Not all austerity is equal...

Allister Heath of City AM:

Spending cuts are austerity of the public sector  (as it has to reduce its activity)

Tax increases are austerity of the private sector

Think about which one is more likely to decrease employment, and which one is more likely to reduce economic growth.

Self-driving cars could transform land transport

In the UK the talk is about taxpayers paying for an extensive high speed railway network between London, Birmingham, Manchester and Leeds.  It would cost £35 billion to build and would lose money.   It will mostly service well-heeled business people (the fares will be too high for families, who will drive, or the poorer, who will take the multiple competing privately provided coach services).  90% of its users will be those using trains now, or people who wouldn't have travelled in the first place.  It will make next to no impact on domestic flights or road traffic.  One of the main objectives is to free capacity on the existing lines, so that more loss making commuter services can operate on the lines close to London.

In Auckland the talk is about an underground rail loop to enable its commuter rail service, soon to be electrified, to have more capacity during the peak hours.  Roughly 45,000 trips a day are taken on that system, roughly the entire average daily trips of Fenchurch Street station in London (yep that busy) (and 10% less than Wellington's network, despite Wellington's region having at least a quarter of Auckland's population.  It would cost NZ$2 billion to build and would lose money.  

In both cases the projects are expensive, not financially viable, and serve relatively few people.

They are 20th century solutions to perceived transport problems, but another is on its way, and it could transform land transport between and within cities.

Self-driving cars. Allister Heath says it makes big rail schemes like HS2 outdated.

The technology exists now.  Cars can already park themselves, emergency brake, follow road lines and follow other vehicles and brake automatically.  Several US states are already changing laws to allow for fully autonomous road vehicles, and the technology now being trialled enables vehicles to navigate safely along existing roads.

What could that mean?

Road vehicles that actively avoid collisions, both with other vehicles, and cyclists and pedestrians.

Road vehicles that operate in convoys, in close formation on major roads, increasing the capacity of those roads by a factor of three to four, rivalling railways.

Road vehicles that don't need a driver, that can be sent to be parked anywhere, called up on command by mobile phone.

Motorways that operate like trains of vehicles, except that the vehicles have the ultimate flexibility of starting and ending trips anywhere on the road network.

Traffic lights will no longer need to keep traffic stopped, but rather interweave traffic to maximise capacity.

Speeds can be faster where it is safe to do so, and better managed where there are many pedestrians.

Cars could be parked with a far higher density.

Let's not pretend there are barriers to this.

Technology needs to be refined, it needs to be secure.  Nobody wants autonomous cars diverting onto footpaths and mowing people down.

Laws need to be changed, so that owners of vehicles are liable for accidents when there is no driver or active driver.

Roads need to be better managed, so lines are maintained, databases about road rules, traffic signals adapted and systems in place so the network is actively managed.   

However, it can transform transport.

Buses can have the capacity of commuter railways (with the exception of high frequency metro services, which Auckland will never have).

Roads can have much more capacity, so there is far less need to build more capacity, and there is far less need to build safety into the roads with barriers and signs and speed limits that reflect driver behaviour.  

Roads would be so much safer that incidents of accidents causing congestion would be rare, and thousands of lives would be saved from serious injuries, and hundreds of millions of dollars of property damage and health costs avoided.

Vehicles would be much more fuel efficient, as vehicles become more efficient anyway, reducing emissions and the environmental impacts from transport.

Roads would be more like networks akin to telecommunications and energy networks, and politicians choosing projects to expand capacity would be rightly treated as amateur fools.  Who today would listen to a politician who says that a specific switch needs to be installed on a network, or a substation or that cable capacity be added somewhere?

Railways are bespoke inflexible networks that have a lot of capacity best suited for a narrow range of transport tasks.  The range of those tasks will narrow even more with automated road transport.

Of course some will still choose to drive, and will have options to do so, for leisure, but probably pay much more for insurance to do so without driving assistance.   What happens ought to be up to market demand, for vehicles and for roads.

Unfortunately, roads are managed by politicians and bureaucrats.  If anything is going to get in the way of setting them free, it will be them.

Auckland road pricing?

Some questions:

- Is there a funding gap if large totemic projects that the users would never pay for themselves are dropped? (yes rail and road)

- Why does Auckland Council assume fuel tax will still exist in 30 years time when multiple states in the US and the Australian Federal Government are considering whether it has a future at all when vehicle engines become so fuel efficient that the tax would have to be very high to collect enough money at all?

- Why does Auckland Council think that two road pricing options, both highly criticised in a previous report are still worth considering, especially since technology has moved in leaps and bounds since then?

- Why does Auckland Council think that if there is user pays on the roads, directly, not through fuel tax, that there shouldn't be user pays on the railways?

- Why do options to fund transport in Auckland automatically exclude any evolution of the existing road pricing type system in the form of national road user charges?  A system that now has increasing numbers of people paying through a privately provided electronic system that measures where and when vehicles use the roads, and has competitive delivery.

