Monday, November 20, 2017

New Government already seeing unintended consequences

The unfortunate thing about believing that government is the solution to every problem is the Law of Unintended Consequences. This law says that almost any government action will produce unintended, and generally negative, consequences. The new New Zealand Government certainly believes that it has the solution to every problem, real or imagined, that prevails in this country with literally hundreds of new policies in their manifesto and coalition agreement. But they are already seeing unintended consequences of their policies, even before they have had time to enact any of them.

The most obvious example of this was today's headline in Wellington's DominionPost newspaper reporting that the city is heading for its worst rental crisis ever, with a sudden contraction in the number of properties being offered for rent. Property Investor's Association president Richard Bacon blames the new government's policies including the Healthy Homes Guarantee Bill, which is intended to raise the standards of properties offered for rent, saying that many landlords are pulling their properties out of the rental market in anticipation of higher compliance costs. So rather than getting healthier homes, many tenants will be getting no home at all.

Another example is the increase of the minimum wage to $20/hour. Muriel Newman points out in this article (based on figures from the Ministry of Business, Innovation and Employment), that this increase to one of the highest minimum wage levels in the world could destroy over 60,000 jobs. So rather than getting higher wages, many workers will be getting no wages at all.

A third example is the new government's policy of building 100,000 new homes. The details of how they are to go about this are still sketchy but if the government funds and constructs these houses, it will have an enormous effect on our already highly constrained building industry, diverting resources from private house construction. The real cause of the lack of new houses is the Resource Management Act, which enables local government to severely constrain the supply of land for house construction and to impose huge compliance costs on builders and developers, but the government has said it will not touch this draconian law. At the same time, the government intends to pursue a looser monetary policy, which will further inflate the real estate bubble. I am prepared to bet that the unintended consequences of these policies will be to further reduce the supply, and increase the price, of new housing.

I could go on. One doesn't need to be a genius to figure out the unintended consequences of almost every one of the new government's policies - they are obvious to anyone with a basic understanding of economics and human nature. But those with faith in the religion of big government don't want to hear facts and reason.

Thursday, November 16, 2017

A Year of Trump

You have to admit it, even if you detest Donald Trump and everything he stands for, the last year of US politics has been the most interesting since...well, probably since Teddy Roosevelt was in the White House (and I think there are many parallels between that earlier renegade Republican and Trump). I still find myself laughing aloud at Trump's tweets, the utter bewilderment and denial of Hillary Clinton that she lost to him, and most especially the mainstream media's continued outrage that they have lost control of the political narrative.

Trump hasn't achieved a lot in terms of policy - Obamacare is still in place, the wall hasn't been built, and the tax cuts he wants are bogged down in the congressional swamp - but doing nothing isn't a bad thing for a politician because it means he hasn't stuffed anything up, which is more than you can say for the preceding four presidents. The earnest ingenues in the new coalition government here in New Zealand should take a leaf from Trump's book and work on their golf game rather than pursuing their utopian dreams.

Much is made of Trump's low approval ratings but I wouldn't dismiss his prospects of re-election in 2020 just yet, assuming he decides to run. Three years is an eternity in politics and events may overtake the narrative as they did with George W Bush in 2001. The U.S. economy is finally rebounding, and if you add to that some tax cuts, a major foreign policy success, and a Democratic Party that continues to be its own worst enemy, and we could well see Trump win a second term.

There is much I dislike about Trump and his policies but it would be almost worth putting up with another few years of his cronyism, xenophobia and simplistic economics just to see the mainstream media's reaction to (as Australian rugby star George Gregan once said about the All Blacks losing the Rugby World Cup) "four more years."

Thursday, November 9, 2017

Is the NZ Government the result of a personal grudge?

We learned this week that Winston Peters, the 'kingmaker' in the recent coalition negotiations to form the New Zealand government, is suing four National Party members of parliament, including former prime minister Bill English and deputy Paula Bennett, over the leaking of information that he had been overpaid his state pension for seven years. Peters' lawsuit seems to be a fishing expedition with journalists, National Party officials and even the chief executive of the Ministry of Social Development (the government agency responsible for payment of the pension) being served papers.

The most concerning thing about this matter is not the overpayment itself or the speculative nature of Peters' legal action, but the fact that it reveals an obvious conflict of interest in the coalition negotiations. Peters swore an affidavit in support of his legal action the day before the election, meaning that he was involved in the lawsuit when he sat down to negotiate a possible coalition agreement with the very National Party leadership that he was suing. He should have declared this conflict of interest before the election so that voters could have taken the matter into account or, at the very least, prior to the coalition negotiations getting underway. Ideally he should have recused himself from the coalition discussions and decision-making of his party.

