism? 

Or five years of Sarkozy fiddling enough to stop things sliding too fast, playing lip service to his own nationalist rhetoric, but by and large representing the status quo or slow progressive decline? 

What’s most repulsive is how popular fascism remains, seen now when Sarkozy – son of a Hungarian immigrant – talks of “too many foreigners” in France to woo voters from the seductively dangerous Marine Le Pen, despite he himself having spent five years embracing the political union that facilitates open migration among 27 countries. 

Or indeed the popularity of communism, with a sixth of voters choosing options that have been tried, tested and delivered misery and poverty across half of Europe. What does it say about the desperation of French voters who are swamped by the miasma of stagnation that they blame foreigners or businesspeople, and think a strong authoritarian leader will save the day? Where have we seen this before?  Fortunately, most French voters will never embrace fascism or communism proper, but they are almost infantalised to think politicians, with advice from those educated at the closed shop École nationale d'administration (Civil service school), can fix their problems with more laws, more spending and more taxe.  (Perhaps it is the philosophy behind THAT school that needs to be investigated)

Whatever does happen, one thing is abundantly clear, the future French President and forthcoming government will not be friends of capitalism, free trade or open markets. They will continue to seek protectionism at the price of French consumers and taxpayers, the unemployed and those who fund the EU. France will be the most strident force in international trade against free trade, less subsidies, more transparency and smaller transnational government. More strident indeed than even China. The question is to what extent it gets ignored and sidelined as it embarks on its continued process of relative economic delay, or if it ends up slowing the Western world down with it, given its prominent role in Europe. Given how central France is to supporting the growth of the EU project, and how it is the single loudest opponent of liberalisation of trade in agriculture, it is fair to say that, for those of us in New Zealand (and indeed in all efficient agricultural exporting economies), France will continue to represent the biggest stumbling block to getting progress in opening up international trade in agricultural produce and services.  For those of us in the UK, it remains the fervent cheerleader of a Federal Europe, and opponent of the UK vision of the EU as an open area for trade and business, rather than a protectionist fortress.

Editor supports individual freedom for the UK, but do the people?

I've written before about City AM, a free newspaper that is avowedly pro-capitalist. It has a circulation of over 100,000 in London, and is distributed across metropolitan London every morning (although to be honest just because I've always lived somewhere where it is distributed doesn't mean it is everywhere!).

Its editor Alistair Heath is a bright young finance and business journalist who shows he thinks well outside that world in his regular pithy commentary about public affairs, politics and economics.  He has successfully managed to become a regular commentator on BBC and Sky TV news programmes, and on a range of radio stations, so his influence is growing.  A breath of fresh air when the UK political discourse is dominated by so many arguing about what government should do, rather than whether government should do anything at all.

His latest editorial demonstrates he isn't just a man for the economy, but a man for freedom.  He writes:

LIBERTY. Freedom. When did you last hear these two words in the UK political debate? Well, I certainly can’t remember. Our country is dominated by busybodies and collectivists who believe that they and the state have the right and duty to tell us all what to do, to spend our money for us and to control what we can eat, drink, trade or say. It’s all gone too far. Individual freedom and its twin sister personal responsibility are the cornerstones of successful Western, liberal capitalist societies; yet these are being relentlessly undermined. Ultimately, there is no difference between economic and social freedoms. Attacking one endangers the other.

So this is my plea: let’s put the emphasis back on the individual. Let’s stop trying to ban everything. Let’s stop describing a tax cut as a “cost” to the government or – even worse – as morally identical to public spending. Let’s stop assuming adults should no longer have the right to eat fast food, or smoke, or drink, or paint their walls bright green, or build a conservatory in their back garden, or whatever it is they wish to do with their own bodies and with their own private property. Let’s once again speak up for the rights of consenting adults to choose how to live their own lives, even if we disapprove. Let’s allow people to hold, discuss or display their beliefs freely, especially if we disagree. 

I could easily just copy the whole lot, but it is worth a read in its own right.  Why should it come to this?

The examples of government seeking to boss people around and demonstrate the attitude of "we know best" towards citizens have continued to grow under the Conservative/Liberal Democrat government.  Despite early claims of a "bonfire of regulation" touted by the Liberal Democrats, it is clear that any pretensions towards individual freedom from that party have gone up in the smoke of pragmatism.  Politicians so easily outwitted by Oxbridge educated bureaucrats find it difficult to fight on principle, and as Conservatives who have had at best a checkered history of defending individual freedom, especially since David Cameron started the "transformation" of the party into an bullwark of environmentalism and activism, treat freedom as something you declare when the other lot are in power. 

Examples in recent months of clampdowns on freedom include:

- Proposals for new powers to require all telecommunications companies and internet service providers to retain records and  make them freely available to the security services of all phone calls, all emails and all internet website visits for all users for the past year.  The Deputy Prime Minister, Liberal Democrat Nick Clegg glibly reassures people that it doesn't include the contents of such communications, but the government will be able to access, as of right, records of everyone you every called, emailed and indeed everything you looked up online.  Of course you are meant to trust the Police, security agencies and indeed the whole apparatus of government not to abuse this to snoop on people's private affairs, inquire why people might search all sorts of words or visit certain websites.

- Proposals to force property owners to install energy efficiency measures if they build an extension or replace their boilers.

- A new law to prohibit the sale of tobacco in anything other than plain packs or to display tobacco in shops.  Already health authoritarians are demanding alcohol and fatty foods be treated the same way, or that there be a new fat, sugar and salt tax on"unhealthy food".

- Grasping measures to claim more tax from the wealthy by capping tax allowances for charitable donations, capping income tax free allowances for pensioners, imposing extortionate taxes on the sale of homes worth more than £2 million.

- Prosecutions for men who have made offensive and racist comments on twitter about footballers.

- Proposals for the state to recruit (as private contractors) tens of thousands of nannies to provide parenting support for those on low incomes.

