Wednesday, November 27, 2013

FATCA legislation and agreement is a breach of NZ sovereignty and rights

You may have concluded from my postings that I'm somewhat libertarian in my views and you'd be correct - most of my posts are rants about the ever-increasing encroachment by governments on individual rights - however, I recognise that the vast majority of government policies have the intention (however misguided that intention may be) of improving the lives of the citizens and residents the government represents. I part ways with my philosophical opponents in the means, not the ends. But the New Zealand Government is currently in the process of enacting legislation that has no benefit for New Zealanders, that is a breach of our sovereign rights as a nation, and that breaches our Human Rights Act and Privacy Act, solely because it has been demanded by a foreign government. I am talking about New Zealand's acquiescence to the United States Foreign Account Tax Compliance Act, known as FATCA.

The usually staid law firm of Minter Ellison describes this Act as "a striking example of what could be called American fiscal imperialism." In short, it is attempting to turn all foreign financial institutions into tax collectors and snoops for the US Government by forcing them to hand over information about anyone considered to be a "US taxpayer." This is not, as you might think, just people who live and work in the United States.  The US is one of only two countries (the other is that bastion of liberty and human rights, Ivory Coast) that think it is their sovereign right to extract tax not only from those who live and work in the country but anyone who lives outside the country who they might deem to be a US citizen. Let me give you an example of who the US considers to be US citizen.

My friend, a New Zealander born and bred, married a US woman and together they have a newborn baby who was born in New Zealand. Unsurprisingly, the wife, who holds both NZ and US citizenship, is considered by the US Internal Revenue Service to be a valid target for the FATCA regime. She not only has to pay tax in New Zealand, where she now lives, she has to file a US tax return and pay taxes there as well (although she gets to deduct some, but not all, of the taxes she pays on her NZ income). But here's the kicker - the IRS also considers the baby to be a US taxpayer, irrespective of whether the baby ever sets foot in the United States. My friend's child will be subject to intrusive surveillance by the IRS for the rest of her life and her bankers will be forced to hand over information to the IRS about her, against her will and contrary to her rights under other NZ laws, and all this will be abetted by the New Zealand Government that, as the writer of this blog points out, considers her to be a "US taxpayer habitually resident in New Zealand."

This is, frankly, a disgraceful capitulation by the New Zealand Government to bullying by a foreign power. It is the financial equivalent of 'renditions', that euphemistically-named US Government practice of snatching citizens of other countries off the streets of foreign cities in order to have them tortured and imprisoned.

It is high time the rest of the world stood up to these thuggish policies of the US Government. New Zealand has stood up to the United States before over issues such as visits of nuclear-armed warships and, in my view, this is a more fundamental issue of sovereignty than that. We need to stand united with other countries and tell the United States we will not comply with their unilateral policies and we need to take whatever retaliatory measures are necessary to force them to back down.  If enough countries stand against the US on this, they, like all bullies, will back down.

Monday, November 25, 2013

Iranian Nuclear Deal is "Peace in Our Time"

I am currently reading I Shall Bear Witness: The Diaries of Victor Klemperer. These diaries are the extraordinary personal account of the only Jew to have survived The Holocaust and to have recorded his experiences from the date Hitler came to power to the end of the Second World War. The books should be compulsory reading for every high school student as they give a true insight into what Hannah Arendt called 'the banality of evil.' Klemperer records how friends, neighbours and even Jews themselves, stood idly by and watched the evil of Nazism as it encroached on, and then destroyed, the lives of so many millions of European Jews and other minorities. 

Which brings me to Israel. What, I hear you say, isn't that a leap of logic? Well, I don't think so. I don't believe you can consider 'the Israel question' without considering The Holocaust.

I'm not a Zionist - I don't believe the Jews have some God-given right to occupy the land of Israel any more than I believe the Queen of England has a God-given right to occupy her throne. I don't even think they have a particularly strong historical right and, incidentally, Kemplerer didn't either. But I do think humankind owes the targets of its most bloodthirsty tribalism a safe harbour. The historical reality now is that that safe harbour is Israel. It's there, so get used to it.

And that brings me to Iran. The ayatollahs and successive presidents of the Islamic Republic have pledged to destroy Israel and its people and I think it would be a huge mistake not to take them seriously. I think President Obama and Secretary of State Kerry have got this wrong and I believe their deal with the Iranians will turn out to be their version of Neville Chamberlain's "peace in our time". I think there is a very good chance that the consequences of the deal will be an all-out, probably nuclear, war in the Middle East that will make the conflicts in Iraq and Afghanistan look like curtain-raisers. Obama and Kerry are taking an enormous gamble and the worst thing is they is gambling with the lives of Israelis rather than Americans.

Victor Klemperer described in his diary how Germans and the international community did not believe until it was too late that Hitler's intentions were wholly malevolent. Hitler, like successive Iranian leaders, made no secret of his aims, but the more blatant he became, the less people believed what he said. The only difference today is that the Jews in Israel have the means to defend themselves. Every Israeli prime minister since David Ben Gurion has had six million ghosts looking over his shoulder and Benjamin Netanyahu is no different. When faced with a clear and present existential threat to Israel, he will push the button.

