Judge says "society to blame" for sexcrime

That, according to the Daily Telegraph, is the conclusion of Judge Gareth Hawkesworth of Cambridge Crown Court (UK). It is also the logical conclusion of many decades of the embrace of the post-modernist philosophical morass of determinism and denial of the causality principle.

What happened?

A 14 year old boy tied an apron around the face of a girl of 4 and performed a sex act with her. The boy got a three year community order with supervision as a sentence.  The girl's parents are upset, but I don't want to dwell on what is an appropriate sentence, needless to say the boy needs both help and punishment.  What matters is how the judge got to his sentence.

The judge said of the offender:

"I'm satisfied it was impulsive and I believe you have become sexualised by your exposure to and the corruption of pornography. Your exposure at such a young age has ended in tragedy. It was the fault of the world and society.”

Actus reus and mens rea are the two key tests to secure a criminal conviction in most cases. Actus reus is the “guilty act” meaning the accused did the deed. Mens rea is the “guilty mind” meaning the accused intended to commit the crime. Prove both beyond reasonable doubt, and the accused is considered guilty of the crime.

Judge Hawkesworth has contradicted himself. For the boy has been found guilty and been sentenced, yet he effectively claims the boy did not have mens rea.  The boy was not "at fault".

For that to be true, there could have been a number of defences, such as acting under duress, or insanity. The age of criminal responsibility is 10, so he can’t legally claim that he is not responsible for his actions.  Yet the statement by the Judge implies just that.

He wasn’t under duress nor insane, but rather under “undue influence”, not by one person, but by “the world and society”. We are ALL to blame. He didn’t really have a choice. He was corrupted. Yet the murderers of James Bulger, who were younger when convicted, were not subjected to such an excuse (and their backgrounds did explain, but did not excuse their actions).

This is the philosophical reef upon which Western society has been wrecking reason, objectivity and justice against for many years. It is the underlying foundation of so much taught in the humanities departments of universities. It is the fundamental dimunition and denial of free will and conscious volition.

It is, in fact, the argument put forward both by the post-modernist believers in a large state sector and many religious conservatives. The Muslim women who are told to wear the niqab do so because otherwise men “can’t help themselves” but molest them. Christian campaigners for censorship argue that erotica, pornography and violence in the media “makes” people commit those crimes, indeed the current censorship laws are in part predicated on this. That’s why you can (in New Zealand, Australia and the UK, but not the USA) be prosecuted for writing or owning erotic stories about certain sexual acts ( a woman was prosecuted for writing such letters). David Cunliffe supported this strongly in select committee when challenged about it. The idea is that such stories “make people do them”, so it is better to take away a bit of freedom than to risk “making people do crimes”.

In this case, “society” or rather EVERYBODY made the boy commit the crime, so EVERYONE should feel shame and contrition. Not only the little girl, but the perpetrator is a victim.  Consider what effect that will have on the girl, to think that the offender is somehow less responsible.  If "society" and the "world" are responsible, isn't she a tiny part of that?

In which case, the judge is effectively saying who is he to blame the boy? Society must do more to shield people from such corrupt influences. It is deterministic. Because the boy was exposed to pornography (although it appears he looked for it, watched it and kept doing so), it was inevitable that he would commit this crime.  He wasn't just corrupted (probably true), but he was incapable of reconciling fantasy and desires with reality.  He could not control himself.   Yet he is not insane.

I don’t need to explain the consequences of extending that principle. For indeed we see them today:

Excusing people who steal, vandalise and commit arson against the property of innocent people because they were “upset” at their own lives. Yet vast numbers of people can claim the same or worse, but do not commit such crimes.

Excusing those who beat up their children because they don’t have enough money. Yet millions are in poverty and do not mistreat their children.

Excusing the woeful life choices of this generation, because of what happened to past generations. Yet many make different life choices having inherited next to nothing from past generations.

I don’t doubt Judge Hawkesworth is, in part, politicking. He wants politicians to restrict the access of young people to pornography. You see, he could have blamed the boy’s parents, for allowing him such unfettered access to the internet. He didn’t. He blamed us all, implying the solution is going to come from government or at least from people listening to his preaching.  We all raise all children, we are all responsible for everyone else's children (and of course we must pay for them and have our behaviour regulated, as if we are children too).

Let me be clear, I believe there is an issue about unfettered access by young people to extreme content online, and that there are potentially serious consequences that can arise from this. Whether the state acts or not is a political question. However, when sane individuals commit crimes, including teenagers (who are between being children and adults), it is quite simply incorrect to claim that others are to blame.

To attribute blame to an amorphous collective such as “the world” or “society” is meaningless and even corrosive. There is no such thing as a collective brain or consciousness (unless you subscribe to the malignant class or race theories that ultimately justified mass murder on hitherto unknown scales). For a judge to even think it appropriate to “blame” in this way is not just unprofessional, but dangerous.

Who will turn up in his court next week to claim “it is society’s fault that I…” (insert crime)? How can he disagree when he believes this is a perfectly credible defence to grant someone leniency?

After all, if this boy isn’t to blame for his actions, why should others be to blame for theirs? Is not every criminal a product of their experiences, influences and history? Can everyone with rotten parents, or who was bullied, or who saw a violent or sexually explicit film, image or read a story, or had no friends, or grieved their dead pet or whatever – now say they are not to blame, but society is?

