Friday, 2 December 2016

Friday Morning Ramble, 2 December


“Business creates wealth;
government divides it.”

~ Will Spencer

The good news story of the day…
Buzz Aldrin, second man to walk on the moon, evacuated to NZ from Antarctica – NEWSTALK ZB

National is now just Labour without the identity politics.
Nick Leggett’s “defection” surprisingly revealing – NOT PC

Trump's potential incoming Commerce guy, Wilbur Ross, has a bizarre take on sales taxes. And it might mean that the New Zealand government should rethink how it treats imports and exports in GST.
Tax and trade barriers – Eric Crampton, OFFSETTING BEHAVIOUR

I haven’t fully followed the story, but on the face of it there is much here that needs answering.
Tolley needs to apologise – THE STANDARD
Tolley rules out apology for child abuse in state care – RADIO NZ

When the law gets in the government’s way, the government changes the law. If only it were that easy for the rest of us.
Debris to be dumped in ocean to fast-track Kaikoura road repairs – STUFF

“Of those children born in 2010 who'd been abused or neglected by age two, 76 percent were born into a single-parent setting. This startling fact comes from government research which received little or no publicity. Why?”
Child abuse and family structure – LINDSAY MITCHELL

“It is illegal to pay organ donors for their gift. Economists can easily explain the consequences: at a price of zero, you have a big shortage… Most of the time, economists would just take this as example of the stupid that happens when people can't think clearly about prices and exchange.
    Al Roth instead saw it as a constraint to work around, and came up with matching donors as a way of making things suck less given the constraint that money can't be involved.
    And Chris Bishop, in an excellent bit of policy entrepreneurialism, saw the opportunity to save lives by repackaging things.”
Compensating organ donors – Eric Crampton, OFFSETTING BEHAVIOUR

“Dear Mr Goff,
Only a politician would think that introducing new targeted rates is the best scheme to ‘keep rates down’ … “




“Identity politics is taking us backwards to division and prejudice.”
Why is the left reviving apartheid? – Matt Ridley, RATIONAL OPTIMIST

“In your lifetime, how many times can you remember when everyone agreed about the significance of a major cultural phenomenon? It is happening now, as libertarians, conservatives, left-liberals and far-leftists all agree that a deep rot has set into Political Correctness.”
Understanding Triggers and Microaggression as *Strategy* (Part 1) – Stephen Hicks, EVERY JOE
Understanding Triggers and Microaggression as *Strategy* (Part 2) – Stephen Hicks, EVERY JOE

“He feels he has a moral responsibility to raise it, as it is what he believes.”
Boris Johnson calls for illegal immigrants to be granted amnesty after Brexit – TELEGRAPH

“Over the course of the last twelve months, there has been increased focus on the role of policing drugs in the UK. TV presenter and writer Alex Stewart spent six years working on the front line combating drug related crime in London as a Metropolitan Police Officer. Here he provides a genuinely eye-opening insight into the capricious nature of policing the illicit drug market in the capital.”
Why Policing Drug Crime in London Simply Isn’t Working – Alex Stewart, VOLTEFACE

“About 3% of all medals awarded in Beijing 2008 & London 2012 have been stripped due to doping retests (= 52/~1800).”
A Summary of Olympic Drug Re-Testing So Far – Roger Pielke Jr.,  THE LEAST THING

“Well, the claims of the “first climate refugees” are coming up again. I think we’re up to the ninth first climate refugees, it’s hard to keep track. In any case, I came across this..”
The Ninth First Climate Refugees – Willis Eschenbach, WATTS UP WITH THAT

“Modi govt sold elimination of banknotes as 'surgical strike' against criminality. Result more like carpet bombing.”
Foreign capital outflow from India since demonetisation (below).
India: Demonetisation & its Discontents – INSTITUTE FOR NEW ECONOMIC THINKING
Angry Mobs Lock Up Indian Bankers As Cash Chaos Soars: "We Are Fearing The Worst" – ZERO HEDGE
India’s currency chaos – NOT PC
First the War on Cash, then the War on Gold – NOT PC



“Long-term, generalised conflicts are always about abstract principles in collision. … Defeating an enemy such as politicised Islam is a multi-front battle — requiring police, military, plus diplomatic, cultural, and philosophical engagement.”
The Fight with Religious Terrorism is a Philosophical, Multi-Generation, Winnable Battle – STEPHEN HICKS

“’I’m a Muslim, it’s not what the media portrays me to be. If people look at me, a Muslim praying, I don’t know what they’re going to think, what’s going to happen,” the future killer stated in a school profile of him.
So your way of coping is to brutally attack innocent people, Mr. A**** R*** A** A****? Poor baby!”
Islam and P.C.: No Evidence Need Apply – Michael Hurd, LIVING RESOURCES CENTER

“This is the pure evil Mitchell and his colleagues confronted each day at CIA ‘black sites.’ ‘I have looked into the eyes of the worst people on the planet,’ Mitchell writes. ‘I have sat with them and felt their passion as they described what they see as their holy duty to destroy our way of life.’ …
”But perhaps the most riveting part of the book is what Khalid Sheikh Mohammed told Mitchell about what inspired Al-Qaeda to attack the United States – and the U.S. response he expected.””
A horrifying look into the mind of 9/11’s mastermind, in his own words – WASHINGTON POST

“Liberals have really failed on the topic of theocracy. They’ll criticise white theocracy, they’ll criticise Christians. They’ll still get agitated over the abortion clinic bombing that happened in 1984. But when you want to talk about the treatment of women and homosexuals and free thinkers and public intellectuals in the Muslim world, I would argue that liberals have failed us. . . . The crucial point of confusion is that we have been sold this meme of 'Islamophobia,' where every criticism of the doctrine of Islam gets conflated with bigotry toward Muslims as people. . . . We have to be able to criticise bad ideas, and Islam is the mother lode of bad ideas.” ~ Sam Harris
Sam Harris States the Obvious about Islam, Enrages Ben Affleck – OBJECTIVE STANDARD

Q: “Why would the pope need bullet-proof glass in his car?”
Contradictions of Christianity and the Bible - Some Striking Examples and Cases – WAKELET

“Conflict across the Middle East has many causes. But the combination of an interconnected world in which young people can see and hear how others around the world are living, combined with a system of political and economic governance that makes it extremely difficult for many of them to attain even a modestly secure middle-class economic future, is a recipe for social turmoil.”
Youth and the Economic Future of Arab States – Timothy Taylor, CONVERSABLE ECONOMIST

Surprising, but true: “Venezuela’s infant mortality rate has actually been above Syria’s since 2008.”
Socialism Kills More Babies than War – Chelsea Follett, FEE



Looks promising: “Australia and New Zealand Students For Liberty is compiling a selection of student and academic works on freedom in society, and is releasing a new, semesterly magazine, with its first edition out on December 21st, and print copies to be distributed in O-Week 2017!” Keep your eyes peeled for their first edition – or contribute!
Coming Soon: ‘The Gold Standard’ – STUDENTS FOR LIBERTY