- Fiddling with the planning laws which do little to change the need for the consent of ones neighbours, council and various interest groups to make changes to your own property that don't infringe upon the property of others.

The antipathy of politicians towards freedom does reflect a disturbing streak among some in the UK.  It was most visible when comedian Alan Davies said it was wrong for Liverpool Football Club to boycott playing on the anniversary of the Hillsborough disaster because similar events don't provoke similar abandonment of activity.  In response he received death threats and what would have been called (had it raised his race, gender or sexuality) hate speech.  People so angry they would threaten to kill a man because he expressed a different opinion.  A cultural attitude of absolute intolerance of those who offend you.  This is the sort of attitude seen all too often in public places when drunken ferile (typically young) men or women "take people on" because they think someone said something or look at them the wrong way, or they were "disrespec'ed".  A sense that one's view of the world, even the way people react around you, is a right that you can defend with force.

What does this mean? It means that there is an underbelly of grotesque intolerance about other views, an intolerance rooted in the justified fights against the state backed racism, sexism, censorship, sectarianism and bigotry of the past, but which now embraces an attitude not only of what is called "political correctness" (which the left deny even exists), but of generalised intolerance about those who offend others.  Some Muslims demand it, Christians are rightfully demanding they be treated with the same kid gloves as Muslims are, now it's people from regions and even the smug Scottish First Minister, Nationalist Socialist Alex Salmond has said the Economist magazine will "rue the day" it made fun of Scotland with a cover page depicting an independent Scotland as Skintland.   This is the language of Islamists upset about Danish cartoons, now being assumed by a leading politician.  

Is it any wonder that people across the country think it is ok to get angry and threaten violence if someone offends or upsets them?  

Is it any wonder that politicians think it is ok to regulate, tax and control activities, language and monitor communications that is contrary to the goals they want to achieve?

Allister Heath's editorial is welcome.  It should be replicated in the Daily Telegraph, which once ran a campaign about individual liberty - when Labour was in power of course.  

Labour presided over a 13 year period of ever encroaching state control and new laws, the Conservatives have shown they have been dazzled by bureaucratic promises that everything will be "ok" and threats that without new powers, people might die.  After all, every extension of the Police state would, of course, reduce crime (and who can argue against that?).  The Liberal Democrats meanwhile are no longer liberal in any sense of the word, and just a different sectarian part of the socialist brand unaffiliated with the unions.

It is time for Britons who do believe in freedom to stand up, to say no and to demand the end to the ever increasing calls to regulate, tax and monitor people's lives for their own good.  You wouldn't expect bureaucrats and politicians to tell you what to eat, what to wear, what to watch, what to say, where to go and who to associate with normally.  Yet that is exactly what they all do, to a certain extent, right now.

Politicians in the UK respond to one overwhelming trend - public opinion.  Only when the people who demand freedom shout loudest and demand to be part of the political discourse, will that opinion move and the erosion of freedom be stopped because voters don't want any more of it.

In the UK,  the Adam Smith Institute, the Taxpayers' Alliance, the Libertarian Alliance and the Institute of Economic Affairs are all at the forefront of taking on the statists.  It is time that more stood up for simple right to live one's own life as you see fit, as long as you do not interfere with the right of others do the same.

100 years ago today - a disaster in the making

Today millions of people will be commemorating an event that happened on 15 April 1912.  It wasn't uncommon in itself, having similarities to occasions that happened before and since, but over many decades it passed into legend.  Movies, books and songs have been written about it, and more than a few people have made it an obsession and a fascination.

The people who were injured and killed as a result of the chain of catastrophic errors that followed are themselves largely forgotten, except by the remaining relatives and friends of those who were lost. 

However, the hype that surrounds the event today is ridiculous.  It isn't something to be commemorated, for it has caused millions to be wrapped up in a romanticised version of events, that underplays (and even glorifies) the horrors that can't be denied.  Although it has sustained the careers of thousands feeding the industries surrounding it all, is it right that this be such a focus for so many?  

I was tempted to go to the place which is the epicentre of the commemoration of the event this year, because I know it would not be repeated on the same scale given it was a centenary, but decided not to feed this monstrous caricature of reality.

No it's not the 5th largest peacetime shipping disaster, more an event that spawned a man whose decisions killed millions and enslave millions today.  

A dictator was born.

The star in the sky commemorates the event for these folk

Brian Rudman - a little knowledge isn't dangerous, just ignorant

Brian Rudman is perhaps the most regular of the NZ Herald's columnists to comment on transport issues in Auckland.  He comes at it from a rather predictable standard point of view which blends the railevangelism of the Greens with the cynical populism of NZ First.  To be fair to him, he does a bit of research, but the conclusions he comes to shows a rather dire lack of understanding of economics, a paucity of depth of knowledge about the sector and an unfortunate tendency to be driven by faith rather than evidence.

His latest column is headlined "tolls alone won't unclog our roads".  The implication being that someone claimed that they would.   A more honest headline in response is "trains wont unclog our roads", since column after column he has been preaching the gospel of the church of passenger railways.

What he is talking about is a proposal to introduce new tolls on Auckland's existing motorway network to "raise revenue" tax road users to pay for Auckland Council's grand transport plans, much of which is to fund infrastructure for subsidised public transport services.

There are three substantive issues here:

1.  Is the NZ$11.7 billion "funding gap" real and justified?  (i.e. should that much extra money be spent on transport in Auckland? What is gained by that? Who are the winners, and are they the same as the losers?  Why should anyone trust Auckland Council on this?  Given that all of the future money taken from motoring taxes and rates is already taken into account, has anyone asked Aucklanders whether they are willing to pay more?

2.  If there is a gap, how should it be funded?  Should users pay more for infrastructure and services they will benefit from?  Should ratepayers pay for infrastructure that increases their property values?  Should existing taxes go up? Should there be new taxes?