- Why did Auckland Council completely ignore other road pricing options used elsewhere?  Is it because its consultants know nothing about them? (I very strongly expect this)

- Why does Auckland Council think roads shouldn't be run like a business?  Just because Auckland Transport Blog wants to plan, tax motorists and subsidise public transport in its eager bright eyed bushy-tailed attempt to push people into doing what it thinks is best for them, doesn't mean people will comply, or that it is good for them.

- What is Auckland Council's view on the automation of road transport, including the increasing likelihood that road vehicles will increasingly be self-steering and self-driving, at least part of the time?  Given this could treble the capacity of existing roads,  virtually eliminating congestion, dramatically cut pollution and eliminate one of the few advantages of rail over road, why ignore it?

Syria - Time for difficult decisions

Let's make some points very clear.

Syria's government is reprehensible.  It is a softer version of the north Korean crime family one-party state, but only in scale and depth of totalitarianism.  Bashar Assad inherited the supreme leader role from his murderous tyrant of a father.  That family, from the Alawite minority sect has run the place for my entire lifetime.

Bashar Assad loosened the screws somewhat, but has demonstrated the typical attitude of any dictator when challenged by his subjects.  He wont step down, wont disband the secret police, wont abolish the state monopoly on media, wont legalise free speech, wont legalise competing political parties, wont hold elections.

He has spread nationalist-sectarian fear amongst Alawites, fearful that anything other than the dictatorship of his family will mean their slaughter.  He has encouraged the view that anyone who opposes his "secular" rule, is an Islamist.

Assad's regime torture and executes political opponents, and it is clear that it has used its own military to attack civilian populations to repress political dissent.  By no measure can it possibly be said to claim any moral authority, unless one adapts Mao's statement to claim morality comes from the barrel of a gun.  Human Rights Watch estimated 17,000 people 'disappeared' in Syria in the first decade of his father's rule.  In 1982 he bombed the city of Hama, slaughtering between 10,000 and 40,000 people as he suppressed an uprising by the Muslim Brotherhood.   Yes, one can't argue that the Islamists would be better, but the indiscriminate oppression was brutal on a scale that Western "peace" advocates would usually decry.

Bear in mind Syria has previously invaded and occupied Lebanon, and assassinated Lebanese politicians.  It is far from being a non-aggressive actor in the region, a point thrown by its supporters against Israel, but ignored in Syria.

Assad's regime has long been supported by the USSR and more recently Russia, and has always been anti-Western.

It is perfectly moral for Syrians to fight to overthrow this regime.  It kills, torture and imprisons those who challenge it.  Its apparent use of chemical weapons does cross a threshold, one of degree.  As chemical weapons kill and harm over a wide area indiscriminately in a way that is almost impossible to defend against.  It is a tool of mass slaughter, beyond that of conventional bombs and firearms which have very localised effects.

Providing arms or other support for the Syrian regime is being a party to this.  Russia already does this, it maintains a military base there and openly supports the regime.   Hardly surprising, since Russia is an authoritarian faux-democracy that arrests and imprisons its opponents, and has little compunction about using force against those challenging its corrupt corporatist crony-capitalist state.  

So let's not pretend that Syria should not be subject to international intervention in its civil war, it already has it.

Similarly, Qatari, Saudi and other Arab states have been arming and funding different rebel groups.  The very same states which would cite "state sovereignty" as a reason to oppose anyone interfering in their politics.

So the genie of intervention is already out of the proverbial bottle.

Should something be done?

Anzac Day 2013

Anzac Day is largely ignored in the UK.

Which is sad, given that it started by commemorating the loss of life in World War One, for Britain.

Over 17,000 New Zealanders died from fighting for the British Empire in World War One.
Over 60,000 Australians died from fighting for the British Empire in World War One.

So tomorrow I will take a moment to remember them, and all the others who died fighting.  It's a day to wear a Poppy in London, causing some to be confused and some others to smile and acknowledge, for they too, have not forgotten.

Previous posts on Anzac Day are, as always, just as applicable.  Here, here and here.

Robyn Malcolm - the classic ignorant Green airhead - loving a mass murderer

I thank Peter Cresswell for highlighting this.  It may seem like a small accident to some, but airbrushing the mass murders and starvation of millions is not that.

It's not that she denies it, or pretends it didn't happen, she's just too ignorant to know about something she decided to celebrate.

Expecting actors to come up with pearls of wisdom about politics and history is a bit like expecting them to be competent at medicine, so I'm hardly surprised that Robyn Malcolm wished the mass murderer Lenin a happy birthday.

She said Stalin, Mao, Kim Il Sung and Pol Pot were very different from Lenin.

Brainless bint.

She is espouses the classic far left myth that Lenin's revolution was some glorious popular revolution that transformed Russia into a socialist state that was corrupted by Stalin's cruelty.

This view of history is the revisionist version that the CPSU spread after Khrushchev, as he "de-Stalinised" the country, which of course meant that instead of everyone fearing everyone else all of the time, everyone feared everyone else just some of the time.