“The son of a domestic worker raised by his sisters in a black township near Pretoria under apartheid, Herman Mashaba became a self-made millionaire in a country that systematically excluded blacks from economic opportunities. Sworn into office on August 22, he must wrangle a coalition that includes the revolutionary socialist Economic Freedom Fighters as he tries to implement an anti-regulation, pro-market agenda.”
Meet Johannesburg's New Libertarian Mayor – Leon Louw, FEE

“If leftist critics want to decry the focus of modern economics on consumption, they should turn their sights on the Keynesian interventionists.”
Consumerism Is Keynesianism  - Steve Horwitz, FEE

“Economists are too detached from the real world and have failed to learn from the financial crisis, insisting on using mathematical models which do not reflect reality, according to the Bank of England’s chief economist Andy Haldane.”
Economists need to get into the real world, says Bank of England chief economist – TELEGRAPH

Deirdre McCloskey on the origins of the minimum wage…

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“Contrary to the dominant political narrative from members of both parties, which is parroted uncritically by most of the press, there is little evidence that these public works projects promote long-run economic growth.”
The Great Infrastructure Myth – Marc Scribner, FEE

“The Fed's policies continue to cripple the middle class while favouring those few who benefit from the Fed's inflationary policies.”
End the Fed To Really ‘Make America Great Again’ – MISES INSTITUTE

“When it comes to grand, ambitious government programs imposed to make the world more wonderful, nothing ever goes according to plan.”
If All Had Gone According To Plan – Jeffrey Tucker, FEE
The Pretence of Omniscience – Don Boudreuax, FEE

“One of the leading delusions of social engineers, central planners and government regulators is that they know enough to redesign, direct and command the development and evolution of human society and its social and economic institutions…
“It was Adam Ferguson who coined the phase so often used by Austrian Economist F. A. Hayek, that “nations stumble upon establishments [institutions], which are indeed the result of human action, but not the execution of any human design.”
Economic Ideas: Adam Ferguson and Society as a Spontaneous Order – Richard Ebeling, FFF

“How have economic ideas transformed over the past hundred years?” Lawrence H. White, author of The Clash of Economic Ideas, talks to EconTalk host Russ Roberts about the economists and their ideas of the past one hundred years. They discuss Keynes and Hayek, monetary policy and the Great Depression, Germany after the Second World War, the economy of India, and the future of monetary policy.”
Lawrence White Podcast on EconTalk: The Clash of Economic Ideas – MERCATUS CENTER/ECON TALK


Cowardice asks the question, is it safe?
Expediency ask the question, is it politic?
Vanity asks the question, is it popular?"
But Tu Quoque asks the question, did Hillary do it first?

~ Keith Weiner, with apologies to Martin Luther King


“For us non-Americans it is sometimes hard to understand Donald Trump because he speaks and writes in what the British philosopher Bertrand Russell called “little patches of color”—micro-facts that must be pieced together to form a meaningful picture…
”As I’ve pieced together Mr. Trump’s little patches of color, I’ve come to realize that his real enemy is not globalism but mercantilism…”
The Real Enemy for Trump Is Mercantilism, Not Globalism – Hernando de Soto, WALL STREET JOURNAL

“Donald Trump won the presidency with a promise to ‘drain the swamp’ of crony insider deals in Washington, DC.” Yet “there’s always an excuse for why your gang’s favour-trading is in the public interest, while the other guy’s favour-trading is cronyism. So before Trump even takes office, he’s letting us know that he definitely won’t drain the swamp. You didn’t really think he would, did you?”
Change the swamp – Robert Tracinski, TRACINSKI LETTER
Trump meeting with Goldman Sachs president – THE HILL

“How Steven Mnuchin, Trump’s nominee for Treasury secretary, made millions buying failed IndyMac.”
Steven Mnuchin’s Defining Moment: Seizing Opportunity From the Financial Crisis – WALL STREET JOURNAL

“The economic illiteracy of protectionism.”
Threats & cronyism–and he’s still only President-elect! – NOT PC

“Six months of fake news stories about Hillary Clinton didn't doom her election chances; two decades of real news stories did. But the fake-news meme provides Democrats with an excuse to avoid self-reflection; it clears Clinton (and them) of any responsibility for the loss."
The Liberal Postmortem on 2016 Is Not Going Well – Barton Hinkle, REASON

“Which might make you wonder: Why were we donating to them in the first place?”
Australia ceases multimillion-dollar donations to controversial Clinton family charities – NEWS.COM.AU

“The alt-right didn’t invent post truth. But it’s certainly learned how to take advantage of the left’s abuse & overuse of it.”
Who gave us post truth, conspiracy culture and the alt-right? – Mehrdad Amanpour, HARRY’S PLACE

“Instead of keeping them in place, we must finally understand that such policies are seen as acts of war and that they do not hurt the ones they are intended to. Instead, only the poor  in nations targeted by these embargoes suffer the consequences.”
Castro Was Monstrous, and So Is the Embargo – Alice Salles, FEE

"A president on his way out of town, like a dinner guest who frets the next morning that he talked too much and stayed too long, is obsessed with how he’ll be remembered" -- from this Washington Times editorial. My view: Obama should be remembered as the vapid ideologue who fanned the fires of racial tension; imposed a ludicrously expensive and unworkable health care scheme that broke virtually every promise he made on the subject; ballooned the national debt more than all previous presidents combined; shamelessly politicized the Justice Department, IRS and FBI; supervised a foreign policy of one flop after another; vilified the productive and successful of the country; delivered the weakest economic recovery of the last hundred years; and projected an endless aura of arrogance amid massive incompetence. If there's one program of his eight years that serves as the best metaphor for his presidency, it would be "cash for clunkers." We paid a monumental sum of our hard-earned cash for one sorry clunker of an eminently forgettable administration. If this had been a private sector operation over the past eight years, it would be fiscally and morally bankrupt; most of us would be suing on grounds of breach of contract, negligence, malfeasance, extortion and fraud--and we'd win easily.”
Obama’s legacy rhetoric belies scandal-scarred presidency – WASHINGTON TIMES

“Obama may be leaving the White House, but he still has big plans to destroy America. Please be aware of the following from my LYING monograph…”
LYING AS A WAY OF LIFE: Corruption and Collectivism Come of Age in America – Alexandra York, AMAZON

Bugger the pollsters:


Let’s hope this is true news.
First paralysed human treated with stem cells has now regained his upper body movement – THE HEARTY SOUL

File under “Virtue of Productivity.”
Napping can Dramatically Increase Learning, Memory, Awareness, and More – REFLECTION OF MIND

“Q: You talk about capitalism and that the politics would just be the police and the law courts and the military. So, what is going to be done for like the sick people that are needed of healthcare and they can't pursue their own happiness if the government is just restricted to that. What's going to happen to them?
”A: …”
From the Q&A following Leonard Peikoff's talk Introduction to Objectivism – FACEBOOK

“The Quotes of Steven Wright:
1 - I'd kill for a Nobel Peace Prize.
2 - Borrow money from pessimists -- they don't expect it back.
3 - Half the people you know are below average.
4 - 99% of lawyers give the rest a bad name.”
More here: The Quotes of Steven Wright – THIS BLEW MY MIND


