Future energy policy for NZ

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NZ has in recent years experienced some significant increases in electricity prices. These rises can be attributed to several factors:

1. Latent inflation in exceedingly low capital and operating costs in an era of low interest rates. This is destined at some point to change; whence-forth, we can expect a rise in energy prices.

2. Capital cost structure or framework for distribution and transmission cost pass-thru

3. The high marginal cost of new generating capacity - High because anyone attempting to build a new generating unit has to recover costs without knowing when competitors are commissioning their capacity 

4. The need for all energy businesses to focus on yields rather than profits in a growth restricted market. If you can't cut costs or increase sales, then you are compelled to raise prices in order to achieve the profit growth that shareholder want to see;  but  more importantly the growth executives want  to see so their option incentives deliver the gains that will put them on par with foreign enterprises and other sectors which are able to deliver those gains. 

5. The high cost of natural gas. NZ has small resources of gas and those resources are concentrated in the Taranaki area. Eventually the nation will develop more competitive supplies from other fields, and this will mean cheaper fuel. The benefits may flow through to electricity prices. This assumes however that new supplies are competitive and in a state of oversupply; and that  their geographic location will allow for interconnection through the NZ grid. There is good reason to expect that a new gas resource will be off-grid or too small in size for the resource to make a competitive  difference. If it is so large to support export sales, then the imperative to offer cheap gas is undermined by export prices. This of course will not preclude lower long term contract prices to win an energy supply agreement.

What does this mean for NZ energy policy? Well it probably supports:

1. Energy market reform to encourage more privately owned electricity generation to supply local communities;  which store surplus capacity for timely sale into the grid or captive consumption. This will make more sense as battery prices fall, whether they support wind, wood or solar capacity. Reform of the Resource Management Act (RMA) and council management and land use facilitation will also be important. 

2. The reform of the distribution and transmission pricing so that it does not result in over-investment in said infrastructure.  Observe that under govt patronage NZ capital spending has gone from under-investment to over-investment. From crippling black-outs to pillaging of customer savings. What can we say of NZ energy sector management? We can say that political intrusion has been a huge mistake.

The only political party in NZ which has an energy policy consistent with lower energy prices in the short term is the ACT Party. In the long run, one would expect National policy to increase gas exploration to eventually increase competition, but that could be decades.  Private syndicate investment in generation offers the greatest scope for cheaper NZ energy supplies.  The impact of such an energy policy would:

1. Increase competition in the power market;  resulting in more money in the consumer's pocket. The gains would not however be equal. The disparity can be expected to impact residency decisions. Even in a town or city, you might welcome living in a community with captive power generation and supply arrangements. 

2. Increased energy generation at point of use; reducing transmission demand. Sadly this will have meant prior capacity development was wasteful and that consumers reliant on said supplies will have to pay more.

The prospect of higher costs for some is not a justification for an aversion strategy by government, simply because government just adds to the distortion.

There is an opportunity for governments to optimize this investment however by easing the RMA rules. Ie. If community development was easier,  more people would be living in optimized villages. Why? The reasons for living in communities with identity and connectivity has never been stronger. We don't have the regulatory setting to achieve that. We have dogmatic proscriptions understand which Gibraltar proscribe what is a healthy lifestyle. The practical outcome has been the exact opposite. The justification for adopting private planning is not the fact that the private sector always makes better decisions; it's that the private sector pays the costs of its mistakes - not you the consumer.

Another element of energy policy concerns the locating of generating plants and power lines. Said infrastructure raises two issues:

1. Property ownership - People have a right to compensation for disturbance of person or property.  i.e. Build a generating facility in proximity to a house and people should expect compensation. I would however argue that there should be no compensation for land beyond disruption from use. I would argue that people own the property improvement,  not the land. There is a tendency to consider property rights as intrinsically good; therein failing to ask why they are valued, and therein what actually constitutes property. 

2. Property values - Any investment in property is for the sake of certain values or enjoyment. We might properly ask whether latter parties have the right to undermine the enjoyment of smothers property. In the same way that a person cannot undermine your right to live, they cannot undermine your ability to be productive or to enjoy one's labour. Again, there is a tendency to see property boundaries as intrinsically the basis of property disputes. The shortcomings of this regime have contributed to the collectivisation of property rights such that they have come to be defined as social mores. This development occurred because libertarians failed to provide an adequate solution to contemporary land use conflicts over previous  centuries. Practically they folded and allowed the stat is talk to rule. This was understandable because if the mystic Christian roots for socio-economic values even dating back well before classic economics even developed.

It can only be hoped that sufficient numbers of libertarians will be able to politically advance a common law style of property rights rooted in rationality. To do that libertarians will need to differentiate themselves from 'small government' conservatives who have merely failed to identify the nature of the contradiction that has prompted their political brethren to sell out.

Dr Jamie Whyte is the new leader of the New Zealand ACT Party

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It seems Dr Jamie Whyte is the new leader of the ACT Party. I have mixed views after reading his book and his latest news statements. Certainly he is a shift in the right direct in terms of ideology; though I suspect he might fall prey to the idea that the electorate is stupid, so you have to pull the wool over their eyes.

In any case, I can understand the desire to 'placate conservatives' who are perhaps an important element of the party. The problem is that I suspect this is a precursor to a wholesale sell-out. I'm not sure the extent to which is 'posturing' or 'coaching' conservatives, who would otherwise be destined to join the Conservative Party. I actually think it would be a good idea if religious and other dogmatists joined Conservatives and left ACT to intellectual libertarians, then they might both get 5 seats. There is a large market to be developed here; particularly among youths, and particularly online.

Went to the beach today; surprised that a former National Party supporter now votes Green (a former farmer). Unbelievable how they are losing supporters....to the Greens???