Lenin was a monster, and airbrushing his history is a grotesque misjustice to the millions killed or starved under his misrule.

For a start, let's not forget that the Tsar was not overthrown by the Bolsheviks in October 1917, but a popular revolution in February 1917 which saw a democratically elected executive created.  In October, it was the Bolsheviks that overthrew that regime.

Beyond that the story is grim:

The "Red Terror" was Lenin's campaign to "cleanse Russia of the filth" who opposed him.

December 1917 the Cheka was established, the secret police.  It shut down all newspapers critical of the Bolsheviks and established a press monopoly, by force.  In 1919 concentration camps were set up, to place the bourgeoisie and hold them as slave labour for the revolution.  About 70,000 people were in such camps by 1923.

One shouldn't forget Lenin's famous hanging order:

Comrades! The kulak uprising in your five districts must be crushed without pity ... You must make example of these people. (1) Hang (I mean hang publicly, so that people see it) at least 100 kulaks, rich bastards, and known bloodsuckers. (2) Publish their names. (3) Seize all their grain. (4) Single out the hostages per my instructions in yesterday's telegram. Do all this so that for miles around people see it all, understand it, tremble, and tell themselves that we are killing the bloodthirsty kulaks and that we will continue to do so ... Yours, Lenin. P.S. Find tougher people

So the idea of the kulaks, the label for the hated scapegoats of the revolution popularised by Stalin, started under Lenin.

Historian Robert Gellately estimates that between 300,000-500,000 Cossacks were forcibly relocated or killed by 1920.  

In September/October 1918 10,000-15,000 were summarily executed by the Cheka.  Ownership of a business or a large house that you refused to surrender to the state (for no compensation) could be sufficient grounds to be liquidated.

Lenin, after confiscating farmland from landlords and giving it to peasants, then oppressed the peasants demanding any surplus after what they needed for their own "personal use" be sold at heavily knocked down prices to the state.  Some peasants sold produce to the black-market, and would be executed for this.  Many chose not to sell the surplus, and got it confiscated.  So they chose to simply produce less, given there was little point in working harder than was necessary to feed themselves and their families.  The resulting underproduction, and with a subsequent drought (and no surplus stock), saw the 1921 Russian Famine result. 

At least 3 million died in that famine, ameliorated only by the end of the Civil War which saw the Bolsheviks utilising the opposition (White Russian) surpluses in grain for their own needs.

Historian Richard Pipes said that:

Lenin repeatedly said that he would sooner the whole nation die of hunger than allow free trade in grain. In short, Lenin and his comrades knew with substantial certainty that their policies would cause widespread death from starvation. Under any sensible definition of murder, this makes Lenin the murderer of millions.

Now I don't expect Robyn Malcolm knew this, given her tweet I don't expect she's spent much time with books that don't have a lot of pictures in them.

As a result, she ought to apologise, profusely, for insulting the memory of the hundreds of thousands slaughtered by this tyrant.  A tyrant that spawned Stalin, and who then spawned 70 years of totalitarian terror spanning much of the world from Havana to Hanoi, Luanda to "Leningrad".  

It is, as if, she accidentally didn't know about the Holocaust, and it's disgusting.  

Earth Day 2013, keep it to yourself

I like what the Ayn Rand Institute said about it in 2009:

The lights of our cities and monuments are a symbol of human achievement, of what mankind has accomplished in rising from the cave to the skyscraper. Earth Hour presents the disturbing spectacle of people celebrating those lights being extinguished. Its call for people to renounce energy and to rejoice at darkened skyscrapers makes its real meaning unmistakably clear: Earth Hour symbolizes the renunciation of industrial civilization.

I called it onanistic vileness, as it is a childish exercise in mutual gratification amongst the self righteous who have the luxury to choose to spend a short period of their comfortable lives deprived of a light bulb, a car or maybe something else they take for granted.

Children are starving in gulags in north Korea today.  Tens of thousands of them, like concentration camps, whilst most people think north Korea is a bit of a joke.

Millions of people every year get electricity to power a light enabling a child to read a book at night.

Billions of people right now are alive because electricity and man-made energy enables them to be warm, to be fed and to be sustained.

To hell with Earth Day.   Yes, pollution kills.  Yes, it is important to not destroy the environment that sustains us all, but that isn't achieved through the worship of non-production, non-technology and de-industrialisation.

However, those who propagate Earth Day are at best hypocrites, like the jetsetting, big house owning, big mouth propagandist Al Gore, and at worst destructive towards humanity, like those waging war against genetic engineering.

Abstain from consumption if you wish, but don't pretend that asceticism towards energy use, technology, production, mining or the like is doing anyone any good.  If you want look after the environment, look after your own property and campaign for property rights to be expanded, and against the abuse of the commons because they are the commons.

For those who cite science as the basis for their policy misanthropy, are more often than not as much (if not greater) abusers of science than those they condemn.

North Korea - what's going on?