3.  Should Auckland roads have direct tolls/road pricing introduced as a different way to charge for road use, which could also reduce congestion by introducing the price instrument?

Is the NZ$11.7 billion "funding gap" real and justified?

On the first question, Rudman fails.  He doesn't ask this question.  With some irony, the Greens are attacking (with some good reason) central government's Think Big highway spending plans for being poor value for money.  Neither the Greens nor Rudman apply a similar test to the Auckland Council project list.  For many years, the former Auckland Regional Council had unfunded transport wishlists, is it any surprise the new Auckland Council has simply grandfathered that wishlist and added to it?

He simply parrots the simple line that Auckland "needs more public transport " and the myth of "building the passenger transport options that might well help unclog the roads without the need to build more".  Might well? Where in the new world have major rail projects actually unclogged roads?  What city has accomplished this successfully?  It's a simple belief system - it is one the Greens share - but it is just that, a belief.  The bare fact is that no new world city has significantly reduced traffic congestion from construction of a new rail link - none.  Advocates may argue that congestion would be worse without them, but that's just hypothesis, and it isn't based on any significant difference in mode share from car driver to rail after a line has been opened.

So let's take the highest profile project that he and the Greens advocate - an underground CBD rail loop.

The Treasury/MoT report that reviewed the Auckland CBD underground rail tunnel states that this project, estimated to cost NZ$2.4 billion in capital, with ongoing additional costs of NZ$37 million per annum (although revenue offsetting that is not mentioned), will only reduce car trips into the CBD by 2,000 a day - out of a total of 40,000.  Now 88% of commutes in Auckland are not to the CBD.  That stark fact is constantly ignored by almost all advocates of rail in Auckland.

Of the remaining 12% around, 42% of motorised commutes to the CBD in Auckland are by car - yes a majority go by public transport now. You might ask why that is a problem.

So his pet rail project, will reduce 5% of 42% of 12% of Auckland commutes, which means only 0.25% of Auckland commutes will be shifted from car to public transport.  It's a brave person indeed who claims that is worth NZ$2.4 billion.

However, he completely blanks out the other effect.  The CBD rail project reduces bus trips to Auckland CBD by 10%, with double the number of people taken from existing bus services, both subsidised and unsubsidised, than from cars.  NZ$2.4 billion would in part be about shifting more people from buses than cars.  In short it is estimated to accommodate only 19% of the growth in future trips to the Auckland CBD.  The rest would be travelling by bus, car and ferry.  In his own article on this very report he blatantly misses this point by saying that other improvements wont be able to "cope with the predicted 32,000 extra passengers into the CBD in the 2041 morning peak. For that we need the rail loop." No Brian, only 6,000 of those 32,000 will use the loop.  It's deception to claim otherwise.

So it has a negligible impact on congestion, in fact the effect is so low it will be more than offset by forecast growth in traffic.  It reduces bus use more than car use, and only 1 in 5 future Auckland CBD commuters (which are themselves a subset comprising 1 in 5 of all Auckland commuters) would use it.

Even if you presume that all of the car commuters to the Auckland CBD benefit from the 5% reduction in car trips (and presumably a handful of fewer buses), that means that only 5% of all Auckland commuters experience a reduction in the negative externality of congestion.  So quite why should anyone pay over NZ$2 billion, plus ongoing operating subsidies, for 6,000 new rail commuters and for 5% of car commuters to save time (which they would do, on the margins), is a mystery.  It either hasn't occurred to Rudman (the report is rather clear on this) or he is evading it.

If there is a gap, how should it be funded?

However, let's leave that to one side, because his column does.  How should the money be raised if it was legitimate in the first place?  He doesn't spend much time on how it should be funded, rather how it should not be.

The solutions be posits are to both spend existing funds differently and raise new taxes from motorists.

He wants the state highway budget "redirected" towards public transport. Beyond the Puhoi-Wellsford motorway project, he isn't too clear on what other funded road projects shouldn't proceed.  In the past he has bemoaned other parts of the country getting money for roads, when his beloved Auckland can't get enough to pay for what it wants.  What he neglects is that outside Wellington and Tauranga, virtually all state highway projects are about reducing accidents, not reducing travel time.  However, he is an Auckland advocate so let's just accept that bias as being natural to him.  To be fair to the Greens, they do seek to abandon large swathes of road projects, including the Waterview connection, Puhoi-Wellsford and Waikato Expressway series of projects. 

For new money, he supported the regional fuel tax Labour tried to introduce, but which the National government scrapped.  This was a stupid idea, and tends to be embraced only by those with a paucity of understanding of such taxes and their role in New Zealand.

For a start, regional fuel taxes in the past have been opposed by oil companies because of the administrative cost in applying differential taxes for a commodity distributed nationally.  Service stations near the boundaries of Auckland (which most people wont be aware of) would be winners or losers for fairly obvious reasons if applied regionally.   National tried regional fuel tax in the early 1990s and had to abandon it because oil companies calculated the revenue that should have been collected based on consumption in the regions, but applied the tax nationally to save on the administrative costs and boundary effects.  Regional fuel tax for Auckland risks being applied nationally again, unless government applies stiff enforcement procedures to stop oil companies repeating this - which adds another cost.  Something Brian curiously ignores given his pleading on the cost of operating tolls.

Secondly, he ignores the effect on diesel.  There is currently no fuel duty on diesel, because diesel powered vehicles are liable for road user charges (RUC), paying in advance for distance travelled on roads based (shortly) on maximum vehicle weight.  There are various reasons for that, but what it means is that RUC, in its current form, cannot be applied regionally because diesel vehicles have distance bought before they travel regardless of where the roads are.  So regional RUC wont work for now, without a significant change in technology.  Regional diesel tax would mean the 36% of diesel usage off road would have to have a refund scheme (as applies to petrol tax), which imposes an administrative cost on the agriculture, industrial and fisheries sector to which this largely applies - unless Brian thinks that off road users of fuel in Auckland should pay for Auckland transport, in which case he is arguing to get rid of refunds for off road use of petrol and LPG as well (and why only abolish refunds in Auckland).   He simply wont be aware of these implications of imposing new costs outside the transport sector.

