Greece for dummies. Austerity = living within your means

So, once again, the taxpayers of prudent Eurozone countries are going to mortgage their future income and savings because the taxpayers of an imprudent lying Eurozone country are unwilling to pay for the bureaucracy and socialised services and welfare state they voted for.

The latest 130 billion Euro is 406 Euro for every resident of all of the other Eurozone countries, unless you want to remove the others in trouble (Ireland, Portugal, Spain and Italy) in which case it becomes 660 Euro. 

I've written before about the chain of events that led up to it, but here is a summary:

1. Greece joined the European Economic Community in 1981.  It proceeded to receive considerable sums of money from it through structural funds from European taxpayers to pay for new infrastructure, as well as gaining subsidies from the Common Agricultural Policy.

2. The Greek government ran continuous budget deficits since then, although for much of the time it had the drachma and so inflated/devalued its way out of trouble.  Greek politicians would buy off groups of voters by increasing the size of state employment, increasing pensions, funding specific projects and essentially running a patronage state.  By the mid 90's public debt as a proportion of GDP was greater than 90%.

3. In 2001 it finally dropped the drachma in favour of the Euro, having gained Euro membership after lying about its fiscal position.  It did this by hiding the true size of expenditure on defence and healthcare, this was not discovered until 2010.  For nine years Greek governments had paid Goldman Sachs to cover up its systematic fraud towards financial institutions.

4. Since 2001, Greece was able to borrow at very low interest rates reflecting the low inflation and relatively buoyancy of the wealthier Eurozone countries.  Year by year public debt would rise as Greek politicians continued their behaviour of bribing voters with borrowed money.  This growing state of subsidies saw little reform or restructuring as Greeks could import more freely with the higher valued Euro, but found it more difficult to export as productivity hardly improved.

5. The 2008 global financial crisis, catalysed by sub-prime mortgage lending mostly in the US, but also parts of Europ.  Greece was hit by a downturn in tourism and shipping.   This exacerbated shortfalls in tax revenue, which were in part due to systematic tax evasion over many years.   Similarly, Greece was experiencing reductions in funding from the European Commission as cohesion funds were transferred to the poorer new Member States from the former Warsaw Pact.

6. In 2010 the fraud of the Greek government was revealed, with budget deficits 2.5 times what was being reported.  Increasingly, it became more and more difficult for the Greek government to rollover its debt and to borrow to cover its persistent overspending.

7.  In February 2010, the Greek government gained a special loan of 80 billion Euro from the International Monetary Fund and European Central Bank conditional on an austerity package that froze state sector salaries, froze state sector employment growth and cut expenses.

8. In March 2010, the Greek government agreed to cut public sector bonuses, a 7% cut in public sector salaries, increased VAT and fuel tax and taxes on new cars.  The intention was to reduce the budget deficit by 4.8 billion Euro.  This was the second attempt to

9.  In April 2010 it was clear this wasn't enough, so the Greek government asked the IMF and EU to bail it out as was unable to rollover existing debts due in late May 2010.   In May it was decided to implement further austerity measures including further cuts to public sector bonuses and public sector pensions, increases in the retirement age from 61 to 65 and a wide range of tax increases, as well as consolidation of local authorities to reduce administration costs.  110 Billion Euro in loans were agreed as part of this deal with the IMF and other Eurozone countries.

10. In 2011, it was clear the deficit cutting targets were not going to met, so further austerity measures were introduced.  Higher income taxes and VAT were introduced, along with a promise to privatise 50 billion Euros worth of state assets.  Yet in August it was revealed that spending was continuing to increase overall, while tax revenue continued to decline.  In October, the EU promised Greece another 100 billion Euro loan conditional on it meeting austerity targets.  The Greek Prime Minister sought a referendum on the deal, causing panic among lenders fearing default.  He resigned and was replaced with a technocrat (former Governor of the Bank of Greece Lucas Papademos) to negotiate a package before elections in April 2012.

11. The latest deal has been struck, including a cut in state sector employment of 150,000 by 2015, cuts in state pensions, cuts in defence and health spending, liberalising various sectors of the economy by abolishing statutory monopolies, and 15 billion Euro of privatisation by 2015 (the 50 billion had not been achieved.

In the deal just agreed, lenders are expected to write off 53.5% of the debt they loaned.  The Occupy activists might pause for thought that this represents a massive transfer from the financial institutions they hate to Greek public servants, recipients of public services and welfare recipients.  In one swoop, market signals (i.e. a debtor unable to pay) effectively saw market players take the risk and give up on recovering their money from a feckless borrower.   

