New Zealand election 2011 - party vote options

Whilst I traditionally write about the political parties and their relative interest in freedom, that might read a bit like a cracked record.  It's obvious Libertarianz is the party most committed to individual liberty, private property rights and economic liberty, setting aside that the Aotearoa Legalise Cannabis Party would leave everything the way it is, except for legalising cannabis.  If freedom matters to you, your vote will really only be a debate between whether you support Libertarianz or ACT (or ALCP if cannabis is all you care about), which is a matter of whether you support a pure vision of individual freedom or a diluted vision, which has a reasonable chance of getting MPs elected.

That decision is one for another post.  For now, I want to quickly go through the parties that are standing lists, with a summary of my view on what they all mean, and their chances, in alphabetical order:

ACT - Most have forgotten that ACT stands for the Association of Consumers and Taxpayers, and I suspect most forget ACT was spawned by defectors from the Labour Party.  As much as the angry left might seek to ex.communicate them all, the simple fact is that Roger Douglas convinced more than David Lange and Richard Prebble of the wisdom of free market reforms.  Stan Rodger, Koro Wetere and yes Phil Goff, along with David Caygill, Michael Bassett and Bill Jefferies all bought into it.  Helen Clark willingly entered Cabinet and supported the reforms at the time.   Since then, ACT has picked up political refugees from National and most recently has been remodelled after a coup against Rodney Hide. 

The decidedly mostly libertarian Don Brash (his remarks on cannabis are notable) faces tension from the more conservative wing of the party in a final dash to make a real difference, given that the past three years have been disappointing (indeed was the greatest achievement voluntary membership of student unions?).   A party vote for ACT is, first and foremost, a vote for Don Brash to help keep the Nats from going backwards (John Banks is not first on the list, but rather fourth), with Catherine Isaac deservedly in second place (notwithstanding the late Roger Kerr's passing), and Federated Farmers' ex.leader Don Nicolson in third.   ACT is finally with a leader who is unafraid to talk publicly about personal freedom (and with considerable personal integrity). An honourable vote for the freedom lover, if you can hold your nose regarding John Banks and the odd policy about Fiji.   My prediction is ACT will scrape through, with three seats, one being Banks.

Alliance - Oh how the mighty have long fallen, and the true believers keep the faith.  Again, I am sure few remember the Alliance was a merger between Jim Anderton's New Labour Party, the Greens, the Democrats (followers of the wacky "Social Credit" faith) and the "original Maori party" Mana Motuhake.  The so-called "Liberal Party" of the erstwhile Gilbert Myles also joined in.  Of course it was the Jim Anderton party, and in 1993 Jim won his seat, along with Maori radical Sandra Lee, and the party gained its highest ever support that year - when those who voted Alliance knew it wouldn't mean the party getting into a position of power with 18.2% of the vote in a First Past the Post election.   The Alliance dropped to 10.1% in 1996 under MMP with 13 seats (including such intellectual giants as Pam Corkery, Liz Gordon and Alamein Kopu), in 1999 it dropped to around 7.7% and 10 seats having lost the Greens in the first divorce - but gaining coalition with Labour.   However, then the solidly socialist ideals proved too much.  In 2002, there was a second divorce, with Jim Anderton setting up his own personality cult party taking his seat with him, leaving the Alliance to the power crazed Laila Harre (that's another story) who failed to get the workers excited enough to do more than steal her billboards, with only 1.3% of the vote.  2005 and 2008 have been disasters. 

The Alliance faces too much competition on the left, with the Greens and now the Mana Maori Party both likely to get elected, why vote Alliance if you're a socialist, unless you're neither a radical environmentalist nor a Maori ultra-nationalist?  Still there is buckets of force and state violence in the manifesto, with much more tax, renationalisation of Telecom, airports and power companies, bans on any serious foreign investment, compulsory wage rises to match inflation and masses of new regulation and massive expansion of welfare.  Hilarious to think people believe this.  However, with the competition it faces, I predict the Alliance will have its worst ever showing and wont manage 1,000 votes this time.  The party list and leadership says it all really.

Aotearoa Legalise Cannabis Party - Michael Appleby perenially standing for legalising cannabis.  No other policies.  Yes, it is one I agree with, so yes if for you freedom just means legalising cannabis, then tick the leaf.  Honourable mention to Richard Goode, number 9 on the list, former Libertarianz candidate and a principled man.  However, the ALCP peaked in 1996 with 1.66% of the vote, since then the Greens have cannibalised the cannabis liberalisation vote, although there was a minor gain in 2008 given the departure of Nandor Tanczos.  As sympathetic as I am to the single issue, I think having MPs who will spend three years on one issue as a waste, and I'm unconvinced that there is any point voting ALCP.  I expect ALCP might pick up a few more votes this time, given Labour has little chance of being in government and the Greens are ignoring the cannabis vote, but the impact will be zero. Yet if ALCP members joined ACT or Libertarianz? (but then they would have to reject the welfare state)

Conservative Party - Effectively the successor to the Christian Heritage Party, Family Party and the Kiwi Party, without the disconcerting branding (and hypocritical leader).  Besides the second party with a Kevin Campbell as candidate (the Alliance has one), and the unremarkable ex. United Future MP Larry Baldock on the list, it has not much of note.  To be fair, I agree with some of what it says, some useful points on welfare and law and order, and there is a distinct lack of much to do with religion, abortion and sex.  However, the war on drugs is on as far as this lot is concerned.  On top of that, Colin Craig's intellectually lazy press release in response to independent candidate Stephen Berry says a lot - a new bunch of control freaks who want to criminalise alcohol consumption.  There is nothing new here.   The law and order emphasis already sits with ACT, along with being tough on welfare and repealing ETS.  What's left is smacking kids and toughening the law on alcohol.  Given the Kiwi Party gained 12,000 or so votes last time, this party may well get quite a few votes, but it wont come near getting a seat in Parliament.  Frankly, unless telling people what to do with their lives is your thing, I can't really see the point of voting Conservative.  I estimate it will pull in about 10,000 votes though as it reaches through churches and with a lot of money to spend on electioneering (and because there are easily that many frustrated busybodies around).

Democrats for Social Credit - Not to be confused with fascists for Social Credit of course.  It is an oddity that New Zealand has sustained a movement based on the bizarre ravings of the vaguely anti-semitic Major Douglas (if you haven't heard of them, don't worry, he only got a following in parts of New Zealand and Canada).  If you study the "A+B theorem" long enough you will go mad.   So are the policies of this lot.  It include some heavy handed xenophobia (foreign investors beware, except this lot have no chance), and yes it is funny money.  You'd have to believe in conspiracies to think this all makes sense and that the only reason it doesn't happen is that there are forces out there stopping it.  It's an embarrassment of New Zealand's political history that doesn't die and was only sustained because nobody else could be bothered sustaining a third party during the hey day of First Past the Post, other than these "true believers".   Ironically, the global financial crisis will have given this lot some backbone, so expect another 1,000 votes or so to be thrown at this, truly one of the religious based parties.  If you encounter one of this lot, try debating and see how far you get before he or she resorts to conspiracy based arguments.

Green Party - The most successful big government, pro-state violence party, which is getting a boost as leftwing statist voters abandon Labour and go for what they really want.  The Greens benefit from a friendly cuddly brand that suggests panda bears, trees, clean air and oceans, whereas behind that is a rampant series of policies designed to tax and regulate, including state supervision of whether newspapers are acting "in the public interest".  If that doesn't send a chill down the spine of any human rights advocate or believer in freedom, what does?  The Greens have advocated nationalisation of children as promoted by neo-Stalinist Cindy Kiro ("cradle to grave monitoring of people"), includes the obnoxious prick Russel Norman, the woolly headed lunatic Catherine Delahunty and with Marxist Keith Locke and control freak Sue Kedgley retiring, adds new lovers of big government such as Eugenie Sage (environmental radical), Sue Bradford acolyte Jan Logie, anti-American Steffan Browning, unionist Denise Roche and spin advisor Holly Walker.  Not a long list of achievers, but certainly a bunch to support the Marxist "we know best" policies the Greens promote.   I suspect the Greens might pull off around 8% of the vote this time, a record amount, but will only do better if they aren't seriously confronted and Mana doesn't siphon off votes on the left (along with ALCP now the Greens are quiet on cannabis).  It will largely depend on how much of a free ride they get from a docile sympathetic media.  There is nothing honourable about voting Green, unless you get a thrill out of pushing other people around and feeling self-satisfied.

Labour Party - The government in waiting, which will still be waiting.  A solidly centre left-wing party, believing in government providing solutions, led by a man who isn't too unsympathetic about ACT, but who has hoisted himself to a career that he probably suspects, has reached its nadir.  Andrew Little, an annoying little leftwing unionist, is the highest placed non-MP on the list.  Labour may claim to be more frugal, but is trying to sell capital gains tax, which will be one of its downfalls.  Still, it has a chance of governing, if a coalition of perhaps the Greens, Maori Party, NZ First (!), Mana and Peter Dunne might be cobbled together.  Labour is partly dependent on unionised civil servants and on welfare beneficiaries who want to keep the tap.  It does have an honourable history of reform.  Let's be honest, Labour makes more reform than National when in power.  However, only in 1984-1990 did it largely do any good on that front, and the results were mixed.   Labour has a large tribal vote, by that I mean hundreds of thousands who vote Labour because it's in the family and because they think the alternative means National - a party they instinctively think is "for the rich" and "against them".  If only many of them started to realise that the only person they can rely on is not a politician, and certainly not a political party that says it will "do things for them", but themselves.  Yet, I think Labour will be lucky to reach 30% this time round, although Helen Clark survived getting 28.2% in 1996, Phil Goff must know his role is almost certainly to be the fall guy.

