Economic Freedom Report shows how far the US has fallen

The Fraser Institute - a Canadian libertarian think tank - has produced a fairly comprehensive assessment of the ranking of about two-thirds of countries on the basis of economic freedom over a wide range of indicators.  It produces it every year.  This year the story it tells is of a world where economic freedom is still correlated to wealth, but also relief from poverty and, despite the scaremongering of the left, proportions of wealth owned by the poor relative to the rich.

Peter Cresswell pipped me to the post in writing about it,  describing why economic freedom means more than just wealth, but also wealth for the poor (who are many times better off in free economies) but I thought it deserved a longer review.

The report measures a wide range of indicators such as:

- Size of government:  This includes the extent of government consumption, levels of transfers/subsidies, the share of government presence in the market as an owner and investor in business and top tax rates.  No doubt socialists would regard this as being an invalid measure of success or failure, as they would see a large state participant in the economy as positive.

- Legal System and property rights:  Independence of the judiciary, impartiality of courts, protection of property rights, military interference in rule of law, integrity of the legal system, enforceability of contracts, restrictions on sale of land, reliability of the police and the business costs of crime are included here.  I'd have thought most of these would be seen by even those on the centre-left as being critical components of any good state.

- Sound money:  Measures here include growth in money supply, inflation and freedom to hold foreign currency accounts.  Of course those of us who believe that fiat currencies are fundamentally flawed wont be satisfied, but it is a good measure of the management of a key policy that can be so destructive to the wealth and savings of the vast bulk of the population of a state.

- Freedom to trade internationally: Tariffs, regulatory barriers to trade, the usage of black market exchange rates and controls on the movement of capital and people (including travel restrictions) are all considered here.  Again those on the left would be supportive of restrictions on many of those points. 

- Regulation:  Regulations on bank ownership, credit and interest rates.  Labour market regulations ranging from hours of work to conscription, and regulations on starting, licensing and tax for business are all included.  It also measures the need to pay bribes.  Once again, those on the left would be keen to have more of most of these.

The full report is here, and I'll leave it to others to do a more depth distillation of specific results, but for me there are some notable trends and statistics.

Key overall rankings

Hong Kong and Singapore are the top two, followed by New Zealand.  Yes NZ is number three, the freest "proper" liberal democracy.  It shows both how far NZ came in the 1980s and 1990s, but also how far others have not come.

Australia is fourth, but the UK is 12th and the USA 18th.  The last of those should be a clarion call warning to Americans who believe in capitalism that warnings about Obama making America like Europe are optimistic - for six European countries are more free, economically, than the USA.  It is noted the US was ranked 2nd in 2000, and fell to 8th in 2005.  No sign of Bush "neo-liberalism".

In Europe, Switzerland tops clearly, at 5th,  Finland at 9th, Ireland at 12th equal with the UK,  Estonia 14th and Denmark at 16th.   Of the other big European economies it is telling that Germany is 31st (below the likes of Sweden and Austria), Spain 34th,  France is 47th (barely above Poland but behind Albania - yes Albania), Greece is 81st,  Italy is 83rd, all beating Russia at 95th.  Ukraine is the worst in Europe at 122nd.

In the Americas, Canada is 5th equal with Switzerland.  Yes, more economic freedom north of the border.  Chile soars ahead of the rest of the Americas at 10th.  Mexico 91st, Brazil 105th, Ecuador 126th and Argentina 127th.  Venezuela naturally is 144th (bottom rated of those measured). 

In Asia, Taiwan gets 15th, Japan 20th and South Korea 37th. China 107th.  India and Pakistan both 111th.  Myanmar is bottom in Asia at 143rd (yes I know another would be worse). 

In Africa, the best performer is Mauritius at 8th, but then it is a long drop to Rwanda at 45th.  South Africa is 85th.  Most of the bottom rated countries are in Africa, still, with Zimbabwe at bottom on 142nd.

The Middle East has Bahrain topping at 7th, proving that economic freedom does not necessarily mean political freedom.  UAE is 11th and Qatar 17th.  Algeria is bottom of the Arab world at 137th, with Syria at 119th.  Israel is 52nd.

What of New Zealand's ranking?

NZ might be third overall, but it is 95th on size of government (95th smallest out of 144), which shows how highly ranked NZ is on most other measures. 

Yet NZ was ranked far more highly on size of government recently.  In 2009, the year after the current National led government stopped the Helen Clark juggernaut, it was ranked 73rd on size of government.   So National has led the growth in the state, relative to others.  Of course Labour achieved a lot on that front, as NZ was ranked 47th freest in 2000 just after it was elected, but that's a far cry from 1995 when it was 18th.   You can thank Jim Bolger, Jenny Shipley and Winston Peters for that.   You can go further back and see Ruth Richardson saw NZ rise from 66th to 18th in five years and now drop to a ranking last seen in 1985 when Roger Douglas was only starting to unwind Muldoonism.

Beyond that measure, NZ's score on legal system and property rights has slipped a little from a high point in 1995, although it would be interesting to probe into the detail behind the scores here (and elsewhere).

On sound money it remains about as highly rated as it always has been.  However on freedom to trade internationally it is now scored the lowest since the 1980s, with compliance costs on trade, foreign investment limits and limits on capital flows reducing the score.

The overall regulatory score is the best it has been since it has been measured, but on labour market regulations NZ is ranked 9th, its lowest ranking besides size of government.

So what does this mean?  Simple.  Any claim this National-led government is implementing radical free market reforms falls flat on the evidence - it has grown the state.  In relative terms, NZ has been retreating from such reforms for around 17 years now.  The state grows faster under Labour, slower under National.

Yet despite slipping on some measures, especially size of government, NZ ranks well largely because others have slipped as well.   It becomes more apparent if one looks at key comparators like Australia, the US and the UK.

Australia

62nd in size of government, 66th on freedom to trade (a lot of protectionism), 29th on monetary policy, 11th on regulation overall, 13th on legal system and property rights.  Australia is 4th overall still, which is still the best position it has ever had.  However, under that Australia has slipped on size of government (had been 47th in 2009), slipped on legal system and property rights (was 3rd in 2000), slipped on monetary policy (10th in 2009), plummeted on freedom to trade (was 19th in 1990 and has slipped since, mainly because others have moved faster) and slipped a little on regulation (was 8th in 2009).  Disturbingly one area Australia has slipped back on is bribery.   Capital controls are also severely restricted.

In essence, Australia slipped back on protectionism some time ago, but the end of the Howard administration has been characterised by ongoing slippage in economic freedom.  Not entirely surprising, as this has been shrouded by the bubble of mineral prices that politicians have been riding on.

UK

117th in size of government, 41st on regulation, 19th on monetary policy, 15th on legal system and property rights and 5th on freedom to trade.   The UK has slipped badly in recent years as it was 5th overall as recently as 2005, being 12th today.  How has it dropped?  It was 58th on size of government in 1990, just after Thatcher had resigned.  It has fallen steadily since 2000. The legacy of the spending and regulatory measures taken after Blair won a second election is what is now apparent, with the Gordon Brown years particularly reducing economic freedom.  The hysteria over the barely apparent austerity (which is simply slowing the growth in spending) is just that, and the big emphasis now ought to be cutting the size of the state and regulation - but it's unlikely to happen under a Conservative coalition with a schizophrenic leftwing party.