When I started studying north Korea it was the early 1990s, and few were paying attention.   Nobody paid attention then, and few pay attention now to the horrors of the totalitarian slave state that it has been for over 60 years.   The name - Democratic People's Republic of Korea (DPRK) - says much in itself.   Governments that use names to deliver messages about how utterly devoted they are to "the people" are  naturally quite the opposite.

The adjectives thrown about by the mainstream don't do justice to the place.  Stalinist?  No, the extent and efficiency of the  cultural revolution, the rewritten history and the personal cult far exceed that of Stalin, and it has now gone into two subsequent generations.   Dictatorship?  That bland term doesn't really highlight the totality of control in the DPRK.  Life there is under constant surveillance.  Totalitarian?  The DPRK should be the dictionary definition of it.

Much of the media coverage of the place focuses on how amusing it is to have a strongman leader, legions of soldiers goosestepping, and now how it is a bit of joke that he threatens to attack the United States.  Yet the DPRK isn't that funny for those living there.  

Thatcher was allied to Reagan, but never kowtowed to the USA

The Falkland Islands.

Grenada.

Supporting the right to first use of nuclear weapons.

Repelling Iraq from Kuwait.

On all of these, Thatcher disagreed with the US President of the day.

Why?

It was principle.

Thatcher week and then some

It's been huge in the UK.  Paeans on one side, hatred on the other.  So much to read, but today's bits are

- City AM editor Alastair Heath on how the left are wrong that Thatcher's policies led to the banking crisis and as an acolyte of Hayek, she would have disapproved of the protection from moral hazard presented by the pre-crisis regulatory and monetary policy environment (and the post-crisis bailouts).

- People are organising "Thatcher death parties" which, of course, she would say is their fundamental right.  Reminding us all that to even discuss such a thing for a dead leader in the former Soviet bloc would be to risk   the secret police having one, for you, without so much laughter.  She might have wondered if they think their children and grandchildren would be proud of them, and who else they would hold such a party for, but finally that it says more of them than of her.  Highlighted is one Romany Blythe, a drama teacher who is organising a death party saying "people danced when Hitler died" and who proudly flies the red flag.

Think the Holocaust Memorial Day Trust might invite this vapid empty head to meet some people who can tell her what Hitler was like.  She's prove beyond doubt that Thatcher's biggest mistake was not to privatise education.

- The Adam Smith Institute take on current popular UK leftwing pinup Owen Jones on "something called facts", which as a child of communist parents Jones finds get in the way of a good bashing of capitalism.

Meanwhile...

Here is the intellectual depth of most of the hatred of Thatcher

Meanwhile, George Galloway, sympathiser of Saddam Hussein, supporter of "accepting" the election of Mahmoud Ahmadinejad, the man who said the Syrian people are "lucky" to have Bashar Assad as their leader (and who calls out Western intervention wherever he finds it, but is curiously silent about Russia's intervention in Syria, has done one better.

He now sympathises with North Korea with its "innocent and pristine" culture.... of locking up children as political prisoners for the sins of their family.   Of course he still trots out the North Korean line that the USA started the Korean War, a piece of propaganda disproved by the opening of the Soviet archives and even more recently by a few Chinese academic pronouncements.

- Christine Lagarde and the IMF warn against what monetary policy retard Russel Norman is proposing.  Money printing is creating a timebomb (City AM) warning it will be hard to reverse these policies when it is needed without there being a profound market reaction (i.e. bursting bubble)

British politics changed this week - principles are being discussed

Having lived only in the UK and New Zealand, I've witnessed only a few passings of political leaders.  In the UK,  I barely missed Ted Heath and James Callaghan's passing.  In NZ, I recall the passing of Rob Muldoon and David Lange, oh and Bill Rowling (truly a footnote I barely recall).

None have been more than a fraction of the influence that Margaret Thatcher has had on the world, and because she was driven first and foremost by principle and a commitment visceral belief in freedom and resistance to communism.

The more there is of her, the more it is abundantly clear that she turned the tide of history for the UK, and that the left, with its faux compassion and peculiar attachment to central planning, only wishes it could do the same in reverse.

The media coverage of her has been wall to wall, and there is no lack of writing for and against her, but what really counts is the level of discussion.  Conservative Home is perhaps the best place to find links to much of that coverage, positive and negative.

Perhaps the most poignant point made of her yesterday was in the House of Lords. Lord Tebbit, who left Parliament in 1987 for family reasons, regretted his retirement from politics saying "I left her, I fear, at the mercy of her friends. That I do regret".   Men, and they all were, who will themselves be footnotes in history, floored a giant.  Yes, because she made one big mistake, but none would get her to change that through principle, but for popularity.  She wasn't going to have that.

Time after time, backbench Conservative MPs have paid testimony to her out of principle. Those who opposed her have shown themselves up for what they are.  Socialists who think they know how to spend other people's money, whose compassion is only shown by their belief in spending other people's money, and whose decade after decade of caricature have been shown up for being false.