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Jamie Whyte preserves the ACT Party's conservatism - libertarians left estranged

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I consider it a fatal flaw in the direction of the ACT Party that they are pursuing a course of action which best depicts the folly of the National Party - the only difference being that their sanction for 'extortion-based' politics is contrived as support for 'small government' when in fact, at issue is:
1. The legitimacy of representative democracy and the extortion it invokes. They support this political game when they cease to make member or constituent views worthy of consideration, simply because they are not popular.
2. The role of government - and not simply the size of it. You cannot know the size of government until you have decided the role.

Now, such issues are seldom discussed by governments, parties or even political commentators. This does not mean that they don't have a view, but it means something; and it can only mean that they think it 'impractical' (or ideological) to consider such issues, or that they are conservatives all to happy to welcome their fate as participants in our contemporary 'representative democracy', which I describe as an extortion racket. They don't see it that way. They think they can redeem the system by appealing to the logic of their counterparts. Nevermind the fact that their opponents don't sanction or entertain reasons; they sanction 'authority' measured in terms of 'numbers' and 'credibility' measured in terms of 'number', 'organisational or hierarchical influence' or plausibly whether you have a 'PhD', but then many people have those these days, and every side has at least one.

So where is the evidence of the ACT Party taking this path. Well, it comes from a recent interview with their two candidates in the forthcoming leadership challenge - to be decided. I have made the argument that the debate or 'battle' has already decided 'epistemologically'; but in a few days, they will make a political decision. So let's examine what was said in an interview with the NZ Herald, and why its important.

“ACT leadership hopeful Jamie Whyte says he does not want to impose his own views about drug liberalisation on to the Act Party. Dr Whyte has been a vocal advocate in the past for the legalisation of drugs on the basis of personal liberty. But he told the Herald this week he was not going to "hijack" the party with a libertarian agenda and push drug legalisation on it”. 

My initial reaction was to say “What is it about politics that makes people sell-out their values”. Jamie Whyte says “He doesn’t want to impose”? Why not, that’s what the ACT Party, in fact all parties, are doing, imposing. That’s what political parties that support ‘popular franchises’ do, they impose their popular views on minorities. That’s how the system is structured. Why can’t Whyte impose his view of drugs on the party with an underlying respect for facts? Is that not what parties are supposed to be about? The ‘virtue’ of the ideas, and not their legacy of historic popularity. At the end of the day, it is the outlawing of drugs which is the 'imposing', and supposedly his role as a 'moral authority' was to defend people's right to smoke pot. For this reason it perhaps requires clarification as to what he means by 'not wanting to impose'. After all someone is deciding ACT Party policy, and if its not a rational perspective, there is no question of avoiding imposition. At issue is whether its justifiable imposition, or simply your garden-variety subjective extortion. But having argued that he supports the right of people to use drugs, he seems to be stepping away from that view because its unpopular with his constituency.
Personally, my love affair with Dr Jamie Whyte was always going to be brief. He has good ‘street cred’ on economics, but his philosophy was always going to disappoint. Sadly, he might not regard himself as a conservative, but he just identified himself as one. i.e. As an intellectual coward. Am I being too hard?
The notion that he is not going to 'hijack the party' might be posturing to placate conservatives. But I would in fact prefer it if he actually just honestly acknowledged that his views are different from most conservatives, and that he would offer explanations for why he holds the views he does, and I'd hope that he would attempt to reconcile his views with others inside the party, and that constituents or members had the opportunity to challenge party policy. That doesn't seem to be happening. This is after all a party 'with an agenda', its just that Whyte is 'disavowing' his hold on it. Maybe its John Boscawen's because he is the main party financier.

"You could not make that Act policy [drug legalisation] and carry the party with you so I am not going to try to make that Act's policy”. 

It bothers me less that he ditched the issue, but rather I’m concerned more by his reasons for doing so. That’s what political leaders do; they make moral cases on issues. i.e. The collect evidence, they make arguments, they listen to arguments. If you can’t make a case to defend the policy, then don’t participate in politics, or alternatively, you castigate the system for not allowing you to make a case to your constituents. There is unquestionably people in the party who are conservatives who belong in the National Party; with a  greater proclivity for "smaller government" than the National Party. But ACT should not be about small government; it should be about government taking its ‘proper role’, whether that role is 'big government' or 'small government', or plausibly 'big government' today but shrinking to 'small government', if at all government in the future.
He says he is not going to try to make [drug legalisation] ACT Party policy because it would estrange members of the party. Clearly Whyte has decided that he is not a libertarian. I don't think you can claw your way back from that position.

“Act held itself together around economics and the role of the state. Focusing on discrepancies within the party was silly”.  

Actually it didn't hold itself together so much as stand on a popularised policy, and fail to deal with less popular, more contentious issues. The reason why it did not deal with the 'drug legalisation' issue is because there had been no resolution. You had party leaders debating their own personal views without having reconciled their views, or made a case within the party to defend them. The problem with this approach is you sabotage debate if you say you won't hold certain values as policy. Calling these contentious issues' or party divisions "discrepancy" is ludicrous. What is the role of political organisations if not to debate the issues. If there is a discrepancy then please elucidate it. That is not an argument for anything. It is an intellectual surrender; a 'conservative' concession to the mindless journalists and voters outside of the party, and those inside the party who retain a conservative perspective, and who don't belong in a libertarian party. If indeed this was ever a libertarian party. Well, it seems therefore that ACT is NOT a libertarian party. It is official. ACT is a 'small government' franchise of the National Party, where people hope for smaller government, but they never achieve it because ideas are vaguely threatening. 

"We don't want to be like the bloody People's Front of Judea [Monty Python's Life of Brian] or whatever it is and splitting off. It's bad enough already”.