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This looks great, coming up at the Auckland Art Gallery: 'The Body Laid Bare: Masterpieces from Tate' to open at Auckland Art Gallery Toi o Tāmaki from 18 March 2017. Journeying through time, from the classical, biblical and literary subjects of the 1800s to the body politics of contemporary art, 'The Body Laid Bare' brings together masterpieces by renowned artists including JMW Turner, Auguste Rodin (pictured above), Pierre Bonnard, Pablo Picasso, Henri Matisse, Louise Bourgeois, Cindy Sherman, Sarah Lucas and many more …
International masterpieces to reveal the naked truth at Auckland Art Gallery in 2017 – AUCKLAND ART GALLERY

And the Auckland keeps getting better …
Pop-Up Globe
Shakespeare's Henry V tempts star back to theatre – NZ HERALD

Told as a conversation between Marco Polo and Kublai Khan, Italo Calvino’s Invisible Cities offers descriptions of imaginary cities Polo hopes will delight his host as much as they delight the reader. Every lover of architecture should have a copy – and in imagining each city for themselves, will delight in these beautiful illuminated illustrations by Lima-based architect Karina Puente of how her mind’s eye sees them …
Italo Calvino's Invisible Cities, Illustrated – ARCH DAILY
55 (In)visible Cities Project – KARINA FUENTE

“…shows the state of Hollywood, only 3 films from the last 16 years on this list.”
The 100 greatest American films – BBC

Not for everyone … but for those who loved him this is definitely something they will love.
Hear a 9-Hour Tribute to John Peel: A Collection of His Best “Peel Sessions” – OPEN CULTURE

It’s called parallax.
This GIF shows the camera really does add 10 pounds — here’s why – BUSINESS INSIDER

“Craft brewing’s growth is supply-driven. Production is growing fast, not because breweries are growing bigger, but because new brewers are entering the industry. The industry as a whole is showing excellent (and very tempting) growth, but breweries are not growing nearly as much."
Yee Ha! The Great Craft Beer Gold Rush! – BEER TOWN

Answering the important questions.
What’s the best Gin and Vermouth for a Negroni? – DRINKS & DRINKING

[Hat tips quips etc … F.A. Hayek PPE, Shishir BajpaiPaul Rooney, Alison Ballance , Libertyscott UK, Hernando de Soto, Old Whig, Jim Rose, Josh Perry, Screwed by State, Damien Grant, Steve Simpson, Timothy Sandefur , Kevin D. Williamson, Alex Stewart, Yaron Brook, hockey schtick, Drinks Info, New Thinking, Peter R. Neumann, Keith Weiner, Christian Wernstedt, Mark V. Kormes, The Richard Dawkins Foundation for Reason and Science (Official), Riko Stevens, D.K. Williams, Scott DeSalvo, Anthony John Loder, The Cato Institute, Michael Hurd, For The New Intellectuals, Michael Yon, Dale Charteris]


Thursday, 1 December 2016

Experimental method’s most famous experiment finally proven experimentally


If science built the modern world – specifically, if the scientific attitude towards knowledge built the modern world – and there is much evidence to say that it did -- then it really did all begin with Galileo. Because it was with him that the experimental method really began.

For millennia armchair philosophers had just sat around and debated whether objects of different mass would fall at different rates – whether, when dropped from a height, a pound of lead or a pound of feathers would land first. For centuries, the armchair theorists had sat back and argued and had concluded, in their wisdom, that the lead would fall fastest. And then they sat back and fell again into their dogmatic slumbers.

Bugger that, said Galileo (but he said it in Italian) I’m going out to find out for myself.

And he did.

Dropping cannonballs of different weight from the Tower of Pisa (which fortunately for him was built on a lean) he could prove that no matter their weight, they would all land at the very same time.

Thus were the theorists disproven. And so was born the experimental method.

Except that the feather and the cannonball would still fall at different rates. Air resistance, you see. So despite the clear experimental evidence filled in and confirmed again over several subsequent centuries that mass played no part in the rate at which objects fall to earth, there was still a frustrating lacuna when it came to the feathers …

Until now*:


* Well, 2014 actually. But what’s 2 years between historians of the scientific method.

[Hat tip Azizi Hashim]


Nick Leggett’s “defection” surprisingly revealing


In that Labour’s Nick Leggett’s decision to become ex-Labour – and worse, to join the Blue Team! – is so unimportant, it’s important.

It’s not so much a defection as a jump aboard one train as his former one was leaving him.

He said he grew up "with Labour burned deep into my DNA" and both sides of his family were supporters.
    But the party's activists, staffers and MPs had become distant from the party's voting base.
    "They take their heartland for granted and sadly fail to understand the ambitions and challenges of working New Zealanders,' Leggett said.

Leggett is hardly the Waitakere Man that Trotter reckons the party needs. He’s the type of handwringing centrist apparatchik that’s virtually interchangeable with every other of the type. But where those types now might have been happy to wring their hands on Labour’s benches, they’re now discovering that Labour is not their home. National is.

NationalNational is that home because under John Boy Key the former party of free enterprise has made itself so “centrist” that it’s now virtually Labour without the identity politics – and without the Green tail on the red dog. So for those to whom identity politics is a bust and the Greens are too much watermelon to handle – those working Waitakere Men and Women who were once happy to call themselves “True Labour” people – it’s a train to jump aboard for the journey. Soo too the apparatchiks, who no longer see anything in the Blue Team to scare them (which should scare us).

It’s not so much that the apparatchik has changed; it’s the parties that are changing under him.

No wonder that Labour’s Andrew Little was seething. He’s “not True Labour,” spewed Little. When there’s nothing but identity politics separating the two biggest parties, then party tribalism like that is all you have left to draw on.

Several elections ago True Labourites were casting around wondering what their party stand for in a modern world in which the Blue Team is happy to pinch all their policies. If they thought embracing identity politics and the Greens were recipes for success, the gentle attrition seen since tells them the answer is probably “no.”

That’s why Angry Andy was so angry about something so apparently not-so important. And this is why it probably was.

UPDATE: From this distance it now looks like John Tamihere’s rant against the “front bums,” Shane Jones against the xxx, and Damian O’Connor’s against the . Bookend those and many other less celebrated moments with Leggett’s departure and the like of today’s TVNZ report, and you begin to sense the trend:

Eight Labour members have quit the party in protest over a proposed electorate deal with the Greens in Nelson. It includes one supporter who held membership for 30 years and the campaign's coordinator is also understood to have walked away.

To lose one hardcore Labourite may be put down to misfortune. To carry on losing them looks much worse than just carelessness …


First the War on Cash, then the War on Gold


Following up on yesterday’s blog about Indian Prime Minister’s confiscation of “large” rupee bills (the largest being similar to a $20 note): any confiscation of banknotes has to be just a first step, argues Reason magazine’s Shikha Dalmia, because everyone is being hurt, and everyone is trying to rescue themselves. “Yes, the rich have indeed gotten poorer. But the poor have been decimated. Call it trickle-down poverty.”