However, it wont be enough.  I've said before that Greece ought to default.  Why?  Because it will finally confront banks and other lenders with the reality of lending to governments that they cannot rely on the taxpayers of other countries to rescue them.  They quite rightly should stop seeing sovereign debt as 100% safe.   It is only as safe as governments are able to force money out of the hands of their citizens and/or devalue the currency by printing it.  In Greece, the government can do neither.  The problem is that default would likely mean Greece exiting the Eurozone.

So if Greece was actually allowed to default, several things would occur.

1.  The Greek government would be unable to borrow, forcing it to cull its bloated state back out of sheer necessity.  It would have to amend its absurd constitution that prohibit making state workers redundant.  In other words, reality would be confronted full on.

2.  The Eurozone would face choices.  One is to keep Greece in, and face a significant depreciation of the Euro and increase in interest rates for all of its members (this is what the current pillaging of taxpayers in Germany is designed to avoid), another is to eject Greece meaning it may create its own near worthless fiat currency ("New Drachma") and a third would be for the Eurozone to split into two currencies.  One for the poorer economies another for the richer, effectively doing away with the purpose of the Eurozone in the first place.

3.  Greek people would vote in governments that would force them to make stark choices, such as remaining within the Eurozone or leaving.

Yet default is probably incompatible with remaining in the Euro, and I don't believe leaving the Euro will make Greece better off.  The choice is about more austerity or default.   There are no easy answers.

You see the path taken by Greek government has been, as I said before, a massive exercise in reality evasion.

Greek politicians who were in government since the 1980s and especially since 2001, are fraudsters on a grand scale.  By rights, they should be have been lynched by Greek citizens for they have destroyed the country's economy.   They took the country into the Eurozone through lies and they continued to lie for nearly a decade about the true nature of the country's finances.   Accomplices with them are Greek state officials and Goldman Sachs.  By rights there should be several of them getting prosecuted for fraud and face having their assets stripped to the bone, and to go to prison.

Even today, Greek politicians and state servants are resisting and proving next to useless to implement austerity measures. Almost no privatisations have been carried out and the unemployment in Greece is entirely from the private sector.  State sector employment has not shrunk, it simply has not grown.   They are inept to the point where it is hardly surprising so many Greeks don't bother paying taxes.   They would see it as being wasted.

However, politicians are not the only ones to blame.  The Eurozone countries, European Central Bank and European Commission were negligent in enforcing the Euro deficit rules and completely neglected to punish France or Germany for breaching them.  They all at least deserve to face some culpability in not being scrupulous about the accounts.  Eurostat did not act in response to queries from Goldman Sachs about its derivative swaps by looking after the interests of an EU Member State.  If the European Commission is expected to be a guardian of the Eurozone today, why wasn't it so when it could have flagged an issue some years ago.

Greek voters are also complicit in this reality evasion.  Many of them, particular state servants, have happily gone along with ever increasing salaries, benefits, pensions and "bonuses" extracted from future taxpayers.  Greece's public debt and deficits were no secret, just the size of the deficits were.   Greek voters would vote for the corrupt politicians who would sustain a system of patronage socialism that has bankrupted the country.  Yet whilst some took from the state, most refused to pay it.  Many Greek citizens opted out of paying taxes because they didn't think it was worth it and it was easy to evade.  How long they thought this would last is unknown, but it is fair to say few Greek voters really thought twice about stopping the gravy train.

Finally, lenders who expected the Greek government to pay up and indeed other Eurozone countries' taxpayers to do so whilst they treated Greek sovereign debt as "safe".  Lending money to governments has long been seen as "safe", yet it is only so as long as two things happen.  Firstly, the government can forcibly extract money from taxpayers to pay you back with interest.  Secondly, the government doesn't devalue your loan by printing more money.  Greece has been unable to do the first and can't do the second.  As I said above, those lenders are rightfully taking a slightly over 50% cut in their debts.  It should be more.

Margaret Thatcher said "the problem with socialism is that eventually you run out of other people's money".

That's what has happened.  The Greek government has always been spending more than it collected from its own people, so has been borrowing other people's money to cover the difference.  Now it has all come to an end.

Greece has tried decades of socialism, with a highly regulated and protected economy, financed by lenders and more recently taxpayers' from other countries, and it has failed.  

The latest bailout will fail too, because it is only starting to confront the regulatory environment that strangles the Greek economy.   The austerity measures are half about increasing taxes, which is strangling the economy as well.  Greek governments have done little to really cut spending, but done much to increase taxes.   Socialism is still the way in Greece and the EU is still embracing such an approach, negligent to the costs that higher taxes are imposing on the productive - perhaps because bureaucrats don't accept that it is the private sector that grows economies.

