Winston Cullen's populist xenophobia

So according to Stuff Michael Cullen is as hysterical as Sue Kedgley. Who would have thought! Like some squawking bird he has thrown up his hands in leftwing xenophobic horror at the "gateway to the world" falling into foreign hands. You can see the talons of foreigners, eagerly trying to pillage what is "ours". Of course it seems to be ok for the Christchurch gateway to be held by a loony leftwing council and the Wellington one by a New Zealand investment firm.

What absolute nonsense.

The hurried legislation is Labour making a marriage with "don't trust the wogs" NZ First, pandering to the xenophobic fears of some on the conservative right as well as the anti-globalisation left - with no objective basis for it whatsoever.

The government will now have the right to interfere in ANY private land transaction, as "ministers will be able to block the sale overseas of any land or assets if it runs counter to the need to maintain New Zealand control of strategically important infrastructure on sensitive land."

What is this "strategically important infrastructure" or "sensitive land"? Better hope it's not yours, or those of a company you own shares in - because Ministers can now pillage part of the asset value -purely due to xenophobic hysteria.

The arguments Sue Kedgley rattled off in her press release are all too ludicrous, and I pulled them apart a few days ago. I said the Greens are Canadaphobic only partly in jest, because they are xenophobic when it comes to ANYONE from another country making an investment in New Zealand.

The impression is that somehow Canada Pension Plan would blow up the airport, or treble landing charges, in other words do anything OTHER than run it to maximise a rate of return.

Of course this isn't the first time. Dr Cullen deliberately delayed allowing Singapore Airlines to raise its shareholding in Air New Zealand to 49% because of a preference to consider the Qantas offer, which had already been rejected by the Air New Zealand board. It is speculation to claim that this dithering was because of a preference for an ANZAC Air NZ over a more "foreign" one. This dithering saw Air New Zealand collapse, until Dr Cullen forced taxpayers to bail out and nationalise the airline.

So I want three questions to be answered by those on the left who will cheerlead this on flying the red flag as they do...

1. What evidence is there and what incentives are there for a foreign owner of a New Zealand company to treat the assets and the business in a manner differently from a New Zealand one? Give verifiable examples, not simply tired rhetoric.

2. What is the financial value of land being "strategic"? Will you compensate the owners for this over and above the previous market value now reduced because of this legislation?

3. If the land is so "strategic" to you, why don't YOU and those who agree with you come together and buy it? Clearly the value is so high that you are willing to use force to ride roughshod over private property rights and contracts. Can you explain why you are unwilling to use your OWN money to demonstrate how strategic this land is?

Finally, I expect the shrieking Greens and xenophobic NZ First to support this, along with xenophobic Anderton. That will be enough, but will Peter Dunne, National and ACT stand on some principle? (The Maori Party is inherently racist so I expect nothing from it).

By the way, this isn't about privatisation - this is about already privately owned shares not being allowed to be sold to a willing buyer. Just think about it, and think about your own xenophobia.

It is racism, just a kind the left champions.

UPDATE: Not PC rightfully points out that "Too many New Zealanders don't like foreigners, however (or investment, for that matter). We think we might catch nasty diseases from them -- things like hard work and being enterprising".

Sue Kedgley is taking the credit for this nonsense, repeating her absolute doggerell that "New Zealand could not afford the economic, environmental, biosecurity or security risks of allowing control of our main aviation gateway to pass into foreign hands".

Go on Sue, explain yourself will you? Why do foreigners pose risks that locals don't?

Meanwhile Winston is cheering it on, like the Muldoonist he is.

UPDATE 2: No Right Turn makes the ultra nationalist/socialist assertion that privately owned shares comprise “our” strategic assets. If HE finds it strategic, why does he not buy them from those who don’t see it as being strategic? At the very least he argues this is about the balance of payments deficit - without explaining that this deficit is privately funded. The owners of Auckland airport shares are not responsible if some New Zealanders spend more overseas than they receive from overseas. It is not THEIR responsibility to make money to pay someone else’s deficit. Sadly he panders to the xenophobic populist nationalism of Winston Peters that is more about prejudice than it is about economics.

Healthcare - the elephant in the policy room

In both NZ and the UK, rational debate about public health care is just about impossible. This is because, as an issue, it is too complicated for the average journalist and average member of the public to understand.

Few would argue that there are not major problems with both the NZ health system or the British NHS. Waiting lists continue to grow and get worse. In short, the demands people place upon both systems often are not met by the supply - whether it being waiting lists for surgery, waiting times at accident and emergency, lack of coverage for necessary drugs, failure to accurately diagnose or supply international best practice treatment consistently, or even simply problems of hygiene in some hospitals.

So the response of both Labour governments in the UK and NZ has been simple- pour more money into healthcare. In the UK it is not far short of a 50% increase in the proportionof GDP being spent on state funded healthcare. The worst example of this extravagance has been the £2.3 billion NHS National Programme for IT, well £2.3 billion was the budget originally - it now is over £20 billion. However, taxpayers are easy pickings. In NZ it has gone up by around a third - yes a third, in GDP and in real terms - $2 billion more per annum, since Labour was elected. $2 billion is $500 per man, woman and child per annum.

So what have you gained from that? Seriously? You see, for example, Southern Cross could offer you the mid range private medical insurance for around $350.

Yes, that's how good health spending is.

The truth is that more money is not going to make a huge difference. Why? Because there are fundamental problems with state funded state provided healthcare:

1. Demand is endless: With no controls on price, and no sense that there should be limits, the public will demand the latest, best and most sophisticated healthcare concerning drugs, equipment, techniques and treatments. Rationing is not done by cost, but by politics.