Similarly, does it not mean that everyone who does well at school, who wins a sports match, starts up a very successful business, becomes wealthy, becomes popular, invents, creates or discovers something of note, is not actually responsible for that? Are not those who succeed therefore “because of society”? Should not everyone who does well then be made to share the fruits of their endeavours? Think how often you hear that trotted out by those on the left who fondly believe in increasing taxes for those on higher incomes, who say that successful people are only successful because of “everyone else”. That if the state hadn’t provided a hospital, school or roads, these people would have been “nothing”.  Even though the number of tall poppies that grow from this very same field are always few and far between.

Think what that means for how the state treats individuals. You’re not to blame when you do bad, and you’re not to get all the credit when you do good. It was all going to happen anyway, and we’re here to soften the punishment and to share the proceeds. Individual choice? Not so important now.

That, ladies and gentlemen, is at the core of so many of the political debates that are engaged in today.

Is the individual to be treated as a thinking, conscious, choosing human being, who whilst carrying a vast array of influences from family, peers, media, community, school, religion, business, can decide whether or not to act in a certain way, including whether or not to act with objectivity, reason, benevolence and respect for others? Or is the individual already pre-determined, with his ancestors, sex, race, religion, sexuality and class effectively programming him to think, act, succeed or fail in certain ways?

If the former, shouldn't people be free to live as they wish, as long as they respect the right of others to do so?  If the latter, is there any point to anything people do at all, unless it is a constant battle of power between those pre-determined to succeed and those pre-determined to fail, until everyone is ironed flat so we are all pre-determined to be in the same way?

Who will bail out Germany?

This is the question economist Detlev Schlichter has asked in today’s City AM.

Seems ridiculous right? After all, Germany is bailing out the rest of the Eurozone. Its economy is growing, its budget deficit is low. Greece is the basket case of the Eurozone, with Portugal, Italy, Spain, Cyprus and Ireland not far behind. If you were look at who would be next, both Belgium and France appear on the scene, because both have high public debt, budget deficits and are structurally sclerotic economies (imagine Belgium without the massive EU bureaucracy sucking in money from across Europe and consuming in Brussels).

Germany though? Well yes. It is, once again, wilful blindness to reality. Germany’s public debt is 81% of GDP, this having risen from 61% in 1999. That should indicate that there is a day of reckoning to come. Yes the budget deficit is low, but in an environment of steady growth, low unemployment and very low interest rates (meaning public debt can very cheaply be refinanced), Germany isn’t able to run a surplus. Remember how the Keynesians say that in good times you can run a surplus and pay down the debt you incur in the bad times. Well this is the good times for Germany, and it can’t run a surplus. Why?

Quite simply, the German state is lumbered with the same burgeoning welfare state and social policies that have already been bankrupting its southern neighbours. The difference is that the economic growth Germany is experiencing for now, and the low interest rates are slowing the inevitable slide towards that day of reckoning.

Schlichter points out that in the past four decades “Germany extended considerable, unfunded promises to the populace, mainly in the areas of public health insurance, state pensions and the public care insurance”. He blames this as an inheritance from the Helmut Kohl administration, an ostensibly “right wing pro-business” government. He says it implies effective government debt in excess of 200% of GDP. It is Germany’s ticking time bomb.

The difference with France and the south of Europe is that Germany has a more liberal labour market than all of them, but that isn’t hard. Germany’s state may be more efficient in tax collection and operation than the southern states, with much less corruption, but again that isn’t hard. It was the centre-left government of Gerhard Schroeder that implemented modest reforms (Agenda 2010). He liberalised labour laws, reduced the size of the welfare state and reduced regulation. Merkel has been unable to continue this further, even though she started her administration in a grand coalition with the leftwing SPD opposition, after he resigned as leader as his party had lost badly in the 2005 election. The message was clear. You don’t get re-elected in Germany after implementing radical reforms.

You can now see why Angela Merkel doesn’t want Germany to be the saviour of the rest of the Eurozone anymore – Germany cannot afford it. German voters are as attached to their big generous welfare state as other Europeans, but they have been immune to actually paying for the full costs. The legacy has been rising debt.

So when the protestors in the rest of the Eurozone think Germany will write them cheques to bailout their own bankrupt welfare states, they are deluded. For not only can Germans not afford that, they can’t afford their own. The difference is that German politicians are hoping that no one notices for now, and that the problem becomes someone else’s. On top of that, German taxpayers are carrying, still, the burden of the deeds of their ancestors as guilt that makes them at least partly amenable to helping the rest of the Eurozone.

The problem is that if German taxpayers/voters and politicians don’t confront their own bubble of debt and overspending, they too will face a crisis. That will indeed be a Eurozone crisis, a European crisis and a global one. That’s if Japan and the United States haven’t dealt with their similar looming crises in the meantime.

Peak oil is bullshit - ask George Monbiot

Yes, the poster boy for the green movement, George Monbiot, has come out in today's Guardian admitting he was wrong. 

Oil isn't running out, there isn't an energy crisis.  He's not happy about it, because you see it fits into the broader agenda about fighting climate change...(emphasis added)

For the past 10 years an unlikely coalition of geologists, oil drillers, bankers, military strategists and environmentalists has been warning that peak oil – the decline of global supplies – is just around the corner. We had some strong reasons for doing so: production had slowed, the price had risen sharply, depletion was widespread and appeared to be escalating. The first of the great resource crunches seemed about to strike.

Among environmentalists it was never clear, even to ourselves, whether or not we wanted it to happen. It had the potential both to shock the world into economic transformation, averting future catastrophes, and to generate catastrophes of its own, including a shift into even more damaging technologies, such as biofuels and petrol made from coal. Even so, peak oil was a powerful lever. Governments, businesses and voters who seemed impervious to the moral case for cutting the use of fossil fuels might, we hoped, respond to the economic case.