I do not share the view that Greece should opt out of the Euro, because all that would do is destroy the savings and contracts of the smallest businesses and least well off in the country.  Everyone else would transfer their bank accounts to foreign banks and transfer contracts to other jurisdictions.  Shifting from one flawed fiat currency to another is an easy way out that will only benefit exporters, but will decimate the average person.  

What needs to happen is clear, and it needs to be presented to Greek voters in the upcoming election.   There is a choice:

Reject socialism:  Austerity should be about cutting spending.  No more tax increases, indeed Greece needs serious tax reform to simplify taxes and lower them to levels where people will be more willing to pay.  Taxes need to be competitive with Bulgaria, its only bordering EU Member State.   Privatisation should be carried out of all enterprises that can easily face competition, others should be privatised by issuing shares.  The economy needs restructuring, with statutory monopolies and complicated licensing arrangements abolished.  It should be made far easier to set up businesses, for contracts to be agreed and enforced, for property to be transferred.  In short, Greece needs its entire business, employment, taxation and property regulatory environment gutted and reformed, as what happened in the former Warsaw Pact countries.  This requires acceptance that the welfare state as it stands is unaffordable, that health and education will be at least in part user pays and that retirement incomes are to be self funded.  It also means rooting out corruption tooth and nail, which will be much easier without subsidies and favours to be granted through officials and politicians.  There is less to be corrupt about if there is a free market and a small government that focuses on its core functions.

The alternative is bleaker.

Embrace devaluation:  Greece would default and seek to leave the Euro.  The Greek banking system would collapse as Greeks would use Euros and other currencies in foreign bank accounts for savings and transactions, and the drachma becomes the currency primarily for state workers.  The effect of this is a massive pay cut in the public sector and for contractors to the government.  The government would face embracing an inflationary printing of money to pay for its persistent deficit, resulting in further devaluation and the fleeing of skilled people and entrepreneurs, as property prices skyrocket in response to inflation and devaluation.  Exporters find themselves competitive purely on price, but it becomes increasingly difficult to obtain foreign exchange to import energy and capital goods.  Ultimately, Greece faces up to finding socialism unaffordable, but after several years of pain.

I fear the latter will happen.  Already Greek banks have seen a 25% reduction in deposits in the past year as businesses and savers forecast this scenario.

What else could happen is of course far worse.  Greece does have traditions of communist and fascist parties keen to extract themselves from the EU and the Euro and become isolated.  

Let's hope Greek voters are not tempted by that, and may actually look to their ancient past as a nation of people who embraced reason, science and reality.   They have a lot of pride.  That pride has been hurt by some in the Eurozone accusing Greeks of being lazy.  That's unfair.  Some are, some are not, as in any nation.   Greeks in response have unfortunately used Nazi slogans and symbols to depict the German government.  That is grossly vile, insensitive and unfair, especially since German taxpayers have been bankrolling the past two years.  Yet running a country from Brussels will result in such analogies being applied.  Eurozone countries cannot completely neglect democratic mandates.

The greatest pride for Greece will be to live within its means and to rebuild an economy devastated by pessimism, higher taxes and socialist economic policies.  The only way that can be done is by agreeing to a future without such state dependency for money, services or regulatory privilege.

It need only look north to the most recent EU Member States, such as Romania, which in 1989 opened up their devastated, ruined economies, people, societies, industries and environment to an outside world willing to help.   Romania then was far far worse off than Greece today, had to scrap virtually its whole industrial sector, most of its entire public sector, its law and even its culture and start again, the hard way.   Half of Europe needed rescuing, rebuilding and re-educating in how to function in the 1990s, and most have succeeded, all those that did implemented free market reforms.

The solution is capitalism.  It isn't devoid in Greek people as can be seen in the 7 million of so Greeks who live, work, own businesses and succeed in other countries.   Now if only that spirit, culture and attitude could be applied to their home country by their countryfolk, Greece would once again be a country they can all be proud of.

Militant secularism? Much of the world could do with it

Baroness Warsi is a Conservative peer, a Minister and co-Chairman (yes!) of the Conservative Party.  She is a failed Parliamentary candidate and undoubtedly was selected to be a peer because of David Cameron's desire to make the Conservative Party look more inclusive and diverse, even though voters didn't want her to represent them.  So, in the peculiarly British tradition of shouting loudly about democracy, but ignoring it when one wants to promote people to power based on who they are not whether they have a mandate, she is in the House of Lords, as a Minister without portfolio, because she is a female British born Muslim of Pakistani descent.  Without a doubt her religion helped her gain power.   However, that isn't the current issue (Labour, after all, promoted Peter Mandelson to be a senior Cabinet Minister after he had lost his parliamentary seat.  All of the parties happily use peers to grant jobs for cronies that the public don't give mandates to).