2. State providers have little cost control: As seen in the 1990s, badly run, in debt hospitals in New Zealand get bailed out, are not allowed to go bankrupt, and so pressures to perform efficiently are poor. Costs increase because administrators simply ask the government for more money, and when it isn't offered, there are claims that it will hurt people's healthcare.

3. State providers have little competitive incentive to perform: As most users have little alternative, queues, poor service and failures to perform aren't subject to much sanction. Money still flows.

4. Increases in funding are largely captured by well organised health workers: Nurses, doctors and all others claim increases in funding, because they can. They public loves them, so they play up to that, they threaten strike action, and almost always win.

5. State healthcare provides little incentive to live healthier: Be a drug addict, smoker, heavy drinker, obese, don't exercise - you'll get treated the same as if you looked after yourself. Not only that, you pay the same and get the same treatment, well unless the bureaucracy starts discriminating against you.

6. Bureaucratic decision making is glacial and unresponsive: By its very nature, government agencies are slow decision makers, and tend to have to make tradeoffs between who is interested in the decision politically and bureaucratically. Multiple objectives and a lack of accountability for delayed investments and approvals means things move slowly.

You see the current model have no relationship at all between those who pay, those who use and those who supply. The incentives to limit demand, to look after yourself, are personal - not financial, and so the budgets grow, performance barely improves and nobody seeks to change this at the fundamental level.

Nobody.

Will you hear John Key this year seeking to radically change health care? No. You wont see it from David Cameron in the UK either. The reason being this- nobody on the right of the political spectrum has the courage or the articulation necessary to win the argument with the public.

The left is absolutely scandalous on healthcare. Dr. Cullen knows only too well that the current health system can't get better with more money thrown at it, but he wont reform it - he can't. The Labour Party writ large can't swallow the truth that the current system is broken - it cannot be made to work better. Its supporters will treat ANY steps to allow private sector participation or some sort of insurance model as being "Americanisation". US health care is the great bogeyman, and whenever it is mentioned there are images of people dying because they can't afford it. Few point out those dying because of failures of state health care. Yes, some in the US undoubtedly die because they don't have health care - but then so do some under socialised health care.

Unfortunately, the nature of mainstream politics is such that the left knows it can push the right emotional triggers on this issue in the media. It simply says "our way" or "American way". The solution to "our way" is always more money. Anything about a more businesslike approach is going the other direction, and the left can command a majority of those in the healthcare profession and hoards of hangers on to protest at will, making a lot of noise, but with precious little debate about how to do it better. Helen Clark can't wait to see if John Key says ANYTHING interesting about health.

The left wont point out how healthcare in many countries with socialised models is insurance based, and how this helps to control costs, demand, and incentivise healthier living. It ignores failures to achieve gains under high levels of additional funding, but will point fingers at those seeking to cut funding.

The call to end "endless restructuring" ignores that such restructuring is, at best, half hearted. What is needed is a fundamental change to how health care is seen, and it means starting to move towards individual responsibility.

There are many ways this could happen, probably the most palatable would be an insurance based approach. Such an approach would have several advantages:
1. Insurance premiums can reflect risk and behaviour, and encourage good behaviour (regular checkups and healthy living) but penalise bad behaviour (smoking etc). This would be far more effective than many public health promotion campaigns.
2. Insurance can invest the proceeds of premiums to get a return and manage risk more prudently than the state in collecting taxes.
3. Insurance creates a direct customer/supplier relationship, as people expect more when they actually seek medical services.
4. Insurance can allow more competition in delivery of health care. People can choose different suppliers, and insurance companies.

Now how could the state move towards this? It could simply offer you back the proportion of taxes you pay that goes towards healthcare, and you could buy health insurance with that money. The state COULD develop its own health insurance company that operates by default as a portion of your income, and you might opt out of it buying private care instead. That was ACT policy, not libertarian but arguably a significant step forward. Which is what I am looking for.

Will John Key propose anything that WILL address the fundamental problems of public health policy? Highly unlikely. You will elect him though, and the problems will persist - again, and Labour will say more money is needed. The best National's health discussion paper says is "The judicious use of public-private partnerships can increase the availability of elective surgery and reduce waiting lists." A toe in the water wont stop someone from continuing to overheat.

and if you think it's hard in New Zealand, in the UK the NHS is sacred - shame so much that is sacred is not subject to close scrutiny!

The anti-Obama strategy that will fail

Giving a damn about his middle name being Hussein
Giving a damn about him being an Arab or African-American or whatever.

At the most this will pander to conservatives who are bigoted xenophobes, with little substance behind why Obama should be opposed. It will shore up the leftwing liberals who respond badly to such doggerell, so it is NOT manna for Republicans.

What DOES matter is that he is leftwing, his economic policies are blatantly anti-free trade and pro-big government. His talk is mostly rhetoric and little substance.

Obama as a President is most likely to be a disaster for New Zealand, as he will have little interest in promoting a liberalisation agenda at the WTO that persuades global abolition of agricultural export subsidies, removal of non-tariff barriers to agricultural imports and moving towards free trade of agricultural commodities.

That is why New Zealanders should, grit their teeth, and hope Hillary wins in Ohio and Texas tomorrow.

Herald nearly a month late on this one

First A380 services to New Zealand

yes I reported that on 8 February Grant Bradley.

By the way, Singapore Airlines is ending its Boeing 747 service to Auckland on 11 May 2008. They get replaced with smaller Boeing 777-300ERs. That isn't a bad thing. The new 777-300ERs have the same new business and economy class of the A380s, and still have first class.