Modi’s scheme will only encourage more movement out of the rupee from all classes.  There is a massive influx of interest into bitcoin from India’s rich and young professionals.; a move into things like tangible assets (such as gold and real estate), foreign currency and offshore bank accounts, corporate shares, and so on. And the poor are already buying jars of laundry powder for barter, “giving new meaning to the term money laundering,” quips Dalmia, “This means,” she goes on, “that this crackdown will set the stage for future crackdowns.”
    Dalmia argues this war on the private economy is far from over: “… you can be sure that Modi, who has already warned of further action before the end of the year, will go after gold and other assets next. He's already raised excise duties on gold and requires jewellers to check the tax identification card of anyone purchasing gold worth over $3,000, echoing India's notorious
1968 Gold Control Act that criminalised gold holdings by private citizens.”

America too has experienced a gold confiscation in the past century (see Franklin Roosevelt’s notorious Executive Order 6102) – and “only the naive would believe it couldn’t possibly happen again.”

You’d be wise to pay attention, argues Jim Rickards in this guest post, because India’s simply pulling from the global elite’s playbook. What’s happening in India could happen anywhere …

First the War on Cash, then the War on Gold
by Jim Rickards

The global elites are using negative interest rates and inflation to make your money disappear. The whole idea of the war on cash is to force savers into digital bank accounts so their money can be taken from them in the form of negative interest rates.

One way to avoid negative interest rates is to go to physical cash...

They can’t impose negative interest rates on cash.

In order to prevent people from using that option, the elites have launched a war on cash, as recent events have borne out. The war on cash is old news, but it is escalating rapidly…

India’s decision to make 1,000- and 500-rupee notes worthless is having devastating ripple effects in the Indian economy and the market for gold.

The consequences of the decision are both appalling and encouraging — appalling because they show governments’ ability to destroy wealth, and encouraging because they show the ingenuity of individuals operating under the thumb of an oppressive government.

One immediate consequence of the cash ban was that paper money began trading at a discount to face value. The entire banking system in India has been running out of cash and alternative forms of payment such as gold and barter have been emerging.

In plain English, you might be able to sell your illegal 1,000-rupee note to a middleman for 750 rupees in smaller denominations. You would get legal tender for your worthless 1,000-rupee note. The middleman presumably has some connection with the banks that allows him to deposit the funds without being harassed by the tax authorities.

It’s not unusual for bonds to trade at a discount due to changes in interest rates or credit quality, but this is the first time I’ve ever seen cash trading at a discount (although I did predict this development in Chapter 1 of my new book, The Road to Ruin.)

The second distortion is that gold is selling in India for over $2,000 per ounce at a time when the world market price is under $1,200 per ounce. This is because Indian citizens are rushing to buy gold for cash.

The gold dealers can then deposit the cash for full value. This is just another form of discount on the face value of the cash. It’s not that gold is more valuable; it’s just that your $2,000 is worth less than $1,200 (in rupee equivalents) when it comes time to buy the gold.

I’ve said for a while that the war on cash would be followed quickly by a war on gold. India may prove the point.

Don’t think of this as something that happens only in poor countries. Similar scenes will play out in the U.S. and Europe as elites become more desperate to take your money.

It should be clear that the war on cash has two main thrusts. The first is to make it difficult to obtain cash in the first place. At home, U.S. banks will report anyone taking more than $3,000 in cash as engaging in a “suspicious activity” using Treasury Form SAR (Suspicious Activity Report).

The second thrust is to eliminate large-denomination banknotes. A 1,000-rupee note may sound like a lot, but it’s only equivalent to about $15 U.S. dollars. The U.S. got rid of its $500 note in 1969, and the $100 note has lost 85% of its purchasing power since then. With a little more inflation, the $100 bill will be reduced to chump change.

Of course the European Central Bank announced that they were discontinuing the production of new 500 euro notes (worth about $575 at current exchange rates). Existing 500 euro notes will still be legal tender, but new ones will not be produced.

This means that over time, the notes will be in short supply and individuals in need of large denominations may actually bid up the price above face value paying, say, 502 euros in smaller bills for a 500 euro note. The 2 euro premium in this example is like a negative interest rate on cash.

Ken Rogoff is a leading voice of the elites in the war on cash. He recently wrote an article detailing the ways elites can steal your money. The first is negative interest rates. The second is the elimination of cash (governments can do this by declaring the $100 bill worthless, just as India did with the 500- and 1,000-rupee notes).

The third way is to set higher inflation targets. Rogoff wants to raise the Fed’s inflation target from 2% to 4% per year. At a 4% rate, the value of a dollar is cut 75% between the time you’re 30 years old until a normal retirement age of 65. The money you save in your younger years is nearly worthless by the time you need it.

Why should you care what Ken Rogoff thinks? Because Rogoff is not just another big brain. He’s a professor of economics at Harvard University and the former chief economist of the International Monetary Fund. More importantly, his name is frequently mentioned as a possible nominee for a seat on the Board of Governors of the Federal Reserve. If Rogoff were on the Fed board, he’d be in a position to turn his confiscatory ideas into policy.

But even if Rogoff remains at Harvard, his views are highly influential on economic policy in general. Rogoff is not alone in his views.

One solution to negative interest rates is to buy physical gold. But if the government has a war on cash, can the war on gold be far behind?

Probably not.

Governments always use money laundering, drug dealing and terrorism as an excuse to keep tabs on honest citizens and deprive them of the ability to use money alternatives such as physical cash and gold.

When you start to see news articles about criminals using gold instead of cash, that’s a stalking horse for government regulation of gold.

Guess what? An article on the topic of criminals using gold just appeared this spring, in Bloomberg….

Jim Rickards is the editor of Jim Rickards' Strategic Intelligence. He's an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. Rickards advised clients of the impending 2008 financial collapse, of a decline in the dollar and a sharp rise in the price of gold, all years in advance. Rickards is the author of The New York Times bestseller Currency Wars, published in 2011 and The Death of Money, published in 2014.
This post and its introduction first appeared at Laissez Faire Today.


Threats & cronyism–and he’s still only President-elect!


If put into practice, “Trump’s disastrous pledge to keep jobs in the US would raise the trade deficit, politicise the economy, and bring on a corny-capitalist nightmare.” (But apart from that, Mr Trump, how was the play?)

The President-elect’s overnight “deal” with Carrier to keep part of the air-conditioning company in Indiana comes on the back of his threats during the campaign to slap tariffs on Carrier imports from Mexico, and since the campaign to end their lucrative defence contracts. This is just a small sign of how his policy will work. Tyler Cowen explains some of the consequences:

Economists might regard this [policy] as a misguided form of protectionism, but in fact, it’s worse than that: If instituted, it could prove a major step toward imposing capital controls on the American economy and politicizing many business decisions…
   Using the law to forbid factory closures would have serious negative consequences. For one thing, those factories may be losing money and end up going bankrupt. For another, stopping the closure of old plants would lock the U.S. into earlier technologies and modes of production, limiting progress and economic advancement.
    An alternative policy would prohibit companies from cutting American production and expanding in Mexico within, say, a two-year window. But would that be effective? If a law is needed, it presumably means that Mexican production is more profitable, at the margin, than U.S. production. So if American companies couldn’t shift production to Mexico, Mexican companies could expand production on their own. Or perhaps Mexico would look to non-American multinationals. The end result would be that Asian, European and Mexican investors would gain at the expense of U.S. companies.

