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.