You see, he made the shocking discovery that the free market and the price mechanism delivers some remarkable results:

A report by the oil executive Leonardo Maugeri, published by Harvard University, provides compelling evidence that a new oil boom has begun. The constraints on oil supply over the past 10 years appear to have had more to do with money than geology. The low prices before 2003 had discouraged investors from developing difficult fields. The high prices of the past few years have changed that.

Yes, the price goes up, so the economics of production change, with more expensive fields and sources becoming economically viable.

Now George is distressed about this because he is convinced climate change is the new armageddon:

The problem we face is not that there is too little oil, but that there is too much.

In other words, the arguments against consumption of fossil fuels on the basis that they are "running out" are absurd.  The claims that aviation is going to collapse, that private motoring is going to evaporate, that export and tourism driven economies dependent on goods and people travelling long distances need to become autarkic "green economies" are nonsense.  

Many years of industrial, energy and transport policies based on "peak oil" scenarios need to be revisited.   All need to be put on a market footing.   Pursuing unprofitable, unviable renewables with taxpayers' money is fraudulent and wasteful.  Building big new railways on the basis that "people wont be able to get about" without it in an age of "peak oil" is bullshit.

Meanwhile, there ARE environmental arguments about the use of fossil fuels, but those are arguments first and foremost about noxious emissions (which a property rights approach can address), and then about climate change.   However, as I have said before, an appropriate response would be for governments to stop subsidising activities that emit CO2, and get out of the way of those using or developing technologies that offer alternatives.  Let's say "first do no harm".

I can't wait to see how quickly or otherwise the rest of the green movement stops using the "peak oil" rhetoric (they can't admit making a mistake collectively), and starts moving back to the armageddon rhetoric he is using.   A big underground rail loop in Auckland will no longer be about "protecting us from peak oil", but rather "saving the planet".  Hmmm.

Meanwhile, Monbiot's children will be saved being lectured about how we are all doomed since he said "right now I’m not sure how I can look my children in the eyes".  With such self-loathing I'm hardly surprised.

UPDATE:  James Delingpole does a delightful review of Monbiot's previous scaremongering in the Daily Telegraph, and describes him quite appropriately as:

one of those bitter, misanthropic, control-freak kill-joys, green on the outside but red on the inside, the true purpose of whose "environmentalism" is not so much to save the planet as to end Western industrial civilisation.

How long before the Moonbat Monbiot followers Green Party in New Zealand either excommunicates Monbiot or starts showing some contrition, or will it persist in its pursuit of the swivel eyed peak oil doom mongers?

TVNZ7 funeral and braindead TV, where have these people been?

I'm amused at those who chose to hold a "mock funeral" for a little watched state TV channel (TVNZ7) on the basis that without it New Zealand TV would be completely braindead.  As if equating the closure of a TV channel with "death" isn't itself rather childish and unbalanced.   Indeed, quoting the 1.6 million cumulative viewing figure as being meaningful is also rather braindead.  All it means is that at some point, 1.6 million people had the channel on for at least five minutes.  At no point has TVNZ7 had viewing figures representing 1% of all people watching TV at any one point. 

Where were the handful of people who give a damn been?  New Zealand television has been braindead for nigh on 25 years, it all started when then TVNZ CEO Julian Mounter prepared an all out attack against the upcoming TV3, by focusing on adventure, entertainment and by dumbing down national news and current affairs into a simple binary "good vs bad", "us vs them" format.  Lindsay Perigo said so himself not long afterwards.  The focus was on growing the news audience to include the vast bulk of people whose main interest in news is the sport, celebrity "news", disaster and crime stories (so easy to make it a story of victims against adversity) and then some cute kid, animal or quirky piece at the end.

TVNZ7 did not challenge that, it was TVNZ news lite, and had a handful of local programmes with certain high profile commentators who would host debates.  However, viewing figures were abysmal and the standards although higher than TVNZ could hardly be said to have been at the cutting edge of intelligent debate. It didn't present a wide range of incisive opinions with in depth analysis.  National Radio with Pictures it was not (if that is the standard its acolytes were aiming for, though it isn't mine).

However, why the fuss over this channel?

Regional channels did make attempts to have more uplifting TV.  Triangle has done so (excluding Martyn Bradbury) as has CTV over some years, yet the demise of Stratos from nationwide coverage caused far less fuss.  However, it is possible to see more current affairs on free to air TV now than it was 20 years ago, given both TV3 and TVNZ have Sunday morning shows that they did not previously have.

Yet I wont pretend this amounts to anything of particular note.  The reason is simple; regardless of what politicians, pundits, bloggers and journalists think, most people most of the time do not turn on television wanting intellectual stimulus and debate.   Television is an entertainment medium.

Most people, most of the time, don't want the sort of television that the public television advocates want to push.  After all, the Australian ABC has long had audience levels well below that of the big three commercial network oligopoly. The BBC's highest rating shows are indistinguishable from what is on commercial television (talent shows, sit-coms, soaps and sport).

Yet it's not hard to understand the disdain many hold against most TV in NZ, especially given the dominant free to air broadcaster is state-owned.  The bigger question is the chicken and egg one.  Did TVNZ result from a braindead culture of whim worshipping entertainment driven airheads, or is TVNZ in fact part of the problem? (take for granted that TV3 has essentially gone along with it)

I'd argue that TVNZ follows the culture (it wouldn't be a roaring success if it didn't tap into it), but that it also reinforces it.  Not challenging it, not extending people, not trying to go a step above the audience.  Not uplifting,  but in fact embracing and celebrating the "average mediocrity" of "everyday kiwis".  Their interests, their understanding of the world, even how they talk is just replicated by TVNZ, or even lowered.   In fact, my favourite braindead TVNZ moment was in 2000, when a TVNZ "journalist" said the "people of Pyongyang took a day off work to welcome the south Korean President", when Kim Dae Jung undertook his historic visit of north Korea.  Braindead indeed.