So the policy would do the very opposite of what Trump claims to want, while raising prices for all those Americans he claims to help.

But it gets worse.

Perhaps most importantly, a policy limiting the ability of American companies to move funds outside of the U.S. would create a dangerous new set of government powers. Imagine giving an administration the potential to rule whether a given transfer of funds would endanger job creation or job maintenance in the United States. That’s not exactly an objective standard, and so every capital transfer decision would be subject to the arbitrary diktats of politicians and bureaucrats. It’s not hard to imagine a Trump administration using such regulations to reward supportive businesses and to punish opponents. Even in the absence of explicit favouritism, companies wouldn’t know the rules of the game in advance, and they would be reluctant to speak out in ways that anger the powers that be.
    In other words, the Trump program for protectionism could go far beyond interference in international trade. It also could bring the kind of crony capitalist nightmare scenarios described by Ayn Rand in her novel “Atlas Shrugged,” a book many Republican legislators[and voters] would be well advised to now read or reread.


Wednesday, 30 November 2016

India’s currency chaos



So what’s going on with the Indian government’s crackdown on cash?

Their sudden decision to demonetise 87% of the country’s currency (notes of Rs. 500 and Rs. 1000 all in people’s personal possession) is as historic a decision as it is destructive --- messing up the country’s financial system; denying wages to the millions of day labourers paid in cash; destroying the perishable stocks of farmers and vendors suddenly unable to sell fresh produce – not to mention that close to 50 deaths have been attributed to the sudden demonetisation. This has affected the life of every single person in the country, for whom their wealth in the form of the government’s paper is now under threat of simply disappearing.

Not to mention their confidence in the very medium of exchange that makes their economic system’s division of labour possible (in India, over 90% of all transactions are (or were) conducted in paper currency). In a paper-based system with no commodity backing, then as Milton Friedman once noted

private persons accept these pieces of paper because they are confident that others will. The pieces of green paper have value because everybody thinks they have value. Everybody thinks they have value because in everybody's experience they have had value.

This is not trivial. When that confidence in that value has gone, well, that’s when paper money goes away and dies.

So something this patently destructive must have a reason, particularly when (as even the wreckage’s supporters readily concede) the note cancellation will do little to remedy tax evasion, corruption, or illicit commerce. And there is a very plain reason, as economists Larry White and Shruti Rajagopalan make clear: The demonetisation represents “a massive one-shot transfer of wealth from the private to the public sector."

If there is anything that explains Prime Minister Modi’s sudden and hitherto unconcealed enthusiasm for currency cancellation, then this unprecedented one-off wealth transfer to his government is surely it.

Since every government in the world is desperate to keep their ships of (welfare) state afloat, yet all are evidently running out of the readies, these raids on people’s wealth by the likes of the Indian and Greek government (who simply did an overnight raid on savers’ bank accounts) should be understood as precursors of the destruction to come further afield – so their effects should be fully grasped. White and Rajagopalan list three, all hidden:

1. Effects of transition away from old notes
2. Fiscal impact of transition into new notes
3. Impact of the non-uniform injection of the new notes into the economy

Of the first they point out that Modi’s surprise announcement imposes “a one-time wealth loss on currency holders who are unable or unwilling to convert their entire holdings of old notes.” In that the stated aim is to eliminate “untaxed wealth,” this effect is intentional.

Modi seems to have underappreciated, however, that in so doing his policy creates a serious shortage of currency. This shortage blocks ordinary currency transactions, blocking honest ordinary people from making a living, thus reducing national income. The biggest impact is on the poor, who have few substitutes for cash transactions…
    [So] a policy ostensibly intended to inflict losses on tax evaders and criminals is imposing, at least in the transition, much greater losses on honest users of currency.

Of the second, they note the hidden gain to the government in the imminent issue of new notes.

The most striking implication is that the Indian government enjoys a one-time revenue gain. Suppose that, as the government purports to believe, a large share of the old currency is “black money” held by tax-evaders and professional criminals who will be penalised by the cancellation because they do not want to face the scrutiny that will accompany the exchange of too many old notes for new. They will simply eat their losses.

This on its own could represent nearly half of the value all the invalidated currency notes issued: i.e., Rs. 7.2 trillion, or US$106 billion. So without any new increase in the money stock, the government can now spend into existence US$106 billion on any pet project without any inflationary consequence whatsoever.

It’s easy to imagine any finance minister or adviser hopping with delight when they figured that one out. Little would they have worried that this effectively represents a giant capital levy, “a massive one-shot transfer of wealth from the private to the public sector.”

In blunter words: outright theft.

But this injection of new notes will not be even: as with the injection of all new money, especially in a corrupt commonwealth, the new money is spread unevenly through the economic system. Importantly, it is the cronies who get the new money first.

Those who receive the new currency notes first can buy goods and resources at depressed prices. The terms of trade turn against the unbanked sector, and the relatively wealthy banked population receives a transfer from the relatively poor unbanked population. The skewing of relative prices and incomes will persist until the access to new currency notes flows throughout the economy.

Very nice if you’re a crony.

But that’s not all.

There is also a geographic skewness. Tea vendors in the city of Mumbai, for example, where new currency is appearing relatively promptly, are less hard-hit than tea vendors in the rural villages of Maharashtra.


The currency shortage may also cause structural imbalances in the economy for longer production processes.

Crops need to be paid for and sown (“Close to half of Indian families are engaged in agriculture, and it accounts for 16% of the GDP.”) Commodities need to be bought as inputs. And in construction, (“almost entirely a cash-based industry”)  current projects “are already being postponed until new currency notes become sufficiently available. This postponement will have effects on housing supply and prices for several years ahead.”

So not just an immediate one-off destructive effect, but destruction for some years to come.

What makes it the ideal government project however is that the cause of these long-term destructive effects will be hidden, the gain them in scads of ill-gotten lucre is immediate. For a politician, what could possibly be more motivating.

That the government no doubt understood much of the destruction the project would cause, yet went ahead with it anyway, attests to the desperation that all governments will have when they face their own financial emergencies.

Be warned.


Castro’s Dead: Here’s What His Tombstone Should Say…


Fidel Castro, as you certainly know by now, is dead. And, says Chris Campbell in this guest post, there are some things that really must be inscribed on his tombstone.

Although we’re not ones to engage in schadenfreude or death celebration, we certainly won’t act like Fidel Castro was some kind of hero.

But that’s just us.

The US Green Party’s Jill Stein, who just won the lottery (what is it? $7 million now?) by tricking people into funding her “recount” (and, surprise, missing the Pennsylvania filing date), tweeted this about Castro: “Fidel Castro was a symbol of the struggle for justice in the shadow of empire. Presente!”