She has recently visited the Vatican representing the Government, which itself is remarkable.  However, the big controversy is that she gave a speech, published as an article by the Daily Telegraph, expressing concern about "a militant secularisation" of society.  By that, of course, she means assertive atheism.  This comes from a background of a number of events, the most recent being a court case that prohibits local authorities from starting their council meetings with a prayer.  Others include cases involving private companies setting rules around wearing religious icons etc.

So what did Baroness Warsi say?

She says "we stand side by side with the Pope in fighting for faith".  Really? Who is this "we"?  Is it the Government?  In which case, to hell with the lot of you (so to speak).  The Liberal Democrats should pull out of the coalition immediately and there ought to be a few Conservative MPs who didn't realise they were fighting for religion, not for their constituents.  Is this "we" the Conservative Party?  Who does she think she represents?

What she is calling for is at best inappropriate.  The state should not be "fighting for faith", it should be neutral.  Religious belief is like political and philosophical belief.  It is personal, people use it to inform their own behaviour and to provide some comfort and fulfillment emotionally, particularly when dealing with difficult issues of life around grief, relationships, tragedy and events outside their control.  

She claims that "to create a more just society, people need to feel stronger in their religious identities and more confident in their creeds. In practice this means individuals not diluting their faiths and nations not denying their religious heritages.   This begs so many questions, as to what she means by a "just society"?  What evidence is there that if people "feel stronger" in their religious identities that this will result in things being more just?  Every country where Islam has the state fighting for it, literally by assaulting, torturing and executing those who reject it, there is not "justice".  There are countless examples of Christians, Jews, Buddhists, Shintoists and others who "felt strong" in their religious identities and confident, who didn't "dilute their faith", but were fundamentalists, and happily spilt rivers of blood in the name of their religious faith.  

History is awash with people who took their religious identity and killed for it.  The UK itself has much recent blood spilt in this regard, with Northern Ireland crawling slowly out from the pernicious weight of Catholic/Protestant fundamentalism, "strong identities" that saw adults bullying children as they walk to school, if they weren't blowing people up or shooting them.   London of course has been a victim to Islamists murdering in the name of their religious identities.

Yet she goes on to say that Europe should be more confident and comfortable in its Christianity.  The reason being " the societies we live in, the cultures we have created, the values we hold and the things we fight for all stem from centuries of discussion, dissent and belief in Christianity."  That claim needs some closer scutiny.  She is quite right that Christianity, in its various sectarian versions, had has a profound influence on Europe.  Indeed, it is worth noting the various effects the three main strands have had on different parts of Europe.  Orthodox and Catholic Europe both demonstrate significantly less success, economically, than Protestant Europe.  Yet to pretend that the Enlightenment, a secular movement of reason, was not also a profound part of this, is to be wholly ignorant.  Before that, Christianity's influence had been predominantly authoritarian and had held back progress in science and technology, let alone justice for centuries.  Whilst Christians led the movement to emancipate slaves, there were many also who resisted granting women equal rights before the law and who embraced discrimination against Jews and others of different Christian denominations. 

It is difficult to argue that the significant leaps forward in confronting state sanctioned sexism, racism and criminal persecution of homosexuals were done, in many cases, with people of religion in strong opposition.  I don't doubt there is a significant strand of Christianity that actually does represent values that are universal and consistent with individual freedom, individual rights and property rights, and indeed ethical behaviour to others, but it has been extensively tarnished, blackened and corrupted by so much else that has been used to oppress millions.

It was the willingness to oppress people for religion that saw the Founding Fathers of the United States create a new land, independent, that was secular, founded by deists who did not want to bring the sectarianism of Europe into that land.  The Declaration of Independence was written by men of the Enlightenment, who whilst Christians, were not quoting the Bible, but were leaping forward humanity in a revolutionary manner by creating a state that existed to protect the rights and liberties of its citizens, not having them as subjects.

She claims the militant secularism is seen "in any number of things: when signs of religion cannot be displayed or worn in government buildings; when states won’t fund faith schools; and where religion is sidelined, marginalised and downgraded in the public sphere.".  I think if people want to wear religious symbols to work it should be up to their employers.  Signs of religion displayed in government buildings may exist for historical reasons, and nobody should get too worked up about that.  However, to purposely add them for "balance" is quite wrong. Similarly, if people want faith schools, let them fund them, but don't force people of other faiths or no faiths to fund schools, of any kind.  The problem would be resolved simply if parents got back their taxes that pay for schools so they could buy the education they want, rather than support schools that people may find objectionable.  

The wider claim that religion is "downgraded" in the public sphere is misleading.  It is entirely appropriate to have a secular state which is blind to religion.  However, if people want to embrace religion themselves using their own time, money and property, then they should feel free to do so. 

