Icelanders shrugged

Taxpayers in Iceland are fed up.  They have in the past year or so faced two referenda on whether they, personally, should be responsible for the costs of bailouts of depositors of privately owned Icelandic banks.  Quite rightly they told the UK and Dutch governments (and the EU implicitly) to go fuck themselves.

So what is it about?

Well the Icelandic government set up a Depositors' and Investors' Guarantee for its banking sector.  It was set up as a legal obligation under the European Economic Area decision to follow EU Directives on banking guarantees.  In short, if Iceland wanted to maintain free access to the EU markets for its goods and services, it had to comply with EU laws demanding state guarantees for banks.

So it did.  One private bank, Landsbanki set up aggressively with branches in the UK and the Netherlands, offering retail bank accounts with highly competitive interest rates.  It attracted 300,000 customers in the UK and 125,000 in the Netherlands.  Another bank called Kaupthing Edge was also part of the Icelandic banking boom, but for simplicity let's leave that one out for not.

The long and the short of it is that Landsbanki collapsed.  It had been over leveraged with extensive foreign debt linked into banks outside Iceland.  The bank was put into receivership and the Icelandic Financial Supervisory Authority declared that domestic deposit holders would be protected.

For UK depositholders the situation was clear.  The UK government guaranteed them up to a relatively high limit, which meant they were safe from any risk.  However, the UK government wanted this guarantee to be born by the Icelandic Depositors' and Investors' Guarantee, which was effectively bankrupt.   So it confiscated the assets of Landsbanki in the UK, under anti-terrorism legislation, albeit rather late as Landsbanki had already moved most of its assets back to Iceland.

The dispute since then has been because the British government wants the Icelandic government to pay back its guarantees of British depositors.  It claims that under the EEA agreement, the Icelandic government agreed to do this, which may very well be true.  However, Icelandic taxpayers are not happy and don't accept it.

However, this raises the far more fundamental point - who are those who agreed to this and what right do they have to do so?

At a basic level UK and Dutch depositors took a risk in getting accounts with Landsbanki - a risk they largely unconsciously thought was not real because of national government guarantees of deposits. 

The UK and Dutch governments decided to guarantee those depositors regardless of risk, and have used their taxpayers' funds to do so.

The Icelandic government signed up to certain guarantees for deposits, up to 20,000 Euro.  However, there is not enough in the guarantee fund to cover this for UK and Dutch depositors.  Understandably, given it is taxpayers' money, the fund has covered Icelandic depositors as a priority. 

So the relevant governments argued and negotiated, but Iceland's government decided on only paying out 4% of the country's GDP to the UK and 2% to the Netherlands to pay up.   Both the UK and Dutch governments refused to accept this.   A new bill was submitted to the Icelandic parliament for Iceland's taxpayers to cough up 3.8 billion Euro over 14 years.   They were not amused. It comes to around 12,000 Euro for every man, woman and child.  They petitioned for a referendum on the matter.   It was held in 2010 and 93% of Iceland's voters said no.

The reaction from the bigger countries was despicable.  The Prime Minister Gordon Brown and Lord Myners (Financial Services Secretary) said they expected Iceland to meet its obligations, the Dutch Finance Minister said essentially the same.   Iceland's taxpayers had said enough.

The Icelandic government negotiated another deal, spread over 30 years at an interest rate of 3%.

Iceland's voters have just rejected this once more, but with a 60% to 40% margin.

As so they should.  Iceland's taxpayers primarily work in the fisheries, aluminium and manufacturing sectors.  They don't see why they should be responsible for those who risked their money in a private bank they had nothing to do with.  They don't see why their governments should bind them to bail out governments who decided to guarantee nationals of their countries for investment in a private bank.

They are right.

The Icelandic government should work for them.  It should accept that they, as productive, hard-working people don't owe their government, let alone foreign governments, anything.

Iceland has NOT defaulted on sovereign debt, it has not got a major fiscal problem.  It is not seeking a bailout because of years of socialist economics and bloated welfare.

The UK and Dutch governments should leave them alone.  THEIR taxpayers should be demanding the skin of the politicians who demanded they guarantee the deposits of those willing to invest in new banks with high rates of return.

It is especially galling at a time when the UK government is quite happy to throw taxpayers money at Portugal to help bail out its fiscal incontinence.

Icelanders have told the world that they are not responsible for governments promising to use their money to rescue those who chose to invest in a privately owned bank.  They are right.  They shouldn't be bullied to give up their money as a result.

The value of the African Union's deal on Libya

Nil.  Indeed it may make things worse.