Libertarianz - Still surviving, still declaring the unabashed belief in the freedom of the individual, private property rights and the right to life, liberty and the pursuit of happiness and private property.  I need not say more, as I've been a member for 13 or so years.  Still the only choice for those who believe in much much smaller government, so government exists to protect people from the initiation of force, not being the chief perpetrator.  Libertarianz face the challenge of ACT led by Don Brash, but the opportunity presented by National looking like a sure thing is for freedom lovers to see they can vote for what they really want.  Indeed, ACT voters who can't stomach John Banks have a natural home in Libertarianz.   Of course I'd like Libertarianz to get 12,000 votes, a 10 fold improvement on 2008 - it would only take a small fraction of past ACT voters to give the tick to freedom.  However, I suspect the actual result will be closer to 1,200 than 12,000.   And no, it is NOT a wasted vote to vote for what you believe in.

Mana - The new far-left party, making the Greens look centrist and the Maori Party look not so racist.  This is Maori nationalist socialism, with massive state transfers from the successful to the not so successful, serious controls on tobacco and alcohol, and if you claim Maori ancestry, expect the state to smile upon you more than others.  It has Annette Sykes, who once noted a risk of terrorism in the quest for Maori sovereignty, although she reassured Maurice Williamson she didn't support such action.  The same woman who said she cheered when she saw the news about 9-11.  Hone Harawira himself once said "Our fight for a better world will only be won . . . when the white man comes home", and who cheered Osama Bin Laden as a "freedom fighter".  This is truly the vile party, the party that isn't just about state violence, but sympathises with those who have used terrorism and has candidates that no only have cheered mass murder, but also empathise with Islamist misogynistic totalitarians.   He said ACT policies are like that of Hitler.  This is the politics of the gutter.  Hone Harawira will no doubt get elected though, but will there be enough votes to get a second candidate?  I think probably not, and if the media did its job thoroughly enough, it would treat this party as what it is - the Zanu PF of New Zealand.  Mana makes the Greens look honourable, which quite frankly in comparison, they are.  A case for abolishing the Maori seats if ever there was one, but that would be painted as being like the Holocaust.

Maori Party - No party list seats going to be won here, but it wont win back Hone's seat and will probably lose another.  National's other partner in government, that wont tolerate talk of colourblind government, but which only exists because of the Maori seats.  Is a party for Maori a racist party? Well it is a nationalist party, and a party that is driven by what it sees as the interests of one race, one nationality, by definition.  Not exactly a friend of freedom.  Essentially a breakaway from Labour that is more focused on pragmatism than political tribalism, but as such will probably suffer from having supported National and the loss of its radical wing to Mana.  3 seats with less than 2% of the vote.

National - If you're happy and you know it, tick National.  So if you don't like change and you thoroughly approve of the confiscation of private property and the grotesque mismanagement of Christchurch since the earthquake, then tick National.  Frankly if you claim to be pro-business, pro-property rights and believe in small government and vote National you're a fucking hypocrite or a fool.  I am convinced this debacle is mostly due to Ministers taking the advice of officials and letting council and central government bureaucrats do as they see fit.   It's a disgrace and is destroying downtown Christchurch.  Don't vote National if you believe in property rights, don't vote National if you are in any city and fear what government will do in an earthquake or volcanic eruption or any other major disaster.   The proof is clear - government will run roughshod over those who fund it.

NZ First - The "Asians are coming" party (with an Asian candidate just to "prove you wrong"), which so disgraced itself in 1996-1998 with politicians who were people so inept they sought and enjoyed the baubles of office, and then again in 2005 when Winston didn't want baubles, then became Minister of Foreign Affairs.  By natural attrition, NZ First will probably grab 3% of the vote this time as the slippery short arse Winston proclaims how "unfair" the media is.  Tired populism without the real commitment or modern campaigning skill to really get there again.

United Future - Peter Dunne might scrape through again, having survived common sense, religious conservatism and supporting Labour and National in government, but it's going to be touch and go whether the party vote drops so far that he is an overhang MP.  Nothing to see here because Dunne will go whatever way the wind blows, so voting United Future means you don't care whether Labour or National is leading a government, and you don't mind either so much you want to change them, which means you don't really have strong views on anything, except maybe Transmission Gully, drugs and the creation of the "award winning" Families Commission (oh and outdoor recreation, lots of policies on that).

So that's it, the full spectrum from authoritarian racists to freedom lovers, and all sorts of blends in between.  Don't vote National, it doesn't deserve it.  Don't vote Labour, you're better than that.  Don't vote for lunatics (Social Credit), control freaks (most of the above) or those seeking to pander to the worst in you (Mana, NZ First).  A party vote should express your political philosophy, what do you want government to do.  If the status quo is National, you have a lot of choices for government to do more, and it would appear only three to do less. 

Asset sales bad, asset purchases good?

A simple, impertinent question, to ask all those on the left of the political spectrum in New Zealand.  Labour, the Greens, Mana, NZ First (socialism can be nationalist) and the Maori Party.

You are all trying to scaremonger, use barely shrouded xenophobia to frighten the average voter into being opposed to the government selling assets.  The first thing you all emphasise is that "foreigners" will take over, with the implication that foreigners will be out to rip off consumers.  Even in competitive sectors (like electricity, which has five suppliers, or aviation where Air NZ ran 100% private for 12 years, including 4 years under a Labour government).  The implication being the foreigners are devils, unlike the benign, beloved New Zealand government.

The second thing you do is contradict yourself.  Whilst you imply that the assets you want to keep provide cheaper services (and goods if you include Solid Energy) than they would if owned by foreign devils, you then say the government will be losing out on lucrative revenue.   Hold on.  This lucrative revenue comes from the consumers you don't want ripped off.   Are you implying the government could make more money from consumers that it does now from these assets (given you think the government making money from selling goods and services is a good thing), or that taxpayers (the people who effectively carry the liabilities, but don't directly carry the benefits) are getting a lower rate of return than they would have done, had you simply gone out and bought them shares on the stockmarket on their behalf (or better yet, let them invest the money themselves)?

However, your biggest contradiction is in your attitude to the two sides of the government asset ledger.  The government buying assets has considerable costs.   

Labour bought Kiwirail at a price well in excess of its market value, and subsequently Labour and National have spent over NZ$750 million - which is greater than the purchase price itself, in buying more "assets" for the business.  This is money that has come from borrowing, it is money from taxpayers pockets, and is money that is almost certainly never going to be recovered ever from them.  The main beneficiaries of this are the foreign (devils they are not now) businesses who manufacture these assets (don't even start claiming you can make tiny short runs of trains in New Zealand when mass production of cars is grotesquely inefficient on the scale of a country this side), and the small number of New Zealand businesses that benefit from rail freight being effectively subsidised (Fonterra, forestry companies, Solid Energy, freight forwarders, shipping companies).  Why is this good?  Don't use words like "strategic", "environment", "future-proofing", use financial measures, like you use for asset sales.   Why can't you?   Why don't you consider the enormous transaction costs of that purchase, and the Air New Zealand transaction? 

Beyond that obvious example, there is Kiwibank, Air New Zealand and indeed any capital expenditure by the state in any sector.   You don't seem to care when the state increases its pool of "assets" (regardless of whether they raise revenue, most don't), you don't care whether consumers get a good deal from those assets or their owners,  you don't care whether taxpayers make money from them.   

In other words, you don't apply the same standard to asset purchases as you seek to apply to asset sales.

Is that because you are all really full-blown socialists who believe in public ownership of the means of production, distribution and exchange, and like the growth of government ownership of the economy?  (surely you don't all think like that?)  

Or is it because you are conveniently using this rather modest policy (yes National doesn't have many that are easy to argue or communicate), one that in almost every OECD country would be considered relatively benign and inconsequential by the political mainstream (far-left and far-right excluded), to bait the rather deep seated xenophobia and "tall poppy" suspicion of quite a few New Zealanders, who are inately suspicious of foreign business people, and subscribe to the Muldoonist paternalistic feeling that you can't really trust business people to "see you right"?

You want to frighten people into thinking that foreigners will rip them off, will "asset strip" these "great assets" and the country will be "worse off" because people like you don't control them and don't spend the money raised by them.  You like them to believe you are better at spending their money than they are, and that you're a kinder gentler business person than they are.

In other words, aren't you all just playing the Winston Peters card?

New Zealand electoral system referendum 2011

I have to admit I have had some difficulties deciding what to do about this one. This will be my second electoral referendum this year, having voted for the UK electoral referendum, which was a straight choice between FPP and a form of PV (FPP won overwhelmingly).

In the 1992 referendum I voted for no change, but also voted for the Preferential Voting system for change. Why? Well having experienced eight solid years of reformist free market governments, I was pretty happy with first past the post. I also saw the minor parties that were heaving in the polls being what they were. A xenophobic personality cult called NZ First and a lying mass of Marxist reality evaders called the Alliance. I also saw the Christian Heritage Party as the only other one sitting on the sidelines and wanted to avoid Graham Capill like (well you fill the gap). FPP looked like it delivered strong stable government, and MMP was backed by everyone who opposed less government, by those who opposed reforms largely now taken for granted. Preferential Voting was the “least worse” option, and after all it could be argued that a representative electoral system ought to have every MP gaining at least 50% of the vote. 