What she neglects is the fear Christians have in their private sphere in how the state appears to treat them relative to Muslims.  Many see Muslims happily preaching, as part of their religion, hatred of homosexuals, but when a Christian couple want to run a Bed & Breakfast and not allow homosexuals to share a room, they are pilloried even though it is their home.  Would an openly gay Muslim man be admitted to a British mosque?  Hardly and quite rightly that should be up to the mosque.   Christians should have the same rights to discriminate in their own properties as others.

Baroness Warsi says she is "astonished" that the "European Constitution" has no mention of Christianity.  I'm not.  It's entirely appropriate for an institution that encompasses 27 countries all with rather different heritages, and which one day is likely to embrace some that are not predominantly Christian at all.  However, it it questionable surely whether many of these "Christian" countries are so today.  France, the Czech Republic and Estonia all have significant atheist minorities.  How would Jews in Europe react to a "Christian" EU?  

However then she simply goes off the rails altogether putting up a strawman when there is an enormous elephant in the room that she ignores.  She says:

"one of the most worrying aspects about this militant secularisation is that at its core and in its instincts it is deeply intolerant. It demonstrates similar traits to totalitarian regimes – denying people the right to a religious identity because they were frightened of the concept of multiple identities."

"That’s why in the 20th century, one of the first acts of totalitarian regimes was the targeting of organised religion."

To claim, in effect, the likes of Richard Dawkins "displays similar traits to totalitarian regimes" is quite vile. Even more vile when she ought to know that the religion with the worst record for totalitarianism, is her own.  With the exceptions of Turkey, and the former Soviet and Yugoslav republics that are predominantly Muslim, every other Muslim dominant state in the world prohibits apostasy.   What can be more totalitarian than criminalising people leaving a religion that most were "born with"?  I reject any atheists who seek to close down places of worship or shut down peaceful religious expression.  However, I don't know of any who actually do seek this.  Who denies people a religious identity?  

In fact the law demands people "respect" religious identity, when it is no more deserving of respect that any other belief system whether it political, philosophical or scientific.  People in the UK are increasingly fearful of making jokes about Islam, or criticising it, because there are Muslims, and more than a few leftwing activists ready to throw "Islamophobia" labels at those who do so.  Yet the very same people will happily pillory Christians.  The fact that Baroness Warsi is a Muslim and can't identify this double standard is astonishing. 

Yet to make the claim that "one of the first acts of totalitarian regimes was the targeting of organised religion" ignores some truths.  Organised religion has been hand in hand with more than a few totalitarian regimes, albeit with some brave exceptions.  The Nazis were not without blessing from Catholic and Protestant clerics.  The Croatian Ustashe thugs had express endorsement from the Catholic Church, as the Serbian Chetniks did from the Serb Orthodox church.  Again, Baroness Warsi ignores the role Islam has had in being central to totalitarian regimes from Afghanistan to Iran, to Saudi Arabia and the Gulf States, to Syria and Sudan.  The Japanese militarist regime was hand in glove with Shintoism.  Yes, the communists suppressed religion, but beyond the USSR and Albania, religion was not the first target, but part of an orchestrated campaign to eliminate ANY private non-state sphere.   Her cheap shot that seems to equate secularists and atheists with Nazis and Communists is vile and uncalled for, and is one of the lazy arguments by some Christians against atheism.

For the mere claim of an absence of a belief in something does not imply embracing the belief in something else.  A lack of belief in ghosts does not mean a belief in vampires.

Yet she then claims that she doesn't want to reject secularism, but that religion "should have a seat at the table" and that the UK shouldn't be a theocracy.  Let's be grateful for that, but why should "religion" have this?  What religion?  Whose interpretation of it?  What does this mean? 

Why should faith, not reason and argument, drive public policy?  Why should something be a law becomes someone says that the deity he believes in says so? 

I am an atheist. I believe in secularism for all states.  I don't believe the power of government should be coloured by any religious beliefs nor should governments treat citizens on the basis of religion.  The fact that the UK is, in fact, a state with a state religion (with the head of state leading the state church) is almost irrelevant in terms of public policy and lawmaking, although not entirely. 

However, as an atheist I do see leftwing atheists pursue religion, by which I mean Christianity (they seem scared to pursue Islam so vehemently, with no need to guess why), with a vengeance that I think goes too far.  In a capitalist free society people should feel free to pursue their own lives according to whatever belief system they have, as long as they respect the rights of others to do the same and respect the individual sovereignty of adults over themselves, their personal relations and their property.   Whether or not those beliefs are based on the supernatural or whatever, is irrelevant.   This includes being able to discriminate against people you hire or trade with based on those beliefs.   