USA

73rd on size of government.  Yes 73rd!  57th on freedom to trade.  31st on regulation.  28th on legal system and property rights and finally 7th on sound money (really??).  Where has the US come from?  It is 18th overall now, but was 2nd as recently as 2000.  By 2009 it was 15th (yes you can thank Bush for that) and the slide has continued under Obama.   On size of government it has dropped from 24th in 1990 to 73rd now, consistently.  That's through two Bushes, Clinton and Obama, and Congresses dominated by Democrats and Republicans.  On legal system and property rights it was 1st way back in 1980, yes before Reagan.  It slipped through to 1995, improved a little for 2000, and then kept slipping back, although is slightly better now than it has been since 2005.  In 2005 it was top for sound money, but it is no surprise that that has slipped with the printing presses.  Freedom to trade was once 7th in 1980, but has slipped back almost consistently since then - globalisation?  No, the US hasn't kept up with that.  The slide has been particularly intense since 2005, but Obama has never been a friend of free trade.  Finally, the US was once 2nd for regulation in 2000.  It has plummeted since then to 31st, notably it was 24th in 2009, showing once more that Bush was hardly a small government President.

Republicans in the US often talk about how they don't want to be like Europe because it is so socialist, but they need to look at themselves.  The US ranking on so many measures is worse than several European countries.  On size of government, Albania, Bulgaria, Lithuania, Moldova, Romania, Switzerland and Ukraine are all smaller than the US.  Yes, Albania, once the last bastion of true believers in Stalin.   This should blow any claims that the US is the bulwark of economic freedom of the world - it quite simply isn't.

Curious ratings

On size of government Madagascar gets the best rating, but given every other rating is 92nd or worse than 100th, it isn't really a fair indicator, much like Bangladesh at 3rd (which more shows an inept state rather than a good small one).  Hong Kong is 2nd though.  At the other end of that ranking, Algeria at 142nd sits near the Netherlands at 144th and Sweden at 143rd.  Big states that are offset by good legal systems, protection of property rights and lower levels of regulation.

Legal system and property rights ratings are more consistent.  Finland is 1st,  NZ 2nd and Denmark 3rd.  Every other top 10 country is either western European, Singapore or Hong Kong.  At the bottom are the likes of Venezuela, Haiti, DRC and CAR.  All other below 100 rated countries are developing countries in Africa and Asia, including the likes of Argentina.  

On monetary policy the leaders are the likes of Japan (yes really!), Portugal, Albania and the USA.  Bottom rated are Zimbabwe, Venezuela, Angola and DRC.  Still I've little confidence that monetary policy deserves a high rating anywhere nowadays.

On freedom to trade internationally, the best rated are the likes of Singapore and Hong Kong, UK, Uruguay, Guatemala, Ireland, Peru, Netherlands and NZ.  Not a consistent lot, but showing different levels of openness.  At worst it is Venezuela, Iran, Myanmar and DRC.  India is also ranked poorly at 114th, not great for a country seeking to emulate China (which itself is 104th).  Russia is 127th, but oddly Iceland is 118th!  A lot depends on what is protected and size of the domestic economy, obviously Singapore and Hong Kong would not thrive being closed economies.

Finally on regulation, the best rated are Hong Kong, but then Fiji, NZ and Singapore.  At bottom is Algeria, Brazil, Myanmar, Venezuela and Zimbabwe.  One wonders if Brazil can sustain growth with such a tightly regulated economy. 

Conclusion

The big picture is that for much of the world economies have been subject to more government regulation in recent years, as the automatic response to a financial crisis caused by central bank fueled credit bubbles and exacerbated by fiscal incontinence has been to regulate more, engage in more central bank incontinence and to do little to substantially shrink state spending.

So let's stop talking about austerity.  In Greece, the only dimension that has ranked well as of late has been monetary policy - the rest have been the measures of a state dominated and regulated economy.  The broad indicators of a sound economy come down to a robust legal system that protects property rights and reasonably sound monetary policy.  Beyond that, the more regulation and more trade restricted the economy, the less likely it is to grow or to deliver better results for the poor. 

There is a lot of further analysis that could be done of these figures, particularly trends in GDP growth, GDP per capita and changes in rankings over time.  Of course this is all based on scoring which is not particularly transparent.  Herein lies the difficulty in making more than broad based interpretations of the report.

It is a clash of civilisations - it's about time we were proud of our's

Back when I studied international relations at university, Samuel Huntingdon’s “Clash of Civilisations” was not cited as a particularly seminal work.  It was thoroughly criticised, as the prevailing view at the time was that Fukuyama’s “End of History” thesis appeared to be more valid.  Bear in mind this was just after the end of the Cold War, and followed what appeared to have been a successful excising of Saddam Hussein’s gangster regime from Kuwait, under UN Security Council sanctions.

The heady days of humanitarian intervention appeared ahead, and with Russia a friend of the West, China focused almost entirely upon economic growth and internal stability and Middle East peace talks focused around pathways towards resolving the Israeli/Palestinian conflict, it did not look like there was great international disunity like was seen under the Cold War.

Liberal democracy and basics levels of individual rights and free speech seemed largely universal now that what was the Soviet bloc, seemed to embrace them.  The weeping sores of Israel/Palestine, South Africa, Northern Ireland all seemed to be on pathways to progress.   China, albeit a large country still a long way from any embrace of such rights, appeared to be pointing in the right direction, and was inwardly focused only likely to lash out over Taiwan or Tibet.  Latin America appeared to have rid itself of virtually all of its tyrants.  East Timor was finally liberated from Indonesian military rule.  Saddam Hussein seemed contained.  The Balkans were a disaster and a travesty, but after (finally) intervention against Serbia, it all seemed to come to a halt, and Europe has managed to ringfence and rebuild those lands that were once Yugoslavia.   However,  Rwanda/Burundi and Liberia showed how easy it was for political/military leaders to incite mass extermination campaigns.

It has been clear now, at least for 11 years, that this rosy view of the world has been a mistake.  Most importantly, it is abundantly clear that the values of individual freedom, free speech and freedom of religion, are not embraced by the majority of the world’s population.

Whilst those of us in the “Western” world see differences between the US and Europe, these differences are insignificant between those of other civilisations on the planet.  It is taken for granted in the “West” (by which I mean the EEA countries, US, Canada, Australia, New Zealand), that women should be equal under the law to men, that racism is unacceptable and barbaric, that free speech including the right to criticise all political views, and to both criticise and mock public figures, is inviolable, and that freedom of religion and from religion are part of a modern society. 

However, whilst many share some of these values, many not only disagree but cannot even comprehend a viewpoint that holds them.

It is fair to say that support or embrace of those values may be slightly weaker in Latin America than in the West, and moreso in the former USSR.   Confucian and Hindu cultures in east and South Asia also carry less tradition and support for such freedoms, but there have been, by and large, positive paths towards that (although racism/sectarianism remains rampant).   Sub-Saharan African countries have also a different view of such freedoms, which are more diverse than Huntingdon could reveal.

However, the big conflict is with the Islamic world, which itself has many diverse strands, but which by and large, with the exception of the likes of Bosnia, Albania and Turkey, is hostile to individualism, secularism and freedoms of speech and religion.

The reaction seen across the Muslim world, and in many Western countries, is a throwback of some centuries, indeed it is a difference that is more profound that than between Marxism-Leninism and Western liberal democracy/mixed capitalist countries during the Cold War.

The flames being fanned by Islamists are ones of values that are completely contrary not only to the post-enlightenment settlement between Christianity, the state and society, but also international law on human rights, including the Universal Declaration of Human Rights.

 
The protestors are predominantly men, promulgating a misogynistic world view, which not only treats women and girls as possessions, but has no tolerance for even engaging in debate or challenge of their religious view.  Freedom of speech is to be burnt at the stake along with all those who they feel have hurt their point of view.  It is as dangerous as it is infantile, as fanatically anti-reason as the anti-semitism of the Nazis, the anti-classism of the Khmer Rouge and every sectarian conflict you can remember. 