Portrayal of Thatcher as a warmongerer, for taking on the invasion of the Falklands by a fascist military dictatorship is simply churlish.  To say she supported apartheid has been thoroughly shouted down, because she considered those fighting it to be no angels either.  The claims that what she did "caused the ills of today" are treated as laughable, 23 years later.  Memories of rubbish piling up in the streets, blackouts and strikes shutting down the economy, and limits on foreign currency purchases, cause some of the young to notice how far we have come.  Few want to go back to a phone monopoly that took weeks to supply a new phone.

Finally, the caricature of her as a predatory heartless hater of the poor is shown to be just that - the creation of leftwing spin that could not confront her willingness to cut the blood supply of dying industries, that was draining the life from the living.  She didn't cut the welfare state, she didn't privatise the NHS and nobody could accuse her of withdrawing state support for the poor.  She was a conservative, not a libertarian.  She believed the welfare state existed to cover people when they had bad fortune, to give them what they needed before they found or created a new opportunity.  The left simply wanted all of these people to be forever dependent on the state, and the unions that destroyed businesses by demanding pay rises of 20-30% every year.

"Divisive" Thatcher won three elections in a row, with landslides, whereas the 1970s were plagued with governments of tiny majorities and a short run coalition.  Indeed the late 1970s were plagued with militant union strikes under the Labour Party, as the unions thought Callaghan to be too moderate, as what they wanted was Soviet style socialism (don't believe me? Google "Arthur Scargill and Lenin").  

There were 605,000 miners in 1960, 289,000 in 1970, 235,200 by 1979 and 62,000 in 1990.  Far more lost their jobs under Harold Wilson than under Thatcher.  Manufacturing production rose 7.5% between 1979 and 1990, smashing the lie that she destroyed industrial production.  What did happen was that the services sector took off, shrinking manufacturing as a proportion of GDP.  

What shines above it all were her principles, and these are like a shining light in today's politics of spin, compromise and polls... they are worth remembering.

Eastern Europe did it, why not Liverpool and Glasgow?

Thirty years ago Margaret Thatcher closed antiquated, heavily loss making industries, putting hundreds of thousands out of work in many towns in the North, Scotland, Wales and elsewhere. 

Today, many of those towns and cities appear to have never recovered.  It takes little for the BBC or other journalists to find groups of disgruntled people old and young, saying that Thatcher took away their jobs, their childrens' jobs and destroyed all hope.  It is like without nationalised industries, they can do nothing.  The GDP in many of those regions is between 55 and 70% state based still.

Twenty or so years ago, post-communist democratic governments across eastern Europe closed antiquated, heavily loss making industries (perpetuated under 40 years of the sorts of policies Arthur Scargill and the British trade union movement advocated), putting millions out of work in most cities across their countries.

Today those countries are transformed, with new industries, with new jobs, with thriving growing economies.  Some with per capita GDPs at the levels of the poorer western European states.  They have open competitive economies, with public sectors less than half the size of what they were when they threw off the shackles of authoritarian communist governments.

Why?

Margaret Thatcher : The not so libertarian PM who stopped the socialist slide

I was young when I first heard of Margaret Thatcher, and having a few relatives who were socialists, I wasn't fond of her at the time, although she was a curious figure, as I hadn't ever seen a political leader who was a woman.  Certainly the mainstream media in New Zealand and most of my teachers held her in some degree of scorn.  However, I learned better, one could tell from so many of those who opposed her, what she was made of - courage.  Courage to take difficult decisions that caused much short term pain, for long term gain.

She was courageous, and it was difficult to be neutral between her and a tinpot military dictator seeking to take some islands full of hard working farmers and fishermen, and then difficult to side with a communist mining union, that used violence against those willing to turn against them.   I became warmer towards her over time, as her opponents increasingly looked like control freaks, or deniers of economics, and she looked ever braver as time went on.

For there was, at the time, a stark choice.  Margaret Thatcher, against those who thought they knew best how to run businesses, grow the economy and provide people with a living.  In 1983, Labour's Michael Foot tried to sell neutrality in the Cold War, unilateral nuclear disarmament, much higher taxes, nationalisation of major industries, withdrawal from the European Economic Community (to create a fortress Europe).  It nearly came third in the popular vote as it opposed fighting for the Falklands and supported unions that openly sympathised with the Soviet Union.

Margaret Thatcher against those who taught the politics of envy, the politics of moral relativism, and those who believed fervently in class warfare.  Margaret Thatcher against those who thought that the UK should be neutral in the Cold War, as if neutrality against totalitarianism was the moral highground.   Ken Livingstone was one of those who embraced the authoritarian left, and continues to crawl in the gutter.

She was no libertarian, but in the equation of freedom for me, she moved two out of three in the right direction, and the black marks she left on freedom do not mean she deserves the opprobrium her death is now bringing from the simple minded and the statists who despise her. For none of them have the slightest interest in individual freedom.  Indeed, the reason she stirred up such venality is because she argued on principle - short term populism was not her game.

That in itself, is rare in politics today.  

Why is the peace movement so quiet about Korea?