This airhead culture predates TVNZ, and is now seen in the regular political discourse of many commentators.  It is seen in the hysterical hyperboles seen lately about part-privatisation, the anti-scientific scaremongering about anything nuclear or anything to do with genetic engineering.  Complex ideas, issues that have more than two perspectives and anything that needs plenty of time to explain doesn't work well on TV after all.

The whole issue about the airhead culture is big in itself, and it's the height of hypocrisy for some of those who embrace shallow, sound bite culture and participate in it, to think that a small TV channel that doesn't challenge any of it is the way to deal with it.  The same people who think paying teachers based on performance is wrong think somehow they are well placed to judge the performance of broadcasters catering to the people those teachers helped churn out.

Yet is there a case to say intelligent TV can help?  Arguably yes.

Of course, intelligent TV is widely available and seen throughout NZ.  It's called Sky.

Sky brought New Zealand 24-hour news in the form of CNN, and more recently multiple options ranging from the BBC, Sky News, France 24, Fox News, CCTV and the new channel for nutty conspiracy theorists who are anti-American - Russia Today.  New Zealanders have never had better access to news about Australia, the USA, UK, Europe, the Arab world, China and Russia.  It also brought multiple dedicated channels for documentaries and then classic movies, arthouse movies and well as the mass market entertainment channels it supplies.

Sky started by paying the government for its first network, a series of UHF frequencies, installed its own transmitters and bought content.  It spent the first seven or eight years losing money, and now gets into around half of New Zealand homes.  People who are prepared to pay for the content it provides, which is not just sport, not just movies, but far more content than state TV can ever provide.  Now we all know Sky succeeds because of sports coverage, but nobody would have predicted what it now brings, thanks to an open market, absence of foreign ownership restrictions and absence of local content quotas.  It isn't just because of the poor standards on other channels, because pay TV thrives in the UK, which has seven state owned national non-commercial TV channels (and which heavily regulates three commercial ones to provide "public service content").

Yet that isn't the point according to public TV advocates.  Indeed, they don't like Sky very much at all.  The Listener, once the state owned magazine with a statutory monopoly on TV listings, has already published an article rallying an unsurprising set of arguments about Sky - with it being foreign owned, owned by News Corp (the "devil incarnate" to much of the left), owning the rights to much compelling TV content, and allegations this is "unfair" against a state owned broadcaster that has existed for over 50 years, 29 years of which was in a monopoly position. 

What isn't braindead about embracing such shallow, xenophobic, anti-big business attitudes? 

You see, the Save TVNZ7 club have moved away from this now, as Clare Curran intimated on Twitter saying:

@publicaddress have pretty much said all of that before. Good to hear Maharey on this though. Things have moved on tho. Time to address Sky

A successful business, which has brought far more choice and intelligence to NZ television that any other broadcaster, is now in the firing line from one of those who asserted that she is against braindead TV.

I'd have more sympathy if those who wanted to Save TVNZ7 had raised money to set up their own TV channel - which of course you can in New Zealand, given that there are no legal barriers to entry and there is a surplus of digital TV frequencies available on Freeview.  It is a matter of money.

The problem is that the Save TVNZ7 people don't want to put their money where their mouths are, they want to make everyone do it.  So when the investors in Sky, have put their money in, have done so with no taxpayer subsidy at all, have been supported by around half of the adult population in subscriptions, you might wonder why they don't like that very much.

I'm resigned to free to air TV in NZ being braindead, because it's what most people want most of the time.  There is better on Sky and some regional broadcasters.  There is more online and that is where the media is heading.

I don't trust politicians to bring me better broadcasting, because I don't trust them to buy me food, clothing or buy me healthcare or a pension.  Those who want better should support what is there now and if so inclined, make their own content.  It is remarkably cheap to do so given digital technology (none of which came from public broadcasters).

The coming years will continue the profound revolution in media that has been going on for the last 20 years, a revolution that is challenging existing free to air broadcasters and newspapers.   The ability to access content from all over the world and publish your own content is transforming media, discourse, journalism and starting to affect politics. 

That is where the future is - not a small state owned TV channel, nor in considering ways to regulate one of the country's most successful broadcasters (particularly when just about any way that a government might consider regulating it will breach the country's WTO commitments on audio-visual services).

UPDATE:  Mark Hubbard has also written well on this.

Kiwirail's asset revaluation - because Labour concealed the truth with accounting: UPDATED

Regular readers will remember that I’ve been long critical of the bizarre Treasury valuations of the social policy/heritage/commodity sector subsidy project called Kiwirail. So the latest report that this “asset” is to be revalued hardly surprises me. However, I am enormously dismayed at the unprofessional politically driven basis for valuation of this business which was instigated by the previous Labour government. It is one thing to throw taxpayers’ money at buying it back, another to hide what a real dud it is on the government accounts. Let’s bear in mind that neither Labour, nor the church of the Holy gRailway the Greens, have any interest in really showing what it’s worth.

So let’s start with the latest announcement. What does it mean?

The short version is “I told you so… again”. What was reported before has finally happened.