Nothing at all.  It is because the African Union is an association of killers, rapists, thieves and scum of the earth.

The only compromise possible with murdering dictators is your own slavery.   Jacob Zuma came from Tripoli having "negotiated a ceasefire" with a man who happily uses jet fighters, artillery and snipers on his own people.  Why not "negotiate a ceasefire" with your next armed murderer?  Or perhaps this is what crime fighting is like in South Africa.

The African Union is chaired by none other than Obiang Nguema Mbasogo - President of Equatorial Guinea, since 1979, having undertaken a coup against his insanely drug riddled murdering uncle -Macias Nguema.   Equatorial Guinea has remained under the iron grip of Obiang, whilst he and his family, including his playboy son Teodoro Obiang Nguema Mbasogo, enjoy the lavish wealth of one of Africa's richest oil-soaked countries, whilst most of the population remains illiterate and with a subsistence lifestyle.

The African Union has improved performance in recent years, suspending the Ivory Coast and Madagascar because of their political crises.  It should do the same for Libya.  The problem is Libya helps fund the kleptocratic scum and their comfy lifestyles.   Zimbabwe notably has also faced no real sanctions from the African Union.   It refuses to recognise the international arrest warrant that was imposed against Omar Bashir of Sudan in response to the massacred in Darfur.

In short, a club of scoundrels is not a reliable one to eject or punish one who acts as they do.

The rebels in Libya quite rightly are ignoring all of this.  Jacob Zuma, who leads a country that is increasingly looking more and more like a one-party state in practice if not in law, has no standing or credibility in Libya for anyone other than Gaddafi seeking power.

Oh the cuts!!

The big news in the US is how the Republicans leading the House of Representatives are refusing to accept a budget that doesn't cut spending sufficiently, whereas Obama and the Democrats are portraying it as some great social mission to hit abortion and the like.

The truth is that the Republicans are doing what they were elected to do - to cut the deficit.

The proposed cuts are less than 4% of the budget deficit (2% of the total budget) according to Reason Magazine.

4%!

Consider that the UK government is seeking to abolish its structural deficit (deficit not attributed to reduced tax revenue and higher welfare spending because of recession) within five years.  4% needs to be closer to 20% to make a difference, and Obama and the Democrats wont even accept 4%.

The Cato Institute has a more ambitious plan that should be the least that is adopted, as this would abolish the budget deficit and set a path to start rolling back the US national debt, as well as lowering taxes.

The question I wonder is why anyone on the left thinks they can evade reality by building debt mountains for future generations to confront - or more importantly, why they think this is moral?  Do they think "if only we could confiscate the wealth of the rich" or are they so stupid to think they can have their heads in the sand?  If they "don't know any better" or are "just guessing" then it isn't good enough.  If they DO want to confiscate wealth, then just admit it, and show themselves up to be the violent crooks they want to be.  The same crooks that didn't want banks to collapse, didn't want motor manufacturers to collapse, didn't want ANY businesses to collapse, so used other people's money to pay for it.

Auckland Council heading for more congestion

That's if you take the latest report from INRIX and see the comparison between lower density US cities and higher density European cities, and the effect on traffic congestion.

New Geography reports that "the added annual peak hour congestion delay in the United States is roughly one-third that of Europe".

It follows a report last year that indicated that intensification of development in Sydney is exacerbating traffic congestion and local air quality.  It is logical, of course, that having more people in the same area will mean even if a greater proportion don't drive that there is more traffic and more exposure to vehicle emissions.

Given the Green Party, the Auckland Council (and indeed Wellington, Christchurch, Tauranga and most other urban councils in New Zealand) and the Ministry for the Environment all endorse what is variously called "Smartgrowth" "New Urbanism" "intensification" and the like, you might wonder why they don't look at such evidence?

What it means is that the attempt to intensify Auckland's development within urban growth limits and so-called "Transit oriented development" is counterproductive.  Well it would be clear if the point of intensification was clear.  It isn't, you see.  It isn't about reducing traffic congestion, because if that was the primary goal then a whole raft of measures would be proposed that are not about land use, but around the supply and pricing of roads.  It isn't about reducing emissions, because if that was the primary goal then measures would be taken to clean up the vehicle fleet and reduce congestion.  No, it is something less direct and far more utopian - it is about long term changes to the urban form of the city.  I was told this directly by a manager from the MfE some years ago - it is about changing the housing and employment patterns so that - eventually - people would cluster their living near railway stations and their employment near railway stations.  It is a railway fetish based on the notion that railway transport is the most economically and environmentally efficient.   The problem is that a railway can't deliver this unless it moves large numbers of people regularly - in Auckland it doesn't even start to do that.