Browningrad?

The swing to the left under Gordon Brown has been modest, but every week or so something new comes along to remind me that the UK is governed by the LABOUR party. A party that thrives on envy, and is willing to slip back into the bad old ways if it is about being popular.

Today two examples of this:

First, according to the Sunday Times, Gordon Brown preparing to put "drastic curbs" on second home ownership, largely to stop people buying weekend pads in rather nice rural villages. This appeals directly to the anti tall poppy "eh uup" constituency that wouldn't think it is "fair" that someone is successful enough to buy a second home. You know, the people who Labour would have trapped in council houses, on the bottom tax rate and forever being reminded that if it weren't for Labour, they would be starving, without health care and the like - the ones Labour LIKES having dependent on the state.

Brown is apparently going to recommend that local authorities - the bastion of petty fascism - prevent "outsiders" (in German it would be "auslanders"!) from buying houses that they wouldn't make their permanent residence. I mean, the audacity of such people, and those selling them to such people! Councils could refuse permission to buy! Interfering directly in a voluntary exchange between buyer and seller.

Liberal Democrat MP Matthew Taylor, showing how illiberal and fascist he really is said “In some communities, 30%, 40% or 50% of the village is dark most of the year. It raises huge issues for the sustainability of the community.” Does it Matthew? Huge issues for who? I guess those who sold the houses don't count, or the people who bought them. Maybe you'd like to buy them instead with your money?

All of this ignores the economics. Doing this will reduce property prices and returns for those CURRENTLY owning properties, it wont encourage more construction and will hardly ensure "communities are sustainable" whatever that means.

Secondly, the Sunday Times reports on the inevitable envy ridden backlash against energy companies, which have been ordered to hand over part of their profits or face a windfall tax by Gordon Brown. Apparently those who invest in energy companies, wisely at a time of increasing demand, don't deserve the proceeds more than the grim, slow moving, inefficient, wasteful behemoth of a state. They should, of course, tell the government to go away, nicely. They are being asked to subsidise the gas and electricity of the poorest. They might ask the government a few points:
- Why does the government continue to levy VAT at over 17.5% on many goods and services for everyone, why can't it cut taxes to help those it cares about?
- If energy companies don't make large returns at times of high demand and short supply, how will they afford to invest in sourcing new energy supplies?
- How does subsidising the price of energy encourage people to use it more efficiently?
- Why doesn't the government reduce regulatory restrictions and compliance costs on competition between energy companies and figure out how, if there are windfall profits, why companies don't compete so much on price?

Thanks Big Sister, we really need you

Big Sister Cindy "Kim Jong" Kiro has spent your money urging you to spend time with the family.

However it isn't YOUR family or YOUR kids, she notably never says that. She does say "our children" in the context of "she's a parent so she's one of us".

It shouldn't fool you. Cindy Kiro wants to nationalise the raising of children, by having a Stalinist style monitoring of every child, and a plan for every child authorised by the state from cradle till whenever. This warm and otherwise benign press release is unnecessary, but paints a picture of the Childrens' Commissioner have a useful role - when she has none. She undoubtedly cares a lot for children and abhors child abuse - hardly controversial. However, she thinks we are ALL responsible for this. This justifies her call for Orwellian monitoring of children including:

Planned assessment at key life stages, including early childhood, primary and secondary school entry, and moving to tertiary education or employment and training opportunities, is a key component of the framework. The assessment will take into account the whole child; their physical, social, educational, emotional, and psychological development.

She is either ignorant of the evils of totalitarianism, or an advocate of it! Simply, how fucking dare she call for children of responsible, loving, non-abusive parents have their kids monitored by the state?

She dilutes the blame by being unable to confront the truth - the problem is abusive families, no others. There are thousands of children barely being parented at all. Their teachers know this, and no doubt also do neighbours, distant family members and the like. THAT is where the state effort should be, as part of the criminal justice system. It is about intervening when there IS abuse, not watching everyone else. Yes, it will mean intervening in a higher proportion of Maori households than others, because it is disproportionately a problem with families of Maori background.

So no Cindy Kiro. Parents will decide what they want to do childrens' day, some will be working to pay taxes to fund your well about average income and the big nanny state you warmly embrace - think how much more time the parents might spend with their kids if they didn't need to work so hard to pay taxes (for you and the state) as well as earn a living. The children living in New Zealand are not "ours", they are not a shared responsibility. They are the responsibility of their parents and guardians, and they should be accountable when they abuse or neglect their children. If you were to do ANY justice to your job you'd stop making blanket statement about everyone, and focus on CYPFS and support efforts to intervene when there is demonstrable abuse and neglect. You would also work to deny custody of children from those who are convicted of abusing kids, permanently. Instead of monitoring all families, how about breaking up the ones that are destructive and stopping those who are from being near kids.

To be fair, Dr. Kiro is not an apologist for child bashing unlike one blogger who wants says "the structural issues which leave people so broken that they torture a three year-old", in other words "capitalism makes people torture a toddler".

Greens Canadaphobic

Sue Kedgley is at it again, hysterically trying to ban something. This time the sale of private shares in Auckland airport to a (wait for it, it is horrifying and disgusting) FOREIGN company. Those wogs (well they are Canadian, but they are foreign, so they must be inferior) can't be allowed to have "our" airport (well actually it is owned by the shareholders, but Sue doesn't understand property rights), I mean after all, think what they could do. They might want it to run efficiently, at a profit, encouraging people to use it and that would NEVER do.

