Sunday, September 21, 2014

Common Sense of the New Zealand Voter Prevails

The general election in New Zealand produced a result that is both extraordinary and comforting. It is extraordinary because the National Party won a third term in government with an overall majority of seats and an increase in votes - the first time a third term government has increased its vote since Richard 'King Dick' Seddon's government in 1899. The left-wing Labour and Green parties both saw their vote decrease over the 2011 election. The race-based Maori Party also saw its vote decrease and the Internet-Mana Party, Kim Dotcom's personal political vehicle for ensuring he maintains his legal sanctuary in New Zealand, was wiped out.

It was comforting because New Zealand voters ignored all of the distractions from left-wing commentators and the mainstream media to ensure the current government's middle-of-the-road economic policies would continue. Voters saw the distractions, including allegations that the National Government has abused the powers of the security services to target New Zealanders and its political enemies, as disingenuous, rightly questioning the motives of those who were making the allegations.

I was hoping for the libertarian ACT Party to do better and particularly that its leader, Jamie Whyte, would make it into Parliament, but nevertheless I am well satisfied with the result. Had the outcome of the election been radically different, with a Labour-Greens coalition introducing new punitive taxes and other economically damaging policies, I would be seriously reconsidering whether I would continue to call New Zealand home. But that is not necessary, at least for another three years, and for that I am grateful for the common sense of the New Zealand voter.

Thursday, September 18, 2014

Kiwiwit's Easy Guide to Voting

I imagine the whole world knows there is a general election in New Zealand this Saturday, given I have seen articles about our ridiculous election campaign in the Wall Street Journal, New York Times, The Times, The Daily Telegraph and many other international publications over the last month.  Many other bloggers are publishing their voting guides, giving their careful assessment of candidates in each electorate. My voting guide is much simpler. It has three easy principles that the discerning libertarian voter can apply to ensure New Zealand ends up with the best of the bad bunch:

1) Don't vote for the looneys. That includes all Conservative, Green and New Zealand First party candidates.

2) Vote for the ACT candidate if you have one in your electorate. If you don't, vote for the National candidate. Yes, I know, voting for that bunch of unprincipled wimps in the National Party sticks in my craw as well, but as bad as they are, the others are worse.

3) Give your party vote to ACT.

Simple really.  And remember the old Democratic Party slogan, vote early and often!

Tuesday, September 16, 2014

Moment of Truth for Dotcom Will Come Saturday

When the Dotcom case first hit the news in New Zealand, I had some sympathy for the corpulent German. New Zealand law enforcement agencies, acting upon the instructions of US authorities, had grossly abused their legal powers and Dotcom's rights as a New Zealand resident by subjecting him to a humiliating arrest and confiscation of assets - all in pursuit of criminal copyright charges that even the US courts have been extremely reluctant to enforce in any case where a service provider like Dotcom's Mega-upload business has been the defendant. But any sympathy I might have had for Dotcom has evaporated as he has attempted to use his considerable wealth to pervert the New Zealand electoral process in his own interests.

I didn't watch the coverage of Dotcom's so-called 'Moment of Truth' rally last night in Auckland but I've read accounts of those who were there. The Mega-man was expected to reveal damning evidence showing that Prime Minister John Key knew about him before the New Zealand authorities acted on the US arrest warrant. Furthermore, he claimed that he was lured to New Zealand with the express purpose of the New Zealand Government extraditing him to the United States. Unfortunately for Mr Dotcom's credibility he revealed no evidence to support these claims. The only credible allegations were those by Edward Snowden (who joined by video from Russia) and journalist Glenn Greenwald that the New Zealand Government has been engaging in mass surveillance of its citizens. John Key has categorically denied these allegations and has released declassified documents that he claims support his denial.

Anyone who reads this blog knows that I am more than a little suspicious of our modern security state. The security capabilities that are meant to be directed at external threats are often used for internal surveillance and any legal constraints on their misuse are inadequate or ignored. The use of New Zealand's security agencies to enforce the copyright infringement case against Kim Dotcom is proof of this. However, the New Zealand courts have already shown a willingness to uphold Dotcom's legal rights and there is every likelihood that they will eventually dismiss the extradition case against him. But that is not enough for the the former Herr Schmitz.

I believe anyone should be able to exercise their rights to free speech by putting their money where their political mouthpiece is, but I think no one should have any illusions about what Dotcom is trying to do here. This has been a torrid election campaign with the left-wing opposition engaging in what has looked like increasingly desperate tactics to topple the Key Government. The latest polls show the National Party's support as holding at around 50% and it seems likely that, come the election next Saturday, New Zealanders will respond to Dotcom's cynical misuse of our electoral process by denying him and his political allies any representation in Parliament. 

Friday, September 12, 2014

Scottish Yes Vote the End of 'Great' Britain

While here in New Zealand we wrestle with the choices of who is the least bad political party in a crowded general election field, on the other side of the world a more crucial vote is about to take place. I am writing, of course, about the Scottish referendum on independence, which, if you believe the polls, is going down to wire.

