Tesco Dandong - convenient for North Koreans

The Amnok river separates the People's Republic of China from the Democratic People's Republic of Korea (yep the more words implying "people" and "democracy" the more oppressive it is). Mao Tse Tung once said that the two countries were as close as "lips and teeth" in relations. The differences are stark between Dandong on the Chinese side of the river and Sinuiji on the Korean side. You see in Dandong there is a Tesco, a three storey one. Dandong is a thriving city. Sinuiji is a stark contrast. On the left you can see Kim Il Sung Square in Sinuiji, you can see the shadow from the statue and the people, with no cars. On the right you see Sinuiji stadium, run down, filthy from the industrial pollution, and people roaming around on foot and bike - no cars, no sport, but something was happening there on that day. I daren't even guess what.

Until recent years, the DPRK patrolled this bordered harshly, and scope for bribes and corruption with border guards was very low. However, the stark economic situation on the Korean side has seen that change. For a price, DPRK border guards will let people through, and North Korean entrepreneurs (bless them) have been doing just that. According to the Sunday Telegraph, they are some of the best customers for Tesco Dandong in China, "They buy soap, toilet paper, shampoo and food, of course". This is what capitalism can provide, which totalitarian socialism cannot.

The nearly worthless DPRK won currency trades not at the official rate of 20.5 to the Chinese Renminbi, but 400.

The Economist this week also reports on the Koreas. It notes that North Korean society is in serious flux, because of the border becoming more porous and economic changes in neighbouring countries flooding through to the country in curious ways:

"Earlier this decade DVD players fell dramatically in price, so South Korean households quickly dumped their old VCRs in favour of the new players. Smugglers picked up the old units for next to nothing and sold them in North Korea for US$40 or so apiece - a price that plenty of urban North Korean familis could afford if they saved up. The consequence was what Mr Lankov (Australian National University) calls a "video revolution": a flood of South Korean soap operas, melodramas and music videos entering North Korea by the same route and delighting new audiences. The impact of the astounding affluence on display - the star's clothes and cars, Seoul's glittering skyline - exposes the central lie on which the regime bases its claim to rule: that South Korea is a backward, impoverished and exploited."

In other words, the hermit kingdom whereby everything about the outside world could be controlled - as North Korean radios had no tuning dial to allow foreign stations to be heard, like North Korean TVs, as satellite dishes were banned, as the internet was banned - is starting to unravel. The dire economy has resorted to many near the borders taking advantage of opportunities to buy and sell what they can to better themselves, and as a result the news of the outside world is drip feeding in. Not that residents of Sinuiji would have any illusions - from their side of the river they have watched Dandong grow like umpteen other Chinese cities in the past 20 years, into a brightly lit capitalist beacon of wealth, whilst around them is the dreary poverty of their socialist paradise.

Tesco's slogan is "Every little helps", and it can say, in China, it's doing just that for North Koreans. It's far more than you'll notice most politicians in the West doing for them.

Our children will thank us

So say the environmentalist lobby. The likes of the Green Party, and indeed the vast numbers who believe that it is critical now to force or subsidise people into a low carbon dioxide future because of the "costs" of climate change. The primary point such doomsday merchants make is how unreasonable it will be to allow "our children" to pay for this.

So have you noticed how willing so many are to use their children's taxes (and grand children's) to bail out the unwise borrowing of so many today? Why not pay the cost now? Why not ensure that the risks of foolishness are born by those who took them? Government borrowing transfers problems to future generations - it may be justified to manage the capital costs of core government spending, such as defence infrastructure, but to bail out banks?

Whose children will thank you because you were prepared to support governments who borrowed off their future taxes due to the mistake of a minority of people offering and taking credit unwisely?

Am I going to "own" another bank?

Amidst the negotiations to use future US taxpayers' money to bail out banks who have lent to the barely creditworthy, UK mortgage lender Bradford and Bingley looks about to be nationalised. Last ditch efforts to save the institution are underway, but according to the Sunday Telegraph B&B has a £40 billion mortgage portfolio of which most comprises self-certification and buy to let loans. The types that didn't require proof of salary to be given. In short, it lends to those with nothing left if, as has happened in the past year, property values drop below the value of people's mortgages.

The UK government isn't letting those who borrowed so imprudently (or deposited with such an institution) bear the costs of their risks - no - it is taking on the so called "toxic mortgages" and then polluting the bank it already nationalised - Northern Rock - with them. That allows the rest of B & B to be taken over by another bank - nice, so socialising the losses and privatising the profits. The £24 billion in deposits would be owned by another bank, but th £42 billion in useless mortgages - the British taxpayer. Yes £1000 of extra debt for every adult and child.

Although B & B shares are now worth 20p when they were worth £2 in April, any such takeover should include the shares which should be rendered useless.