After all, despite the best efforts of the left to equate Islam with a race (and to be fair the fascist right using hatred of Islam to justify its own racism), religion is and should always be a personal choice.  

Baroness Warsi would be far better placed embracing the secularism that is at the heart of most European states, and telling the Muslim world that it should do the same.  The utter disgusting vileness of the "crime" of apostasy outranks anything experienced by people due to their religion in the UK.  It is telling that whilst politicians run round in circles expressing outrage for the totalitarian regime in Syria embarking on its latest killing spree (it's being doing it on and off for decades after all), none raise this issue with the legion of Muslim states running from the Maghreb to New Guinea.

If militant secularism took over the Muslim dominated world there would be an quantum leap forward in the rights and lives of millions of people, particularly women and girls in these profoundly patriarchal and sexist societies.  People would not longer be brutally imprisoned, tortured and executed for "insulting" a religion they don't believe in.  It would be far easier to confront the treatment of women as property, the genital mutilation of girls, the treatment of rape as a crime rarely prosecuted unless the father of the girl is a witness, the rampant domestic violence of these societies.   In addition, the senseless sectarian and racist bigotry that is seen most clearly in the mindless Shi'a/Sunni divide, but also in how some Muslims treat others who they think are beneath them (see how Dubai treats Pakistani labour for a clue on this).

So in conclusion, Baroness Warsi's only, small, valid point is the way that some in the West have been hectoring Christians going about their private lives.   However, secularism should not be fought, it should be embraced, and most particularly in the theocratic dictatorships she has seen fit to ignore.  Some of the very ones who take aid from her government (Pakistan) and who shelter those who are out to destroy our secularism and kill us, and impose their own theocratic patriarchal death cult.  The world would be a lot better off if more states were theocracies.

There is a gap in Western society in relation to ethics and morals, which is seen most profoundly in the feral underclass that feeds ungraciously off of the taxes taken to keep them fed, clothed and housed, who have been corrupted by the moral relativism and entitlement culture propagated by the left in the past fifty years.   Baroness Warsi would be better placed attacking that culture, one that the Conservatives have barely touched upon, that the Labour Party has successfully nurtured for decades.  Combined with the identity politics that rates ethnic minorities as inherently disadvantaged, and so lowers expectations of their performance and heightens expectations of state help, it has perpetuated for Labour an ongoing constituency of dependency that provides a ready made group of people forever reliant on government giving them money (and voting Labour to make sure of it).

However, that would rely on her actually having some real courage, and given she is a politician appointed by fiat, not by election, one wonders why she can't have it?

Len Brown's Think Big plan - 10 questions

When you look at Len Brown's plans for spending a fortune on transport infrastructure in Auckland and his plans to charge those using it rather than tax various groups to pay for it, you might ask some real fundamental questions about what he isn't saying and in fact why you trust politicians to get these things done at all.

You see when you look at the underground rail loops, with cold dispassionate eyes, you can see this:

-  An underground rail tunnel and stations costing NZ$1.5 billion plus, that wont be a saleable asset.  Nobody will want to buy it outright for anything approaching 5% of that cost, without getting some subsidy for doing so.  In other words it is a wealth destroyer on the face of it.

- Those who would be forced to pay for it wont be those using it, regardless of what taxes are imposed to force others to pay for it.  Indeed those using it wont even be paying for the cost of running the trains through it.  At best they might pay half the operating costs, one day.  They are not paying for the trains either, you are.

-  Besides the users, the others benefiting are those businesses staffed or patronised by the users, who also wont be paying for it directly, well no more than you are paying.

-  There will be no discernible difference in traffic congestion, because both central and local government run the roads as Soviet style assets charging all users similarly regardless of time and location, with no attempt to ration scarce resources except by queuing or to invest in new capacity unless it is approved by political fiat.

The biggest problem I see in considering urban transport in Auckland is the complete lack of context of the debate.  You see if you want to fly to London, there is precious little involvement of politicians deciding, anymore, the prices, the frequencies of services, the types of planes, the timetables or in getting taxpayers to cough up money for the planes, or the airports.  Similarly if you want to send a container from Albany to Manukau.  You find a company that does the job and you pay it, with the company finding a truck, setting the price and then using the road - and paying road user charges for the privilege (and hopefully avoiding the queues inspired by the Soviet style rationing of the state and council's roads).  In neither case does what the Mayor of Auckland think have too much influence, although in the latter he'd clearly like to tax it more to pay for some unrelated infrastructure.