The land assets will remain under the NZRC, which has in fact been the case since 1 April 1982 when it was created. There was always a peppercorn rental of NZ$1 paid for use of the land under the rail corridor, which given that the Crown isn’t paid for the land under the road network, has always seemed an easy compromise in dealing with the thorny issue of valuing strips of land with little alternative use (especially roads, given land without access to roads has greatly diminished value). This should not be controversial, but let’s be honest about what the valuation of that asset should be – the market value of the land if sold. A study commissioned by the MoT valued it, in 2001, at NZ$462 million. This could be indexed to today’s values and priced, but I doubt it would top NZ$1 billion. Bear in mind this was never privatised in the first place, because every time TranzRail closed a rail line (which was rare), the corridor would, ultimately, be able to be sold by the Crown.  So the valuation was done professionally based on assumptions of the value of neighbouring land being applied, in most instances, to a narrow inaccessible corridor.

Yet the Annual Report 2011-2010 indicates land is valued at just over NZ$6 billion. This is quite absurd, so is the asset write down going to address this? Let’s continue.

The transfer of the other assets to a separate SOE is exactly what happened before the last privatisation, when NZ Rail Ltd was set up. The logic of this is clear, as the issues around rail land and its use are complex. Partly because of Treaty of Waitangi claims over Crown land, partly because the confiscation of past land under the Public Works Act means that if the land isn’t to be used for rail purposes, the previous owners or their successors must be offered the land back.

So the new SOE will be responsible for everything, other than the land, just like before. This is already raising the spectre of a new privatisation among those who treasure Kiwirail because they think it will be the saviour in the event oil prices and climate change suddenly decimate the viability of road transport.

Bill English states the total assets are being written down from NZ$13.4 billion to NZ$6.7 billion, this being both the land and the operations business. A simple halving of value, indicating a lot of in depth work was not done into this at all. The Kiwirail press release explains this further by saying that the non-land business will carry a valuation of up to NZ$1.3 billion “reflecting the revenue generated by it” rather than the current NZ$7.8 billion.  That's helpful in analysing this further.

The land component of the valuation seems to retain most of its book value, as it will be worth around NZ$5.4 billion, yet wont be expected to make a return on most of that asset (given the land under the roads isn’t expected to either). A small writedown of around NZ$600 million, but not nearly enough. Has the land under the rail network really shot up in value by a factor of 11 since 2001?  Kiwirail's Annual Report indicates that a professional valuation was done, no doubt in good faith. However, does that really reflect the market value of this land? If a railway line across a field, or behind some warehouses or houses is sold, are there really any other likely buyers beyond the neighbouring property owners? The discrepancy between valuations seems extraordinary, and I doubt whether valuations of railway corridors are done frequently enough in New Zealand to enable it to be equated to other such valuations.  

Setting that to one side, the valuation of NZ$1.3 billion for the operating business still seems wildly excessive. It was bought for NZ$665 million. How has it suddenly become worth double that since 2008? Is it revenue? Well no.

In 2011 it had gross revenue of NZ$667 million. It also got nearly NZ$345 million from taxpayers (yes you’ve spent more than a billion on this one and counting). However, its operating costs were NZ$567 million. Cool NZ$100 million profit before government right? No. Once you remove roughly NZ$60 million in subsidies for operating Auckland and Wellington passenger rail services, you’re down to about NZ$40 million. Not so good then.

Bearing in mind that the NZ$345 million from taxpayers is a capital grant to replace and renew some assets, you’ll also see it’s clear this isn’t a sustainable business able to renew its capital.  Otherwise it would take out debt that would be repaid over the depreciated life of those assets, which of course is not going to happen (but Treasury of course has taken out debt to pay for the nationalisation and all of the capital grants).  Bear in mind also that the market valuation when Toll Rail was nationalised was only NZ$435 million. Has the government really trebled the value of this business even though it has never paid a dividend yet? 

One guess as to why Opposition Finance spokespeople haven't asked that - because they fully supported this destruction of taxpayer wealth.

So the valuation continues to be generous in market terms. Kiwirail, if sold, would not go for the sort of money on its accounts, even if it continued to get hundreds of millions of dollars in subsidies and grants every year.

The use of replacement cost as an asset valuation gives a false impression of the value of an asset if it to be sold, simply because it does not generate sufficient revenue to justify ever replacing the asset on the scale (and in the same way) as it was originally acquired.

My previous post on this was right.

Kiwirail is not an “investment” in its current form, but rather an emotionally laden piece of heritage that mixes some commercial elements, some local public policy elements with a lot of hyperbole and wishful thinking.

Debates about pouring taxpayers money into it need to be based on some market based accounts, accounts that might actually show it can generate a reasonable rate of return based on what it could be sold for – but which wouldn’t ever justify the money poured into it so far.

For that reason, given both National and Labour have thrown over a billion into this taxpayer owned bonfire, and the Greens are just gagging to throw billions more at it, means that having debates based on reasoned balanced analysis are absent when most of those involved prefer conspiracy theories around corruption, hyperbolic evangelism about rail “saving the economy” and economic illiteracy.

Most of my past posts on this subject are summarised in this one, on what it would take to make the railway a viable business.

It includes the following ones:

-  The Greens posted a link to a great presentation on Kiwirail, which actually destroys most of their own self-generated myths about the business.  I link to it here.

-  Where is the rail network viable?

-  Bill English admits the rail network is virtually worthless

Another good read is this from Ross Clark which explains that the "failure" of rail privatisation is because there are some serious questions about the viability of rail at all.

UPDATE:  I know this article has been linked to by a couple of forums.  Please read the articles at the bottom and indeed the presentation I linked to here. You can romanticise as much as you like, and I have a stack of Rails magazines from the 1980s and 1990s, and the NZ Railway Observer as well, so I am a rail enthusiast at a personal, emotional level, but the hard economic facts are that rail is an expensive way to move goods given the high capital costs of the bespoke equipment and infrastructure.  Only when volumes are high, frequent and over long distances do the fuel and personnel advantages start to offset this.  It's about economics.  In the US, rail freight succeeds in spite of serious undercharging of trucks on untolled interstate highways, in NZ Road User Charges contribute to a very different picture.