No, but we need to ask why people take off and form all-manner of ‘splinter organisations’, and consider the fact that that has already happened. The reason is that there is no attempt to reconcile values. And maybe Whyte is not the person to reconcile arguments if his view is, not to be radical, but to be a ‘National franchise for small government’. My vision of ACT was that it was a party for ideas, a party that honesty and openly entertains different ideas, and by having some respect for people, facts, evidence and arguments, it arrives at policy, using that evidence to defend those values outside the party. But instead, we seem to have adopted the mantra of a conservative party where 'the vaguely threatening, unintelligible, inextricable external world' decides policy because we don't have the confidence to project honesty, integrity or certainty. Perhaps the folly is to think that the debate is to be held in the media, i.e. That the party needs to convince the media that their ideas are good, and therein people like the media's interpretation of the party. This strikes me as a bad approach because the people who take that approach are not going to like the ACT Party's values. This might appear to be a strategy for maligning the ACT Party, but in fact it builds a fan base among those who actually respect ideas. Maybe this party needs to construct its 'constituency' or loyal following among internet friends, and the like, and to simply to circumvent the media, which is becoming an increasing irrelevancy to questions of politics, cited only for talking points rather than for controversial ideas. The contemporary parties are media instruments. I think its folly that drives people to sanction and support these 'media puppets'. That is what they are. The media decides whether a party lives or dies. ACT is dying because it allows the media, who deplores its values, to shape how the world perceives it. Rather than define itself another way, it has instead decided that its going to malign itself to remain 'relevant' to the media. 

"So I have no intention of hijacking the party and ramming a radical libertarian agenda down its throat."

An intellectual defence or argument is not hijacking; its respecting the facts of reality, and making a case for them. The implication is that Whyte’s vision is that he is entrenched in a sceptical view of the world, where, if he can’t reconcile his ideas with others, he just defers to the power of the extortionist, unwittingly giving sanction to the political system of extortion that keeps his ideas at bay. Libertarianism will remain ‘at bay’ as long as he and others ‘sceptically acquiesce’. Now, of course, we as libertarians can go off and form our own groups. Maybe that is indeed what we need to do. We need to stop looking outside; to stop looking to political parties to define our values, and to organise as a group of people without political identity, but with a shared set of coherent & correspondent values, which when we have the support of 5% of the electorate, we might seek representation on the political stage. This is I think a better way to go about this purpose. For this reason, I have established a website and Facebook page. At some point the political system has to be challenged, as constituents in Thailand are currently doing. Democrats in Thailand are standing up to government. Despite having the military on their side, they are not even able to articulate an intellectual argument for their views, and yet they are certain they are against the current system. It may well be that some leaders in fact have a 'purpose' but they don't want to 'impose' their views because people might question the vision. They are not ‘coercing’ they are defending their right not to be a victim. Whyte needs to similarly ask ‘who is imposing upon whom’? Possibly the vision needs to start with his supporters rather than with the general populace. 

Whyte adheres to the principle that "something is good for you if its benefits exceed its costs. Otherwise it is bad for you".

One would have to argue that this is not a profound philosophical statement; it is in fact, a part definition of ‘self-interest’ or ‘the good’, but it’s not even complete, since it neglects to offer an epistemological foundation for one’s interests. This was always the folly underwriting Whyte’s scepticism. This is why he is of the view that life is about leaving other people alone, but he can’t bring himself to defend the idea, because he hasn’t got a working model to go by. He therein renounces his mind, and becomes a conservative. 

“Drug users are simply people for whom the pleasure outweighs the risk of death, illness, addiction and all the rest ... the same is not true of everyone”.

No. Drug users are not thinking about the risks of death, or even getting caught for drug addiction. They are seeking a 'expedited' benefit rather than a long-term one, in the same fashion that a lonely guy might sleep with prostitutes, or a guy lacking self-esteem, might sleep with prostitutes. Its not because they have appraised the risks of prostitution, i.e. Getting aids, otherwise we would all be having sex with kids as they turn 18 years of age, free of the knowledge that they are 'legal targets'. The truth is that most people expect the pleasure or benefits to outweigh the risks; that what acting in one's self-interest entails. This is the type of analysis that makes me question Whyte on psychology. 

“People have just got to believe that it isn't just a vehicle for either careerist politicians or to be used by other parties for their goals - that it is more than that. It really is a party in its own right with strong principles”.

Well, perhaps sceptics need to ask themselves what caused them to become ‘careerist politicians’; how they came to be used by other parties. The reason is:

1. There is no private ‘market’ for skills in extortion and dishonesty that plague ‘practical politics’

2. These people were idealists when they joined the political movement; but in the process of being ‘changed’ by politics, they defined themselves and career direction. In so doing, their values were ‘cemented’. 

The ACT Party has historically defined its ‘strength’ as lying with the balance of power. That is a role vested in extortion. Did the party use that ‘power’ to misappropriate value? Perhaps not, but it apparently uses the same standards to appropriate power, as its unwilling to entertain ideas that it considers ‘unpopular’. The reason why drugs does not get on the table is not because its bad policy; its because no one is prepared to make the case to support it. Jamie Whyte has backtracked on this issue, as Brash and Banks previously did. 

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ACT Party confronts leadership choices before Sunday

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In recent weeks I have been excited with the prospect that NZ's ACT Party would have a new leader. More exciting perhaps was the prospect that there was the knowledge that there was a candidate that did not come from a traditional political background; a 'careerist politician', but rather someone who'd lived in the world, knew economics, philosophy, who had a real job, and moreover, had sensible values because of it. More refreshing still was the fact that that he had written a book 'Free Thoughts', so I would have the opportunity to get inside of his mind. This was a rare opportunity. I've never known a politician to be so open at the start of their career. Most wait until the end before they'd ever allow themselves to be 'pegged'. Well, its probable that Jamie Whyte never intended to be a politician. Still, honesty is a great path, but can he stay on it.
I am speaking of ACT Party presidential candidate Dr Jamie Whyte. His book is available at the Adam Smith Institute. I have not only read the 220-odd pages of this book, but I have critiqued it. This is what philosophers should do. In doing so, I was able to arrive at some startling conclusions:
1. Jamie Whyte has a magnificent capacity to make complex issues seem simple. This is great for articulating ideas; as long as you do justice to the ideas.
2. Whyte has a great understanding of economics, and he's pretty handy at politics too. I am less comfortable with his understanding of psychology and philosophy, but then that debate will have to wait for an issue to make the point.