Much has happened since then, but I am hoping that simply writing this post will clarify my own thinking, as I have not yet decided how to vote. Given I studied electoral systems as part of one of my degrees, I think I have a fair background on all of the options, so here goes. 

The first point to remember is that electoral systems are about counting heads, not what is in them. Some people, across the political spectrum, laud democracy as something rather special, when it is, as Winston Churchill once said, the worst form of government ever devised – except for all of the others ever tried over history. The reason for that should be obvious. There is nothing inherently good, right, whether pragmatically or morally, about what the “majority think”. After all, if you accept that the bulk of the population has average intelligence and abilities, then the majority involves pandering to average people. Indeed, it also means that the most successful, able and intelligent (not always the same) are valued as much as the least successful, able and most dim-witted. It doesn’t take too much to figure out that untrammelled democracy can mean the majority vote to oppress the minority and take from them. 

A simple view is it is like three wolves and a sheep voting for what they’ll have for dinner, but if you look at most politicians, most of what they promise during elections is to take from someone to give to another, although they are usually astute enough to focus on the giving, and ignore the taking. If governments can just spent and borrow and pass the bill to the next lot, then inevitably someone will have to make tough decisions. Greece and Italy are examples today of democracy failing, because people voted for politicians who gave them what was unaffordable. Now they don’t want to vote for politicians to make them face reality. Democracy isn’t good at getting politicians to make difficult decisions, or rather decisions that involve not giving people bribes. Mencken said elections are an advance auction of stolen goods. He was right. Imagine if Churchill had asked the British public if they were willing to go to war against Germany. 

So I take a dim view of democracy anyway, in part because I know my opinion has a higher value than anyone else’s. If you don’t think the same way about yours, then you’re probably right as well. I simply don’t accept that my opinion can be reduced to it being counted the same as some half-brain dead nitwit who votes for John Key because “he’s pretty cool”, or who votes for Winston Peters because “she doesn’t like the Asianisation of the country”.

However, democracy DOES have a useful role – which is to remove governments. It is a limit on government because ultimately it offers one control on what governments do, by giving voters the chance to boot them out. In fact, if you look at recent elections, it is clear that 1999, 1990 and 1984 elections were exactly about that. Politicians and activists about electoral systems are almost always driven by their partisan views. The left love MMP because of the success of the Greens and the various Maori parties, the right don’t because it has seen the likes of NZ First emerge, and because ACT has done badly (and the conservative right has failed miserably too). So ignore them all, they are self interested wanting whatever system helps them gain power or blackmail power or whatever.

I have a different approach. To be honest, it is not something I get enthused about, beyond the basics of how the systems deliver different outcomes for the same votes, but also encourage different behaviour. Yet it is a chance to shake things up a little, so what is it I want from an electoral system?

I’d like an electoral system to enable individuals to be removed from Parliament, and MMP isn’t very good at that, because of party lists. Look also at what MMP does to electorate votes. In most seats, they are now considered irrelevant. However, in Epsom, Ohariu and the Maori seats, they are critical. Indeed they allow for an overhang for the Maori Party that over represents its support. Now supporters of MMP will say that these can be dealt with by tweaking it - such as removing the electorate threshold to let party votes count, or abolishing the Maori seats, but these aren't on offer. 

So I will vote to change the system, but what to?

First Past the Post is easy, but it does create constituencies where MPs win with a minority of the vote, and others where they are so dominant that it renders the voting by others to be irrelevant. Electorate boundaries are artificial constructs anyway, so FPP is far from satisfactory. Why should your vote be less valued because you are on one side of the road and not the other? It would make the National Party comfortable, but why is that a good thing?  FPP did bring Muldoon and brought decades of stagnant do nothing government.  It also brought Social Credit as the stubborn third party of weirdness.  However, FPP most of all means that a lot of people who got a minority of votes get power.  No, I'd rather not support that.

Preferential voting does away with the minority voting for a representative, and it also means every vote counts. You can choose someone who doesn’t win, but then rank your options. This has some appeal, but even at best I can’t see me ranking more than 3. Again though, it becomes a matter of electorate boundaries as to whether this works. Yet it would deal to the Epsom, Ohariu, etc problem. In Epsom, those who don’t support John Banks wouldn’t have to vote for the National candidate, but could vote for the candidate they prefer. Similarly those who would prefer the National candidate but would rank Banks second, could do so as well. Ohariu has a similar scenario. Maybe National voters would rank Peter Dunne second and keep him elected, or maybe most Ohariu voters don’t want him and would rank 1st and 2nd those who oppose him. Tauranga could have got rid of Winston Peters quicker as well. So you see, there is some appeal in this option. 

Supplementary Member is a watered down version of MMP, so on the face of it less list seats, but all this does is reduce the effect of the smaller parties. The main advantage I see is that the list seats will reflect party votes, but this wont be affected by the electorate seat wins. Electorates suddenly become important again, and it gets rid of the “win an electorate, get some party seats as well” distortion that exists now. ACT, NZ First and others would apparently need to get 3% of the party vote to get a seat, but as Parliament would be dominated by FPP seats, it would make only a small difference. 

STV gives you multiple member constituencies, but rather big ones. Some will baulk at huge constituencies, but frankly I couldn’t care less. It will make constituencies a little less partisan and parochial, but also means people can call upon multiple MPs to “help them out” (something I haven’t really understood, because I largely wouldn’t trust an MP to fix anything for anyone in a way that would appear to be neutral). It will mean that all MPs are actually accountable to voters directly. Party lists will not predetermine who gets elected, but voters will. What that really means is voters can remove them as well. STV means voters can rank candidates in preference, just like PV, or can just vote for the party’s list of candidates for a constituency. Candidates who get a majority of votes get elected, just like PV, whereas the remainder get elected based on preferences. In conclusion, I believe STV would be worth voting for. It makes all MPs people elected directly, even if from preferences, rather than MPs selected from lists developed by parties. In other words, voters can remove those they don’t like. It makes electorates important again, but greatly increases their size so that parochialism becomes less important. 

There is one test I haven’t applied. Would it get more Libertarianz candidates elected? Well actually no. I am certain FPP and PV would not help that. SM might, because the threshold for a seat would be only around 3% compared to 5% today. STV I don’t believe would make any real difference to MMP on that front. However, I believe the advantages of STV, more generically, outweigh MMP enough to make it worthwhile of some attention.

Finally, what about the concern of coalitions vs one party government? Frankly I don't care that much. One party government can achieve good or bad, coalitions can as well. What matters is who gets elected. Yes MMP and STV both give the Greens a better chance than SM, PV and FPP, but they do the same to ACT and Libertarianz. I'm not sufficiently enamoured by the two big parties to want to trust them with one party government, besides would Helen Clark have acted any differently had she not been in coalition? I doubt it. So I'm going to say vote for change and vote for STV. If you want preferences, then an honourable second choice would be PV, as it would give constituents a bigger chance to remove MPs they don't like than either MMP or FPP. I'd rank SM in third place, as a way of reducing the threshold for small parties, though it also reduces their influence. Finally, I rank FPP last. I simply don't believe returning to two party politics would help advance freedom any more.

Refurbishment

It's been six years since I started blogging, and since I've been getting older, wiser and less angry, I decided it was time for a refresh.  So I've brightened it up and gone through my links and deleted the ones that don't work and relegated those that haven't been updated for ages.  I'm going to add some new ones and new categories, since I am now almost as much British as I am Kiwi. 

oh and in the meantime, it's time to get serious about the New Zealand election, because far too many don't realise that their little chance to have their say, can be an expression of what they really think, not just a choice between two devils.

ACT should push Brash for North Shore

I've said before that ACT under Don Brash could be very promising, but policies to date have been disappointing.

However, let's look at the bizarre spectacle the whole National-ACT scene is as of late.

ACT came from the Backbone Club, a branch of the Labour Party upset that Roger Douglas had been hounded to the boondocks, and had Douglas's book "Unfinished Business" as its bible.  Douglas proposed abolishing income tax, replacing it with GST and a host of compulsory insurance policies for pensions, health care and education.

ACT didn't have a natural leader, until Richard Prebble lost his seat in 1993 to radical Alliance MP Sandra Lee.  ACT by then had started attracting National Party interest after Jim Bolger unceremoniously knifed Ruth Richardson in the back (Bolger after all, having once been an acolyte of Muldoon).  As we fast forward to 2002, John Key entered Parliament at a time when National, under Bill English, had its worse ever election result.  Less than 21% of the vote, and only 27 seats.   Don Brash also entered Parliament at that election, as a list candidate and became Opposition Finance Spokesman.   Of course, just over a year after the appalling result in 2002, Brash went on to lead the National Party, remember that?  Suddenly, National had policies to cut taxes, to remove race as a factor in government and to reduce welfare dependency.   These policies helped rescue National by boosting the vote to 39%, yet most of that swing was from minor parties - by taking some policies from ACT and NZ First (and making the Nats electable so eviscerating United Future), Brash had moved National to have some policies of principle.

Yet a series of gaffes and the media obsession with Nicky Hager's belief that Brash should have told the Exclusive Brethren not to embark on a campaign that was anti-Green Party, saw him ultimately fall on his sword.  National then backtracked on abolishing the Maori seats, and started moving to the centre, whilst ACT had been reduced to a rump under Rodney Hide.

The 2008 election saw the Nats finally get the swing needed to be the largest party, and with confidence and supply agreements with the Maori Party and ACT - created a moderate centre-right government, by and large not touching most policies Labour had implemented.   ACT had done better than expected, but being in government would take its toll.