Sue's press release on this says "The Green Party sees no reason why a Canadian pension fund should be allowed to gain control of the gateway to New Zealand"

Well I see no reason why it shouldn't? Why is a Canadian pension fund less of a good owner than a New Zealand pension fund, or local government, or central government (remember Wellington airport when it was majority government owned?)? Sue doesn't say, just apparently as long as the Green Party doesn't see a reason to allow something, it should be banned.

Then she goes on a little to suggest that "New Zealand cannot afford the economic, environmental, biosecurity and security risks of letting control of our main aviation gateway pass into foreign hands"

What are these Sue? Economic risks. Hmmm that it will be efficiently run, will seek to encourage passengers and airlines to operate there. Are you concerned about monopoly pricing? Well apparently not since the Green Party opposes outright Whenuapai being developed as a second airport.

Environmental risks? What are the Canadians going to do Sue? Use the airport as a toxic waste dump? Encourage less fuel efficient planes to fly in? I mean those Canadians are such environmental vandals.

Biosecurity risks? Oh yes, apparently they will take over the MAF role too will they Sue? Or the Canadians will just let it rip on foreign plagues of insects and plants to ravish our countryside.

Security risks? Yes they'll let those Canadian terrorists in to hijack planes, or Canadian thieves to steal luggage.

Not a single rational reason to stop the sale, other than xenophobic hysteria.

Blame Canada, with their evil little eyes and their heads that flap with lies.

Bloody hell Sue, take some pills and get some therapy, it's not nice to discriminate against those from other countries.

The OTHER deniers

Holocaust deniers are well publicised and hassled for their vile beliefs, albeit that they SHOULD have the legal right to hold them and express them.

However there is another group of deniers, the Stalinist deniers. These are the small group of fanatics for totalitarianism that live in the free world, but deny the evidence of the thousands of Russians who suffered terrible ordeals under Stalinism and CONTINUE to deny the evidence of the North Koreans who escape. They claim Alexander Solzhenitsyn was a neo Nazi, they excuse labour camps, executions and political oppression. They treat Saddam Hussein as a hero

They are so radical that even Arthur Scargill, mate of the former USSR, expelled them from his own Marxist party.

It is called the Stalin Society, led by an Indian migrant to the UK called Harpal Brar. He chairs the Communist Party of Great Britain Marxist-Leninist.

That party supports Robert Mugabe and Kim Jong Il.

What bloodthirsty warped scum. Are they deranged, stupid or just plain evil?

Top ten reasons Castro should be hated

The Times has produced a handy list of the top 10 reasons Castro should not be a hero of the left. Let's see the lickspittle felchers of Cuba, George Galloway and Ken Livingstone defend these, or Matt Robson, or Willie Jackson.

1. Sending homosexuals to forced labour camps.
2. Executing people attempting to leave Cuba (as recently as 2003).
3. Urging the USSR to launch a nuclear first strike against the USA.
4. Holding 316 known political prisoners in 2006.
   
5. Banning independent trade unions.
6. Single candidates for all seats in the National Assembly.
7. Computer and internet access is severely restricted.
8. In 2003, 22 libraries raided with 14 librarians arrested with jail terms of up to 26 years, for having banned literature.
9. Opposed even modest economic reforms, including the opening up by Gorbachev.
10. Cuba's imperialist adventures in Africa, including supporting the Mengistu regime that was behind the 1980s Ethiopian famines that Bob Geldof relaunched his career off of.

So how about it? How about the New Zealand supporters of this dictator repenting for their support for this scumbag?

So how many more reasons do you need to vote out Ken Livingstone as Mayor of London?

Meanwhile, Daniel Finkelstein in the Times has an excellent article asking why the left worships dictators, including the Deputy Leader of the British Labour Party - Harriet Harman. Oh and no excuse that Thatcher supported Pinochet. Two wrongs do not make a right.

Silliest British reaction to earthquake

No, it's not the people running into the street and then having to dodge masonry. No it's not the failure to give details about the depth of the epicentre as well as the richter scale reading (both are needed to explain severity).

It is the the GMTV host Ben Shephard.

This morning he asked a British Geologist if the earthquake is attributable to... wait for it ... climate change!!

Did you dream up such a brainless question or did your producer? How utterly banal. It's the sort of thing I'd expect from a NZ based television reporter (you know the sort that talk of North Koreans spontaneously taking a day off work to welcome foreign politicians).

Ben, you have a degree in Dance, Drama and Theatre Arts from Birmingham University, best to stick with that than, um, general knowledge.

Oh by the way, I went into Wellingtonian mode. It felt hellishly strong for a force 5 quake, but that reflects being in a solid building, next to a canal in Manchester!

It woke me up (in a hotel contained in a century or so old building), I shot instinctively into the doorway (lost count of earthquakes I've been woken up with in NZ), waited until it ended then went to sleep, all half dozed. Woke up thinking I must have had a helluva dream, because it didn't feel real.

Initiating force is wrong

Tomahawk Kid has an excellent article reminding us all of why it is wrong to initiate force to get what we want. He said

"There is no more moral system than the voluntary interaction between consenting adults when applied to ANY situation."

Quite and who would disagree with that? Well, every political party in Parliament for starters and most other blogs. You might see some saying yes, BUT... as they justify the exception that they want to see, something they can't convince others about so hey, let's use state power.

If we want a culture of non-violence, which so many on the left purport to support, it should start by an unequivocal condemnation of force initiation against people and their property. That requires acceptance that the state should shrink until it no longer initiates force. That wont happen overnight, or within three years, but it does mean the end to victimless crimes, respect for private property rights, the withering of taxation down to core state responsibilities and moving towards choosing to pay for what you use, rather than force.