Union and religious bullies tell you when your business can trade

Once again, union bosses and socialists - most of whom haven't created wealth from scratch in their entire lives - have found common cause with conservative Christians, in blocking legislation that would have allowed businesses to open the days they want to - this time in Timaru only.

For shame. 

I expect it of the nasty little busybodies in the Green and Labour parties, who can't even let an owner-operator business open the days he wants to, who embrace the religious (who they spurn most of the time), because they fear that some more people might feel like they have to work on a public holiday.

It is not about allowing people to shop.  It is about allowing property owners to decide when they can open their businesses to trade. THEIR businesses, not Maxine Gay's, not Peter Shearer's. 

It's none of your bloody business.

Same to the petty preachers who think because it is against THEIR religious belief to do business on certain days, think they should by force demand others obey their beliefs.

Get out of the way.   The fact that National MPs opposed this shows that the shadow of Rob Muldoon hangs over this party with such gutless "pragmatic" despisers of choice and free enterprise.

Jacqui Dean's attempt to let her constituents decide for themselves if they wanted to open on Good Friday and/or Easter Sunday, has been thwarted by 70 MPs who think they know best.

Yes it was only Timaru, but so what?  It is one step towards freedom.  If only more constituency MPs would do the same, then the country could see tiny roll backs across the land, and eventually they might get it that there is no point having such laws at all.

It wouldn't be compulsory to open on those days.  Where is there a law making that compulsory?  Who even suggests that, except those with the warped post-modernist belief in floating strawmen that distract from the real argument - property rights.

I haven't seen the breakdown of who voted on this Bill, but all those who opposed it have shown themselves up for what they are - petty minded little busybodies who think they know best how ordinary men and women, shopkeepers, run THEIR businesses.  Forgetting of course, that these business owners are those who pay the wages of the MPs and indeed the edifice of the state these MPs so love to harness to do their bidding.

Is fuel tax in the UK becoming impossible to increase?

I hope so.

Yesterday, Chancellor of the Exchequer George Osborne did his latest U-turn on his budget – he deferred a 3p/l increase in fuel duty that was planned for August. The increase had actually been planned under the Gordon Brown administration, which was always keen to increase taxes on fuel faster than inflation. The coalition government simply sought to maintain it, but was under pressure from Labour (hypocritically) and others to not proceed with it, so it has been delayed.

Now this move is welcome. Unlike the US (and New Zealand now), increases in fuel tax in the UK are not dedicated to spending on transport, but general revenue (and indeed four times as much is collected in fuel tax than is spent on roads). The statist media (indeed state media in the form of the BBC and Channel 4) talk about how it is a “cost” of £500 million (£1.5 billion if the increase is permanently suspended), but this is of course only the nonsense accounting view of Treasury.

It is £500 million that remains in the economy to be spent, invested or saved by individuals and businesses, rather than be spent by government. On top of that the official view (ineptly put by junior minister Chloe Smith) is that it is “funded” by savings in spending from various government agencies. All good stuff, but it does raise two issues.

The first is whether it is permanent. It’s unclear how it will be easier to raise fuel duty in January compared to August. The same politics will arise then and rightfully so.

The second is whether the UK is finally getting to the point where atlas (in the form of motorists) will shrug and say “no more”, at least in relation to fuel tax. That stage has already been reached in the US where the federal government has been unable to raise fuel tax since 1994 and neither have 20 states. It’s causing concern because, unlike the UK, fuel tax in the US is dedicated to expenditure on transport, mostly roads and so it is becoming difficult to fund improvements and maintenance. As a result, more and more states are looking at new ways to pay for roads, with tolls for new links and capacity being popular, along with letting private companies build improvements and toll for them, others are considering how to replace fuel tax completely with direct user charges.

In short, the politics of increasing fuel tax are promoting a shift to user pays, away from taxing proxies, in the United States.

Opposition to fuel tax increases is understandable. People don’t want to pay more when they see government poorly spending the money it does get, with money misdirected to politically motivated new works whilst maintenance falls by the wayside. Tolls are grudgingly supported because they get linked to what you use.

In the UK, opposition is twofold. For a start, motorists feel unfairly singled out, with tax at around 59p a litre BEFORE VAT, tax is the majority of the price of fuel.

Most grudgingly accept VAT on most goods and services, because it isn’t targeted. There is also tolerance of taxes on alcohol and tobacco because of the links between their consumption and health impacts. However, why fuel?

Since none of the money is dedicated to roads (and it is many times higher than the road budget) and roads are crumbling, it seems it has nothing to do with that.

Since there is a discounted rate of VAT on electricity and gas, the environmental argument seems fatuous and inconsistent.

What remains is a Nanny State finger pointing view, aligned to the Green Party, that people “shouldn’t” drive and so fuel tax is a way of encouraging them to use public transport, cycle or walk. The fact that the freight hauled on most trucks has no realistic alternative mode is blanked out. The fact that so many reject other modes, even though they are subsidised (with taxpayer subsidies for rail almost as much as total spending on roads), indicates that it doesn’t meet their needs.

So the overwhelming impression is that fuel duty in the UK is about fleecing people who have few options to avoid it.

It is about time motorists stood up and said enough.