ACT started to implode for a number of reasons.  Rodney Hide no longer seemed to be the man fighting for less government and lower taxes, but the face of mega-local government in Auckland.  David Garrett proved to be a walking embarrassment and so Hide was rolled, for Brash.

So John Key and Don Brash, once Parliamentary colleagues, both leaders of the same party, now face an election fighting for the same votes.   However, why is John Banks there?   Who knows - especially with the possibility it will be only him or him and Don Brash forming the ACT caucus after the election...

Don Brash on the campaign launch said there were nine policy areas ACT is looking to work on, but does this look any better?

- Pass Spending Cap (People’s Veto) Bill and Regulatory Standards Bill - This would ensure government spending doesn't rise faster than GDP (and indeed would be slower) and help stymy growth in regulation.  Far better than nothing.
- Reduce government spending relative to the size of the economy to enable radical tax reduction, and a lower exchange rate - The simple point that National is spending more than Labour as a proportion of GDP should cause many National voters to think twice about ticking National for the Party vote.   Brash is suggesting company tax reduced to 12.5% and the top income tax rate to 25%.   Both would make a worthwhile difference to the economy.
- Radically reduce bureaucracy - Brash suggests radical reform to the RMA and Local Government Act, whereas National tinkered with the RMA and the Local Government Act wasn't touched.  He also mentioned amending the Bill of Rights Act to include private property rights "possibly".  Not really enough of a commitment for the Nats to care.
- End ETS - New Zealand rightfully shouldn't cripple itself to save the world, when so many others refuse to do so.   
- Give parents effective control over their children’s education - Bulk funding in effect, with more autonomy for state schools.   Still ridiculously limp wristed compared to Ruth Richardson's 1987 National election policy for education, which was essentially replicating Sweden's successful experiment in vouchers.   Let anyone set up a school and let parents take their taxes back and pay for that school.
-  Promote a multi-party consensus on changes to New Zealand Superannuation - The worst thing about a consensus is that the strongest thing that can usually be agreed is fairly weak.   This is virtually worthless, whereas while I did not agree with compulsory superannuation, it had the merit of granting property rights in a retirement income - something that doesn't exist now, and particularly disadvantages the heirs of those who die before retirement.
- Promote a safer, more secure, society - Supporting the right to self defence is important, and so should be seen as a positive move.
- Push for equal legal status for all New Zealanders, irrespective of race  - Enough said, it should be obvious, except of course to the Greens and Maori Party, who think this is racist.
- Re-establish a constructive relationship with Fiji - Sorry?  No.  This obvious pander to the local Fijian vote is absurd.

Yet while that looks mixed, Brash comes out with gems like this rural policy announcement saying "ACT will overhaul the RMA and reinstate the right for property owners to use their land as they see fit, subject to respecting the rights of others. "  Beautiful stuff for those of us who believe in property rights, but is it a case of the policy being right when Lindsay Perigo is drafting the press releases?

For me ACT should keep things simple. 

It should be about property rights - which means not only the RMA, but about businesses doing as they see fit, about lower taxes and about the right to self defence.

It should be about moving public services into the hands of consumers and suppliers.  So that people can take their taxpayer funding of education to new schools and educational institutions set up freely.  The same with healthcare and pensions.

It should be about personal rights.  That means property rights, but also recognising that people should feel free to live their lives as they see fit,  and that less government promotes more personal responsibility.  It also means treating laws on personal matters, like drug use, tobacco and alcohol, as being up to adults.   ACT should, at least, support medicinal use of cannabis, and taking a radical look at drug laws and whether they are working.

Finally it should be one law for all.  That does not mean denying people national identity, or acknowledging Maori as indigenous people, but it does mean the state is colourblind. 

ACT is relying on John Banks, a man who I don't believe has any real belief in any of those concepts.   It should rely on Don Brash.

Don Brash is standing in North Shore, against no other than Maggie Barry.   It doesn't take two seconds to figure out which of those two is the one with intellect and the one to be more effective for North Shore. 

ACT should be pushing Brash for North Shore.  With Wayne Mapp's retirement, North Shore would be far better represented by a man who would be Party Leader and also be elected in his own right as an MP - by Don Brash.

Then ACT wouldn't be relying on John Banks.

Forget nine points, stick to four:
- It's your life
- It's your property
- One law for all
- Services for the public, not the public service.

and Brash for North Shore. 

It's too late to remove Banks and it would look awful to do so at this stage, but the show should be the Don Brash show.   Besides, does New Zealand need someone in Parliament whose main contribution in recent years has been to warm the hearts of pensioners who like gardening?

The failings of unconstrained liberal democracy

There is literally no excuse for newspapers and news broadcasters not to be filled to the brim with substantive global news.  However, as there is always trivia about celebrities, sports and the fetish for disaster porn, these will always come first, yet 2011 is becoming one of those years that may go down in history as marking a turning point.   It is a time when critical decisions are needed by elected politicians, most of whom are not really up to the job.   The difficulty comes from the nature of liberal democracy.

It takes a certain type of person to stand for elected office.  At best they are well educated, have benign intent (in their eyes), are willing to take advice, and will carefully weigh up the options before choosing policies that appear to generate more good than harm.   In fact, that's what voters by and large expect.

What people get is something else.  Despite the ravings of tabloid media and talkback radio, political office in and of itself doesn't pay well for the hours that politicians are expected to put in.  That is, if you're professional or entrepreneurial.  However, if you're Georgina Beyer, Ken Livingstone, Alamein Kopu, George Osborne, Jack Elder, Diane Abbott, Danny Alexander or Jami-Lee Ross (yes go read up on them to see what genius is behind them), then this is the pinnacle.  You're unlikely to be earning that much doing anything else.  If you want more, you need to be at best planning your future career (consider Simon Power), or to be corrupt.

Your first and biggest concern as a politician is getting elected, which means telling people what you think they want to hear.  It is an exercise in marketing, and to be fair most voters are either loyal customers of a single party (and so uninterested in results, but act tribally), or make the decision based on hunches and feelings, or single policies that tap their emotions.   The number of voters who thing of the long term, and use any combination of economic or scientific analysis (even flawed) to decide who to vote for is insignificant, and engaging with those who do, one on one, is a waste of any politician's time.   Avoiding conflict and avoiding difficult decisions is what they do, because to do so means upsetting people, and those are people you need for support.  

The Eurozone crisis is entirely because of that factor.  Politicians in Greece, Italy, Spain, Portugal and other European countries promised voters a lot of "free" things, whether it be healthcare, education, pensions, welfare, housing, or at least lots of cheap things.  They offered more, year in year out, they promised more, spent more money, didn't ask for it in taxes, and simply borrowed.  There were banks that were willing to loan because it was governments borrowing - Eurozone governments - the risk was perceived to be minimal, so they ignored it.

The politicians offered something for nothing, the voters took it and the bankers loaned to the politicians, in a cycle of delusion that is now breaking apart - because the bankers have finally figured it out.

It isn't confined to the Eurozone either.  The US is finally facing the same hiccup, the UK became close to it, all because for year in year out, governments overspent.

Some on the left will glibly blame it all on "capitalism" and "the banks".   Uncontrolled growth in government spending is about as capitalist as Che Guevara.  The blame banks get is for lending to governments in the first place, although you can be sure if they did not, that they'd be blamed for being "obstructive" and not "socially minded", although there are quite a few countries that find it difficult to borrow on international markets.

Certainly the bank bailouts tipped many government finances over the edge in terms of sheer debt load, particularly Ireland.   However, the counter-factual is rarely argued.  If banks were not bailed out, and they were allowed to collapse, and people faced their businesses, properties and deposits being lost, then would that have been preferable?  I'd argue that yes, there should have been a process for the orderly collapse of banks.  However, neither Bush nor Obama, nor Brown, nor Sarkozy nor Merkel, wanted to contemplate that.   

The arguments about debt claim it is all about the banks, but a cursory look at public debt before the financial crisis shows that is simply untrue.  Greece, Italy, the UK and the United States all had growing public debt burdens, the bank bailouts made it worse, but had the public finances for any of those countries been in a far better state - the current crisis would simply not exist.

So now there is the spectre of Western European governments asking a one-party state - the People's Republic of China - to "invest" in lending to their spendthrift governments.   The idea that the Communist Party of China (which, by the way, runs an economy that has a smaller state sector than most Western countries) will take lessons or instructions that suggest liberal democracy has anything to teach it, is laughable.

The one lesson unconstrained liberal democracy is teaching the rest of the world is that in democracies voters are short term thinkers, politicians are driven by popularity and placating whatever rent seekers are the loudest - and the result is the same as if you had a teenager with a credit card seeking to be popular with his or her friends. 

In other words, Europe and the United States are telling the dictatorships in China, Russia, the Middle East, Asia and Africa that their way, is the path to economic ruin. 

Even those who were elected on the basis of dealing with this are largely impotent for they face the opposition from the rent seekers who benefit from the borrowing state.   The Tea Party Republicans in the US who were voted in on a platform of smaller government and less tax, are finding it rather difficult to cut spending.