Now, I am a person who really gets excited when someone like Whyte comes along. Maybe my expectations were always too high; or maybe I simply did not identify what was destined to become of him. i.e. How he was destined to reconcile the views outlined in his book with this political system. On some level I was apprehensive or suspicious about his intellectual roots. He identified himself as a supporter of Frederick Hayek. In some respects, I was always going to have a problem with his views. Indeed, I expected it. I in fact told myself that Whyte was a necessary precursor to people like me. I must say that, having been confronted his views, I'm having less success reconciling and accepting them as I see the concrete implication. Not because 'I'm extreme', but I'm having trouble accepting that any good can come out of his strategy. This strategy of placating 'popular support', or conservatism, arises from the belief that 'you can't change people's minds. You need to compromise. But you might ask whose views are changed, or what values are served, when:
1. You betray your values
2. Your views are examined by journalists who have no compunction but to deride you (because they hold opposing views) because they find contradictions
Why is it that no one gets to argue that "Its not my fault; its the systems?"
"The system made me betray my values".
Its an understandable argument that never gets made. I wonder if Jamie Whyte will get the chance to make this argument, and whether anyone will listen or care. I guess its ultimately the journalists who will decide if anyone cares, by thinking him important enough to write an article about him.

Based on this interview in the NZ Herald, my initial critical view was that 'this is not good', that this is a sell-out, or a betrayal of party principles. Well, its hard to argue that because this party has long been a 'sell-out' defined by 'conservative interests'. This is the price it seems that ACT pays for its coalition with the National Party, or is the problem simply that the ACT Party executive and board want to be 'more relevant', and to them that simply means being 'popular', by appealing to the self-evident values of people. The problem I have with this argument is that parties therein become 'creatures of populism' rather than ever acquainting themselves or their constituents with any values. Show me a party that discusses values. They don't. They extort or command influence, or demand it. They appeal to the 'common good' as if they knew what it meant, or they spoke for it. I know they don't, because I know that there is no such thing as a 'common good'. There is only the presumption of some person's good to be won at the expense of anothers. That is what extortion does. It does not win the argument; it circumvents the need to even discuss ideas by threatening people with adverse consequences if they don't agree, or it can simply presume to represent the interests of anyone who subscribes to some aspect of their policy position. This 'rough & ready' perspective of "representation" is a failure when any system of representation. It is ultimately an argument for voluntarism. Jamie Whyte says in this article:

“He does not want to impose his own views about drug liberalisation on to the Act Party".

The implication is that this is not a party for debating ideas; that this is a party where some people's ideas take precedence over others, even someone seeking to be leader. The acknowledgement by him is that you have to sell your soul to be leader, or that practicality (in terms of populism) in this party trumps facts, evidence and argument. Unless a philosopher, Jamie Whyte, is concluding that he doesn't have one. Is he arguing that he supports drug decriminalisation because he 'feels its a good idea'. The implication is that this party demands that he acquiesce. The question is to whom, or to what moral imperative. This sounds like a betrayal. Is that the best we can do? Apparently so. It appears that people are apprehensive about what an intellectual debate actually looks like.
On Sunday, the ACT Party will decide its new leader. It sounds like the deciding vote has already been lost. It was an epistemological 'cliff-hanger'; the political decision is now perhaps a foregone conclusion. Man overboard.

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NZ Greens Party and Labour Party discover an 'over the horizon' election losing strategy

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Wow!!!! This is huge news. Labour and Greens together have raised minority party extortion to a new level. As far as I'm concerned, its great news because it highlights the nature of our useless 'representative' democracy. At stake is the spectre of a non-governing party threatening to subvert the existing government.
The Labour Party and Greens are saying in the midst of a power privatisation that they are going to change the rules of the game. An 'asset' is a capitalised stream of earnings. If you change the government, change the rules, you are going to change the expected earnings, or investors sense of vulnerability. The market is already uncertain about 'drought' (least of their worries), the closure of the Rio Tinto smelter, and now Labour and Greens are saying they will thwart the sale - in effect!
This effective curtails any hope of investment in the country (in anything substantive) as well as any hope of getting a sale of assets. Its the cheapest form of populism. Worse that 'minimum wages' and capital gains taxes by a country mile. Mind you, the policy was unpopular for National, and they were too arrogant to even deal with the broad-based apprehensions. This is of course just another reason for spurning 'representative' democracy. see and like us at www.meritocracy.org.nz. Join our mailing list.

This is actually worse that Julia Gillard's Mineral Resource Rent Tax (MRRT) because:
1. NZ needs the jobs and industry
2. Australia is a strategic and prized supplier of minerals
3. People kind of expect minerals to incur some rent
4. The mining industry was always very powerful, and thus a backflip was to be expected
5. The Australian Labor Party is just about to be dropped
The twisted aspect of this is that Labour and Greens just placed themselves in the wilderness....and ACT are looking more credible than ever. We have the socialists to thank for it....they really showed their true colours. Giving people sugar does not always work; most particularly when the market/media show you the implication of your decision-making. Shearer just retired permanently.
I guess we have to respect the 'honesty' (if not blatant stupidity) of the NZ Labour Party and the Greens Party. I guess they have locked in the support of the party faithful. But they might have just jettisoned any member or supporter with any sympathy or brain stem. To those people, I say welcome to ACT Party. John Banks, its leader is probably the only person with half a brain stem, and its a semi-impervious connection to God. So we live in hope. But you know; that's the price you pay for moral relativism. Get rid of representative democracy! Its not really 'democracy' in any meaningful sense. It does not give you 'real representative'. It takes from you power of attorney, vested in a person you will probably never meet or really know, who runs agendas you will scarcely understand because he is thinking full-time about thwarting your better judgement, and you are scarcely 'participating' to bearer scratch together a few brain cells. We need a meritocracy with a rational framework for political discourse. This is the only way that anyone can participate in a legislature. Visit us at www.meritocracy.org.nz. You want respect for your legitimate interests and rights - become a libertarian - we are not all Christians.