In other words, his bright idea for new money is full of holes, but since Labour tried to do it (against official advice) it must be ok, because he trusts politicians of a leftwing bent.

Should Auckland roads have direct tolls/road pricing?

Most of Brian's latest comment is a diatribe against road pricing.  That puts him firmly in a camp I describe as populist left-wing opposition to tolling - he shares this with NZ First.


I am, in principle, in favour of road pricing as a replacement for taxation of motorists, because it creates a direct relationship between the road user and road provider, sidestepping the interfering influence of politicians seeking to spend motoring taxes on pet projects.  However, from an economist's point of view, it enables the price instrument to be applied to roads.  That alone means road users can be charged directly for the costs of the roads they use, accordingly to the proportion of usage, according to the wear and tear they impose on the roads, and according to the vagaries of demand and supply.   Congested roads would cost more, managing demand, but generating revenue that might be enough to remove bottlenecks and build new capacity, or may simply mean off peak charges are lessened to spread demand.  It is this lack of the pricing instrument, which affects both demand for road use, and the funds to supply roads, that is the biggest single factor in facilitating traffic congestion, and the negative externalities from that in the form of wasted fuel and increased pollution.  Even when applied bluntly, the effects of pricing on congestion have been seen clearly in Singapore, Oslo, Stockholm and London.

It would appear Rudman is almost oblivious to this, or at best dismissive of it.


He claims tolling is "not fair", because he doesn't believe Aucklanders should pay more for their roads and public transport than other New Zealanders.  Rather odd that, if Aucklanders actually wanted more roads and public transport than other New Zealanders, they shouldn't pay.  Who should pay?  Aucklanders pay more for land and property now, does he suggest people living in Oamaru pay a land tax to equalise it, or should Auckland land be subsidised? However, this is a man advocating a REGIONAL fuel tax, which would mean Aucklanders would pay more.  He can't make his mind up. It is a specious "argument" worthy of a drunken talkback caller.   Aucklanders should pay for the transport they want, maybe if they did, they may want less of it (and nothing could be "greener" than that).

He repeats the claim by Chairman of Auckland Council's business advisory panel Cameron Brewer that "tolling is a flat tax that hit the poor the hardest".  Yet I have never seen Brian advocate that poor motorists get a discount on their petrol tax (the equivalent to a toll now), or discounted train fares, or discounted phone line rentals.  Why is a user charge for one service a "tax" when it doesn't apply to others?  Again, a specious argument.  Even though Brewer's sensible suggestion that "it be levied at a reduced rate for service sector shift workers in off-peak times" has economic merit in that tolls should be lower at times of low demand.  Brian's regional fuel tax, which would be paid most by those in least fuel efficient (i.e. old) vehicles on slow lengthy trips would be paid more by them, but he blanks out even considering that.

His next claim is that tolling targets private motorists, whereas commercial road users and councillors (cue NZ First type rhetoric here) can pass it on.  Well what would a regional fuel tax do Brian? 

However, moving beyond this rather facile rhetoric, his big opposition to tolls appears to be because the collection costs are higher than fuel tax.  Now I've already fisked him on fuel tax given that the regional fuel tax would cost more than he thinks, and so would mean costs for administration by both government and oil companies, and for those off-road users of diesel facing a new refund regime.  However, he does use both the Northern Gateway toll road and the earlier Auckland Road Pricing Evaluation Study work to back up his claim that, yes indeed, having a direct customer relationship with users one by one and being accountable to them is more expensive than a tax.  However, as I have written before, the costs now claimed are for a government specified bespoke system that is far more expensive than it should be.  Work I've done elsewhere indicates the costs of collection can be much much less if you have the volume to sustain it and outsource much of it effectively, like utility companies do.  So this argument is less worthy that it appears on the face of it.

Yet the real benefit of tolls, compared to taxes, is that they can charge according to costs and demand.  The benefits to Auckland of road users paying tolls to use roads, compared to more taxes, is that they could be charged more for roads close to capacity and could be charged less for roads at off peak times.  This can spread demand, encourage use of other modes at peak times, and cause people to think again about whether it is worth using that rather expensive piece of infrastructure when it is highly priced.   Yes for "revenue" alone it isn't clever, but if that was the only measure, then electricity would be free and everyone would have paid for it through their taxes, so would phone calls etc.  The effect on use of electricity if it was paid for through your rates or income taxes would be dramatic.

To be fair to him, he is right in quoting the Auckland Road Pricing Evaluation Study work in opposing tolls on the motorways only.  I don't believe this can be justified in Auckland today, but I do believe that a shift from rates and fuel tax based funding of roads to tolls is justified.  The issue is how that is done (privatising Auckland Harbour Bridge might offer a clue).

If Auckland did have largely privately owned roads, charging usage on various basis (e.g. tolls, distance charging, property access charges), it would transform transport in Auckland, particularly by eliminating rates funding of roads (cutting your rates by 10-15%) and fuel taxes (cutting fuel prices by 20%).  It would mean users of main roads at off peak times would probably pay less, whilst at peak times they would pay more.  It would mean buses wouldn't need bus lanes in most locations, except where bus companies were willing to pay for special access.  Truck operators would probably change times of travel.  Short car trips would be more likely to be replaced with walking and cycle trips.  The legacy railway might even have a financially sustainable life, somewhere where it parallels road corridors too expensive to expand (or it gets taken over by them).  