Wednesday, November 20, 2013

Lincoln was truly heroic

Several years ago, during a visit to Washington, DC, I took the time to visit the Lincoln Memorial and, while looking around the magnificent monument with its enormous seated statue of the great man, I did something that few other visitors to the monument do - I took the elevator down to the basement and visited the small museum that is housed there. At first glance the museum is not very impressive - just a few of Lincoln's personal items and papers in several small rooms - but I found myself engrossed in its contents. Amongst the papers was a letter Lincoln had written to a colleague while he was a young lawyer in Illinois. The topic of the letter was slavery. Lincoln had returned from a trip to the South and expressed his disgust at what he had seen - human beings being treated as chattels and subject to the most inhuman indignities. He vowed in that letter that he would enter politics with the express purpose of abolishing the dreadful stain that he saw slavery to be on the principles by which the founding fathers established the United States of America.

Today in America is the 150th anniversary of Lincoln's greatest speech - the simple 272 word paean to the ideals that are in the words of the Declaration of Independence - that men are born equal and that government should be accountable to the people, not the other way around.  Lincoln's speech at Gettysburg on November 19th, 1863, was intended to be nothing more than an afterword to the lengthy oration by retired senator, Edward Everett, but in a little over two minutes the President said far more than Everett had said in two hours.

Abraham Lincoln is portrayed by some historians as pragmatic and even unprincipled - deferring political and military confrontation over slavery until he was forced to act.  But those historians obviously have not read that letter that I saw at the Lincoln Memorial. Lincoln devoted his life to what he knew was right and he stood by his principles to the end of his life.

I see no counterpart amongst politicians today.

Sunday, November 17, 2013

Governments are useless at most everything

It has been amusing, if somewhat predictable, watching the unravelling of the 'Obamacare' healthcare legislation in America. The US Government spent $200m on a health insurance website that doesn't work, but that is the least of the problems. The penny has finally dropped for most Americans that their existing health insurance plans will have to be abandoned and a more expensive scheme purchased, giving the lie to the name of the legislation, the Patient Protection and Affordable Care Act.

The British National Health Service is held up by Britons and by all advocates of socialised medicine worldwide as the exemplar for state-run healthcare, even to the extent of it being the centrepiece of the London Olympics opening ceremony (in a disgusting misappropriation of the supposedly politically-neutral Olympics for political ends). God knows why - as this Forbes article reports, you are 88% more likely to die of breast cancer in the UK than in America and less likely to survive all other major forms of cancer. So, why would Americans want to give up private medicine for socialised medicine?

In my consulting business in recent years I've been doing a lot of work for the New Zealand Government, much of it quite important stuff in terms of delivery of the Government's main policy initiatives. I work for government because Wellington, my home town, does not have much of a private sector any longer (and I've blogged on Wellington's economic situation before). In my work I see many public servants who are dedicated to their work and who genuinely strive to serve the public to the best of their ability. But I see a great deal of incompetence too - monumental computer systems failures like the Obamacare website, construction projects that produce buildings that are faulty from the day they are finished and ships that can't serve the purpose for which they are acquired.

The problem is that some of those who work in government believe that there is no limit to their role and moral mandate, that they can poke their noses into any area of citizens' lives that they see fit.  Any problem, be it social, economic, scientific or environmental is not so daunting that our elected representatives and unelected officials don't think they can fix it. Never mind that they have no expertise in the field concerned - there is always some patsy 'expert' (usually an academic with no practical experience of the subject) ready to support their view that the problem can be fixed by more government interference in citizens' lives.

The truth is that government can never compete with the market in terms of providing solutions to human problems. The reason for this is obvious - the market is the collective result of millions of people applying their knowledge to achieve individual goals, whereas even in the largest government agencies there can be only ever a fraction of the effort and wisdom applied to the problem. The market will always beat the bureaucrat and those who work in government should have the humility to accept this.

Monday, November 11, 2013

On this day, lest we forget

Today is Remembrance Day, when we remember the fallen in the Great War and the conflicts that followed it. Such remembrance is proper. We take so much for granted in Western nations today - our freedom, our prosperity, our respect for some basic human rights - that it is easy to forget that such is not the natural state of affairs for humankind. Liberal, democratic society is hard won and there are still plenty of examples of the alternative around the world to show that there is a thin veneer between civilization  and barbarism.

I think all human societal conflict stems from the belief of certain individuals or groups that they are superior to other human beings and therefore have the right to impose their view of how the world should be on everyone else.  It is this arrogance that makes some people think their dealings with their fellow human beings shouldn't be on the basis of a voluntary exchange of value. Every militaristic leader in history has had this arrogance - I am better than you and I know what is best, so I should rule and you should submit. Sometimes this arrogance stems from religious faith (e.g. Christian Crusades and Muslim jihad), sometimes from philosophical dogma (e.g. Marxism), sometimes even from misguided scientific theory (e.g. Nazi eugenics). Political leadership that is based on a voluntary exchange of value - a social compact to use a modern term - does not need force because most individuals in most human societies will gladly exchange a degree of absolute freedom for a political structure that honours and preserves their individual rights.

Unfortunately we live in a world not dissimilar to that which existed immediately prior to World War One. Liberal, democratic institutions are being curtailed and politicians and bureaucrats are taking more and more power to themselves in the name of protecting us from faceless enemies.  The real conflict in the first half of the Twentieth Century was not between the European powers and their far-flung allies, but between the ideas of individual freedom and mob rule.  Imperialism, Communism, Nazism and Fascism have an etymological commonality - they all derive from collective nouns and are all about dictatorial rule in the name of the group. 

It is freedom from mob rule that we won in two World Wars and in the Cold one, and it is this that we should honour and preserve when remembering our fallen soldiers.