Like most distant international observers, at first I regarded this referendum as something of a sham. Early indications were that the 'No' vote would win by the best part of 20 percentage points and that the Scots would soon get back to complaining about the weather and their lack of success on the football turf. My reaction to the latest poll, which has the 'Yes' vote one point ahead, initially was shocked disappointment. Britain is the country in which I have lived the most years of my life after New Zealand and I have a immense fondness for the place.  But on consideration, another part of me concludes that 'Great' Britain died a long time ago and the dismembering of the corpse is overdue.

Britain today is a country that ignores mass child abuse in the name of tolerance. It is a country where you can be arrested for quoting its greatest prime minister. And it is a country that chose to launch the Olympic Games with a celebration of a moribund public health system in which people are much less likely to survive cancer than in other countries. In other words, it is not a country its citizens should be particularly proud of. However, does that justify the Scots seceding?

The problem for the Scots is that the things they want to preserve by becoming independent are the things that have caused Britain to decline from its former glory. They want more National Health System, more welfare and more government interference in their social and economic lives. They think they are a more caring society than the rest of Britain and they want even more of it. The problem for the Scots is that England, or more specifically the Southeast of England, pays the bill and they delude themselves that North Sea oil will continue to pay for their already over-extended Socialist economy. Nothing could be further from the truth. North Sea oil is already starting to run out and without it the Scottish economy will look more like that of Greece or Portugal.

But in my view the worst thing about a Yes vote in the referendum is that it is a point of no return. Britain seemed like a lost cause once before - in the 1970s - but Maggie Thatcher dragged it kicking and screaming back into a position of world political and economic leadership. I have liked to think that the decline since Thatcher was just one more good prime minister away from being reversed. A Yes vote will lock in that decline and Britain will never be Great again. Personally I feel that is a very great shame.

Tuesday, August 26, 2014

The True Cost of Election Bribes

We have an election campaign underway in New Zealand. You would need to be a blind and deaf hermit to miss all the bullshit the media have been spouting about it. But in between the wall-to-wall coverage of the petty name-calling and downright lies, we are beginning to see some policy announcements from the parties and almost every one of them is trying to bribe voters with promises of more government spending. Even the so-called centre-right National Party thinks it can bribe first home buyers into voting for it (and Not PC gives a very good account of why that is a silly idea in this blog post). 

Unfortunately, many voters are too gullible to question where the money for these bribes comes from. Every dollar has to come from some hardworking taxpayer's pocket. In fact, every dollar of government spending means that around $1.25 has to come from a taxpayer because there is a transaction cost in collecting and spending the money. It costs to run the tax department and it costs to run all the government agencies that spend the loot the government extorts from taxpayers - and despite the ease of the task, they're none too efficient at spending the money because they have no incentive to be efficient (unlike businesses who have to compete with other businesses to be ever more efficient at producing the products and services they produce). 

But, in reality, it's even worse than that. The true cost of the government spending one dollar is much higher because the taxpayer's $1.25 probably would have been invested in a business (either directly by buying shares or indirectly via a bank) and that $1.25 of capital might have enabled the business to produce an additional $20 worth of products or services. That $20 worth of revenue to the company would have been spent on, say, $10 in wages, $5 of supplies and $3 in rent. And the workers that earned the wages would have spent their additional $10 on food at the supermarket or put it towards an Air New Zealand flight to see grandma, and the supplier would have spent some of his $5 on wages, and the landlord would have spent some of his $3 on paying a contractor to get the roof fixed, and so on and so forth.

Now you start to see the true cost of that one dollar the government is promising to spend on you. Talk about cutting off your nose to spite your face.

Friday, August 22, 2014

What Keeps People in Poverty

I have observed that in the current general election campaign in New Zealand there has already been much of the usual commentary about 'child poverty'. The phrase is meaningless because minors cannot have legal title to assets and therefore can't really be rich or poor. What the politicians and commentators really mean is parental poverty.

I have been interested in seeing whether there is anything new in the election commentary about poverty and came across this article by Kate Tindall on the Tindall Foundation's website. The Foundation was established by New Zealand businessman Stephen Tindall and his family and engages in charitable activities. The article quotes the Auckland City Mission on the factors it thinks keeps people in poverty and while I agree the factors exacerbate the difficulties of people in poverty, I think they are symptoms rather than causes and I disagree with most of the proposed solutions.

Debt
The Mission blames 'fringe lenders' for keeping poor people poor, as if lenders somehow press-ganged their customers into borrowing, and a 'poverty premium' in the form of higher interest rates. Anyone who knows anything about the finance industry knows that interest rates are proportional to risk. I can borrow at very low interest rates because I have never not paid back a loan. I am sure many of the Auckland City Mission's clients pay much higher interest rates (if they can get anyone to lend to them at all) because either they have a track record of not paying the money back, or no track record at all. The solution, according to the Mission, is to cap the interest rates charged by all lenders. Of course the outcome of this is that no one will lend to these people at all - why would they when they can't get a sufficient return to cover the losses on the default loans?