Quite simply, it is Rudman who doesn't have a transformational state of mind.  He, and the Greens, are trapped in tired old solutions implemented en-masse in the United States in the 1970s and 1980s that have failed - in the form of new government provided rail transit systems.  He ignores road pricing, like it was ignored then (except at least then, technology was a bigger limiting factor than it is today).  He swallows the hackneyed and overused line that "building more roads leads to more traffic" (given Auckland has had a lot of new roads lately but no more traffic, he has failed to join the analytical dots).  He wants taxpayers to spend a lot of money for what are pet schemes, whilst he resists economics and employs contradictory arguments.

Auckland's transport could be transformed, with technology, pricing instruments and a more commercial and market oriented approach to the provision of infrastructure and services.  Cities from London to Stockholm to Singapore to Tehran even, have had success in better pricing of roads to reduce congestion, yes reduce.  New technologies in San Francisco and Los Angeles are offering real time information on parking availability with the scope for dynamic pricing of parking.  Bus rapid transit has demonstrated enormous success in Auckland in limited form as it is, and has also been a success in cities in the US, Brazil, Germany and Australia.

It is overwhelmingly clear that the advocacy of rail in Auckland is not about transport policy outcomes, but a broader agenda that is about intensification of the Auckland CBD, moving more Aucklanders into high and medium density housing, for environmental policy reasons, and because of a warm fuzzy feeling that electric trains are just great, but cars and roads are just wrong.

It isn't about Aucklanders making the best choices about how to get around based on the costs of travel, it isn't about balancing what people want in homes, businesses and leisure activities, it isn't about real environmental outcomes (because road pricing would deliver a bigger constraint to sprawl and reduce pollution due to traffic jams, than any rail scheme), it is about grand centrally planned visions that look nice in drawings and in theory, but don't actually deliver the real-world trade-offs people actually want.

The biggest irony is that the greatest beneficiaries of this agenda, if it gets pursued, are owners of commercial property in downtown Auckland.  Now they are far from willing, it would seem, to pay for more than a tiny fraction of the grand CBD rail project.   Is it not ironic then, that Rudman and the leftwing promoters of this plan are advocating a massive transfer in wealth from taxpayers across the country, to this small, some may say, elite group?

30 years since the foolish Falklands War

30 years ago a nasty little fascist military dictatorship launched a vain war to conquer a collection of islands 460km away from its territory.  The purpose was to rally a shallow machismo-like nationalism to divert attention from the economic disaster and oppression that it had brought to the people it pushed around.

Today its successor regime, democratically elected, and far closer to Western values of freedom and individual rights, is playing the same game.  Engaging in shallow machismo to demand that islands that are inhabited by people who don't want to be ruled by them, are handed over to them, and effectively commemorating a war that, by implication, it considered to be just.

For a woman called Cristina Kirchner, ruling a country in South America, to talk about colonialism is comical.  For the claim Argentina makes is because of its past Spanish coloniser (and her late husband's ancestry is no more linked to that land than it is to Spain).

Let's make it clear.  Britain discovered the Falklands, but France later established a separate colony on the Falklands that Spain acquired in the late 18th century.  Spain attacked the British colony, but a peace treaty divided the island.  However, subsequently both Spain and Britain abandoned the islands although leaving plagues indicating their claims.  Subsequently Britain returned, and Argentina attempted to do so, claiming Spain's authority.  It failed.

However, today countries don't fight territorial wars of conquest.  The Falklands have a permanent settlement of virtually entirely people of British descent.  Under the principle of international law known as self-determination, the future of the islands should be decided by those who live there.  As they have repeatedly made it clear, they want to remain under British sovereignty.   It's hardly surprising, given almost all of Argentina's post independence history has been pockmarked with dictatorship of both fascists and socialists, hyperinflation, corruption and economic illiteracy.  Kirchner has continued this tradition.

She has managed to reintroduce import licensing, constrained exports of food with export quotas and taxes.  Importers have to follow bizarre rules, that economic nationalists would be proud of, in that they need to export the value of the goods they want to import.  Absurd arrangements are set up as exporters make money by setting up multiple businesses to help importers get the foreign exchange they want.

Kirchner's regime in 2008 nationalised private pensions to help balance the budget, so she is a long proven thief, but a thief that commands enough patronage through subsidies, welfare and other transfers that she has managed to get re-elected.  

In fact, it has even started lying about its inflation statistics to the point that the Economist has stopped reporting it.  Argentinian politicians have long been adept at stealing from their own people through inflation to the point that the US$ is the preferred currency in the country.  Inflation is really around 25% despite official reports of less than 10%.   Of course the result of the preference to the US$ is strict monitoring of currency conversions with tax inspectors especially focused on such transactions.  The result is that larger companies arrange their affairs to minimise liability, small ones and individual Argentinians get their savings thieved either by inflation or Kirchner's patronage based administration.

Argentina's economy isn't stagnant, the rise in commodity prices has meant that revenue from mining and agriculture has kept the country afloat, yet Kirchner's profligacy has wasted away a period when the country could have boomed.  It could have built an economy like Chile, by doing away with patronage laden monopolies, trade licences and subsidies, and liberalising, but it refused.  It has even told RIM and other mobile phone manufacturers they must assemble phones in Argentina.  A few are proceeding to do so, at high cost, obviously creating less jobs than they are costing by raising the price of mobile phones.   The economics that brought Argentina from 2nd highest per capita GDP in the 1940s to third world are being replicated.

It's hardly surprising, she is allied to that poseur and economic lunatic Hugo Chavez, who helped fund her electoral campaign. 

So now she is using the Falklands to distract attention from the accumulated economic cost of her kleptocratic policies.  It is a tiresome expression of Latin machismo and bluster.  Argentina hasn't remotely got the means to militarily take the Falklands, and her interest is in vacuous nationalism, and to claim the oil and gas reserves that she claims are "polluting" "her" country and ocean.  They wont be if she was running them of course.