Actor Jack Nicholson said Castro was a “humanist like President Clinton.” And Chevy Chase said Cuba is “proof socialism sometimes works.”

Erik Loomis, a history professor at the University of Rhode Island, called Castro, Che Guevara and Ho Chi Minh, “an inspiration for billions of people around the world seeking freedom from colonial overlords.”

[And read: ‘Fidel Castro died as he lived: to the sound of useful idiots making allowances for his crimes.’]

And there’s the rub. In a perfect world, or in a void, Castro certainly wouldn’t have been great in any non-sociopath's eyes. Certainly not if any of these people lived under his regime. Why, being the intellectuals and personalities that they are, most of these limelight-hunters praising Castro probably would’ve been killed, or at least persecuted, by him.

But relative to the mightiest colonial overlords, they say, Castro wasn’t so bad. Principles be damned. Carlos Eire, a Professor of History and Religious Studies at Yale explains this unrequited love for Castro in, of all places, a Washington Post Op-Ed:

Because deceit was one of Fidel Castro’s greatest talents, and gullibility is one of the world’s greatest frailties. A genius at myth-making, Castro relied on the human thirst for myths and heroes. His lies were beautiful, and so appealing.
According to Castro and to his propagandists, the so-called revolution was not about creating a repressive totalitarian state and securing his rule as an absolute monarch, but rather about eliminating illiteracy, poverty, racism, class differences and every other ill known to humankind. This bold lie became believable, thanks largely to Castro’s incessant boasting about free schools and medical care, which made his myth of the benevolent utopian revolution irresistible to many of the world’s poor.

Fortunately, there’s been plenty of opposition to this “Castro is a hero” narrative. Take, for example, the backlash on which Canada’s Prime Minister Justin Trudeau has found himself on the receiving end.

Castro was “a controversial figure,” Trudeau said during his eulogy. But he was also “A legendary revolutionary and orator” who “made significant improvements to the education and health care of his island nation.”

The Twitter trolls instantly jumped into action. The backlash was no less than epic. Under the hashtag #TrudeauEulogies, (albeit dark) hilarity ensued:

“Today we mourn painter and animal rights activist, Adolf Hitler. His death also highlights the need for suicide awareness.”

“Mr. Stalin’s greatest achievement was his eradication of obesity in the Ukraine through innovative agricultural reforms.”

“Jim Jones provided shelter and hydration to hundreds of Americans and, for that, we will remember him fondly.”

“While a controversial figure, Mr. Gacy entertained many children at birthday parties.”

Today we mourn the death of Jeffrey Dahmer, who opened his home to the LGBTQ community and pushed culinary boundaries.”

Justin Trudeau Meme

In a just world, rather than those in power praising a tyrant, the truth about Castro would be left to no ambiguity.

In a just world, says Eire, “these 13 facts below would be etched on Castro’s tombstone and highlighted in every obituary, as bullet points -- a fitting metaphor for someone who used firing squads to murder thousands of his own people.

  • He turned Cuba into a colony of the Soviet Union and nearly caused a nuclear holocaust.
  • He sponsored terrorism wherever he could and allied himself with many of the worst dictators on earth.
  • He was responsible for so many thousands of executions and disappearances in Cuba that a precise number is hard to reckon.
  • He brooked no dissent and built concentration camps and prisons at an unprecedented rate, filling them to capacity, incarcerating a higher percentage of his own people than most other modern dictators, including Stalin.
  • He condoned and encouraged torture and extrajudicial killings.
  • He forced nearly 20 percent of his people into exile, and prompted thousands to meet their deaths at sea, unseen and uncounted, while fleeing from him in crude vessels.
  • He claimed all property for himself and his henchmen, strangled food production and impoverished the vast majority of his people.
  • He outlawed private enterprise and labour unions, wiped out Cuba’s large middle class and turned Cubans into slaves of the state.
  • He persecuted gay people and tried to eradicate religion.
  • He censored all means of expression and communication.
  • He established a fraudulent school system that provided indoctrination rather than education, and created a two-tier health-care system, with inferior medical care for the majority of Cubans and superior care for himself and his oligarchy, and then claimed that all his repressive measures were absolutely necessary to ensure the survival of these two ostensibly “free” social welfare projects.
  • He turned Cuba into a labyrinth of ruins and established an apartheid society in which millions of foreign visitors enjoyed rights and privileges forbidden to his people.
  • He never apologised for any of his crimes and never stood trial for them.

Yes, Castro did great evil. [And read: ‘Why The Left Loves Totalitarians Like Fidel Castro.’]

And, as Bryan Caplan writes on, he continues to do evil by “charismatically inspiring sympathy for this psychopathic path to a glorious future.

“We need to get rid of all sympathy for Castro,” says Caplan.

But, he says, that’s just the first step: “Our ultimate goal should be to get rid of the errors that Castro has come to represent. Castro was a villain straight out of 1984. And in a just world, Orwell's words would adorn his tombstone:

“One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship.”

Chris Campbell is editor of the Laissez Faire Today newsletter, where this post first appeared.



Tuesday, 29 November 2016

‘Broken Window Fallacy’ on Radio NZ


I was heartened to discover through RNZ podcasts that Frederic Bastiat’s Broken Window Fallacy made an appearance back on the 17th. Shamabeel Eaqub was there to begin a regular appearance on the afternoon programme talking economics, and for his first visit he talked about the fallacy of disaster economics:

The idea there is an upside to natural disasters – that they are good for the economy - is ‘a figment of our imagination’, economist Shamubeel Eaqub says.
    We shouldn’t celebrate natural disasters or war or things that are destructive because ultimately what we find is the net impact is we are worse off than we would otherwise have been.
    Eaqub told Afternoons there is a tendency to think there is a net-economic gain as a result of natural disasters such as earthquakes, because they prompt lots of visible economic activity such as cleanup, construction and repairs.
    He says it's akin to digging a hole and then filling it up again.
    “It frustrates me a great deal because it is a figment of our imagination.”

Great to hear good sense and Bastiat on the local wireless.

LISTEN HERE: The fallacy of disaster economics [audio] - RNZ

No new parliamentary building for MPs, says NOT PC: Make room downtown instead



Some years ago back when Rodney Hide was busting perks rather than enjoying them, he busted the government’s plans for a new parliamentary building that was going to cost taxpayers millions. (This may be the only service he ever performed for the country.)

The plan to give hundreds of millions of taxpayer dollars to Wellington builders and interior designers didn’t disappear like his morals, however, it just slumbered. And with the lease on  Bowen House soon to expire, Sleeping Beauty has been dusted off – this time with the boast that it will cost “only” $100 million this time. Plus cockups.

Naturally, the Government’s David Farrar is big on the boasting, arguing it’s better not to pay foreigners $6 million a year to rent Bowen House to house MPs, and to build big instead. A commenter there identifies the false alternative however, and with it calls the National blogger’s bluff in a way that saves us both costs: given that National had promised to slash bureaucrat numbers, surely it’s better to use one of the many government buildings that should now be sitting empty for lack of staff to fill them? And if there are not, then why not.