Utopian visionore creative as human being as to how to resolve problems and conflicts - peacefully? Well in the sense that it is idealistic yes - but it is moral, and we can debate the hows and the priorities, but shouldn't it be where human beings head? A culture of civilisation, of non-violent voluntary interaction?

The greatest barrier to it all, unfortunately, is that all too many of you are happy to be forced to do what others say, and you are prey to those who are happier telling others what to do.

Bush administration goes forward - on roads anyway

Whilst many pundits decry the Bush Administration as a “disaster” as if it were self evident, it is clear to me that in the field of transport, it is light years ahead of past administrations of both colours.

The current Transportation Secretary Mary Peters (and her last significant predecessor, Norm Mineta) have both made the very clear and blunt points – the status quo doesn’t work. Environmentalists may be surprised that the Bush administration is strongly supportive of road pricing, instead of ongoing politically driven funding of roads and public transport.

Some of the best points she made at a recent meeting of Governors at the White House were:

“in the era of a government mandated monopoly in telecommunications and price controls you'd get a recording: "I'm sorry all circuits are busy. Please try again later." "Your call couldn’t go through the system for the same reason your car can’t get through rush hour – poor pricing," Peters said.”

That's the fundamental point. People put up with chronic traffic congestion roads, but wouldn't with other infrastructure - and it is due to lack of pricing and poor quality investment - those are both due to government's running roads in the same old Soviet era way. She also points out that throwing taxpayer money at the problem hasn't worked:

"The failings of federal tax and earmark programs she said are highlighted by the 300% increase in traffic congestion in the past 25 years while spending on roads and transit is doubling every ten years."

Think also about healthcare, how throwing money at that simply isn't working either. None of this should be a surprise.

"There is no greater symptom of failure than the fact that Americans simply don’t support putting more money into this broken system. Poll after poll shows strong opposition to traditional fuel taxes. The public ranks gas taxes as among the least fair taxes at the federal, state and local levels. And they are rightfully suspicious that higher taxes will (not) translate into more efficient transportation systems."

Quite right too. Fuel taxes are charges for buying fuel, not buying road use. While New Zealand has only just moved to spend all central government fuel taxes on transport (note this includes public transport, walking and cycling infrastructure), the temptation during hard times will always be to use it for general revenue.

"More and more people are seeing that direct charges offer a better deal for taxpayers than increasing dependence on dysfunctional sources like federal gasoline taxes. This simple but powerful technology unlocks enormous new opportunities for communities BOTH to attract new investment capital AND to manage congestion through variable prices."

So let the private sector in and the market mechanism of price in. Letting them both do it removes the political albatross that doing either wont work well. London's congestion charge is severely hamstrung by the political agenda of Ken Livingstone which gives a significant portion of London traffic a discount or exemption, but also earmarks the money for a lot of buses, many of which carry few people.

Hopefully her initiatives to set free private capital for investment in highways at the federal and state levels, set free the price mechanism for charging for highway use, ending "earmarked" pork barrel funding for roads and getting better results from what federal spending that remains will not be jeopardised by the games of Obama, McCain and Clinton. I am not optimistic, but these baby steps are all in the right direction, and are worth watching. It also shows there is a bit of free market thinking in the Bush administration after all.

ARC plays with your money

The ARC, which became a greatly empowered and enriched entity under Labour, is looking to spend $10 million of Auckland ratepayers' money on Eden Park.

.

Stuff reports "Council chairman Michael Lee said the proposed contribution would come from its investments, not rates" which is still ratepayers' money, he simply wants to soften the blow by claiming rates wont go up as a result - well they will, as there will be less money than there would have been otherwise.

.

The alternative is that $10 million could simply be redistributed to all Auckland ratepayers as a grant. Given around 300,000 or so ratepayers, that extra $30 would be helpful for some, it might even help pay for a ticket to Eden Park - you know, so that people can choose to support it.

Roger Douglas and ACT?

Well if Sir Roger Douglas wants to return to politics and appear on the ACT list, good luck to him. However, it will raise the issue as to whether ACT IS the liberal party that Rodney Hide has been inching it towards. It could be an interesting challenge, after all ACT's original platform had a number of characteristics, that varied from the tempting to the confusing to the disturbing.

The tempting included:

• Zero income tax. That's right, the only tax ACT was pushing back in the early days was GST, with income and company tax gone.
• Privatisation of all government businesses and some activities such as ACC.
• Opening up social services such as health and education to a wide range of choice and competition. People would not have to put up with compulsory die while your wait health care or paying twice for their kids education if they wanted to use independent schools.

The confusing was:

• Absolutely no policy on anything that wasn't economic. For example, justice, law and order, defence, foreign policy, constitutional matters.

The disturbing was:

• Replacing income tax with compulsory private superannuation, compulsory health insurance and education cover. In other words, instead of the state forcing you to pay it to provide services, the state forced you to pay the private sector (although it wasn't always clear if schools would be privatised or not) for the services. Yes it might have been more efficient and more competitive, but it was still compulsion - and absolutely no indication that this was a transitional step which, on balance, I could support.

So let ACT go forward and be rescued by Sir Roger Douglas, but I doubt very much if it will be the liberal party it has aspired to be. Having said that, for some National supporters he might just give them a reason to tick ACT. Given National is largely devoid of policy, ACT can fill part of the vacuum, if only it would fill the vacuum it always has within itself. It is the vacuum that meant ACT had no policy on civil unions, no policy on legalising prostitution and doesn't lead campaigns to get rid of crimes such as blasphemy and sedition.