The fundamental issue with the Falklands is that self-determination is about what the people of a territory want.  The people of the Falklands want to remain British, not least because Argentina's unstable history of dictatorships of the left and right, kleptocratic lying corrupt regimes whether elected or not, is hardly conducive to closer relations.  Why would farmers on the Falklands want to pay extra taxes to export, or deal in the worthless Argentinian peso, or face the patronage laden courts, police or the socialist eccentricities of a country which elects Presidents who care more about their own pride and posturing than about their people.

That is why the Falklands will remain British for now.  For until Argentina and Argentinians create a country, a political culture, an economy, a legal and constitutional framework that people want to join, they will seek to remain part of the UK.  For however flawed it is and however distant it is, however slow its economy, however much of its glory is in history, Britain is still less corrupt, more stable, more dependable, and respects individual rights and freedom more consistently than a young post-colonial Latin American republic, barely a generation away from military dictatorship.

It is for that that good men and women served to defend the Falklands from the frightened young men of a military dictatorship 30 years ago.  The sacrifice and effort of those who defended the Falklands are to be commended and remembered, the loss and tragedy of those who were forced to fight the petty little war of Galtieri is sad.   

Earth Hour?

If I hadn't seen the odd reference I wouldn't have remembered that this event was meant to be today.  In the UK neither TV, nor the rest of the mainstream media have paid it any attention.

Perhaps in an age of economic stagnation, most people are fed up with smug middle class types telling them how good it would be if they used less electricity and cared more about environmental causes, and perhaps they are also tired of being told about how much harm they are causing, when the same types don't bother telling people of countries with far greater per capita contributions to emissions to do the same.

The environment matters because we breathe, eat, drink and live in it.  Yet without harnessing it, using the resources around us and applying reason to it, we would not survive.  The harnessing of energy and generation of forms of energy that only a few generations ago were mostly only visible in electrical storms, has resulted in a monumental improvement in the lives of billions.

That's something worth celebrating.  Let the people worshipping the dark do so, but I'm more concerned about the millions who don't yet have the opportunity to brighten their darkness with technology we take for granted because of the philosophy of those who don't believe people own their lives, that property rights should be defended or that science, reason and individual creativity should prevail over superstition.

Earth Hour is contrary to that, it proclaims that the answer to concerns about pollution is to abandon technology and the advantages that modernity has brought us.  That's wrong.  The answer is to embrace it, to embrace reason, to embrace the creativity of the human individual and to create property rights for that which people value (and hundreds of millions of people do value protected natural environments).

West Bradford shames itself

I don't need to say much about George Galloway, he is one of the most repulsive politicians in Britain today.  As Christopher Hitchens once said "the man's search for a tyrannical fatherland never ends".  He has been a sycophant of Saddam Hussein, Bashar Assad, Mahmoud Ahmadinejad, Fidel Castro and Hugo Chavez.  He misses the Soviet Union - the stale stinking behemoth of blood stained lies, oppression, imperialism and terror.  He supported the Islamist terrorists who festered in Iraq after the Western invasion, he supports Hamas, he said the Syrian people are lucky to be ruled by Bashar Assad.  On top of it all, this Dundee Catholic fifth columnist lies - blatantly - denying that for which there is video evidence.  He blames 9/11 on US foreign policy.  He claims to not support the Iranian system, yet said explicitly he supported the campaign of Ahmadinejad on Iranian TV.  His direct relationship with the Hussein regime was demonstrated with evidence, but he continues to deny it.

So how did such an odious creature get elected in a low profile Bradford West by-election?  Simple.

He has a high public profile (he appeared in Celebrity Big Brother in 2006).  He spent money and time in the constituency spreading his latest brand, of being a teetotaller who has always supported Muslims, who opposed the war in Iraq, opposes Western forces in Afghanistan, supports Palestinian militancy and opposes Western intervention in the Middle East.  He played to the tribalist, anti-Western bigotry of many ethnic Pakistani voters in the constituency.  He benefited from a week of appalling mismanagement by the government, and the continued ineptness of Labour leader Ed Miliband.  It was a protest vote, apparently driven also by Galloway targeting young Pakistani voters who otherwise may not have voted.  It has been alleged that some of his supporters voted for him as a rebellious action, for his shenanigans with Celebrity Big Brother were looked down upon by some of his Islamic support base.

Bear in mind also that turnout was low (25% or so down on the general election), and it was meant to be a safe Labour seat, which motivates less supporters for major parties to bother voting.

Yet while much analysis will focus on why the major parties, especially Labour, did so badly, the real menacing implication is that a man who has long provided succour to Islamists and dictators, can command such overwhelming support.  Was there not sufficient media scrutiny of Galloway?  If there had been much more, would his campaign have been harmed (and is it not for the other parties to do that?)?  Or do his voters agree with him - that Iran doesn't have such a bad President, that Syrians are lucky to be ruled by Assad, that criticism of Syria is because of the "good things" Assad does, that Saddam Hussein deserved to be saluted for courage and indefatigability, that Hamas is a force for good, that Islamists who shot dead 58 people at a Catholic Cathedral in Baghdad were to be supported, or the ones who bombed 48 people at a restaurant, or who let off a bomb killing 54 Shia on a pilgrimage, etc?

George Galloway has always done well out of politics, he has connected himself to whoever he can who opposes open, free, liberal Western democratic capitalist societies, and embraced variously Marxist, Soviet, Islamist, Ba'athist dictatorships.  He says one thing on the broadcast outlets of his favoured dictatorships and another in the West.

So it's about time that proper efforts are taken now to hold this friend of thugs to account, to reject his evasion and deception, and expose him once again.  However, although I hope most of his supporters are naive young voters who see him as a high profile protest against the mainstream parties (and their parents), I fear more than a few embrace an agenda that is anti-British, anti-Western, sympathetic to Islamism and believers of the rampant conspiracy theory ridden nonsense that passes for "theories" in some parts of the world.  Is anyone confronting this?