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Focus NZ Party: A struggle for identity

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The prospect of yet another libertarian party in NZ. I don't know whether to laugh or cry? I do know that I'm leaving the country, so what's the difference. Well, its nice to think that there is some hope of a libertarian sovereign state somewhere; but given the values conveyed by these 'hicks', I do believe I will be crying. So what's up with them. Well, here is the problem as I see it....the list is a little long.


1. The prospect of a a new (Focus NZ) party is probably only going to increase the chance of a Labor-Green victory because it will mean no list seats for a libertarian party. This will of course spell the death of all libertarian parties. 'Divide and rule'....that depends on how you divide. Three libertarian parties is ridiculously too many, particularly since you make no point of differentiation. If they merge with Daniel Craig's Conservative Party (yeh that was a joke) or ACT, that would be better.
2. The other big problem is that they have pursued the wrong approach to credibility. ACT's strategy of digging up former National Party leaders is ridiculous for a party that should be trying to differentiate themselves. Find credibility within the business community and appeal to high profile people across the country to back you, not just business people....otherwise you look like a pack of hicks or vested interests. But don't just create the perception of being broad-based, actually change your mind-set from concrete 'vested interest' 'exporter of the year' myopia, to all issues. Not just fiscal, monetary and industry policy, but welfare, treaty, energy policies and besides.
2. Another big problem for libertarian parties is that they have no clear identity. This is perhaps the hardest pill to swallow, but 'libertarianism' as a concept is rife with problems. You have to pick a winner. If you accept to 'pick the package' then you diminish your credibility. You are positing yourself as the 'honest party', but you can't be if you are contemporary libertarian, which means, only caring about advancing 'small government' agendas, but being indifferent to the divided philosophical values that divide people. This 'packaged' attempt to be all things to all people works for the 2 major parties; but it won't work for ACT or Focus NZ. The reason is clear I hope - the 2 major parties are 'extortion' based parties - both peddling fear. Labour is peddling concessions based on extorting wealth from the rich; and Conservative-Centre National Party, is peddling a defensive 'we'll protect you strategy', or 'we'll allow you to grow' on a good day. They are entrenched in this extortion-based two-party model. Trying to be the balance of power is not going to work given that the Maori Party is already doing that. This means the libertarians need to differentiate themselves, and that means 'growing market share', and that means being something the other parties are not. But since its different, you need to convey integrity. It does not matter if you have to divide your market share; at least you will convey a coherent system of values the people can trust.
3. Identity - The problem with 3 parties is that there is no point of difference. Libertarianism is a political philosophy that advances 'small government'. Your problem is that people support small government for basically 3 different reasons (i) Indulgent, reactionary, subjective anarchistic reasons, (ii) intellectual Randian objective 'natural law' type reasons, (iii) intellectual utilitarian reasons, (iv) divine/Conservative party reasons.
The implication is that its very hard to integrate that set and preserve integrity because at the end of the day, the Labor Party, and National Party and even Greens, have a fair claim on these people.
4. Broad based policy is needed. Just looking at your website, and that's where journalists will look, one observes the following errors, aside from the pitiful website....
(a) Right wing is not a good term to adopt...its meaningless...better individualism, prosperity,
(b) Focus on 'producers and exporters' - its a mistake. You may as well call yourself an irrelevant farmers party. Farmers are the 'backbone of the country''. Perhaps, but the problem is they are 3% and you have not found a way to teach sheep to vote. Labour has. 

(c) Talk of 'foreign exchange rate' controls is the wrong way to go about policy for a party that purports to be 'free market'. You need to ask yourself why the currency is high and deal with the problem from that respect. All commodity currencies are high...to give you a hint.
5. Criticising the outsourcing of jobs. There is already a 'nationalist party', why are you going that path. That's not 'broad-based', that's just idiotic. Winston Peters already panders to the ignorant. Jobs are going offshore because its cheap to make things in China. If you increase the costs of living in NZ, then you have inflation. You will diminish jobs in NZ...the exact opposite of your intention. The cost of living will rise. It is true that there is a false economy in outsourcing jobs which will come back in 20 years, but the solution is not simply protectionism. The solution is not to identify the problem and not have a solution either.

The policy position of Focus NZ is actually not bad, at least from their opening page; the issue is more on the strategic positioning of the party. Of course there will be a need to see the detail. The problem with such small parties is that they tend to lack the lack of analytical skills to make a credible effort, and then they tend to fail on public presentation, which the major parties handle convincingly. Most voters are not analytical; but journalists will be voracious, so party speakers need to be. Going after list seats makes sense as a policy strategy until they identify credible public speakers.

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Financial plan for the homeless

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NZ is the arse-end of the world; neverthless within this stagnant economy there are cities which are doing relatively well, such as Hamilton, Auckland, Palmerston North, Christchurch (belatedly). But within those cities, as well as elsewhere, there are people who are struggling to make ends meet. We might well consider this to be the 'doughnut effect'.
From Hamilton, NZ comes this interesting story of a homeless man living on government job benefits but otherwise with $70K in savings. This is an interesting issue both from a personal finance perspective, as well as from a public policy perspective. In this post I want to consider 4 issues:
1. How this man is impacted by National Party policy
2. How he would be effected by Labour Party policy
3. How he would be affected by ACT Party policy
4. My public policy advice to these parties
5. My financial planning advice for this man - even though he is not asking


National Party policy impact
What I like about this guy is that he breaks the stereotype of what we have come to expect of homeless people. Anyone who has been to Japan realises how proud the Japanese homeless people are. Its as if the origin of their pride was their mistreatment by the Japanese government. Yes, another success for representative democracy. Hoorah!