The political landscape of liberal democracies has evolved to be dominated by the middle ground, that which Tony Blair called "the third way", or which Bill Clinton embraced.  It is naturally "conservative" in that it isn't dominated by radical reform, but is fundamentally corporatist.  It tinkers with the free market, meddles with business, regulates and taxes and tries to manipulate the economy, whilst maintaining a dominant public sector role in areas such as education, health and retirement incomes.  It is neither old left, nor free market "right".   It did require economic growth to keep tax revenues up to sustain budget deficits, and for the Eurozone, for cheap credit to remain on tap, forever.  The brief interlude of budget surpluses in the US in the late 1990s were quickly eaten up by the post 9/11 hit to economic growth, and then devoured as Bush spent up on wars, and everything else as well!

The problem with this model is that it was incapable of responding to the financial crisis, which it begat because at the heart of this model was belief that centrally managed fiat banking could deal to "boom and bust", and because in the US the tinkering was on a grand scale with Fannie Mae and Freddie Mac as the state owned mortgage guarantor, whilst banks were required to lend to those who would not otherwise be able to borrow.   When this corporatist approach unwound because of the property bubble IT begat, and banks faced collapse, the "middle way" suddenly bolted to the left.  Bureaucrats and politicians decided doing something was necessary, so they printed and borrowed. 

The choice was to be Keynesian - or not.  To be Keynesian, was to spend borrowed money and print some more, in the hope it could generate economic growth.  The problem was that public debt in a few countries looked so large, that banks, who had been warned about being profligate (and faced considerable new rules on the amount of leverage they could have), could see enormous risk, particularly in parts of the Eurozone, but also the US and the UK.

Now in the Eurozone reality is hitting home.  The Greek government needs to either cut spending by around 20%, or hike taxes by the same amount or some combination of either to avoid a crisis.  It is unable to do so, because Greek taxpayers are fed up.  Half of them are rent seekers who have been enjoying bank subsidised jobs and benefits, the rest are tax avoiders who don't want to pay for the rent seekers.  Italy is little different.  The German government faces telling German taxpayers to pay more because the Greeks and Italians have been living on borrowed money and they wont pay it back.

There no longer is a middle way.   Either governments live within their means, cutting back or raising taxes, or other governments bail them out.

It is either less government, more free markets and more of people paying for what they use.

Or it is more government, more transfers from those who are productive (in this case Germans, but also Austrians, as well as Dutch, Finnish and French people), to those who are not. 

Merkel and Sarkozy are looking for a middle way, of the banks that loaned to Greece and Italy taking a big hit, of Greek and Italian taxpayers getting less for more, and for German and French taxpayers to save their own banks.  Yet even this wont wash.  Obama also can't find a middle way, because he can't convince enough Americans to pay more tax, while he is unwilling to cut spending on anywhere remotely near the scale he needs to.

For the period from 1989 to 2011, it could reasonably be argued that mixed economy liberal democracies had "won" the battle of ideas, both in terms of economics, but also socially.   The moral and economic bankruptcy of "actually existing socialism" was obvious,  China and Vietnam already knew the economic bankruptcy of it and had started to change.   The moral dimension of freedom vs. dictatorship had won, at the time.  However, since then, it has been challenged.

Russia has seen some measure of economic success, coinciding with authoritarianism, as it has ridden on a wave of community price booms for energy.  China has gone from strength to strength to be the second largest economy in the world.  Meanwhile, Western Europe has been sclerotic, and the US, following the bubble of productivity and innovation arising from IT and telecommunications, is looking like it did in the 1970s - morose and stagnant.

The trend towards more personal freedom continues.  The Arab Spring is, in one part, about that, as people throw off the shackles of dictatorships, although whether they elect their new shackles is a moot point.  China too, is experiencing freedom of speech and debate unseen in over 60 years, although there are still lines that are dangerous for citizens to cross.

However, on economics, mixed "third way" economies are now seen to be wanting.   It is, in part, due to fiat banking (the inflationary bubble created by printing money is only starting now to apper), but is moreso due to politicians being incapable of being fiscally prudent.   In the US the debate is becoming one about whether Americans want a smaller government, with lower taxes, but less benefits/subsidies, or a bigger government, with higher taxes (for a few), more like Europe.  At least there, the debate is being opened up.  In Europe, the debate is yet to be entered into, but the far-left and far-right are starting to sound off where they want it to be.  The far left want to squeeze business and run big governments, the far-right want to reassert national sovereignty and not pay for bankrupt foreign economies.

The centre is floundering about wanting a "solution", but given their philosophical base is neither to increase taxes, nor dramatically shrink the state - they have no clear answer to fiscal profligacy.  Their bumbling attempt to discuss a financial transactions' tax being inept, and largely pandering to the far-left desire for blood, theft and destruction of the financial sector.

You see, it comes down to politicians.  Most do not understand economics, let alone finance.  A TV journalist some months ago asked a cross section of UK MPs what the difference is between the deficit and debt, and many had no clue.  Why would anyone trust any of them to spend your money or borrow in your name?

They do not know what they are doing, and the voters do not understand what is going on, and will vote based on short term imperatives rather than long term ones.

In other words, liberal democracies can't find an answer because they are inherently incapable of making difficult decisions that must be made.

In this climate, is it any wonder that China is looking on to see the eclipse of the West and the slow withdrawal of Pax Americana from the world, as Obama withdraws from Iraq, seeks withdrawal from Afghanistan, plays a back seat role in Libya, and seems ready to leave the world to others, whilst seeking to follow the European example on economics.

The only way this will be confronted is if voters decide they will no longer expect politicians to deliver them answers, but that government should stick to what it is good at, and do less, and tax less.

The alternative is what the "Occupy" lot incoherently seem to want, which is more government, more taxes on those they don't like, to confiscate property and bugger the consequences.

You see the approach being taken now, of spending a little less and taxing a little more, doesn't deliver an environment for economic growth and more jobs, nor does it meet the demands for blood and money that the far-left are bullying for, because it maintains the corporatist state - that borrows and taxes to give privilege to some.

Meanwhile, figure out for yourself who represents what view in the New Zealand elections and in mainstream politics everywhere else.  Good luck at finding those who aren't of the middle ground or the grow the government mob, or indeed journalists who can understand it at all.

Fear unbridled government? The answer isn't a coalition

When Geoffrey Palmer wrote "Unbridled Power" his concern was primarily about the lack of constitutional limits on government in New Zealand, and how Cabinet would dominate single party government which itself would almost always dominate Parliament.   Jonathan Milne has taken the latter tack in his latest article in the NZ Herald.  His hypothesis is that small parties will do badly this election, and that there is a real chance of something "dreadful" - one party government.

Of course he might think he looks like he is making a rather generic point about the advantages of coalitions and minority governments compared to single party majority government.   Yet he hardly hides his colours at all.  He doesn't pick on Rob Muldoon "banning inflation", spending billions on Think Big and bribing voters with national superannuation, he doesn't pick on Norman Kirk for creating big government businesses, expanding the welfare state and greatly expanding subsidies for government trading departments.  He wouldn't.  You see he isn't exactly an economist, or a historian or a political scientist, he's a leftwing reporter.  What other explanation is there for this comment:

The controversial free market reforms of the Rogernomics era were pushed through by the all-powerful fourth Labour Government without warning or by-your-leave. Similarly, there were few fetters on the National Government when Ruth Richardson presented her slash-and-burn Mother of All Budgets. No presidential veto, no senate or upper house sitting in oversight, and no small coalition partners to soften the hard edges of these governments.

All governments are "controversial", but you'd only say that if you thought that.  Except Jonathan is naive.  In 1987 Labour asked for a mandate to continue the reforms, got one and continued.   "Softening the hard edges" is the sort of comment one would only make if you disapprove, and those who disapproved were Jim Anderton and Winston Peters, and their bands of socialist, nationalist and xenophobic state worshippers they founded.

I opposed MMP in 1993 primarily because I had seen the previous two governments implement the most politically courageous policies in modern history.   Governments that cut subsidies, cut public spending, including cutting benefits.  They restructured government departments, made thousands redundant and privatised in the face of venal xenophobic hysteria.  Farmers, state sector workers, beneficiaries, pensioners and unemployed people were unhappy at the time, not a state of affairs most political parties are keen to promote if they want to be re-elected.  Contrast that era to the smile and wave of John Key, and Helen Clark's middle class welfare, and cash thrown at various interest groups (and craven acceptance of support from Winston Peters).

Even at the time of the 1984-1993 governments, the "hard edges" had plenty going the other way.  The fourth Labour Government opened up the Treaty of Waitangi settlement process, created bureaucracies for conservation, the environment, womens' affairs, youth affairs, Pacific Island affairs, and sowed the seeds for the Bolger government to pass the RMA.  Foreign policy saw New Zealand effectively step away from being aligned with the United States in the Cold War.   Education and health care remained firmly within the grip of the state sector and the rent seeking unions that dominated them. 

For Jonathan, stopping governments doing all they want is a good thing.  Which of course would be all very well, if what they wanted to do is more.  However, Jonathan's opposition to single party government is not that, indeed he rejects it because of history when governments were deliberately pulling back from spending money they didn't have, and telling people what to do.

He showed a childish thrill to think of the Greens and National working together on transport policy - because two conflicting ideologies must produce the best results.   He mentions NZ First, ACT,  Jim Anderton, Peter Dunne and the Maori Party, as if he misses them having influence (remember the positive influence of NZ First after 1996?).

Somehow he links Brian Tamaki to Peter Dunne, and then concludes while the Greens might not be good on "roading policy", one party government is "far worse", and his only evidence is the reforms of the 80s and early 90s.   That's just being rather vacuous.

Frankly, if either National or Labour were committed to privatisation, commercialisation, cutting government spending and winding back the state, I'd say bring on one party government.  However a Labour-Green-Maori-Mana government would be a four headed hydra of disaster, which would easily spook foreign investors and send more aspiring New Zealanders abroad. 