Idiot Savant has lost the plot and is clueless about Europe

For a while I would read the blog of Malcolm Harbrow, aka Idiot Savant, aka No Right Turn, if only because it would provide some useful coverage of Parliament, and it is helpful to know what the hard left is thinking. It's hardly surprising that I mostly disagree with him, except when it comes to individual liberties where he can often be right - and will call out politicians of all ranks on that, and bureaucracies as well. 

 After all he thinks that children are the responsibility of everyone, through the state. He'd only be happy if the welfare state expanded, was more generous with less limits on eligibility. After all, tightening up eligibility for the invalids benefit is seen as "sadism" by him. He considers Ayn Rand and objectivism to be a "cult". He thinks people are only free if they don't have to provide for themselves and can choose whatever they want to do with their time. 

Such a disjoint with reality indicates a fair degree of foolishness. If everyone was "free" to do this, then everyone would starve, freeze and die rather fast. In order for anyone to have this "freedom" to "do whatever you like" literally, someone else has to be forced to provide for that person, or to choose to sacrifice oneself for that person. It's quite absurd, but then I've come to the view that Idiot Savant is indeed absurd himself. He is a great example of the fundamental disconnection between reality, principle and morality that the hard left carries with it. See I am fairly generous about most people across the political spectrum. I think they genuinely do believe they want the best for humanity, in general. The key debate is the means of getting there, and the priorities in doing so. However, there is a more fundamental belief around rights, and the relationship of the individual to the state. Statists believe individuals are a means to an end, individualists believe they are ends in themselves. 

Idiot Savant doesn't believe those on the right or those who believe in less state want people to be better off, he actually believes that those opposite him on the spectrum are sociopaths.  Because he advocates using the state to force some groups to be better off, he thinks everyone wanting to shrink the state want the rich to be better off and the poor to suffer and die.  The idea that people who believe in less government actually want better outcomes for all is ridiculous to him, because he can't conceive of how you do that without Marxist redistribution and regulation policies.

The simplistic position he takes is that those who believe that the state should take from those better off and pay those worse off, are morally good. Those who want to force people to give people jobs, keep them in jobs, allow them to work less for more money, and to ban people from choosing to work more for less money in competition, are morally good. A big warm cuddly state that exists to facilitate such transfers of money from "rich to poor", to provide state monopoly services paying its employees generously, not expecting them to be accountable for performance and having safe jobs for life, and which ruthlessly restricts businesses or entrepreneurship when it threatens to undermine state monopolies, existing employment or punitive taxes, is his dream.

 He stands for unionised labour closed shops. He is willing to use shonky surveys developed by private companies seeking to promote their services if it supports his point of view. He touts tired old leftwing cliches about privatisation which have been proven to be false, whilst supporting implicit subsidies of the coal, dairy and timber industries. He manufactures a story about protests in London that he never witnessed, and which even the media he uses doesn't support. He likes to give the impression that he is authoritative, like a journalist, and does his research. Well patently he doesn't. He is an angry bigoted little man, whose view of his political opponents has become so bitter he may as well paint them all as fascists or caricatures of Montgomery Burns. 

Take his recent celebration of Nick Smith's resignation (which was entirely justifiable). He can't just stick to that, he has to say "climate change denial and destroying the environment are tribal shibboleths of the right, and so these portfolios will almost certainly go to someone with no commitment to them." Tribal shibboleths? Does he really think those on the right want to destroy the environment? Is it true that everytime National gets in power that it lets rip with pollution and destruction of habitats? Is this what the hard left tell themselves - that they are the great saviours of the planet? His comment on the UK's budget speaks volumes too about his inane grasp on reality. It's one thing to slate tax cuts for those on highest incomes, as par for the course for Marxists. However, he manufactures a claim that benefits are being slashed for the unemployed, disabled and the sick. It's simply not true (the kernel behind this is tightening up eligibility for disability benefits because of the hoards who remain on it, even though they may be as mobile as many others). He claims it is cutting the NHS, when funding for the NHS is growing (even a leftwing website bemoans at how low the increases are). He of course, like any Gramscian Marxist ignores the increase in the income tax free threshold for the very poor - he can't compute, accept or spread the fact that the evil child eating Conservatives might cut taxes for the poor. That interferes with his bigotry. 

However, the post which really caught my attention was his rant about austerity in the Eurozone. He said: But there's little doubt that these cuts will lead to tens of thousands of deaths in each country. And every one of those deaths can be laid at the feet of the foreign bankers demanding their pound of flesh. What they are doing to Greece and Portugal constitutes mass-murder on a vast scale. And they need to be held to account for it. He basically believes that cuts in health spending in Portugal and Greece are resulting in people dying citing a Guardian article. 

Let's assume that there is evidence of this, it is curious who he blames. 

 Does he blame the politicians in those countries, who spent other people's money and borrowed more money than they could pay back to buy goods, services, infrastructure, welfare for those people? No. They would be socialists. They meant well. Even the Greek politicians who deliberately lied about the public finances. 

Does he blame the voters who elected the politicians who spent the borrowed money that couldn't be paid back, and who ostensibly benefited from the excess spending? No. Suddenly the commitment to democracy and politicians acting on behalf of the people, even in countries with proportional voting systems, evaporates.

 Does he blame the citizens the countries whose taxes are funding the bailout of these countries? The taxpayers of Germany, the UK, France, the Netherlands etc who have helpd finance this? No. They are irrelevant to him. 

 No he blames his bogeymen, his scapegoat, his hated minority, the "foreign bankers". The same "foreign bankers" who wrote off 79% of the debt owed by Greece to them (quite rightly so). Except of course, he's avoiding the point. 

 You see the austerity in Greece and Portugal is NOT about paying off bankers. It's about stopping those countries from continuing to borrow more. They are both still in deficit, the amount the government spends in both countries is more than they receive in tax. If his philosophy was applied, presumably taxes would shoot up in both countries (and they have to some extent). 

