Greek voters do have rational choices - but they reject them (UPDATED)

The two main incumbent parties in Greece, although both supporting the necessary bailout plan, are both institutions that have led the country down a path of corruption, fiscal incontinence and reality denial for too long.  Beyond them, the Greek Parliament is polluted by the likes of Marxists who believe business should all be owned by the state, and fascists who preach bigotry and racism with their faux pride and proto-violent approach to government.

However, there are parties that can make a difference:

- The Liberal Alliance advocates the state withdrawing from business, abolishing permanent employment in the state sector, privatisation and replacement of the state pension with a privatised pension system, along with tax cuts. 

-  The Drasi party supports cutting government spending and free market reforms.

Both parties ran on a single platform in the May 2012 election, but only gained 1.8% of the vote.  This time they are running with the "Recreate Greece" party which is said to share a similar approach to economic policy although being more centrist.  The hope is that the combined support of all three will cross the 3% threshold for Parliamentary representation.

Democratic Alliance would have been another option.  It supports cutting the civil service by a third, abolishing permanent tenure and introducing performance pay.  It also seeks major tax cuts with a flat tax of 20% and negative income tax to replace welfare.   However, it has aligned itself with the incumbent New Democracy Party (the non-socialist one).  Will it have enough influence to make a real difference?  I doubt it.

So the best option appears to be the "Recreate Greece - Action – Liberal Alliance". 

Together they would embrace real austerity that does not include raising taxes, but does include cutting the state down to a size that is affordable, it does mean not scrapping the Euro in favour of a junk currency and means opening up the Greek economy to be more competitive and dynamic.

The two major incumbents support more taxes, the Syriza party supports putting its head in the sand and hoping that Greece doesn't go bankrupt.

In the meantime, wise Greek citizens will be emptying their bank accounts in Greek banks.  Opening German, French and British ones, and depositing their Euros as fast as they can, and holding onto just enough cash necessary to function.   Good luck to them all.

UPDATE:  It looks like a binary choice between New Democracy (in favour of the bailout package including spending cuts, privatisation AND unfortunately tax rises) and the Green Party like Syriza Party which essentially expects to blackmail Germany into paying for its retention of socialist economics.   New Democracy retains a chance Greece remains in the Euro, Syriza is highly likely to see a complete default in late July if it can't convince the Germans to prop them up.

It is entirely plausible that neither could form a government.

That's why it remains the most principled choice to back the Liberal Alliance, for only it will support both less spending and lower taxes.  New Democracy may be less worse than Syriza, but if economic growth matters to anyone in Greece, they can't get it voting for for those who support higher taxes (let alone a bunch of reformed communists).

No Asset Purchases without a referendum

If the parties that lost the last election can demand that the Government seek an additional electoral mandate to implement the policies National stood on in its 2011 manifesto, then surely the same applies in reverse.

Every time the state buys something with taxpayers' money, it should ask permission.

Labour should have held a referendum on buying buy Air New Zealand, buying the Auckland railway network then buying the national rail network then buying TranzRail. 

If the state should gain permission when it sells assets, it should also seek it when it buys them.

Somehow, I doubt the idea will gain traction with Labour and the Greens, because to them when they spend taxpayers money, acquire property for the state - it is "good" for it is for "everyone".

In other words, the state can always accumulate more and more property with your money, but it daren't dispose of any of it.   However, none of that is really a surprise is it?

Greeks withdrawing cash

If anything demonstrates how far we are all removed from free market capitalism and an economic system based entirely on private property rights, one need only look to see the power the state has on the resource most people have as a medium of exchange and storage of value - money.

With speculation rising about the next Greek government quite possibly being led by a quasi-communist who thinks he can call the bluff of Eurozone governments in demanding that they lend the Greek government more money it can't pay back (having already received bailouts worth nearly a quarter a trillion Euro), fear is that the bluff wont work and Greece will be cast adrift, with the Greek government unable to pay its bloated public sector, unable to pay interest on its debt and pushed out of the Eurozone.

With all of that goes any talk of European solidarity, as quite rightly, Germans, Austrians, Dutch, Slovaks, Estonians and the like say no to their government funding Greece's fiscal incontinence, so Greece finds a new way to pay its bills - by printing worthless banknotes likely to be called a New Drachma.

What does the average Greek citizen do then?  Well, Greek banks get all their assets and liabilities redenominated into this junk currency, so the savings of Greek people get utterly destroyed, because of the Greek government.  Greek companies with debts with foreign banks in Euros face bankruptcy as they will be unable to pay debts using the junk currency.  

Many Greeks will seek to flee to live and work in the rest of the EU.

Except the EU has other ideas.  Greeks will be cast asunder, not only having their savings plundered and destroyed by their government, but having their fellow EU partners treating them as foreigners, not worthy of being able to live and work in other Member States.   The grand political project would be over as far as Greece is concerned.  This shameful treatment of people unfortunately stuck in a country that the EU embraced, subsidised and treated fraternally for decades, shows the real limits of the openness of the EU - when the going gets tough, they turn their back on you.