They are as incredulous about the relaxed Western view over a film produced privately in the US, as Westerners are over their violence and (literal) sabre rattling.  They live in societies where drawing an image of their prophet can get you executed, and indeed even deciding that you no longer believe in Islam can mean death.    This is accepted as being integral to their entire social system and set of beliefs.   Religion is not an adjunct to life that provides meaning for certain ethical questions or advice on living under difficult circumstances, for reflection at least once a week.  It is central, fundamental and provides a source of guidance on a daily basis.  The closest parallel outside it in modern history is seen in the personality cult laden totalitarian regimes of Nazi Germany, the Stalinist world, Maoist China and today in North Korea.   In all of them, the thoughts and words of the personality cults meant everything, their lives, their deeds took up so much time in education and daily life.   For many Muslims, Islam is that special.  The idea anyone would choose to abandon such believes is not only foolish, but dangerous and any such element is likely to bring down their proud culture.
 
Given they live in states which enforce this society, they find it remarkable that other states do not also reflect their national religions.  The idea that private American citizens can produce a film, without any official endorsement or state oversight, seems improbable and impossible to them.  After all, surely all governments everywhere enforce the religious values of their societies?  Just because the West has corrupt ones, and Christianity has been debased so much (they would say), is not the point.  After all, the Islamists would say, they certainly don’t allow people to poke fun at Christianity (don’t ask about the Jews though).

The seriousness by which they take religion, the state and the offence they feel, is palpably toxic.  Because they fanatically embrace Islam (almost entirely because they were born and raised with it), and because they believe anyone departing from it must be both foolish and evil, they see anyone who dares challenging it to be challenging them personally.  They see it as the devil – like an ancient tribe of animists who see outsiders mocking their totems.   They see it as dangerous and genuinely feel that a challenge or mockery of their faith is an attack on themselves.

Yet people in the West are regularly exposed to mocking, to having either religious or political beliefs challenged.  Few would resort to mass violence to defend their point of view.   You see, Western culture and society has embraced free speech, a diversity of views, open discourse and satire as being healthy.  The amount of mockery and what would be seen as blasphemy against Christianity is significant, and is seen across the Western world (although there are parts of the US where it is a bit scarcer than others).   However, the Christian response is, mostly, to engage, to debate, sometimes to call for new laws, but it isn’t to go out and vandalise or demand beheadings.

That is the response I’d have expected 600 years ago.  That is roughly where many in the Islamic world are.   It is why the invasion of Afghanistan is failing, because barely any effort has gone into changing culture – a culture which is as sexist, racist and religiously intolerant as Western society was in the dark ages, and as economically and scientifically innovative. 

So what does this mean?  The key question is how to respond to such sabre rattling.

There are, logically, five options.

Submit, appease, ignore, engage or fight.

Submitting to such declaration of bigotry or ignorance is not an option, it is surrendering that which literally millions of men and women have died to defend.  No one who even considers such an option deserves to live in a free society.

Appeasement is the worm’s way out, and indeed is the option that more than a few politicians will adopt.  This is to agree with the bigots, and to call for greater “respect and tolerance” of beliefs that themselves embrace little respect and tolerance.  This is the vile sycophantic selling out of more than a few on the left, who are only too quick to want to placate the men who want to continue to treat women as chattels, and execute apostates, rape victims and homosexuals.  No one who speaks the language of appeasement deserves to even be considered to be liberal or respectful of human rights.  It is telling that this is the response of the UN Secretary General.  It is also not the path for victory, for ultimately you will have sold out all of your freedom to placate those who hate the values you say you believe in, but prove by actions that you'll sell for some short term peace.

Ignoring the protests is a viable option, until of course, they start engage in vandalism and violence against the innocent.  In some places, they are on a scale where this appears the only logical option, to “let off steam”, but this simply means steam will build up again.  Nobody who fought for fundamental freedoms would see this as being honourable.

Engaging them, would appear to be the most logical and productive step forward.   Indeed, it is promising that counter-protests have appeared in some cities, such as Tripoli, and that some Muslims fear the approach taken by protestors is to deny the freedom some have fought for.   The message to them all should be very simple:

• -          Secular states do not control what films private citizens produce;
• -          Freedom of religion and freedom of speech include freedom to offend, to challenge and to mock;
• -          The response in a free society to being offended, is to challenge back and mock back, to disarm others through argument, reason and one’s own creativity, not violence;
• -          Those that advocate violence or vandalism to make arguments for their religion have already lost, as they are incapable of debate.

Finally, the need to fight in self-defence is critical.  Whether it be people or property owners, the application of violence should be resisted by the state and individual victims to the extent necessary to defend themselves.  For let's be clear, 9/11 was undertaken by those willing to destroy our way of life.   People who are not amenable to reason and engage in force, must be fought - there is no peaceful option to deal with those willing to kill you.

In conclusion, it is critical for those in the West, whether they be libertarians, conservatives, socialists, Christians or atheists, to understand that the commonly shared basic Western values of individual autonomy, equality of the sexes and races, and tolerance of different religious beliefs, are not shared by many on the planet (indeed they are inconsistently shared in the West).  For those values to get greater adherence requires patience, it requires leading by example and it requires continuous consistent engagement against those willing to take it on, and the use of force in self-defence for those willing to initiate force.

This has significant implications for a whole range of public policies, including immigration, education, defence, foreign relations, international aid policy, the welfare state and media.

These require politicians who are prepared to embrace a principle, rather than kowtowing to avoid offence.  Politicians who are proud of the freedoms fought for since the Enlightenment.  However, for them to come out, it requires citizens of Western countries to want to articulate loudly to defend the society that so many have, by and large, done little to defend. 

Post-modernist moral relativists have no place in this.  Neither do those wishing to appease.

Quantitative easing should upset the left - it's highly regressive

Anthony Randazzo of the Reason Foundation explains why money printing quantitative easing ought to get the socialist Occupy movement out in the streets. 

Which of course wont happen, since their pinup economist - Paul Krugman - is a fond believer in printing more money and spending more money the state doesn't have, to boost the economy.

No doubt some Democrats will think this is a cunning move to give the US economy a boost before the election, as some Republicans think this also, and are criticising it on that cynical basis.  That isn't a reason to criticise it, because it is unlikely to make enough difference to enough people to have an electoral impact.

So why is it bad?

You see you have to ask the question as to who benefits from the creation of new money and who loses.  Bearing in mind Bernanke has said he will create US$40 billion out thin air, every month, until the economy recovers, this matters.  It's also why the price of gold took a big hike overnight.

The beneficiaries are those whose securities the Federal Reserve is now going to buy with its new money.  Those will include the securities holding debt to the Federal Government or mortgages.  So the immediate winners are investors in those securities who now have a willing buyer.  With such purchases, the recipients are the financial institutions who now have money to reinvest.  So it is the shareholders of those institutions who immediately gain from money printing.  The next beneficiaries are those owners of securities, stocks and bonds that gain such investments, as they suddenly find there is more money available to invest.  Prices for stocks and bonds will rise, so existing holders of them benefit.

Those who own such stocks and bonds are going to be primarily other institutions or wealthy individuals. People who are also aware of the counter-risk of money printing - inflation - and so are able to take steps to protect themselves from what inevitably becomes a new round of malinvestment.  Why malinvestment?  Because the flow of "free money" will see choices made that are dependent on what securities the Federal Reserve buys.  The Federal Reserve will want to sweep up government debt and mortgage securities because they are seen as low value investments, so that there is a preference for stocks and shares.  However, with investors having low confidence in the economy, many also sweep into commodities, because they see any scope for rising demand being seen in rising prices for commodities.

So a speculative bubble emerges, with those who joined at the start - those who gained from state purchases of their securities, gaining the most.  Whether it be energy, food or minerals, another round of malinvestment will create a bubble.

That's where we find the losers.  For the consumers of such commodities, be it in purchasing food, heating their homes or even building materials to fix or extend their homes, they face inflation, and as that grows it means their purchasing power declines.