Unfortunately Jonathan hasn't really bothered to check what the two main parties have on offer.  National is hardly driven by a desire to engage in major reforms, it is instinctively conservative.  Labour is hardly seeking to engage in radical reforms, although is at least masochistically more interesting than National.

So no Jonathan, one party government after this election wont be perilous or dreadful, it will be "meet your new boss, same as old boss".  Politicians wanting to boss people around, spend their money while saying "it's good for you".  The only difference with a coalition is that the flavour changes.  Maybe if National needed ACT, and ACT gained 10 seats, there might be something more radical - presumably that's when Jonathan gets upset because that's not what he meant.  You see to him, like so many reporters in New Zealand, government should be there to fix problems, not get out of the way.

So you're having an election

Get a feeling it is a little like 2002?

Elections in New Zealand haven't been the same since 1996 when MMP meant that "winning" wasn't all it used to be.  However, sadly, neither the media nor the public have fully got to grips with it.  The simple truth is that it is extremely unlikely that National will get to govern alone, just as it was the same for Labour in 2002.  

A cycle has commenced.  In 1999, 2002 and 2005 Labour cobbled together coalitions, in 2008 National did, and it will likely do so again.  However, it cannot be guaranteed.  You see after one term, with a media essentially presuming a simple result, voters get complacent.

National will desperately want to ensure it gets a good turnout, for it will fear a low turnout will mean things are far closer than usual.  Bear in mind MMP means that it is getting party vote out that counts, and that means all electorates.  The flipside is that Labour will also be seeking a turnout, when it knows most assume it cannot win.

Yet it isn't quite as simple as that.  2002 is an object lesson for the two main parties, because it saw a significant shift in votes.

In 2002, Labour saw polling say it might win an absolute majority, yet it gained only a small swing of 2.5% in its favour, primarily because it gained at the expense of the Alliance.   National was decimated.

One interpretation of what happened was that support for the government, which had been slim, shifted around a bit, from the Alliance to Labour and the Greens.  There isn't quite the same parallel for National.  The Maori Party isn't a natural ally, and ACT is more likely to face fear of oblivion seeing its support go to National.

In 2002, the decimation of National was due to an assessment by many of its supporters that it had no chance, so they voted for United Future to give Labour a tolerable coalition partner.  This time, it is Labour that may be seen as having little chance, but Labour supporters aren't going to back Peter Dunne the same way (why would they? he is back to being a one man band), unless he gets some lucky media traction.

Some Labour supporters may choose to vote Green for the same reason ACT did better in 1999 and 2002, because they prefer a more principled opposition. 

This time round there is another dynamic - the Maori seats.

Mana Maori is making them a three horse race, and my pick is that it benefits National. 

You see, Mana Maori is more likely to take votes from the Maori Party than Labour.  Odds are this will not see Mana Maori pick up seats besides Hone's one, but could decimate the Maori Party.  It could eliminate the Maori Party overhang (but create a one seat one for Mana Maori), which can only benefit National.  Moreover, if Labour has a clean sweep of the Maori seats, the overhang is gone, but it only takes seats away from Labour's list allocation.  It can only be good for National.

Except of course, if ACT doesn't get Epsom or North Shore, and National is just short of 60, and Peter Dunne isn't enough.

National is playing its traditional game, being the classic "do next to nothing" party that saw it win most elections since the war.   It impresses the masses who like the smile and wave.  Labour will get out its core vote of public servants, low level aspirational control freaks, beneficiaries and some of the working classes.   What's left is who votes for the other parties.

The Greens have the clearest consistent brand for those who want someone else to do the thinking for them, or at least the emotive neo-Marxist posturing.  It's the party for people who believe the end is nigh, but also those who think they know best for other people.  The classic authoritarian party.

ACT is on its last legs, on life support, but still offers - just - a more "National than National" party with policies that are closer to National's own principles.

The Maori Party has shed its most racist, Marxist, pro-violence wing in the form of the Mana Maori Party.  However, will it have satisfied its supporters?  Has it handed them enough in coalition?

Beyond that, we are saying bye bye to Jim Anderton's personality cult party as he retires, and Winston Peters is having another go at attracting malcontents, but most of his past voters have passed away.   Peter Dunne faces his repeated challenge from two sides, and the only minor parties that remain outside that which have survived are the Alliance retards, Libertarianz and the ALCP.

Of that lot, only three parties offer any hope of less government.  ACT has a leader who talks the talk, and policies that mostly face the right way.  Libertarianz is consistently pro-freedom, with a nicely refreshed lineup, and ALCP maintains its single policy.

I hope to do a bit of a quick review of the main people on the party lists and the electorates, if the psephologist in me gets the time.

Greece is to collapse under the weight of its own reality evasion

Greek Prime Minister George Papandreao's decision to hold a referendum on the "bailout" plan agreed with other Eurozone countries has sealed the final act for Greece's democratic socialist attempt to live a life that it wasn't willing to pay for, and should serve as a warning for the economic catastrophe that the Euro project has become.

Let's recap what happened.

Since Greece became a liberal democracy in the 1970s, it has run policies that could broadly be called "democratic socialism".  A typical right/left democracy saw little difference between policies, but the Communist Party consistently would come third.  Progressively more generous welfare policies and a growing public sector, combined with a lackadaisical approach to tax collection, and feather bedding the armed forces.  Meanwhile, the Drachma devalued again and again.

Greece joined the EEC in 1981 and the money came rolling in.  As the poorest Member State it gained funding to build infrastructure, generous agricultural subsidies and access to markets in Western Europe.  The typical EU type deal was made.  Greece gained new markets for its goods and services, grew tourism and attracted investment, whilst the money flowed in from Brussels to prop up a burgeoning public sector, inefficient state companies (Olympic Airways being one of the perpetually near bankrupt ones). 

The delusion worked for a while, and then Greece got the next offer - get a Western European currency.  The Euro.  Greek governments lied their way into the Euro, not really having a 3% budget deficit (hiding defence and hospital spending) at all.  So out went the Drachma, and Greece borrowed - more and more.  Borrowing for the Olympics in 2004, and this time credit flowed freely.   The Euro was being loaned out at interest rates reflecting the economic environment of the dominant Euro Member States - Germany and France.  So Greece was receiving credit not on the basis of running large budget deficit and public debt approaching 100% of GDP, but rather running low budget deficits with a reformed economy - like Germany.

Greek government kept getting elected, by Greek voters, to give them their pork, at little cost to them.  Ridiculously generous pensions, a public sector where nobody could legally be fired under the constitution, a bloated armed forces that had not changed since the Cold War (nor since Bulgaria became an EU Member State rather than the front line of the Red Army), and a tax system that was a bit of a joke, saw Greece slip slide its way to bankruptcy, as banks in France, Germany and to a lesser extent Britain and elsewhere, lent to the Greek government believing all was well - because it was the Euro.  A currency those banks believed would be government guaranteed.

They didn't factor on a Eurozone government going under.

Greece is to all intents and purposes, bankrupt.  Its austerity programme of cutting spending and increasing taxes only slices off some of the overspending.  It cuts the budget deficit NOT the debt.  Think of it as you being on the brink of being personally bankrupt and you've managed to cut your spending to be only 5% higher than your income rather than 10%.  You still need to borrow.

So who is to blame?  Well, quite a few.  Greek voters, Greek politicians, Eurozone governments, the European Commission and Greece's creditors all carry some blame.

Greek voters

If you believe in liberal representative democracy, then Greek voters are to blame.  They voted for politicians who gave them public spending that was unaffordable.   They didn't support politicians who believed in containing the size of government or even increasing taxes to pay for their socialist state.   They benefited from the loans taken out in their name, they happily evaded taxes, but they didn't evade taking advantage of the money spent by their government.   Now they are unhappy about facing reality - the reality that they have been living beyond their means, or at least, supporting governments that have been doing so.   For so many they need only look in the mirror to find who to blame.

Greek governments

Many Greek voters and citizens obviously did not support the government, and were not public servants or major users of the profligate Greek state.  They can rightfully blame Greek politicians for lying.  Lying to join the Eurozone, lying about the state of the books and engaging in massive reality evasion at elections.   It is telling how so few Greeks are pointing fingers at past Prime Ministers and Finance Ministers for their combined failure to confront the public finances, and most of all in colluding with the state sector to lie - and I do mean lie - about the budget deficit to join the Euro.   That big lie is now costing lives and livelihoods.   Greek citizens should be baying for the blood of these lowlifes - lowlifes who now live off the back of generous political pensions.   Greek politicians didn't just evade reality, they denied it and covered it up - for shame.

Eurozone governments

Greek governments would not have been facilitated down this path had Eurozone governments not allowed it to happen.   They could have shown greater due diligence with Euro membership, but the Euro is a political project, driven by France, accepted by Germany, to bring European economies together.  It is not an economics project, but one driven by hubris, pushed by people sharing a democratic socialist vision of the EU being a fortress of common laws, taxes and generous business and personal welfare states.   They wanted it to be central to EU membership, and France itself has almost always failed to meet the Eurozone membership test itself, of a budget deficit no greater than 3% of GDP.   They supported lending to Greece, supported Greece's fiscal profligacy (given their own) and engaged in their own wilful blindness of both Greece and their own failures to meet their own disciplines.   Reality ignored

European Commission

The EC got Greece hooked on the corporate and state welfare of its subsidy programmes and cohesion fund.  It supported Greece's growth of the state and addiction to the European project as part of its political culture.  The EC is adept at covering up its own embarrassments and at pretending things are what they are not.  The EC wont admit failure, wont admit the inherent immorality of its project of transferring wealth from the earned to the unearned, and of power from Member States to the unelected Council and Commission.   The European Central Bank is, of course, central to this.