Hopefully the taxpayer wont step in, as it didn't need to when Lloyds TSB took over HBOS. I don't doubt the willingness to do so, and how that is affecting those negotiating to buy the assets of B & B, as they will want the liabilities to fall on the taxpayer.

Gordon Brown's economic genius at work - 10 years of budget deficits during the good times. Labour has been pump priming the economy with debt, borrowing from future taxpayers, and within 18 months will be out of power.

The Conservatives may then gain power, and face the reality that spending needs to be cut, quite dramatically, and Labour will point fingers and say how "mean" they are.

At what point should those who took out credit to speculate on the housing bubble have to pay for their unfortunate mistake? At what point should those who deposited with banks who did the same pay also? In the UK the first £35,000 anyone deposits in any financial institution is guaranteed by the Financial Services Compensation Scheme - so I hardly think Labour's rank and file voters are going to lose out anyway.

When will the thieving from future taxpayers end?

Sunday Herald joins Green religion

Yes, sadly, it is five weeks to the general election and the Herald on Sunday devotes its editorial to what? Wanting tens of millions spent subsidising cyclists and pedestrians to cross the Auckland Harbour Bridge. Crime, healthcare, education and the economy aren't as important as wasting a fortune for a few tourists and the ultrakeen to get $40 million of other people's money spent on a cycle/pedestrian way.

As I've said before, and so has leftwing columnist Brian Rudman, this is a colossal waste of money for something that would be barely used. It is especially inappropriate to want to waste precious road users taxes on a project that doesn't stack up.

The sheer banality of the editorial can be summed up in this statement: "A vociferous cycle lobby has good claim to the moral high ground in the debate. Climate change, traffic-choked roads and the remorselessly increasing price of fuels drawn from the earth's dwindling and finite reserves all argue for the value of getting more commuters out of their cars."

Where is the moral high ground is making others pay for something you want people to use? To demand something you pay nothing towards? What nonsense is the claim that fuels are remorselessly increasing in price? Do they not follow the fact that oil prices have been easing downwards for the last month or so? What IS the value of getting more commuters out of their cars except - to those commuters? Actually the NZ Transport Agency DOES value reducing congestion, fuel wastage and pollution, and this project doesn't even come close to producing economic/environmental benefits that exceed the costs.

The only people advocating this project are those handful who will benefit from a new facility they wont have to pay for, and those worshipping the Green Party religion on transport, called its policy. Can't New Zealand get a Sunday paper that's 10% as good as either the Sunday Telegraph, Sunday Times or the Observer?

McCarten talks nonsense again

Yes, you didn't have to wait long for failed socialist Matt McCarten to treat the failings of an excessively generous central bank and poor judgement by banks lending mortgages to bet on the property market at the bottom end(and those borrowing with little to no deposits hoping the same) as the free market proven wrong.

Rubbing his hands with glee like any typical authoritarian who can't wait to be proven that if you he and his ilk could be controlling what people do with their money, it would all be easier. His NZ Herald column is a triumph of banal slogans and offering nothing, but his sneering envy that he never got a chance to do things differently.

How empty is this phrase "Quite frankly, the free-market theoreticians have been shown to be a bunch of charlatans dressing up old-fashioned greed as a social good." How Matt? It is an individual good, and people pursuing their individual good, as long as force and fraud are absent (and they are not in part of this equation) is perfectly moral. This is different from your "sacrifice yourself for the greater good" nonsense, which always seems to involve taking money from everyone else and you and your friends deciding how best to spend it. Your system involves force - none of what has happened recently is about force, it is about speculation.

Then he becomes so incredibly economical with the truth it's barely worth believing anything else he says:

"Remember, we spent a billion dollars of our taxes bailing out the Bank of New Zealand in the early 1990s. The bank made the same mistakes that the American institutions have made. You'll remember that our free-market ideologue, Ruth Richardson, was in charge of our economy at the time, but that didn't stop her from taking a billion dollars of our funds to bail them out"

I remember a bit better than you Matt. The bail out was NZ$380 million, hardly a billion. However, you have long campaigned for higher taxes so what's NZ$600 million between socialists? The bail out was just after the 1990 election, the bank had been left in a parlous state after the 1988 sharemarket crash, and Matt - it was majority state owned. Yes the taxpayer held a majority state - something you undoubtedly approve of. So the taxpayer bailed out a majority taxpayer held bank, it was privatised two years later.

"Our politicians and business leaders need to come clean and admit that free market capitalism doesn't work and never has." Oh I see Matt, so what does? Oh you don't know do you? So how doesn't it work? Are the failings of a majority state owned bank an example of free market capitalism? Are the failings of government created behemoths Fannie Mae and Freddie Mac examples of free market capitalism? Is the extension of the money supply, backed by - nothing - in the 1990s, an example of free market capitalism?

Go back to reading the selected works of Lenin Matt, stop pontificating on something you know nothing about.