The National Party is the current party and they are paying this guy $180 less $12 per week for the interest earned on his $70K savings. Firstly, the guy should be applauded for saving money, and working prior to his last decade of joblessness. It is not easy to work in a country when you are relatively unskilled, surrounded by more able-bodied persons, and amidst a labour oversupply. Its not all bad. He has a proven track record of working. 

What is shameless about the conduct of this administration, and indeed, all governments is their blatant ignorance and incompetence. Some voice should be shouting inside of them saying that "This guy is a value; not to me, but to someone. His life is not worth zero". Now you might say that the government gives him $168 per week, so they are not treating him as zero. Not right. Governments don't have money. You the taxpayer are financing this man to aimlessly drift around Hamilton in the vain hope of his getting a job. The sad issue is that he is just going to get more mentally ill, he is going to get beat up, so he will no longer be employable, or even 'useful'. Post-traumatic stress will probably ensue. So then we have a 'disability pension', with all the rights and 'obligations' upon you, the taxpayer that that entails. What is apparent is just how detached governments are for the money. If this was your money, you would have some discretion to withhold it if you did not like what the guy was doing with it. Maybe you wouldn't give it to him anyway, because 'it's not your problem'. The thing is - it is. The government is taking $168/week for this guy alone, from you & a great deal of other people. It's your problem! You don't take issue with it because you feel disempowered. It's not kindness. You're indifferent to this guy's existence; and you'd not allow yourself to consider his plight, because it's out of your control. The problem is too big! It's your problem. You have a government responsible for such things. Problem solved! 

I guess the National Party are hoping that this guy should hang on until the job market recovers. The problem is - he is 60yo - and there is going to be an excess of labour for the next 2 decades because of the liberalisation of global labour markets after collectivist (socialist) governments collapsed, and purportedly saw the error of their ways. It will take 20 years for capitalism to solve the problem caused by collectivism over centuries. It's a big backlog. So basically, the National Party is offering voters no respite. They are indifferent to this guy's happiness. It might be argued that it's his decision to stay on the street; but ultimately it's you - the taxpayer - who will pay when he gets beaten up. So there will be a hospital bill and invalid pension. The good news for indifferent taxpayers is that this guy will immobilised, and will probably die early of diabetes. Unless there is more costly intervention.

So, to you this guy is not looking good at a $168/week investment. He's what you might call a drag on the economy. He is right to feel like he deserves his money. He's playing by the rules, he's paid taxes, and so he has a sense of entitlement. Interestingly, in Australia, he could not get a jobless allowance if he had more than $10,000 in the bank or investments. But is that the issue? I know because I claimed for a time between jobs when I was young. It pissed me off too because, like him, I argued, why can't I get the 'dole' when I pay taxes. There are people with $500,000 houses who can get it because they manage to have less than $10,000 in cash. The implication for NZ is that welfare is a form of income insurance, whereas in Australia, it functions more as a form of nominal insolvency insurance. i.e. You get it if you lose your capacity to service costs of living. If you have cash, you can still service your costs. 

My interest here however is not the equity or inequity of welfare, but the waste. This guy could be doing something useful. He is not worth anything in this economy....and that ought not sit with people so well. He could function as a child carer's assistant, a trainee, carer for elderly, cleaning the streets. There are any number of things he could be doing, even if they entailed no sense of efficacy. What a waste when there are things needing consideration. Instead the government says, take the day off....just fill in these forms to say you are looking for a job, you have no chance in hell of getting for the next 2 decades - when he will be 80yo. By the way, I see no reason why he cannot be working until he is 90yo. Old people regret giving up meaningful activity.  

I'd not be surprised to see National take the Australian approach in future. This would in a way be worse because it would give him greater financial apprehension because he's dwindling away his savings, and he might be more frugal with it, to the point of diminishing his diet, resulting in the decline of his health. It would incentivise him to find work if he was capable of competing; but realistically he is not. He has not worked in a decade. 

Labour Party policy impact

Now, looking at the NZ Labour Party. They have always advocated minimum wages. That will only make him less employable...even if he had a running chance. At 60yo, he doesn't in the contemporary labour over-supply. In fact higher minimum wages will add to the unemployment queues. I suspect Labour would increase benefits to people like him, but really no substantive change, to this guy's life, since he is saving for the future. 

ACT Party policy impact

Now, one might expect the ACT Party to be the 'economic rationalists'. I would expect however their position to have the most beneficial impact on joblessness, which would ensure a great many youths would get a job, i.e. they would lower/scrap minimum wage, they would cut regulation. The problem I have with ACT, is that whilst they hold the upper leg, they fail to consider: 

1. The impact of market distortion - stripping away some distortions creates other distortions

2. The legacy of market distortion - stripping away distortions creates other distortions

My policy suggestion

The value of this guy is not zero. The value of the taxpayer is not negative $168 per week. These people are important, if only to themselves. These people have hopes and aspirations. These people have real grievances; and most of them arise systematically, and as some horrid legacy of government intervention, often stretching back 100s of years. It will not be cured overnight, it will probably take a generation....but we are not solving the problem. These people are useful. You cannot rely on the market to solve the problem if you distort the market; if you market says they are worth 'zero' or 'negative' value, when by any objective standard, we know there are valuable things which they could be doing, but don't because centralised governments can't get around to organising solutions. Why is John Key so busy? Well, he's focused on changing the term of parliament. You have got to be joking? The problem is not his job term; the problem is the decision-making process which means he is ineffectual for the first and last years; not to mention the fact that it's an unaccountable, majoritive, extortion-based system. What does his priorities tell you? It's all vanity. He wants the job because it serves his vanity. He cannot honestly say he is doing a good job, so he blames the system (which is bad), but he has no solution. 