With virtually zero interest rates, it means savers lose out as with growing inflation, they find they are fighting a losing battle.  They can choose to hop onto various speculative bandwagons, but know it is high risk.  So they mix between commodities, stocks and shares, property and various other equities.  Those who already had property theoretically benefit, but few are likely to realise this gain unless they sell at the right time and convert their depreciating currency into another investment.   Of course for those who largely live on receiving an income, they face inflationary pressure with little hope of relief unless their field of employment can afford to raise their wages.   Those who are saving to buy property or indeed anything, are on a losing streak.

In short, what is called quantitative easing, which is a euphemism for printing money, benefits those who the Federal Reserve buys securities from the most, and actively harms those who are poor, who don't own property or whose savings are primarily in bank deposits.  

Will it work?  Well Randazzo believes that private debt levels remain so high that most people are simply concentrating on reducing their levels of debt, rather than seeking to invest.  So whatever trickles down is likely to be used on that.  

Black and for school choice? You must be racist

So says the Louisiana Federation of Teachers.

The American Federation for Children (a lobby group promoting educational voucher programmes and tax credits to enable parents' taxes to follow the school they want their children to attend) reports that the Louisiana Federation of Teachers, an avowed opponent of school choice (presumably because it breaks their dominance of the profession and the single shop approach to negotiating pay) has tweeted that the Black Alliance for Education Options (BAEO), a group of African Americans who also support education vouchers/tax credits for private schools supports teaching that the KKK is good.

Yes.  A pro-Democrat, leftwing union claimed a black educational advocacy organisation endorsed the teaching of racism.

How did it come to this conclusion?  Who knows.  It simply tweeted this...

BAEO has responded and clarified...

Because some private schools enrolled in the program reportedly use texts that may attempt to downplay the awful history of the Ku Klux Klan, LFT (via twitter) called BAEO a "black organization that supports KKK vouchers." This is not only the most ludicrous description of our organization but it is also one of the most unintelligent. 

We unapologetically stand for parental choice. That doesn't mean that we believe every private school is great or that private schools are better than public schools. It simply means that while serious people go about the difficult and long-term work of trying to reform low-performing traditional public schools, we must also give parents real options that allow their children to get a quality education today. We trust that parents, when given the option to choose and when armed with accurate information, will make increasingly better choices for their children.

What I see is an interest group adopting any technique it can to smear those presenting options that threaten their position of privilege and lack of accountability.

The idea that a state monopoly on education and restrictions on access to schools only in a local area is good for children or what parents want is ludicrous, and it is little short of disgusting that teachers' unions - whose primary interest is to increase the pay, reduce the workload and reduce the accountability of teachers - continue to prey upon the vulnerable, weak and poor to demand that they maintain this monopoly on teaching their kids.  They fear new schools, dynamic ones, ones that pay teachers on performance, that hire teachers that aren't unionised into their collective gang, and that parents like them.  They fear not being able to lobby politicians to decide what those schools teach or what they should be paid.  They fear that, when given their own money back or given a way to transfer their taxes from public schools to other options, that they wont choose the options the teachers want monopolised.

They'll find every example they can of non-public schools not delivering the best performance, whilst ignoring the same of their monopoly schools, they will constantly claim that it's all about the children, that this is all they care about, all the time implying that they and the state knows best, not parents.  

Nothing is more important in pushing freedom and changing the culture of modern liberal democracies today than taking schools out of the hands of these peddlers of protectionism, hatred and statism.  That's why they, and their friends in politics (e.g. the Green Party in NZ), are so keen to oppose them.

For they argue private schools should remain for the rich, for the poor kids shouldn't get to go to a school which declares that individual achievement and excellence are the primary goal that should be strived for.

After all, what could be worse that kids from backgrounds that can't afford to pay taxes and private school fees, stand up and proudly live lives that aren't about dependence.

The Olympic honeymoon period is over

I've spent the last month or so basking in what truly was a magnificent time to be in London.  It was, on two occasions, a centre not of banal cultural emptiness, not of history shrines and hoards of tourists eager to look backwards, not of a sub-culture of misogynistic violent no-hopers eager to pillage and destroy in anger at their own uselessness, not a centre for Islamist horror, but of individuals as elite athletes, whether Olympic or Paralympic, striving and winning, and in a culture that truly glorified and celebrated them.  Whilst Team GB got by far the greatest attention, there was never an ounce of resentment or denial of the wondrous successes of those from other countries, the remaining malignant nationalism that comes with the Olympics (and which China still pushes), was not apparent. 

It was truly a celebration of the achievements and efforts of thousands of individuals, it saw a mood of benevolence and patience, as both the cost and the draconian approach to branding were largely ignored, and people celebrated.  Yes, I wish it hadn't happened because it was destructive of wealth (proven also by July seeing a drop of around 200,000 overseas visitors and drop of spending by visitors of around £120 million compared to the previous year) and a travesty of a waste of money, but it did come with that beautiful element of human beings striving, succeeding, proud of success in any form (whether it be medals or personal bests), and others genuinely celebrating in their success. 

The bubble of that culture has been well and truly popped.  One minor event was at the Trade Union Congress, where t-shirts were being sold that said that when Thatcher dies a generation of trade unionists will be dancing on her grave.  It was being sold by the Derbyshire Unemployed Workers' Centre, which itself is part funded by three local authorities. All of the nastiness of Marxism epitomised in one product, and whilst the TUC condemned it, Labour leader Ed Miliband chose to remain silent.

However, that minor piece of disgusting behaviour is nothing compared to the true travesty of justice over Hillsborough.  David Cameron has apologised for the vile behaviour of the South Yorkshire Police and the emergency services, not just for their grotesque negligence that apparently allowed as many as 42 of the 96 who died in that tragedy to die unnecessarily, but their lies, manufacturing of evidence and perverting the course of justice to cover up their own ineptness.  This conspiracy by agents of the state to cover up their own failings is not just disgusting, but criminal.  There should be people charged for acts which, if they were private citizens, would see them in prison for many years.   Altering statements and editing evidence to conceal failings is palpably inexcusable.  

Many in police forces wonder why people don't trust them, why they are antagonistic or obstructive, it is because of this sort of activity.  The willingness to flagrantly act without good faith.

Finally, it looks like a badly made film lampooning Islam and making it out to be a religion of violent bigots, has incited lots of groups of Muslims to act as violent bigots.   Those who think that the act of private citizens in a country is the act of a state, those who believe that the appropriate response to being offended is violence.

Meanwhile, the US is led by an Administration which has as its first response is to sympathise with those offended, whose Secretary of State condemns the film as disgusting and reprehensible (as well as condemning the violent reaction to it).   

Yet there is hope.  Mitt Romney, who is easy to criticise for so many reasons, gets it right by saying:

America will not tolerate attacks against our citizens and against our embassies. We will defend also our constitutional rights of speech and assembly and religion. We have confidence in our cause in America. We respect our Constitution. We stand for the principles our Constitution protects. We encourage other nations to understand and respect the principles of our Constitution because we recognize that these principles are the ultimate source of freedom for individuals around the world.

“I also believe the Administration was wrong to stand by a statement sympathizing with those who had breached our embassy in Egypt instead of condemning their actions. It’s never too early for the United States Government to condemn attacks on Americans, and to defend our values. The White House distanced itself last night from the statement, saying it wasn’t ‘cleared by Washington.’ That reflects the mixed signals they’re sending to the world.

When was the last time you heard a major party US Presidential candidate standing explicitly behind free speech and freedom of religion? When was the last time that you heard one talk about those principles being a source of freedom for individuals around the world?  Where is the stereotypical theocratic authoritarian that is the caricature that Democrats want to paint him to be? 

What exactly could anyone of a classically liberal (not socialist liberal) bent oppose of that statement?