Greek creditors

The banks that loaned to Greece believed they were lending to a watertight debtor.  They believed German, French, Dutch and other Eurozone taxpayers would cough up, if anything went wrong.  They facilitated Greece's overspending and expected to make money out of making taxpayers pay up - whether they be Greek, or other Europeans.  They pretended governments couldn't go bankrupt, the "bailout" deal is based on them swallowing a 50% write off of the debt borrowed to date.

What now?

The bailout is doomed, quite simply because Greece is still overspending, its economy is on its knees and the banks that have loaned to Greece will be forced to face a larger than 50% cut in their loans.   It isn't enough and can't be enough.  France and Germany are pretending they can fool the markets into having confidence, through the construction of complicated derivative lending instruments, akin to those blamed for hiding risk before the financial crisis of 2008.   

However, the collapse will come from the referendum on the bailout.

If Greek voters choose yes, they face short and medium term pain, in the form of a vastly smaller state and longer term pain, by being hooked to the Euro.   They could take a bitter pill of reducing their failed democratic socialist state and become a reformed, free market economy that is competitive, following the reforms of its northern neighbours (e.g Bulgaria).   However, I wouldn't count on it.

If they choose no, as it widely expected, then Greece will default.  It will be unable to borrow, the government will effectively shut down many activities, and is likely to be forced out of the Eurozone, meaning it will have to either create its own junk currency, or operate in Euros independent of the European Central Bank.  The price of that will be severe in the short term.  Any Greek resident who isn't moving their money into a foreign bank in Euros is gambling, because Greek banks will collapse.  Greece will face an Argentine style default so will have no budget deficits after that, but then it could reawake and be revitalised.

The Greece experiment in profligate democratic socialism will have been dumped - and eyes will be on the Italian, Portuguese, Spanish, Belgian and French varieties.

Oh and despite the vapid plaintiff words of some protestors, most of the blame for all of this lies not with the private sector but the political classes, and ultimately, the majority of voters.

The Eurozone crisis is not a crisis of capitalism - it is the dying gasps of a grand project of democratic socialism, and the first - weakest - branch of that tree is about to fall off.

I want to vote ACT

but I'm unconvinced.

Rodney Hide's record the past three years has been bitterly disappointing.  I am glad I didn't vote ACT in 2008, for I'd be, in part, to blame for the gargantuan planners' wet dream called Auckland Council.  

However, ACT has purged Rodney Hide and installed Don Brash, a man for whom I have immense respect, a man who almost single-handedly rescued National from near oblivion to near victory in 2005 - a mission that failed because of the National Party and some ill-advised campaigning.

The candidates are largely a fairly impressive lot.  Brash and Isaac top the bill rightfully, but there are two issues.

Firstly is John Banks.  How he got admitted to be a candidate is beyond me.  Peter Cresswell says much of what I think of him.  It's not that he's a bad man, he is certainly interesting, but he is not a lover of individual freedom.   Indeed, his profligacy as Mayor (remember how he once opposed the grand plans for Auckland's rail network then supported them?) is not what you'd want from someone seeking to keep the National Party's spending in check.  Actually, as a man who held Rob Muldoon as a figure of respect, you'd already be wondering why he could ever be trusted to help reduce the size of the state, and that's ignoring his vocal and solid opposition to the Homosexual Law Reform Bill in the 1980s.  

Now it wouldn't be so bad if he was an electorate candidate in Whangarei, and lower down the list, but he isn't.  He is ACT's lifeline.  ACT is betting on him winning Epsom to stay in power, so ACT will owe John Banks everything.  Now I'd like to think the people of North Shore might choose Don Brash instead, but Banks is still number three on the list.   In other words, he is hard to hide from.

Choosing Brash as leader appears to be in part a purge of gutlessness and the remnants of pro-state conservatism, but why include John Banks?  Nobody can pretend he has a profound belief in smaller government and individual liberty.  Similarly, what delusion can ACT have that Banks is some sort of high profile "celebrity" candidate, in the mould that Hone Harawira, Jim Anderton, Winston Peters and Richard Prebble have been for minor parties before?

Let's say I swallow Banks and look at policy.  How does that look?  Let me rank the policies out of 5.  1 being virtually worthless. There are 18 policy areas, possible score of 90.

Defence - Positively allowing nuclear powered ships, and strengthening the armed forces, including rebuilding relationships with the US and Australia.  4 out of 5.

Economy - Cut spending to 29% of GDP (the level Labour left the country at in 2005), cap spending increases to inflation and GDP, cut regulation and privatise.  Hardly bold.  Nothing on flat tax. 2 out of 5.

Education - Increase school autonomy, increase state funding of independent schools, increase school choice in assessment systems, more scholarships for underprivileged children.  Less ambitious than National's 1987 manifesto.  1 out of 5

ETS - Remove agriculture from ETS and suspend the rest till majority of trading partners have caught up.  A quite respectable approach.  4 out of 5

Environment - Push road pricing, market pricing of water, support mineral exploration and "acknowledge" the role of voluntary groups.   With RMA elsewhere, this largely looks positive.  4 out of 5

Health - Encourage competition, target subsidies on the poor, reduce taxes so people can buy health insurance, review occupational licensing and reduce bureaucracy.  Promising, but a bit vague.  3 out of 5.

Immigration - Lower administrative barriers to entry, favour productive workers, ensure it is no drain on the welfare state.  Reasonably positive, although somewhat vague.  3 out of 5

Law and order - Review procedures around self-defence, consider re-introducing Sentencing Council, sanctions for prisoners who reject opportunities for rehab/education, "broken windows" approach, victims to receive reparation payments.  Nothing on victimless crimes or National's authoritarian approach to drugs.  1 out of 5.

Local government - Pressure local government to focus on core role, reduce restrictive land use planning.  Less policy than before.  Such an opportunity to reform!  1 out of 5

One law for all - Allow more choice in education and health (yet not really mentioned much in either policy), accelerate Treaty compensation process, remove RMA requirement to consult by race, no Maori seats, no local authority Maori seats and no statutory boards.  It goes much of the way there, but could be clearer. 4 out of 5

Primary industries - Reduce spending, dump ETS, streamline RMA.  It could be worse, but could include property rights as well.  3 out of 5

Regulation and red tape - Continue Productivity Commission, pass Regulatory Reform Bill, reform RMA.  Could have been a long list, but it is aiming the right direction 3 out of 5

RMA - Separate planning and approval functions from councils, limit consents fees, widen powers to order costs against objectors, increase rights to compensation from planning decisions, removing "intrinsic values" from consideration.  Nothing on property rights, but otherwise it is a positive step forward. 2 out of 5.

Spending cap - Pass Spending Cap (People's veto) Bill, promote culture change and innovative policies.  Not a lot to say about this.  A step forward, but not nearly enough. 3 out of 5.

State owned assets - continue a rational evidence based debate about the government's role?  Well yes, but you can do better than that.  Much better.  You say so in economic policy, so I will say a 3 out of 5.

Tertiary education - Remove fee caps, introduce market interest rates for student loans, open trade courses to competition, lower taxes so students can pay back loans quicker.  A useful step forward, but not more so 3 out of 5.

Transport - Invest in projects with higher benefits than costs, embrace better pricing, streamline the RMA for building infrastructure, push government to invest in any modes.   RMA streamlining shouldn't interfere with property rights, and the government should be investing less. What about the private sector?  Disappointing 2 out of 5.

Welfare - Youth minimum wage, tougher approach to welfare, reform Working for Families, and more detail.  Definitely the best thought out policy of the lot.  A generous 4 out of 5

50 out of 90.   Is that enough?

I wish I could say yes, but there are three things missing.

Property rights

Where are they? Where is putting property rights at the centre of the RMA?  This should be central to any liberal party.  They are alluded to, indirectly, but why just that?

Tax

Nothing specific about taxation, about reducing it, about flattening it.  Yes, spending caps are all very well, but there isn't even a focus on deficit elimination and then lowering taxes.  That is disappointing.

Victimless crime

I don't expect legalisation of drugs, but I do expect something to be mentioned.  I do expect a review of criminal laws to consider how there might be a reduction in regulation overall and interference in people's private lives. 

It's a shame.  I wanted to vote for ACT,  I really did.  I like Don Brash a lot.  He could make a very positive difference to a government,  but what I've seen so far is very very disappointing.  Can it be saved?

Farewell Roger Kerr - one of New Zealand's intellectual giants

I am genuinely saddened at the news of the premature passing of Roger Kerr, news we all knew would come in due course. I only met him a couple of times, and we talked about – unsurprisingly – a free market approach to transport.  He came on a march FOR capitalism, remembered my name and we had a great chat about a wide range of issues. He always was softly spoken, gentle, intelligent and played the ball, not the man.   For those unfamiliar with him, he was one of the architects of the free market reforms of the 1980s and 1990s, as a public servant and then as Executive Director of the Business Roundtable.  A role that saw him receiving nasty brickbats.

I can confirm what Lindsay Mitchell said of him:

He was very experienced and accomplished. I was out of my league. But neither the audience nor myself was made to feel as though Roger was superior, above us, imbued with some god-given truth. Roger knew that persuasion meant honest and non-personal debate. In fact I think he was Mr non-Nasty. A rarity in the emotional arena of philosophical ideas.