And since we know that rather than slashing numbers as promised the Key Government has instead raised them, perhaps some genuine opposition to the government could extract some sort of a promise from them: that instead of either building big or renting again, that it has until the Bowen House lease expires to find office space in Wellington by laying off enough surplus staff to make room for Bowen House’s soon-to-be ex-tenants.

Tick tock.

PS: If anyone thinks the cost of building for MPs is ever cheap, they need to read (or re-read) the story of Europe’s most costly building of its size ever constructed. Situated in Westminster and connected by tunnel to its parliamentary host, just like Bowen House, the cost of Portcullis House became so rapidly inflated by all the extras that British MPs desired for themselves that the palace was built (eventually) at a cost of £1.2m for each MP.

And they’re still suing.

[Pic from the Government Blogger]

[Pic from.

Goff dreaming up new ways to pick your pocket


I can’t help thinking Phil Goof’s focus as mayor is somewhat the same as his predecessor’s: picking your pocket for more millions on his pet projects.

Yesterday’s brainfart: dunning tourists while pledging to “peg” rate rises to only 2.5 percent a year. Len Brown pledged the same thing with rates–even the same number—and we saw how well that peg worked, didn’t we.

Given the way rates and debt both exploded under Pants-Down’s round, any pledge to “keep rate increases below inflation” now is like a strangler promising only to suffocate you more slowly. And that’s even if the politician were to keep his promise. (Q: How do you know a politician is lying … )

So I can’t help but think that the touted tourist tax is just a way, just one small way, to help fill the very large pot he needs to gets his own monuments out of the ground (new stadia; new train sets; who the hell knows what else) and pay for his not-inexpensive pledge to raise the wages of most people employed by the council..

The fair city of Sydney has used this ploy for some years to help it pay off the Olympics. The costly event has long gone, but its debts and room-tax remain, raising room rates for everyone who roams there while turning their hosts into tax collectors.

Goof wants to use it, he says, to pay for more tourist promotion – which has as much credibility as that from Brown that the petrol tax he toyed with would help him build more motorways. Goof has plans for his own spend-up, and he needs to fill the pot.

Notice that in addition to this touted tax he’s already flagged both a petrol tax and a tax on “large-scale developments” that are increasingly struggling to get off the ground financially – both of these to be paid in the end by you and I [UPDATE: Plus he’s “bidding for a significant share of the Government’s Housing Infrastructure Fund.”] To paraphrase a popular line, a room tax here, a petrol tax there, and several other taxes later like it and sooner or later you’re talking real money. Brown raised debt and core rates to pay for his projects; Goof hopes to get these and several other taxes off the ground to pretend he’s kept a core pledge – but of what worth is it that rates themselves rise at 2.5% if a score of new taxes is added to the amount we pay to his Grey Ones.

And who really believes he won’t keep raising that rates bill anyway.


Ayn Rand predicted an American slide toward fascism


Are fascism and socialism opposites? No, observed Ayn Rand, in practice they “are only superficial variations of the same monstrous theme,” with as little difference to those under their boot as there was between Castro and Batista. The two systems differ only in one technical respect, making socialism “in this respect [only] the more honest of the two.”
    Contrary to many conservative commentators during the 1960s, Rand maintained that America was drifting toward fascism, not socialism, and that this slippery slope was virtually inevitable in a mixed economy.
    In this guest post, George Smith ponders how she might view her prediction today …

In a letter written on March 19, 1944, Ayn Rand remarked: “Fascism, Nazism, Communism and Socialism are only superficial variations of the same monstrous theme—collectivism.” Rand would later expand on this insight in various articles, most notably in two of her lectures at the Ford Hall Forum in Boston: “The Fascist New Frontier1; and “The New Fascism: Rule by Consensus2.

Smith1Rand knew better than to accept the traditional left-right dichotomy between socialism (or communism) and fascism, according to which socialism is the extreme version of left-ideology and fascism is the extreme version of right-ideology (i.e., capitalism). Indeed, in a 1971 Ayn Rand Letter she characterised fascism as “socialism for big business.” Both are variants of statism, in contrast to a free country based on individual rights and laissez-faire capitalism. As Rand put it in “Conservativism: An Obituary”:

The world conflict of today is the conflict of the individual against the state, the same conflict that has been fought throughout mankind’s history. The names change, but the essence—and the results—remain the same, whether it is the individual against feudalism, or against absolute monarchy, or against communism or fascism or Nazism or socialism or the welfare state.

The placement of socialism and fascism at opposite ends of a political spectrum serves a nefarious purpose, according to Rand. It serves to buttress the case that we must avoid “extremism” and choose the sensible middle course of a “mixed economy.” Quoting from “‘Extremism,’ Or The Art of Smearing”:

If it were true that dictatorship is inevitable and that fascism and communism are the two “extremes” at the opposite ends of our course, then what is the safest place to choose? Why, the middle of the road. The safely undefined, indeterminate, mixed-economy, “moderate” middle—with a “moderate” amount of government favors and special privileges to the rich and a “moderate” amount of government handouts to the poor—with a “moderate” respect for rights and a “moderate” degree of brute force—with a “moderate” amount of freedom and a “moderate” amount of slavery—with a “moderate” degree of justice and a “moderate” degree of injustice—with a “moderate” amount of security and a “moderate” amount of terror—and with a moderate degree of tolerance for all, except those “extremists” who uphold principles, consistency, objectivity, morality and who refuse to compromise.

In both of her major articles on fascism (cited above) Rand distinguished between fascism and socialism by noting a rather technical (and ultimately inconsequential) difference in their approaches to private property. Here is the relevant passage from “The New Fascism: Rule by Consensus”:

Observe that both “socialism” and “fascism” involve the issue of property rights. The right to property is the right of use and disposal. Observe the difference in those two theories: socialism negates private property rights altogether, and advocates “the vesting of ownership and control” in the community as a whole, i.e., in the state; fascism leaves ownership in the hands of private individuals, but transfers control of the property to the government.
    Ownership without control is a contradiction in terms: it means “property,” without the right to use it or to dispose of it. It means that the citizens retain the responsibility of holding property, without any of its advantages, while the government acquires all the advantages without any of the responsibility.
    In this respect, socialism is the more honest of the two theories. I say “more honest,” not “better”—because, in practice, there is no difference between them: both come from the same collectivist-statist principle, both negate individual rights and subordinate the individual to the collective, both deliver the livelihood and the lives of the citizens into the power of an omnipotent government —and the differences between them are only a matter of time, degree, and superficial detail, such as the choice of slogans by which the rulers delude their enslaved subjects.

Contrary to many conservative commentators during the 1960s, Rand maintained that America was drifting toward fascism, not socialism, and that this descent was virtually inevitable in a mixed economy. “A mixed economy is an explosive, untenable mixture of two opposite elements,” freedom and statism, “which cannot remain stable, but must ultimately go one way or the other” (“‘Extremism,’ or The Art of Smearing”). Economic controls generate their own problems, and with these problems come demands for additional controls—so either those controls must be abolished or a mixed economy will eventually degenerate into a form of economic dictatorship. Rand conceded that most American advocates of the welfare state “are not socialists, that they never advocated or intended the socialisation of private property.” These welfare-statists “want to ‘preserve’ private property” while calling for greater government control over such property. “But that is the fundamental characteristic of fascism.”