Farewell Thomas Szasz

Thomas Szasz passed away last weekend.  He was a prolific writer and critic of psychiatry.  He was vociferous in his view that so much of psychiatry was not scientific at all, and was rooted in social and political beliefs that when people behaved in ways that were unacceptable that they were "ill".  

He only saw illness in those who had physiological attributes of brain damage or disease, whether they be congenital, infection, stroke or accidental, not in conditions that were diagnosed with no signs of such damage, such as depression and schizophrenia.

His famous quote was. "If you talk to God, you are praying; If God talks to you, you have schizophrenia. If the dead talk to you, you are a spiritualist; If you talk to the dead, you are a schizophrenic"

He was highly critical of the use of drugs to "treat" perceived mental illness, looking to ECG and lobotomy as previous coarse and even inhumane exercises in curing behaviour.

He talked of how women who didn't act as were expected were deemed "hysterical", about attempts to cure homosexuality through surgery.   This and other attempts by psychiatry to diagnose and treat people reflected more about the context of social norms of the day as to what was "acceptable" behaviour, than to actual disease. He saw incarceration used more and more as a means of control than to protect people from those who would behave badly, as few people deemed to be mentally ill commit criminal acts upon others.  He rejected the defence of insanity as being an abrogation of personal responsibility, and believed the defence should not exist.  He wanted people accountable for their behaviour which it denied the rights of others, but he was a stalwart defender of the rights of others to live their lives as they saw fit, as long as they did not interfere with others doing the same.

He thought of psychiatry as a profession full of people bent on control, and indeed the film One Flew Over the Cuckoo's Nest was in part inspired by Szasz's observations of the profession. 

He saw some diagnosis of mental illness as denying people responsibility for their own behaviour meaning they could have control of their lives taken over by professionals, only too keen to medicate, incarcerate, electrocute and operate.

Psychiatry loathed him.  He was a libertarian.  He was no fan of psychotropic substances or narcotics per se, but he loathed the war on drugs and loathed depictions of drug users as all "addicts", and believing that the state's treatment of drug users created far more harm than they ever did to themselves or others.

Reason has a good obituary about him, along with a series of links to articles, some supportive some scathing.

However, for me Szasz has the status of a man who confronted power, who confronted orthodoxy and did so despite being excoriated by them, for whilst he was not always right, he was not meek.

For who can pick up a copy of the "The Myth of Mental Illness" and not be rattled by the title, and not consider that the term itself has been used, so very much, to simply describe people who are having problems living.

Tax stops Usain Bolt from bothering more with Britain

It was telling that in a live BBC interview during the Olympics that Usain Bolt said that he would love to spend more time in the UK, but the tax laws make it not worth his while.

The Taxpayer's Alliance explains why:

Under current rules, athletes competing in the UK are liable to pay tax on their winnings in addition to paying levies on any of their passive income such as marketing, sponsorship and image rights deals. Athletes often have to pay a 50 per cent tax rate on their appearance fee as well as a proportion of their total worldwide earnings. 

No wonder he can't be bothered.

Of course, neither the supposedly "pro low tax" Conservative Party, nor the Liberal Democrat or "opposition in name only" Labour Party agreed with him, largely because all three parties have been embarking on a cannibalistic feeding frenzy on tax for months. How did he compete in the Olympics then? Simple. The UK Government was told it had to suspend these provisions for the extent of the Olympics: The International Olympic Committee insisted that HMRC suspended its normal tax regime for those competing in the London 2012 Olympics. London simply wouldn’t have been able to host the Games otherwise. And the Government has also said that tax breaks will be available to the Commonwealth Games and those taking part in the 2017 World Athletics Championships in London. They've all been claiming how moral it is for people to pay taxes, and how tax avoidance (i.e. legally acting in ways to not pay more tax than you are required to) is immoral. It's been a Marxist orgy of claims that tax avoidance "costs the UK" money, when what is actually meant is that it costs the government - when in fact people with more of their own money tend to invest it or spend it, benefiting them and the people who gain the investment or sell them goods and services. The classical Marxist bogey of tax avoidance is the stereotype of some rich businessman sitting in a suit with a cigar laughing as he appears to do nothing whilst gaining more and more money. He's probably a banker, or someone who earned lots of money in ways that are "not honourable" to socialists (remember earning a six-figure sum as a politician or unionist is ok though). Usain Bolt doesn't fit that stereotype. He's loved by millions of fans. Nobody dare utter a criticism of him or the substantial earnings he gets from promotional deals. See it is ok to make money running fast and being attached to ad campaigns, but not to run an advertising company, or manage his investments, or own a hotel he stays at. Yet the political silence of this issue is palpable. Clearly the tax laws as they stand not only deter the UK from hosting athletics events (when they get hosted they do so with exemptions), but stop people from living and working in the UK as athletes. It is completely self defeating, it means there is less money in the economy and indeed if Bolt lived in the UK and paid no income tax, the UK would still be better off. This is a man who wouldn't be claiming public housing or welfare benefits, he would be almost certainly never using the NHS (when he can afford private healthcare) and would be paying plenty of VAT on his consumption (and fuel tax and air passenger duty on travelling) to cover a decent contribution to defence, law and order and other state spending. However, to argue that, Red Ed Miliband, his new sycophants in the Liberal Democrats and the sellout Conservatives would have to admit that, actually, most wealthy people don't cost the state very much at all. They pay their own way, pay for their own housing, education, health care, pensions and by and large only have a role for the state in defence, law and order and the provision of roads. Because, you see, the underlying reason for the clamour for tax is to take from the rich to give to everyone else. Now if you were Usain Bolt, earning for a relatively short period of your life, enormous sums of money for promotional campaigns, why would you decide that middle class and low income British deserve to get half of all your earnings, when you can stick to Jamaica?

The positive legacy of the London 2012 Olympics

Now I was quite curmudgeonly about the Olympics in advance, for reasons I've already written about.  That being the economic disaster they are proving and will prove to be, and the overweening authoritarianism both written into legislation and enforced by the Police, indeed, such reasons continue to pop up, such as the man arrested by Police for not appearing to enjoy the event he was watching (he has Parkinsons' Disease).   

Kiwiwit has a good post about reasons to dislike the games as well.  

In almost sickening cliche terms there is constant talk of "legacy" from the Olympics.  Part of this is attributed to the construction of venues, although these will be grossly underutilised and the stadium itself is likely to be leased at below a return on capital to some soccer club.   Part of it comes from handing over the athletes' village as new housing, some of which is the awful cliche "affordable housing" (I didn't know I lived in unaffordable housing - except it would be before long if I lost my job).  Part of it is the claim that the record British medals' haul will inspire lazy kids to take up sports.  It might do a little, but that tends to be over exagerrated.

Yet for all these negatives, there is a single overwhelmingly fantastic element to the Olympics.

It is a display and celebration of personal achievement.

People who to a man and woman, tried their hardest, spent months or years training and practicing and giving it their commitment to pursue their own goals.  

They are not altruists.  The medals were not won so that Britain could feel great.  They were not won to boost the economy or to encourage others to take up the sport.  

They were won by people who wanted to win as their individual achievement - including those in teams.  It was a desire to be the best.

This in a world where the word "elite" is taken as a sneer that success comes only from privilege, this in a world where individual success in so many fields is taken as a chance to demand a pound of flesh for everyone else.  A world where those who make things happens by applying their mind and energy to ideas are simply seen as obliged to carry everyone else along with themselves.  A world where so many see those as succeed as hosts to suck the blood from.  

Further to this has been the unashamed joy of those winning, with justified personal pride that their own effort and skill have paid off.  However, also delightful has been the joy of many of those who did not get gold.  Why?  Because they gave it their all, they blamed nobody else for not getting gold, if they did blame someone it was themselves.   Total responsibility for their actions and result.   This one year after London was beset by riots from those expressing the antithesis of this.  Nihilistic parasites destroying, invading, stealing, blaming it on the Police, blaming it on society, blaming it on the government, when their motivation was a combination of euphoria from destruction and personal gain directly at the expense of others.  