Take the Western rail line, which Auckland Transport blog reported carrying around 305,000 in the month of February 2011.   Wow.  Except that figures from just two years ago on the North Western Motorway, between Newton Road and St Lukes indicate 123,000 vehicles on an average weekday.  With an average occupancy of say 1.2, that means around 147,000 people, per day.  Even if you divide the whole of the rail patronage among weekdays only, you get 15,260 per day, just over a tenth.  Bearing in mind that there are other roads carrying traffic parallel to the railway (New North Road and Great North Road), that means the railway is carrying one tenth of the people of the road.  

Now the railphiles are getting all excited about record patronage of their heavily subsidised services, but ignoring the price of this.  Len Brown is factually incorrect when he claims tram lines were ripped up in the 1950s so motorways could be built.  In fact, tram lines were being ripped up after the war because they lost so much money it wasn't economic to replace the wornout track, so trolley buses were put in place (which in turn faced the same fate from the 1970s).   The trams were owned and operated by Auckland City Council, the motorways (which didn't start getting built until after the trams were virtually all closed) by the Ministry of Works.

However, note the pattern for patronage.  Rail patronage has climbed 276% between 2002 and 2010, but bus patronage only grew 8.5%.    Why?  Well bus patronage fell two years in a row (2004 and 2005) by a total of 10%, whilst in the same year rail went up 53%.  Bus patronage dropped marginally again in 2007, but in effect by 2008 there were less trips by bus than in 2002.  Bus patronage recovered almost exclusively because the North Shore busway was such a stunning success.  

That doesn't mean rail hasn't attracted more than people from buses, it has generated new trips, and has no doubt taken some people out of cars - it should, it has cost taxpayers over $1 billion so far.

However, you see this is what intensification is about.  It is about moving the mountain to mohammed so to speak.  Most people in Auckland don't live within a coooeee of a railway station, so said Helen Clark.  Building railway lines closer to them would be ridiculous (although look at the Think Big plans for the North Shore, even without the electrification opened, they want more!), but changing planning rules so that new housing is about living on top of or close to railway stations - that's what they want.

People wont divert long distances to go to a railway station, but making them live near them - that will solve the problem!!  Then Auckland will be like Copenhagen or Paris or Stockholm (or whatever quaint European holiday city the fantasisers imagine Auckland could be)!   The actual impact is higher housing prices, less homes that people want and worse congestion because, even if a few more people ride trains at peak times, the rest of the time almost everyone still drives.

The whole SmartGrowth, intensification policy is quasi-religious - the evidence does not demonstrate that it delivers improvements in terms of transport outcomes, let alone housing or environmental outcomes.  It is simply a tool to try to make new urban railways seem more viable - but it fails on all counts.

The wisdom of Islam

Deep inside me there has been a burning desire to find faith and find a purpose that is beyond myself, and which goes beyond the tainted lurid pursuit of money and personal satisfaction.

I have found it, in the wisdom of the Koran.

For years I have excoriated this religion, but have been quite wrong, indeed blasphemously insulting to those who have found the voice of God through his blessed prophet the most merciful Mohammed.

As such I have decided to resign from my employment and to plan a trip to Mecca, and pursue a new career to spread the word of Allah to those who have been misguided in their ways.  

For it was only the realisation of the pernicious toxin of our culture upon my heart and soul that caused me to recognise the wisdom of these teachings.  You may join me in my faith, and be my brothers (sisters you should listen to your father or find a husband who will keep you on the righteous path), or you will be my enemy until you convert and see the path to glorify our short time on earth before we enter paradise.

I see all in a new light, the aural pollution of so-called "music", the visual pollution of the totems of the abandonment of the soul through reason, and the dressing of women as whores and harpies to lure men to the path of satan and attract new converts to their lives of prostitution.   The relegation of the beautiful Arabic language to second place to that of the pagan languages of English, French and others, and the desecration of our holy lands by the peoples chosen to taunt us and betray us.   Those who read the first and second books of the Prophet but not the latest and greatest.  Their internecine wars told us all we needed to know - that there is nothing to be learned from Judaism, Christianity or atheism - except the means to defeat them all.

So on April 1 I beseech you all to read the Koran, visit a Mosque, sacrifice your mind, your life and dedicate it all to the worship of Allah, to the glory that comes from death and the celebration of the destruction of all the creations of the infidels.  For if it all fails, on April 2 things may just change back!