However, no. 

This little man in Palmerston North is venting his ranting spleen against foreign (note how xenophobia is good if you have Marxist motives) bankers.  He wants them to pay, and I doubt he means not using force.  See it's all very well caring about civil liberties, until you want to extract a pound of flesh yourself from your favourite scapegoat. 

Bankers should just lend Greece and Portugal as much as those governments want, and not expect any of it back right? Indeed they should be charities, right Malcolm?  Should the countries abandon the Euro and print their worthless new currencies endlessly until they can pay for it all? 

Let me be crystal clear, so that even an Idiot can understand. 

Austerity means living within your means.

Both Greece and Portugal are unable to borrow internationally to fund overspending, so they are getting taxpayers' money from other Eurozone countries, and IMF member states, to cover their current overspending. Money taken from people and businesses. The austerity measures they are required to undertake to meet this are to bring their budgets into balance. Something he once appreciated, when it was a government he preferred spending a surplus. 

If people in Greece and Portugal die because of reduced health care, it is because they can't afford it.  They are unwilling to pay directly or pay additional taxes to pay for it.  They are also unwilling to vote for politicians who will force some to pay additional taxes to pay for it.

Don't expect your health care to be paid for by money borrowed by politicians from people who don't believe you're willing to pay it off - because they have good reason not to lend it to those politicians who have now forced them to write off a good chunk of past bad loans.

However, Malcolm can help those people.  He could donate money from his own pocket to save the infants of Greece and Portugal.  He could arrange others to donate as well.  He could actually do some good.  However, if he has any charitable aspirations or interests, he really ought to say, because by and large his key interest appears to be in forcing others to pay more for state bureaucrats to help people - which isn't exactly philanthropic in deed or spirit.

UK budget, a lost opportunity

So it was George Osborne's third budget, and a lot was done about tax.  He could have just cut taxes, but instead he cut some, increased others and pandered to the strong red tinge of envy about anyone who earns higher incomes.

What did he do?  What should he have done?

- Cut the top tax rate from 50% to 45% (this applies to earnings over £150,000).  A pathetic response to a tax rate imposed for political reasons weeks before the 2010 election by Gordon Brown.  Almost all of the noise from the left will be about this as they feed the vile hatred of success, the envy of wealth and the lie that this is all about benefiting "the people who caused the crisis".  Osborne should have scrapped the top rate altogether, that would have indicated Britain is open for business.  Still the evidence from Revenue and Customs is that the 50% rate only earned a third of what was forecast, as high income taxpayers rearranged their affairs to minimise their tax liability - or what I call, property protection.

- Age related allowances for pensioners are frozen, effectively eroding them with inflation.  A minor reflection of the soaring cost of the PONZI unfunded state pension.  A start, but still a stark failure to remind people that government funded pensions will have be less and later as the years go by.

- Income tax free allowance increased to £9,205 in April 2013 (the amount anyone can earn without paying income tax) with this applying to anyone earning under £100,000.   It remains a stingy trend to increase this allowance, but lower the higher tax thresholds to make it so people earning higher incomes don't benefit.  This allowance should be at least £15,000 so that those on the minimum wage and slightly above are untaxed.  

- Corporation tax immediately cut from 25% to 24%, dropping to 22% by 2014.   Osborne should have bitten the bullet and dropped it to 20% immediately and aimed to reduce it to 10% by 2015.  That would have made the UK the most competitive corporate tax in the EU, and been a real shot in the arm for business.

- A "General Tax Avoidance Rule" is to be introduced, to make protection of your income and property from tax even more of an offence.  This is what is morally repugnant, not tax avoidance, which is morally just - it is an act of self defence.

- Fuel and alcohol duty ARE going up, by the rate of inflation, just the same as Labour had decided before, but tobacco duty is to soar by 5% above inflation immediately.  There was no need for this from the point of view of the costs imposed by consumers of those products.

- New gambling taxes, just another grab on people's fun.

- Stamp duty - a tax on purchases of property - will be 15% on residential properties worth more than £2 million transacted through a company, designed to plug a loophole in this tax. For those not transacted through a company it will be 7%.  A better move would have been to abolish this ridiculous tax on property transactions.  However, this was about hitting the rich.

-  Child benefit will be reduced for households where anyone earns more than £50,000 down to zero for those earning over £60,000.  All of them are in the second top tax bracket, so this is a welcome cut in middle/upper income welfare.  However, he should have been far tougher.  Simply announce no new child benefit for children born in one year's time.  This would have saved a fortune, and enabled further tax cuts.

- Some more money for railway electrification, tax credits for certain creative industries, money to subsidise broadband networks, planning regulations to be simplified with a presumption "in favour of sustainable development" whatever that means, and a limp wristed waiving of Sunday trading restrictions for eight weeks over the Olympics.   In short, some pork, some relief for property owners and "testing" allowing businesses to trade when they wish.

- Despite all of this and claims of savage cuts, the UK government is still seriously overspending. Total borrowing will come in at £120bn next year and £98bn in 2013/14, followed by £75bn, £52bn and finally £21bn in 2016/17.  Austerity?  Where.

Uninspiring, a few steps in the right direction, a few in the wrong direction, little evidence of serious new spending cuts, and money thrown at activities that would be best left to the private sector.

Yes it could be worse. It could have been Gordon Brown, but it deserved to be braver.  Abolishing the 50% tax rate outright would have been braver, not increasing ANY taxes would have been braver.  It was a missed opportunity.

There are promising steps on the horizon, like abolishing national wage settlements for the public sector, like reforming highways funding and ownership and the reform of planning laws, but for now, it is business as usual with some tinkering.  No reason to get excited.  However, for most people it is a tax cut, which is not something to be sniffed at - until you lose it all from increases in fuel, alcohol and tobacco duty.