So Greeks are preparing.  With 800 million Euro exiting Greek bank accounts today, this will only accelerate.  Once they have their cash, they will deposit in foreign banks, convert it to gold or silver, or simply stuff it under the mattress.

For you see when it comes down to it, a fiat currency isn't a store of any real value if those who issued it declare it to no longer be so - for it is as easy to destroy that which you printed out of thin air.

For all the SYRIZA party is offering Greece is the promise that all can be made better out of the thin air of socialist economics.

UPDATE:  A former Socialist Defence Minister of Greece is facing charges of money laundering and is facing ongoing investigation for tax dodging.   Is it any surprise that so many Greek citizens actively avoid tax when then is corruption at the highest levels by those who want to spend their money, but make sure they use the state to enrich themselves?  Shame the political choices of Greeks are largely more of the same.

Only the state should dominate the media, right Ed?

The ludicrous circus that is the Leveson Inquiry, has been filling media time for many weeks now.  In part because the media is so excessively solipsistic it think everyone else gives a damn.  Most don’t.

The key “story” being manufactured by this waste of time and money is whether News Corporation and Rupert Murdoch have “undue influence” over politicians.   The inquiry is meant to have a wider mandate that beating up on News Corp, but it is driven by politicians and bureaucrats whose agenda has that narrow focus.   

It’s important to bear in mind the extent to which News Corp is allegedly dominant in the UK media.  It owns, effectively, two daily newspapers.  The tabloid Sun and the more serious Times (and Sunday Times).  Like most British papers they don’t shy from expressing editorial views regarding politics.   However, that isn’t unusual.  The Sun’s direct competitor, the Daily Mirror has long been seen as a left wing tabloid, consistently supporting Labour (which of course means accusations of impropriety aren’t flung its way).  Its other competitors in the tabloid market (such as the Daily Star) take next to know interest in politics.  The mid market Daily Express and Daily Mail have tended to take an angry “anti-politics” view that slammed the last government and are not much more keen on this one.   

Of the serious papers, the Guardian/Observer is the leftwing rag of record, followed closely by the Independent, which largely tended to sympathise with the Liberal Democrats.  The Daily Telegraph has long been seen and acted as the “Torygraph”.  

This diversity of newspaper choice is astonishingly wide, and whilst the Sun and the Times are influential, it is generous to claim either are dominant, when the market is so split among others.  The Daily Telegraph remains the leading circulation serious paper, although the Sun leads the tabloids.

In broadcasting, BSkyB (minority owned by News Corp which sought to take it over 100%) is the major pay TV provider, yet it has competition in that market from Virgin Media (for the half of the country with cable TV) and BT.   However, the most influential broadcasters remain the TV extortion tax funded BBC and commercial operator ITV (followed closely by commercial state owned broadcaster Channel  4).  Sky News is one of the news channels, but it faces direct competition from the 24 hour BBC News channel (let alone a panoply of foreign ones).

So when Labour leader Ed Miliband decides that newspapers shouldn’t be “allowed” to have more than “20% of the market”, you might ask some questions not only about what he means by that, but why he thinks it is ok for the state to be dominant in TV and radio broadcasting.

For a start, the “market” he says is not clearly defined.  Does he mean nationwide newspapers?  What about local or regional newspapers?  Besides which, what if people actually LIKE buying the newspapers with bigger market share, does it mean that a proprietor with a very successful newspaper must do something to be less successful?

All this nonsense is taken even further when one looks at the British government’s overwhelming presence in the broadcasting market.

It owns two major free to air broadcasters.  The BBC and Channel  4.

The BBC itself has seven fully owned national TV channels, and owns a 50% shareholding in a company that broadcasts another ten channels.   It also has nine continuous nationwide radio stations and a network of regional and local radio stations.  

Channel  4 has six fully owned national TV channels (and five timeshifted +1 channels on top of that).

The state is by far the dominant TV and radio broadcaster in the UK, with its channels gaining a majority of the audiences in both media.  The BBC is also one of the most popular websites.

Of course it should hardly be surprising that the Labour Party thinks the state supplying news and entertainment to the masses is a good thing, since it presided over the rapid expansion of the BBC when it was in government.   However, this is a point the Conservative Party should be making.

Media dominance is the newspaper sector in one of the most competitive newspaper markets in the world is ludicrous, particularly when it is a sunset industry as circulation continues its ongoing erosion and people seek out online media and other options.

The questions raised about the influence of a single proprietor of two newspapers and one TV news channel are never raised about a vast organisation that dominates the TV and radio market, that has been recession proof (having been funded by a extortion racket called the TV licence that criminalises people who don’t pay it and haven’t the wherewithal to evade it successfully).  