Yet when it is about people commuting, it suddenly becomes interesting.  Compare even simply getting a bus from Auckland to Whangarei, which is a service run by a private company for profit, buying its own buses, setting its own timetable and prices and providing a service for passengers willing to pay admittedly using State Highways.   Getting a train from Auckland to Manukau involves a train bought by the government, owned by the council, running at prices and times set by the council, managed by a private company, with its costs paid for by ratepayers, taxpayers and road users.

1.  Why are there always alleged "funding crises" for "Auckland transport", mostly involving shifting large numbers of people short distances, but not for moving freight short (or long) distances and not for international passenger or freight transport?  Could it be because the latter is virtually always the responsibility of private companies operating for profit, but the former is dominated by local authorities and planners deciding how they people should move, rubbing up against most Aucklanders who decided long ago they can buy a car and figure it out for themselves?

2.  Why is it that new ships, aircraft, trucks, buses, bicycles and cars (i.e. NOT infrastructure, just the objects that use it) are always  paid for by their owners, because in almost all cases they get enough from their users (if they are used to offer paid for services), but not trains?  Could it simply be that the people that use trains don't like them enough to pay for new ones?  Could it be because government is too lazy to spread the cost of capital of new trains over the life of the asset? 

3.  Why is it that users of ports, airports and the state highway networks all pay for the full costs of maintaining and building them, but users of railways and local roads don't?  Why are they special?

4.   If Aucklanders so desperately want an underground railway loop to use, why does no one, not even the uber-council of Auckland want to borrow the billions required to build it?  Could it be because there wont be enough money raised by the users of the railway to pay for the cost of operating a train through it, let alone pay for the railway in the first place? 

5.  If the underground railway loop is not about the people using the trains, but about revitalising the Auckland CBD, why wont the property owners of the area served by it invest in the loop, or at least support a specific rate to pay for the cost of it?  Is it because they know they Mayor and government are a soft touch with taxpayers money, or do they really simply not believe that the underground rail loop will make a lot of difference?

6.  Given the government has committed to spending NZ$1 billion of other people's money electrifying the current network (with the users not paying a cent towards it), predicated on ambitious prediction for growing usage (and reducing usage of the roads), why would anyone commit to spending several billion more before it actually being demonstrated that the earlier predictions for the results of destroying taxpayers' money on an unsaleable liability would meet expectations?

7.   Why is it good to shift large numbers of people from using a mix of subsidised and commercial bus services to using far more expensively subsidised rail services?  Could it be that advocates of the rail strategy don't like this inconvenient issue being highlighted?

8.    Outside peak times, how much of the capacity of Auckland's rail network lies idle, how much more will lie idle after electrification and the rail loop (I suspect around 66% given international benchmarks)?  How does that compare to the recent extensions to the motorway network?

9.    Why should road users across Auckland, on all roads, at all times, pay for a piece of unprofitable infrastructure that will

10.   Finally, why wont Auckland's Mayor and grand council face up to the fact that if it replaced rates funding of local roads with a form of direct tolls with congestion charging, that it would do far far more to relieve congestion and improve mobility than any rail scheme at next to no cost (whilst giving Aucklanders that don't contribute to peak jams some tax relief)?  Or is it far simpler politically to promise people big infrastructure baubles they don't have to pay for?

Want to know the common denominators with all of these?  A hint is this:

-  Planners don't like people moving about at times, places and in ways that they don't understand and can't organise.  They inherently fear this.  What they ignore is that there are planners in the transport sector that make things work smoothly, but they are commercial planners.  They make airports work like clockwork, logistics companies arrange for parcels to go from Dunedin to Dar Es Salaam and major to do all of this, because the incentives are right.

- Politicians don't like telling people they can't continue to have recourse to other people's money to subsidise their activities any more.  They much rather offer people something for nothing the cost of taxing others.

- Privatising the roads terrifies people because they have been inculcated with legends of fear from past privatisations perpetuated by hysterical socialist doom merchants. 

You see anyone who pretends that an underground rail loop will fix Auckland's transport woes is either a fool, naive or a liar.  Have a guess as to which one the people who should know better are.  If they don't like answering any of the questions above with a straight answer, then you'll know it isn't because they are stupid.

Yes I do own water

and I don't mean buying a bottle of Evian.

If I have land, and collect water on that property, it is mine.

Just because the state treats the sea, rivers and lakes as owned by it and local authorities, doesn't mean that water can't be owned.  It is ludicrous to claim otherwise.

Reticulated water costs money.  It requires people to work, people to construct, lay, maintain and replace pipelines, dams, pumps and the electricity required to operate them.  That isn't free.

There is no good reason why that can't be owned and operated by a private profit oriented company.  In England they are, under tight regulation, but that water is owned, and you buy it.