Roger made time for people. He was humble and magnanimous. He could never have met the low standards of politicians and political debate in the house.

Cactus Kate’s comments about the strength of his writing are also true. He was one of the best writers to synthesise free market economics and public policy in a coherent, intelligent and eminently readable way:

What he leaves behind for us younger members of the VRWC is literally a lifetime of wonderfully written literature, speeches, opinion and research….It is not often in life you get to meet someone so academically smart who doesn't sit in an ivory tower on the taxpayer tit.

David Farrar has pointed out how Roger could have easily gone overseas and earned much much more money, but his interest was in New Zealand and in making New Zealand a happier, wealthier, more prosperous and free country:

Roger had a great love of New Zealand. I have no doubt he could have earnt much more money if he had not devoted the last 25 years to establishing and growing the Business Roundtable. While of course his views were controversial and often unpopular, Roger was only motivated by a genuine desire and belief that they would make New Zealand a better place.

Roger was genuinely a man who was easy to respect, whose mind was that of a giant, and who didn’t let the insults and hatred spun by some on the far left affect how he communicated. He wasn’t baited by the intellectual midgets who couldn’t respond to him with their minds, so responded to him with threats.

He lived a life of remarkable achievement, got to see his ideas implemented in many ways, and saw the fruits of it. However, there was always so much more to do. It was shown in that he blogged up to the end with a post from the 28th. He is a tremendous loss from New Zealand public life. His contribution has been immense, the likes of which puts the political circus of the election look so shallow and frankly inept.

The only wonder I have is why this man did not become Sir Roger Kerr. Given some of those who gain such a title, he is undoubtedly one of those who deserved it so much – although his own modesty and personality was hardly one of a man who demanded or expected such a thing.  He CNZM was so late,  no doubt because both National and Labour politicians were either too gutless or churlish to recognise someone who was out of their league. 

The NZ Herald has an excellent tribute to him in pictures.

However, one of the more poignant tributes come from Lindsay Perigo's interview with him earlier this year.  His introduction is written here.  

I wish his wife (former ACT President and now candidate, Catherine Isaac) , family and loved ones sincere commiserations. His legacy is one to be proud of, and his memory, influence and contribution will long be part of New Zealand’s history.

Told you so - Kiwirail's bullshit asset valuation is written down

The NZ Herald has reported that Kiwirail has proposed writing down its asset value of NZ$13 billion by NZ$6 billion, and splitting the firm into a property company (with a NZ$5 billion value for the rail corridor and land), which is essentially the old New Zealand Railways Corporation and the operating business (with a NZ$1 billion value).

I predicted this in 2009 saying:

The NZ$12 billion book value of rail on the Treasury accounts is a nonsense, equating it to all other SOEs combined (e.g. 3 power companies, Transpower, NZ Post) which all make profits. Most of the value is based on a replacement cost if it was built today, which of course would never be done. I'd argue it is probably worth 4% of that at best.

That was based on a presentation by David Heatley from the NZ Institute for the Study of Competition and Regulation called"The Future of Rail in New Zealand".

I would still argue Kiwirail is grossly overvalued.  Its business and related assets are not worth NZ$1 billion, indeed they are probably about a third of that.  The value of the land is more significant, but I would question the NZ$5 billion for that, especially given the Surface Transport Costs and Charges study valued the land in 2001 as being worth NZ$462 million.   Property prices haven't inflated over 1000%.   Indeed there may be more value in the scrap of the track.

The key point is that The Treasury was being seriously disingenuous accepting that ridiculous over valuation of Kiwirail in the first place.   To consider an infrastructure business as being valued on a replacement cost basis is ludicrous, for it would see all of the electricity SOEs valued on the basis that you would - once again - build a Clyde Dam, for example.

The real asset value of Kiwirail is the optimal value that can be gained for the business either as a going concern, or if it was split and sold for the sum of its parts.   As much as there is much romanticism about it (and I carry a fair bit myself, as I have loved trains since I was a child, and have many fond memories of riding on them), that shouldn't be allowed to distort objective appreciation of what Kiwirail is as a business.

I believe it has a future, providing a core freight service on higher density lines, and given the fortune poured into the black hole of commuter rail in Auckland (and not so much in Wellington), it may as well be used for that until those assets need replacement.  However, it is telling that, at a time of high fuel prices, and with RUC rates having recently been increased, the railway still struggles.   The reasons why are partially explained by Heatley's presentation, and are in part because there simply isn't enough freight with enough frequency being moved in New Zealand on the routes serviced by railways, to make most of the lines sustainable in the long run.

Could it be that a further writedown will be on the cards, and is the reason it hasn't happened that much yet is to protect debt related to Kiwirail?

What do we want, more Nanny, we're the 0.99%

The 99%.  It's laughable and ridiculous.  The New Zealand mob is claiming it represents 99%, which obviously means it should set up a political party and then sweep to power in the November elections.  After all, with the MMP electoral system, it would mean they would have power, could pass all the laws they want, raise the taxes they want.  

Except of course, they aren't 99%, not even 9%, but quite possibly 0.99%.

More seriously, what are they about? It is very easy to dismiss them as the usual leftwing mob who demand government does more violence to the property and people of whom they don't approve.   However, there is one point - opposition to bank bailouts.

Government should not prop up business.  There shouldn't be subsidies for any businesses or protection from competition.   Corporatism should be fought.  Banks that make foolish loans that they can't recover should not have their risky behaviour bailed out by taxpayers.  That includes loans to governments.  Shareholders, bondholders and ultimately depositors should bear those losses.

Yet the "occupy" mobs think all banks are bad, they oppose capitalism and demand other people's money to pay for all the things they like.  Yet they use mobile phones invented and built by capitalists, on telecommunications networks invented by capitalists, wears clothes sold by capitalists, drinks coffee and eats food produced and sold by capitalists.   They think capitalism is bad, yet they can't conceive of what it is like to eliminate capitalism - which after all, is simply the freedom to establish your own business trading goods or services, to make a profit (or loss) and hire who you wish to supply labour.   The alternatives have tended to at best result in sclerotic stagnation, or at worst created rivers of blood.

By contrast they embrace government, the institution with the monopoly of legitimised violence.  They want new taxes, they want to take money by force from people who they think have too much.  Yet on a global average, virtually everyone in everyone developed country meets that definition.  The average GDP per capita (PPP) is US$11,000 per annum.  Every country in the European Union, every OECD country (including Turkey and Mexico), even Botswana is above that level.  By rights surely at least half of the people in those countries should have more tax taken from them, to pay for?

Public health care monopolies, education monopolies, state welfare and state make work programmes.  

They want more Nanny State and they think people who earn higher incomes will keep doing so, just to pay for what they want.  Even if they don't think that, they want to confiscate wealth and give it to the state, as a trusted party to "look after everyone".

So childlike.

Old Holborn went to visit the London mob and concluded:

Bottom line? These protesters want MORE taxes, an enlarged welfare state, a bigger Government, State jobs and death to bankers – and a bath. Marx would have been proud of them. I give them a fortnight at most. The Police have already removed the portaloos and it can’t be long before Starbucks and Pizza Express get fed up with toilets blocked by Lentil casserole and organic dysentery. As much as I hoped people had woken up from the stupor of a decade of Labour benefit addiction, the OccupyLSX protest is nothing more than a cold turkey sweat of the terminal welfare junkies.

Meet the new boss, same as the old boss.

He also points out how intellectually inept the mob are, because they somehow think that public debt is the responsibility of capitalists:

No one has EVER forced me to buy shares. Contrast if you will, the £100,000 of PUBLIC debt carried by EVERY family in the UK, thanks to Politicians and the Central Banks raiding our currency, yet no one has demanded to occupy Parliament or the Bank of England. Germans are protesting outside the European Central Bank in Frankfurt, thousands of them who know EXACTLY where the criminals are. Us? Sitting on the steps of St Pauls Catherdral and being kettled once again by the laughing Policeman.

There are good reasons to be angry.  Angry at politicians who ran budget deficits endlessly to bribe voters with their children's and grandchildren's money, without their consent.  Angry at politicians who required banks to lend to the feckless and who ran the fiat currency system that provided an ongoing supply of credit to banks, expecting them to lend, and then who promised to save the banks when they loaned out too much.   Angry at politicians who were never straight about the ponzi schemes they created of public debt, pension and health promises.


Yet they should also be angry at themselves.  How many of them would vote for any politician who pointed out the overspending?  How many of them would vote for politicians who would let banking be free, who would let banks be very tight and conservative on credit? 

You see in a liberal democracy people are to blame for the governments they elect.  In the UK, US, EU, New Zealand, all over, the majority voted for governments that favoured some businesses over others, that spent more than they gathered in taxes, that protected some with the money of others, and which refused to say "no" when people kept wanting more and more without paying for it.

No.  They are hooked on being protected from reality, being protected from the consequences of their own decisions.  They want the government to give them jobs, give them health monopolies (anything else is like "America where people die bleeding on the streets because they don't have their credit card handy to pay the ambulance" (bullshit)), teach their kids what they should learn, give them homes, tell them what to eat, look after their families, wipe their bums.

They offer at best confused anger over a situation they don't understand.  At worst, they are a mob who want what other people have out of pure envy, and are hopelessly addicted to government fixing their problems.

In Rome they were violent criminals, hopefully this time the mobs will quietly dissipate under the contradictions of their own incredulity about economics.