That, of course, requires a commitment to individual freedom, and only the Libertarianz have that in New Zealand at the moment.

Unfair trade : download the Adam Smith Institute report

It is here

Here are the highlights of the executive summary points, which are even more damning than I expected. 10% of the fairtrade premium goes to the producer, the rest is retail markup:

• Fair trade does not aid economic development. It operates to keep the poor in their place, sustaining uncompetitive farmers on their land and holding back diversification, mechanization, and moves up the value chain. This denies future generations the chance of a better life.
.
• Fair trade is targeted to help landowners, and not the agricultural labourers who suffer the severest poverty. Fairtrade rules actually make it more difficult for labourers to gain permanent, full-time employment.
.
• Four-fifths of the produce sold by Fairtrade-certified farmers ends up in non-Fairtrade goods. At the same time, it is possible that many goods sold as Fairtrade might not actually be Fairtrade at all.
.
• Just 10% of the premium consumers pay for Fairtrade actually goes to the producer. Retailers pocket the rest.

So I challenge the Green Party, and promoters of so called "fair trade", to present the evidence. Show it is more than spreading guilt, feeling good and paying more.

Ask everywhere if your council or employer has hopped onto this bandwagon, why. Send them a copy of the report, and tell them to stop wasting money on this fraud, and instead lobby for free trade, or support a genuine NGO charity in a poorer country.

Fairtrade damned further

Following on from yesterday's reports on Fairtrade, a comment on the Daily Telegraph website makes for sobering reading - about the reality of Fairtrade:

.

"I was the acting Chief Exective of the largest independent coffee and tea trader in the world in the early 1990's and found all that you have mentioned and even worse to be true. I want to highlight some of your points toward the end of your article to make clear that the mega-growers also ship and sell their lower quality beans into the Fairtrade markets through brokers and receive the subsidized "charity price" from the "socially responsible" rather unquestioning public. This is exactly what was meant to be avoided, and it is done in huge volumes. This type of illegal activity is almost impossible to police at the level where it occurs, and where supervision has been pursued it has either failed or been simply too expensive to maintain (especially when the bribes at the storage and market delivery locations are factored in). So what happens is that the small farmers end up competing directly with the mega-producers for "shelf-and-mouth" space, which is a losing battle and exactly the opposite of what was intended to occur. Please, everyone, do not buy Fairtrade unless you (or somone you completely trust) can track your purchase back from the cup in front of you to the fields/farmers that the beans (or other produce) came from."

.

So there you have it, Fairtrade markets get exploited by the large producers that Fairtrade lovers so abhor, and it is difficult to thwart this.

.

One of the most damning criticisms I have of Fairtrade is that it diverts attention from the REAL "fair" trade issue - opening up of markets. Perhaps the most wealth generating and liberating move that could be made for people in developing countries would be for both developed and developing countries to open up their markets.

.

Developed countries need to end export subsidies that mean their producers undercut those from competitors, they also need to end prohibitions, quotas and tariffs on imports so that the most efficient producers have a fair shot at the wealthiest markets. Developing countries need to abolish legal monopolies on imports and infrastructure, open up internal markets to competition and remove prohibitions, quotas and tariffs on imports, especially those that can aid in improving productivity.

.

Fairtrade diverts attention from the fight to remove these barriers to productivity and wealth, by claiming that fiddling with prices can make people wealthier.

.

Of course those in poorer countries should not be maltreated, should not have their property stolen, should not be expected to work in extremely dangerous conditions, but the answers to this are complex, and lie significantly in having governments which apply a rule of law, which protect individual rights and property rights.

.

So what is "fair"? Janet Daley in the Daily Telegraph today notes how the word "Fair" has been misused by the left and is now used as a synonym for equality of wealth, yet is highly destructive.

.

She said:

... even more dangerous is the peculiarly lethal principle of "fairness" that seems to prevail in the NHS (or at least at the National Institute for Health and Clinical Excellence, which determines what treatments the NHS may use): if everyone can't have it, no one should. On this basis, procedures and medications that could save or transform individual lives must be barred if they cannot be made available to every patient who might conceivably benefit from them.

.
Once again, "fair" must mean "the same": so the breast cancer patient who is a young mother may be denied the drug that could lengthen her life because it would not be feasible to provide it for all the breast cancer patients who are over 80, and if she offers to pay for the drug herself she may be barred from receiving any NHS treatment (because it is "unfair" for her to use her own money to buy what others cannot afford).

.
How have we come to accept such vindictive uses of the word "fair"?

.
Of course it was initially the fault of the Left and its special pleading lobbies, which - like some Fairtrade promoters - had a lot to gain. But the Right has been complicit: it has surrendered words like "fairness" and "opportunity" - and accepted caricatures of other words such as "selfish" and "greedy" - with scarcely a murmur of dissent."

.

Indeed. Expect John Key this year, and David Cameron two years from now to talk about fairness a lot - and both will be peddling the status quo.

Fairtrade fails and deceives: Part Two

Like I posted earlier, there are a whole host of reasons why Fairtrade creates perverse incentives and can hurt more than help. However, most of them come down to one major difference between Fairtrade and free trade - Fairtrade corrupts the price mechanism. Prices aren't just about "what it costs to buy something", they are signals about whether to increase or decrease production due to demand, whether to increase or decrease consumption, they inform about quality. They are the culmination of many factors, but ultimately are the culmination of free choices to produce/sell, and to buy. It is the ultimate democracy of the market, more than voting for a politician, it is voting for a product. Sadly too many do not recognise this.