The state should not have its hands on so many levers of media in a free society, out of principle.  That’s setting aside the myth about the impartiality of the BBC and Channel  4, both of which carefully select stories to report on with a line that demonstrates a certain perspective (for years, Euroscepticism was treated as the view of cranks, but not now).

I don’t have to buy the Times or the Sun or subscribe to Sky TV in the UK.  The influence of Rupert Murdoch on me is my choice.  I also don’t have to watch or listen to the BBC, although if I have a TV I am forced to pay for it regardless of whether I want it or not.

Attempts to restrict media ownership when plurality of the print media is so obvious are absurd, particularly when attention ought to be drawn to the dominance of the state in British broadcasting.  That dominance is not only unnecessary, but it is unsettling and has a profound influence upon political and public discourse.  It is about time a debate is had about weaning the UK public off of state broadcasting.  Privatising Channel  4 should be an uncontroversial early first step.   The bigger step should be weaning the BBC off of the TV licence fee so that every day it has to convince people to pay for it, not threaten them with court.

Calls in the UK to stick up for capitalism

For too long those of us who have stood up for free market capitalism have tended to wonder why it seemd quite lonely.   With the exception of a handful of think tanks, the voices in favour of less government and more freedom have been few and far between.  Most of the media seems to be inhabited by the "what is the government going to do about it" school of questioning regarding any issue or situation that comes along, precious few ask "when will the government get out of the way".

So it is gratifying that in the UK, at least, two voices have come out in the past day in favour of capitalism and less government.

The first comes from Sir Terry Leahy, former Chief Executive of the largest supermarket chain - Tesco.  He is no libertarian and he wasn't advocating stripping back the state like I would, but writing in City AM he said:

"As a believer in the free market, and someone who trusts people, in my eyes taxes are still too high.  Insufficient incentives exist in the UK to encourage investment, hard work and job creation.  The ambition to steadily cut corporation tax is laudable.  This, though, should be part of a much wider programme of tax reduction, which does not imperil plans to cut the deficit or spook the markets, but gives employees, employers and investors more money to do with as they wish."

More of their own money of course.

"what is needed in the UK: a rebirth of capitalism. Business cannot sit idly by and expect politicians to do this alone.  If we have the courage of our convictions, business people need to get stuck into the debate, taking this message not just to the media but elsewhere, including schools.  Every student should be taught about wealth creation and entrepreneurship."

Quite.  Business people have for far too long stood by and let politicians on the left push anti-business and anti-capitalist agendas.  The chimera of "corporate social responsibility" has been used to shroud the idea that fundamentally business and capitalism is "bad", and that it needs to compensate society for what it does.  Utter nonsense.  More recently the idea of "green business" and "triple bottom line accounting", have been spawned by those pandering to the ecological-left, in the hope that it will chase away threats of more taxes and regulation, when all it does is surrender the intellectual argument to them.  There is no harm in seeking to be more energy efficient, to gloat about how environmentally friendly you are and the like, but to surrender the intellectual argument that in fact - your business creates wealth, makes people better off, satisfies consumers and employs people - all through voluntary exchange - something government fails to do, is a disaster.

It parallels the businesses who embrace corporatism, who think "government relations" is about seeing what favours can be granted to their sector, whether it be reduced competition, more subsidies, regulation of competitors, taxing of competitors - rather than encouraging government to get out of the way, except when it is about protecting property rights and contract enforcement.

For Leahy to say this is welcome, but the other promoter of capitalism is more bewildering, although one might hope encouraging.

It's the Chancellor of the Exchequer George Osborne.  He said businesses need to fight back against anti-business sentiment that "dominates current political discourse".  He was quoted by City AM saying "If you are not out there, engaged in those arguments, then you are going to leave the field open to those people who want to fill that space, and who argue that companies... have got to pay more tax".   He wants businesses to retaliate against "the politics that says it's perfectly acceptable for the state to take half of all national income".

Naturally I agree, but isn't this his job too?

Shouldn't he be arguing in favour of not just simplifying planning law, but by scrapping it in favour of private property rights?

Shouldn't he be actively cutting all areas of state spending, not ringfencing the Soviet style NHS with half-hearted reforms that incentivise more contracting out, not ringfencing aid to developing countries?

Shouldn't he be abandoning the "Green Investment Bank" boondoggle, not waste money on an unprofitable (and uneconomic) high speed railway, abandon green taxes on electricity generation and be winding back and abolishing the legion of regulators for so many sectors?

Shouldn't he be leading the charge against the ban on new airport runway construction by the private companies that own London's three biggest airports?

In other words, shouldn't he be the government's chief advocate of capitalism, less government and freer markets (let the Liberal Democrats argue the contrary)?

The morality and the empirical evidence of what capitalism has enabled should be getting shouted from the rooftops, especially when the UK media is dominated not by Rupert Murdoch and News Corp, but the state owned BBC - itself almost entirely funded by the forcible extracted extortion system known as the TV licence.