In view of this, it is unsurprising that Peters chose the Labour Party as his coalition partner. I have written before about how Labour and New Zealand First don’t even have a plurality in the new parliament and the fact that the National Party, which has more seats than Labour and New Zealand First combined, would be part of a government under any electoral process other than our shambolic MMP system.

The fact that Peters didn't declare his conflict of interest begs the question whether he entered the negotiations in good faith and whether he had any intention of forming a coalition with National. It makes a mockery of the coalition negotiations and casts further doubt on the legitimacy of the new coalition government. Peters may have a legitimate grievance over the leaking of his confidential superannuation details but that doesn't justify him holding the country to ransom and making decisions of constitutional importance on the basis of a personal grudge. The fact that this is even a possibility raises serious concerns about the health of our democracy.

Tuesday, November 7, 2017

100 years of failure and there are still naive Marxists

On this day, one hundred years ago, the Bolsheviks under Vladimir Lenin overthrew the Russian provisional government of Alexander Kerensky, thus ushering in the most brutal political system the modern world has known. Many left-wing commentators continue to laud this as the day the Russians overthrew the repressive Czar, but that event actually happened in March 1917. Lenin and his cohorts seized power in a coup and imposed a totalitarian dictatorship that would last for three quarters of a century and that would kill at least 20 million people of its own people.

Leftists of all persuasions defend Communism on the basis that the political philosophy has never been truly implemented. They also claim that Lenin had noble intentions and that he was innocent of the slaughter that followed. Let us deal with the second of these claims first. Lenin was not a good guy. He overthrew a democratically-elected government and quickly imposed the totalitarianism that would characterise the Soviet regime until its demise. He established the Cheka secret police, the Gulags, secret arrest and detention without trial, summary executions and the mass killings of recalcitrant peasants, workers and soldiers. He also began the mass starvations of the Kulaks (the so-called 'rich' peasants) that was to reach its nadir under Stalin, particularly in the Ukraine.

The first line of defence of Communism for today's leftists - that it has never really been tried - is equally false. Every form of Communism, or even staunch socialism - Marxism, Leninism, Stalinism, Maoism, Juche, and the latest, Chavism - has caused widespread misery for its subjects. Genocide is not an aberration of Communism, it is a characteristic of it. Communism and socialism are based on the philosophical concepts of idealism and materialism, which support the Marxist belief in determinism - that is, that human beings are not individually responsible for their actions and are merely components of the collective species-being. This justifies the sacrifice of any individual to the collective will (that will, of course, being determined by a small leadership elite). Is it any wonder that people who believe this end up killing anyone who stands in their way?

Today's left-wingers believe that their political system is better than any that went before because they control it, but what makes them think they are better than all the fellow travellers who went before them? It is naive arrogance, that is all. Were they ever to find themselves in a position to make good on their beliefs, they wouldn't last five minutes - because there will always be a Stalin or a Mao standing behind them, only too ready and willing to put a bullet in the backs of their heads as they contemplate their benevolent revolution!

Thursday, November 2, 2017

NZ coalition agreement's best clause

Tucked in the very bottom of the coalition agreement between the New Zealand Labour Party and New Zealand First to form the new New Zealand government is a small, incongruous clause that could be missed on first reading. It says the parties agree to "Record a Cabinet minute regarding the lack of process followed prior to the National-led government’s sponsorship of UNSC2334."

United Nations Security Council resolution 2334 condemns Israeli settlements in the occupied Palestinian territories and I have written before about why I was so disgusted by my government's sponsorship of it. The Israelis claimed that New Zealand was pressured by the outgoing Obama administration into fronting the resolution (with the US abstaining, presumably so that the Democratic Party did not suffer blowback from the powerful American Jewish lobby). The fact that the new government's coalition agreement acknowledges that due process was not followed suggests that there may be substance to this claim.

New Zealand's stance is in contrast to Australian Prime Minister Malcom Turnbull's lauding of his country's strong relationship with Israel on his recent trip to that country. Turnbull took the opportunity during his visit to celebrate the extraordinarily courage of Australian (and New Zealand) cavalry during the Battle of Beersheba one hundred years ago.

It takes a degree of political courage to stand with Israel today. I am sure the clause in the coalition agreement would not have been welcomed by everyone in the Labour Party caucus and certainly not within the Green Party, their other political partner. I imagine that both the New Zealand First leader, Winston Peters, and deputy leader, Ron Mark (a former soldier who served in the Middle East), had a part to play in insisting on the inclusion of the clause, and for that I salute them.