Smith2Rand gave us some of the finest analyses of a mixed economy—its premises, implications, and long-range consequences—ever penned by a free-market advocate. In “The New Fascism,” for example, she compared a mixed economy to a system that operates by the law of the jungle, a system in which “no one’s interests are safe, everyone’s interests are on a public auction block, and anything goes for anyone who can get away with it.” A mixed economy divides a country “into an ever-growing number of enemy camps, into economic groups fighting one another for self preservation in an indeterminate mixture of defence and offense.” Although Rand did not invoke Thomas Hobbes in this context, it is safe to say that the economic “chaos” of a mixed economy resembles the Hobbesian war of all against all in a state of nature, a system in which interest groups feel the need to screw others before they get screwed themselves.

A mixed economy is ruled by pressure groups. It is an amoral, institutionalised civil war of special interests and lobbies, all fighting to seize a momentary control of the legislative machinery, to extort some special privilege at one another’s expense by an act of government—i.e., by force.

Of course, Rand never claimed that America had degenerated into full-blown fascism (she held that freedom of speech was a bright line in this respect), but she did believe that the fundamental premise of the “altruist-collectivist” morality—the foundation of all collectivist regimes, including fascism—was accepted and preached by modern liberals and conservatives alike. (Those who mistakenly dub Rand a “conservative” should read “Conservatism: An Obituary,” a scathing critique in which she accused conservative leaders of “moral treason.” In some respects Rand detested modern conservatives more than she did modern liberals. She was especially contemptuous of those conservatives who attempted to justify capitalism by appealing to religion or to tradition.) Rand illustrated her point in “The Fascist New Frontier,” a polemical tour de force aimed at President Kennedy and his administration.

Smith3Rand began this 1962 lecture by quoting passages from the 1920 political platform of the German Nazi Party, including demands for “an end to the power of the financial interests,” “profit sharing in big business,” “a broad extension of care for the aged,” the “improvement of public health” by government, “an all-around enlargement of our entire system of public education,” and so forth. All such welfare-state measures, this platform concluded, “can only proceed from within on the foundation of “The Common Good Before the Individual Good.”

Rand had no problem quoting similar proposals and sentiments from President Kennedy and members of his administration, such as Kennedy’s celebrated remark, “And so, my fellow Americans: ask not what America will do for you—ask what you can do for your country.” The particulars of Rand’s speech will come as no surprise to those familiar with her ideas, but I wish to call attention to her final remarks about the meaning of “the public interest.” As used by Kennedy and other politicians, both Democratic and Republican, this fuzzy phrase has little if any meaning, except to indicate that individuals have a duty to sacrifice their interests for the sake of a greater, undefined good, as determined by those who wield the brute force of political power. Rand then stated what she regarded as the only coherent meaning of “the public interest.”

[T]here is no such thing as ‘the public interest’ except as the sum of the interests of individual men. And the basic, common interest of all men—all rational men—is freedom. Freedom is the first requirement of “the public interest”—not what men do when they are free, but that they are free. All their achievements rest on that foundation—and cannot exist without them.
The principles of a free, non-coercive social system are the only form of “the public interest.”

Smith4I shall conclude this essay on a personal note. Before I began preparing for this essay, I had not read some of the articles quoted above for many, many years. In fact, I had not read some of the material since my college days 45 years ago. I therefore approached my new readings with a certain amount of trepidation. I liked the articles when I first read them, but would they stand the test of time? Would Rand’s insights and arguments appear commonplace, even hackneyed, with the passage of so much time? Well, I was pleasantly surprised. Rand was exactly on point on many issues. Indeed, if we substitute “President Obama” for “President Kennedy” or “President Johnson” many of her points would be even more pertinent today than they were during the 1960s.

Unfortunately, the ideological sewer of American politics has become even more foul today than it was in Rand’s day, but Rand did what she could to reverse the trend, and one person can only do so much. And no one can say that she didn’t warn us.

George H. Smith is an independent scholar and a weekly columnist at the Cato Institute’s He is the author of Atheism: The Case Against God (1974), Atheism, Ayn Rand, and Other Heresies (1991), and Why Atheism (2000). He is also the author of the audio series on “Great Political Thinkers,” “The Meaning of the Constitution,” and “The Ideas of Liberty.”
This post previously appeared at FEE and Libertarianism.Org.


1. Dec. 16, 1962, published as a booklet by the Nathaniel Branden Institute in 1963
2. April 18, 1965, published as Chapter 20 in Capitalism: The Unknown Ideal by New American Library in 1967


Monday, 28 November 2016

Safety, stupidity, and why common sense isn’t very common anymore


With the weekend disaster on the Kaipara bar still on everyone’s mind, an ex-Department of Labour inspector, paramedic, and fireman wrote to Newtalk ZB’s Leighton Smith with the subject line, 'The Science of Being Stupid: Common Sense vs Health and Safety Act vs Bureaucrats'.

He joined the programme to talk about common sense and how bureaucracy and box ticking has diminished it – on the Pike River tragedy, the Kaikoura earthquake, and more. Very interesting.

AUDIO HERE: Tony Rigg: Common sense isn't very common anymore – NEWSTALK ZB


“Why no leftie fake news sites?”


Fake news. Left liberals like to think they’re not part of it – to be specific, of the whole website-publishing-fake-political-stories-that-go-viral thing. The Double Standard for instance has this morning published a piece by “a fake news writer” claiming (to The Sub-Standard’s obvious delight) that “leftie / liberal fake news [sites are] much rarer” because “it just has never worked, it never takes off. You’ll get debunked within the first two comments and then the whole thing just kind of fizzles out.”

Perhaps a simpler explanation is that the liberal left don’t need to set up fake news coming from sites in Macedonia and elsewhere because they have them coming out already in the mainstream media from places like the Clinton News Network and Times Square. (Not to mention Tony Blair’s entire media army, from which milieu the very term “spin doctor” emerged.)

This is neither new, nor trivial. They have peddled fake news that has literally changed the world. Consider for example how the New York Times helped to save, then lionise, the “anti-communist” Castro (“Fidel Castro has strong ideas of liberty, democracy, social justice, the need to restore the Constitution’” wrote the Times’s Herbert Matthews over the sound of Castro’s firing squads, “but it amounts to a new deal for Cuba, radical, democratic and therefore anti-Communist.”) And to actively cover up Stalin’s many infamies ("Any report of a famine in Russia is today an exaggeration or malignant propaganda,” wrote the Times’s Walter Duranty while the corpses were being piled high around him.) Not to mention how even today its senior staff gather each week in the Times office to “craft the narrative” for the week, or even year, ahead – and have all-but admitted post-election that it publishes advocacy instead of news.

The Times being just one among hundreds, and still the most influential mainstream outlet among them, why on earth would you need to start fake liberal-left news sites when the mainstream ones are already doing the job for you?