North Korea threatens to start a war with the United States, threatens with bellicose rhetoric to attack with nuclear weapons, to wipe out the enemy.

What do you get from the so-called "peace" movement and the political parties which so rabidly go on about nuclear weapons?

Nothing.

The Green Party is completely silent about north Korea.  Just imagine if it were the United States, or even the UK or France threatening to attack another country.   Just imagine if any nuclear weapons state was happily and gleefully testing nuclear weapons, to show off that it shouldn't be messed with.

The leftwing blogs similarly have largely little to say.  The Standard ignores it.  Real estate agent Martyn Bradbury's outlet ignores it. Idiot Savant ignores it.  

Tim Selwyn thinks that the regular US/ROK military exercises are a "provocation", as if close allies facing a proven holder of all types of WMDs shouldn't make a show of strength as a deterrent.   In fact he just wants New Zealand to not be involved, even though New Zealand fought bravely with the UN-led forces in the Korean War to defeat north Korea's attack on south Korea.  He appears to grant moral equivalency to US and DPRK forces, while criticising the DPRK for being crazy, he doesn't think it is "ok" to support a close ally and major trading partner, the ROK, in deterring Pyongyang.  His rabid anti-Americanism gets in the way of him supporting New Zealand willing to oppose one of the worst dictatorships in modern history.   

Internationally, Greenpeace is silent.

I don't believe most on the left support the DPRK, for it would be akin to supporting the Khmer Rouge, Mao, Stalin or Hitler.  The regime is reprehensible, and commits acts against its own citizens that are sheer horror.   Find another regime that imprisons small children in gulags for the political crimes of their family.

Yet it is that sheer horror that should unite them in opposition to the regime.  There should be protests outside DPRK embassies, there should be peace marches, there should be effigies of Kim Jong Un burnt in the streets.

But nothing.  Surely the left aren't sympathetic to this slave state?

No, I am sure most are not, but they are fickle because the DPRK wants to take on the great Satan - the USA.   So it doesn't really matter if warmongering dictators threaten to attack US targets, for the so-called peace movement presumably thinks they are "fair game".

What happens if the bluff is real?  What happens if there is an attack, will the left claim it is ok for the US to respond?  What if a north Korean nuclear, chemical or biological warhead is released on south Korea?  Will the left/peace movement believe it is ok to respond in kind to utterly destroy north Korea's military capability?

I doubt it.

Why so neutral in the face of unspeakable evil?  Most on the left and in the peace movement accept it was right to fight Nazism.

Why is it not acceptable to deter totalitarian socialism, and to fight it when it attacks?

Is it just because hatred for the United States is stronger than anything?

Financial Transactions Tax fails the test of reality... again

Financial Transactions Taxes (also known as Tobin taxes) are the fond friend of the banker-bashing left, believing that there are vast fortunes of money swirling around the ether that, if only they could take a tiny cut of it all, they could save the world.

It has been advocated widely by the likes of Paul Krugman, Bill Gates, Resource intensive fat capitalist dickhead hypocrite  Michael Moore, Greenpeace, Oxfam, WWF, Occupy Wall Street and Fidel Castro

So the EU proposed one, and it has been getting introduced in 11 EU Member States.

It appears to be failing to deliver ... and the Swedes would rightly say, having been there before, "told you so".

Cyprus bail out - the good, bad and the ugly

Cyprus has a stay of execution, I say that because its banks will never be the same again.  Indeed, if ever there was a case to allow full reserve banking (whereby loans = deposits, albeit with precious low returns if any), this is it.  Cypriots will want banks that exist purely to protect their money from being stolen, not banks that risk just that.  

Allister Heath has pointed out that there are some good dimensions to this deal, it is a lot better than how it was looking a week or so ago.  

The Good

- All deposits of 100,000 Euro or less are safe.  Given this was an ECB guarantee across the Eurozone, and the ECB has ensured this elsewhere, this was a minimum responsibility.  It may not be the wisest promise, but it was that. This will, at least, mean that most Cypriots have their savings protected, although plenty of businesses will get hit.

- As only two banks are in trouble (albeit two of the biggest ones), depositors for banks other than Laiki and the Bank of Cyprus, have their deposits untouched altogether.  Good.  It was a nonsense to effectively "nationalise" all bank deposits, including those of banks that are not having difficulty meeting their obligations.

- Shareholders of Laiki bank lose the lot, and bondholders get their bonds replaced by equity, as low as that will be. 

- Taxpayers are no longer solely responsible for bailing out the banks, but rather there is an orderly wind down of Laiki back, with depositor accounts transferred to an inheritor bank - the Bank of Cyprus.

In short, instead of a tax on all deposits, only depositors above the insured threshold of banks that need bailouts, get hit.  

The Bad

- Actual deposit insurance is not being triggered, rather there is just an exemption for those under 100,000 Euros (and larger cuts for those above it).  It saves taxpayers (as insurers), but it does disproportionately hit depositors when there is insurance that could be used to offset that.  Still, the state shouldn't be insurer anyway.  Allister Heath reckons it would have been better to wind down the banks completely, figure out a flat percentage of deposits across all accounts needed, and then used the insurance to recompense those under 100,000 Euros.  