.

Price sends the following key signals, Fairtrade grossly distorts these:

.

1. Prices for produce are partially a function of quality: The better the produce, the better the price, and vice versa. This rewards good farmers, innovative farmers and producers, and penalises those growing in areas less suitable or those less attentive (who should probably do something else).

.
2. Prices are a function of supply and demand: Very low prices for produce reflect over supply relative to demand, which is a signal that some producers should stop producing or shift to other commodities/enhance quality or the like. Paying some regardless of quality and demand, suppresses prices for all others and encourages more to produce, creating a cycle of increased poverty. This particularly hurts those unable to participate in Fairtrade, but even if all were involved in Fairtrade, it would create a glut of unsold produce. Buyers would pay high prices, but would be turning away produce - which wouldn't get paid for, which may end up harming the most productive. Think carefully how much harm this could cause.

.
3. Low prices encourage higher productivity: Producers of low priced products can decide to change what they produce or could become more efficient, so that their margins over cost are better at lower prices. This means taking steps to increase productivity, such as in Brazil where in the coffee sector mechanisation can mean five people can have the productivity of 500. The price is then shared between less people. What do the others do? Well they can produce goods and services that people will pay more for - perhaps Fairtrade activists could help them out to find what these could be rather than trap them in overproduced commodities?

.

4. Paying high prices for Fairtrade products damages sellers of other goods and services: While you’ve been assuaging your conscience buying Fairtrade bananas or coffee, you’ve spent money on those goods that you might have spent on other items. Not only have you lost out on not having those, so has the producer of those missed out on you not buying them. Given the amount of the Fairtrade premium milked by others along the way, you might also question whether the high price didn’t largely benefit your local supermarket as much as the farmer. You might have bought more fruit and vegetables, you might have bought more meat, you could have spent more on clothes, holidays, or paid off your mortgage. In other words, a whole chain of people could benefit from what you save paying market prices.

.

So how long will this Fairtrade charade persist? As long as you keep supporting it and not asking questions. Ask those supporting this why they encourage overproduction of poor quality produce in poor countries. Ask them why they encourage old fashioned means of production that keep people stuck in labour intensive jobs. Ask them how much of the Fairtrade premium goes to retailers and wholesalers, and don't take "not a lot" as an answer, ask for number. Ask why you should pay more to buy one product and then not buy another product, which also helps people making it?

.

Make THEM think too!

Ralph Nader to stand for US Presidency

Hmm well, those on the left will be a little worried he'll rob them of their entitlement at the Presidency, like they think he did in 2000 - but well, I'm not fussed. Frankly, he might help Obama as claims of Obama being on the left will be diluted by Nader standing, as if one can point at Nader and say "hey he doesn't think I'm socialist enough" (or "progressive" as statist thieving is called").

.

Funnily though, Ralph Nader said to NBC according to the Sunday Telegraph "if the Democrats could not win this year by a “landslide” despite his involvement, then “they should just close down". He's probably right.

.

I despise Nader, but he does have principle - he at least gives those who want more government, more taxes, more regulation, destruction of private property rights, surrendering US allies to their enemies and hatred of business, someone to vote for. Who do those who want less government, less tax, more freedom, wider application of private property rights and respect for wealth creation, along with standing with US allies against attack and oppression?

Fairtrade fails and deceives: Part One

"Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their position and have more control over their lives"

That’s the legend sold with Fairtrade, on the Fairtrade Foundation website. It is about to be heavily promoted big time in the UK through Fairtrade Fortnight. However, Fairtrade isn't fair, or good, it is ignoring basic economics and is highly deceptive. It is hindering development far more than it helps.

It is often treated by the likes of the Green Party as an alternative to free trade, so it excuses protectionism (bans and tariffs on imports). You see they are ignorant of economics too.

What Fairtrade actually is about is an ideology of guilt-mongering to brand products on the basis of being “ethical” which are marked up for the “good” of all those involved, grossly distorting price signals and producing perverse results. In the Sunday Telegraph today, the Adam Smith Institute has announced the release of a damning report about “Fairtrade” called, aptly, “Unfair trade”. The Institute states “At best, Fairtrade is a marketing device that does the poor little good. At worst, it may inadvertently be harming some of the planet’s most vulnerable people”.

How so, you say? How can it be unfair to pay producers more for making what they do, in such poor countries? Well the report points to a number of major issues:

• Fairtrade pays farmers to maintain uncompetitive farming methods rather than using modern techniques that can enhance production. Environmentalists might argue that those techniques are more environmentally sustainable, but the Fairtrade Foundation admits it has no programmes to encourage the use of technology in farming, of any kind. It even gives counterproductive advice, encouraging crop mixing, which hinders mechanisation.
• A fraction of the Fairtrade premium charged to consumers reaches the producer, retailers pocket the rest as Fairtrade products are perceived as high yield and less price sensitive. In short, customers are more willing to pay for the “Fairtrade” label, oblivious as to whether the premium reaches the producer. The Fairtrade Foundation insists it ensures farmers are paid more than they would otherwise (no doubt retailers are too!), but do consumers accept the premium paid to everyone is fair?
• Fairtrade only accredits farmers if they join together as co-operatives. Farmers working for Café Britt in Costa Rica are self-employed small business people who own the land they farm, but this is “unacceptable to ideologues at FLO international” Fairtrade’s certifiers. Café Britt has been refused Fairtrade status, even though its Costa Rican farmers have increased incomes by processing, roasting, packaging and branding locally as well. Fairtrade coffee, by contrast, is roasted and packaged in the EU.
• The Fairtrade Foundation is seeking to dominate the trade, by seeking to monopolise the concept of “ethically branded” produce by persuading local authorities, companies, schools and the like to declare themselves “pro Fairtrade” at the expense of other brands claiming the same thing (like Café Britt). This has effectively limited the range of "pro producer" activities as the brand itself limits innovation to that approved by the brand. It also inflates the price by not having competing "fairtrade" brands.
• Fairtrade supporters ignore the real causes of poverty amongst many growers by pursuing an ideological crusade against world market prices and multinational corporations. According to the Sunday Telegraph, coffee growers in Kenya interviewed by Alex Singleton of the Globalisation Institute told of being forced to used the monopoly milling and fertilizer companies, imposed by the state, and the high tariffs on imported tools that could assist production. Of course this could be addressed by free trade, but Fairtrade supporters are not interested in confronting poor country governments.
• Fairtrade encourages poorer quality produce. As many farmers sell produce in both Fairtrade and open markets, farmers will often sell their best produce on the open market to secure the best price (as the open market is quality driven), and sell poorer quality produce on the Fairtrade market, as the price is guaranteed. The effect this has on quality for those selling entirely on the Fairtrade market is questionable at best.

Fairtrade is another example of good intentions paving a road to hell, as it is driven by an ideology distant from reality. It is driven by faith that the world would be a far better place if only those mean old markets paid people more for what they produce (low prices are unfair!!), with even more ideological baggage along with that. Part of it is environmental – the old adage that organic is better than mechanisation, and fertilisers are “bad”. Part of it is simply socialism – companies are bad, so farmers should all be in co-operatives. Beyond that is the basic rejection of the price mechanism.

Ah, you say, but if I want to pay more so that a farmer gets more, shouldn't I be allowed to? Of course you should. I'd let you set fire to your money if you wanted to (you're not allowed), but that doesn't mean you should necessarily feel better, or those that don't buy fairtrade are immoral - the truth may be quite the opposite.

So what does ignoring the price mechanism do?

Report on the environment - how shallow is it?

So what about the "Environment New Zealand 2007" report? Is it a piece of robust well researched analysis that is balanced, or does it contain some of its own spin? Well it is lengthy, so as I said before I've read the transport section - since environmentalists have a particular dedication to that sector - to see what it says.

Most of the chapter on transport contains a lot of statistics, which themselves are quite interesting. Nothing too surprising there, as increases in wealth parallel increases in car ownership, the size of cars owned (which also reflects demographics of baby boomer families wanting larger vehicles) and kilometres driven. This all is a good thing, as it means more people have access to flexible transport options. It also shows that only 5% of trips to work are by public transport, with twice as many people working at home. Funny how the ones taking the most environmentally friendly option don't get subsidised for it (neither do the 6% who walk to work).

However, in with all the stats come some less evidence based claims:

1. “Public transport generally provides a lower-cost and more environmentally friendly transport choice than using a private car.”
.
How? If it is lower cost, then people will use it and pay a fare to recover the fixed and marginal costs of public transport. However, they don’t. In fact 95% don’t find it “lower cost” if you include value of time and comfort. Moreover, it is hardly lower cost when it requires subsidies of between 50% and 70% in many cases. When did you last get a subsidy to drive your car to work? Of course there are externalities, but this claim doesn't say that.

.

2. The environmentally friendly claim is made again “Public transport offers benefits to the environment in the form of less air pollution, lower fuel consumption, and less traffic congestion compared with private transport.”

.

Really? For starters it is a messy statement, triple counting one benefit. Lower fuel consumption isn't an environmental benefit, but the cause of less air pollution, and congestion is about delays, not pollution. So we are talking about air pollution only. Secondly, the government's own Surface Transport Costs and Charges study changes the view on this...

.

That states that an average bus in Auckland at the AM peak emits over 18x the emissions of the average car. Now according to that study, the average car typically has occupancy levels of around 1.4, with buses have average occupancy of around 18 people, which means that cars - on average- emit less pollution per passenger carried than buses on average in Auckland. Now trains ARE cleaner, but they have a bigger problem - train fares are only 30-50% of the cost of running the trains, and it is damned expensive replacing them and building their corridors (which don't get well used).

.

So the claim that public transport IS better for the environment is questionable. The truth is that it depends on it being well patronised, and funnily enough commercially run services tend to be more than subsidised ones, because subsidised ones don't HAVE to make money from fares alone.

.

In fact the Surface Transport Costs and Charges study does expose some of the favourite Green Party myths about transport in New Zealand:

.

1. On a per person basis the same pollution is created by 3 people travelling in a car on a long distance trip as is every person travelling on a bus or a train. So the average family holiday by car is more environmentally friendly than the average family holiday by bus or train.

.

2. The environmental costs of long haul freight, for the primarily rural movements analysed, are similar in magnitude between trucks and trains. On top of that "Current charges (mainly RUC) are in most cases greater than the level of marginal provider/external costs (principally accident externalities and marginal road wear)." So in short, trucks already more than cover the costs they impose in most cases.

.

3. ACC charges significantly over recover the costs of accidents attributable to cars (112%), trucks (587%) and buses (345%), but under recover costs from motor cycle users (18%). So it is nonsense to claim the costs of road accidents are not paid for by road users, except one group.

.

Yes there are problems, congestion is by far the biggest "unpaid "cost, but this is because of poor management of networks and bad investment decisions. Most environmental costs comprise air pollution (which is getting better) and are on local roads (due to slow speeds and exposure to people).

.

It simply isn't as bad as is made out