'
Now, I have a resolution for this problem, but it's another topic. I am concerned with this guy. The 'unemployable' worker who is useful. Offer people 'conditional support'. You can't help them get jobs in the current market if the market values them at zero, so:

1. Create opportunities for them to work 'staying alive', i.e. Growing food to live. NZ is currently importing foods from abroad, supermarkets are adopting huge mark-ups for these vegetables, and so people can grow here for own stake, or for sale, and live on the proceeds. 

2. People with sufficient resources like this guy can do it themselves. They have the time if they are spared the burden of 'useless job searching'. They will never get a job in market economy that is distorted. Pay them to produce food, i.e. If they have $70K plus, they can self-sponsor. If they don't, have a government sponsored scheme using contractors who tender for these programs. These people might need basic services upfront; but they will act if they are able because its meaningful work. People coming out of prison could go straight into these programs. Once taught some of these people could use their savings to build their own 'food production' scheme.

The world is currently reliant on foreign food increasingly because of low-cost emerging market labour. What is not appreciated is that, when in 20-30 years time, those country's surplus labour is fully absorbed by global markets, then their labour rates will match ours, and food production will make more sense locally. These are valuable skills we are loosing. These people could be the foundation for a budding industry; but more importantly - they are useful! And their utility to themselves and others is being wasted.

Want to rebuild NZ? Start with people left behind. Reduce the cost of looking after them; then you'd be surprised at how well the economy can run without useless government programs, without useless govt regulation. You'd be surprised how many problems like mental illness, joblessness will disappear!

My financial planning advice for this homeless guy

This guy has $70K of cash and a benefit. My advice to him is to buy a house in a depopulating place like Wanganui. The nice thing about this solution is that you have an asset, a place to retain possessions (which if you are poor, might include things other people don't want). The bad news is that you have an expense - your rates. Given the waste of money on rates, you should question the value of government. Most of you clearly don't. $1800 per year in NZ; I pay just $300 per annum in Japan for a 18-year old house. This guy could be eating salmon & rice bento box in Japan at Hokka Hokka Tai for Y420 ($NZ5.50). Back to expensive, over-serviced NZ. I would suggest he pays $65K for a house - yes they exist. If he contracted with a tenant, he might be able to secure one ahead of time. Here is how I would do it. Probably settlement takes time, so whilst being on the street for 3 months, I would try to meet someone in a similar position. It might be easier in Auckland city. I would say to them: "Look mate...we could be dead on the streets if we stay here. I have money saved for a house. If you pay me $60/week, I can give you a home, or $80 with minimal services, leaving his friend with $100/week for other costs. That gets him and a friend off the street, gives them spare money, and if gives them land to grow vegetables. The house might not appreciate, but it gives him more cashflow than the bank. Now he is discouraged from doing that because the government will say he has rental income, so his benefit will be reduced. For this reason, he will probably not declare that income, and will instead receive cash.

Perhaps the government could save money by offering financial advice because according to this guy's plan, he is living on the streets to get cash, placing his life/health in jeopardy, and his prospects for an early death from diabetes are enhanced. Good job gov!

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NZ 2011 election - dirtiest election ever?

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This article and the hounding that NZ Herald and other journalists are giving to the National Party and ACT Party highlights the extent to which the media are interfering in the NZ election. This would have to be the most corrupted election I've seen since President Arroyo was caught in a 'real tape scandal', where President Arroyo stands accused of benefiting from election bribing. This issue is currently being investigated in the Philippines. But back to the 3rd world:

1. Labour and Greens are trying to discredit the National Party and ACT Party because of their 'private conversation'. Nothing controversial was said except they referred to NZ First Party supporters as dying out; hehe funny 'private' joke, and the imminent resignation of Don Brash. Oh, and surprise surprise, Winston Peters is expounding the fact that Catherine Isaacs is being vetted by Key as the new leader. Should that surprise anyone? She is has 2nd ranking on the party list Winston. Winston Peters discredited himself here.

2. Greens Party people are caught sabotaging National Party billboards; and many in the party are supporting the action, saying party supporters would have welcome the moves. Yes, I guess because a chick is being unfairly treated, we ought to break the law indulgently. You'd think the media would be more interested in this story, but they are more interested in tarnishing the reputation of John Key. I don't much like John Key's pragmatism, but I think his credibility stands up a great deal better than the Green's ideology. Yet there is nothing in the media; and far from two people (John Key and John Banks) being scandalised for a harmless 'private' conversation, we have 50+ Greenies defacing billboards, and members unapologetic for the action, and the media doesn't think this story is newsworthy. Wow.

How biased can the media get. I hope the Elections NZ decide that the news media has tarnished the credibility of this election, and call upon the media to pay compensation, and for a new election to be held; hopefully in a new parallel universe where Don Brash is not ACT Party leader, so they can secure 15 seats! What a shocker!

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The misappropriation of political information

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The NZ Herald has attempted to defend its story by garnering the support of a 'victim' of the 'News of the World' scandal in the UK. The effort is rather pathetic. Consider the lawyers arguments:

Barrister Mark Lewis said “The "teapot tape" should be released and is in no way comparable to the News of the World scandal”.[i]

Really? In no way the same? Not even a little? They occurred on the same planet? They involved taped conversations between known parties; journalists with a personal interest in the activities.

Barrister Mark Lewis: "The News of the World were really using what is lazy journalism - they were hacking people's phones to get cheap stories".[ii]

What difference does it make whether the journalists were lazy or deliberate in their activities. The issue is not whether they tried to record the incident; the issue is whether they are attempting to profit from it after the fact.

The fact that these politicians made parts of their conversations or the imagery pertaining to the conversation available or ‘public’ does not mean that every aspect of their life has to be exposed. The fact that the media asked for permission to publish the tapes is evidence enough of that.

“Mr Lewis said he believed it was in the public interest for the transcript of the tape to be released”.[iii]

How can he know if the releasing the tape is in the public interest without knowing the contents of the tape. Ethically, only the police can determine what is ethical or proper to do in this case, as well as the journalist and media executives who have viewed its contents. They will be morally and legally liable if they misuse the information. If there is any criminal content; this would not even necessarily justify release of the taped information, though I suggest it should in order to permit collaboration of evidence.