-  There still isn't a legal place for basic "safe" banks to operate outside the fractional reserve banking system economically.  Many people would be happier, especially now, to have money sitting in a zero or near zero interest rate bank account that didn't face these risks.  These events ought to have accommodated that.

The Ugly

- Capital controls.  I said enough about that yesterday.  When removed, there will be grand capital flight.

- With what is about to happen, it will kill off Cyprus being a financial hub for a generation.  Just as well the country has good beaches and olives.  Maybe it will think again about rejecting the UN brokered deal to reunify the country with the Turkish occupied north.  That, along with Turkey being an obvious trading and investment partner (although the Greek Cypriot community may fear being overwhelmed), could help revitalise this country.   Many will lose jobs and find themselves floundering as a result, but they will pick themselves up.

- The rhetoric around "Russian money launderers" will haunt the EU and the ECB for many years.  It is one thing to have concerns and beliefs, another to air them without presenting evidence and without taking regulatory steps to address them.  To sweepingly act as if Russians with money in Cypriot bank accounts are all criminals is an unwarranted slur.  If there is substance in this, and the ECB cares, then there should be Eurozone wide directives to cover this.  

- Cypriot public debt will be at 100% of GDP by 2020 at best, given it is borrowing 10 billion Euro from the Eurozone to cover all of this.

- Cyprus has agreed to increase corporation tax to 12.5%, reducing its competitiveness.

Capital controls - the tool of the statist

"An economic and political disgrace" is how City AM editor, Allister Heath, describes it.

I call it theft.

Capital controls, a euphemism for banning you from taking more than a sliver of your property out of a particular country.

They are motivated by concerns over the "public good", over "the long term stability of the economy", when in fact the mere fact of introducing them speaks volumes about the latter, and is contrary to the former.

It is the logical end point of the moral turpitude of statists, whose fundamental belief is that private property, really, doesn't exist, but is tolerated and can be confiscated, controlled and shared as long as it fits the big picture, the grand plan.

The plans of politicians who think they know best how to run your life.

Cyprus has no future as a financial hub.  Confidence is utterly destroyed, as depositors, regardless of whether they individually will lose part of their savings as part of the bailout, will abandon its banks.

It's over.  Runs on banks happen because people panic about their property and their savings.  That money is their's, and they frequently worked hard and took time to make that money. 

They rightfully seek to protect it, withdrawing it from institutions that might take it from them, because money is an extension of the self.   It is the product of people's minds and labour, translated into a universal medium of exchange, and a means of storing that value.

Being able to take it out of a country is an extension of the right to leave, the right to take your life includes taking your possessions, includes your bank account.

Of course, banks are not foolproof.  In a free market, people rightfully take a risk in deposits with banks, particularly given virtually all banks engage in fractional reserve banking, lending much more than they take in deposits.  If a bank fails, then depositors should become unsecured creditors effectively being a segment of the new shareholders of the bank.

However, it is quite another thing for a sovereign state to do this, to restrict ALL capital flows out of a country.

You see the primary reason why a government does that is because it knows it has lost the confidence of its people, because it is about to steal from them in one way or another (in this case not through devaluation/QE of the kind propounded by Paul Krugman, Russel Norman and Robert Mugabe).  

It is a sign of failure, the tool of the statist and the act of a scoundrel.

Ed Miliband is an economic and moral vacuum

The UK Leader of the Opposition is empty.  His One Nation rhetoric is the antithesis of what he offers, which is a vision of "them" (the rich, which curiously excludes himself) and "us" (people on welfare, people working for government).

The man who offers envy, class hatred, regulation of private enterprise and more state housing to an economy lumbered by public debt that he denies is the fault of his very party when it was in power.

The man who uses terms of utter lies, like "bedroom tax" (there isn't one) and "tax cut for millionaires" (there isn't one, there isn't a tax on wealth), and fuels disdain and anger against entrepreneurs, private enterprise and success, by pandering to beneficiaries and state employees.

Read more here.

Cyprus in a nutshell

This is my go at summarising this.  Obviously, if someone spots something fundamentally wrong with my analysis, please leave a comment.  I don't profess to be an expert on the Cypriot financial sector.

Cyprus took a light regulatory touch to financial services, so its sector grew.

It gained a reputation for providing only the minimum level of scrutiny needed to comply with European banking rules, hence it tended to attract substantial deposits from Russians keen to keep their money away from Russian authorities.

Cypriot banks grew from this, but invested heavily in Greek public debt as a “safe” investment.

Greece approached bankruptcy, and the Eurozone (Germany) and Greece agreed on a bailout plan that meant its bond holder (those who lent money to the Greek government) would take approximately a 50% cut in their bonds.   This shared the burden between Greek taxpayers and Greece’s creditors.

Cypriot banks have been hit by this “haircut” in their investments, effectively being on the edge of folding without ongoing liquidity support.