There is a reasonable argument that, in the absence of tolls and privatisation of roads, a tax on fuel used on the roads is a rough proxy for user pays. So if the rate of fuel duty was to match that (taking into account tax taken from annual vehicle excise duty) it would drop from 59p to around 9p a litre (in fact given the massive backlog of capital work needed to renew the network I’d say 10p). If that was transparent, then it would show it up for what it is – a tax grab. Any reasonable view of it being environmental would mean increasing VAT on electricity and gas, which is also unpalatable.

It SHOULD become political unpalatable to continually increase fuel duty – a tactic that Chancellors of the Exchequer have been using since John Major, with Gordon Brown particularly keen on milking money from motorists.

Of course the UK can’t cut fuel tax more than half, for EU law prevents reducing tax on unleaded fuel below what is around 29p/l. Yes, the EU actually sets FLOORS for taxes with Directive 2003/96/EC.

Meanwhile, it ought to be time that UK motorists generally said no – and were louder and more militant against persistent tax increases. This fuel duty increase postponement should be permanent, and fuel duty ought to be in decline.

Shock news - Socialists hate constraining local government

Some months ago Nick Smith raised himself in my estimation (to be fair, the only way was up) by declaring that the “power of general competence” granted local authorities around a decade ago by the then Labour-Alliance coalition government, with warm support from the Green Party, would be overturned.  Rodney Hide, whose beliefs should have meant he was at the forefront of this, failed, and Nick Smith, who is typically considered to be one of the more centrist of the Nat Cabinet Ministers, embraced an agenda of local government sticking to “core services”.

Now setting aside what they are (and I think it could be very few), this has the promise to help keep local government out of private property rights, out of the way of businesses, individuals and keep rates bills from rising faster than inflation.   It essentially would stop councils thinking they can grow functions as long as they can force ratepayers to pay for them.

When Labour, the Alliance and the Greens embraced “empowered” local government, it was part of a wider belief that the role of the state, including local government, should not be constrained by legislation if elected councillors wanted local government to do things.  It was saying that when councillors are elected, they should have the widest mandate to “do as they wish” collectively,  because accountability would lie at the next local election.  All very well if you think of government and society as being a conglomeration of groups with interests that are all competing, which are gloriously tempered by democracy.  Not very well if you think government is the body with the monopoly of legitimised force against individuals, which typically takes from the many to give to the few, and which regulates some for the satisfaction of others.

You see, those on the left of the political spectrum have a benign, almost warm fuzzy view of government because it can do things that they can’t do themselves – for them it is about forcing people to do things or banning them, or engaging in commercial or non-commercial activities that none of them could ever imagine being able to do so by choice.   For me, it is about using the coercive power of the state to use other people’s money to pursue pet projects and to take rights or property from some less favoured individuals for the benefit of more favoured ones.

It is hardly surprising then to read the news that Wellington’s Green Party Mayor is upset about the proposed changes, and spouts the typical propaganda line used by anyone who thinks local government is representative.  She talks about it constraining the “self-determination of communities”.  Really? For a start, a community does not have a collective brain, it is comprised of individuals with their own views.  As a result, a community is not a “self” so cannot have “self-determination”, because it is comprised of hundreds or thousands of “selves”.  If thousands of people want to act in a particular way, they do not need local government if they are not intending to use force.  They can fund raise, they can spend their own money, they can open up a business, or a charity or they can boycott one.   Indeed, self-determination of the individuals in a community is very empowering.

Yet what Celia Wade-Brown means is the power to force people to pay for something they don’t want, or the power to ban people from doing or make people do things they don’t like.

The idea that people in a city are somehow “empowered” because a minority of them bother to vote for a cabal of councillors who are off the leash and able to do whatever a majority of them deem as being a “good idea”, is a nonsense akin to the absurd theory of the “vanguard party” of the people which represents the “general will”. (Remember your will if contrary to that, is at best meaningless, at worst dangerous).

For the leftwing gutter rag the Standard to support this view is unsurprising.  Besides generating a headline that is sheer nonsense (if only it were true), it talks in glowing terms of local democracy, largely because statists like themselves think of government as doing “good”.  It makes the false claim that New Zealand local government “has the lowest gathering of funds at a regional level in the entire OECD”, when the UK easily outstrips that (there being very low contributions from council tax).  It raises the red herring that “attempts to change this with regional fuel tax and congestion charges” have been vetoed by National, when there is no evidence that any local authorities in New Zealand have wanted to do either (nor did Labour push for either outside Auckland).  Nothing gets statists excited more than wanting new taxes and new ways they can interfere in the lives of businesses, property owners and individuals in the guise of “local democracy”.

It cites an article by Christine Cheyne of Massey University.  The same Christine Cheyne who was an advisor to Prime Minister Helen Clark on local government and transport policy.  Not surprisingly she will take the view that the status quo is just wonderful.

Local government should be constrained.  Regional Councils were once just regional water catchment boards, they should return to this role.  Territorial authorities were once simply land use planning agencies that also looked after local roads, parks and refuse collection, they should return to the planning function alone with the rest of the activities privatised by both sale and transfer to ratepayer shareholding owned entities.  The monstrosity that is Auckland Council should be curtailed back in the same way.  If local government is to have any function it can be as a local arbitrator and record keeper of property rights in land (and waterways and airspace).  Nick Smith’s bill should turn the clock back to the situation pre 2002 in many senses (although it doesn’t have a clear vision for its role in transport, which is another issue).  It isn’t enough but it is a good start, the next big step ought to be to deal with the RMA – but I’m not holding my breath for that one.