Yet those celebrating and enjoying the Olympics have not just been those competing and their team mates, families and coaches, but the spectators both in person and on television.  Much of that has been a patriotic joy at seeing British men and women succeed, particularly as the story of so many of them is one of coming from an average background, deciding to pick a sport, finding they do well and wanting to do better.   However, it isn't just some blind nationalism.  Usain Bolt's success has captured the imagination of millions, many of whom have no connection to Jamaica.  Michael Phelps likewise.   Indeed one of the great points noticed by many athletes have been the spectators, predominantly British, cheering on the winners, regardless of nationality.

This celebration of success, achievement, personal, is overwhelmingly positive.  

It's been noted that this is the antithesis of the recent celebrity culture of attention seeking of non-achievers.  The world that of the likes of Piers Morgan, who dared slam Team GB athletes who stood on the podium with gold medals and didn't sing "God Save the Queen".  This overpaid unachieving tabloid media hack whose life has been to invade the privacy of others to sell pap populist bullshit almost epitomises the leadership of the attention seeking vacuousness of mass culture, most notably seen in the nobodies called the Kardashians.

Gold medal athletes are so far above and beyond parasites like Morgan that they shouldn't give him the oxygen of their attention.

Meanwhile, almost a complete sideshow during this time has been the politics of it all.  Those who themselves want to suck popularity and publicity from the achievement of others and gloat or point score around the games - or rather, those who gleefully spent other people's money for the event under the cover of, at best, non-evidence based wishful thinking about the benefits of the games.

So, if the one thing that is taken away from the games is a sense of joy, awe and respect for those who achieved the pinnacle of their chosen sports, then that IS the positive legacy.  A legacy that shows children and adults that people can achieve great things if they show determination, discipline and responsibility.   A legacy that also shows that for most athletes, achievement is not seen in medals, but in getting to personal bests, participating with world champions with the chance of success, and almost none of them blame others for not getting gold. 

It is an antidote to the culture of equality worship, the years of opposition to competitive sports, the idea that someone succeeding "makes the losers feel bad", that those who succeed must always bear in mind the effect of their success on those who don't.

This corrosive attitude that those who succeed shouldn't celebrate their achievement, and that there should be celebration of those who come last may have a place in encouraging young children (or the intellectually disabled) to try things and learn to get better, has permeated its way into cultures with a "tall poppy syndrome".  It's perhaps New Zealand's worst cultural trait - the willingness to sneer and think someone who is proud of having done well and keeps doing well "thinks he is better than the rest of us".  So what if he is, he's probably right.

Usain Bolt shows the antithesis of this attitude. "Fastest man in the world" who knows he is, is glad he is, and is unashamed about it, and millions of people share the joy of seeing him do just that. He did not think for a moment to give his team mate Yohan Blake a chance to "be equal" by getting a Gold Medal, and Blake would never have wanted him to.

The Olympics doesn't see the competition getting retarded or limited just to allow someone else to have a chance at winning.

As such, despite it being a grand taxpayer funded display of state celebration (which it is, and which more than a few countries use it for), it is an antidote to the culture of our times.

Who of the Marxists who demand that the people at the lowest level jobs in businesses be considered the creators of the true wealth of those businesses would stand up and say "Usain Bolt didn't do that" because there were others who washed his laundry, drove him to the venue, cooked his meals or made his shoes.

Did the people in the factories in Asia producing his running gear win his gold medal?  No.

Indeed the BBC tried desperately hard to push a Marxist criticism of the games on Newsnight a few nights ago, claiming some Team GB medals came from "elite sports" that only the wealthy could pursue, and the Olympics were "out of reach" because so many sports were not mass events.  The argument is so absurd as to be barely worthy of a response, when the Olympics is full of track and field events, team ball events, swimming and others that are accessible.  How many children get inspired by Usain Bolt running like a champion?  The Marxist MP Dianne Abbott talked of a lack of ethnic diversity among those benefiting from the games, denying the remarkably multi-ethnic backgrounds of the medallist (and indeed both her and the BBC's hypothesis were swatted down within 24 hours when Jade Jones (from a small Welsh village) and Nicola Adams (from Leeds of Afro-Caribbean descent) won gold for taekwondo and boxing respectively.

So the equality bullies, the people who always want to point out how unfair life is because not everyone everywhere can win gold, not everyone everywhere can get the time or money to become elite athletes, have been overwhelmed by a tide of enthusiasm, warmth and joy from those who DO succeed.

That, despite all that has been wrong about these Olympics, is quite beautiful.

Finally, to almost epitomise this sheer joy and delight at success, is one of my favourite moments from the Olympics.  The absolutely unalloyed expression of love, pride and emotion from Bert le Clos.  This interview was on the BBC minutes after his son, Chad le Clos, won the 200m butterfly in swimming  beating his hero Michael Phelps.

Naughty Brisbane Metro

Don't joke about the Democratic People's Republic of Korea.

The owners and staff of Brisbane Metro (and Melbourne mX) will be first up against the wall if the world revolution comes embracing the Juche idea...

The use of language is astonishing and has to put most journalists to shame.   I've highlighted a few choice pieces.  I doubt very much if this event will go down in history for longer than about a week, but what is more astonishing is that someone picked up on this either online or in Australia to get the apparatchiks at the KCNA fired up over it.  North Korea's internet presence is progressively growing.

From the Korean Central News Agency - Pyongyang

Naughty Brisbane Metro Challenges Olympic Spirit: KCNA Commentary Pyongyang, August 7 (KCNA)

The Australian newspaper Brisbane Metro behaved so sordid as to describe the DPRK as "Naughty Korea" when carrying the news of London Olympics standings. 

This is a bullying act little short of insulting the Olympic spirit of solidarity, friendship and progress and politicizing sports. Media are obliged to lead the public in today's highly-civilized world where mental and cultural level of mankind is being displayed at the highest level. 

Brisbane Metro deserves criticism for what it has done. The paper behaved so foolish as to use the London Olympics that has caught the world interest for degrading itself. 

The paper hardly known in the world must have thought of making its existence known to the world by joining other media in reporting the Olympic news. Then it should have presented its right appearance to the world. 

Editors of the paper were so incompetent as to tarnish the reputation of the paper by themselves by producing the article like that. There is a saying "A straw may show which way the wind blows". A single article may exhibit the level of the paper. 

Many people were unanimous in denouncing the small paper for defaming the mental and moral aspects of the players of the DPRK who earned recognition from several appreciative world famous media. Even hostile forces toward the DPRK heaped praises on its players' successful performance at the London Olympics, saying that "Korea whirlwind" sweeps the world. The Australian paper cooked up the way of moneymaking, challenging the authority of the dignified sovereign state. The paper deserves a trifle sum of dirty money. 

As already known, it was reported that a lot of petty thieves sneaked into the London Olympics together with tourists. Players fight to the finish in the stadium, but those petty thieves demonstrate their "skills" outside the stadium. The paper Brisbane Metro is little different from those petty thieves. In a word, the paper discredited itself. How pitiful it is. 

The Brisbane Metro will remain as a symbol of rogue paper for its misdeed to be cursed long in Olympic history. The infamy is the self-product of the naughty paper Brisbane Metro which dared challenge the spirit of Olympic, common desire and unanimous will of mankind. 

Don't come to London - it will be too busy

They didn't, so it isn't.