Socialists may argue against this, ignoring the disaster of state ownership seen recently in Northern Ireland, or the crass incompetence that saw government fail to upgrade infrastructure over many decade in places from London to Dunedin (in England and Wales investment in infrastructure increased by 83% after privatisation).

Swedish analyst Fredrik Segerfeldt concluded that water privatisation can generate enormous benefits:


For example, before privatization in 1989, only 20 percent of urban dwellers the African nation of Guinea had access to safe drinking water; by 2001 70 percent did. The price of piped water increased from 15 cents per cubic meter to almost $1, but as Segerfeldt correctly notes, "before privatization the majority of Guineans had no access to mains water at all. They do now. And for these people, the cost of water has fallen drastically. The moral issue, then, is whether it was worth raising the price for the minority of people already connected before privatization in order to reach the 70 percent connected today."


he concludes by asking... "why anti-privatization activists do not expend as much energy on accusing governments of violating the rights of 1.1 billion people who do not have access to water as they do on trying to stop its commercialization".


However, the National Party has never been that good at selecting politicians who can argue principle over fear and scaremongering.  

Torture is not as serious as rape

That's what the current sentencing of offenders against children appears to indicate.

Take this story from Stuff:

The young girl's plight came to national attention when police found her hiding in a cupboard in her West Auckland house on November 15, 2010. She was starving, dehydrated, bruised and was suffering from broken bones and anaemia from internal bleeding. A police statement released a month later made public the horrific details of her abuse - including prolonged beatings and having her toe nails ripped off. The girl had been in Child, Youth and Family (CYF) care most of her life after being taken away from her parents as a baby.

Her mother got 7.5 years with 5 year non-parole period as a sentence.  Yet when she is released she can still breed, still default to getting custody of children, wont be banned from living with or working with children, wont be a registered offender who has to report where she lives.

You see a woman torturing a child is not as traumatic, it would appear, as a man molesting one.  She was a sadist, she isn't fit to be near children and should be permanently denied access to children.  However, she needed to sexually abuse the girl for things to be seen to be that serious.  She's appealing her sentence of course.

How about the child's father?

The father also hit the child in a way that was ''unacceptable'' and deliberately concealed the situation from the child's school by keeping her at home when her injuries would have made it obvious that she was being physically abused.

So he knew it was wrong, covering things up to protect the sadistic monster of a mother and himself.

(his lawyer) said he was caught between trying to control his daughter's ''disturbing behaviour'' and getting through to his partner.

Astonishing.  He couldn't actually figure out that this girl, of 9, being tortured by her mother, who had been sexually abused by a relative previously and who had spent most of her life not being loved, understood, listened to and helped, would behave in ways that are disturbing?  This entity, called the "father" is barely fit to go to the toilet himself let alone be a parent.

Judge Gibson responded by saying that the girl had been subjected to ''the most appalling revictimisation'' due to the couple's contention that the abuse was a result of her ''difficult'' behaviour. ''You continued to blame the child for what happened to her and I utterly reject that,'' he said. In sentencing the man, Judge Gibson said he wanted to denounce his conduct, deter others, hold the man accountable, protect the community and send a clear message to people who stood by and did nothing to intervene. ''It is clear that your daughter is unable to understand why she was tortured, and that is the appropriate word for it. ''You didn't do your duty as a parent.''

No doubt this entity thinks he is a "big man", I'm sure he plays up being tough and staunch and every other faux "value" low lives like him posture about.  Yet he faces only three years in prison, with two years non-parole.  He to is not being denied future custody of children, not being denied the right to live with children.  Who can doubt his dick will be out pumping kids into the next ego-less strumpet who thinks so little of herself she'll take him, and the evil entity who is the girl's mother will no doubt create another tragic child, so she can feel "complete".

Garth McVicar is right.  The sentencing is insufficient, both deserved much more.  She should have a sentence commensurate to the harm done.

Let's look at some other sentences:

- 13 year sentence for stealing war medals.  

- 17 year sentence for producing an illegal substance that other adults wanted to buy

- 8 year ban from owning a dog due to neglect ( no ban from having kids that you neglect though)

- 5 year nine month sentence for breaking and entering, robbing, tying up a 19yo woman and "indecently assaulting" her (which means kissing her on the lips when she did not consent)

- 6 years and four months for fraud

The core role of the state is to protect citizens from violence.  In the case of parents who abuse their children, it is a particularly despicable crime for those who are entrusted to protect children do the opposite.  Banning smacking didn't have an effect on these two.  However, having sentences that effectively incarcerate such egregious sadists for the period of their greatest fecundity and fertility, would be a step forward, as would denying them ever being allowed to live with anyone under 16.

Meanwhile, wouldn't it also be a good start for the state to deny anyone convicted of serious violent offences ever being able to claim welfare?