Meanwhile, you have until 26 July to make a submission on the Bill.  Go on, encourage Nick, you know the other lot will be moaning and groaning for councillors to keep and strengthen their powers to tax, spend, borrow and regulate.   The Labour Party, which treats local government as a training ground for its new generation of finger-pointing, do gooding, control freaks, is already prepared with an automatic submission website (which I wouldn't waste your time editing, because they wont forward submissions that disagree with their "we know best" point of view).

Egypt's new dawn or a new dark age

For many years, there has been much concern expressed in the Western world about the consequences of letting the Muslim Brotherhood take over in Egypt.  After all, it was the justification for providing oodles of financial support for Hosni Mubarak’s regime, after he succeeded Anwar Sadat (who dared to make peace with Israel and was assassinated as a result), who himself succeeded the warmongering personality cult figure of Nasser.   Egyptians have been under the jackboot of dictatorship for decades, and as much as US Administrations have appeased Mubarak and Sadat (given both have maintained peace with Israel and kept the Suez Canal open), their opponents have long deified Nasser.  Egyptians who dared cross with any of the regimes would face a police, secret police and military ably dishing out summary justice, engaging in imprisonment, torture and summary executions.  

There were two comforts casually taken by Western supporters of the Mubarak regime.  One was that he wouldn’t wage war against Israel, back Islamists in Iran, Israel or elsewhere.  The value of having an ally who is peaceful in an area that has been volatile, is considerable, especially when it can have its hands on the throat of one of the great shipping routes between Europe, the Persian Gulf and Asia.   The second was that Egypt appeared to modernise.  It could be seen in the malls and shopping centres in Cairo, where young Egyptian women would walk around in jeans, hair uncovered and look little different from those in Europe.  It could be seen in the relative vitality of a country that welcomes tourists, has many fluent in English and had a semblance of a civil society.   However, underneath that entire facade were multiple pressures.

The first was the tired nature of living under a tired corrupt regime that had last more than 30 years with one president.  A regime where wealth and success could come to the well connected, the relatives, the friends and those willing to share with those in power the booty of contracts, trade and business.  A regime where the victims of such corruption, victims of the extra-legal use of authority by the regime would be ignored, at best.  A seething resentment that a country that was becoming wealthier, more connected, with an increasingly younger population, was sitting atop something rotten.  

The second came from those who resisted the modernisation, who saw the wealth and success of fellow Arab regimes to east and west, and would spread resentment at the dependency of Egypt on the succour of the United States (Egypt being, until recently, the second biggest recipient of US taxpayer funded aid after Israel).  They would prey upon the fact that most Egyptians are Muslims and see the hope in dealing with corruption, crime and what they perceived as moral decay, in dumping the quasi-secularism of the Mubarak regime, in favour of Islamism.  They did not think of the 10% Christian minority, or the tiny Jewish minority, nor did they think women should be anything but “equal, yet not bearing duties against their nature and role in the family”.  They would also prey upon the strong anti-Israeli sentiment, which harks back to the families whose sons were victims of the wars Egypt had waged against Israel in the past, and the strong fraternal sense of injustice many Egyptians felt with Palestinian Arabs.

So when Egyptians threw off the Mubarak regime and held elections, the inevitable binary result was that the top two candidates would represent the old regime, and the organisation best organised and longest protesting about it – the Muslim Brotherhood.

With Mr. Morsi becoming President, in a land that no longer has a working Constitution, the stage is set for a new battle.  Given the Parliamentary elections have been ruled null and void, these will presumably be held again, but he faces the army first and the smaller mass of Egyptians who support modernity.  The women who deep down fear new laws about what they wear, who they marry, their rights to divorce, their treatment if abused, their employment and their work.  The Christians who fear new laws about worship, about free speech, about education and about equal treatment under the law.  The Egyptians more generally who want a society where the state protects everyone’s rights, as individuals, including the right to apostasy (which has, at best, been controversial and difficult in Egypt).

For now, it is likely that Egypt will not become the new Iran.  It is still receiving US government largesse, which is largely benefiting the military.  Any shift in policy that results in this ending will risk a military coup, given the sheer size of the Egyptian military.  However, it is difficult to envisage how a man who belongs to an Islamist organisation, which espouses Sharia law as definitive, which seeks to restrict the role of women, which supports the abolition of the state of Israel and considers jihad and martyrdom as glorious, is going to ever represent a step forward.

If his colleagues get elected in the Parliamentary elections (along with Salafists who are more extremist), then one can envisage a new constitution.  Not one that separates religion and state, nor one that prioritises individual rights.

The intellectual bankruptcy of supporting democracy as the measure of freedom will then be revealed. Egyptians will be deemed to have “supported” an Islamic state, and it will be “better” than the Mubarak regime.

Those who would protest in the streets for civil liberties, for the rights of women and the rights of minorities would appear to be willing to surrender those, for the victory of a man who represents rejection of Mubarak, and implicitly, the United States which backed him.

It may be that fears of an Iranian style Islamist revolution are wrong, it may be that Mr. Morsi is in fact willing to support a secular Egypt, that respects religious and individual freedoms, that fights the scourge of corruption that has long infested that land and takes only token steps towards embracing the long held agenda of an Islamist state.  

However, it is clear that being allowed to vote for a President is not freedom.  Individual rights are not protected when people who do not belong to the dominant religion, live and worship in fear, and when laws are enforced to prohibit people abandoning the dominant religion with the death penalty.

State religion, deep cultural misogyny, suppression of “blasphemous words and deed” and death worship are not compatible with individual freedom (including the rights and equality under the law for women), freedom of religion, freedom of speech and embracing of life.  

Like a train that has escaped one tunnel, had a brief smattering of daylight and may now be about to enter another…