Justice
The Mission talks about the serious impact of having a family member in prison, as if this situation was merely an unfortunate accident rather than the result of the criminal activities of the family member in question. Somewhere, some other family is living with the consequences of that person's criminal action - perhaps the loss of a primary breadwinner with the result that the victim's family in now in poverty through no fault of their own. The Mission talks about making more use of the Clean Slate Act, as if state-sanctioned lying about someone's criminal activity is going to make everything better.

Housing
The Mission calls for 'a minimum standard for all rental accommodation' including private rentals. This is similar to the cap on interest rates. Putting additional compliance costs on private landlords is not going to magically create better, less-expensive housing - rather it will push up rentals and discourage property owners from renting out their properties at all.

Employment
The Mission calls for 'tougher monitoring' of casual employment and legislated increases in minimal wages. Again, the obvious effect will be the exact opposite of that intended as employers will be discouraged from hiring the very people the Mission claims to care about - the least skilled and qualified - with the consequence that they will be denied a very real opportunity of gaining work experience and improving their lot.

Dental Care
Dental care is already free or heavily subsidised for school children and there are welfare grants available to low income people to pay dental bills. The reality is that dental care is not cheap and the higher taxes that will be required to pay for increased state-provided dental care will mean taxpayers will be less able to provide for their own dental bills.

Food
The Mission says its clients struggle to provide school lunches to their children. I suspect that in many cases the problem is not that the money is not available at all but rather that money spent on school lunches is regarded as discretionary and a lower priority than competing adult 'needs' such as beer, cigarettes and poker machines. I imagine another problem is that many low income people simply do not know how to make a cheap nutritious lunch such as sandwiches and a piece of fruit and instead give their children cash (when they can afford it) for fast food - hardly a cheap or nutritious choice.

Services
This is probably the one area where the concerns expressed and proposed solutions are valid. Negotiating government services is labyrinthine, particularly for those who have to deal with government a lot. To their credit, MSD is doing much to try and simplify and improve their services, but more certainly needs to be done.

Education
Finally, the Mission says that 'course providers who receive government subsidies must guarantee sustainable employment outcomes.' This is probably the craziest of all their solutions. How on earth can an education provider possibly guarantee employment for their graduates? If this were to be enforced, it would force education providers out of business.

It might seem from my comments above that I am unsympathetic to the plight of the poor. That is not the case. There was a time in my life when I was down to my last few dollars and was genuinely unsure of where my next meal would come from or where I would spend the night. I just don't think that the ill-conceived and clearly illogical policies advocated by the Auckland City Mission are likely to have any real impact on poverty in this country. There is only one real solution to poverty and I would have thought Stephen Tindall and his family would know what it is - a vibrant and growing economy that creates demand for labour and thereby increases employment and wages and salaries. It is only by creating greater prosperity through economic growth that we will provide opportunities for the unskilled and unemployed to improve their lot.

The Auckland City Mission needs to think about what conditions are required to create a vibrant and growing economy and to support policies that will achieve this. Stephen Tindall knows what these conditions are because he (and his many thousands of employees and suppliers) benefited from them during the period of greatest growth of his retail empire during the 1980s and 1990s - deregulation, low taxes and minimal government involvement in the economy. 

At best the solutions proposed by the Auckland City Mission are Bandaids, at worst they will make the problem worse.

Thursday, August 21, 2014

A Very Small Village

I woke up this morning to the news on Radio Live, a national radio news station here in New Zealand. Normally, an internet jazz station wakes me but this morning I wasn't in my own bed and had to make do with the station that was tuned on the clock radio. You see I make a point of avoiding the New Zealand mainstream news media and the early morning news report today reminded me why. 

There was the usual petty political bickering - we are in the midst of an election campaign after all - and an article about a fatal road accident somewhere down south, and a story about a kitten caught up a tree (or something similar - I forget the exact details), and then it was straight on to the sport.

You would never know, if you relied on the local New Zealand media, that the world was agog with stories of great achievements and great horrors. You wouldn't know there was a worsening Ebola epidemic in Africa or that the hideous thugs from the self-styled Islamic State of Iraq and Syria (ISIS) had decapitated an American journalist the day before, or that the militarised police in Ferguson, Missouri thought the appropriate response to a protest march was to use Iraq War surplus tanks and M16s against their fellow townspeople. You also wouldn't hear of the wonderful achievement of the scientists behind the comet-chasing Rosetta spacecraft, the fastest vehicle mankind has ever built, that set off in 2004 to fly beyond Jupiter so it could circle back and chase down Comet 67P/Churyumov-Gerasimenko, finally arriving in the last few days and sending back spectacular close-up pictures of a strange and wonderful alien world.

New Zealand might as well be a very small village as far as its mainstream media are concerned. Our news is mostly 'village pump' stuff. I suppose that in a crazy world we should be grateful for the peaceful country we live in. It would be nice, however, to hear about what's going on in the world.