Barrister Mark Lewis: "There is a difference between the News of the World hacking into someone's phone to find out private information and seemingly - whether accidentally or on purpose - effectively a journalist investigating some kind of political statement”.[iv]

This barrister really has no concept of philosophy. There is a distinction to be made between private and public lives. i.e. You cannot plant video cameras in public toilets. That is the principle involved. Yes, hacking into someone’s private communication represents a higher level of deceit, but both actions are morally reprehensible. A barrister should know that.

Barrister Mark Lewis: "But if it's particularly a political statement which affects the future government or the ways to achieve future government in a country, then that's something in the public interest and it sounds like it should be reported without the unfavourable comparison to what was clearly a criminal act”. [v]

Well, that is fine if the content of the tape was public, or if the content which the media sought to publish was ‘public policy’, but they are after scandal. So it’s a big ‘if’ that this barrister has not even explored. Even if there is content which might be deemed ‘in the public interest’, that is for the owner of the private information to decide. Only if the evidence suggests illegality should this information go to the police; and otherwise there ought to be no publication without the intellectual property owners authorisation. It has been duly rejected by John Key.

Why a barrister is inclined to screw up on this point is that they fail to see the broader context of public accountability; which is a respect for principles. In a sense, the barrister is saying that we will discard principles for the right to affirm the public's interest....whatever that is. i.e. He is throwing the baby out with the bathwater.

According to the NZ Herald,

“News Corp is trying to negotiate a settlement with the Dowlers and has offered them £2 million (NZ$3.9 million)”. [vi]

Barrister Mark Lewis’ comment on the John Key-John Banks tape recording therefore entails a ‘conflict of interest’, and I would suggest his inflaming the NZ political issue could well make him liable to legal action by the PM, John Banks, the ACT Party and the National Party. The conflict of interest arises because he is apparently trying to render his case as more serious, unique, and thus of greater significance. This would of course justify a greater pay-out for his client.

“Mr Lewis said there was a difference between taping the PM speaking about something which could be deemed "very crucial politically" and recording him talking about personal matters, like his health or his family”. [vii]

Actually there isn’t. If the media is so hungry for public policy so that the public can get to know their political candidates, then I’m sure there is no shortage of time available by them; particularly the minority candidates who seldom get much. The reality is that the media wants us to think there are some important sound-bites on here. Maybe there is some crude language or embarrassing comments about Don Brash. Maybe they even hint to the resignation of Don Brash after the election. These are private opinions; they are strategic concerns of the people who did not intend to make them public. The notion that a journalist can accidentally benefit from secret tapes is ridiculous, whether they intended to do it or not. It could only sponsor a raft of ‘disorganised crime’ or purposeless crime. i.e. Smuggling of drugs. Oh sorry, I did not know my BF planted drugs in my baggage, but since I did not know, its ok if I sell them in the destination country.

Barrister Mark Lewis: "If it's to do with how the country is governed then that's good journalism".[viii]

Actually its poor journalism because apparently the action was not deliberate, and the decisions since show poor moral judgement by all concerned.

Barrister Mark Lewis: "The public choose their politicians ... they really ought to know wherever they are in the world".[ix]

Nonsense. Politicians are not always public persons; they also have private lives, and it is the decision of the politician, not the media, to decide when it is public or private, or it can be determined from the context. Voters should only be interested in the public policies of politicians; the fact that they make private comments, etc is really of no importance because they are not well-considered, deliberate or analytical thoughts, as I am conveying here. If my analysis is flawed, then I can be rightly criticised for it. Some of my writing is less well-considered, and whilst I can be criticised for it, I hold myself to a lower standard for that. It is a question of context. I could care less that John Brash curses Don Brash in private or public; the issue is whether they are effective politicians. In that assessment, I do not think people should hold them to unreasonable standards, nor sanction the use of misappropriated information/property.

Mr Lewis suggests a better comparison would be with ‘former British Prime Minister Gordon Brown's gaffe when a microphone he was wearing picked up his comments that Labour supporter Gillian Duffy was a "bigoted woman".[x]

Frankly, I actually think this is a similar situation. If the journalists intentionally released that information and they had good reason for believing they were private thoughts; then they ought not to publish it. If he was making those comments to specific people, as opposed to strangers, then that is private.

Barrister Mark Lewis: "Politicians need to be careful about TV cameras and microphones. They should watch out that things aren't recording". [xi]

Notwithstanding the practical value of anticipating ‘crouching tigers’, we would tend to argue that we do not live in a caveman society, but rather a conceptual society where we expect people to act in accordance with the law, and that the law will entail consonance with ethical principles and more importantly human nature. Where is the ethical principle that the victim is 100% responsible for the consequences of their actions and others actions.

“Mr Key said his police complaint was based on principle. "What happens when it moves to other high profile New Zealanders having a conversation with their wives about personal issues?” [xii]

This is a fair comparison, but the following ethical justification by John Key is not.

John Key: "What happens if a couple of high profile New Zealanders have a conversation about their son or their daughter being suicidal - a Sunday paper reports that and that child takes their own life. We're at the start of a slippery slope here and I for one am going to stand up and ask the police to investigate it".[xiii]

A defining quality of a “suicidal” people is that they have a propensity to commit suicide. John Key seems to be embarrassing a utilitarian or consequential or pragmatic conception of justice here – sadly. The issue is the means by which a person acquires the information. Certainly if the information was misappropriated and caused embarrassment, it could precipitate suicide. This might reasonable considered a ‘causal’ connection between the illegitimate action and the suicide.

References

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[i] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[ii] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[iii] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[iv] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[v] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[vi] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[vii] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[viii] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[ix] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[x] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[xi] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[xii] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

[xiii] “Prime Minister's 'cheap shot” by Amelia Wade, NZ Herald, website, Nov 16, 2011.

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