The economic story of the Olympics is increasingly damning as it has become abundantly clear to many businesses in London that the net effect has been to scare off tourists from the city and to scare away the locals. The first thing that is noticed is that the public transport system and the roads are quieter than usual. The expected huge delays and overcrowding haven’t happened, in fact it is the other way round. On Monday I retimed my own commute to deal with the expected chaos, but on Tuesday found it quiet. It’s busy around Olympic venues yes, and there was awful weekend traffic in no small order because of the cycling road race both closing a whole series of roads and encouraging hundreds of thousands to head that way to watch.  Otherwise it’s grim for businesses (but a delight to walk around).

 Look at these figures: 

- 50% reduction in foreign visitors to London in July 2012 compared to July 2011 (European Tour Operators’ Association) 

- 4.5% reduction in retail footfall in the West End in July 2012 compared to July 2011

 - 2.6% reduction in retail footfall in the East End (where the games are) in the first few days of the Olympics compared to last year 

- 25% reduction in visitors to the British Museum in July 2012 compared to July 2011 

- Traffic counts in central London are down 17% on previous weeks 

- Major retailer NeXT estimates sales are down 10% in its central London shops.

-  The Licensed Taxi Drivers' Association estimates business is down 20-40%.

In short, it has been pretty much what I and others predicted. The Olympics deters as many as it attracts, as many presume prices will be inflated (and they were) and everything will be too busy. However, given that government agencies such as Transport for London have been constantly telling Londoners to make different plans and businesses were told to encourage people to work from home, take leave or avoid unnecessary travel, it shouldn’t be a surprise. People have done what they were told. 

However, politicians are in denial. Culture Secretary Jeremy Hunt said that such figures were nonsense saying that “restaurants, theatres and even cabbies who are out of pocket today will reap benefits for years to come.” according to the Evening Standard.  Yet how come the media can't find businesses outside the mall adjacent to the site that are doing well?  He's touting the obvious manufactured claim of his bureaucrats that "businesses who marketed well are doing well", yet how does he realistically think this can make up for the reduced visitor numbers?  Having taken taxes from all of these businesses to pay for these games and told many businesses to effectively cut travel to London or staff commuting in London, how dare he tell off the people who are paying for the games without the credit for it.

In a parallel story, traders at Greenwich market reported a 60% decline in trading, even though the market is located between the nearest Docklands Light Railway station and the Olympics venue, because of a huge barrier placed on the road to shepherd people from public transport to the venue. It has since been removed.

Of course a small business that takes risks based on a government funded project is always going to be taking a gamble, it doesn't help that Transport for London is still telling motorists to avoid Greenwich altogether and warning people of overcrowding stations in the area.

This follows rude prick and Sports Minister Hugh Robertson saying that businesses had “years” to plan, as if a restaurant in the West End can somehow woo hundreds of thousands of people that have been put off by constant taxpayer funded warnings to stay away. The Prime Minister continues to spout the empty delusion that the Games will generate £13 billion of benefits for the economy. 

Of course not one politician will come out and say the obvious. Hosting the Olympics never made economic sense. The Blair Government had advice at the time that said this. However Tony Blair, Gordon Brown, Ken Livingstone and their minions, and since then David Cameron, Nick Clegg, George Osborne and Boris Johnson, have all gone along with this delusion. The money for the games came from taxpayers. The majority of whom don’t live in London so will have seen no net benefit at all. If the businesses that were meant to benefit, by and large don’t, then you’ve been wrong. You’ve all gambled away £9 billion of other people’s money on a fun party. 

Yes the Olympic Games are a great time, and offer fantastic spectacles of people truly achieving their best through effort and training. Yes it’s nice for Team GB athletes to compete on home soil, but if you asked them if it was worth £9 billion of other people’s money for just that, I doubt they would agree. 

However, don’t bother pretending they are an “investment”. Don’t pretend that there are real economic benefits for anyone, beyond the construction companies for the facilities you paid for with other people’s money. London is already one of the world’s most popular tourist destination, it has no shortage of visitors. It was inevitable that a city as crowded and congested as London would need to chase some people away to allow others to come in.   The same thing happened in Sydney.   A study by James Giesecke and John Madden of Monash University indicated that the Sydney games generated a net loss of A$2.1 billion in economic activity.

Well done. 

Now first prize for the UK politician who stands up, after the OIympics I expect, and says “it wasn’t worth it”. 

and no, unlike the grumpy failed politician Gore Vidal, I don't get that much pleasure from "I told you so" when so much money has been wasted.

Second prize if someone simply pointed out that if London wants more visitors, allowing its busiest airport and only hub airport to build a third runway, a project the airport's Spanish owner is able to fully finance itself, would have been a far more effective and enduring way of attracting visitors that building a stadium that still doesn’t have a long term user. 

However, Olympics are a bigger spectacle and far more exciting than a permanent piece of infrastructure, especially when the latter is opposed by hoards of angry environmentalists (the ones who can't and wont protest the extra runway a month being built in China for new airports) and NIMBYs (who wish that 60 year old airport would go away so their property values would go up).

Which is why the government shouldn't be involved with either!

Meanwhile, DO come to London.  There are massive discounts at hotels, flights are cheap and it's easy to get around, and there are sales on if you avoid the crowded Stratford Westfield Mall (and why would you come to London to go to a mall full of eastenders on school holidays?).

Urban myths about Kiwirail

Once again the Alliance Party and rail unions' views on Kiwirail are being touted by the Labour Party as truths.

They are not.  Don't believe me? Thought not.  However, you might believe the Institute for the Study of Competition and Regulation based at Victoria University.

I've blogged this before, but it is worth repeating.  The full presentation debunking the myths is in Powerpoint here.

Here's a good summary I wrote before...

1. Rail network shrinked due to privatisation. Wrong. Almost all line closures were under state ownership when rail had a statutory monopoly on long haul freight!  The track network length has barely changed in 20 years.

2. Rail stopped being viable after free market reforms. Wrong, it stopped being consistently financially viable by 1945. It had short pockets of profitability since then. The early 1970s saw it drift from profitability to losses, which weren't recovered until 1983 after debts had been written off and it started being paid by government to run commuter rail services in Auckland and Wellington under contract (and a host of unprofitable freight lines, such as the Otago Central Railway).

3. Track Maintenance was run down after privatisation. Wrong, it was already being run down in public ownership, track was run down more, but sleeper replacement under private ownership increased.

4. Rail is worth a lot as an asset. Wrong. The NZ$12 billion book value of rail that was on the Treasury accounts was a nonsense, equating it to all other SOEs combined (e.g. 3 power companies, Transpower, NZ Post) which all make profits. Most of the value is based on a replacement cost if it was built today, which of course would never be done. I'd argue it is probably worth 4% of that at best.   It's worth noting that this has only been partly fixed as of late.

5. Rail only needed rescuing after privatisation. Wrong. It has been rescued several times before. It has long had serious economic viability issues.   In recent history it was bailed out in 1982 (all debts cancelled, and the operation commercialised), 1990 (had the debt of the North Island Main Trunk line electrification written off as a "Think Big" debt, then NZ$350 million, and another $1 billion wiped off to pay for the restructuring to make it viable).

6. Rail is good to reduce accidents, congestion and environmental problems Wrong. "the optimal level of externalities is not zero – at some point it becomes more expensive to lower them than the welfare created by their further abatement" Rail related deaths are only slightly lower than truck related. No evidence that rail reduces congestion. Sea freight is twice as fuel efficient than rail, but little interest in that mode.  Indeed Greens actively oppose international ships carrying domestic freight along the coast to placate their unionist mates.

Like I said before, the presentation basically says that rail is not as fuel efficient as is quoted, and that only 30% of the current network handles 70% of the freight. It suggests concentrating on the main trunk, and lines to the Bay of Plenty and the West Coast

Point scoring not principle

The paucity of principle in modern politics is unsurprising, so let's just establish the Labour Party's view on state ownership.

1.  The State can buy whatever it likes, even large unprofitable businesses, without an electoral mandate.   Taxpayers are expected to cough up for whatever politicians think they should buy with their money. 