The ECB is willing to provide some of this, but is demanding that investors in Cypriot banks take their share.  However, Cypriot banks issued few bonds, so simply demanding Cypriot bondholders take a cut wouldn’t be enough.  So the suggestion was made to take a cut from those who loaned money directly to Cypriot banks – in the form of depositors.

This runs contrary to the pan-Eurozone  guarantee for depositors up to 100,000 Euros.  

The reason given for wanting to confiscate Cypriot depositors is because “most of them are Russian” and “we don’t know where their money came from”.   Concerns that never translated into legal action, and which are at worst racist suspicions.

So now the Cypriot government faces its financial system collapsing.  It is happening now because the previous, communist led, government kept its head in the sand until the election it knew it would lose.

The Cypriot government itself does not have high public debt or a serious budget deficit.  It is not due to rampant overspending, but rather a banking sector that can’t cope with the bailout package for Greece demanding it write off substantial assets.

The Cypriot government is looking to the Russian government to save it, which from the ECB’s point of view means it wouldn’t be willing to provide ongoing liquidity, which means a real risk of a Euro exit, unless Russian support is substantial indeed (to the point where Russia would be the central banker for Cyprus, just think about that for a moment).

To get ECB support, it needs to find money from somewhere and could get it from a levy on deposits over 100,000 Euro.  

If no solution is obtained by Monday and the ECB stops providing liquidity, Cypriot banks will collapse and the Cypriot government may choose to print its own currency to cover spending, meaning a disorderly exit from the Euro by a country that – in itself – did not have a budget.  

Conclusion?

Cyprus’s financial sector is finished, regardless of what happens.   Local and foreign depositors wont trust its banks in most scenarios.

1. If Russia saves Cyprus, and it remains in the Euro, then it will likely mean a substantial withdrawal of deposits from Cypriot banks.  They will shrink, and Cyprus will have a bunch of effectively Russian owned banks operating within the Euro.  It is hard to see the ECB being willing to support this.

2. If Russia saves Cyprus, and it is forced to exit the Euro, then Cyprus will have a nearly worthless local fiat currency that does far more harm to depositors than a levy on Euro deposits.  It is over for Cyprus’s financial sector, but it will become remarkably cheap to holiday and buy land in Cyprus.

3. If the ECB saves Cyprus, along with Russia (providing the Cypriot share), then Cyprus will have a shrinking financial sector. Russians will be looking elsewhere to put their money.

4. If the ECB saves Cyprus, with a bank deposit levy, then Cyprus will see a massive run on its banks, and the financial sector will be effectively finished.  

5. If neither the ECB nor Russia bail out Cyprus, the banks will default, depositors may lose most of their money, it will be forced out of the Euro, and faces considerable civil unrest.

Who to blame?

- Greece, for being fiscally incontinent and being unable to pay back its debts.

- The Eurozone, for being unwilling to guarantee to Cypriot depositors what they guarantee to other Eurozone depositors, on grounds that it was never willing to address in the past.

- Cypriot banks, for being profligate lenders

- Cypriot depositors, for trusting the Eurozone and its government to ensure they avoid moral hazard.

-       Authors of the Euro, for not anticipating the inevitable credit bubbles a pan-economic fiat currency, driven by German economic performance, would fuel.

What to watch?

Monday.  The Cypriot Parliament and the ECB.

My bet is that Cypriots will be dealing entirely in cash in a week's time (they already increasingly are).

The Prodigal Greek has a great summary of the measures taken or soon to be taken, that will ensure this.

Things to do during Earth Hour

I loathe Earth Hour.  I called it "onanistic vileness" or rather the act of utter wankers who have the luxury to claim moral superiority, because they can stop using electricity.

In 2009 I said:

Oh yes, the sheeple in the relatively free rich world (and even the relatively unfree middle income world like China) will have a jolly ol' time switching off our lights for an hour. Makes you feel better a bit of enforced poverty doesn't it?

The Ayn Rand Institute rightly points out how perverse it is to celebrate extinguishing light:

Earth Hour presents the disturbing spectacle of people celebrating those lights being extinguished. Its call for people to renounce energy and to rejoice at darkened skyscrapers makes its real meaning unmistakably clear: Earth Hour symbolizes the renunciation of industrial civilization.

I've seen a city that has a constant earth hour - Pyongyang.  Dark, with lights in a few buildings, focused on the grotesque statues of the city's past Big Brothers, on the railway station and one or two other pockets of light.  It is dismal and dire.  To celebrate replicating this is unspeakably wrong.

Pity those who have no choice but to "celebrate Earth Hour".

Donate to LiNK - Liberty in North Korea.  Help people fleeing the darkness to experience light, heat and civilisation.

Otherwise, keep the lights on or maybe go for a drive.  Celebrate that a century ago, electric lighting was a delight, for being safer, brighter and opening up the evenings to more socialising, to reading, to enjoying more of life.    Celebrate that today, electric lighting is more reliable, safer and uses less electricity than ever before.

The future is not with those who would turn the lights out.