 

2. Successful privatisations have been erased from history.  Opus, the former Ministry of Works, is now a successful multinational consultancy firm taking New Zealand expertise to the world.  Auckland Airport is a shining success as an airport.  Hardly a peep is heard of Contact Energy, bringing private competition to a state owned market.  State Insurance hasn't been state for 20 years.  NZ Steel continues to be a competitive exporter and productive job creator years after it was sold.  

3. It was ok for Labour to try to sell 20% of a state owned asset to its largest foreign competitor.  Dr Cullen was salivating at the chance to sell part of Air New Zealand to Qantas, which would have ended competition on domestic routes, sewn up around 80% of the Trans Tasman market to one operator.  However, that was "ok".  Only the Commerce Commission stopped this cosely set up deal, although few remember how much effort Qantas made to lobby the Labour Government at the time to delay giving the consent to Singapore Airlines buying 49% of the then privately owned Air NZ/Ansett group, which was a key step in kneecapping the group - in Qantas's interest - as it knew the NZ government wouldn't bail out Qantas's biggest domestic competitor (Ansett), and scuppering the Singapore deal bought Qantas years of dominance on the Australian market.

Either you're upfront and believe the state should own businesses and acquire new ones under certain principles, or that it shouldn't and should divest itself of them over time.

The Greens believe the former, Labour and National believes in none of the above and all of the above, depending on who you ask, and what time of day it is.

Why Boris Johnson beat Ken Livingstone

For all of the many reasons to be critical of the Olympics, it being a waste of future taxpayers' money, it being an unjustified corporatist suppression of free speech, the celebration of the world's most centrally planned universal health care system and most recently, the inability to flexibly manage access to tickets, and the lost opportunity to fix London's inadequate transport infrastructure, there are things to be grateful for - besides the great individual achievements by thousands of athletes (which is the true reason to celebrate the Olympics), Boris Johnson is Mayor rather than Ken Livingstone.

Why?

Boris has written "20 jolly good reasons to be cheerful about the Olympics"...

Including:

As I write these words there are semi-naked women playing beach volleyball in the middle of the Horse Guards Parade immortalised by Canaletto. They are glistening like wet otters and the water is plashing off the brims of the spectators’ sou’westers. The whole thing is magnificent and bonkers. 

and

The Olympics are proving to be a boost to tattoo parlours. Plenty of people seem to want their thighs inscribed with “Oylimpics 2012” and other ineradicable mis-spellings. 

Who would ever expect Ken Livingstone to say such things....

London 2012 < that phrase breaks the law (or what's wrong with the Olympics Part Two)

As I wrote previously, the Olympics can be a great cause for celebration of personal achievement my people striving to achieve the very best in their chosen sport or athletic event. As an advocate of capitalism, I’m not a supporter of the anti-capitalist protestors objecting to specific sponsors at the games. 

The patronising and precious attitude of protestors that having sponsors like Coca Cola and McDonalds means people will associate those brands with health living is insulting the intelligence of spectators and those at home watching the games. There wont be ads of Gold Medal winning athletes saying they did it drinking coke or eating McDonalds, but even if there were, then so be it. The do-gooding health bullies who want to restrict free speech because they think they can regulate, tax and berate everyone into eating and drinking as they want should just shut up. The simple response to sponsors whose products you don’t like is to not buy them or organise a boycott. Funnily enough had the Olympics actually come within budget as originally proposed by the government when it bid for the games, then it may be that sponsorship and ticket sales would have meant it broke even. The original budget being £2.4 billion excluding the external costs to related agencies, such as the Police. Now it is £9.3 billion plus those costs at around £2 billion, it’s easy to be cynical about the games from an economic perspective, but also desperate to maximise sponsorship to cover the costs.

You’d think that from my point of view, whatever it takes to get sponsorship is good. Well no. There is nothing wrong with granting the rights to be official sponsors, to use the logos and slogans trademarked for the Olympics. This, of course, is like any other event and any other corporate sponsorship role. Sponsors pay for certain exclusivity related to that which those organising the event have the right to sell. However, it goes a lot further than that here. 

For a start, Lord (Sebastian) Coe, Chairman of the London Organising Committee for the Olympic and Paralympic Games (LOCOG) has said that ticket holders to events wearing items of clothing carrying the brands of competitors to the sponsors could be prohibited from entering the events. He said it was “probably not” ok to wear a Pepsi T-shirt (Coca Cola is the competing sponsor), but “ok” to wear Nike trainers (Adidas is the competing sponsor). There has been some backtracking on that somewhat (only wanting to prohibit large groups engaging in “ambush marketing”), and frankly if all of that had been made clear when tickets were sold, then it would be fine. Yet it’s more insidious than this. 

You shouldn’t need to pass laws to host an event, but the Blair Government passed legislation, which explicitly prohibits unauthorised use of certain words. Typically, protection of sponsorship is about protecting trademarks and logos that you have registered or fraudulently passing yourself off as officially endorsed by an event. Existing laws are quite capable of doing that, but the Blair/Brown and Cameron Governments had been lobbied by the International Olympic Committee and sponsors to do more. So there are now officially banned words and phrases in relation to trade: 

“Using the words Games, Twenty-Twelve, 2012, or Two Thousand and Twelve, in conjunction with one of these words - London, medals, sponsors, summer, gold, silver or bronze - is also banned.” 

You can have a brief laugh at how this demonstrates that the quasi-authoritarian nanny-state approach to British politics, embraced by the Labour Party is now mainstream and uncontroversial among major parties. It is also illegal to take photos of the Olympics rings in public places to be used in publicity. This includes the taxpayer funded quarter million pound rings on Tower Bridge. 

To those who think the British constitutional monarchy system is a great guarantor of freedom, surely this shows it up for the emptiness that it is. The government has restricted free speech around the Olympics. Why? Well to protect the official sponsors, because they can’t possibly have a small local café selling muffins under a sign not using the logo saying “Olympic Muffins”.   Conversely, no airline other than British Airways can advertise "fly to London for the Olympics", which is patently absurd.

This overbearing, corporatist nastiness is exactly the sort of bullying that anti-capitalist protestors rightfully condemn. It’s not free market capitalism to pass laws so that sponsors don’t just register trademarks, but prohibit the use of general phrases and descriptions. So on that I’m with the protestors. 

 

How can any politician in the House of Commons hold his or her head up high and say it’s ok to pass laws restricting public usage of words that are NOT brands. I can’t say “Summer 2012” without it being seen as some insidious attempt to undermine the sponsorship of the Olympics.  To his credit, Mayor Boris Johnson has called overzealous policing of sponsorship as “insanity”, which should hopefully take the sting off the tail of cops who see new laws as a chance to grab some new criminals. Hopefully it means that some local businesses who have contributed in taxes for this grand event wont face prosecution for using words from common usage. He has pointed out the suburb of west London called Olympia and how absurd it should be if businesses around there with that name might be forced to change. Sponsors who use such laws to beat up on smaller businesses who are not using their logos and who are not claiming to be official sponsors should themselves face the opprobrium of the public. It’s not your language, taxpayers are the biggest sponsors of these Olympics. Just because you have convinced a bunch of lilly-livered politicians and gutless bureaucrats to pass laws to restrict free speech, doesn’t mean it is right. For if the Olympics has a spell of petty bullying from bureaucrats, Police and lawyers from sponsors forcing people to not use verboten words, then it deserves to be accompanied by moaning. Britain should no more be beholden to rampant corporatism, than it should be to rampant statism. 

Ironically, there has been one freedom granted - Sunday opening hours, which are currently heavily restricted for shops over a certain size, have been abolished for the period of the Games.   However, Britain doesn't have a Government sufficiently committed to economic growth to allow this to continue, as City AM's Allister Heath bemoans.